Local MarketWhile there are many components of the local market to consider in Latvia, our group has decided to focus on two critical aspects. The first element concerns the economic climate. Over the past decade, members of the Baltic States have experienced tremendous economic growth. Foreign and domestic investors were pouring funds into Lithuania, Latvia and Estonia. As a result, GDP in Latvia increased by 12.3% in 2006 and 10.2% in 2007 (CIA World Factbook). This growth was spurred by three market factors. First, real estate prices increased nearly 60 percent during 2005. Second, consumer spending increased dramatically. In 2006, the current account deficit amounted to 25% of Latvia's GDP. Third, wage and price inflation increased by 10% during 2007 (“The party's almost over”). These elements supported enormous economic activity, helping to explain the high growth seen during 2006 and 2007. However, these economic catalysts were not sustainable. By 2008, Latvia's GDP will contract by 5% (CIA World Factbook). The consequences of an overheated economy affect the needs of Latvian consumers. In particular, a recovering economy pushes consumers to look for simple and reliable products. With a lower marginal propensity to consume, economically average individuals practice more conservative spending habits. This insight shapes our overall marketing strategy. The second component of the local market embodies the geography and topography of Latvia. Like the economic climate, this knowledge provides relevant information about consumers' needs for products. Latvia is relatively small in size, estimated to have an area of ​​approximately 63,500 square kilometers (CIA World Factbook). The s...... middle of paper...... next 7 largest cities after Riga: Liepaja, Ventspils, Jelgava, Jekabpils, Daugavpils, Rezekne, Cesis, Valmiera. While dealers will hold title to our product, we will ensure that they market, sell and advertise the car in a manner that complies with our company's worldwide standards. We will make sure that our cars are highly visible next to our competitors, because often these authorized dealers have contracts to sell cars from three or four companies. The marketing of our cars must be consistent with our company and our image worldwide. To speed up this process, we will offer training for dealers and sellers in Latvia. Also, how the car drives and feels is very important, so we will have test drives available. Customers will be able to book test drives online or call dealerships to schedule a ride.