Looking to export? How to analyse & research your markets
1 Sept 2018 - Author: Sonia Kisbee - B2B data | Data | digital marketing | better SEO | improve your online ranking | how to export | global ready | export strategy | distribution strategy | sales & marketing lists | find new markets
What is market analysis?
Following on from our post on how to get started with your export market research, we consider some key aspects of market analysis and look in a little more depth at how you can research your market at home or on the ground by visiting your potential export market.
Establishing potential market size will help you to decide whether the market is worth investing in, but it is worth remembering you will also need to know how the market works. For example you need to consider the main distribution channels you could use, the key market trends and not forgetting the potential influence and impact of your competitors who are already invested in your target market.
Market research reports
Often a starting point for businesses, market research reports are widely available available via libraries, business groups and trade associations. However generalised industry research does need careful interpretation as a large national or international market is no guarantee of local demand, you should be prepared to carry out your own market research.
By looking at your existing customer data, be it by size, location or type, this will help you establish which market segments to target. Building a customer profile, you can then use business information to find similar types of companies on a country or global basis. - See our article on Targeting, segmenting & profiling.
Finding potential export markets
Which overseas markets offer the best chance of export success? As a first time exporter, it makes sense to focus on a single or small number of key countries. In larger markets, like China or the US, first time exporters are encouraged to focus on a particular region. You will need to consider the following factors in order to analyse and prioritise potential export markets.
Market Characteristics – Size, growth, sectors, seasonal trends and quality issues.
Competitive Environment – Who are your competitors, are they local or overseas? How challenging will it be to distribute your product? Are there any barriers for market newcomers?
Financial & Economic Conditions – Pricing practices, payment terms, tariffs and other barriers to trade as well as keeping in mind the impact of Brexit. Look at each Country’s Doing Business Ranking which includes ratings, costs and the documentation required for “Trading Across Borders”. Foreign exchange and currency stability are also factors that should of course be considered.
Cultural, Political & Legal Factors – Language is a key cultural consideration, but political stability and the local legal system, should also be considered as well as foreign investment & consumer/environmental legislation, registration & licencing procedures, local labour laws and IP protection.
More about market research
The two types of market research most businesses conduct are primary and secondary market research.
Primary Market Research – This is collected directly from the foreign marketplace via interviews, surveys and direct contact with customers and/or representatives. However bespoke and targeted primary market research is both time consuming and can be expensive.
Secondary Market Research – Many businesses prefer conducting desk research, using data that is available from multiple resources including:
- Online business information databases
- International news reports (televised, printed, online)
- Trade and economic statistics (printed, online)
- Trade agencies
Classifying Products & Services – To conduct your market research using an online business information database requires you to classify your products and services against a comprehensive classification system.
- To be effective it is important that you are able to classify your product or service accurately, therefore the more specific detail available within that classification system the better.
- This will enable you to use the classification system to target and refine your searches in order to find out more about the international market & potential competitors.
- As an exporter of a new product that is not yet classified, or to establish the potential international customer base you can use your existing & potential customer profiles. Focusing on their products & services and using the classification system, you can then find similar types of company.
Additional Market Factors – Additional factors to consider are the political & cultural climate, economic stability, geographic factors, as well as market accessibility. However business information can help to provide some of these answers, such as:
- Identifying the existing export or import business within your target markets.
- If there is too much competition this may make it difficult and expensive to penetrate a given market, although if competitors are doing well, there could well be the opportunity and potential for market growth.
- Entering smaller more focused markets, where fewer competitors have setup up shop, gives you more opportunity to grow with the market.
- What has been the growth rate of your target market over the last few year.
- Decide how to distribute and promote your products or services – online direct sales or by using an agent or distributor, where you will benefit from their local knowledge.