A Brief Understanding of An Export Market Research

It is only recently many businesses understood the benefits they can get if they export to a foreign market. The good intentions can be exciting, the rewards can be remarkable but the mistakes can be disastrous. The worst mistake any business can make is to venture into a new market blindly. This is a common mistake with numerous SME’s we have come across. They carry “assumptions” into a new market and the results are always unbearable. Markets come with differences of which your assumptions may not be applicable and a handful of variables you must take into consideration before taking such a bold step.

For any business to systematically assess a market’s potential, it is of prime importance to carry out a detailed export market research for that target market.  What this means is, The Company should be able to collect and analyze information about the market of interest. Information about the consumers, the market niches and how effective can the business marketing programs be applicable in the target market.

Market research should not fall short but thought of as “a systematic process of collecting, analyzing, and presenting objective, useful marketing information for assisting management in problem-solving and decision making. It should help management to identify, service and satisfy the needs and desire of its customers”

We can also simply put it as the process of acquiring and evaluating valuable information in a foreign market with the sole purpose of identifying market opportunities and some constraints.

For an in-depth market research to reflect the potentials of a market and both in terms of perceptual and factual, it must contain specific issues such as;

• The size of the market itself as a whole, the population dynamics. The market economy and the investment conditions in the market.
• Is there available demand, growth potentials and the price trends for the products you are offering?
• Does the product support the cultural values?
• What is the purchasing power of the consumer (per capita income)
• Who is the competition in the market and also the region? What is their market share?
• What are the characteristics of the market? Is there a veritable network of distribution channels? What are the production capabilities? What are the substitutions to your product or service in the market? How is the communication? What strategies can be picked out from the market?

Why is it important to undertake a market research?

The importance of a market research is the information derived can be used to evaluate the potential of the market and easily identify the short, medium and long term potential for a product or service. A detailed market research can indirectly provide solutions, point out opportunities and best options which can guide a company towards a concise plan for their product or service entry and for budget allocation.

In some cases the results can be a red flag for a company, saving them from time and money if they had not taken detailed market research. In other cases, it might be a green light, and with an already conducted market research, you know all the right buttons to press and take immediate action. An effective market research can help a company spot gaps in the market, which can encourage success, growth, maximize profits and enhance competition.

Businesses that are fully equipped and well prepared with the right market intelligence can easily optimize their chances of performing excellently in the new market and eliminating or mitigating risks and damages a business might face stepping in a new market blindly. They are able to identify the largest markets for their services or products, the hot and fast-growing markets, and not leaving out the barriers of a market.

An effective market research doesn’t only share insights of the products or service demand but also tell you who your competition is in the market. With a better understanding of your competition, you can easily diagnose their strength and weaknesses. The market research will tell you if you stand a chance to compete or how management can take advantage of the competitions weaknesses and crop a portion of the market share.

As it is always said of the most valuable “commodity” of a business is the knowledge they hold about their clients and what their future requirements are. So, with proper market research, businesses are able to identify what their customer know, what they think, and value, where are their believes?  what the customers are able to do with the product or service? what do they feel? All combined shares valuable information about the customer’s behavior, what drives them, what motivates them, and what can cause any issue that might impact the product in the market.

The Different Types of Market Research

A market research can be carried out either as a primary or secondary research.  A primary market research is designed to collect data directly from the market firsthand. This is usually done through surveys, interviews and direct contact with the parties involve, like the potential customers and the representatives present in the local market. With a primary market research, the company can get to easily address its needs with their questions customized or tailored to gain specific details or insight. While it is very important to get direct answers to the questions, primary market research can be very expensive, complex, and time-consuming.

On the other hand, secondary market research is set up in a way the company collects data from just secondary sources usually through online sources. Information can be obtained from trade magazines, trade statistics for a country, publications, and business articles. Secondary market research can also be termed as Desk Research. Secondary market research can be less time consuming and not too expensive compared to primary market research. Businesses can easily identify potential markets from trade statistics and data, which may save time from going through numerous markets and regions.  The downside of secondary market research is the fact that the data obtained can be inaccurate, outdated, or not applicable to your business.

Businesses can choose to go with either a primary market research or a secondary market research or choose to use both.  Both in the sense that, a company can start with a secondary market research in order to get a sense of which market, country or regions to focus on. Such information may be obtained from reports from past research, from the internet, in-house business reports, trade magazines. Once the company is able to get the information required to identify a potential market, they can then undertake a primary market research to get specific answers to questions that will help make strategic decisions for market entry. The field research can be more effective in obtaining useful information and can be carried out with a great survey team or even through a trade mission.

Once the primary and secondary market research has been completed, it is very important to analyze the results conclude if they meet the business goals and objectives. From this point, you can start with a strategic planning for market entry using the insight obtained from the market research.

Key Market Research Guidelines To Consider

Carrying a market research can be challenging especially if you are not really familiar with the market in question or how the industry operates in a whole different setting. It is very certain a thorough and full flesh market research can save a business a lot of money and time but for this to be experienced, the research needs to contain highly practical results on which sound export marketing decisions can be based upon.

A wrong approach towards a marketing research can be devastating. This is so because the results and findings will be based on a flawed foundation.  When the purpose of a market research is not fully communicated all through the process the results can be misleading and in some cases whereby the results were affirmative, then the scenario can be best compared to as walking yourself into your own grave. In such a situation, there is practically no difference between your business and another stepping in a new market with little or no market research.

In order to undertake a quality and highly practical market research, it is very important to consider the following key guidelines which will not only help to point you to the right direction but also help you to make sound marketing decisions and provide accurate answers to the questions your management team will need to make decisions. Implementing an appropriate market research will surely give you all you need to enter a new market or look else where.

An understanding of the research goals and objectives

The goals and objectives of the research can be considered as the foundation of the research. An understanding of the goals and objectives of the research already tells you what you are looking for and points the research to that same direction keeping everything focus and aligned.  Research, in simple words, is considered as the search of knowledge, guides us to get valuable information but the next question is what information do we want to get? And how does these information answers your questions, how do they achieve your aims or better still, how does the end justify the means?

Answering these questions will only leave you with a clear objective or purpose of your market research. With a clear understanding of your goals and objectives, you are clear with the exact direction of your research, you can be equipped with the right questions, you can easily avoid unnecessary data, organize your research clearly which will facilitate the development of your research and you can easily move to the next key aspect which is your plan of action.

Developing a research Plan

With your clear goals and objectives in mind planning becomes a very easy process. When you clearly know what you are looking for, you know the right steps to take to make the process easy and fun. Planning can be some how difficult when you don’t know what your goals and objectives are. It can cost you more time and resources as you might take a whole wrong approach to get what you are looking for.

For an example, may be you only needed to undertake a secondary market research to get all the valuable information you need to conclude decision making but you decided to start with a primary research because you don’t have a clear objective. Then you will spend more resources and time taking the wrong route.

As it is said, “battles are already won before they are fought”, A well-structured planning will indicate if your market research will be a success or not. Planning can help you fine-tune your research process into a success.

At the planning level, you must be able to work closely with the purpose of the research and how the outputs of the research can be used for achieving the objectives of the market research. The reason planning is very important is because you can easily spot some flaws, weaknesses, or inadequacies which you can address by providing solutions before you step in the field. Again, saving time and resources. At planning stage, you are able to identify what’s important and what’s not, keeping you focus and what needs to be done first and at what stage of the research process. Every major goal the research seeks must be defined in operational terms and in the context of the research project.

Planning, should be able to help you outline the techniques and strategy to be used for your market research. Are you going for a desk study or field work?  It should be able to indicate your target population or audience. You should be able to determine the best ways to analyze the information obtained to best meet the objectives of the research.

After a well-organized planning has been done, a market research brief needs to be done to evaluate the effectiveness of the research. The required time frame needs to be decided upon, the cost of the project and the report parameters in line with the product type, technology or geographical location to be researched. Once all the information is ready, then execution is next.

Executing the research

The key to implementing the research is determined from the plan. A poorly planned market research will cost time and resources. All necessary arrangements needs to be ready before execution and this is very important for primary research. The execution phase is all based on decisions from the planning stage. Which is why the planning needs to be well structured, flexible, and comprehensive.

At some points, things may not go as planned, this is very common with field market research but a well-structured and flexible planning must address such instances. Close observation is also very important in order to make sure the process is not altered and geared towards the specific outcome. Information obtained during the implementation of the research needs to be valid as management decisions will be derived from the findings.

Developing a report to answer the questions from management

After all data and information must have been collected, it is important to note the information obtained is not just for information purposes or for knowledge sake, but rather solid information to guide the company’s management  for making the company’s most important and strategic business decisions.

The information derived from a market research is effective when the findings or conclusions clears every major doubt the company’s management must have had about a certain market. At a glance, the company’s management must be able to know if a market is worthy to venture or not.

What the company’s management would like to know is if there is a need for their products or services in a specific market. What are the opportunities of the market? What barriers are there in the market? What are the risk factors of doing business in this market? What are the thoughts of the potential customers and what exactly do they need? What are the possibilities for growth in the market? Who are the direct or indirect competition? What are the market characteristics? What motivates the customer? Answers to these questions and many more will give the company’s management an insight of the markets potential.

Providing workable marketing recommendations.

From the considerable amount of information derived from the market research, very important recommendations can be needed to make a venture more realistic and to arrive at a go-to-market strategy. Recommendations can further guide the decision making of the company’s management team. Recommendations can also be needed to overcome certain shortcomings of the market. Recommendations can be geared to further enhance profitability and any other ways available to minimize costs. There can also be recommendations as to what products to engage the market with, Will it be better to partner with agents or distributors? Are there any possibilities to segment the market? How can the market strategy overcome the weakness of the competition?

Recommendations can be easily generated from the findings derived from the market research. Recommendations must be feasible and realistic and solve major problems that may cause the company’s management to think otherwise.

EndNote

As mentioned earlier, for a market research to contain highly practical results on which sound export marketing decisions can be based upon, it needs to be able to touch each of the above five  mentioned points. It is very easy for a market research to be flawed right from the very foundation. Clearly defining the goals and objectives of a market research can help the market research process in planning, implementing, providing valid answers to management’s questions and recommendations. It should be noted the above is just a key guide to consider. But a brief step by step process can be found here for your better understanding.

As businesses today are increasingly strengthening their online presence, it is common practice for businesses to get orders or requests from overseas and may under mind the possibility of conducting a market research, but rather, that should be a signaling factor for an untapped market. A market research is very essential for every business and should be done on a regular basis and not just for new markets. The information a business gets from a market research like the needs of the customer, the market demand, distribution, competition, and many more can drastically affect your success in a market and prevent and mitigate any risks involved.