How do you perform a market analysis?
In this article, we will give you some key points on how to start your export market research, consider the main aspects of market analysis, and go in-depth about how you can research them.
Determining the size of the potential market will help you decide if it is worth it to invest. You will also need to know how the market works. For example, you must consider the main distribution channels you could use, key trends, and the possible influence and impacts of your competitors that are already involved in the same industry.
Market research reports
A good starting point for companies is often market research reports, which are widely available through libraries, business groups, and trade associations. However, general industry research needs to be interpreted carefully and personally since a big national or international market does not guarantee that there will be a local demand for your product or service. You must be prepared to do your own research.
Observing the data and characteristics of your potential customers will help you determine which market segments you want to reach. By creating a customer profile, you can use this information to look for similar segments in a specific country or globally.
Finding potential export markets
Which foreign markets offer the best chance of success for my product or service? How do I export for the first time? Does it make sense to focus on a small number of key countries? In larger markets, such as China or the US, are first-time exporters encouraged to focus on one region in particular? You must take the following factors into account when analyzing and prioritizing potential export markets:
- Market characteristics: Size, growth, sectors, seasonal trends, and quality issues
- Competitive environment: Who are your competitors? Are they local or foreign? How difficult will it be to distribute your product or service? Does that market have barriers to entry?
- Financial and economic conditions: Price-fixing practices, payment conditions, tariffs, and other trade barriers. Analyze each country’s Doing Business, which includes rankings, costs, and the required documentation for trading across borders. Foreign currency and price stability are also factors that must be considered.
- Cultural, political, and legal factors – Language is a key cultural factor, but you must also consider political stability, the local legal system, foreign investment, and local environmental, labor, and intellectual property laws.
In order to perform a market analysis, you need to determine the size of the potential market and know how the market works.
Data from Kompass, your greatest research ally
As specialists in B2B information, we know that your results depend on a relevant audience. Whether your target is Europe, the Americas, Africa, Asia, or Oceania, a key aspect of exportation will be researching and finding the best potential markets.
Our business database gives you access to 21 million companies in 70 countries around the world and can easily be organized geographically, by size, by type of company, and much more! Having access to Kompass’s business database can help you focus on the best market objectives for your products and services. Contact us for more information about how we can help you plan your export strategy.