How to analyse and research export markets

Analyse and research your markets

What is market analysis?

Following on from our post on how to get started with your export market research, we consider some key aspects of market analysis and look in a little more depth at how you can research your market at home or on the ground by visiting your potential export market.

Establishing potential market size will help you to decide whether the market is worth investing in, but it is worth remembering you will also need to know how the market works. For example you need to consider the main distribution channels you could use, the key market trends and not forgetting the potential influence and impact of your competitors who are already invested in your target market.

Market research reports

Often a starting point for businesses, market research reports are widely available available via libraries, business groups and trade associations. However generalised industry research does need careful interpretation as a large national or international market is no guarantee of local demand, you should be prepared to carry out your own market research.

Kompass Market Ranking Reports are also a cost-effective option that is personalised to your business, helping you save time, minimise risk and will help to ensure you focus on the markets most suited to your business.

Customer research

By looking at your existing customer data, be it by size, location or type, this will help you establish which market segments to target. Building a customer profile, you can then use business information to find similar types of companies on a country or global basis. - See our article on Targeting, segmenting & profiling.

Finding potential export markets

Which overseas markets offer the best chance of export success? As a first time exporter, it makes sense to focus on a single or small number of key countries. In larger markets, like China or the US, first time exporters are encouraged to focus on a particular region. You will need to consider the following factors in order to analyse and prioritise potential export markets.

Market Characteristics – Size, growth, sectors, seasonal trends and quality issues.

Competitive Environment – Who are your competitors, are they local or overseas? How challenging will it be to distribute your product?  Are there any barriers for market newcomers?

Financial & Economic Conditions – Pricing practices, payment terms, tariffs and other barriers to trade as well as keeping in mind the impact of Brexit. Look at each Country’s Doing Business Ranking which includes ratings, costs and the documentation required for “Trading Across Borders”. Foreign exchange and currency stability are also factors that should of course be considered.

Cultural, Political & Legal Factors – Language is a key cultural consideration, but political stability and the local legal system, should also be considered as well as foreign investment & consumer/environmental legislation, registration & licencing procedures, local labour laws and IP protection.

More about market research

The two types of market research most businesses conduct are primary and secondary market research.

Primary Market Research – This is collected directly from the foreign marketplace via interviews, surveys and direct contact with customers and/or representatives. However bespoke and targeted primary market research is both time consuming and can be expensive.

Secondary Market Research – Many businesses prefer conducting desk research, using data that is available from multiple resources including:

- Online business information databases

- International news reports (televised, printed, online)

- Trade and economic statistics (printed, online)

- Trade agencies

Classifying Products & Services – To conduct your market research using an online business information database requires you to classify your products and services against a comprehensive classification system.

- To be effective it is important that you are able to classify your product or service accurately, therefore the more specific detail available within that classification system the better.

- This will enable you to use the classification system to target and refine your searches in order to find out more about the international market & potential competitors.

- As an exporter of a new product that is not yet classified, or to establish the potential international customer base you can use your existing & potential customer profiles. Focusing on their products & services and using the classification system, you can then find similar types of company.

Additional Market Factors  Additional factors to consider are the political & cultural climate, economic stability, geographic factors, as well as market accessibility. However business information can help to provide some of these answers, such as:

- Identifying the existing export or import business within your target markets.

- If there is too much competition this may make it difficult and expensive to penetrate a given market, although if competitors are doing well, there could well be the opportunity and potential for market growth.

- Entering smaller more focused markets, where fewer competitors have setup up shop, gives you more opportunity to grow with the market.

- What has been the growth rate of your target market over the last few year.

- Decide how to distribute and promote your products or services – online direct sales or by using an agent or distributor, where you will benefit from their local knowledge.

Visit your export market

Ideally, visiting the market or markets should involve direct contact with potential customers, agents, distributors and government authorities and will enable you to build a clear picture of the business conditions that might affect your export strategy.

visit your export market

Of course it makes sense to seek help with this and your Department for International Trade Advisers should be considered key contacts for help and advice on eventstrade missions and organised trade visits

Planning Your Visit  Ideally at least two people from the business should attend, with decision-making authority and perhaps a technical contact if the product requires detailed explanations.

- Target a small number of your key priority markets, not every potential destination.

- Structure your itinerary but allow for schedule changes.

- Try to organise the administration details in advance, make sure the timing suits both you and your potential clients. Avoid public holidays and weekend meetings, if they are not suitable for that country.

- Include time and opportunities to build relationships with key contacts.

- Consider arranging visits to coincide with international trade fairs or events.

Making Appointments  It is important that you take time to understand and respect local negotiating styles and what may or may not be acceptable. Make sure you take the time to develop relationships and understand how often return visits are expected.

- Allow enough time for meetings and debriefings, especially if you are using interpreters.

- Learn how to choose and work with interpreters.

- Be aware of local attitudes to time management and punctuality – schedule your meetings accordingly.

- Be aware of travel and traffic conditions – how many meetings can realistically be held in one day?

Virtual Events  The Covid19 pandemic lockdown has resulted in the cancellation of many trade fairs, conventions and events. As a result many events are being run virtually - to find out more about virtual events, take a look at our free downloadable ebook - The Essential Guide to Virtual Events.

All you need to know about exporting goods outside the EU

Help your research with data from Kompass

As business information specialists, we at Kompass, know that your results hinge on effectively targeting the right audience. Whether you set out to focus on Europe, America, Africa, Asia or Australia, a key aspect of exporting will be to research and find the best potential markets.

Our worldwide business information database gives you access to 53 million companies across 70 countries globally and can be refined geographically, by size, company type and many more! With access to business data from Kompass, we can help you to focus on the best target markets that offer your company the greatest opportunities. Contact us to find out more about how we can help you as you plan your export strategy.

Our Kompass Export Zone builds on our business information expertise, by giving access to straightforward guidance on some of the key factors to consider when exporting, research advice and country specific market information. For more advice on getting started on your export journey, see our guide to planning your export strategy.

Disclaimer: Please note that this blog only contains general information and insights about legal matters. The information is not advice, and should not be treated as such.