The phrase “going global” captures the excitement and ambition of pursuing customers and markets far from home, but for most product-based businesses it makes little sense to launch export operations by literally selling simultaneously into every one of 200-odd potential export destinations around the world. Because your time and budget are finite, you’ll want to avoid wasting resources by first entering those markets that present the highest likelihood of success for your brand. As in so many areas in business and life, focus is key.
Selecting the right markets for exporting is crucial for the success of a business, as it directly impacts the effectiveness of marketing strategies and the overall profitability of international operations. By starting out in a small handful of large and fast-growing markets, you can focus your resources on regions with the highest potential for growth, ensuring that your marketing efforts are directed where they are most likely to yield positive results. The selection process involves analyzing export statistics, market trends, and the competitive landscape, which helps companies understand where similar products are currently being shipped and how they can position themselves effectively. Additionally, understanding cultural nuances and market-specific characteristics is vital, as these factors can significantly influence product design, packaging, and advertising strategies.
One obvious place to start your selection analysis is to consider your company’s past experience. Even if you haven’t implemented an explicit export strategy, you’ve probably had at least a few leads or sales to foreign buyers or maybe been approached by foreign distributors at a trade show. Especially if you’ve noticed that a majority of these expressions of interest have come from one country, or a group of countries with something in common such as region, climate, culture, or development level, this can be a good indicator of which markets deserve a closer look. Likewise, if you’re seeing activity from competitors in some particular part of the world, that area is likely one you should be checking out too.
But before committing large amounts of your investors’ money and your own scarce time and attention to any group of markets, you’ll also want to do some in-depth research and number-crunching. You should develop an analysis model based on specific indicators of your product’s potential in a given market. Who’s buying your product, and what do these buyers have in common? When, where, and under what circumstances do sales take place? You’ve probably already put a great deal of thought into these factors in the context of your domestic marketing strategy. Now the aim is to develop a set of qualitative and (mostly) quantitative attributes that can be researched for each prospective market to determine which ones most closely match your product’s sales drivers. We’ll take a closer look at some potentially useful indicators in future posts on this blog.
Once you know what information you need about each potential market, there is a wide range of data sources available for finding it. You can begin with free online resources such as The US Census Bureau’s mindbogglingly detailed database of American trade statisics at USA Trade Online or the United Nations Commodity Trade Statistics Database (Comtrade) as well as demographic and economic databases such as the World Bank Development Indicators. Later, when you’ve begun to narrow down the list of potential target markets, you’ll want to collect primary data more closely tailored to your specific requirements. In the United States, the US Department of Commerce produces Customized Market Research reports for a reasonable fee, based on data gathered locally by US embassy staff around the world. If you’re not based in the US, there’s a good chance your own government offers similar services. Many industry trade associations also conduct market surveys, and of course private firms are available to carry out market research in most countries.
In many ways, entering a new export market is like launching a whole new business. By systematically identifying your highest-potential markets and focusing your attention there, you can minimize competition, maximize opportunities, and ultimately enhance your competitiveness in the global marketplace.