Successful companies concentrate on one foreign
market at a time, moving on to the next only after succeeding in
the last. Demand and trend are the two key factors that determine
which countries to select first and how to set priorities.
Primary and Secondary Market Research
Market research is conducted by analysing primary
or secondary data resources. In conducting primary market research,
a company collects data directly from foreign marketplace through
interviews, surveys, feedback and other such direct contact with
potential buyers. Primary market research has the advantage of being
tailored to the company's needs and provides answers to specific
questions, but it is invariably time consuming and very expensive.
Step 1 - Collect Data
Collect export statistics published by authentic
sources. In India, there are two major sources for reliable trade
statistics - DGCIS and Customs.
Step 2 - Identify Promising Markets
Identify five to ten large and fast-growing markets
for products in your export basket. Check volume as well as trend
for a historical perspective of 5 to 10 years. Ask critical questions
- has market growth been consistent year to year ? Has there been
a shift in product choice ? Was there a seasonal bias ?
Step 3 - Identify Emerging Markets
Identify some smaller but fast-emerging markets that may provide ground-floor opportunities. If the market is just beginning to open up, there may be fewer competitors than in established markets. Growth rates should be substantially higher in these countries to qualify as up-and-coming markets, given the lower starting point.
Step 4 - Assess Target Markets
Ascertain the sources of competition, including the extent of domestic industry production. Analyze factors affecting marketing and use of the product in each market, such as end-user sectors, channels of distribution, cultural factors and business practices. Finally, identify tariff and non-tariff barriers (if any) for the product being imported into the target country
Step 5 - Draw Final List
After analyzing the data, the company may conclude that its marketing resources would be applied more effectively to a few countries. In general, if the company is new to exporting, then efforts should be directed to fewer than ten markets. Exporting to one or two countries will allow the company to focus its resources without jeopardizing its domestic sales efforts. The company's internal resources should determine its level of effort.
Happy and Productive Surfing
Dr. Amit K Chatterjee
- Newsletter on Business Opportunties from India and Abroad
Vol: 6, Issue 6
; August 5' 2005