So, your small business has been doing fine for quite some time and you feel that it’s time to expand it beyond the borders of your home country? The world is a global village and new technologies allow you to offer your products or services in different countries and time zones.

This exciting and absolutely feasible plan, however, comes with many obstacles and challenges that you need to be aware of before you embark on the entrepreneurial journey of a lifetime. Before we start discussing the knowledge and skills required for competing on the international stage, it’s important to emphasize that good, high-quality products or services are a must, but by no means are they sufficient for your success.

Follow and implement these simple steps to take your business globally without making rookie mistakes.

1. Explore your target market

The first step is conducting thorough research of the market you want to enter and establishing some important facts to help you decide whether you should take your chances. Some of the questions that you’ll need to consider are:

• How many potential customers are there?
• Who are your competitors?
• Is your existing business model applicable?
• How will you provide local customer support?

Besides these purely technical things, it’s also crucial to understand the local market you’re interested in, as well as its rules, habits, and cultural differences. Make sure that you’re familiar with the legal rules and regulations. Also, since politics, along with the entire business environment in the area you want to expand to, can affect the development of your business, it’s a good idea to hire a consultant familiar with that region to help you make your business decisions wisely and avoid educated guesses.

It’s equally important to analyze the cost-effectiveness of all the efforts and resources that you’ll have to invest, in order to prevent a bite-off-more-than-you-can-chew scenario.

2. Understand financial management

Many business owners suffer from the lack of financial literacy. And if we bear in mind that poor cash flow management is the reason why 82% of small businesses fail, it’s clear how dangerous financial ignorance can be. The things get even more complicated when you need to handle international transactions.

So, learning some basics about financial management and common trade finance instruments can save you from a number of money issues. It’s also a good idea to hire a seasoned accountant who specializes in international transactions and markets. Other frequent problems include securing financing for overseas ventures, ensuring that you get paid in a timely manner, and extra overseas operational costs. Take these into consideration before you make your decision to go global.

3. Localize your marketing approach

Believe it or not, but Google isn’t the most popular search engine in every part of the world. The same goes for Facebook, Snapchat, and other social media and IM giants. So, if you want to get your SEO and marketing right, you need to reach out to your foreign audiences by means of their local channels of communication. For example, if you want to target Chinese audiences, then you should know that Baidu holds 65% of the search engine market share in that country.

Similarly, your content should also be localized. Although it’s possible to translate certain blog posts, it’s much better to have a marketing team composed of people from the region you’re targeting or those who understand cultural, linguistic, and procedural nuances inherent for that part of the world. It’s also worth noting that not the same topics and keywords work for different countries of parts of the world, so make sure that you create your local marketing and SEO strategy from scratch.

4. Build personal connections

Once you pick a foreign market that you want to expand to, visit it and start building personal relationships with your foreign partners and associates. It’s true that modern technologies make it possible for you to have meetings, hire people, and sell online, but face time is indispensable if you want to run your business successfully. Getting to know a certain country isn’t possible without going there and having some first-hand experiences. Share images of your visit and interaction with local people on your social media channels, as that will be some kind of social proof that your company cares about your customers and employees there.

5. Scale your efforts

After you’ve launched your business in a certain region, start tracking your performance and scaling your efforts on a regular basis.  After a while, it may be be necessary to open a local branch which will handle the business there. Another step would be localizing your brand experience and optimizing it to fit the needs of your target audience. However, don’t rush things, as moving too fast will only drain you financially and put too much stress on your business. So, take one step at a time and control your growth.

The post 5 steps to scale your small business to new global markets appeared first on Trade Ready.

For a company to develop the most effective plan for marketing a product internationally, it must understand the needs, desires and income of its potential customers.

It must also have full knowledge of distribution systems, delivery times, pricing and the most effective methods of promotion in the intended market.

These factors will often be very different than a company is accustomed to in their domestic market. The good news is, the differences can be discerned through thorough international trade research.

In fact, the information provided by international trade research is needed at all stages of the marketing process.

Situation analysis
Companies can use the information provided by international trade research to develop a thorough understanding of a market and identify possible opportunities.

Marketing strategy
International trade research will provide information needed to position a product to a selected target market and will also help marketing teams identify the value propositions that are likely to be successful.

Marketing mix
International trade research will provide valuable information to guide product design for a target market and indicate the price range that it will be appropriate to demand.

Implementation and control
International trade research will enable companies to monitor the effects of a marketing strategy and identify changes in the market that will require marketing or product adjustments.

A great example of the successful implementation of the marketing processes above is Proctor and Gamble’s foray into the Japanese market with one of their products.

Proctor and Gamble use international trade research to adapt their product

Proctor and Gamble’s research into the Japanese marketplace identified a possible opportunity for disposable diapers. Customer research showed that Japanese mothers tended to change diapers more often than mothers in the U.S. and other Western countries.

Based on this information, Proctor and Gamble prepared a marketing and strategic plan to sell disposable diapers to the Japanese market. The company calculated that they could export diapers to the market at a competitive price.

Market research indicated that quality was an important purchasing factor, so the exported diapers were high quality, while being reasonably priced compared to competing brands.

Despite these measures, sales of the diapers were sluggish. To find out why, the company carried out more intensive market research. This research identified that one purchasing factor was the limited storage space in Japanese homes as compared to homes in North America.

This insight enabled the company to adapt their product to meet the customers’ needs. They designed a more compact version of a disposable diaper and renewed their promotional strategy. Sales rose sharply.

As well as identifying opportunities, international trade research might indicate that a planned course of action is not wise.

Research might indicate that an international marketplace is saturated with the type of product a company plans to offer. This can prompt the company to adjust the product or service offering or target another location.

Research can also identify warning signs of financial and political instability that might result in future losses because of regime change, currency devaluation or even war.

Pinpoint potential problems ahead of time

Even when a market seems like an attractive possibility for international trade, companies must consider the many challenges and potential problems involved. Many of these might be unknown until international trade research is conducted.

For example, many countries impose tariffs, a form of tax, on imports from countries with which they do not have specific trade agreements. Such tariffs are much higher for manufactured products than they are for commodities. These charges will obviously add to the costs for the importer.

Companies might also decide to export goods without realizing that there are strict legislative or product safety guidelines, required inspections or approval processes for shipping goods in the importing country.

Without proper research, companies might find themselves overpaying duties, paying fines for overlooking compliance issues or encountering costs caused by shipping delays.

There are numerous examples of mistakes resulting from companies developing strategic plans without devoting the time to carrying out proper research into the legalities, customs, cultures or infrastructure of a new international market.

Even the most obvious information can be overlooked, causing embarrassing mistakes

In 2004, a child-labour activist from Hyderabad, India, filed a public-interest action against PepsiCo India for glorifying child labour in a television advertisement. The advertisement showed the Indian cricket team celebrating a winning game while being served Pepsi by a young boy.

This case was embarrassing for PepsiCo and might have been avoided if researchers working on the promotional strategy had identified how Indian consumers were likely to react to this idea.

Microsoft also blundered in the Indian market. When colouring in a map of India for its Windows operating system, the software giant used a different shade of green for the eight pixels representing the disputed Kashmiri territory.

The colour difference meant Kashmir was shown as non-Indian on the map. This led to the software being banned in India almost immediately after release. Microsoft had to recall all 200,000 copies and lost millions of dollars.

The result of not performing international trade research properly can range from poor sales and lost profits to damage to a company’s reputation, legal action, fines and imprisonment.

Companies that conduct diligent research, and are agile enough to adapt their products to meet the needs of their new target market have a much better chance for success.

Have you used insights gained through extensive market research to adapt a product or service that was lagging in a new market? Is there anything truly surprising that you discovered through international trade research?

The post How collecting the right information will make or break your market entry plan appeared first on Trade Ready.

Here is a look at some lessons learned from famous market entry successes. These companies did it right, and others who wish to expand into new territories can learn from their strategies.

1. Starbucks in China

Lesson: Challenging the status quo can create a whole new market.

For thousands of years, the Chinese have produced and drank tea. The beverage has been so closely associated with the country for so long that the phrase “not for all the tea in China” has been a part of popular culture since the late 19th century, as a way of expressing unwillingness to do something for any price.

In the Chinese market, coffee had always been a distant second behind this beverage. Despite this fact, Starbucks believed that it was still possible to get the Chinese to embrace coffee.

They believed this because they thought that the concept of the “third place,” a place that is not work or home, but where one can still spend time and feel comfortable, would catch on in China.

Starbucks believed that an interest in coffee would grow with the interest in the “third place” that their stores provide.

Many other coffee companies may have balked at the immense challenge of breaking such a clear cultural preference. In 1999, however, Starbucks entered the Chinese market and opened its first store.

Over the next thirteen years, they opened 570 stores in 48 cities. These numbers clearly reflect how enormously successful they were.

It turned out that the Chinese were ready for such a big change in their beverage choices. They just needed a company to come in and provide a consistent, quality product in a friendly, clean environment, conducive to social interaction outside of home and work.

By taking the risk to break the mold of cultural traditions, Starbucks actually created a whole new market for its product. That market is alive and well, and demand continues to be strong. In fact, Starbucks plans to have 1500 stores in operation in China by the end of 2015.

2. McDonald’s in France

Lesson: Adaptation to a customer base is crucial.

Despite the fact that McDonald’s has enjoyed tremendous success in America for generations, it doesn’t always fare so well in every new market it enters.

For example, McDonald’s entered France in 1979. While it did okay at first, it was far from dominating the market. It was not until it changed some of its tactics in 1995 to adapt to the French clientele that McDonald’s really started to take off in France.

As of 2012, McDonald’s has 1258 stores in the country, more than double the 542 it had just fifteen years before in 1997.

In order to better appeal to its French customers, McDonald’s took a good look at French culture. The company realized that local cheeses, local beef, and baguettes might better appeal to the French palette.

In France, over 70 percent of sandwiches are made on baguettes. So, adding baguette sandwiches to appeal to the tastes of local customers helped the restaurants take off in the region.

Also, knowing that the French were fond of small coffee shops, McDonald’s started opening “McCafe’s,” where people could order a coffee, hang out, read newspapers, and relax. This was yet another hit with the French market.

In a final tactical move, McDonald’s starting having servers go around to tables and take orders for coffees, desserts, and second courses. They did this because their research showed that the French snack less during the day than their American markets, and instead eat meals that often include several courses.

This helped McDonald’s raise the average amount spent per patron to $15, an amount that is approximately four times higher than it is in America.

3. IKEA in China

Lesson: Bridging cultural gaps helps consumers understand the value of the product.

The middle class in China has expanded dramatically in the last twenty years. In fact, by 2017, 60 percent of the Chinese urban population is expected to be middle class. This amounts to 340 million households.

Due to this increase in wealth, and thus consumerism, a number of foreign companies have tried to expand into the Chinese market.

While results vary wildly from one business to another, IKEA is an example of a company that has had great success there. To see why, it helps to compare their strategy to Home Depot’s, a company who did not do well in China.

Home Depot is a home improvement company that relies on customers knowing what they are doing in terms of adding to or repairing their homes. The problem is that in China, the large middle class is very new, and many consumers do not know all of the nuances of home repair.

IKEA recognized this, and included many models and resources to guide them in how a home should be furnished and otherwise improved in their stores. This helped Chinese consumers understand exactly how IKEA products worked and could add value to their homes.

In other words, IKEA basically taught its customers in China how to furnish and decorate their homes.

This education attracted customers, many of whom were brand new to home ownership.

The result was a home run for IKEA. In fact according to Michael Ohlssen, the CEO at the time, sales in China were growing at a faster rate than sales in the rest of the company’s markets in 2011.

4. Red Bull in America

Lesson: Event marketing can be extremely powerful.

Red Bull’s entry into the American market was so seamless and successful that many Americans don’t even realize that it is actually a foreign company. The Austrian company was able to achieve this feat largely by its genius marketing techniques.

Many people in the U.S. are familiar with Red Bull soap box derbies, Red Bull extreme sports competitions, or the Major League Soccer team the New York Red Bulls.

However, what many people don’t realize, is that Red Bull’s event-based marketing strategy helps to generate a powerful buzz about the company and helps ingrain its brand image into American culture.

For example, in 2012 Red Bull created Stratos, a project designed to generate the highest ever free fall, launched from space. This project, which saw daredevil Felix Baumgartner jump off of an ascending balloon from space, generated almost 7 million YouTube views.

The Red Bull Air Race and the Red Bull Rampage are other events that generate large amounts of attention. From a marketing perspective, Red Bull is able to attract interest in their company in a way that many companies do not. This has enabled Red Bull to become the top selling energy drink in America.

Red Bull simply creates events that are so incredible or sensational that they are difficult to ignore.

People bond over experiencing the event, and soon the concept of Red Bull is fully familiar to them.

Red Bull has developed a winning strategy, and the company shows no signs of slowing in the American market. It seems event marketing really has given the company wings.

Which of these lessons could you most easily apply to your business’s expansion into new international markets?

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