The Importance of Market Research for International Expansion
Are you thinking of expanding your company to a new region? Before you do, make sure that the market research is done right. If you're not sure where to start when expanding your business internationally, it's a good idea to take a look at your local market. A lot of the time people will make the mistake of looking overseas for what they need in terms of product and service offerings, but neglecting the needs on this side of the pond. This can turn into an expensive operation that doesn't get you anywhere- so before you start planning an international expansion make sure you look at your own country first. Market research is especially important for business expansion because it gives you a handle on what the needs are in your area of the world. For ex-pats, this is doubly important because they are exposing themselves to new cultures, and not just their own country's culture. So market research is going to get them covered in terms of really fine-tuning their local operations before they venture overseas. Market research is a crucial task for all companies of all sizes. When you're launching the market of a new locale and/or category, it's important to conduct as much research as possible in many areas to ensure that you're as well-prepared as you can to make your venture with minimum risk.
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What is market research in international markets?
Research in the field of the international market is a broad word that refers to the entire preparation and research you conduct in a new market typically prior to entering it. Contrary to the national market research that is conducted in the United States, international market research focuses on an international market typically with totally different business practices, cultures and consumer behavior. Numerous techniques and stages are involved in global market research. In many instances the specific methods and methods are the same for market research in the US, however, your overall approach is likely to differ.
What are the goals of international research in marketing?
Market research conducted in international markets is a method of understanding the market in a new country before a new product or service in that. The primary goal is to identify your ideal customers and identify any issues to overcome, become acquainted with your competitors and everything else that can improve the chances for success and prevent unpleasant surprises.
What makes international research on market trends different to local research?
There are many key distinctions and aspects between market research conducted in the United States as well as international research. Here are a few major distinctions:
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There are cultural and social differences
Market research in the United States isn't easy enough and time-consuming, but the ad hoc differences between your country and the country you want to target make international market research more difficult in a variety of ways. The reasons that cause this problem are the same reasons you should to conduct the study in the first place -- you must be as informed as you can about a particular culture or region which may be completely different from your home.
There could be additional limitations to research
Alongside cultural and social distinctions market research also comes with legal distinctions. Although you may have a solid understanding of how law (as it pertains to research on markets) is applied at home, the situation outside of the country could be completely different. That means you'll have to know a brand new set of regulations to ensure you don't violate the rules and get into legal troubles. One instance is the United States' TCPA which prohibits using a mobile phone with an automated system for dialing. Legal aspects make it necessary for you to do legal studies and collaborate with lawyers from the market you intend to target before beginning any type of research. If you are in the wrong place under the law can be devastating.
It is a bigger investment
Research on the market in your homeland can be conducted fairly cheaply. If you're conducting the same type of research overseas, however, the costs could rapidly increase. It's easy to hire venues, but conducting phone interviews, or gathering individuals to interview could become significantly more difficult when you're conducting the research in a country that has individuals who speak a different language.
8 reasons for companies to research their international markets
Despite the added challenges with international market research, it's essential when you are trying to enter the market of a different country. Here are a few reasons.
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1. Cultures are different
Your culture and the lifestyle of your target market might be like yours but they may be different. Failure to properly research how the people of your prospective market could lead to some serious mistakes, which can be detrimental to your market entry and your brand's reputation. Cultural differences don't need to be a lot to cause significant problems. For instance, in many African countries, containers are labelled with pictures of the contents. The company for baby nutrition Gerber launched into the market with jars that were labelled with pictures of infants and babies, the reaction was negative, and it seriously affected sales.
2. There are differences in the laws and regulations
Regulations and laws don't only influence your methods of market research. They can impact every aspect of the process for entering your market and the way you conduct business in the new market. If you decide to enter the market with no complete knowledge about the law as well as its connection to your business you could end in legal trouble. There are a variety of legal pitfalls to take into consideration when you enter an unfamiliar market. There are regulations for environmental protection or tax laws, as well as laws that govern hiring new employees.
3. Different customer preferences
Customers from one country could have different tastes than those from another. This is often due to cultural differences that were mentioned previously however it could be due to other reasons too. When China started allowing its citizens to purchase and own houses a few years in the past, the US DIY chain Home Depot quickly seized on this opportunity. After six years, the company had to close all of its Chinese stores and never come back.
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4. Beware of your competition
If you want to enter an entirely new market it is necessary to compete with brands already present. It's not an easy task that puts you at a disadvantage when compared with companies that have been operating in the region for quite a while and are well-known by the local population. It's important to know what your competition is and most importantly, what they've done to achieve success. What exactly do customers appreciate about your competitors? What is it that keeps them returning? What helped them establish and keep their grip within your market? Researching these questions can provide valuable insight into what your business needs to accomplish to be successful. It can also reveal weak points in your competitors that you can improve your marketing.
5. Mitigate risk
Entry into any new market can be a risky endeavor and the risk is increased when you expand internationally. According to research from The Harvard Business Review businesses operating overseas had lower returns on Assets as compared to companies operating that operate in the domestic market. A lot of these companies will not succeed in their attempt.
6. Logistical problems
The logistical challenges associated with the process of entering a market outside of your home country can be overwhelming. It is necessary to like selecting and evaluate suppliers, employ new staff as well as locate the right premises. Study payment procedures as well as financial systems, figure out ways to move your merchandise across the new market and comply with the regulations for export and import and many more.
7. Plan a strategic plan and budget
A well-planned budget and strategy are the most important beginning point for any market entry procedure. The only way to achieve this efficiently is through a thorough market study. Market research can help you be aware of the costs associated with your new market, including any unexpected expenses. It can also help you to anticipate issues and obstacles and formulate your plan in a manner which increases your chances of success.
8. Find available marketing channels
Promoting your product in a foreign market has different issues and concerns. The channels that are successful in your country of origin may be ineffective abroad, for instance, online marketing in a country that has inadequate internet connectivity. In addition, your message will need to be designed to reflect the intercultural and language features of your market. A campaign that performs well in your home country may likely fail in the other part of the globe. Market research is a fantastic method to determine the strategies and marketing channels that are most effective for similar products within the market you are targeting, assisting to develop an effective marketing strategy and increase the chances of success from the beginning. Market research is an essential task to complete when you are looking to enter a foreign market with success. If done correctly, it will reduce the risk associated with entering the market and offer your product the highest chance of success in a marketplace that might differ from the one you are operating in.
Make contact with us at NIIR to find out more about how we could assist in International market research as well as any other kind of research.
Final words:
The main goal of any business is to grow and expand its operations, which is usually easier said than completed. To be successful businesses must have an effective business model and generate an income that will allow them to market their product or service and attract new customers shortly. If they are extremely efficient in their work might be able to expand their business beyond the boundaries of their boundaries and establish a business internationally.
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While expanding a current business or while venturing into a new business, entrepreneurs are often faced with the dilemma of zeroing in on a suitable product/line. And before diversifying/venturing into any product, they wish to study the following aspects of the identified product:
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