International market research plays an important role in the identification and development of a company’s strategies for internationalization. It enables a business to identify, evaluate and compare potential foreign market opportunities and develop an export plan. Research also provides a company with foreign market intelligence to help it anticipate events, take appropriate action and prepare for global changes.
Q: How different is market research conducted abroad versus domestically?
A: Systematic market research and planning is essential to both international and domestic sales and can be instrumental in avoiding costly mistakes. No matter where in the world you’re selling, you’ll want to be aware of the size of the market, customer preferences, competitors’ reputations and prices, and any regulations that could affect sales. Do not assume the way customers behave in one market applies in other countries. What may have worked for you domestically may not work overseas. In foreign markets, exporters encounter different income levels and demand cycles; different languages, cultures and environments; different laws and regulations; different ways of doing business; and different risks (e.g., foreign exchange fluctuations, civil strife, nationalization).
Q: How do I decide which market to start with?
A: You want to find your best markets, but you also want a manageable number of markets. Don’t spread yourself too thin or pursue markets that aren’t right for you. The best markets offer a combination of high comfort for your company and high potential for your products.
High-comfort markets are those you’re personally connected to in some way. You may have trusted contacts, such as relatives or friends; you’re at ease with the language and culture; or you’ve spent time in the country. Often, however, high-comfort countries do not offer the highest potential for your products.
High-potential markets are where you ultimately want to be. They’re the large, emerging or fast-growing markets with high receptivity to products like yours, limited local or foreign competition; and no significant market barriers.
Analyzing and researching overseas markets is critical to determining an export strategy. It helps to distinguish your target markets based on factors such as their size, growth, competitive environment, culture and potential partners. Businesses should identify and select target markets based on the key leading market indicators for their product(s).
Q: What are some useful sources of market information?
A: There are several free sources of information that are good starting points for research:
- U.S. Commercial Service Market Intelligence Resources: access to industry and country-specific market reports, authored by trade specialists working in overseas posts.
- CIA World Factbook: Provides information on the history, people, government, economy, geography, communications, transportation, military and transnational issues for 267 world entities.
- WEDC Global Network–Market Intelligence: Developing a successful international growth strategy begins with understanding where the greatest opportunities are for your business. WEDC’s trade representatives regularly post industry reports on changing market conditions, demand, regulations and opportunities in their markets.
In addition, trade and professional associations are often a useful way to find out what is happening in an industry. It can be valuable to hear what other businesspeople report after recent trips to markets that interest you.
Q: What if I need more details?
A: WEDC has a Global Network of trade representatives who can provide industry insights and customized in-country research in 82 countries around the world. They are able to conduct more in-depth market assessments and partner searches that identify key pieces of information that can affect your strategy and success. Depending upon your industry, there can be large amounts of data and trend analysis available for purchase from industry associations and market research firms based in the U.S. and abroad.
Market research gives businesses essential information on customers, competitors and market conditions. It is important to actively and continuously carry out market research whether you are pursuing a new international market or looking to grow your existing sales in one.