1.4 Choosing your markets: EU and outside
When we are in a situation of internationalization, we must analyze some minimum requirements that will indicate our success in this process.
It is necessary to take into account which are the characteristics that we must analyze, among which we can find factors such as the level of income of the country or economic capacity as well as the political stability and economic security of citizens.
The characteristics of the product will also reduce the possibilities of internationalization to many countries.
Bearing in mind that it is about internationalization of art and culture in that case, we will have to take into account aspects such as taxes or what are the artistic tastes in each country. as well as the customs of the population about attending exhibitions or invest and value more art.
That is why before deciding where to expand our market, it is very necessary to have analyzed all aspects of our brand and know well our product.
Another aspect to take into account when internationalizing our company are the barriers that we can find when we try to implement our brand in another country.
We must analyze if there is sufficient market for our product, and for this we must know our target and have created our buyer person and compare it with our international buyer person to verify that they have the same characteristics.
On the other hand, the tariffs that may be imposed on our product are very important. Even if the currency of the country is different from ours and what are the advantages and disadvantages.
It must also to take into account if it is necessary to approve our product to be able to market in the country of destination. it is important that we know if there are products similar to ours and try to find a way to differentiate ourselves. It must know if we can get our products on time and with excellent quality standards.
Referring to the selection of markets, it is important to know that it is very difficult to implement our product at the same time in several target markets, since the economic capacities are limited and it is necessary to know how to distribute the resources to reach all the objectives.
- Contacts with existing customers
- Good knowledge of that market
- Public aid to access the market
- Clear competitive advantage
- Market with good size and growing
- Little local competition
- Legal and political certainty
- Ease of communication
- Easy logistics and distribution
First basic decision to be made by the company: How many markets can I enter? How many markets should I consider in my strategy?
The answer to this question is the choice between Concentration Strategy and Diversification Strategy. Which is best for the company, concentrating on a few markets or diversifying into several markets simultaneously?
Today any market can be considered potential for all types of products. Developing markets are equally interesting for low-end and high-end products. And therefore, there are countless possibilities for every company, as many as there are markets worldwide.
In this sense, three stages can be established in Market Research:
- Market pre-selection
- Market Comparison
- Verification and strategy phase
The resources, time, human and financial, will always be different at each stage trying to make them profitable. As we advance in the process, the company will have to increase the resources to be invested in order to make the decision. Do not invest everything from the first phase but use them at the right time.
But what does each strategy involve?
A small number of markets are selected in order to develop in them all the effort to penetrate and position themselves. A progressive development is pursued until each market is consolidated. It is a strategy Via Market.
This strategy seeks a rapid expansion aimed at several markets. Sell in a greater number of markets in order to obtain a high return with a minimum investment. The company is not looking for positioning but for the opening of the market or client. It is a Customer Way strategy.
We will have to carry out a comparative evaluation between the selected markets, for it each country has diverse tools that populate the ministries of economy. (e.g. ICEX in Spain) to establish priorities for internationalization based on.
Global market finder
Google's Global Market Finder gives you the possibility to analyze your direct competition with Adwords statistics.
To analyze each keyword you use in your online communication, you can analyze the percentage of clicks to measure its efficiency and know the cost per click.
Thanks to this we can have an idea of whether the chosen market is growing or decreasing. on the other hand, will also allow us to calculate the costs of a Google Adwords campaign.
As mentioned above, there are different types of person buyers, especially when it comes to comparing consumers from different countries. For this reason it is important to know potential customers well and their buying habits so that you can match your product with their demand.
Each country has its own habits, be they social, cultural or related to consumption and distribution. The PayPal Passport platform helps you expand your international sales by giving you an idea of each country's cultural traditions, national holidays, or laws.
Like for example:
- Peak sales in each season, including holidays and events
- Cultural customs, taboos and other trends
- Shipping and distribution costs
- Value of other currencies and rates
- Customs procedures and taxes