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Market Potential Index (MPI) for Emerging Markets - 1996

March 15, 1995

You are currently viewing an old version of the Market Potential Index (MPI).

Global marketing is becoming more and more important along the years with the increasing trend in internationalization. Having too many choices, marketers face the challenge of determining which international markets to enter and the appropriate marketing strategies for those countries.

The focus of this study is ranking the market potential of countries identified as "Emerging Markets" by The Economist magazine. These emerging economies comprise more than half of the world's population, account for a large share of world output, and have very high growth rates; all indicators of enormous market potential.

This indexing study is conducted by MSU-IBC to help companies compare the Emerging Markets with each other on several dimensions. Eight dimensions are chosen to represent the market potential of a country over a scale of 1 to 100. Each dimension is measured using various indicators, and are weighted in determining their contribution to the Overall Market Potential Index.

Notes:
  1. The most recent version of the Market Potential Index can always be found on globalEDGE at: /mpi/
  2. The report for previous years can be reached through the Market Potential Index (MPI) Archive table on the right column.
  3. To sort by any dimension, click on the name of the dimension.

Dimensions and Measures of Market Potential for 1996

Dimension Weight Measures Used
Market Size 4/20
  • Total Population1
Market Growth Rate 3/20
  • Average annual growth rate of industry2
Market Intensity 3/20
  • Purchasing Power Parity (PPP) estimates of GNP per capita (50% weight)1
  • Private consumption expenditure per capita (50% weight)3
Market Consumption Capacity 2/20
  • Size of middle class (the percentage of the population that has 20-80% of the income or consumption)1
Commercial Infrastructure 2/20
  • Telephone mainlines per capita (20% weight)1
  • Paved road density (20% weight)1
  • Trucks and buses per capita (20% weight)3
  • Population per retail outlet (20% weight)4
  • Percentages of homes with color TV (20% weight)4
Economic Freedom 2/20
  • Economic Freedom Index developed by Johnson and Sheehy for the Heritage Foundation. It incorporates trade policy, taxation policy, government consumption of economic output, monetary policy, capital flows and foreign investment, banking policy, wage and price controls, property rights, regulation policy, and black market comparisons of the countries into one aggregate index ranging from 1 to 5, 1 being the most free, and 5 the least.5
Market Receptivity 4/20
  • Average annual growth rate of imports from USA over the past five years (60% weight)3
  • Per capita imports from USA (40% weight)3
Data used are those available for most recent year.
  • 1 Source: World Bank, World Development Report
  • 2 Source: National Trade Data Bank, U.S. Department of Commerce Economics and Statistics Administration
  • 3 Source: Business International, July 1992, pp. 205-216
  • 4 Source: Euromonitor, International Marketing Data and Statistics, London, 1994
  • 5 Source: Johnson, B. T. and T. Sheehy, The Index of Economic Freedom, The Heritage Foundation, 1995

For More Information:

For the indexing methodology, please refer to:

"Measuring The Potential of Emerging Markets: An Indexing Approach" - S.Tamer Cavusgil,
Business Horizons, January-February 1997, Vol. 40 Number 1, 87-91: doi .

" Complementary Approaches to Preliminary Foreign Market Opportunity Assessment: Country Clustering and Country Ranking " - S. Tamer Cavusgil, Tunga Kiyak, and Sengun Yeniyurt
Industrial Marketing Management, October 2004, Volume 33, Issue 7, 607-617: doi .

For additional inquiries, please contact MSU-IBC.

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