AHP and target markets selection: an application to an Italian plastic products company

Abstract

Target market selection is a critical decision for companies that desire to internationalise or expand their trade networks. Management and marketing literature highlight the importance of adopting a systematic and data-driven approach to the issue, taking into consideration different criteria such as market size, profitability, presence of competitors, business risk. This aspect assumes particular relevance for SMEs, which often lack the necessary experience and resources to carry out structured market analyses. Analytic Hierarchy Process, the general theory for decision making developed by T. L. Saaty, represents a practical and efficient instrument for such a problem, allowing to rank market alternatives based on multiple criteria. The thesis deals with a real-life target market selection problem concerning an Italian plastic products company. The study aims to provide the export executives with an intuition about the most appropriate new market to invest in (among a previously defined set of countries) within the scope of a market development strategy. At the same time, it offers the occasion of showing the potentialities of the Analytic Hierarchy Process and its applicability to business strategic decisions.