Great news! You’ve decided 2018 will be a year of growth for your company, one where you’ll reap the benefits of selling internationally. You’ve already learned that companies that export are more profitable, productive, resilient, and innovative, and you’ve done your homework to ensure your company is export-ready. It’s time to forge into new markets.
But now you come to the one of the most common questions exporters have, both beginners and those who are more experienced: how do you figure out which markets are best for your product? And, is there demand for your product and service?
Here’s why figuring out a new market might seem hard
Choosing a good market can seem daunting at first because, let’s face it, there are a lot of fish in the sea, and each one is unique. Let’s start with the fact, there are some 200 markets in the world. On top of that, virtually every country is made up of distinct market regions. In the United States alone, for example, there are 11 economic market regions, each with its own set of sector opportunities.
Add in all the variables that could help make or break your success in a given market, from profitability to consumer trends to risks and barriers, and you’re looking through a virtual kaleidoscope of considerations when making your decisions.
Choose a market the same as you would build any long-term relationship
There are ways to help you cut to the chase and narrow down the field, however. One piece of advice I give to companies is to look for new markets with the same strategic approach you would use to build any long-term personal or professional relationship.
That’s not to say that an exporting relationship can’t happen spontaneously. Many do. Companies can get a foothold in a new market when an unsolicited order comes from an international customer, or by piggybacking into a market when one of their current customers or a supply-chain partner wins a contract there. But waiting for someone else to make the first move means that while you’re standing on the side of the dancefloor, you’re missing out on the opportunities of your strategic choosing, which could be more lucrative for your company than those that simply come by chance.
Here are four ways you can choose a market much as you would choose a long-term relationship, including some helpful resources.
1. Figure out beforehand what you want from a market
You’re more likely to choose a good market if you have a clear picture of your business, its strengths, and competitive advantage, and can match that to what you need and want from a new market. The chance to increase sales is an obvious goal, but there are other things you may need or desire as well, such as a higher profit margin, extended shelf life for your products, a skilled workforce, access to certain materials, ease of market entry, or a market that provides a gateway to other markets in a region.
2. Find out where your competition is selling
One of the best ways to figure out which markets might be receptive to your product or service is to explore the markets where your competitors are selling. What are the market characteristics, such as the economy, customs, income levels, climate, taxation, compliance and regulations that make it attractive? Just as importantly, is there room for your company in the market, or have your competitors already saturated it? Will you be able to woo customers away from the competition? If not, are there other markets with similar characteristics you can enter, before your competition makes a move?
3. Make sure the love will last
To begin with, is there a viable demand for your product or service? And going forward, can you keep that demand growing for a viable period of time? Keep in mind that you will likely have to adapt your product to the market to comply with regulations such as labeling, packaging, or safety standards, as well as to consumer tastes or trends – and these are likely to change overtime, requiring an ongoing commitment and attention.
4. Explore resources that can help you identify market needs
There are a number of resources you can use to help find that compatible market for your product or service.
- The federal government’s Trade Data Online is a comprehensive site that provides regularly updated data and custom-based statistics on international trade in goods. It can help you find new markets; determine competition for your products; and find out what products countries are importing, exporting or re-exporting throughout the world, among other data. You can search the databases by product or by industry.
- Country Risk Quarterly is an electronic publication (updated quarterly, as the name implies) that provides valuable information on the level of trade risk associated with over 100 countries. It explores the risks and opportunities of doing business in Europe, Asia, Africa, the Middle East and the Americas, including key insights on payment experience and risk rating drivers.
- The Trade Commissioner Service has on-the-ground representatives in countries around the world, who can help you learn more about individual markets and connect you to valuable contacts.
This should help you get started on finding some new potential markets, but feel free to contact me at firstname.lastname@example.org if you’d like to know more. EDC is in the business of helping Canadian companies export, and we’d be happy to answer any questions and direct you to the resources and services available to you.
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