I am often asked why a company should invest
in market research before they enter a new market. I sometimes ask them; did
you do any research before you bought a car? How about your house? Heck most of
us even research different cell phones and service provider plans. So
it often baffles me why it seems so unusual to research an entirely new market
before you enter it. Most entrepreneurs only have enough capital to do it right
the first time or they’re out of money/time packing it in and wondering what
they did wrong.
From a market entry consultant’s perspective market research such as country demographics are nice to have but not really something I recommend paying for since its readily available at places like http://www.fedstats.gov/ . What we often recommend is allocating a budget for what I call “Actionable Market Research”.
This includes a range of research dependent on the client’s current knowledge base and management team but often contains competitor research such as how are they selling their product or service (channel strategy) and how are they pricing / distributing it, how do they compare to your company?
It should also look at potential customers – what does your target buyer persona look like, what are the potential changeover costs and why is your product better, cheaper or faster than your competitors?
Another area that is often forgotten is influencers i.e., who will your end customer go to in order to research your competitors or you and who tracks companies in your space. Who are the influencers on Twitter, Facebook or LinkedIn – in the target country / target business environment. Who is likely to talk about your product in this market that your targets will look to and listen to?
Sometimes a product in your target market /
vertical was launched that you can learn from. What did they do right / wrong,
how long did it take what did they do right we can learn from?
There is much more involved in developing a really strong market research project that you can based your strategy on.
At the end of the day your market research should reduce market entry uncertainties, give you a good window into whether you should even enter the market and give you the base information required to develop your market entry strategy. Think of it like doing your homework before a big interview or sale. Prepare and you’ll do well or don’t and suffer the consequences.
That is why quality actionable market research is so valuable to a successful entry and should be part of any new market entry budget.
David is a Director at Sentia, a next generation sales enablement technology company. Dave’s passion for helping people with their sales, marketing, business strategy, startup growth and strategic planning has taken him across the globe and spans numerous industries. You can follow him on Twitter @intlmktentry LinkedIn or on Sentia Says