Entering new markets can be a lucrative but risky strategy for B2B marketers. You may face unfamiliar customers, competitors, regulations, and cultural barriers. How can you minimize the uncertainty and maximize the potential of your market development efforts? Here are some best practices for managing risk in new markets.
Before you launch your product or service in a new market, you need to understand the size, demand, and preferences of your potential customers. Conduct a thorough market analysis using primary and secondary data sources, such as surveys, interviews, industry reports, and online platforms. Identify the key segments, trends, and challenges of your target market. Evaluate the fit and value proposition of your offer and how it compares to the existing alternatives.
Agility. when getting into a new (B2B) market (For distribution of B2C products), get a local (1 Expert, and 100 Target audience). Ask questions. Product-specific questions. This is the best form of market research. Trust me demographics play a crucial role in customer decisions. Customer behavior is a lot about their choices and the patterns of their previous purchases. And if you them you can be super agile with your entry strategy.
Before entering a new market it's important to understand why you are entering it. Your business goal will drive your marketing strategy.
You have to be ready to adapt your products, services, and marketing strategies to align with local cultures and their preferences. This may involve modifying product features, packaging, or marketing campaigns to suit their expectations.
Research alone is not enough to guarantee success in a new market. You also need to test your assumptions and hypotheses with real feedback from your prospects. Use low-cost and agile methods, such as landing pages, prototypes, webinars, or pilot programs, to validate your product-market fit and refine your value proposition. Measure the response and engagement of your target audience and use the data to improve your offer and messaging.
Your marketing strategy in a new market may differ from your existing ones, depending on the local conditions and customer behavior. You may need to adjust your marketing mix, which consists of the four Ps: product, price, place, and promotion. For example, you may need to modify your product features, pricing strategy, distribution channels, or promotional tactics to suit the preferences and expectations of your new market. You may also need to consider the cultural, legal, and ethical factors that may affect your marketing decisions.
One thing is essential- hire local talent to help run your campaigns. - You can’t use the same playbook for a GTM in EMEA markets and in LATAMEC for exemples. As consumers and stakeholders behaves differently(cultural traditions, consumption profiles, retail landscape structure are different as well). Many market are still not mature for a digital marketing-only strategy for exemple. In EMEA your marketing mix could include massive ATL campaigns are most of your effort will be focused on selling in. You just can’t do the same in Latin America. Pricing structure must be different as consumers are very much price sensitive and the concept of brand equity is stronger.
One of the most effective ways to reduce risk and increase your chances of success in a new market is to partner with local players who have established relationships, reputation, and resources. You can leverage their expertise, network, and influence to reach and serve your target customers more efficiently and effectively. You can also benefit from their insights, feedback, and support to overcome any challenges or barriers you may encounter. You can choose from different types of partnerships, such as joint ventures, alliances, affiliates, or resellers, depending on your goals and needs.
I have found strategic (local) partnerships to be a highly effective way to break into a new market. This is easier said than done, as some markets are more complex than others. For example, a single strategic partnership may work in a country like Thailand where the focus is generally on Bangkok and one or two other cities, but for a complex market like India, you’d need multiple partners to handle different cities (divide and conquer I always say). Yet, it is not so easy. You need to find the right partners or risk being taken advantage of or docile partners who offer next to nothing. There must be shared objectives, proper goal-setting, and ultimately built trust. Because why should they work with you? What’s in it for them?
Form strategic partnerships with entities that have a strong foothold in the new market. Seek partners with local expertise, established networks, and a solid brand presence. This collaboration can significantly reduce entry barriers. Opt for commission-based partnerships to align incentives and share risks. In this model, partners earn a commission based on the success of joint efforts, fostering mutual commitment and accountability. Conduct thorough due diligence on potential partners. Assess their reputation, financial stability, and previous market ventures. A reliable partner adds credibility to your market entry strategy.
Once you enter a new market, you need to track and measure your performance and progress regularly. You need to set clear and realistic goals and key performance indicators (KPIs) that align with your market development objectives. You also need to collect and analyze relevant data and metrics that reflect your customer acquisition, retention, satisfaction, and loyalty. You need to use the results to evaluate your strengths, weaknesses, opportunities, and threats in the new market and make any necessary adjustments or improvements.
Regularly monitor market trends, consumer behavior, and political and economic changes. Political changes affect the businesses and situation can sometimes change dramatically.
Entering a new market is a learning process that requires constant experimentation and adaptation. You need to be open to feedback, criticism, and failure and use them as opportunities to learn and improve. You need to be flexible and agile and willing to change your strategy or tactics based on the changing market conditions and customer needs. You need to be innovative and creative and look for new ways to differentiate yourself and deliver value to your customers. You need to be persistent and resilient and overcome any obstacles or setbacks you may face.
We went to a new market recently, where we hired local manpower who has better understanding of the local challenges and they could share with us their personal experiences as in what kind of reasons for failures they have seen in the past from other companies.