Three easy steps for foreign market research
Episode 22. Start Global Insights – podcast for exporters.
Almost all foreign experts Start Global Insights podcast interviews say this magical phrase to the exporters: Do your homework and research the market you are going to enter.
So, the next episode will be devoted to the topic of Market research.
The explainer is split into three easy steps that one should follow to complete systematic market research. But if you would still have questions after that, please write your questions in a comment below.
Listen the full episode on all major podcast platforms like Apple Podcasts, Spotify and YouTube Music and others.
If you have already made your systematic choice of the focus markets, you know what market you need to research. But if not, listen to Episode 13 of Season 1 of this podcast, to understand how to choose your international expansion focus markets.
Step 1. Setting goals
So, the first step you should take is like in all serious journeys. Right, to set the goals and questions to be answered.
And the first question is the fabulous WHY? Ask yourself why you need this research and answer in a very detailed way. Write down all the answers even if they seem obvious to you.
After that write down all the questions that you would need to clear up after analyzing the chosen market.
In general, the research is done to understand the local rules of the game and create the market entry strategy based on the data and not on guesses.
And as we all know the strategy is an answer to the question of how you would go most effectively from the starting point to the desirable state in the future. Therefore the possible questions you would need to research may be as stated in the example below.
Possible questions for your research
- How does the stakeholder landscape look like and what stakeholders would be your top priority? To understand where to focus your limited resources.
- Who is your customer or target segment and what do they want or what is their problem? To determine the demand for your product.
- Of course, what is the size of the target audience? However, if you have chosen a focus market systematically, you have already chosen a market with a sufficient size for you.
- How is your customer currently solving the problem and what are they missing? To understand how to adapt the product to the local market and through which channels to sell and promote it.
- Who are the main competitors on the market, what do they offer to customers and how do they do it? To understand how to differentiate from them or collaborate with them.
- What are the market prices? To understand at what prices to offer your goods or services and calculate the economics of entering the selected market.
- What is the level of discount that your potential partner usually expects? For example, if your product costs 100 euros for the end customer, at what price will the distributor buy this product from you and at what price will the dealer buy the product from the distributor?
- What are the main barriers and limitations to market entry? To prepare for them, obtain certification, licensing, etc.
- What consumer trends are on the market to understand what to expect in the future?
We are not talking about cultural differences, as if you will understand your client’s needs and pains it will cover this question as well.
For you to remember where to look for the right questions more easily here are the main key words: Who? What? How?
Who – is for the Client, Competitor or other stakeholders.
What – is for Pains, Needs, Solutions, Prices
And How – is for channels, logistics, communication, barriers.
Step 2. Information sources for your market research.
Step two is to define the sources of information, where you would look for the answers to the above questions.
In general, there are two types of sources: primary and secondary.
Primary sources
Primary research refers to the data directly from the source or stakeholders in the market. This can include customer surveys, competitor observation, focus groups, or interviews with experts in your target audience. The data collected in this way is original and specific to your company and its goals.
Customer surveys can be conducted on potential customers in the target market to understand their needs, problems, and requirements . Interviewing experts in your industry can provide valuable insights into the market characteristics and competitive forces.
The best way to conduct interviews is in person at trade shows, conferences, or one-on-one meetings. This way you can better control the conversation, read the body language of the interviewer, empathize, and build trust.
However, in today’s environment, a video call or a phone call is also suitable.
By the way, the first resistance after such advice is: why people would share this information with me?
Well, first, people love to feel like experts and share their experiences, the main thing is to fuel such a conversation with the right questions.
Second, you can motivate the interviewer by providing him or her with some value in return, for example, offer to share the summary after all interviews. Every distributor or dealer is always interested in the current state of affairs in his or her industry.
And third, you can pay for such a conversation.
You can find such experts through local business communities, social media, forums, and, in fact, directly from potential partners, for example, just write to the distributor director or category manager on LinkedIn.
And finally, you can listen to interviews with local experts that have already been conducted for you, for example, in the Start Global Insights podcast for exporters.
Secondary sources
Secondary information sources include existing data, statistics, reports, research, and publications. They are available in open access for free or for a fee upon request. These sources can be useful for getting an overview of the market, analyzing trends and market sizes, information about competitors and other aspects that complement your primary data.
You can use open data provided by government agencies, statistical agencies, chambers of commerce and other sources. This data can contain information about economic indicators, trade volumes, demographic data, legislation, and other factors that affect the market.
You may start by looking for market reviews and statistics, for example, on EuroStat or WordBank, in reports of export development offices of different countries, in local publications, business community reports and annual reports of public companies. Having a general picture of the market, you can compile a questionnaire for interviewing local experts.
One of the recent ideas to get proper information sources is generative AI, like Chat GPT, Bing copilot or Google Bard.
You can also ask a generative artificial intelligence for ideas where else you can look for certain information about a specific market.
But be careful, it is better not to ask for the data themselves, since very often AI “hallucinates” and produces nonsense.
By the way, in fact, it is practically impossible not to do research when entering a new market. After all, when entering the market at random, you are conducting an experiment, which is one of the methods of market research. However, if such an experiment is unconscious, without understanding the goals of your research and without analyzing the results, it may lead to repeating the same mistake over and over again.
Step 3. Analysis and summary
Step three is to analyze and summarize.
Very often, when I do the market research, I find myself endlessly searching for information. Here is another source and another one, and this article is very interesting, and this report may give you some more understanding of the market. And it looks like a never-ending story. Therefore, at some point you need to say STOP.
Make sure that the data answers the questions that you asked at the beginning of the research and if they do start analysing and summarizing data you have found.
First, organize and sort the data that you have collected for your market research.
For example, you can create a comparative table of all the digital data.
Look for patterns and trends in the data from surveys, articles, and existing research. For example, you might find that the most common distribution channel for your product is directly through a dealer, without retail chains. Or that the income level of households coincides with certain regions with increased demand.
Compare your offer to competitors.
Compare the offers of your competitors, prices, sales channels, and communication with each other. Perform a SWOT analysis (strengths, weaknesses, opportunities, and threats) of your company in the selected market.
Understand which target audience to choose and how you will differentiate yourself from the competition.
Choose a distribution channel based on the data that you have collected. This could be direct sales to consumers, a network, a national distributor, etc.
Think about how you can convert competitors into partners and what value you can create for them.
Next, group the sorted data.
For example by the questions that you created at the beginning of the research.
Create a logical structure for the report. It should consist of a story with the main conclusions. First, the main conclusions, then their justification.
Save the time of your colleagues and create an executive summary, a short description with conclusions on one or two slides.
And so, after analysis and conclusions, you can proceed to creating an export strategy based on data, not on assumptions.
Listen the full episode on all major podcast platforms like Apple Podcasts, Spotify and YouTube Music and others.
Continuous process of market research.
Finally, remember that market research is not a one-time activity. Today’s world is constantly changing, new needs are emerging, new value chains are being created, the landscape of stakeholders, legislation, barriers to market entry are disappearing and emerging. Therefore, the collection and analysis of market information should become a continuous process integrated into the life of your company.
Therefore, now, with the availability of the internet and using the simple steps described above, research of new markets becomes a fairly simple task, the performance of which will save you from many mistakes, save your money and resources.
