Market recearch!

To successfully export your product, you should study foreign markets. You need to do this, to identify exporting opportunities and “constraints” abroad, as well as to identify prospective buyers and customers.

Market research basically is all the methods that a company can use to determine which foreign markets have the “best potential” for its products.

The market research is generally used to find out the following information for a company:

  1. The largest markets for its product
  2. The fastest growing markets
  3. Market trends and outlook
  4. Market conditions and practices
  5. Competitive firms and products

Sometimes, you may begin to export without conducting any market research if you get many unsolicited orders from abroad. Although this type of selling is valuable, you may discover even more promising markets by conducting a systematic market research.

A firm may research a market by using either “primary” or “secondary” data resources.

In conducting primary market research, a company collects data “directly from the foreign marketplace”. This is done through interviews, surveys, and other direct contact with representatives and potential buyers. Primary market research has the advantage of being as per the company's needs and provides answers to specific questions, but the collection of such data is time-consuming and expensive.

When conducting secondary market research, a company collects data from various sources, such as trade statistics for a country or a product. Working with secondary sources is less expensive and helps the company focus its marketing efforts.

Although secondary data sources are critical to market research, they do have limitations. The most recent statistics for some countries may be more than two years old. Moreover, the data may be too broad to be of much value to a company. Statistics may also be distorted by incomplete data-gathering techniques. Finally, statistics for services are often unavailable.

Even with these limitations, secondary research is a valuable and relatively easy first step for a company to take. It may be the only step needed if the company decides to export indirectly, since the intermediary firm may have advanced research capabilities.

A Step-by-Step Approach to Market Research

Your company may find the following market research method useful.

It basically involves:

  • Screening potential markets
  • Testing the targeted markets
  • Drawing conclusions.

Screening Potential Markets

Step 1. Obtain export statistics that indicate your product’s exports to various countries. 

Step 2. Identify five to ten large and fast-growing markets for your product. Look at them over the past three to five years. Has market growth and import growth been consistent year to year? Did import growth occur even during periods of economic recession? If not, did growth resume with economic recovery?

Step 3. Identify some smaller but fast-emerging markets that may provide good opportunities. If the market is just beginning to open up, there may be fewer competitors. Growth rates should be substantially higher in these countries

Step 4. Target three to five of the most statistically promising markets for further assessment.

Testing The Targeted Markets

Step 1. Examine trends for your products as well as related products, that could influence demand of your products. Calculate overall consumption of the product and the amount accounted for by imports.

Step 2. Find out your sources of competition. These sources could be, the companies in the target country producing the goods you are trying to export. Other sources of competition are other foreign players like your self exporting to the target country. Take a look it the “market share” of all your competitors and see whether it is increasing or decreasing? Increasing market share indicates a strong company and tough competition.  

Step 4. Identify any foreign barriers for the product being imported into the country. Identify if there are any laws in India preventing you from exporting a certain product.

Step 5. Identify any Indian or foreign government incentives that promote exporting of your particular product or service

Draw Conclusions

After analyzing all the data, it becomes easy to conclude whether a particular market is a good or bad choice! Once the "target market" is decided upon, the next step is to...

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Table Of Contents

  1. Is exporting for you?
  2.    >> What is exporting?
  3.    >> Myths about exporting!
  4.    >> What is the possibility of success?  
  5.    >> Do you have the money to export?
  6.    >> Can you handle the "risks" of exporting?
  7. Developing an "export marketing plan"!
  8.    >> Market Research
  9.    >> Export Market Entry Strategies
  10. The process of Exporting
  11.    >> Finding over-seas "buyers" and "distributors"
  12.    >> Responding to inquires
  13.    >> Preparing goods for delivery
  14.    >> Getting Paid!