As we emerge into this new, post-COVID world, many businesses feel it's time to take the next big growth step - international expansion. Huge opportunities await across borders, but new market entry is a time and labour-intensive process and can be very costly if not successful.
Exporting products or services cross-border offers mammoth growth opportunities and can be both simple and affordable - so long as you undertake your research, have a world-class Go-To-Market strategy and lead market entry with a commercial focus. Bridgehead International Agency share their top tips to ensure successful market entry.
1. Evaluate the market
Why would you appoint a lawyer or an accountant before gauging the actual demand for your product or service offering in your new target market?
Many government support agencies are keen to introduce you to them; however, we firmly believe that the most effective first step is to evaluate the market. Speak to your potential customers and start to build a sales pipeline. This provides the backup and evidence required to incorporate and invest within your target market and allows for a swift ROI.
To know which market to pick to ensure the entry is successful, you must gather and interpret key data relevant to your business. You should analyse:
- political factors
- infrastructure
- micro and macro-economic data
- market size and segmentation
- consumer data and buyer behaviour
- distribution trends
- industry growth indicators
- sales data, localisation requirements
- trends and forecasts
- competitive insight
Look at your existing approach together with the competition to identify a key gap for you to enter.
2. Prepare a Go-To-Market (GTM) strategy
Rushing market introduction and failing to plan alongside people who know the country will rarely, if ever, produce the desired result. No two markets are the same, and now that the research is gathered you need to put it into context and use it to create an action plan.
To maximise the potential of your product or service offering, we strongly recommend that you create a Go-To-Market (GTM) strategy for each market you want to penetrate. Having a GTM strategy will be pivotal to your success. Being laser-focused and creating your landing point is critical.
Begin by undertaking thorough market research, encompassing both primary and secondary research. Ultimately, market research will help you to determine the level of demand for your product or service offering, and how and where your potential customers would expect to access it.
- identify your target market and target customer
- outline routes, distribution channels and partners to best reach them
- develop a pricing strategy to fit the market
- define your value proposition, marketing and sales strategy
Once your research is complete, you can use it to fuel your GTM strategy. Learn more about why you need a Go-To-Market strategy.
3. Assess the local competition
In each new market, you will likely encounter new competitors. It is vital to understand what the competition are doing.
- What are their unique selling propositions (USPs) and competitive advantages?
- Who are they targeting?
- Which channels do they use?
If your own product or service has a competitive advantage, make sure that you communicate this to your target audience.
Even massive companies with global swagger can sometimes pay the price for failing to respect their local competition. A classic example is Starbucks’ disastrous entry into the Australian market. Opening their first store in 2000, and expanding to 84 outlets across the country, they were eventually forced to close 75% of their stores after 8 years, incurring a loss of over 140 million dollars. Failure to analyse their competition was a critical factor; with competitors, such as McDonald’s McCafe and Gloria Jeans offering a more competitive price, and a beverage range better suited to local market tastes.
One good option can be to work with established local partners within the supply chain. They have the necessary local knowledge and expertise. By building local relationships, your transition could be a lot smoother.
4. Adapt your product or service offering
Companies often assume that they can launch identical products in different markets. This ignores the fact that they’re dealing with different customers. Be mindful to tailor your product or service to appeal to the local market. This could be product modification, images, packaging, or marketing.
If the product doesn’t resonate with the local market, it will need adapting and localising to drive sales.
McDonalds’ global success can largely be attributed to standardisation and adaptation. The chain always adapts to the needs of the local consumers. In Germany, a country renowned for its love of meat, their burgers combine Nürnberger sausages with beef. Their outlets in Germany also serve beer, a traditional accompaniment for food. In India, McDonald’s adapted their menu by replacing beef with chicken. Their “Maharaja Mac” is the local version of the classic Big Mac. The list of their local adaptations is both extensive and impressive.
5. Adapt your sales and marketing channels
Many companies believe they can enter new markets by replicating the strategies that have served them in their domestic market. This lazy assumption is a common trap that many businesses fall into. Choosing the best distribution channels for your product is vital, and these can only be identified with extensive research.
Your market research should identify which marketing channels deliver the best results in each market. For example, in China, with Facebook, Twitter and YouTube being banned, their biggest social media platform is WeChat, largely unheard of in the west. It is used daily by over a billion active users for restaurant bookings, flight bookings, shopping, transferring money, paying bills as well as creating posts. Unsurprisingly, this is the most popular tool for social media marketing in China.
One of Bridgehead International Agency’s clients is a Singapore-based business called Oaxis, who manufacture cameras aimed at children. For 4 years they attempted, and failed, to penetrate the UK market. During this time, they worked with 5 different distributors. After appointing Bridgehead, we developed a GTM strategy for them, encompassing competitive benchmarking, and targeting specific partners across retail, e-commerce and distribution. We identified key target customers and 5 different channel partners. Major retailers such as Selfridges, Shop Direct and Dixons became resellers of their product range. Within a year, they hit $1m revenue.
6. Seek expert advice
If you take just one thing away from this article, it’s that you should always seek expert advice when going into overseas markets. You don’t want to waste your time and money working with a wrong distributor that doesn’t bring in sales, or the wrong consultants that have big visions that are far from reality and do not realise. Bridgehead International Agency aren’t just consultants; we don’t simply hand over a long strategy document and leave you to deliver it. We are all about achieving rapid results - we will deliver against the strategy and achieve quantifiable results within 90 days, guaranteed.
The proof is in the pudding - we have achieved a pipeline of over £2m inside 6 months for a SaaS SME, secured sales with key distributors and channel partners, with purchase orders value of £500,000 achieved in 90 days for a UK wearables brand, grown a Scale-up’s sales pipeline from £4m to £18m in 9 months and many more.
