CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Week 1 – Global,
expansion and
choosing the
right market
Potential Market
Assessment
What we will cover

• What is globalisation
• What is global marketing?
• The importance of understanding your home market
success
• Globalisation drivers
• Potential Market Assessment models
• Introducing the framework for Assessment Component A
• Determinants of suitable foreign markets
• Environment
• Internal
• Common pitfalls
CHRISTINE COMRIE UMKD6Q-15-3 2023-24
Globalisation – an emotive concept
“Globalisation has pulled millions of “Where globalisation means, as it
people out of poverty… and multiplied so often does, that the rich and
the size of the global middle class. It powerful now have new means
has raised the global standard of living
faster than that at any other time in to further enrich and empower
the history of the world, and is themselves at the cost of the
supporting astounding growth. poorer and weaker, we have a
Whatever people’s fears of change, responsibility to protest in the
globalisation is here to stay - and, if name of universal freedom”
properly managed, it will be a good
thing” Thomas Friedman, NY Times journalist and author
Nelson Mandela

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Local to Global and Back

C
O
V
I
D

I
M
P
A
C
T

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Glocalisation

The overlap of globalisation + localisation = glocalisation

Source: Based on Hollensen, S. (2014) ‘Global Marketing’, 6th edn, Pearson Education, Harlow, p. 22 .
CHRISTINE COMRIE UMKD6Q-15-3 2023-24
The Global Village concept
• “Time has ceased, 'space' has vanished. We now live in
• a global village...where through our 'extended senses' we
experience events as far away as the other side of the world as
if we were there in the same physical space”
• (Marshall McLuhan, 1967)
• Levitt (HBR 1983) – convergence of customer needs;
standardise to achieve value superiority:
• Global ‘communities 'of consumers
• Global product cultures (consumption patterns)
• Cultural homogenisation

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

 So what is Global Marketing?

MARKETING STRATEGY IS BASED ON:

• Identifying, anticipating, satisfying customer needs better than the competition….
• Understanding marketing environment
• Effective STP
• Implementation of competitively differentiated marketing mix
GLOBAL MARKETING STRATEGY IS BASED ON:
• The above
• Understanding the basis of your home market success
• Coordinating activities within a largely uncontrollable, complex global macro environment.

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Globalisation drivers

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Potential Market Assessment (PMA)
• One of the central features of international business is the process
employed by firms to pick those foreign countries or regions that will
form their geographic target markets - and as such it’s an element of
operations that firms need to get right (Kay, 1993)
• However, it remains difficult and contentious because of “the
bewildering array of countries and markets throughout the world…”
(Keegan and Green, 2016)

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

PMA is important because

• There are a wide number of options

• External factors
• A country might look attractive initially but might have hidden
pitfalls or be unsuitable for your product.
• Internal factors
• Company resources, mission, vision etc.
• Basis of home market success?

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

External Analysis
and
Potential Market
Assessment

• Sequential process
• A comparison of different
markets
• Choosing the most
attractive one to enter.

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Potential Market Assessment model to structure your
assignment (Comrie and Hunt-Fraisse(2015)

Filter one: Macro market analysis • PESTLE analysis LECTURE 2

(General Viability of the market)
• Competitor strength
• Consumer habits and attitudes
Filter 2: Category market analysis • Size, growth, seasonality, infrastructure, margins, customer power, entry
barriers, comms channels etc. LECTURE 2
• Analysis of company competitive advantage using Porter's (1985) value
Filter 3: Company competitive chain
advantage relative to in market • Relative competitive advantage
competition • FSAs, CSAs, COE LECTURE 3
• Market attractiveness in the light of
Filter 4: Fit of company offering • Company objetives
• Company Experience
with the new market.
• Company Resources LECTURE 3
CHRISTINE COMRIE UMKD6Q-15-3 2023-24
Potential Market Assessment model to structure your
assignment

Filter one: Macro market analysis • PESTLE analysis

(General Viability of the market)

• Competitor strength
• Consumer habits and attitudes
Filter 2: Category market analysis • Size, growth, seasonality, infrastructure, margins, customer power, entry
barriers, comms channels etc.
• Analysis of company competitive advantage using Porter's (1985) value
Filter 3: Company competitive chain
advantage ralative to in market • Relative competitive advantage
competition • FSAs, CSAs, COE
• Market attractiveness in the light of
Filter 4: Fit of company offering • Company objetives
with the new market. • Company Experience
• Company Resources

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

External – filters 1 and 2
• Macro Factors – PESTLE
• Category Factors
o Competition Lecture and Tutorial
o
o
Consumer habits and attitudes
Trends
Week 2
o Distribution channels

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Internal
Company
Perspective
• Firm size / resources
• Capacity
• Staff resources / experience
• International experience
• Financial resources
• Vision, mission and values
• Top Management Direction
Lecture and tutorial
Can screen some markets out
of contention week 3
CHRISTINE COMRIE UMKD6Q-15-3 2023-24
The fit
• Given all of the market macro and category factors
• And the resources, mission, vision and differentiation of the company
• Do you feel that the brand could be successful in that market?

Tutorial week 3

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Some common pitfalls companies make

• Ranking potential countries purely on market size or growth trends

• Market attractiveness must be measured relative to strategy &

competitive advantage
• Underestimating local competition
• e.g. Groupe Danone in central Europe
• Anticipate local retaliation

• Blindness to local customer motivations

• Research interpretation/ Self Referencing Criterion (SRC)/ local insight

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Distance does matter – Ghemawat (2001) CAGE framework

‘Companies routinely overestimate the attractiveness of foreign markets’

Requires direct contact/ experience - allow for:

• Cultural distance – religious/ language differences
• Administrative distance - regulatory differences
• Geographic distance – further away more difficult to manage from home
• Economic distance - low development means weak infra-structure, payment ability etc.
(Ghemawat,2001)

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Getting the balance right.

• More than half our business is in the developing and emerging markets. The
growth coming from emerging markets is massive, in China, India and Brazil . We
are already well developed in these countries and we don’t want to squander that
inheritance. We will grow these markets and our market share quickly. But we
also have massive businesses in the US, Europe and Japan and we would be mad
to walk away from those. You have to fight harder again to grow share but you
have to do it There are different strategies in both kinds of markets.

• Keith Weed – Chief Marketing Officer – Unilever Marketing Week (2010)

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Ikea Fails in
Japan
• Launched in 1974 – after 4
markets in Europe.
• Felt proposition would work
everywhere.
• Lacked consumer insights
• Quality of service very
important in Japan.
• Japanese houses are very small
• Tough competition
• Limited transport in Japan 
out of town stores not popular
• Big store laws

Could you live in a 200 m2 house?

CHRISTINE COMRIE UMKD6Q-15-3 2023-24
 • In Japan, the size of a room is
often measured by the number
How many of tatami mats (- 畳 -jō)
• 4 ½ mats is about 2.73m x 2.73
Tahami mats? m.
• 7.45 m2

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Relaunch in
2006
• 5 years consumer research
• Large sofas and furniture etc. popular
in Europe not relevant in Japan
• Providing home delivery and
assembly (even for an extra charge) is
necessary.

• Educate people about assembly TVC

• And showcase furniture in small
spaces

• Ikea Japan 2008

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

PMA in action: How
does a Chinese
automobile company
globalize ?
• Three options:
• Target emerging markets with
low-cost no-frills cars (regional
radiation)

• Target developed markets with

“new energy” cars rather than
conventional gasoline cars.

• Target niche sectors – i.e.

Great Wall Motor Company –
Steed pick up.

CHRISTINE COMRIE UMKD6Q-15-3 2023-24

Summary

• Be clear as to your motivation to internationalise

• Use a PMA model to structure your secondary (and primary) data analysis.
• Macro
• Category
• Internal
• The fit
• Be clear of your company capabilities, shortfalls, mission, roots of your home success (and
can this be transferred?)
• Do not chase new markets and ignore your existing business – need to support both
• Filter out unsuitable markets

CHRISTINE COMRIE UMKD6Q-15-3 2023-24