Market entry and expansion can be challenging for even the biggest and most renowned brands. History is sadly littered with flops and failures, with reasons varying from a poor understanding of the competitive environment to go-to-market plans that miss the main chance.
Although reasons may vary, one of the recurring themes for failure is the lack of insight into the desired market. An in-depth understanding of which target group to aim for or which channel strategy to adopt is the key to much higher rates of return.
There are of course some key elements to consider when entering new markets such as the market size, market growth, consumer demographics, and competitors’ presence. However, there are some other things to consider such as:
- Cross-cultural dimension of the market
We can all agree that different markets have different cultures, even among neighbouring countries. Take for example the uncertainty avoidance index (UAI) for a comparison. A lower UAI indicates that the country is more accustomed to ambiguity and usually has fewer regulations.
Countries such as The Netherlands, Denmark, and Singapore with UAI under 55 are more open to try new products and brands compared to countries with UAI above 85 such as Japan, France, and Greece.
It’s crucial to take culture into account when selecting the desired market for your market expansion.
- Socio-economic environment in the defined market
Socio-economics is concerned with the factors that influence how a particular group of people behave within society, which also includes their actions and considerations as a consumer.
When selecting the desired market for your brand or product expansion, it’s crucial to understand the consumers’ purchasing behaviour. Knowing the right buying triggers and key decision-making criteria for each target group will make a difference in optimizing your brand and communications strategy.
How can we help?
As an international consumer insight specialist, we explore new markets and scope initial opportunities for your brand with a holistic view. Our specialty in conducting multi-market projects allows us to further compare various market profiles and to tailor differentiated market entry and expansion strategies for your brands. All the insights we generate are compiled into concise ‘market potential’ reports, for our client’s direct use.
Contact Nimrod to know more about our approach to analyzing market potentials.