Determining the Target Markets

Abstract

The selection of target markets which is in the focus of this chapter is an important and at the same time difficult task: It is important because the success or failure of going international for new markets strongly depends on it. The best strategy for building up new markets and the best market entry project plans are useless if the wrong markets are targeted. The task is difficult, because many industry markets in many countries often come into consideration, and because the selection is based on numerous and partially qualitative criteria.

In Sect. 9.2, approaches to assess countries are presented. The PESTEL analysis is a grid which can be used to structure the country analysis. Important individual aspects can be analyzed with macroeconomic indicators, approaches for assessing political risks and methods for evaluating cultural distances. Section 9.3 then introduces several approaches to assess the attractiveness of industry markets in a country. Market data based on reports of associations, banks and consultancies, the market system analysis and the distinction and analysis of submarkets are three important approaches. Finally, a process to analyze and assess country-industry market combinations is proposed in Sect. 9.4.