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Every year, we observe a strong wave of businesses sailing across the oceans to expand their presence in another country. Few nailed it successfully while others struggled to search for the right approach to make their products appeal in the eyes of the new markets. There are many different factors that result in the success or failure of a business’s new market expansion plan. In most cases, the main reason is the lack of market understanding: customers’ behaviors, driven factors for the growth of the industry, and updates on market trends. In this article, we discuss how important market research (focusing on consumption demand) for international expansion truly is to guarantee your success.

1. Primary Market Research

If you are looking for exploratory and specific kinds of information, primary research is the type you should choose for your business. It is normally done by yourself – your company (or you could also hire someone to do it for you). As the research requires countless interviews, surveys, visits, and questionnaires, it, therefore, takes a lot of time and effort if you consider it yourself. It requires you to go directly to source information from the target market by asking questions during interviews (telephone or face–to–face), surveys (online or mail), visits to competitors or retailers’ locations, etc.
But before conducting primary research, how does a business know who to include in their focus groups? Who they should ask to fill in the surveys? How many people should they ask for surveys? All of these questions should be answered in secondary market research and hence The secondary market research is also very important.

2. Secondary Market Research

For small businesses with limited budgets, people often take the first step to examine secondary market research before they choose to enter a new market. Secondary market research is research that has been compiled, gathered, organized, and published by other people. There are various resources to obtain secondary research, for example, reports and studies by government agencies, trade associations, online reference libraries, etc.

In order to support the primary market research, the secondary market research should include:

  • Demographics: Good demographic research should tell the type of person that buys your service/product. Are they adults or children? How much their income is? What do they normally spend their income on? Or is it a utilitarian product that everyone needs?
  • Psychographics: it should contain information relating to attitudes, activities, opinions, and interests of the target buyers.
  • Geographic: population density and climate, regions of focus for your products. This is important because some products are suitable for certain climates.
  • Behavioristic research tells whether or not the consumers are reluctant to a new brand when they consider buying the products, what factors concern their purchase decision, etc.

3. Why market research is important for a market expansion plan?

  • In different countries, consumers think, like, and act differently. Just because your products are well perceived and sold in the domestic market, it does not mean that it will attract well buyers in other countries.
  • When entering a new market, a business will be joining the same competition with other established and new brands. Therefore, it is very useful to know what others are doing and when is a good time to launch or introduce your new product/service.
  • Product adaptation is the key when entering a new market. Trying to sell what you have/want often fails many businesses. Knowing the new market well ensures you the knowledge to work on small tweaks or big modifications of your products in order to sell them well.
  • Market research shows a business where the target consumers go to buy similar products/services to yours. In different countries, channels of sales work differently and it’s vital to know it beforehand.

To conclude, depending on your budget allocation, time, and size of the project, you can select the most appropriate type of research for your business. In an ideal scenario, businesses who plan to expand to a new market should complete both primary and secondary market research in order to work out if the chosen market is suitable or presents enough of a demand for your products/services.

Discover our market expansion service.