How do I know whether a new foreign market is easy or difficult to break into? This is one of the common questions asked by exporters visiting my Facebook & LinkedIn pages. Of course, market research can do a pretty good job here, but first-time exporters and non-veterans usually find themselves at a loss when it comes to measuring suitability of a new overseas market. They know that market research is crucial, but don't know how to start with it. Here I would like to suggest to them a few basic tips.
First of all, facts and figures can speak a lot. If you are a beginner, I think you can start with some current affairs publications that provide economic analysis of your target market. In addition, the Internet and existing overseas contacts can also be very useful sources of information such as industry size, market growth, demand condition, demographics, local production, political and economic environment, etc. Gathering such general type of information is usually straightforward and doesn't involve much effort. This will help you see the big picture and assess market opportunities.
Now move to those requirements you must meet to export your goods to a specific target market. For example, trade regulations, customs and standards, restrictions and controls on imports, certification and licensing, conformity assessment, documentation, exchange rate, labeling and marketing requirements — this is the kind of information an exporter must know about a target market. Here again, multitude of free online sources can help a lot. Particularly, you must not forget to look on the websites of the government, embassy, and trade bodies of the foreign country.
After collecting this information, move your focus to your product or service. Norms and restrictions can be product-specific or trade-specific. So, you need to narrow the focus to your product or service and gather information about relevant certificates, licenses and documentation applicable. Here again, you can do the research yourself, but this will place bigger demands on your time. Internet searches can be useful but again this might not be the case always. So, you may need to outsource your market research, or otherwise you may try a lower cost option: ask a market research company not for a full report, but for that particular section of the report you need. Many of them sell sections of their full reports at much lower prices.
While conducting market research yourself, you must be methodical. Here a clever idea is to look at sample research reports on the web. This helps in adhering to a logical structure and make sure that you are not missing any essential piece of information. You must have a clear idea about the purpose of your research and you must pursue each of the elements of the research in reference to the requirements of that purpose. Avoid making the process a mere academic exercise, and try to get the market feel: behavior of your target buyers, activities of your competitors, obstacles you need to remove, and so on.
Having said that you can do a bit of research yourself. I don't suggest that you keep the idea of outsourcing your market research or hiring a consultant at arm's length for always, but my view is that a small business should try to get the best value from a small budget in everything it does, and market research is no exception. In fact, market research is commonly conducted by many small entrepreneurs by themselves, and I believe you too can do it, particularly at early stages of your export business. Give it a try.
Until the next time...
George.
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