In the COVID-19 era that we are living, where external forces and new challenges are influencing business success like never before, we cannot now merely rely upon the conventional strategies and calculable experience. They are no longer adequate to guide future strategies especially when it comes to entering a new market. Thus, in order to gain the tactical and competitive edge, it is indispensable that the businesses must learn about the many aspects of the market environment – where, why, what, who and how of the market - as they plan to enter. And, this of course is a daunting task.
So, we hereby bring about the five essential parameters that you need to follow while entering to a new market in order to achieve that desired success. As they say, a ‘well begun is half done’.
Defining the Market
The first crucial parameter is ‘defining your market’ clearly. It is necessary that before you identify who you want to sell your product to, you need to understand their wants and demands. For this, you will have to consider factors such as demographics, trends, location, needs and perceptions of your targeted customers. Also, you need to create a buyer’s persona which can include information on factors such as age, gender, income, and interests, depending upon your requirement. This in turn will help you in identifying and understanding the needs of the customers. And, once you are aware of it then you will have a clear understanding of how they behave, where you can target them, and what kind of interests they have. To simply put, if you do not know your target market, then, you cannot think of reaching them.
Detailed Market Research
The next step calls out for extensive market research as it will provide you with the understanding of whether a target market is suitable or not for your business. As Ryan HolmesIt rightly said, “if you form a strategy without research, your brand will barely float and at the speed industries move at today brands sink fast”.
Further, this will also provide you with an in-depth understanding of the following factors which are particularly important if you are looking to enter a relatively undefined market:-
- Size of the market
- Targeted consumer and their buying behavior
- Market growth rates / growth potential
- Forecasted demand
- Competitors
- Unique Value Preposition in the market
- Regulatory, local laws and other barriers
- Disturbances such as changes in consumer behavior, any new emerged trend
Perform Internal Capabilities Assessment
When you are planning to enter a market, it is advisable to undertake an internal capabilities assessment. This will help you in examining the internal environment of your business with regards to resources, technology, assets, product portfolio, competencies, capabilities, and competitive advantage and other relevant parameters. Also, you will be much aware of your company’s strengths and weaknesses.
Select Market Entry Options
Once you are confident about your target market and customers, then you need to decide your mode of entry into the market. This basically means as to how you want to get your products or services to market and to the targeted customers. However, this is influenced by number of internal and external factors which includes of product offered, financials of the company, infrastructure, and government policies, to name a few. Depending upon your business, you can consider selecting one of the following options or even can combine a number of options:-
- Forming a Joint Venture/Partnership
- Acquisition of an existing local business
- Using the services of an in-country distributor or agent
- Physical presence/office
- Selling through online channels or using e-commerce site
- Hiring export agents or companies
Develop an Effective Business Plan
It is a well-known fact that no business can develop and grow without an effective business plan as it helps you in determining if your idea is feasible coupled with providing you the necessary direction. Moreover, through this you are able to know every next step that is to be taken. In sum, your business plan must take into consideration the following pointers:-
- Your business description
- Product/Service Portfolio
- Scrutiny of the targeted market
- Growth opportunity
- Detailed Financial Plan
- Implementation of work plan
- Timelines to be achieved
- Exit plan (worst case scenario)
Get ready to succeed in entering a new market!
Most of the companies dream of beginning their business smoothly and, to run it successfully. However, the sad part is that most of the newly started businesses are not able to survive for long, even after a good start at times. Rather, as per the statistics, approximately 50 percent of the businesses are not able to survive it till the fifth year. And, this could also be the case with an already established business entering into a new market. One such example is of ‘Starbucks’, the prominent global coffee giant, which is exceedingly popular in the United States, but was unsuccessful in Israel and Australian market. And one of the reasons, was their marketing strategy plan did not pan out. As quoted by ‘Times of Israel’ newspaper, “Starbuck’s coffee, as well as culture, didn’t appeal to the Israeli customers; which means clearly indicates that there was a lack of mapping of target market and customers.
Undoubtedly, entering markets for the first time is challenging and involves your valuable finance and various essential resources and time. So, whether you are starting out or starting over, it becomes imperative for you to take into consideration all the requisite parameters and of course then chances are that you are more likely to achieve exceptional growth in your business. As they say, “a winning market entry strategy is half of the work done in building of a successful business!”
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