Step-by-Step Approach to Market Research
Step 1. Find Potential Markets
- Obtain trade statistics that indicate which countries import your type(s) of products.
- Perform a thorough review of the available market research reports in the country(ies) and industries in question to determine market openness, common practices, tariffs and taxes, distribution channels, and other important considerations.
- Identify five to ten large and fast-growing markets for the firm's product(s). Analyze them over the past three to five years for market growth in good and bad times.
- Identify some smaller but fast-emerging markets where there may be fewer competitors.
- Target three to five of the most statistically promising markets for further assessment. Consult with U.S. Export Assistance Center near you.
Step 2. Assess Targeted Markets
- Examine consumption and production of competitive products, as well as overall demographic and economic trends in the target country.
- Ascertain the sources of competition, including the extent of domestic industry production and the major foreign countries the firm would compete against.
- Analyze factors affecting marketing and use of the product in each market, such as end-user sectors, channels of distribution, cultural idiosyncrasies, and business practices.
- Identify any foreign barriers (tariff or nontariff) for the product being imported into the country and identify any U.S. export controls.
- Identify U.S. or foreign incentives to promote exporting of your product or service.
- Determine whether your product is price competitive after you've figured in packaging, shipping, marketing, sales commissions, taxes & tariffs, and other associated costs. See "pricing considerations".
Step 3. Draw Conclusions
If the company is new to exporting, it is probably a good idea to target 2 or 3 markets initially. Your local Export Assistance Center can provide valuable insight into your "optimal" market opportunities.
Step 4. Test Demand
There are a number of low-cost on-line and off-line services that can help new exporters gauge foreign market interest and collect overseas inquiries: