One of the most common mistakes that new exporters make is picking the wrong market – this may be due to misguided assumptions about demand for your product in that market, or just because you happen to have a good contact in that market who can help you get off your feet. Take the following steps to avoid making that mistake:
Do your research on the right market for you
Do as much research as you can on whether a market is suited to your product or service before making any commitments. Visit the country, meet with potential partners and distributors, understand the local customs and regulations, calculate the costs of modifying your product – this will help you determine whether you are likely to be successful in that market.
Understand the economic and political environment of your target markets*
In addition to the business environment, it’s important to understand the economic and politicial context of doing business in different markets. Currency risks, political risks, tough regulations on businesses – these can all influence the attractiveness of an export market. Efic’s Country Profiles outline some of the risks of doing business in different countries.
Appreciate that every market is different
However well you know one market, another market may be entirely different. Every country is different, and you need to understand the profiles, consumer trends and price points in those markets to develop a product specifically for that market.
Think about the customer
For some businesses, the market is a secondary consideration toidentifying the customer that can pay the best price for your product.Making sure the customer is right may need to come before choosing the market.
Consider the competition
Assess the size of the market and the competition you are likely to face in the market – the competitive environment may be a prohibitive factor at worst, and at best will influence how you market and position your product.
*We will provide further information on country risk in a later edition of this series.