The choice of which country or countries to enter is a critical decision and needs to be made with considerable care and deliberation. Initial market entry decisions have typically focused on country evaluations based on macro‐economic data. While appropriate in providing an initial screening of countries, other factors, notably contextual factors, can provide important insights in assessing international market opportunities. The purpose of this paper is to examine the impact of context at four distinct levels.
The literature on the influence of context on consumption and purchase behavior is reviewed to provide a framework to understand contextual factors as a means to refine entry strategy and develop effective segmentation strategies.
A wide range of contextual factors exert influence on consumption choices and contribute to within‐country heterogeneity. These are typically examined at the macro‐level, but also need to be examined at the meso‐level, micro‐level and situational level to fully assess market opportunities and establish viable market segments.
Examination of contextual factors provides a richer and deeper understanding of which international markets to enter and which segments to target. Within‐country cultural diversity, dramatic economic and regional disparities and marked differences in the infrastructure need to be assessed. In particular, examination of contextual factors helps to shed light on heterogeneity within countries not only in customer behavior, but also in the nature of the market infrastructure. This is a key element, not only in formulating entry and segmentation strategies, but also in implementing those strategies.
The effect of context has received little attention to date. The current paper highlights the importance of considering contextual factors and their impact on consumption behavior – an issue which has largely been ignored in previous research.
