Low risk international market selection
December 30, 2010
In the second of a new practical series about international marketing, Ceris Burns, international marketing specialist for the cleaning industry considers how to select overseas markets to maximise your chances of success and minimise risk.
With your international business audit complete you should now have a clear picture of your company’s ability to manage international business. Before moving on to the market selection process, take a moment to clarify your motives. This is crucial because you will of course choose the country or countries best suited to help you achieve your goals. Maybe it comes down to profit and growth? Do you have a personal urge to export or do you want to achieve economies of scale not possible at home? Perhaps unsolicited enquiries from abroad have awakened your interest?
With your motive crystal clear, it’s time to work through the market selection process. This involves undertaking detailed market analysis – scanning multiple markets, building a robust profile of the shortlisted country/countries and finally conducting field research there. International business is complex as it involves managing different attitudes and values whilst requiring flexibility to cope with new found culture, politics and competitors. You must make it your aim to KNOW YOUR OVERSEAS MARKETS as well as you know your home territory. It’s a fact that 80% of export failures are due to cultural differences. A high proportion of these could be avoided if only effective market research was undertaken at the outset. Market research will maximise your chances of success and minimise risk.
Market scanning enables you to identify potential by comparing the attractiveness of multiple countries with company compatibility. On completion you should have an understanding of market accessibility, profitability, size and risk and be in a position to decide which countries hold enough potential to progress to the next stage. Many country data sources are available. Try World Fact Book www.cia.gov/cia/publications/factbook, UK Chambers of Commerce www.britishchambers.org.uk and Business Week www.businessweek.com. International business specialists both private and government based can also provide expertise and contacts. The British Embassy commercial section in particular can be hugely helpful by enabling access to local market knowledge and sector experts, although the quality of service can vary from country to country.
Market profiling is usually based upon secondary information gathered from existing reports. It enables you to build an additional layer of information and understanding. A straightforward and practical way of analysing a country profile is to gather all the data you can and focus on its implications for the marketing mix rather than building a description. This might for example throw up uncontrollable issues dictated by the market, packaging may need to be adapted or advertising may not even be legal in your chosen country.
By now you should be fairly confident about your market choice and in a position to proceed to field research in the country. You may decide to do this yourself or appoint an external agency to work on your behalf. An organised trade mission to the target country could also provide a cost effective way of gaining market insight while providing an opportunity to meet prospective clients. Although we often take it for granted, do also consider that your target country may not actually be safe to go to.
Safety is not the only issue when undertaking research. In some areas, Asia Pacific for example, outside of Japan and Singapore it is extremely difficult to access reliable quality data. Even government statistics may not be accurate. In cases where you cannot visit a country or suitable data is unavailable you will need to take another approach to market assessment. This might entail looking at similar markets, studying the trends there and forming assumptions from this. As long as you can provide answers to questions about basic market suitability, in place of detailed research, a controlled market entry experiment could be the solution.
For a country selection tool email ceris@cbimarketing.com Next month we will look at routes to market.
ENDS
As published in C&M magazine February 2010.
Time to set sail for foreign shores
December 29, 2010
What is it with British companies, why don’t they export more? Despite being leaders in product design, patent registration and innovation we continue to import more than we export and have a massive trade deficit to show for it – £3.2bn in October 2009. Over the centuries we’ve been described as an insular folk who prefer to deal with our own. So, maybe its fear or contempt for all that is foreign that’s holding us back?
How do you feel about doing business overseas? Do you relish the challenge or does it fill you with dread? If you have a secret fear of export I bet you’re not the only one.
In answer to my opening question, I would wager that our lack of export activity is down to a combination of three factors; Ignorance of market potential, a fear of the unknown and a lack of know-how. Whatever the reason, it’s now time to bring an end to these restrictive thoughts and set sail for foreign shores. Here’s why.
The weak pound means that British products and services are up to a third cheaper to foreign buyers than they were just a couple of years ago. Combine this with shipping costs which are down by 70% and the situation is positively rosy. Government is keen to promote export to British companies so subsidised support is also likely to make overseas market entry an attractive proposition.
And export isn’t just for the big boys. The web and new media technology have made export accessible to us all. In today’s environment, if your company is online you’re likely to be doing business overseas to some extent, intentional or not. The fact that the internet has become a key method of communication has reduced significantly the cost of marketing to multiple countries. Press releases can be distributed internationally via newswires and some companies (even within the cleaning industry) now use Twitter and Facebook to communicate with a broader audience globally.
So how do you get started overseas?
Start by running an audit across your company to assess your ability to manage export business and to pinpoint the preparation required. Look at finance, sales, marketing and your product or service offer. Consider your strengths and weaknesses.
Which factors will help you succeed overseas and which areas need to be tightened up to pre-empt any problems? Will your product or service be relevant outside of the UK market? Are you prepared to adapt your offer to meet differing market needs? What about your marketing materials? It’s likely that they will need to be tailored or ‘localised’ to appeal to potential clients in other countries. At a superficial level this may mean translating copy and tweaking the design while at the other end of the scale it could mean a fundamental rethink of your messaging.
While running through this process you may also uncover a need for training. Perhaps your admin staff will need to learn about export documentation or your sales managers would benefit from a basic understanding of the local language or culture.
Consider each aspect of the business and note down the key points which arise. Once the audit is complete you will need to apply your findings to country information in order to select the most suitable target market or markets.
Good luck with your audit. Next month we will cover market selection.
For a free international audit template document, email Ceris at ceris@cbimarketing.com www.clean.cbimarketing.com
As featured in C&M magazine January 2010
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