Your next move should be to visit the market with which you plan to invest and/or trade!

Below are four perspectives on how in-market visits can help with the opportunity-identification and market validation processes.

1. Witness firsthand the opportunities and potential of your target market

Visiting your target market will give you the ability to witness and validate the foreign market opportunities you plan to pursue firsthand, beyond what you are able to learn through market reports, market studies and presentations.

The Philippines has built a thriving Business Process Outsourcing (BPO) sector from the ground up. The country has overtaken India as the call-center capital of the world because of its highly educated workforce that can speak fluent English, and their strong grasp of Western culture.

In early 2011, I had the opportunity to work on a lead and investment generation project, which entailed finding North American companies that could potentially outsource their contact centre and other back-end functions to the Philippines.

The process took me to the Philippines and enabled me to see  government initiatives, private sector investments, and public-private partnerships that were designed to make the country a BPO hub in Asia and globally.

Some of these developments included the creation of industrial parks, business parks and specialized economic zones (SEZ) to anchor in investments; the building up of BPO sectors in the cities of Manila, Cebu, Davao, and Cagayan; and even the establishment of schools that teaches call center agents how to speak in various accents of the English language.

By conducting an in-market visit to the Philippines, I was able to connect with foreign companies including Expedia, Lexmark, Toshiba, Convergys and Telus, that all successfully invested and leveraged the country’s BPO sector.

I was able to learn first-hand about the business environment, market entry challenges, and what it takes to be successful in the marketplace, and it helped me to identify opportunities in the BPO sector.

2. Uncover nuances of your target market

In-market visits will help you uncover market nuances that could potentially act as market entry barriers or  delay your expansion process if left ignored.

As an example, I worked on a market assessment and sourcing project for used mobile devices in the ASEAN market. A market nuance not uncovered by the team visiting Hong Kong, the Philippines, Singapore and Vietnam through secondary research was the preference to use dual SIM phones in certain parts of Southeast Asia that have limited network coverage.

Having a dual SIM phone allows users to access multiple carrier signals.

By identifying this market nuance, we were able to adapt our business plan accordingly.

3. Connect with parties that can assist in the internationalization process

In-market visits will enable you to connect with parties that can assist in the internationalization process, including:

• Government commercial representatives and sector specialists from the Canadian Trade Commissioner Services (TCS), investment promotion agencies (IPAs), and/or trade promotion organizations (TPOs) that can support your business interests and facilitate a soft landing should you decide to move forward.
• Potential customers, potential suppliers and potential partners that can test the feasibility and fitness of the products and/or services you wish to introduce to your target markets.
• Business associations that can provide you with market insights, guidance on how to navigate the market entry process and key contacts, including potential partners, distributors and end-users
• C-level executives and business owners who can validate the market opportunities you plan to pursue and can share nuances, challenges and constraints in the marketplace.

4. Monitor your external environment, which can affect the market opportunities you plan to pursue

The task of monitoring the external environment is an ongoing process.

By conducting in-market visits, you are able to track any changes in the external environment, which may impact the trade and investment opportunities you plan to pursue.

This will enable you to take corrective action if need be and minimize risks prior to the execution of your trade activities and/or the establishment of your business operations.

In today’s globalized world, Canada’s economic well-being is tied directly to its economic linkages with other countries. Although Canada’s supply chain is deeply integrated with the North American Free Trade Agreement (NAFTA) markets, I believe Canada needs to diversify its economic relationships.

By 2030, Asia is estimated to account for 64% of the global middle-class and over 40% of global middle-class consumption.

Given the tremendous foreign market opportunities Asia offers today and in the future, Canada needs to intensify its economic engagement in the region. If we don’t, then Canada risks losing out to other nations that are actively pursuing opportunities in Asia.

The post Four ways that in-market visits enable you to maximize foreign market opportunities appeared first on Trade Ready.

Research findings are of little or no value until they can be applied to solve problems and help make decisions. International trade research is especially valuable when it is used to decide the following:

• Which markets are good international trade opportunities
• When and how to enter international markets
• Whether to adapt products, processes or services for a new market
• How to adapt marketing to new opportunities

Determining when and how to enter a market requires examining many different aspects. Perhaps the most important one is deciding on the nature of the service or product that should be offered to a promising market. In taking a product or service into a foreign market, your company has several distinct options about how to proceed:

• Your company can sell the product or service as is with no modifications or changes.
• Your company can create several modified versions of the existing product or service, each one aimed at a different market.
• Your company can create new products or services for different markets.
• Your company can incorporate all required changes into one product or service to address the global market.
• Your company can introduce modifications to the processes by which a product is designed, manufactured, sold and delivered to the marketplace.
• Your company can modify the services accompanying the product or service to better accommodate market requirements.

Which of these options your company chooses will depend on the information researchers have gathered about the target market and the market intelligence that has been developed from it.

Do you have a universal product?

Occasionally, modifications to products, services or processes might not be necessary.

Your company might be able to export the same product and use the same processes as it does for its domestic market.

This situation can occur when your company:

• deals with customers who want a product because it is the same in all worldwide markets, such as jeans;
• supplies generic components, such as tires or computer chips;
• produces a unique product that is sold based on its status or foreign appeal, such as Gucci watches
• produces a product that is sold exclusively on a commodity or price basis, such as iron ore or wheat.

In other cases, intelligence gathered by researchers will indicate that a product is unsuitable for a market and cannot be modified to make it suitable. For example, water skis are unlikely to find a mass market in desert countries and air-conditioning units are not required in Greenland.

Some product-market mismatches might be eliminated over time. For example, many Asian countries do not commonly use milk or milk products, but this could possibly change with the right product and marketing approach.

However, such an attempt would require a lot of time and investment and would have no guarantee of success. Another example would be that of a mobile phone provider that does not want to expand into a market without wireless infrastructure.

To begin applying your research take a high level perspective

Applying trade research to product design and modification involves considering the whole production and export process and comparing it to what has been learned about customers in the target market area.

Your company should think of the following factors:

• How its products and services are advertised and sold
• How they are designed and, in the case of products, manufactured
• What happens when orders are received from customers
• How products are stored and shipped
• The speed and reliability of delivery and the comprehensiveness of any after-sales service

Research and the resulting product or service modification must not be viewed as a one-off project. Applying market intelligence should be a process of improvement.

Every aspect of your venture can be evaluated and improved, even if the product or service does not require modification or cannot be modified.

Exporters will never have a perfect product or perfect process. Their products or services will always be at the mercy of competitive pressures, changing market preferences and emerging new technologies. Success depends on understanding and anticipating change through continual improvement.

Case study: Improving packaging in response to market demands

In 2007, Novartis, a Swiss agribusiness, chemical and drug company, announced that all food products made from its genetically engineered crops would be labelled to indicate the presence of genetically modified ingredients.

Genetically engineered products made by Novartis are used on many farms to increase milk production and reduce the amount of herbicides or insecticides used on corn, soybeans, cotton and potatoes. Foreign genes have also been introduced into tomatoes to prolong their shelf life.

There has been widespread opposition to genetically engineered foodstuffs for several years, but Novartis has been unable to change its product to respond to these concerns. However, Novartis decided to improve its product offering in response to numerous customer surveys that have shown that U.S. customers would prefer to know when the food they are eating comes from genetically altered crops or animals.

Use your data to see what your customers want

Products can be standardized, adapted or created for a foreign market. Regardless of which approach is chosen, there are certain common characteristics that all products should have.

They should all be:

• fit for the purpose for which they were intended;
• efficient, safe and reliable;
• devoid of features that might offend customers;
• appealing; and
• in conformance with all regulations in the target markets.

To develop a clear picture of what the target market really wants and what can realistically be provided, your company must interpret market intelligence by sorting through and weighing a variety of factors.

Customers might express interest in a wide variety of features, some of which might appear contradictory: low price, high quality, timely service, expanded functionality, rapid delivery or excellent after-sales service. Not all of these requirements will have equal weight. Their significance will depend on the product being considered.

Your company must decide how to weigh, select and trade off customer requirements to achieve an optimal mix.

It might not always be easy to define or predict what motivates customers to purchase a particular product. For example, Apple has had immense success in recent years, despite its computers and iPods being more expensive than rival brands. What has led to the popularity of its products is good design and a clever marketing strategy that emphasizes that an Apple product is more fashionable than others and that people who own an Apple Mac computer are more creative than PC owners. Younger customers feel that there is a cachet in being seen with an iPod rather than other MP3 players.

Break your market intelligence into 4 distinct categories

The market intelligence developed from international trade research can be divided into four broad categories:

• Political and legal environment
• Infrastructure
• Market description
• Product-specific market data

Each of these categories contains descriptive information about a different aspect of the target market. That information can be examined and evaluated for indications of where some modification is required to your company’s product, service or processes. It can also identify potential areas for growth, perhaps by exposing an unmet customer need.

As well as identifying where products or company business processes might have to be altered to meet customer and market needs, this intelligence can help researchers evaluate the attractiveness and viability of a market that is being considered as an international trade opportunity.

Market intelligence is essential not only for guiding business decisions about whether to engage in international trade, but also for indicating ways in which products, services and business processes must be adapted or changed in order to become successful in a market.

This intelligence can be invaluable for guiding companies towards unexploited markets in which a small and inexpensive change to their product will generate new demand. It is also helpful in identifying markets that seem to be profitable opportunities but will in effect be difficult to sell to without extensive product modification.

Market intelligence is also valuable for guiding how products and services should be promoted and advertised to different cultural markets and can help organizations avoid potential loss of reputation from cultural mistakes.

The post How to apply market intelligence to your products and processes appeared first on Trade Ready.

When a company has completed the process of market research and has confirmed that, given its resources, it is capable of successfully entering a specific international market, it is time to develop a strategy for market entry.

A wide range of options exists for companies to approach the market, and to develop and maintain a long-term and successful presence there.

Because so many options exist, it is critical to select the right market-entry strategy. Probably the first question to answer is whether to work directly with customers or to use some form of distribution, whereby a company’s products or services are managed or impacted in one way or another by a third party. There are pros and cons to both options.

Direct sales enable a product or service provider to minimize prices to end-users and to control the relationship directly. Conversely, leveraging a company as a partner along the supply chain prior to its arrival at the ultimate customer may facilitate more reach into a market but can also increase end-user prices and complicate communications with customers.

Feeling overwhelmed? Start by asking a few questions

When developing a market-entry and maintenance strategy, a variety of other factors must be considered:

What method best suits your company’s product or service? What is the layout of existing distribution networks, and what forces drive them? What is the competition doing, and what can be improved? What does the market research indicate are the drivers of customer buying behaviour? What investment needs to be allocated, in both the short and long term? How will the strategy need to be modified as you (the exporter) progress through the market- development cycle?

Most importantly, what are the critical success factors that could determine the difference between success and failure in a target export market?

All of these and more must be carefully considered as one develops an international market-entry strategy. Before getting started, get familiar with the crucial elements you’ll need to address in a successful strategy.

Your 9 step market entry checklist

The following checklist can help identify the steps required for successful market entry:

1. Successful market entry begins with domestic-market establishment and ultimately ends with investment in the new market.
2. Selecting the correct market-entry strategy is a critical decision, and can mean the difference between success and failure.
3. Selling directly to customers or through distribution is governed by the population of potential customers and by the value of the product or service being offered.
4. When selling through distribution, understanding all available channel options, and how to manage them, is critical to the success of the market-expansion initiative.
5. Competition comes not only from other providers of similar products and services but also from “non-competing” product lines that can occupy the attention of channel partners.
6. Clear communications between suppliers and channel partners make it possible to adjust to changing market conditions.
7. Selling is not convincing customers to do what you want; it is helping customers make astute purchasing decisions.
8. Strong relationships are important to doing business between all cultures, and contact must be maintained through both personal visits and ongoing remote and electronic communications.
9. Successful market entrants must possess management commitment, financial resources, staff and capacity to handle increased demand, language capability and availability to travel.

Preparation and understanding are crucial to successfully entering a new international market. Developing and implementing the correct market-entry strategy at the outset can often make the difference between success and failure. Key components of a successful market entry include identifying and selecting the appropriate distribution channel options and ensuring clear communication with the business partners that are vital for success.

The post Simplify your market entry strategy with this 9 step checklist appeared first on Trade Ready.

Once a company performs, gathers and analyzes the results of its international trade research efforts, it is ready to make global marketing decisions. The next step is to determine how to effectively link research with applicable decisions in global marketing.

Size up the competition

To assess its prospects properly, a key task for any company is to identify its potential competitors, determine how well established they are and learn what it can about their current and future competitive strategies and tactics.

Although primary research is likely to be required to obtain some of the more detailed information (e.g., extent of competitor control over distribution channels, or customer and trade intermediary perceptions of competitor advantages and disadvantages), many of the pieces of the competitive picture can be assembled on the basis of secondary research.

Useful tools for identifying potential competitors include the Internet, trade and industry journals and associated buyers’ guides, trade directories and market research reports.

Journal articles can help develop an understanding of the competitive situation in a market, and advertisements can provide further details about the companies involved and their product offerings. Depending on the prestige and target readership of the publication, its annual buyers’ guide issue may be used as the basis for compiling a comprehensive list of the serious competitors in an area.

Trade directories can also be used for this purpose; the tighter the geographic and product focus, the better. In some cases, agents and distributors representing the competition can also be identified from these sources. Market research reports often provide information about estimated market shares of leading competitors and insights into their competitive positions.

Having identified the leading competitors and some of their products, a company can make effective use of the other research tools. By scanning publication indexes for the names of these companies and products, a wealth of information can be obtained about the competition.

Newspapers, the trade literature, consumer publications, corporate annual reports and brokerage house reports can all provide useful data. Consumer publications are valuable in that they may contain product reviews or yield information about product recalls.

Corporate annual reports and brokerage house reports can provide insights into the financial condition of competitors and possibly disclose information about their R&D, marketing and investment activities.

Where the company is looking at a developed country market, the quickest and easiest way to identify sources of information pertaining to companies and product names is by conducting a literature search on the Internet or in an electronic catalogue of library holdings. For those who are inexperienced in conducting searches on the Internet, it is possible to have the search done by a library that offers assistance.

Working with a reference librarian will help to prioritize and specify the company’s information needs and to identify the databases that are most relevant for the information required. An estimate for the cost of the search will also be provided, so the company can decide whether to proceed with the search.

Narrow down the optimal target market

The process of selecting a target market can be regarded as a kind of filtering process. Several market opportunities are initially selected, then various criteria are applied and assessments are made based on the information assembled. The effect is to screen out some of the less attractive opportunities, leaving only those that offer the best expected returns.

Canadian companies looking for a broad assessment of international market opportunities are also well advised to refer to a series of international business strategies prepared for various sectors of the Canadian economy. These are updated annually by sector teams representing both the industry in question and government researchers. These sectoral strategies, together with other country information, can be accessed on the website maintained by Global Affairs Canada (GAC).

Other factors may also be relevant for a company when deciding to choose which market to focus its international market research efforts on. For example, a company or individual may have a cultural, familial or lingual tie to a specific market, and thereby have a competitive advantage to research and enter that particular market.

Case Study – Cadbury Purple

There is no one correct way of performing a screening to identify a target market. A practical approach to identify promising countries includes the following four steps:

1. Filter the opportunities at a macro level, considering such factors as economic statistics (including analysis of trade statistics), social structures, geographic factors and political environments. The objective here is to eliminate countries with low potential, high risks and complexities that could make exporting difficult.

2. Focus on how potential markets relate to the products. Here the opportunities are filtered to establish a select group of countries with high market potential. To do this, researchers must analyze growth trends, market size, import restrictions, the level of economic development and cultural acceptance.

3. Assess the ease and cost of market entry, the strength of the competition, requirements for product modifications, projections of sales and estimates of profit potential. Considerable primary research is required to furnish the information required for this analysis.

4. Refine the results of the analysis. In order to establish a priority ranking of the target markets, the remaining opportunities are examined in light of the company’s resources, its strengths and weaknesses, goals, plans and return on investment criteria.

Regardless of where the market information is gathered or which target market a company is researching, the entire point of international trade research is to provide marketers and decision makers with necessary and fact-based data from which to draw conclusions and make decisions regarding the international marketing plan.

Depending upon the product or service to be offered to a specific international market, marketers and company decision makers need to know specific details about the market in order to prepare and execute a sound and successful international marketing plan.

The post How to link international trade research to marketing decisions appeared first on Trade Ready.

There is a tendency among some businesspeople to think that politics and law should be left to someone else. However, for international marketing, politics and law play a critical role.

While the details should be left to the specialists, a general awareness of how they affect international marketing decisions is essential. The turbulence of unexpected political or legal issues can damage even the best business plan.

It is important to anticipate unexpected circumstances and take appropriate actions when preparing the international marketing plan.

Understanding the Political Environment

Politics are a crucial factor in the conduct of international trade. Characteristics such as political stability, the attitude of political leaders to foreigners and foreign trade, or the degree of state intervention in the economy will affect a company’s ability to enter a foreign market and turn a profit.

Government actions can influence the operation of market mechanisms positively or negatively. If the international political context in the target market changes continuously, it is imperative that the international marketer fully understand the political situation (current and potential).

Political systems

Political systems affect the degree of freedom that businesses can exercise in running their operations. Democracies maintain stable business environments primarily through laws that protect individual property rights. In a centrally planned political system, there are government rules, regulations and approval processes affecting many routine decisions.

In reality, the political systems in many countries contain varying degrees of democratic and centrally planned elements. For example, even in the centrally planned political systems of China and Vietnam, the private sector enjoys considerable freedom as the two countries seek to maximize their own economic growth opportunities.

Political stability and risk

Political risks are present in many countries in different degrees. In general, political risk is associated with a country’s history of stability and consistency.

An unstable government or an environment of political conflict will increase the risks faced by international marketers. Inefficient governments can cause expensive delays (especially at customs posts) and difficulties in financial settlements. Weak governments can court popularity or try to make themselves seem strong by taking highly visible and restrictive measures against foreigners, especially foreign business people. Most types of political risks arise out of the following sources:

Property seizure: Governments sometimes seize the assets of companies doing business within their borders. Methods of seizure include confiscation, expropriation or nationalization (which might result in the full or partial transfer of ownership). While governments rarely use confiscation and expropriation (usually with some monetary compensation) these days, nationalization continues to remain a vehicle for governments that have ambitions regarding specific sectors. For example, consider Venezuela’s nationalization of the mining and energy sector.

Conflict and violence: Outbreaks of hostility, either within a country or between countries, can have catastrophic effects on the conduct of trade. Over the past few decades, the incidence of wars between states has declined, but there has been a proliferation of domestic conflicts (civil wars, terrorist campaigns, secessionist movements), which inevitably bring instability and economic uncertainty. Conflicts may also be associated with embargoes or sanctions, which are equally disruptive to a company’s plans and prospects. In the past, sanctions were used regularly against the countries of the former Soviet Bloc as well as against the apartheid regime in South Africa.

Policy changes: These changes may involve the following:

• Imposition of control over local production or new rules affecting the disposal of profits.
• Altering the ratio of foreign to local ownership.
• Imposition of restrictions on the repatriation of profits.

Local content requirements: Laws stipulating that foreign companies must obtain a specified amount of a product or service from local suppliers can force companies to use locally available materials, procure parts from local suppliers or employ a minimum number of local workers. These requirements can limit the foreign company’s direct exposure in the local market. They can also have an adverse impact on product cost, product quality and quality of the workforce.

Change in government: There are situations where a change in government may result in the new government not honouring some of the previous government’s commitments. This generally affects industry sectors that are critical to the country’s economy (e.g., mining, energy, etc.).

The study of any legal and political environment requires focus. There are key aspects of politics and law that affect international marketing decisions. The international marketer’s focus is on the degree of political risks, pressures of the political economy, the limits of decision making imposed by the legal system and legal processes.

Virtually all international marketing decisions—how to market the company’s goods in the target market, which technologies to employ, who to hire in the foreign operation, etc.—have to be implemented within the parameters set by the national business environment of the target country.

The national business environment is essentially a conglomeration of its politics, laws, regulations and economic policies.

The international marketer has to understand all the dynamics reflected in the legal, policy and political environment of the target country. Exporters must also develop strategies and tactics to deal with the inherent constraints in this environment and make the best of the opportunities.

The post You can’t sell to a new market until you understand their politics appeared first on Trade Ready.

Many companies hesitate to enter export markets because of perceived risk. Certainly there are some legitimate risks to be mitigated. There are also a number of “risks” which are exaggerated and promulgated with common myths.

But there is one fundamental risk which has traditionally challenged export growth – market selection. Technology is quickly helping to obviate that risk and clear the path for more companies to expand internationally.

The first market gamble

Companies considering global expansion typically follow one of three paths to market selection:

1. Follow a customer – an existing domestic customer is going international themselves and requests global support

2. Accidental – an order comes in from somewhere, unsolicited

3. Speculation – “market research” is conducted and an informed “best guess” becomes the basis for the speculative allocation of resources to market entry and development

There’s a reason why many companies that export follow existing customers. In that case, the only barriers are the transactional challenges of compliance and logistics. There’s very little downside for companies in that situation.

Accidental exporters occasionally stumble into success, but typically they develop a series of ad hoc transactions which don’t justify developing an internal infrastructure, but tax the operations team. This common scenario often leads to organizational frustration with the “complexity” of export sales.

The “well researched” approach is the most problematic. Companies realize that they can’t just throw a dart at the map to select an appropriate market successfully. So they research the options. Sometimes they rely on a government agency to assist, while in others the task is handed off to interns, or management takes responsibility.

Regardless of who conducts the research, it’s inherently hypothetical and based on the company’s perspective – not an objective view from the outside-in, as prospects in the target market might see them, their products/services, or their viability as a vendor.

With a theoretically sound selection made, resources are committed – after all, it’s well researched and very likely to succeed, right?

And companies recognize that it takes time. So, based on the researched decision, they often commit substantial resources to market entry. These resources include not only cash, but also management focus diverted from domestic priorities for an extended period.

Committed to their well-researched initiative, they persist through discouraging experiences, confident that patience and hard work will prevail. And after 3 – 5 years of frustration, they rarely wonder whether their market selection process was proper. Instead, the conclusion is typically that “export isn’t for us.”

In short, the risk is that companies commit resources to do “everything right,” yet risk getting it completely wrong – and at great expense.

Let markets “raise their hands”

Technology substantially changes the way that prospects and sellers interact. While sellers used to have to go forth and find prospects, prospects increasingly use the incredible power of the internet to find what they need/want at the time of their choosing.

They often search for ideas and information, and later search for solutions to challenges they have, and then products/services which may help them.

It’s said that there are already more internet connected mobile devices in the world than toothbrushes, and the rate of growth of connectivity shows no signs of slowing. That means that potential buyers globally have the same access to information, and products/services, as your domestic buyers.

This in turn means that great digital marketing, an imperative regardless of your market focus, generates rich data which provides valuable insights.

One can quickly determine, for instance, by country/region:

• who is finding you when they’re searching
• what searches they’re doing (some of this data is direct and some inferred)
• who interacts with your “content” initially
• who interacts consistently
• where leads concentrate
• where substantive, viable projects develop
• and even where you can consummate profitable orders

This approach provides real market intelligence. While it’s no guarantee of success or profitability, it’s a powerful tool both to identify what may be easier markets to enter, and to challenge and validate the traditional research.

Enter every new market agilely

This approach to market identification offers another huge potential benefit: companies can adopt an “agile” model for market entry.

As successful digital marketing generates international traffic, leads, projects and orders, and certain markets evidence themselves to be particularly promising, companies can progress step-by-step. It’s no longer necessary to skip directly to an extensive and expensive “on the ground” commitment.

Instead, companies can progress incrementally by testing assumptions, efficacy and return at each step along the way. And again, they can focus all efforts on markets where they have data to indicate they’re likely to have some traction.

A reasonable progression might look like this:

1. Collect data generated through great digital marketing focused on the domestic market

2. Use early projects to learn about the prospects’ challenges, concerns, buying process, common questions, goals, market barriers, etc.

3. Create some approximate ideal customer profiles, target buyer personas and buying journey maps

4. Begin to optimize some content around those learnings, gradually incorporating local language keywords (from those interactions, not translation!)

5. Adopt a CMS (content management system) that delivers contextually appropriate content (using IP address, for instance, shows a different version of the site to a visitor – not just language, but even primary content, images, etc.)

6. Start to display some content offers, to targeted visitors, that are designed for those markets

7. Transcreate some early articles, landing pages and eventually some offer documents (while translation converts words, and localization considers dialect, context, images, colors, etc. transcreation builds content from the bottom up as it should be locally)

8. Create a local language microsite

9. Undertake sophisticated SEO (TLD/top level domain, hosting from an IP address that corresponds to the TLD, etc.)

All of this can be accomplished from the home office.

Much of this groundwork can be done for less than the cost of a flight to the target market.

And each step will yield data which will be used to refine subsequent steps and inform resource allocation decisions for deeper engagement within markets as well as guide priority of entry into future markets.

And much of the work contributes to improved results across all markets.

It’s a process, not a solution

Is this a substitute for being on the ground building relationships in a market? Of course not. What this does, however, is provides a platform for companies to explore international market opportunities with much lower risk than the traditional approach.

That allows them to iterate inexpensively until they identify great markets for more intense focus, and helps to guide the direction of limited resources with a series of data driven decisions, rather than a gut feeling.

The post Take the gambling out of global expansion by making decisions based on real data 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.

In today’s highly competitive and global business environment, companies are finding that they must incorporate some form of international trade in order to maintain their level of competitiveness.

The need for international trade research

To make effective decisions about international ventures, it is vital for company managers to have access to information about market conditions.

Accurate information helps reduce the uncertainty associated with new international ventures, reduces the chances that decisions will be based on erroneous assumptions about a market and enables a systematic assessment of the benefits and disadvantages associated with a new business venture.

Conditions in the business world are constantly changing. Customer needs and preferences change; competitors are constantly shifting their product or service offerings, pricing, business strategies and promotional strategies; and market environments are subject to shifts caused by external factors. International trade research enables companies to monitor these changing conditions and alert managers to potential problems in advance.

Overall, international trade research has many applications:

1. Strategic global business planning

Research supports the development of a business plan and its various components, including marketing, financing, distribution and product development.

2. Determining foreign market potential

Estimating the demand for a product or service in an international market is a vital component of strategic and financial planning. Research enables companies to make a realistic assessment of the strengths of their products or services and the amount of competition in a potential market.

3. Decision making

Research provides the basis for informed decision making. It helps managers decide which markets to target and what approaches to use in entering them. It reduces the risk of making costly errors and identifies potential threats before they become harmful.

4. Identifying new global trade opportunities

Research enables companies to identify new opportunities for products and services or new markets. Research enables potential opportunities to be evaluated so that the most suitable ones can be acted upon.

5. Enabling cost-benefit analysis

Every business decision has costs and benefits associated with it. Research indicates how management should balance costs and risks against potential returns.

6. Guiding the international marketing process

Research is used to determine customer needs in a market and how to deliver products or services that will meet those needs. Research provides comparisons with competing products and identifies the modifications required to address new markets.

7. Minimizing global trade risks

Research can help a company minimize its risk exposure in new markets by exposing the signs of instability in a market.

8. Identifying potential problems and challenges

Research helps companies identify situations in which international business is likely to become more expensive or challenging because of unforeseen political, legal or cultural conditions.

9. Monitoring foreign market performance

Research is used to track customer satisfaction, guide operations and test new initiatives. It also helps companies determine which markets are profitable and which are not.

Using international trade research to help strategic planning

When gathered and analyzed correctly, international trade research will increase the chances that a business decision will be the correct one, and thus increase the possibility of successful trading.

Research can help identify unstable markets that are likely to be unprofitable, cultural or financial issues that might make a product unlikely to sell in what seems to be a promising market, or a market that has not yet been exploited.

It is important to plan research into international markets carefully so that the most relevant and current information is obtained.

It is also essential to remember that research cannot be used to make accurate predictions, only as an aid for decision making.

The post 9 reasons why you should spend more time doing international trade research appeared first on Trade Ready.

Market research enables for better decision making, the identification of potential issues and threats, and the minimization of risks involved in the internationalization process.

When conducting market research, a technique you can use to identify investment and trade opportunities is to examine pain points in the Asian market. Pain points are problems or unmet needs in the market place that a company (hopefully yours) can solve.

Identify the pain points in your target Asian market

Let’s use the Chinese market as an example and a pain point that I have had the opportunity to work on since 2008. Food safety is a growing concern among Chinese consumers.

A New York Times article in 2012 discussed the problems plaguing the Chinese food sector, including milk products tainted with melamine—an industrial chemical used to make fertilizer and plastic pipes.

The lack of trust among Chinese consumers for locally made food products, coupled with a growing middle class with more disposable income, has resulted in a strong demand for highly priced Western-made foods. In turn, Western food companies are pushing to get their products into the Chinese market, which has 1.3 billion consumers.

Just to put things into context, a 900 gram tin can of foreign-made milk powder that has a retail price of $16 USD to $20 USD in North America would sell for $60 USD in China.

Examine all angles of a pain point to find opportunities for trade and investment

On the other end of the spectrum, Chinese companies are looking for ways to take advantage of Western-made labels, such as “Made in Canada” or “Made in USA”. Chinese companies are investing in overseas markets by setting up or acquiring food processing plants, producing food-products in Western countries which have very stringent food safety standards, and then shipping the finished products back to the Chinese market.

As a major food producer in the world with strict safety standards, Canadian food companies can stand to benefit from the pain points in the Chinese food sector by exporting “Made in Canada” food products and by being a recipient of Chinese investments into the Canadian food sector.

Finally, Canadian food producers should not limit their scope to China. The Food and Agriculture Organization (FAO) for the United Nations warns that some developing countries in Asia and the Pacific will need to increase their food production by up to 77 percent to feed their population by 2050.

With rapid urbanization resulting in the destruction of farmlands, limited investments in agriculture infrastructure and capabilities (which I have seen firsthand), water shortages and climate change, the region will experience food security issues in the near future.

Some governments in the region recognize the issue and are finding ways to tackle the problem. Solutions include urban farming, increasing agriculture yields by introducing efficient processes, and encouraging youths to go into farming.

However, their efforts will not be sufficient. As a net producer, the Canadian agri-food sector is in a strong position to alleviate this regional pain point.

Use your company’s strengths to start fulfilling unmet needs

Tracking market pain points in Asia have allowed me to find trade and investment opportunities on behalf of my clients. I hope this technique will add value to your internationalization process and enable you to find your own opportunities in the Asian region.

I encourage you to examine your organizational capabilities, your products lines and your service offerings.

The results of the exercise and the opportunities you may uncover might surprise you.

Has your business been able to identify such potential opportunities? What pain points have you noticed in the Asian market that could present trade and investment opportunities for companies around the world?

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