Academic journal article International Journal of Marketing Studies

Determining New Markets Using Analytic Hierarchy Process: Case Study in Güral Porcelain

Academic journal article International Journal of Marketing Studies

Determining New Markets Using Analytic Hierarchy Process: Case Study in Güral Porcelain

Article excerpt

Abstract

The aim of this study is to solve the problem of determining the most appropriate new market upon which Güral Porcelain, a Turkish ceramic company exporting to various countries, will invest within the scope of market development strategy. In accordance with the purpose of the study, analytic hierarchy process (AHP), which enables to choose the most appropriate one among the alternatives by using both numeric and nonnumeric criteria, was used. The study was carried out together with Güral Porcelain Export Department Executive. Total eight main criteria were determined in the study: operating assets, communication infrastructure of the target market, economic growth rate, proximity to other markets, competitive advantage in the target market, demand, functioning of the legal system and trade agreements with the target market-exemption. After paired comparison of the main criteria, their relative importance values were determined. According to these significance values, it was seen that the criterion of "demand in the target market" was the most crucial criterion in choosing the new market to invest on for Güral Porcelain. Relative importance values of the alternatives were computed and the most suitable new market for Güral Porcelain to invest was determined to Northern Iraq. This was presented to the Güral Porcelain Export Department Executive. In this study, the most appropriate market for Güral Porcelain to invest was determined using AHP. Thus, decision makers seeking for new markets to raise their brand value in global porcelain sector were guided in determining the most suitable target market.

Keywords: growth strategy, Ansoff matrix, market development, market selection, Analytic Hierarchy Process (AHP)

1. Introduction

Strategic change process is determined using the data acquired from the interaction between strategies and environmental elements, business structure and dynamics (Ansoff, 1987:514; Lombriser and Ansoff, 1995:95-108). In this context, according to Ansoff (1977:58-77), trade environment in the market, state subsidies, political environment, job safety and constraints, market resistance and potential, laws, social norms, resources and background information, business structure, capabilities and culture should be analysed. Ansoff (1975:26) claims that these three main elements in strategic change improve awareness and approach of the business, enhance its flexibility and enable its development by making the right move to opportunities and against threats.

Growth is a crucial performance criterion and success scale for businesses (Skrt, 2004:108). Due to the powerful effect of competition, business executives aim to grow by launching new products, adding additional values to existing products and acquiring new markets (Porter, 1996:6-17). In order for businesses to grow, they should possess certain principles. Businesses should provide presentations at the right time and place to the right customers involving existing or new products that will meet the customer needs through new processes and appropriate distribution paths, will do them some good and will be able to be differentiated from rival products. Within this process, the following are important: innovation in product production and delivery, pursuing the opportunities that could give competitive advantage, sustainability, a clear vision, long-term strategies, effective risk management, a successful administration and profitability (McKaskill, 2010:4-7)

Ansoff (1965:163-164) emphasizes that businesses are affected by their environment and should defined the main environmental elements to plan their activities. Within the scope of this definition, the product dynamics should be analysed first. Technologic development, increase in customer demands and product innovations have become important tools for businesses to acquire competitive advantage and for their growth. Also, businesses are in search of new markets for their existing and/or new products. …

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