International Markets Strategies Quiz

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Questions and Answers

What is a trade mission?

A contractual arrangement for technology licensing.

A large exhibition for promoting sales of products.

A market visit by business people in search of opportunities. (correct)

A process for establishing a joint venture.

Which of the following best describes a turnkey project?

Selling trade secrets for a fee.

Producing goods for another company based on specific guidelines.

Providing management services to another firm.

Designing and erecting a plant for a client. (correct)

How does franchising differ from traditional licensing?

Franchising offers unlimited rights to patents.

Franchising requires more initial investment than licensing.

Franchising allows selling of products but not services.

Franchising includes operating a business under an established name. (correct)

What characterizes a joint venture?

It involves a cooperative effort among multiple organizations. Signup and view all the answers

What does social desirability bias affect during market research?

The genuineness of respondent answers due to a desire to please. Signup and view all the answers

What is the primary objective of market screening?

To eliminate less desirable markets Signup and view all the answers

Which statistical technique is used to estimate future values by observing a variable at regular time intervals?

Trend Analysis Signup and view all the answers

What constitutes market indicators in the context of market screening?

Economic data measuring market strength Signup and view all the answers

During the third screening stage of market entry, which forces are primarily evaluated?

Political and legal forces Signup and view all the answers

What should be included in assessing competitive forces during market screening?

Competitors’ source of products Signup and view all the answers

What characteristic must a market segment have to be considered for screening?

It should be definable Signup and view all the answers

What is one primary benefit of participating in trade missions and trade fairs?

Direct access to potential clients and partners Signup and view all the answers

What is the role of segment scanning in market screening?

To evaluate specific consumer groups within countries Signup and view all the answers

Study Notes

International Markets: Assessment and Entry Modes

Think locally, offer value, and be patient. Patience is key to successfully entering new markets.
Om Malik emphasizes the importance of understanding local markets, offering value, and a long-term strategy.

Learning Objectives

Review market screening steps and environmental analysis techniques.
Discuss the value of trade missions and trade fairs.
Describe challenges faced by market researchers in foreign markets.
Explain international market entry methods.

Market Screening Approaches and Techniques

Market Screening: A modified version of environmental scanning. Firms identify desirable markets by eliminating undesirable ones.
Environmental Scanning: A process where firms analyze changes in environmental forces that might impact them.

Market Screening Approaches and Techniques (Continued)

Country Screening: A method that uses countries as the basis for market selection.
Segment Scanning: A method that utilizes market segments (consumer groups within a country) as the basis for market selection.

Initial Screening - Basic Needs Potential

A funnel-shaped process to select potential foreign markets.
The process eliminates markets that don't meet basic criteria.
- First, basic needs are assessed
- Then, economic/financial, political/legal, and sociocultural aspects are screened.
A final selection is made based on the remaining market criteria.

Second Screening - Financial and Economic Forces

Market Indicators: Economic data used to evaluate market strength of countries/regions.
Market Factors: Economic indicators that highly correlate with market demand for a product.
Trend Analysis: Statistical technique to predict future values by analyzing past trends.
Cluster Analysis: A statistical technique to group objects based on similarity.

Third Screening - Political and Legal Forces

Assess political and legal factors within target markets

Fourth Screening - Cultural Forces

Culture Wheel: A model used to analyze national cultures.
The Wheel categorizes elements like values, community, knowledge, language, traditions/rituals, arts, tools/objects, and techniques/skills.

Fifth Screening - Competitive Forces

Analyze competitors' number, size, financial strength, market share, marketing strategies, promotional effectiveness, product lines, pricing policies, after-sales service levels, and distribution channels.
Consider whether market segmentation can create currently underserved niches.

Final Selection of New Markets

Carefully select new markets based on thorough analysis and assessment of various factors. Use the selection method (Figure from the presentation, showing an arrow hitting a "right choice" ball amidst many wrong ones) as a tool in the selection process.

Segment Screening Criteria

Definable, Large, Accessible, Actionable, and Capturable segments are key criteria during screening

Trade Missions and Trade Fairs

Trade Mission: Market visits by business people and/or government officials. Used to look for business opportunities.
Trade Fair: Large exhibitions where companies promote their products.

Research in the Local Market

Social Desirability Bias: Respondents' tendency to provide answers to please the interviewer rather than reflect their true beliefs/feelings.

Entering Foreign Markets

Nonequity-Based Entry Modes: Entry methods not involving equity investment.
- Exporting
- Turnkey project
- Licensing
- Franchising
- Management contract
- Contracted Manufacturing
Equity-Based Entry Modes: Entry methods involving equity investment.
- Joint venture
- Strategic alliance
- Wholly owned subsidiary
Turnkey Project: An export of technology and management expertise, the contractor sets up the plant. Involves initial capital equipment, and the process to produce the products, training and operation of the facility. Once the product is tested, operation, the facility is turned over to a purchaser.
Licensing: A contractual arrangement where one firm provides access to its technology/patents/trade secrets to another for a fee.
Franchising: An advanced licensing agreement where one party grants permission for another to operate its business. The permission includes the use of the business's name, and operating practices under predefined rules.
Management Contract: One firm provides managerial services to another firm.
Contracted Manufacturing: Another firm produces products according to the original firm's exact specifications.
Joint Venture: A partnership with two or more entities with common interests in a particular business.
Strategic Alliance: A collaboration formed between competitors, customers, and/or suppliers in the form of equity, or non-equity arrangements.
Wholly Owned Subsidiary: The company owns the business setup overseas.

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Description

Test your knowledge on international market assessment and entry modes. This quiz covers essential topics such as market screening, environmental analysis, and entry methods for foreign markets. Gain insights into the challenges and strategies necessary for successful market entry.