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:
- The largest markets for its product
- The fastest growing markets
- Market trends and outlook
- Market conditions and practices
- 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
- Is exporting for you?
- >> What is exporting?
- >> Myths about exporting!
- >> What is the possibility of success?
- >> Do you have the money to export?
- >> Can you handle the "risks" of exporting?
- Developing an "export marketing plan"!
- >> Market Research
- >> Export Market Entry Strategies
- The process of Exporting
- >> Finding over-seas "buyers" and "distributors"
- >> Responding to inquires
- >> Preparing goods for delivery
- >> Getting Paid!