THE MARKET 1. Careful study of the market necessary.—Before undertaking the development of the foreign market it is advisable to make a careful study of its possi bilities and requirements.
The first step is to determine which of the many markets shall be chosen. The character of the goods to be sold will frequently limit the choice. A manu facturer of Palm Beach cloth will not find buyers in the Northern European countries, while ice skates are not in demand in Central America.
Where the commodities are of more general appeal, it may prove more difficult to determine which market to enter first. Some firms enter several at once. Unless ample capital is available for the ven ture and a large office force can be maintained, such procedure is not to be recommended. It is better for a firm of moderate capital to develop one market at a time. The problems encountered in each are so many and so varied that attempting to solve them all together amounts to scattering one's energies over too wide a field.
2. Purchasing power of the of the first things to consider is the purchasing power of the market. National wealth and population taken to gether afford one index. More suggestive is the per capita income. Of course, neither is wholly reliable. They are to be considered in connection with classes and occupations, density and character of population, whether urban or rural, buying habits, prices, amount of competition, and other factors.
3. Character of goods differences in wealth of the social classes of a country will to a large degree determine the character of goods which the market can absorb. The Ford has established itself as a middle class car in the United States. Tho the sale of cheap cars has been much increased in Europe since the war, no general use of the automobile can be expected on the Continent, at least for many years to come. Class distinctions are too sharply drawn in spite of war's leveling. The rich would not use so cheap a car, the middle class is not quite sure that it is not too presuming to affect a private car, and the working people cannot afford one. The ex
pensive car, cycle and motorcycle will continue to con trol the pleasure vehicle market in most quarters.
The more narrowly the wealth of a country is held the less sale is there for middle class articles. In British India the great market is for extremely cheap articles, but along with that demand is one for a limited quantity of high class articles.
Customs, historical prejudices and religion play an important part in foreign trade. Spain is a large buyer of goods of a religious nature. The sale of rosaries, images and other such articles is in the hands of the government. In China articles which bear the required lucky marks and the favorite dragon design are in demand. Suspenders find a better market in Europe than in the belt-wearing United States.
A careful study should be made of the relative prices ; those paid for similar articles, and the design and the quality of the articles. It should constantly be borne in mind that in order to sell abroad it is nec essary to supply goods that are wanted, in the way they are wanted. Foreign peoples are more set in their preferences than our own. It may be possible to educate them to demand better or, at any rate, dif ferent things from what they have been buying but the safest and least expensive way to start in is to sell them what they want and leave the education until later.
4. Time 'needed for delivery.—After the character and quality of the goods that can be sold in a given market have been estimated, other considerations need attention. One of these is the time needed for de livery. If transportation facilities are inadequate, the exporter may find it necessary to establish store houses abroad to assure quick delivery. If the profit does not permit it, he must find some other way of getting around the difficulty, or stay out of the market.