Market Potential Indicator

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Market Potential Indicator Purpose of Indicator As the name states, it is a measure of the market potential of a country using several dimensions, ratings, indexes and percentages. Currently, emerging economies comprise more than half of the world's population, account for a large share of world output and have very high growth rates, which mean an enormous market potential. With global marketing becoming more important, companies and marketers are attempting to determine which international markets they would like to penetrate and the appropriate marketing strategy. Using the market potential indicator countries are distinguished by the recent progress they have made in economic liberalization using eight dimensions. Each dimension…show more content…
Economic Freedom This is basically a measurement of the degree of economic freedom. This index scores nations on 10 broad factors of economic freedom: business freedom, trade freedom, monetary freedom, freedom from government, fiscal freedom, property rights, investment freedom, financial freedom, freedom from corruption and labour freedom. Market Receptivity Average annual growth rate of imports and per capita imports from the United States. By the year 1998 the country risk dimension was added to the market potential indicator and was given a weight of 4/50 whilst changing the weights for all the other dimensions as well. Country Risk It reflects the ability and willingness of a country to service its financial obligations. Country risk may be prompted by a number of country-specific factors or events. There are three major components of country risk, namely economic, financial and political risk. As can be seen in the able above Asian countries dominate the table with 11 countries out of which four of them are at the top of the table. Focus on emerging market – China: China's ranking in the index has been fairly stable over the past decade (Appendix A,B,C), with steady improvement except for a spike during the period from 1998 – 2000 due to the Asian financial crisis, which made China risky country to invest in. Steps to improve rank The Chinese government has continued to pursue an active financial policy. It

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