Join Doug Ladd for an in-depth discussion in this video Rating systems to help with decision making, part of Marketing Foundations: International Marketing.
- Each of us makes decisions every day. But the bigger the decision that needs to be made the more rigor we put in to the process. When buying a car, it may help to create a list of the features important to you and whoever else is involved in the decision. You may do this in your mind or you may actually create a spreadsheet. But certainly, you weigh the big factors and compare them between your choices. A decision on international expansion can be similar. You've gathered all your information to assist you in making a recommendation and the amount of data can be a bit overwhelming.
The real challenge comes in trying to share all these learnings with others who may play a role in a decision making process. So what can you do? If you haven't yet experienced death by PowerPoint, a long and tedious exercise in self restraint as a presenter clicks through slide after slide of mind numbing graphs, charts, pictures and bulleted text, I implore you not to do this to your audience. The ability to crisply and cleanly show the factors you've considered in your decision and the manner in which you weighed them to make a recommendation, can be a differentiating skill in your career.
When considering new markets for your business this is an opportunity to either build a 100 slide PowerPoint deck or build a decision making tool that also helps you communicate your recommendation of how to take subjective inputs and present them in an objective manner. This tool can be as simple or as complicated as you'd like to make it. My vote would be for simplicity but you're the one that has to be comfortable with it. Across the top, I would put the key criteria that you're going to use to make your decision.
The outcomes of a PESTCL analysis could be one method of comparison for these three countries. You may choose to add some criteria in columns. Feel free to experiment with ideas and concepts. The important piece on these criteria is to weigh them appropriately. You can adjust these based upon the relative importance of the criteria to your company or business scenario. If you are in a highly regulated industry or one that is continually being buffeted by political trade winds, you may want to change the weighting here.
You could challenge each of these weights and discuss them with others involved in the decision making process. The next step is to determine how you are going to turn your subjective inputs into quantifiable numbers so you can score your options. My personal preference is to use a rating scale where five represents the best-in-class option for a given category. Three is used to score an option where it isn't outright objectionable but also not the best.
Finally, a one is used to denote that this is the least attractive consideration. I use the five-three-one method to drive specific choices and highlight the added value of an option being amongst the best-in-class. This seems to work better than a three-two-one scale. To get an even greater spread you could consider a nine-three-one model. You need to write out what these scores represent for each individual column. For example, a five in the political column could represent low barriers to entry and high transparency ratings.
A three could reflect some corruption in the industry. And a one could reflect trade restrictions and other significant barriers in your industry. If you solicit inputs on these descriptive statements for these scores, you'll likely find the product that comes out in the final scoring column is a subject of less debate. The key is to create a tool that will help you reach a decision, communicate that decision and assist others in the organization with buying into it. Experiment with this tool and revise it so it meets your needs.
Who knows? maybe you'll use something similar next time you buy a car.
The course also investigates options for global expansion, such as exporting, licensing, joint ventures, and direct investment, and details how to put together a successful marketing mix using distribution, promotional methods, and translation. Plus, learn where to turn for more information about your specific target markets.
- The rise of the global consumer
- Learning about customers in global markets
- Accessing foreign markets
- Adapting products
- Balancing risks and rewards