Appraisal of foreign Markets

It may be necessary to provide additional protection involving extra production /packaging costs if actual physical features, especially the climate is hot and humid in the foreign market where marketer is likely to export. Other physical features to be considered are the incidence of mountains, rivers, etc. Some countries may be difficult to cover except by air because of extensive deserts.

Appropriate size of markets, i.e. local production plus imports minus exports: Production and sales trends may be examined for the last three or five years. It is not desirable to look at only one or two years data because temporary disturbances may conceal the real long term trend.

Economic Characteristics:

(i) Income – national and per capita
(ii) Wealth – amount and distribution
(iii) Work habits and occupations
(iv) Consumer mobility –geographically and within social class structure.
(v) The rates of change in each of the above

Political Influences:

(i) As they affect consumers
(ii) As they affect suppliers, present and potential
(iii) As they affect international trade policies
(iv) As they affect the economy by,

* Business cycles
* Monetary stability
* Disposable personal income i.e. taxation system
* Amount and distribution of wealth.

Transport and Communication: Mode, speed, frequency and cost.

Social Development Projects:
Extent and stage of industrial development plans for further development and amount of foreign investment coming in.

The possible markets may be reduced to probable or more likely markets. This process would consist of the following steps:

Examination of India’s export statistics which are officially published in the Monthly Statistics relating to ‘India’s Foreign Trade’: This enables the potential exporter to find out where similar products are going and whether the exports are declining or increasing. If the exports are increasing, what is the rate of growth of exports? In doing so, data for a period of three to five years should be collected as it reveals the trend of the markets. Again, always the latest statistics should be looked for old statistics may not be very helpful and may at times be misleading. Examination of import statistics of the selected importing countries is the next step. This will give an idea of the relative size of the various markets. How much of the product concerned is being imported in different countries? Who are the competitors in each market? Is the market expanding, static or contracting? Ideally the market to be concentrated upon should be an expanding market since this means that further sales are possible without affecting the competitors too much. This would also make the marketing task much more easy. Import statistics of foreign countries may be available in foreign embassies or consulates in India and chambers of commerce. In addition, OECD World Trade Statistics and United Nations International Trade Statistics also provide these data.

Examination of India’s export statistics and foreign import statistics both may give an idea of the possible unit value realization as also the price paid for imports in foreign countries from different sources.

Examination of research studies made by the Indian Institute of Foreign Trade, India Trade Promotion Organization and Export Promotion Councils:
These reports contain useful marketing information about the various markets and products covered by them.

It generally pays good dividends to talk to some experienced exporters. In this respect, it would be better to approach exporters of allied items. Competitors would not necessarily be helpful. Contacting trade associations and chambers of commerce may also help in the process of appraising markets. In fact, it is one of the important functions of Export Promotion Councils to help the new exporters to find out foreign markets and give important details about market.

The Economic Times and other economic dailies often publish supplements covering one particular country giving lot of information useful to marketers.

Commercial banks may also provide a lot of information about the payments position and exchange control restrictions in different countries. They can also supply status reports on the commercial standing of the foreign buyers. Freight forwarders may help the exporters to find out availability of shipping services as also the freight charges to different countries.