Market research is an essential and early step in any business’s export plan. Carry out thorough research to:
- assess whether the market is right for your product or service
- gauge demand
- define your target customer
- understand the competition
Conducting research before you start exporting will help prevent costly mistakes and maximise potential for profits.
Consider initially focusing on a couple of target countries you’d like to export to, then decide how best to market and sell to customers in those countries.
As a starting point, gather basic information on:
- the state of your industry in the target market
- cultural considerations that might be relevant to selling your product or service
- your competition
- your market niche
It’s also worth considering overseas events, trade fairs or trade missions. They can be a useful way to familiarise yourself with your target market before you fully commit. They’ll help you to meet potential customers, agents and distributors, and you may even attract some sales.
An analysis of strengths, weaknesses, opportunities and threats (SWOT) will help you get a preliminary sense of how realistic exporting would be to a particular market. Identify the strengths and weaknesses of your company, product or service and then compare them against the opportunities and threats of the market or competition.
Once you’ve selected your target countries, draw up a detailed list of the things you need to consider when operating in this market, such as legal, financial and cultural differences. You’ll need to consider the traditions and ways of doing business in your new market, as well as potential language barriers. Making these a central part of your research will help win your new customers’ trust and give them more confidence in your company.
Know your customers
You will have already defined the characteristics and type of customer most likely to buy your product or service. Next, think about what you know about your existing markets. It’s possible you will attract a similar category of customer in another country.
Base your decisions on facts rather than assumptions. You may find there’s a market for your product or service in some unexpected places. A good starting place is to find out the country’s gross domestic product (GDP) overall and per head of the population. This will give you an idea of the country’s spending power.
To gauge the demand and size of the potential customer base, you’ll need to compile thorough demographic information. Contact your chosen country’s statistical office or a market research agency to get started using the research methods outlined below.
Next, conduct consumer research to assess the preferences, motivations and buying behaviour of your target market. Do this through observation, surveys, interviews, and pushcarts (test-selling in small quantities to test response).
Know your competitors
Thorough competitor analysis is one of the most important factors in successful exporting. Start by finding out if any of your competitors export and if so where to. This may highlight areas you could target, but could also indicate already saturated markets. Few competitors may indicate that it’s an unprofitable or challenging market.
When analysing your competitors, ask yourself the following questions:
- Who are they?
- How do they market their products and services?
- Why do customers in the market buy their products and services over and above other offerings?
Keep in mind that any company that is in the same industry or that offers similar or competing products is a competitor.