Evaluate the potential risks and rewards to NFP of market development into country Y.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2017). The mark or mark type is shown in brackets.

1. [16] International marketing – selling products to another country's market;
2. [16] Market development – selling existing products in a new market
3. [16] Different consumer tastes (not just an ethnic factor) – are milk based desserts popular in Y?
4. [16] Risks: different cultures – many more ethnic groups in Y so will NFP's food products be accepted in that country
5. [16] Lower GDP per head
6. [16] Rewards: higher economic growth
7. [16] Younger population
8. [16] Not using an agent – no local knowledge
9. [16] Few competitors
10. [16] Different consumer tastes (not just an ethic factor) – are milk based desserts popular in Y? Essential to undertake more rigorous market research into Y's food market
11. [16] Risks: different cultures – many more ethic groups in Y so will NFP's food products be accepted in that country e.g. meat products might contain beef or meat from animals not killed in a certain way. Could cause major problems with ethic/religious groups which would then make it hard to get established
12. [16] Lower GDP per head – lower incomes means consumers will not be buying more expensive food products – NFP will have to take this into account with its pricing and promotion decisions
13. [16] Rewards: higher economic growth – as consumer incomes increase, the demand for income elastic food products (processed foods rather than raw food) might increase
14. [16] Younger population – likely to be an increasing population which means a potentially growing market
15. [16] Not using an agent – no local knowledge; contacts with Y's shops will have to be built up by NFP's employees and this will take time
16. [16] Few competitors – NFP may be able to establish a high market share quickly and will have less price competition.
17. [16] Are rewards potentially greater than risks? In which case this is a wise decision
18. [16] Are risks greater than rewards? In which case this international market should not go ahead or more research should be undertaken or local agents used to provide local knowledge/contacts.
19. [16] Justifies case for additional information before final assessment can be made