Increase your international market knowledge

Finding markets with good sales potential begins with thorough research. In the earlier stages, it’s usually fastest and most effective to use secondary resources like the ones listed below. Some resources are subscription-based or may charge a fee for certain services.

• The Country Information page from Export Development Canada (EDC) offers free economic and political research for numerous overseas markets. It provides country-specific information, including the top sectors in the target country, the dollar value of Canada’s exports to that country, and more. You can also obtain matchmaking insight via the list of countries with whom Canada has trade relationships.
  
• EDC’s website also provides a wide selection of guides, articles and other trade-related material, including government programs and trade solutions. You can also sign up for the current EDC newsletter, or go to TradeInsights if you’re looking for specific resources. Some publications are frequently updated, including The Global Export Forecast and Country Risk Quarterly.
• Euromonitor International provides global surveys, market analytics, country information, consumer trends and socioeconomic and industry research that covers the global business environment.
• The CIA World Factbook provides information on the history, people, government, economy and geography of 267 world entities.
• The Ernst & Young Attractiveness Surveys focus on world regions and countries from an investment perspective. They include surveys, reports, key country findings, maps, videos and business cases.
• EU Business furnishes information on the member and candidate countries of the EU, covering politics, law and economics. It has statistical databases, tendering data, funding sources and much more.
• globalEdge is a U.S.-based portal that can help you research markets by country, by trade bloc, by U.S. state and by industry. It also includes databases, an emerging-market index, diagnostics to evaluate your export potential and a tool that allows you to compare the characteristics of selected markets.
• The Organisation for Economic Cooperation and Development (OECD) publishes research and statistics for a broad range of social and economic issues related mainly to the OECD’s 34 member countries. The OECD Economic Outlook assesses prospects for member and major non-member economies. The OECD Factbook is a reference tool for economic and policy issues. The OECD Economic Surveys provide individual national analyses. Going for Growth presents comparative indicators and evaluations of national performance.
• The International Monetary Fund (IMF) provides reports, press releases and statistics on economic development and monetary co-operation from 186 member countries. Its publications include the World Economic Outlook, the Global Financial Stability Report and a variety of regional economic outlooks.
• CanadExport is a free online publication maintained by the Canadian Trade Commissioner Service. It provides news about trade opportunities, export programs, trade fairs, business missions and more.
• The Trade section of Global Affairs Canada provides a wide range of information about opening new markets, trade and investment agreements, and various other trade topics.
• The Canadian government’s international trade data and market intelligence website provides a range of data that can help you learn about world markets. The Trade Data Online page allows you to generate reports on Canada’s trade in goods with more than 200 countries.
• If your company operates in the agri-food sector, be sure to check Agriculture and Agri-Food Canada’s Trade Services for Exporters page. It covers international market intelligence, trade show services, trade contacts and more.

Using these and similar resources, you should be able to identify a select number of markets that may be especially suitable for your products or services. These are your markets of interest.

Once you’ve selected your markets of interest, you can screen them further to identify the ones that may be particularly fruitful prospects. As you do so, try to answer questions such as these:

• Has your industry been growing consistently year-over-year within the market?
  
• Do the potential sales and profits of the market justify the expense and effort of going there?
• Is the market crowded with actual and/or potential competitors?
• Will the market infrastructure allow the efficient and cost-effective distribution of your products, or support the provision of your services? If your products need refrigeration, for example, is there a dependable cold chain that can keep them in good condition while in transit to your customers?
• Are there trade barriers or government policies that might adversely affect your operations in the potential market? For example, are certification standards for your products or services unreasonably stringent? Does the country welcome foreign investors or does it discriminate against them?
• Are there local government incentives that might increase your competitive advantage in the market? Many countries encourage foreign investors via tax and administrative relief, infrastructure support, exemptions from customs duties, financial subsidies, R&D support and the establishment of special economic zones where foreign companies can enjoy a range of advantages.
• What cultural, social and economic factors might affect the marketing and use of your product or service within the market? Are customers highly price-sensitive with respect to your type of product? If you’re selling consumables, do customers buy in quantity or just enough to last for a few days? What cultural norms will affect the images and terms you can use in your marketing materials?
• Do you see specific niches where your product or service offers superior value, while the competition in the niche is weak or nonexistent? You can often answer this question more precisely through a competitive analysis.

When your screening has identified one or two of your most promising markets and suitable niches within them, it will be time to do some research on the ground. This is vital. There is no real substitute for travelling to a market and getting a first-hand sense of how it works. You could simply set off on your own, but it might be a wiser investment of time and money consult EDC or the Canadian Trade Commissioner Service (TCS) before getting on a plane. International trade shows can also be an excellent way of exploring the global market for your products or services.

2.3.1 EDC

EDC’s Market Entry Advisors can connect you to in-country experts who can help you navigate the local business environment, obtain up-to-date market intelligence and start building networks in your market of interest. If you’re looking to do business in the Asia-Pacific region, Eastern Europe, Central Asia, the Middle East, North Africa, North or South America, sub-Saharan Africa or Western Europe, be sure to use this valuable resource to build your competitive advantage.

2.3.2 Canadian Trade Commissioner Service

The TCS has teams in 161 cities worldwide, as well as offices across Canada. It provides a range of services free of charge to companies that show a capacity for internationalization. If your business can demonstrate a firm commitment to international trade, the TCS can help with a number of key things to help you set up business internationally:

Your regional TCS office in Canada should be among your first stops when starting your on-the-ground market research. Trade Commissioners there can help determine if you’re ready for international trade and can work with you to decide on a target market. At the appropriate stage, the Canadian office can refer you to the TCS office in your potential overseas market. They may also set you up with a market visit, so you can obtain information about prospects.

2.3.3 Market visits

Once you’ve identified your most promising market(s) of interest, it’s time for an on-the-ground visit. The visit will confirm if the market is a good choice and help introduce you to potential customers.

Well before departing, you should contact the TCS office in your target market to let them know you’re coming. This is easier if you’ve already been working with a regional TCS office in Canada. Overseas Trade Commissioners can assist you with information about local market prospects and companies. They can help arrange on-the-ground contact searches and face-to-face briefings with local chamber of commerce or trade association representatives.

These contacts could be your first customers. If you’ve identified a company as a potential customer in advance, a Trade Commissioner may also tell you more about the company and how it fits into the local scene.

How to make your first visit to a new market successful:

• Send at least two people from your company. Your party should include senior executives with decision-making powers.
• If your product or service is complex, you may want to bring technical staff to answer questions from potential customers.
• Before going, learn about the local business culture and its attitudes to issues such as punctuality, formality and styles of negotiation. Arrange for interpreters, if necessary.
• Allow time during your visit to build business and social relationships with potential customers.
• Make sure you can answer detailed questions about matters such as price, production capacity and delivery times.
• Always follow up with the business contacts you make, ideally within 24 to 48 hours. Thank them for meeting you, provide follow-up details and promise to get back to them by a specific time if they’ve requested more information.

2.3.4 Trade shows

International trade shows can be an effective means of exploring a new market, identifying sales prospects, gaining useful contacts and assessing the competitive environment for your product or service. By exhibiting at the right show, you can:

• Get attention in a new market
• Introduce your company and its products or services to many potential customers in just a few days
• Show your sales prospects how they can benefit from your product or service
• Find distributors, agents or partners
• See what’s happening in your industry as a whole
• Find out what your competitors are doing in their markets

There are several major types of trade shows:

• Major trade shows for a specialized audience

These are devoted to a specific industrial sector, (such as automobiles), or a market, (such as health care). Many are international and draw large numbers of senior executives who make important sales decisions.

• Major trade shows for a general audience

These large shows may be international, national or regional. They showcase all kinds of goods and services for the public and for businesses. Because they attract a general audience, they may be less suitable for your company than more specialized shows.

• Secondary trade shows

Less prominent than major shows, these can still be important at both the international or national levels. They are often highly specialized and are usually open to business participants only. For companies that aren’t quite ready for one of the major shows, these events can be a good starting place.

• Consumer trade shows

As the name suggests, these shows are for the public at large. Some are general, while others are devoted to particular audience interests, such as home shows or sports shows. Companies that concentrate on selling directly to retail consumers may find these shows useful.

A growing number of sites list upcoming trade shows, such as The Tradeshow Calendar, EventsEye and AllConferences. The TCS website also provides information about trade events and trade missions. Contact your industry’s trade associations. Many keep track of the year’s shows and can provide information about them. Trade publications for your sector can also be useful, as can chambers of commerce, convention centres and visitors’ bureaus. Finding the most suitable trade show(s) in your target market may be easier if you check with a Trade Commissioner or the EDC representative there.