Selling abroad: Researching your market
How to get the knowledge and insight you need
Before you begin selling abroad, it’s crucial that you gather as much information as possible to get your venture off to a flying start. You need to know which markets you can realistically sell into, how much you can charge, how much you should ship and how you should go about winning and retaining customers.
First of all, take a look at your product. Which countries would go for it? Which countries have a gap in the market for it? And, just as importantly, which countries would welcome your trade?
When you’re planning an export strategy, it’s crucial you examine the attitude taken to overseas importers at national government level. Some countries will tax you to the hilt to drive you out, while others will welcome you with open arms and offer you preferential terms. It’s also important to look at issues such as size of population, political crime rate, government economic policies and the general perception of Britain… all these factors could affect how much you sell, and how safe your goods will be once they leave our shores.
Competitors and customers
It’s always good practice to research potential competitors in your target markets, particularly the price they charge; if they’re retailing at a price far below what you were preparing to charge, you’ll probably have to reconsider your own pricing strategy. You should also look at the strengths and weaknesses in their marketing strategy -if they’re missing a particular aspect of marketing (for example, TV advertising), this could be an area for you to exploit.
And then, of course, you have to look at potential customers. You can usually get an idea of companies who’d buy your product using trade directories, and it’s always useful to look at the participants in overseas trade shows relevant to your product. When you’ve identified the customers, find out the way they like to purchase products (if they prefer to use wholesalers than deal with suppliers directly, you’ll need to tailor your approach accordingly) and get a rough idea of spending power.
Many countries will have particular preferences and prejudices which might require you to tailor your product. A particular colour, shape or taste may be popular in certain countries but not in others, and some countries may be unwilling to embrace a particular logo or marketing slogan. Find out what sort of age and background your product will appeal to in each country (this is a key consideration if you’re planning to export toys or games), and make sure your advertising campaign won’t offend anyone!
Make sure you’ve turned over every stone before you begin the sales process. Even an issue as broad as climate change can affect your target market; if the weather is likely to change suddenly and dramatically, that will have a major effect on your transportation strategy. If you think it might be relevant, take a look.
The UK Trade and Investment website offers a market research facility which will allow you to explore potential markets in detail. A number of smaller sites (for example, startupoverseas.co.uk) offer detailed advice on individual countries, giving the pros and cons of each one, and companies such as Dun and Bradstreet offer country-specific risk reports which are always useful. The British Library is also a fantastic resource for market research reports, and you don’t have to pay to read them, so it’s cheap!
If you’ve got the time and money to fly out and visit a particular country before you begin to establish business within it, that can prove invaluable; but, if you’re planning to infiltrate a large and diverse country, it can be very difficult to get a thorough overview during a short trip, so you may wish to contact local distributors rather than relying on your own knowledge.