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 an example of each. For this discussion question, you must support your analysis with a peer-reviewed article. The article must be published between 2015 and 2020. Examples of journals with peer-reviewed articles include

the Journal of International Business Studies, the International Business Review, and the Journal of International Marketing.

In examining foreign markets, companies often categorize them into three major markets: consumer market, industrial market, and government market.

The consumer market is the most familiar of the three and refers to individuals or households that purchase goods and services for personal use. This market is driven by consumer behavior and preferences, and companies must carefully analyze consumer demographics, psychographics, and buying behavior in order to effectively target their products or services. For example, a company looking to enter the consumer market in China might examine factors such as population size, income levels, cultural preferences, and consumer trends in different regions of the country. By understanding these market characteristics, the company can tailor its offerings to meet the specific needs and preferences of consumers in different segments of the Chinese market.

The industrial market, also known as the business-to-business (B2B) market, consists of organizations that purchase goods and services for further production or as inputs into their business processes. Compared to the consumer market, the industrial market is often characterized by larger order sizes, longer sales cycles, and more complex buying processes. When targeting the industrial market, companies need to identify key decision-makers and influencers within the organizations, understand their needs and requirements, and develop value propositions that address their specific challenges. For instance, a company in the medical device industry seeking to expand its presence in the European market might research the procurement practices of hospitals and healthcare organizations, the regulatory environment, and competitive dynamics in order to design a strategy that aligns with the unique demands of the industrial market.

The third major market is the government market, which consists of government agencies and entities at various levels (local, regional, national) that purchase goods and services to support their operations and provide public services. The government market is characterized by a high degree of regulation, bureaucratic procedures, and specific procurement guidelines. Companies seeking to enter this market must navigate complex procurement processes, establish relationships with key decision-makers, and meet stringent compliance requirements. An example of the government market can be seen in defense contractors that compete for contracts with national defense agencies around the world. These companies must understand the specific needs and requirements of government agencies, comply with defense procurement regulations, and demonstrate the capability to deliver high-quality products and services for national security purposes.

To support the analysis of these three major markets, a peer-reviewed article published between 2015 and 2020 can provide valuable insights. One such article is “Market Selection Decisions in the Internationalization Process: A Systematic Review and Future Research Agenda” by Zhaoyang Guan and Shasha Zhao, published in the Journal of International Business Studies in 2016. This article analyzes the factors influencing market selection decisions in the internationalization process, including the relevance of consumer, industrial, and government markets. It reviews existing literature on market selection and proposes a future research agenda in this area.

Guan and Zhao highlight the significance of understanding the characteristics and dynamics of consumer, industrial, and government markets for successful market entry and expansion. Their research emphasizes the importance of aligning market selection decisions with the company’s strategic objectives and capabilities, as well as the need for comprehensive market analysis and intelligence gathering. This article serves as a comprehensive resource for companies aiming to make informed decisions about entering and targeting foreign markets.

In conclusion, when examining foreign markets, companies typically categorize them into consumer, industrial, and government markets. Each market segment possesses unique characteristics, and companies must conduct thorough research and analysis to understand the specific dynamics and requirements of each market. By utilizing peer-reviewed articles, such as Guan and Zhao’s research, companies can enhance their understanding of these markets and make informed decisions regarding market entry and target segmentation.