Selecting and researching potential countries/markets abroad
7: Selecting and researching potential countries/markets
The need for meaningful research
Before you commit yourself and your company
to the complexities and costs inherent in exporting, it
is absolutely essential that you undertake some degree of
research to better understand the foreign markets that you
will be competing in and the consumers to whom you will be selling. It is important that this research is meaningful; simply compiling statistics and other facts
about a market without any purpose, is of limited value. Any information that
you collect needs to be compared, interpreted and conclusions
drawn. Your marketing research activities should be a planned
and practical exercise leading to specific decisions that
drive your export marketing strategies.
Marketing research is about providing answers to questions
Market research should attempt to provide the answers to questions such
as (this is not a complete list):
- Will our products be
acceptable in the market?
- What quantities are likely to
- What modifications need to be made to the
product to enhance its appeal in the market place?
is the best way of marketing the product and what will be
the cost of such a marketing programme?
- What is the long-term
potential of the product in the market?
- Who are my customers likely to be?
- Who can assist me in marketing my goods within the foreign marketplace?
What is export marketing
The American Marketing Association defines marketing
research as: "the systematic gathering, recording, analysing
and interpreting of data about problems relating to the
marketing of goods and services". Export marketing research
therefore has to do with the "the systematic gathering,
recording, analysing and interpreting of data about problems
relating to the marketing of goods and services across national
borders. Domestic and foreign marketing research clearly
involves similar objectives and methodologies. The major
difference lies in the scope, complexity and, ultimately,
the cost of conducting research in foreign markets.
research versus marketing research
- Market research is about understanding the broader marketplace in which you intend to compete. Marketing research, on the other hand, is about understanding what 'package' of marketing elements (i.e. the product, price, promotion and distribution factors) your firm will need to put together in order to meet customer needs and to succeed in the marketplace. Click here for a more detailed definition. Market research is the more encompassing/broader concept of understanding the market environment in which you will be competing, while marketing research is the more specific/focused view of consumer needs and behaviour (especially with your product(s) in mind). In your export endeavours, you will be trying to do both market research (in order to better understand how the marketplace works and to select the most promising markets on which to focus your efforts) and marketing research (in order to better understand your consumer and to put together a winning marketing mix). Your export market research efforts will be geared towards selecting suitable countries and market segments within these countries to focus your export marketing efforts on. Your export marketing research will aim at understanding your foreign consumers and how best to meet their needs.
Export market(ing) research - two broad objectives
Although every firm will
need to set the specific objectives they wish to achieve
with their export research, there are generally
two broad research objectives:
- The first objective of the
research is to evaluate all the countries abroad and to segment
these countries into three groups reflecting the potential these countries represent for your product. The main (first) group
being a shortlist of three to five countries that you believe
offers your firm real potential for exports. The other two
groups are those with some potential and those with no potential. (At some later stage you may want to review this list and move countries between the groups.)
Once this has been done, you will want to narrow your shortlist down to one or two countries - this you would do using more extensive desk research. Having selected one or two countries to focus on, you will now want to better understand the foreign environments that you will
be competing in (which we referred to as market research) -
using desk research and in-market research,
- The second objective of the research is to better understand how your company and its marketing mix will best fit in with the foreign marketplace and meet customer needs. This we referred to as marketing research which you will conduct using desk research and in-market research.
The research steps you need to follow
The export market(ing) research process comprises a number of steps aimed at
achieving the broad objectives outlined above. The steps
involved in undertaking export market(ing) research are:
- Prepare a research
brief (or plan) outlining why you are doing the
research and what you hope to achieve
- Implementing the research brief and deciding on who should conduct the research
- Preparing a research report based on the research undertaken