Decisions decisions. In today’s world research suggests that an individual has on average 35000 conscious decisions to make daily. From the pure mundane like will I get sprinkles on my cappuccino to those which have much more far reaching implications for you and your business like making crucial market selection choices for your product.
When starting out on your international growth path then which market(s) to enter first is often an area where businesses struggle to decide upon. So how do you try and map out a decision making process for doing so that will help to formulate a strategy and a rationale for your subsequent market choices? Here are some considerations that you may wish to reflect on further to help you try and decide where to focus first:
1. Your marketing mindset
This is certainly the starting point that drives a large part of this decision making process in so far as if you wish to keep a standardised marketing strategy and approach when selling overseas and not to deviate from then this will also dictate to a certain extent where you should focus on from a target market point of view- i.e. On the more culturally close Anglo-Saxon markets.
Firms with greater flexibility in their marketing, in their production and most importantly in being open to opportunity can fare the best as this all goes hand in hand with ‘being global’ in today’s world. However this isn’t always possible depending on the business model or corporate strategy of a company and so understanding this and taking this into account when dealing with market selection is paramount.
2 The size of the potential market & ease of access
Once you have evaluated your marketing mindset then more concrete data needs to be examined. Move away from national stereotypes and the preference of the boss to find business in the Caribbean and objectively analyse readily available data on the market- demographics, geographies, purchasing power, existing competition all have a top line role to play in market selection. However don’t let some of these figures deceive you either! India is a prime example which according to economists will become the most populous country in the world by 2028 and yet if you have a premium consumer product then your product will only be accessible by a very small percentage of this population. Therefore in terms of potential market size this is suddenly not as attractive as somewhere else much smaller such as Hong Kong with only 7 million inhabitants but with a purchasing power of $56 701 USD versus $6162 USD of India (2017 Index of economic freedom) where actually there is greater sales potential due to the ability of these consumers to buy your product. As an aside, ease of access to these markets is also important – the US may seem highly attractive again due to its size and shared language but it is a very competitive and complex market and a closer, smaller one within the EU (at present) may be more effective to target in the first instance too.
3.Check out the trends and the demand in potential markets
Whilst market sizing is an important part of the process and desk data can be useful to flesh out an initial picture, cultural nuances deriving from country level trends as well as more specific consumer demand tied into each market are even more fundamental when deciding which markets to plump for and which to operate in a more reactive opportunistic manner. So if you have a product that targets the half a million vegans in the U.K., where are there other national populations that favour this plant based lifestyle and are growing in number? Or if you have a product developed for consumers with certain food intolerances, where are other consumers beyond the domestic market also seeking out similar products and why? Could your product be a good proposition for them too? This can also be a case of cultural preference for a type of product driven by a number of factors beyond the actual ingredients it contains (or lack thereof), including the type of packaging, the branding, its country of origin and pricing.
There is much more to say on this topic (we could definitely go on!) but this should at least give some useful starting point. For more detailed advice and support on picking the most appropriate target markets for your product (and those best in line with your business objectives) then please do contact us below, we’d be very happy to help!