9 March 2023
If a company takes a life-changing decision to expand its business and enter foreign markets, it has several ways to do so. The method a company chooses to go overseas depends on some crucial factors such as the use of advanced digital solutions, cost, degree of risk, and level of control over the processes.
Why do modern businesses need digital solutions?
The path of almost every successful business, sooner or later, rises the question of finding new markets for their products. Many due to lack of competence and experience in international markets prefer to stay within the national territory. Those who do decide to develop their export history discover new horizons, seriously restructure their business model, and make risky decisions regarding the choice of strategy for the future sales markets.
To make it easier to take the right decisions, there are many different tools to support exporters, which include data and analytics solutions. Now analytical and prospecting tools are becoming more accessible, responsive, and useful due to the introduction of digital technologies, but yet artificial intelligence does not know how to think and decide instead of the businessman.
The question of why we need all these digits and how to use them was raised a long time ago, but it has never been as crucial as it is now. First of all, the amount of available digital information that is relevant to business has grown tremendously, and in the coming years, this amount will only increase. And while previously it was possible to somehow cope with the traditional paper workflow and solve difficult situations at the expense of business streak, intuition, and business news, the further on, the more business will have to turn to big data technologies, neural networks and artificial intelligence in order not to get swamped by the information wave.
Right now, there are services that help not to drown in this ocean of digits, but the volume of data is growing exponentially. Without the ability to operate with these data, it will be extremely difficult to “ride out” on intuition alone.
After all, what is trade? This is a business associated with the right choice of goods, customer segment, pricing policy, organization of sales, logistics and marketing. For commercial success, it is necessary to combine all of these components. Business analytics and data processing work at the initial stage: to put together a picture of the world, to understand the landscape. That is, we can make a decision reasonably, taking into account the true market situation. These are digital solutions which provide the essential information for decision-making.
Secondly, one should understand that protectionism and market protection are in principle strengthened both in the West and in the East. If a country is not a member of any business corporation or integration association, within which trade is conducted under simplified conditions, most likely, an exporter will face a number of tariff and non-tariff barriers. But this should not frighten exporters, because it is a natural process that should be just taken into account in their activities.
Sales expansion to international markets is the real salvation for any business today. The algorithm for expansion provides for the presence of a business model – the backbone of any business.
What should be considered when boosting an export business and which digital solutions can help here:
1. Identify and segment the target market
It is vital for business owners to understand who they are selling their products and services to and why consumers are buying them. This knowledge will help develop an effective marketing strategy and choose the right promotion channels.
What is a target market and why segment it?
The target market is the groups of consumers who might be interested in your product. And in B2B, these are also companies that may become your partners.
The target market is not equal to the target audience. The target market is a broader concept. It can be described as a set of target audiences.
Identifying your target market is a necessary part of your marketing strategy. It helps:
- Find your niche and evaluate its perspective in order to develop an adequate marketing strategy;
- Form a unique selling proposition and stand out from competitors;
- Study the needs of potential buyers and on the basis of these data to improve product characteristics;
- Increase customer satisfaction and loyalty;
- Make your brand more recognizable;
- Stop spending money on ineffective marketing activities.
But this is not enough for competent positioning of your product, especially if it is appealing to a wide range of consumers. For accurate targeting, you need to break down the market into separate segments and develop a strategy for each of them.
The target market can be segmented according to various characteristics: geography, import or distribution, number of employees, year of establishment, sales turnover, etc.
The tasks of identifying and segmenting the target market can be solved by such a digital prospecting tool as EasyBusiness, which allows you to generate lists of ideal prospects, potential distributors and importers:
- 70 countries worldwide
- 60 million companies of all types of activities
- 84 million executives and decision makers
- 34 million phone numbers
- 28 million emails
- 60 search criteria
- Data export to Excel and PDF
- Data display via maps, charts and tables
- Personal notes
EasyBusiness has helped many companies achieve their goals and get off to a good start in exporting.
- For example, the French SIFA Group, operating in the transport sector since 1951, set itself the goal of expanding its presence on the national and international markets. To this end, it invested in EasyBusiness, a digital prospecting tool to optimize its sales department.
According to SIFA Group’s marketing and communication director, EasyBusiness has allowed the company to meet the challenges of the time adequately and to boost their export activity in new foreign markets.
- Another success story is the one shared by DMG, an Italian company which has been operating in the elevator and lifting equipment industry since 1973, decided to research the global market in order to attract new customers abroad.
According to DMG marketing and sales director, with the help of prospecting platform EasyBusiness the company was able to make targeted searches, identify new potential customers in different countries and contact them in order to start cooperation. In addition, the company was able to harmonize the work of the marketing and sales departments and organize constant market monitoring thanks to smart alerts.
2. Evaluate market potential
The digital ecosystem helps companies developing export activities on the stage of their initial orientation in foreign markets. The digital solutions allow companies to generate lists of potential markets, ranked according to various parameters and criteria.
If a company needs to study foreign markets in more detail, to determine the potential for exporting products, it is recommended to apply for a detailed market ranking report. The experts will conduct research directly on the target products of the company and evaluate its prospects on specific foreign markets.
At this stage our solutions for exporters will help you to generate a market ranking report, to assess perspective of the distribution and supply chain rollout, to develop a strategy, focus and objectives for the sales department.
Kompass can accompany you in your export plan design, with decades of experience and a far- reaching international physical network. Kompass’s Market Ranking Report can help you.
The Market Ranking help you choose the markets wisely as you can estimate the request eventuality of 5, 10 or 20 countries contemporaneously, and identify new import requests with the loftiest
- For example, the French Alphitan Group is the European specialist in electrical and electronic maintenance. In order to improve the efficiency of its divisions worldwide, the company used Kompass digital solutions for competitive analysis, market research and segmentation.
According to the commercial director’s feedback, Kompass digital solutions have become an integral part of their marketing strategy.
3. Compete by creating a quality product
How do you create a quality product and at the same time reduce the costs associated with winning new markets? One effective way is to choose the right suppliers involved in creating your products and build an optimal supply chain.
If you’re having trouble finding local or international suppliers for the parts, components, raw materials and supplies you need to manufacture your products for export, look no further than our digital Contact+ tool, specifically designed to help you find the best suppliers to improve your margins and value chain at an international level. It will help you quickly find new foreign partners who are ready to support your production processes smoothly.
4. Design your sales processes, feed your sales reps and manage & optimize the sales pipeline
It’s not only a matter of leads and good sales professionals: when you face an international market and you want to grow, designing carefully your sales processes and providing your team with the right tools to nurture their leads, follow up their customers and monitor their activity and results is what can really make the difference.On the other side, the adoption of a CRM can sometimes be tricky, with your sales reps not being keen to learn a new system, full of tens of useful but still complex features, and also not willing to dedicate time to data entry.
Integrated solutions such as the Sales Accelerator module are designed to avoid complexity and make the Sales team onboarding easy, providing them with the main key features to manage accounts, contacts, opportunities, tasks and events, and monitor sales and forecast with a dashboard of customizable reports. The integration with a prospection platform such as EasyBusiness and its international B2B database makes it a powerful and time saving all-in-one tool, that is exactly what a Sales team needs to be efficient and effective when going global.
5. Develop brand marketing and performance marketing tools
- Brand marketing is the level of recognition a company enjoys in the market, the percentage of your total audience that knows about your products. If the percentage is low, you need to work not only to boost sales, but also increase brand awareness.
- Performance marketing is a measuring channel for where unit economics In this case, you need to know how to win the attention of a potential customer, how to start a communication so that he makes a decision to buy from you.
One of the drawbacks of bringing a business to the international market is a low level of brand recognition and audience loyalty. This issue should be paid greater attention.
- This was the case of the Italian company SO.TEC, specializing in the design and manufacture of industrial air cleaning systems against dust, smoke and oily mist, used by companies in various industries. The company operates in Italy as well as exporting its products, so it faced the challenge of maximizing its online presence and increasing the traffic to its website.
According to the commercial director, using a solution like Booster has increased the company digital visibility, boosted lead generation and increased traffic to the corporate site.
6. Bid in international online tenders
Electronic tenders are extremely popular nowadays due to its convenience and undeniable advantages over conventional tenders, including transparent competition and selection of verified and reliable participants.
Kompass Public Tenders helps companies find new export contracts by providing access to global opportunities and to public and private sector tenders:
- More than 50,000 tenders per day
- Tenders in 145 languages
- Tenders from more than 190 countries
- Customized email alerts
Landing Ingeniería, a сivil engineering contractors located in Spain was looking for international tenders. To save time, they decided to subscribe to Public Tenders because it allows them to keep abreast of the new bids published in the different Public Administrations at a wider scale.
7. Participate in special export business missions
As much as electronic communication channels have evolved allowing you to solve many issues remotely, including marketing and sales ones, face-to-face communication remains extremely important. Business missions are precisely designed to meet the need for direct communications between the parties to the commercial relationship.
Taking part in business missions, in most cases, in addition to protocol meetings on neutral territory, you can visit the location of companies – potential partners. After getting acquainted with the “home” of the company, it is much easier to get a correct idea about it. If we consider cooperation, for example, with a manufacturing company in the creation of a common product, such information is of particular value.
What is a business mission? It is essentially a mechanism to convert warm contacts into hot contacts, which will make it possible to conclude a contract. Warm contacts are sought by the organizer – this is his direct task, working through the cold ones. But how do you generate a list of cold prospects for a specific request? Only knowing the portrait of the potential partner and having a challenging commercial offer for him. The potential counterparty’s portrait, in turn, arises either from the analysis of requests to the company from the market or from market research.
As we can see, all these questions, such as the choice of a priority market, market research or analysis of requests to the company, the preparation of a targeted commercial offer should be resolved in advance by the interested party. A company giving clear requirements to the organizer of the business mission as to where, whom and how to look for (geography, counteragents’ profile, presentation of the commercial offer) is more likely to get those foreign partners who ensure the expected outcome.
KOMPASS provides innovative information services to achieve your goals, thanks to its unique B2B data expertise in more than 70 countries. With years of experience and an extensive international physical network, the Kompass group organizes international missions and business events, providing a full range of services for market ranking and segmentation, identifying potential partners abroad and arranging meetings with them.
We provide customized international trade services based on a clear strategy.
- As a brilliant example of business mission success we should mention the organization of Polish export mission to Brazil. Ten Polish companies visited Brazil with the aim to meet at least two potential Brazilian partners. The mission, organized by Kompass Poland, was a real success, and the Polish companies got back home with many contracts under negotiations.
- Another story is about a Korean exporter who wanted to enter the US market and needed a deep market survey and market entry strategy. Kompass Korea prepared a presentation of 20 key potential buyers in USA and gave a customer support during a trade show in Miami. As a result, the Korean company found its first importer in USA.
8. Develop an export market entry strategy
The modern culture of consumption in the market involves creating a capture level strategy. When entering the international market, an important task is to identify the target audience, build your business model, and look for a way to exceed the expectations of the norm level in the market.
A company that decides to enter an overseas market must answer 3 questions, which are the key steps in gaining access to foreign markets:
|When?||The company should clearly understand the time to enter the market: to become a first-mover or a follower. Each of these strategies has advantages and risks|
|How?||The company must determine its scale of market entry: an aggressive market takeover or a gradual, consistent expansion of the business. This depends on the company resources, investments and management competencies.|
|Where?||The company should decide which markets and which segments are the most profitable to enter now; in other words, to find a balance between the attractiveness of the sector and the risks and costs of entering foreign markets.|
Ways of entering foreign markets
Let’s consider the basic entry modes from the point of view of market servicing process, investment level and the degree of control over the process. In the world practice there are distinguished 3 basic strategic directions of this process: hierarchical building of business, export, and intermediary role.
Export activity implies production of products and services in the main local market of a company (or in a third country or region) and distribution of these products in the targeted abroad market. If a company has chosen the export method of entering new markets, it should decide which functions in the promotion of products it will retain, and which functions it will delegate to intermediaries in foreign markets. The degree of delegation determines the level of responsibility and risks.
The advantages of the choice of export activity are the minimum risks and costs that the company bears when implementing such an entry mode. The main disadvantage of export activities is the low level of control over the trade intermediaries in the targeted country. A company that has an aggressive strategy of capturing a new market must think through additional leverage on its resellers to ensure that they comply with the rules of working with the products, reach the sales plan and promote the company products to the market.
Export activities are often a “reconnaissance”, helping a company assess the real demand for its product and understand the shortcomings of the product regarding local consumption patterns. If the product begins to beat the demand, the company can move on to more controlled activities in foreign markets.
Mediation is a type of interaction with foreign markets, which implies not full ownership by the company operating in a foreign market but sharing a certain degree of responsibility and control with it. As a result of such interaction the main company transfers to the intermediary its knowledge, experience, skills and a part of resources and in return receives a guarantee of implementation of a certain strategy to the targeted foreign market and a certain guarantee of sales.
Hierarchical business construction
This entry mode is also called the investment method of business expansion. It implies full control of the business in the targeted foreign market, namely full ownership of the business in the target country. This business may take the form of a branch or a separate enterprise independent from the parent company. There are 2 main ways to use a foreign market entry investment strategy: buy an existing business or build a new company from scratch.
Merger and acquisition
The acquisition of an existing business in the target foreign market can be achieved through a merger process or the purchase of a controlling stake in the company. This method is less costly than building a similar business from scratch and can immediately provide the company with a certain share of the target market. Acquiring a business also reduces future competition because a potential competitor is usually acquired. When buying a ready-made business, it is necessary to know all legal restrictions and rules of this process; to have a good staff of specialists who will properly conduct the merger and organize the integration processes between companies; to conduct a complete analysis of the purchased object.
Business from scratch
In business communication it is called the term “green field strategy,” which means the expansion of a company’s business into an outside market through the creation of a new manufacturing facility. This route represents minimal risk and maximum control for the company (because it can do everything in such a way as to optimize the business) but is a very high-cost and time-consuming way to enter the foreign market.
Whichever strategy you choose, you will definitely need a three-step algorithm to get it up and running:
- Select the right markets, thanks to the Kompass market ranking reports.
- Identify potential distributors in the targeted countries, thanks to the Kompass international database.
- Maximize your online visibility to attract potential customers in the selected markets.
9. Answer important marketing questions
Before expanding to an international market, ask yourself the following questions:
- Where can a potential customer first see information about your company?
- Thanks to what tools will you receive contacts of potential clients?
- How do you get clients? (CRM, lead generation, online prospecting)
- How will the potential customer develop loyalty to your company?
- How will you fuel the loyalty of potential customers? (Communications, content)
- How will you stimulate sales?
- What kind of communication will be done with customers who have already purchased the company products/services?
Regardless of where you are located and doing business, when entering international markets, these are questions you need to answer for yourself in advance.
As it is more vital than ever to meet the challenges of the times and find new business opportunities, Kompass provides the answers and innovative B2B digital tools and solutions to meet your goals based on its unique experience in over 70 countries.
Let’s sum it up
Criteria and key elements of a company required when expanding to foreign markets.
- An effective business model and growth strategy.
- A system for attracting and retaining customers.
- Organizational structure and business processes.
- Quality HR function (training of people).
- Effective operational management function (with a focus on planning).
- Quality financial management and financial planning function.
- Strategy and discipline for implementing strategic plans.
Business modes to access international markets.
- Direct export sales remotely. The team (analysts, managers and others) works remotely. It is important to divide the prospecting process – ones look for leads, the others sell. Services can be promoted online through extended visibility options or targeted advertising.
- Work through dealers and distributors. The business model takes into account the presence of physical products. The product must be on the shelves of stores and supermarkets, so you need to work through retail distribution. On your own, it’s hard to find a network that covers all the stores. For B2B it is better to work directly.
- Own branch office. Independently or with a local partner with experience of cooperation to open a branch. There needs to be a person on the spot who will manage it. It is important to coordinate correctly from the legal point of view.
- Sale through marketplaces.
- Franchise offer.
Hunting for clients – what to pay attention to
- Outreach advertising and online presence. Where are the points of creating knowledge about your company and building loyalty with your potential customers?
- Traffic management. How do you encourage customers to encounter your company?
- Lead generation and prospecting. How do you collect your customers’ contact information? How do you feed your customer database?
- Sales. How is the negotiation process built to “press” your clients into a sale?
- Client Management. How is your customer service process built to ensure their maximum satisfaction and desire to come back?
- Repeat sales. How do you motivate customers to make repeat sales and what products do you re-sell to them? How will repeat sales and the ability to increase Lifetime Value be built?
A major mistake when going international is getting your business off to a bad start. It’s important to think things through beforehand. The business should adapt to the new environment, look for ways to market the product in new markets. The focus should be shifted to a set of guided tools – digital marketing, online prospecting, and the creation of a digital sales pipeline.
Are you ready to develop an export business? Then we are ready to help you do it!