Companies collect a wide variety of information about their foreign markets to d

Question

Companies collect a wide variety of information about their foreign markets to decide in which countries to conduct business and which market segments in these markets they should target. What are the three major markets that exist in all foreign markets? Describe the markets and provide examples of each.

Write a paper of 500-600 words, typewritten in double-spaced format (Arial 12-point font or Times New Roman styles), page margins Top, Bottom, Left Side and Right Side = 1 inch, with reasonable accommodation being made for special situations and online submission variances.

Explanation / Answer

MNCs always explore the opportunities to expand into the foreign market. Though, it brings a dilemma of identifying the audience in that foreign market. There are different types of the target audience, segments that can be broadly categorized into the different markets. On this basis, each foreign market consists of three type of markets. These markets are as follows:

1.   Consumer market

2.   Industrial market

3.   Government Market

The consumer market represents the target audience that are end consumers or households. Such market has huge diversity in terms of size, demographic characteristics, ethnicity and sex. To target this market, the firms match the offerings of their products and services to the needs of the consumers. Once the need is matched and demand is established, the firms enters into the market and build communication with the target audience. For example, a soft drink maker company enters into the foreign market and identify the consumer segments who can buy their soft drinks. Afterwards, a communication via different channels is built and messages are communicated to the target audience. It brings awareness and educate the customers to develop the interest and desire to purchase the product. As a result, consumers start buying the products and the firm establishes into the market. On a similar note, the ecommerce firms enter into the foreign market to target the end consumers and sell products of different types to the consumers. It is based upon the demand among the consumers and quality of the products. This market is also termed as B2C market.

The Industrial market represents the derived demand created by the industries and firms operated with the economy of the country. Here, the firms cater to the raw material needs of the companies, rather the consumers. In this case, the MNCs identify the market being created by the demand of factors of production by the firms. By matching the capability to meet the demand, firms enter into the market. For example, a steel manufacturing MNC enters into the industrial market of an overseas nation that has firms making products using steel. It can be real estate firms, bicycle or auto maker or firms making kitchen utensils. The demand of steel created by these firms are catered by the steel manufacturer MNC. It is also termed as B2B market.

The government market represents the demand created by the government enterprises. The government operates different institutions and maintains a huge workforce of different nature. To cater the needs of different institutions, government buys the merchandise of different nature. It creates a market that is known as government market. It is also present in all he overseas nation. For example, Lockheed Martin sells fighter jet to the air force of any government, and builds an advanced aero-defense system for the government, then it is the example of MNC catering to the government market. Here, the company fulfills the needs of the government and it is purely a demand created by the government. On a similar note, building a nuclear reactor for the government is also to cater the industrial market as private firms are not allowed to build the nuclear reactor on its own and generate power in some overseas nation due to the security reasons.

It is true that companies are eager to cater the markets, but they analyze the micro and macro business environment of the each foreign market before entering into that market.

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