1 – Going international for small businesses : How to do concise and effective market research?By M.Benhamed.
Today, going international offers firms and groups new horizons for development and growth. In order to increase their chances to go international and to succeed in a given market, export-oriented companies adopt market research in their export strategy. Because if done correctly, market research has the ability to support decision as far as business is never simple and finding out what actually drives a given market is imperative.
Export-oriented firms & Market research:
Usually, to do market research export-oriented companies adopt two process:
- Secondary market research: To be simple, let us say that this process mainly consists on collecting valuable information to help firms find out about things they need to know such as:
- Market demographics;
- Local production;
- Import duties and taxes;
- Distribution channels;
Those information are available from a multitude of free online sources, books, peeriodicals,magazines, etc.
However, secondary market research implies the existence of an export team able to analyse and to exploit efficiently all the information collected.
- Primary market research : Primary market resarch is a process which completes secondary market research, includes specific surveys and industrial reports and requires substantial financial resources.
If done correctly, this process is particulary useful in helping export-oriented firms to make decision and to assess which countries offer the potential for their products or services.
Small businesses & Market research:
But what about small businesses? For small businesses, the problem is most complex. Because of lack of experience, of human capital and of financial resources, going international across the world constitues a delicate decision and some succeed and others do not.
Otherwise, today Internet can help anyone identify where there might be a market opportunity across the world. But the reality and the experience when it comes to go international show that amateurism is not conceivable. That is why it is of prime importance that small businesses should pay a close attention to market research as far as this process is absolutely necessary and represents the first key factor for going international.
How to do concise and effective market research?
If you are a small business and you are just starting out in export business, you can adopt secondary market research. But before you should keep in mind that market research is not an academic exercice of assembled facts and figures.
In fact, once you have identified potential market you have to consider market research as the process that will help you to finding out important things you really need to know about the potential market and about what products can be sold there and how to reach new customers for your product or service.
In another terms, you have to be practical and able to make concise and effective market research which really helps you to understand the target market, to know its needs, to identify your direct competitors and to think how to reach new customers. That is why,you need to realize a concise and an effective market research and to careffully consider the three(3) following fundamental components:
1. Market size :
Determining the market size is important. In fact, it helps you to calculate for example:
- The potential value that market has for your business or service;
- The total volume of the market;
- The volume of local producion (industries);
- The total sales of competitors;
On a simple word, market size consists principally to look at the market in more detail.
2. Market segmentation :
In each market, customers needs differ. That is why market segmentation can help you to:
- Subdivising market into clearly identifiable segments having similar needs, wants or demand characteristics in relation with your range of product(s) or service(s);
- Taking advantage of potential benefits to your business such as better matching of customers needs or personalizing your marketing actions or increasing sales.
Every business has competition, no matter how unique it might be. In add and across the world, competition is today strong and feroce as far as there is always competitors that are taking away customers from others.
That is why as a small business, it is imperative for you to:
- Identifying and analysing your direct competitors in the target market;
- Finding out your strengths,weakness,oppotunities and threats.
On a simple word, you will need to do a SWOT analysis for yourself.
Once you have make this comparaison with your direct competitors, you will be in position to:
- Adjust your export strategy and marketing actions;
- Add value to your product or service.
According this process, you will gain significant market share slowly and surely.
If going international constitues today one of the most important success factors for organizations and companies, it is also a fantastic opportunity for small businesses to expand their activities abroad.
In order to take advantage of this opportunity and to increase their chances to succeed in exporting, small businesses may need to make concise and effective market research which will produce clarity in their understand of foreign markets and will keep them in the right direction for growth.