International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12-1
Module 12: International Markets: Assessment and Entry
Modes
YOUR CONTENT
Summary
Learning Objectives
Key Terms and Definitions
Content Outline
ENGAGEMENT & APPLICATION
Boxed Text Discussion Questions with Suggested Answers
End of Module Exercises
Critical Thinking Questions
globalEDGE Research Task
MiniCase
Bonus Activities
CONNECT TOOLS FOR ASSESSEMENT OF LEARNING
Connect Content Matrix
Connect Activities
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12-2
YOUR CONTENT
SUMMARY
This chapter introduces a screening process to assist in the analysis and assessment of foreign
markets based on environmental forces. This process consists of an examination of the forces in
LEARNING OBJECTIVES
LO 12-2 Discuss the value of trade missions and trade fairs.
LO 12-4 Explain international market-entry methods.
KEY TERMS AND DEFINITIONS
big data (p. 331)
The massive sets of data, both structured and unstructured,
that businesses are collecting, which can be analyzed with
advanced data analysis methods such as predictive
analytics or user behavior analytics to provide valuable
insights into consumer needs and trends
cluster analysis (p. 323)
Statistical technique that divides objects into groups based
on similarity
contracted manufacturing (p.
334)
An arrangement in which one firm contracts with another
to produce products to its specifications
country screening (p. 321)
A screening that uses countries as the basis for market
selection
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12-3
environmental scanning (p.
320)
A procedure in which the firm scans the world for changes
in the environmental forces that might affect it
franchising (p. 333)
A form of licensing in which one firm contracts with
another to operate a business under an established name
according to specific rules
joint venture (p. 334)
A cooperative effort among two or more organizations that
share a common interest in a business undertaking
licensing (p. 333)
A contractual arrangement in which one firm grants access
to its patents, trade secrets, or technology to another for a
fee
management contract (p. 334)
An arrangement by which one firm provides management
to another firm
market factors (p. 323)
Economic data that correlate highly with market demand
for a product
market indicators (p. 322)
Economic data used to measure relative market strength of
countries or geographic areas
market screening (p. 320)
A modified version of environmental scanning in which the
firm identifies desirable markets by eliminating the less
desirable ones
segment screening (p. 321)
A screening that uses market segments, a within-country
analysis of groups of consumers, as the basis for market
selection
social desirability bias (p. 330)
The respondent’s desire to please that leads to answers
designed to please the interviewer rather than reflect the
respondent’s true beliefs or feelings
strategic alliance (p. 334)
Collaboration with competitors, customers, and/or
suppliers that may take nonequity or equity form
trade fair (p. 329)
A large exhibition at which companies promote the sale of
their products
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
trade mission (p. 329)
A market visit by businesspeople and/or government
officials (state or federal) in search of business
opportunities
trend analysis (p. 323)
Statistical technique used to estimate future values by
successive observations of a variable at regular time
intervals that suggest patterns
turnkey project (p. 332)
An export of technology, management expertise, and
possibly capital equipment where a contractor agrees to
design and erect a plant, supply the process technology,
provide the production inputs, train the operating
personnel, and, after a trial run, turn the facility over to the
purchaser
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
CONTENT OUTLINE
The following section provides the flow of information using the LEARNING OBJECTIVES as a
guide, KEY TERMS learners will need to take away from the course, and LECTURE NOTES to drive
home teaching points.
LO 12-1
Review the steps of market screening and techniques for
environmental analysis.
• Market Screening Approaches and Techniques
o Initial Screening—Basic Needs Potential
o Second Screening—Financial and Economic Forces
o Third Screening—Political and Legal Forces
o Fourth Screening—Cultural Forces
o Fifth Screening—Competitive Forces
o Final Selection of New Markets
o Segment Screening
I. Market Screening Approaches and Techniques (See Figure 12.1)
A. Application of environmental scanning, but narrower.
B. Conducted at the country or segment level to eliminate potential markets.
II. First Screening—Basic Needs Potential
C. Influenced by climate, geography, and natural resources.
D. Some needs easy to assess (industrial goods); others more difficult, especially when desires
(chocolate).
E. Data include imports, local production.
III. Second Screening—Financial and Economic Forces
1. Market indicators: measures relative market strength.
2. Market factors: data that correlate highly with demand for product.
3. Trend analysis: statistical technique to measure future values.
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
IV. Third Screening—Political and Legal Forces
A. Barriers to entry: import/export barriers, limits on foreign ownership, limits on repatriation
of earnings.
B. Stable government policies (different from government stability).
V. Fourth Screening—Cultural Forces
A. Difficult because culture is subjective and interpretive.
VI. Fifth Screening—Competitive Forces
A. Review of competitors.
B. May need to review by subcultures (Brazilian markets in Japan).
VII. Final Selection of New Markets
A. Personal visit a good idea.
B. Collection of data may be necessary (consumer products).
VIII. Segment Screening
A. Across nationalities based on age, income, psychographics. Segments must be:
a. Definable—so they can be measured.
b. Large—worth the effort (3D printer manufacturing changes this).
c. Accessible.
LO 12-2
Discuss the value of trade missions and trade fairs.
• Trade missions and Trade Fairs
Key Terms:
• trade mission
• trade fair
I. Trade Missions
A. To seek out market opportunities.
B. Often with government or Chamber of Commerce support.
II. Trade Fairs
Hanover CeBIT show.)
B. Often organized by governments.
C. Source of marketing leads plus competitive intelligence.
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
LO 12-3
Describe some of the problems market researchers
encounter in foreign markets.
• Research in the Local Market and as Practiced
Key Terms:
• social desirability bias
• Big data
I. Research in the Local Market and as Practiced
A. Home country research methods used, may need to be adapted to local conditions.
B. Cultural problems may be present.
a. Language-related issues: translation and back-translation, many languages in one
country.
b. Low levels of literacy—limits mail surveys.
c. Who should be interviewed—may be difficult to determine decision-maker.
d. Respondent may try to please researcher—social desirability bias.
C. Availability of online data bases and big data increasing.
LO 12-4
Explain international market-entry methods.
• What Methods Are Available for Entering Foreign
Markets?
o Nonequity Modes of Entry
o Equity-Based Modes of Entry
Key Terms:
• turnkey project
• licensing
• franchising
• management contract
• contracted
manufacturing
• joint venture
• strategic alliance
I. What Methods Are Available for Entering Foreign Markets?
II. Nonequity Modes of Entry
A. Exporting—little investment and low level of risk.
B. Turnkey project—contractor designs and erects plant, supplies process technology and
production inputs, staffs and trains. When up and running, turned over to purchaser.
1. May involve licensing with royalty payments.
2. May lead to IP issues.
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12-8
E. Management contract—use in hotel, airline sectors.
F. Contracted manufacturing—firm contracts to produce goods to specification.
III. Equity-Based Modes of Entry
A. Wholly owned subsidiary.
B. Joint venture—cooperative effort to share business undertaking, drawing on expertise.
(Alliance may be a kind of JV, or may be nonequity.)
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12-9
ENGAGEMENT & APPLICATION
BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS
GLOBAL DEBATE: Should Africa be the Next Priority Market for International Companies?
The focus of this debate is about the growth and future prospects of the Sub-Saharan market.
This market currently includes over one billion people, but, because of high birth rates, is
1. What might make Sub-Saharan Africa an attractive market for entry by international
companies? Which types of firms or products might be expected to do best? Why?
2. What arguments could be made for why Sub-Saharan Africa would not represent an
attractive market for entry by international companies? Explain your reasoning.
Students will likely present many different examples to illustrate this. Corruption could present
IB IN PRACTICE: Uniqlo Tries to Succeed in U.S. Fashion Clothing Market
This section is about the Japanese fast-fashion company Uniqlo. Although they are the biggest
apparel chain in Asia with about 800 retail sites, they have struggled in the U.S. market with two
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–10
Copyright © 2020 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
types and that the styles do not appeal to Americans. There is also competition from other fast-
fashion retailers like H&M, Zara, and Forever 21, as well as from online retailers like Amazon.
Uniqlo clothing is generally of higher quality than these competitors, but they are having
trouble getting consumers to know that. At the end of 2018, Uniqlo had 53 stores in the U.S.,
but the brand is still relatively unknown outside of major urban areas.
1. What should Uniqlo’s strategy be for the U.S. market?
2. If Uniqlo were to design products specifically for the U.S. market, it would reduce their
economies of scale and harm their profitability. How should Uniqlo overcome this?
GET THAT JOB! FROM BACKPACK TO BRIEFCASE: Ella Michelich in Romania: Keep an Open
Mind When Entering a New Culture
Ella Michelich describes her experiences volunteering for a nonprofit in Romania, which was her
first trip abroad since a family trip to Mexico.
1. According to Michelich, what does it mean to have an “open mind” to a new country?
2. What opportunities exist at your institution for short-term work abroad?
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–11
END OF MODULE EXERCISES
CRITICAL THINKING QUESTIONS
1. Select a country and a product that you believe your firm can market there. Make a list of
the sources of information you will use for each screening.
Students will choose various products and countries. The goal of this exercise is to encourage
them to review sources for desk research.
2. What is the logic for the order of the screenings? Can you suggest a time when the order
might change?
3. A firm’s export manager examines the UN’s International Trade Statistics Yearbook and
finds that the company’s competitors have begun to export. Is there a way the manager can
learn to which countries the U.S. competitors are exporting?
4. Do a country’s imports completely measure the market potential for a product? Why or
why not?
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–12
5. What are three examples, either real or hypothetical, of political and legal barriers that
may eliminate a country from further consideration?
6. Trade missions are political junkets that get the taxpayer to fund a politician’s vacation. Do
you agree or disagree, and why?
The company representative who goes on a trade mission will learn firsthand about the market,
7. What are some of the complications that researchers may face when they collect primary
data in a foreign market? Give examples.
8. Consider the market segment screening method. Take a lifestyle segment—say, people
who like do-it-yourself home decorating. How would the segment screening method suggest
that you go about identifying potential foreign markets?
9. You are a consultant to the developers of the latest Spider-Man video game, responsible
for telling the Gameloft CEO where the likely international markets are. What do you do?
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–13
10. Assume that your academic unit (probably a college of business) wants to open a campus
in a foreign country and that the dean has asked you to prepare a list of possible countries.
How would you go about fulfilling the dean’s requirement?
GLOBAL EDGE RESEARCH TASK
Exercise 1
Search for ‘South Africa’ in globalEDGE and on the introduction page click on the country
commercial guide link listed under the ‘Quick Links’ subheader. The ‘Selling US Products &
Exercise 2
Market Potential Index (MPI) is available under the ‘Tools and Data’ tab on the top menu. The
dimensions and indicators (measures) used are listed on the main MPI landing page.
MINICASE: Clotaire Rapaille: Charlatan or Code Breaker Extraordinaire in International
Marketing Research?
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–14
Face-to-Face: Students develop responses to the questions in class in teams/groups and report
to the class on their outcomes.
1. Is Rapaille’s code system a short-cut code to understanding the complexities in culture and
a way to make market research easier? Or is it a superficial hoax sold by a charlatan?
2. As a manager, would you hire Clotaire Rapaille or his company to assist you in assessing
and interpreting international market opportunities?
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–15
BONUS ACTIVITIES
This section provides you with support of your course above and beyond what is found in the
text. We have developed these resources to support your course, to support your traditional,
hybrid, online, or flipped class.
VIDEO SUGGESTIONS
McGraw Hill’s collection of international business videos is available at
TEAM EXERCISES
These may be done individually or in groups or teams, either in or out of class, for later class
presentation. Some are also appropriate for hybrid and online courses.
1. Political Stability
Research areas of the world that have lagged economically behind the rest of the world. Choose
one country and further research how policy instability has affected the country’s economic
2. Key Terms Exercise: Meaningful Paragraph
Choose five key terms from the end of the chapter and write a paragraph using them. Your use
3. Screening Exercise
Assign small teams (up to 5 students) a product and 3 countries to screen as part of a market
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–16
SUPPLEMENTAL ACTIVITIES
Case Studies
Case studies that focus on intercultural issues and their effects in business environments are
Ivey Cases
“Cadim: The China and India Real Estate Market Entry Decisions” and “Cadim: China and India
Real Estate Deals” cases describe the need for assessment of investment opportunities by
CONTROVERSIAL ISSUES
1. Marketing Gurus or Snake Oil Salesmen?
The MiniCase in this module describes Clotaire Rapaille’s approach to marketing research, a far
cry from a systematic methodology. The introductory vignette in this module describes InSites
Consulting, another unusual marketing company that collects information through online
2. Current Events for Sources of Culture Controversy
A focus on current events that are relevant to the module’s topics is a good way to bring home
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–17
Copyright © 2020 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
class to discussion of current events. Recent relevant current events include the coming
opportunity for U.S. investment in Cuba and investment in developing economies. Depending
on the online interface, this activity may be done in chat forums (Blackboard) or discussion
boards, before class begins. This activity also works well in large lecture classes.
TEACHING SUGGESTIONS
1. This module is very important to students’ understanding of the process of market
assessment in international business.
2. Focusing on the boxed material and the case study will help students achieve the objectives
3. The Critical Thinking Questions at the end of the module will help in understanding chapter
content. These topics may be assigned as an outside class assignment. One of the problems in
giving textbook questions as outside assignments is that students frequently do not do the
4. Guest lecturers on international marketing are a way to underscore the importance of the
information in the market assessment module. Possible guests include:
• A market researcher who has conducted market entry assessments who can present
some interesting “battle stories” of marketing entry attempts.
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
12–18
CONNECT TOOLS FOR ASSESSEMENT OF LEARNING
CONNECT CONTENT MATRIX
For every chapter, please refer to the Connect Content Matrix to see what application exercises
are available and what Learning Objectives they help reinforce/assess.
Title
Assignment
Type
Topic(s)
Learning
Objective(s)
AACSB
Accreditation
Tagging
Bloom’s
Taxonomy
Market
Screening: The
Case of Ghana
Video Case
Statistical Techniques
for Estimating
Market Demand
12-01; 12-03
Analytical
Thinking
Understand
Equity-Based
Entry Modes
Case Analysis
Different Modes for
Entering Foreign
Markets
12–04
Analytical
Thinking
Understand
Nonequity
Modes of Market
Entry
Click and Drag
Nonequity Modes of
Market Entry
12–04
Analytical
Thinking
Understand
Market
Screening
Click and Drag
Environmental
Analysis and Market
Entry
12-01; 12-03
Analytical
Thinking
Understand
Research in the
Local Market
Click and Drag
International Market
Assessment
12-02; 12-03
Analytical
Thinking/
Reflective
Thinking
Analyze/
Understand
CONNECT ACTIVITIES
1. Market Screening: The Case of Ghana
Activity Summary: This is a video case in which students watch a short video about Ghana. It
describes how Ghana’s major exports are gold and coco and that the country has had
difficulties diversifying into other industries.
International Business, 2e
Geringer, McNett, Ball
Instructor Guide to Module 12
2. Equity-Based Entry Modes
3. Nonequity Modes of Market Entry
Activity Summary: This is a click and drag activity in which students must match boxes of
4. Market Screening
5. Research in the Local Market
Activity Summary: This is another click and drag exercise. In this one, students drag boxes of