Understanding consumer behaviour is essential to break into a new market. Knowing what makes your customers tick allows you to sell to them better.
But becoming enlightened and understanding what they want is surprisingly challenging. It doesn’t come naturally to many business leaders, even the famous ones.
Fortunately, this article can help. It covers the nuances of consumer behaviour in small markets and how to adapt to local preferences. The article ends with case studies of businesses that have successfully done this.
Conducting market research
As always, begin by conducting market research. Learning more about target customers can make you more compelling when marketing products and services.
Focus groups are one option. These let you meet real people and learn what they think, but they take a long time to run and can be misleading (if participants aren’t honest).
Customer relationship management (CRM) data is another source of insights you can use. It teaches you more about your existing customers. However, it doesn’t tell you much about additional demographics that might benefit (including those in foreign countries).
Social media listening is another option. However, you already need an understanding of the local culture to interpret the signals.
Some businesses focus on demographic information in the target market. Age, income, education and family structure provide generic information on the types of consumers you want to attract.
Psychographics are helpful, too. These tell you more about the population’s values, motivations and character tendencies. Some cultures are more conservative, while others are more liberal.
Adapting to local preferences
Once you have that information, you need to adapt to regional preferences. It is essential to customize your products and services to meet local needs. For example, a fast food company might cater to the local preference for rice over fries.
Product packaging also matters. Designs should feature your branding while making sense to local audiences in the context of what they expect. Novel packaging might work in a Western context but not elsewhere.
Focusing on consumers’ marketing channels is a cost-effective small-market entry strategy. Some cultures rely more on radio and TV, while others get information from social media.
When marketing to foreign audiences, adopt their tone and culture. Use images likely to resonate with them instead of boilerplate Western concepts.
Case studies and examples
Fortunately, numerous companies have adapted to local consumer behaviour and been successful in foreign markets.
For example, Coca-Cola saw success in Southern Asia after it used Bollywood actors in its advertising. It worked because these stars resonated with the local audience.
Dunkin Donuts adopted a different approach. It kept its basic recipe and brand the same but adjusted toppings to suit local markets. The company’s products in the Philippines are different from those in Canada.
Conclusion
In summary, understanding consumer behaviour in small markets drives success. The more you can get inside the heads of the target audience, the more likely you will appeal to them. Don’t transplant your business model to a new geography without considering the cultural aspects – that’s a recipe for disaster.
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