With globalization, many industries and companies are asking themselves the question of going international. A real strategic issue, internationalization can be a growth lever as long as the strategy is well studied, but it can also quickly become a financial pitfall if it is not well prepared.
It is recommended that companies wishing to go international and conquer new markets launch a market study either through internal resources or by calling on specialists.
Find out why and how to conduct market research before going international.
Market research: an essential tool for refining your strategy.
When a company is looking for new growth levers, the international market appears to be one of the opportunities to be taken into consideration. However, it is not enough to want to go international to succeed and many companies every year pay the price.
Before launching internationally and thus opening the doors to new markets, it is essential to conduct or have conducted a market study.
This study will make it possible to identify :
- The potential of a country
- Local political, social and cultural context
- The technological context
- The environmental context
- Local competition
- The country’s economic situation
- Consumer needs: motivations and barriers
- Potential market barriers
- Opportunities that may be different from those imagined at the time of launching
Before going international, a company must have a thorough knowledge of the country and the market(s) it wishes to penetrate.
The 5 steps of the market study
The export diagnosis
This is the very first step before starting a market study. The export diagnosis allows to evaluate the financial situation of the company in order to know if it has all the necessary resources for its export, namely :
- A profitable business model
- The state of the cash flow
- The short-term financial outlook
- Does the state of the accounts allow for investment?
Indeed, exporting represents a cost and in addition to the expenses related to a market study, other expenses are to be taken into account such as those concerning logistics: transport, storage, local constraints…
The financial health of the company is therefore an essential step in exporting, but it is not enough. Having a good financial health in a market with little demand would serve no purpose other than to waste resources and spend funds unnecessarily.
During the export diagnosis, it is imperative to ensure that the company will be able to meet a strong demand for production, whether the production is local or imported. It is strongly recommended to carry out a study of the production units.
Finally, to conclude the export diagnosis, we must not forget the human resources aspect. Without the “Men” the company cannot function, it is thus essential to verify their experiences in other countries and their linguistic capacities will be decisive for this international development project.
The documentary research
Who says market research, says the detailed analysis of a country and the market to be conquered therefore time and money to know the different information related to the realization of a market research:
- The target(s) in the new country,
- The local economic and political situation,
- The customs, the languages spoken, …
- The possible legal specificities, etc.
In order to obtain this information in a qualitative and quantitative way, we mix documentary research with direct experiences in the field.
From an economic point of view, documentary research does not require much investment for the company. However, it will be necessary to mobilize personnel for this work, while sometimes requesting the help of experts such as SNECI for example.
This inexpensive research stage allows above all to collect the first and important elements that are indispensable for the reflection.
- What is the economic situation of the country?
- Is the country growing?
- Is the purchasing power of the consumers important?
- Are there any conflicts that could represent a risk for the local economy?
This step allows us to make an initial assessment of the development potential in the target country. It is at this stage that we also start to look at the competitors installed, in particular to draw inspiration from them and to imagine how it is possible to stand out by offering better products or services.
Documentary research is intended to immerse oneself in the local culture (language, culture, religion… which can influence consumption patterns).
The field survey
Documentary research is a good starting point for getting to know a market following an export diagnosis. However, nothing beats the information collected on the spot in real time during a visit to the country of export or establishment.
In the context of a field survey, it is strongly recommended to select representative samples in order to conduct qualitative studies.
These qualitative studies will help improve the understanding of behaviors, motivations and possible obstacles on the markets. This phase requires some human and material investments for the company.
Thanks to documentary studies and surveys conducted directly in the field, we end up defining personas. In marketing, the “buyer persona” is a typical profile, a fictitious identity card determining a potential buyer profile (demographic and social criteria, motivations, obstacles) and essential to conquer a new market.
It is therefore important to keep in mind that knowing your potential customers allows you to adapt your offer, but also your commercial approach. When you export your brand, you must not forget that in a new country, you cannot always offer exactly the same product, and you often have to be agile.
Synthesis and analysis of the information collected
- Verify the veracity of the information
- Analyze the questionnaire
- Analysis Identify the opportunities and risks of the market
- Define the keys to success and the constraints of the market r the answers to the interviews
Estimating the projected turnover
In order to determine your projected turnover, several methods are necessary:
- The benchmark method: figures from similar projects
- The purchase intention method: during a field survey
- The test method: wage portage, CAE, micro entrepreneur, etc.
- The method of sales objectives and market shares: estimates the value of a market.
A forecast must be as realistic as possible but if it is too cautious the company will not be able to face external difficulties.
Once the market study and the strategy have been defined, it is time to draw up the business plan, for which it is also possible to be assisted.
SNECI and the accompaniment in market research & strategy:
With 70 years of experience, 10 subsidiaries around the world and over 450 experts, SNECI assists manufacturers and suppliers in all sectors in conducting market research and defining their strategy of conquest.
150 studies have been carried out by our experts in nearly 50 countries, enabling us to identify business opportunities and meet our clients’ needs in 100% of cases.
We specialize in international strategic support for industrial companies, from SMEs to large groups, in France and abroad.
Our knowledge of market characteristics in 50+ countries allows us to have a local and agile approach with cultural, legal, economic and environmental specificities in the business and industrial world.
If you wish to benefit from our market research support, contact Laura by email firstname.lastname@example.org or directly via our website in the contact tab.