          
                             MARKET RESEARCH
          
          
          To be successful, exporters must assess their markets
          through market research. Exporters engage in market
          research primarily to identify their marketing
          opportunities and constraints within individual foreign
          markets and also to identify and find prospective buyers
          and customers.
          
          Market research includes all methods that a company uses to
          determine which foreign markets have the best potential for
          its products. Results of this research inform the firm of
          
          *    the largest markets for its product,
          *    the fastest growing markets,
          *    market trends and outlook,
          *    market conditions and practices, and
          *    competitive firms and products.
          
          A firm may begin to export without conducting any market
          research if it receives unsolicited orders from abroad.
          Although this type of selling is valuable, the firm may
          discover even more promising markets by conducting a
          systematic search. A firm that opts to export indirectly
          (see chapter 4) by using an intermediary such as an EMC or
          ETC may wish to select markets to enter before selecting
          the intermediary, since many EMCs and ETCs have strengths
          in some markets but not in others.
          
          A firm may research a market by using either primary or
          secondary data resources. In conducting primary market
          research, a company collects data directly from the foreign
          marketplace through interviews, surveys, and other direct
          contact with representatives and potential buyers.  Primary
          market research has the advantage of being tailored to the
          company's needs and provides answers to specific questions,
          but the collection of such data is time-consuming and
          expensive.
          
          When conducting secondary market research, a company
          collects data from compiled sources, such as trade
          statistics for a country or a product.  Working with
          secondary sources is less expensive and helps the company
          focus its marketing efforts. Although secondary data
          sources are critical to market research, they do have
          limitations. The most recent statistics for some countries
          may be more than two years old. Product breakdowns may be
          too broad to be of much value to a company. Statistics on
          services are often unavailable. Finally, statistics may be
          distorted by incomplete data-gathering techniques. Yet,
          even with these limitations, secondary research is a
          valuable and relatively easy first step for a company to
          take. It may be the only step needed if the company decides
          to export indirectly through an intermediary, since the
          other firm may have advanced research capabilities.
          
          METHODS OF RESEARCH
          
          Because of the expense of primary market research, most
          firms rely on secondary data sources. Secondary market
          research is conducted in three basic ways:
          
          1.   By keeping abreast of world events that influence the
               international marketplace, watching for announcements
               of specific projects, or simply visiting likely
               markets. For example, a thawing of political
               hostilities often leads to the opening of economic
               channels between countries.
          
          2.   By analyzing trade and economic statistics. Trade
               statistics are generally compiled by product category
               and by country. These statistics provide the U.S. firm
               with information concerning shipments of products over
               specified periods of time. Demographic and general
               economic statistics such as population size and
               makeup, per capita income, and production levels by
               industry can be important indicators of the market
               potential for a company's products.
          
          3.   By obtaining the advice of experts. There are several
               ways of obtaining expert advice:
          
               *    Attending seminars, workshops, and international
                    trade shows.
          
               *    Hiring an international trade and marketing
                    consultant.
          
               *    Talking with successful exporters of similar
                    products.
          
               *    Contacting trade and industry association staff.
          
          Gathering and evaluating secondary market research can be
          complex and tedious. However, several publications are
          available that can help simplify the process. The following
          approach to market research refers to these publications
          and resources described later in this chapper.
          
          A STEP-BY-STEP APPROACH TO MARKET RESEARCH
          
          The U.S. company may find the following approach useful.
          
          1.   Screen potential markets.
          
          *    Step 1. Obtain export statistics that indicate product
               exports to various countries.
          
          *    Step 2. Identify 5 to 10 large and fast-growing
               markets for the firm's product. Look at them over the
               past three to five years. Has market growth been
               consistent year to year? Did import growth occur even
               during periods of economic recession? If not, did
               growth resume with economic recovery?
          
          *    Step 3. Identify some smaller but fast-emerging
               markets that may provide ground-floor opportunities.
               If the market is just beginning to open up, there may
               be fewer competitors than in established markets.
               Growth rates should be substantially higher in these
               countries to qualify as up-and-coming markets, given
               the lower starting point.
          
          *    Step 4. Target three to five of the most statistically
               promising markets for further assessment. Consult with
               Commerce district offices, business associates,
               freight forwarders, and others to help refine targeted
               markets.
          
          2.   Assess targeted markets.
          
          *    Step 1. Examine trends for company products as well as
               related products that could influence demand.
               Calculate overall consumption of the product and the
               amount accounted for by imports. Industry sector
               analyses (ISAs), alert reports, and country marketing
               plans, all from the U. S. Department of Commerce, give
               economic backgrounds and market trends for each
               country.  Demographic information (population, age,
               etc.) can be obtained from World Population (Census)
               and Statistical Yearbook (United Nations).
          
          *    Step 2. Ascertain the sources of competition,
               including the extent of domestic industry production
               and the major foreign countries the firm is competing
               against in each targeted market, by using ISAs and
               competitive assessments. Look at each competitor's
               U.S. market share.
          
          *    Step 3. Analyze factors affecting marketing and use of
               the product in each market, such as end user sectors,
               channels of distribution, cultural idiosyncrasies, and
               business practices. Again, ISAs are useful, as is the
               Comparison Shopping Service (CSS) offered by Commerce.
          
          *    Step 4. Identify any foreign barriers (tariff or
               nontariff) for the product being imported into the
               country (see chapter 11 for an analysis of tariff and
               nontariff barriers). Identify any U.S.  barriers (such
               as export controls) affecting exports to the country.
               Country information kits produced by the Overseas
               Private Investment Corporation (OPIC) can be helpful.
          
          *    Step 5. Identify any U.S. or foreign government
               incentives to promote exporting of the product or
               service.
          
          3.   Draw conclusions.
          
          After analyzing the data, the company may conclude that its
          marketing resources would be applied more effectively to a
          few countries. In general, efforts should be directed to
          fewer than 10 markets if the company is new to exporting;
          one or two countries may be enough to start with. The
          company's internal resources should help determine its
          level of effort.
          
          
          SOURCES OF MARKET RESEARCH
          
          There are many domestic, foreign, and international sources
          of information concerning foreign markets. Available
          information ranges from simple trade statistics to in-depth
          market surveys.
          
          Trade statistics indicate total exports or imports by
          country and by product and allow an exporter to compare the
          size of the market for a product among various countries.
          Some statistics also reflect the U.S.  share of the total
          country market in order to gauge the overall
          competitiveness of U.S. producers. By looking at statistics
          over several years, an exporter can determine which markets
          are growing and which are shrinking.
          
          Market surveys provide a narrative description and
          assessment of particular markets along with relevant
          statistics. The reports are often based on original
          research conducted in the countries studied and may include
          specific information on both buyers and competitors.
          
          
          The following sources fall into two broad categories --
          general information resources and industry- or
          country-specific information resources. Each category is
          divided into several subgroups.
          
          GENERAL INFORMATION RESOURCES
          
          One of the best sources of information is personal
          interviews with private and government officials and
          experts. A surprisingly large number of people in both the
          public and private sectors are available to assist
          exporters interested in any aspect of international market
          research. Either in face-to-face interviews or by
          telephone, these individuals can provide a wealth of market
          research information.
          
          In the private sector, sources of market research expertise
          include local chambers of commerce, world trade centers or
          clubs, and trade associations. In the federal government,
          industry and commodity experts are available through the
          Department of Commerce, USDA, and SBA. In addition, these
          agencies provide the following publications, many of which
          can be found in local libraries.
          
          Worldwide General Information
          
          *    International Financial Statistics (IFS). Published by
          the International Monetary Fund, IFS presents statistics on
          exchange rates, money and banking, production, government
          finance, interest rates, and other subjects. It is
          available by monthly subscription for $188 yearly
          (yearbook, $50 alone, included in the price); single copy,
          $20. Contact International Financial Statistics,
          Publication Services, Room C100, 700 19th Street, N.W.,
          Washington, DC 20431; telephone 202-623-7430.
          
          *    UN Statistical Yearbook. Published by the United
          Nations (UN), this yearbook is one of the most complete
          statistical reference books available. It provides
          international trade information on products, including
          information on importing countries useful in assessing
          import competition. The yearbook contains data for 220
          countries and territories on economic and social subjects
          including population, agriculture, manufacturing,
          commodity, export-import trade, and many other areas. The
          latest edition available (1987) is about 900 pages and
          costs $100. Contact United Nations Publications, Room
          DC2-0853, New York, NY 10017; telephone 212-963-8302.
          
          *    World Bank Atlas. The World Bank Atlas provides
          demographics, gross domestic product, and average growth
          rates for every country. The latest edition, 1990, covers
          data for 1980 to 1989 and costs $6.95. Contact World Bank
          Publications, 1818 H Street, N.W., Washington, DC 20433;
          telephone 202-473-1154.
          
          *    World Factbook. Produced annually by the CIA, this
          publication provides country-by-country data on
          demographics, economy, communications, and defense. The
          cost is $23 (GPO:041-015-00169-8).  Contact Superintendent
          of Documents, U.S. Government Printing Office, Washington,
          DC 20402; telephone 202-783-3238.
          
          *    World Population. The U.S. Bureau of the Census
          collects and analyzes worldwide demographic data that can
          help exporters identify potential markets for their
          products. Information on each country _ total population,
          fertility, mortality, urban population, growth rate, and
          life expectancy _ is updated every two years. It also
          contains detailed demographic profiles of individual
          countries, including analysis of labor force structure,
          infant mortality, and so on. The cost of the latest
          edition, 1989, is $7.50 (GPO:031-024-07074-0). Contact
          Superintendent of Documents, U.S. Government Printing
          Office, Washington, DC 20402; telephone 202-783-3238.
          
          *    Worldcasts. This eight-volume annual series presents
          60,000 abstracted forecasts for products and markets
          outside the United States (150 countries). Forecasts are
          arranged by modified standard industrial classification
          (SIC) codes and are typically one-line entries providing
          short- and long-range projections for consumption,
          employment, production, and capacity. A product volume and
          a regional volume are published each quarter. The complete
          annual set of four product volumes and four regional
          volumes costs $1,300; the product set and the regional set,
          $900 each; single volumes, $450 each. Contact Predicasts,
          11001 Cedar Avenue, Cleveland, OH 44106; telephone
          800-321-6388 or 216-795-3000.
          
          GENERAL INDUSTRY AND AGRICULTURE INFORMATION
          
          Industry Information
          
          *    Foreign Trade Report: Monthly Exports and Imports _
          SITC Commodity by Country, FT 925. This monthly publication
          by the Department of Commerce provides statistics on all
          export and import trade engaged in by the United States.
          Annual subscription cost is $139 (GPO:703-091-00000-8).
          Contact Superintendent of Documents, U.S.  Government
          Printing Office, Washington, DC 20402; telephone
          202-783-3238.
          
          *    U.S. Industrial Outlook. This annual publication of
          the Department of Commerce provides economic and commercial
          assessments and forecasts on U.S. industry, including
          statistics on trade, investment, and finance. The cost for
          the 1991 edition is $28 (GPO:003-009-00586-8).  Contact
          Superintendent of Documents, U.S. Government Printing
          Office, Washington, DC 20402; telephone 202-783-3238.
          
          *    Export Information System Data Reports. Produced by
          the SBA, each data report covers approximately 2,700
          product categories. XIS helps small businesses determine
          which export markets to pursue. Upon request, SBA provides
          a small business with a list of the 25 largest importing
          markets for its product, the 10 best markets for U.S.
          exporters of that product, the trends in those markets, and
          the major sources of foreign and UN data. This service is
          available free to small business. Contact the local SBA
          field office or telephone the Small Business Answer Desk,
          800-368-5855 or 202-653-7561.
          
          Agriculture Information
          
          *    AgExporter. This monthly magazine is published by the
          USDA's FAS.  Appealing to the farm exporter, the articles
          analyze conditions affecting U.S. agricultural trade.
          AgExporter highlights market development and export
          activity. The annual subscription cost is $14.  Contact
          Trade Assistance and Planning Office, Foreign Agricultural
          Service, U.S. Department of Agriculture, Washington, DC
          20250; telephone 703-756-6001.
          
          *    Export Briefs. This weekly bulletin produced by the
          FAS presents current news and statistics on world
          production and trade of agricultural commodities and
          highlights upcoming trade shows. Available free and on line
          (electronically). Contact High-Value Products Division,
          Foreign Agricultural Service, U.S. Department of
          Agriculture, Washington, DC 20250; telephone
          202-447-3031.
          
          *    Trade Policies and Opportunities for U.S. Farm
          Products. Published by the FAS, these reports document the
          policies other governments use to help their agricultural
          exporters compete against U.S. suppliers. Also identified
          are import barriers to U.S. farm products and marketing
          opportunities for U.S. agricultural exporters. Fifty
          countries and the trading blocs of the European Community
          (EC) and the Gulf Cooperative Council are covered.
          Available free. Contact Trade Assistance and Planning
          Office, FAS, U.S. Department of Agriculture, Washington, DC
          20250; telephone 703-756-6001.
          
          Country and Area Information
          
          *    Country marketing plans (CMPs). CMPs are prepared
          annually by the commercial sections of U.S. embassies for
          the US&FCS, covering 67 countries. Each CMP is a planning
          tool that analyzes an individual country's business and
          economic climate, emphasizing the marketing and trade
          statistics, development, and issues. CMPs are available at
          $10 per report through the Commercial Information
          Management System (CIMS).
          
          *    Foreign Economic Trends (FETs). Published by the
          Department of Commerce, each FET covers a single country
          and provides in-depth assessment of political, commercial,
          economic, and investment conditions and developments.
          Special emphasis is given to implications for U.S.
          business opportunities. Annual subscription cost is $50
          (GPO:  803-006-00000-8). Contact Superintendent of
          Documents, U.S. Government Printing Office, Washington, DC
          20402; telephone 202-783-3238.
          
          *    Overseas Business Reports (OBRs). Published by the
          Department of Commerce, the OBRs provide background
          statistics and information on specific countries useful to
          exporters, current economic and commercial profiles, and
          information on U.S. foreign trade with the country. Annual
          subscription is $14 (GPO:803-007-00000-4). Contact
          Superintendent of Documents, U.S. Government Printing
          Office, Washington, DC 20402; telephone 202-783-3238.
          
          *    Background Notes. This series surveys a country's
          people, geography, economy, government, and foreign policy.
          Prepared by the Department of State, it includes important
          national economic and trade information, including major
          trading partners. Available by set or by subscription.
          Price of the set is $58 (GPO:844-000-914-7); with binder,
          add $4.75. Annual subscription cost is $18
          (GPO:844-002-00000-9).  Contact Superintendent of
          Documents, U.S. Government Printing Office, Washington, DC
          20402; telephone 202-783-3238.
          
          *    Commercial Activities Report (CAR). The CAR is
          prepared annually by the economic and commercial sections
          of the U.S. embassies, covering 67 countries where the
          Department of Commerce is not represented. Designed as a
          planning tool, each CAR provides the basis for an ongoing
          evaluation of a particular country's political, economic,
          and business activities. Special emphasis is given to
          identifying U.S. marketing opportunities, particularly to
          assessing market potential and strategies for increasing
          U.S. sales. Topics include the commercial setting and
          trends, import data, best prospects, major projects, and
          trade information and event activity. CARs are available at
          $10 per report through CIMS. Contact the local
          Commerce district office or telephone 202-377-4767.
          
          *    Congressional Presentations of the State Department's
          Trade and Development Program. This annual document reports
          Department of State dollar expenditures by industry in
          specific countries around the world for the past several
          years. (For a description of U.S. Trade and Development
          Program [TDP] activities to stimulate U.S. exports, see
          chapter 7.) Contact U.S. Department of State, Information
          Office, Trade and Development Program, Room 301, SA-16,
          Washington, DC 20523; telephone 703-875-4357.
          
          
          *    Country information kits. Covering developing
          countries and 16 regions worldwide, the kits are put
          together by OPIC. Each kit includes most of the background
          information considered necessary when a business is
          considering entry into a specific foreign market. Available
          free.  Contact Overseas Private Investment Corporation,
          1615 M Street, N.W., Washington, DC 20527; telephone
          800-424-OPIC or 202-457-7128.
          
          *    Exporters Encyclopedia. This extensive handbook on
          exporting is updated annually and contains exhaustive,
          in-depth shipping and marketing information. More than 220
          world markets are covered country by country. Topics
          include country profile, communications, trade regulations,
          documentation, marketing data, health and safety
          regulations, transportation, and business travel. The
          annual price is $535. Contact Dun's Marketing Services, 3
          Sylvan Way, Parsippany, NJ 07054-3896; telephone
          800-526-0651 or 201-605-6749.
          
          *    Foreign Agriculture. This annual factbook published by
          the FAS presents agricultural profiles of 65 countries,
          focusing on production, marketing, and trade, and it
          includes a full atlas of world agriculture with maps and
          graphics. The cost is $12. Contact Trade Assistance and
          Planning Office, Foreign Agricultural Service, U.S.
          Department of Agriculture, Washington, DC 20250; telephone
          703-756-6001.
          
          *    Investment climate statements (ICSs). ICSs are
          prepared annually by the commercial sections of the U.S.
          embassies for the US&FCS, covering 67 individual countries
          and designed as a planning tool. Through statistics,
          policies, issues, and analyses, each ICS comprehensively
          assesses a particular country's environment for direct
          investment, particularly foreign direct investment.
          Available at $10 per report through CIMS and NTDB. Contact
          the local Commerce district office or telephone
          202-377-4767.
          
          *    Organization for Economic Cooperation and Development
          (OECD) surveys. These economic development surveys produced
          by OECD cover each of the 24-member OECD countries
          individually. Each survey presents a detailed analysis of
          recent developments in market demand, production,
          employment, and prices and wages. Short-term forecasts and
          analyses of medium-term problems relevant to economic
          policies are provided. The surveys are shipped from France.
          The complete set costs $180 ($203, airmail); a single copy,
          $13. Contact Organization for Economic Cooperation and
          Development, Publications and Information Center, 2001 L
          Street, Suite 700, Washington, DC 20036; telephone
          202-785-6323.
          
          *    OECD publications. OECD publishes widely on a broad
          range of social and economic issues, concerns, and
          developments, including reports on international market
          information country by country, such as import data useful
          in assessing import competition. The chartered mission of
          OECD is to promote within and among its 24-member countries
          policies designed to support high economic growth,
          employment, and standard of living and to contribute to
          sound economic expansion in development and in trade. For
          information and prices on these publications, contact
          Organization of Economic Cooperation and Development,
          Publications and Information Center, 2001 L Street, Suite
          700, Washington, DC 20036; telephone 202-785-6323.
          
          DETAILED PRODUCT-AND INDUSTRY-SPECIFIC DATA RESOURCES
          
          U.S. Government Product and Industry Resources
          
          *    Comparison Shopping Service. CSS is a custom market
          survey service produced by US&FCS. On request, CSS provides
          a U.S. firm with detailed market information on a selected
          single product in a selected market worldwide. CSS answers
          basic questions about the marketability of the product, key
          competitors, comparative prices, customary distribution and
          promotion practices, trade barriers, and other factors.
          Available at fees ranging from $500 to $4,000 depending on
          the particular country market chosen. Contact the local
          Commerce district office or telephone 202-377-4767.
          
          *    Industry sector analyses. Prepared by the commercial
          sections of the U.S. embassies for US&FCS, ISAs provide the
          basis for quickly sizing up one particular commercial or
          industrial market in a particular country. ISAs present
          market demand, market size, competitive analysis, end user
          analysis, and market access criteria as well as marketing
          opportunities. Available at $10 per report through CIMS.
          Contact the local Commerce district office or telephone
          202-377-4767.
          
          *    Alert reports. Prepared on an ad hoc basis by the
          economic and commercial sections of U.S. embassies and
          consulates for US&FCS, alert reports help to identify
          unique market situations and marketing opportunities for
          U.S. business. Available at $10 per report through CIMS and
          EBB. Contact the local Commerce district office or
          telephone 202-377-4767.
          
          *    Agricultural Trade Highlights. The Highlights,
          published by FAS, provide economic analyses of major
          overseas markets and demand trends.  They also provide
          in-depth monthly summaries of major activities and events
          affecting U.S. agriculture exports and imports, and
          year-to-date summaries of commodity performance. Available
          as a single free copy or by subscription. For a single free
          copy, contact Information Division, Foreign Agricultural
          Service, U.S. Department of Agriculture, Washington, DC
          20250; telephone 202-447-7937. For the annual subscription,
          contact Trade Assistance and Planning Office, Foreign
          Agricultural Service, U.S. Department of Agriculture,
          Washington, DC 20250; telephone 703-756-6001.
          
          *    Staff papers on best prospects. These reports,
          produced by FAS, offer the best overall prospects for
          expansion of U.S. agricultural products over the next three
          to five years. They cover about 15 countries and are
          available free. Contact Trade Assistance and Planning
          Office, Foreign Agricultural Service, U.S. Department of
          Agriculture, Washington, DC 20250; telephone 703-756-6001.
          
          Private Sector Product and Industry Resources
          
          *    American Export Register. This two-volume directory of
          38,000 U.S.  exporters and the materials, products, or
          services they sell internationally is published annually.
          Advertising is accepted. The cost is $120. Contact Thomas
          International Publishing Company, Inc., One Penn Plaza, New
          York, NY 10119; telephone 212-290-7343.
          
          *    Export Shipping Manual. Published annually and updated
          weekly, the manual is a three-volume looseleaf reference
          service containing up-to-date, country-by-country shipping
          and market research information.  Social, political,
          economic, and commercial conditions of each country are
          profiled. Detail is given to policies, regulations, issues,
          development, and laws pertaining to commerce, especially
          foreign trade.  The cost is $524. Contact Bureau of
          National Affairs, Inc., Distribution Center, Keywest
          Avenue, Rockville, MD 20850; telephone 800-372-1033 or
          202-452-4200.
          
          *    FINDEX: The Directory of Market Research Reports,
          Studies and Surveys. This reference guide to commercially
          available market and business research, including
          international market research, contains more than 10,000
          listings of reports, studies, and surveys. The 1991 edition
          (900 pages) costs $325 (ISBN:0-942189-03-5). Contact
          Cambridge Information Group, 7200 Wisconsin Avenue,
          Bethesda, MD 20814; telephone 800-227-3052 or 301-961-6750.
          
          *    Inside Washington: The International Business
          Executive's Guide to Government Money and Resources. This
          publication is a complete source book on government
          assistance programs and services. It is organized the way
          executives think about international business and includes
          comprehensive contact information. The latest edition, 1988
          (ISBN:0-8191-6934-X), is 295 pages long and costs $49.95.
          Inside Washington publications are now available for
          specific industry sectors and have a special emphasis on
          financial support programs. Each book contains case studies
          and a comprehensive exporters telephone directory.  The
          following editions are available at $24.95 each:
          Environment-Money, High Technology, and Food-Business.
          Contact Delphos International, 600 Watergate N.W., Suite
          960, Washington, DC 20037; telephone 800-288-2582 or
          202-337-6300; fax 202-333-1158.
          
          *    Electronic data bases. A number of private sector data
          bases are available to provide specific marketing
          information for firms interested in doing business
          internationally, such as the PIER service of the Journal of
          Commerce and DIALOG. Many of these data bases are
          accessible both at local public libraries and universities
          and directly by personal computer.
          
