Once you have carried out a preliminary analysis of your company, the next step towards internationalisation is to choose the market(s) you want to focus on.
Selecting the right markets and learning how to reach out to them could determine the viability of your expansion strategy. These markets will shape your international development, business planning and growth potential.
This article will address:
Before you try to identify your target market, think of a number of suitable markets where your product could work – then think about how you could serve each one.
No strategy is universally correct – it all depends on the type of business you are in and its marketing environment. Base your strategy on the resources available and the lifecycle phase your product has reached. A wide variety of factors will determine your choice of strategy.
Focus on a few select markets. This strategy will help you consolidate your company’s presence in these markets, with the aim of securing constant sales growth.
Factors favouring concentration:
Introduce your product to as many markets as possible – perhaps with small shares in the majority of your markets.
Factors favouring diversification:
We recommend conducting an initial global market selection process using the following criteria:
Put together a short list of countries that present a good concentration or potential concentration of your target market.
Analyse the variables for each country:
In this first stage of pre-selection, consider countries that interest you or have good market potential. Next, rank the countries in order of:
To analyse competition in your market:
Your choice of distribution channel will determine how your company expands in the market.
Track the supply chain of your product, from its origins to its final customer. Develop a clear idea of the intermediate operators and their prices. Analyse the existing sales structure in the country and how this could be adapted to your product or service.
There are a number of possible distribution channels:
You will need to analyse the current and potential demand of your product in its source market, as well as its profile and expected evolution. This information should confirm that your pre-selection process was successful and that your chosen markets are suitable for your product.
You will learn how best to design your subsequent marketing strategy based on price, presentation, promotion, distribution and so on. We recommend that this initial analysis is backed-up by further research in the market itself or through intermediaries. This will help you assess whether your initial analysis was correct.
The following entities will help you analyse potential markets: