How to find a new international market for a product
Tags: newmarkets, startup, product
Published: 2022-10-25 05:10:18

If you’re reading this, the chances are that you already have an established brand with a stable commercial stream and you are looking for a way to grow and expand your business. Breaking into a new market might be exactly what you’re looking for. Launching a product in a new market is a highly ambitious, but equally risky and expensive goal which requires thorough preparation and analysis.

Firstly, you have to look at some key statistics of the potential market. General economic factors include things such as population of the country and GDP per capita. Together, they can give a rough idea about the market size. From open sources (like [Statista](urlhttps://www.statista.com/)) you can find the market volume of your appropriate industry and the rate of growth of this industry. Collect information about the volume of online payments, main industry leaders and their market share. Key stats like [CPI](urlhttps://www.appbrain.com/stats/android-cpi-per-country) (cost of install) of a mobile application might be crucial to your product launch and give a baseline for the marketing costs.

When you’ve recorded the population of the country, consider the main city population. Especially if your business model includes both online and offline approaches. It’s easier to break through to the big city (1 million + population) as there are many advertising mechanisms which can be employed. Most of them are KPI trackable.

If you aren’t selling first need products, don’t count countries with low GDP out, because they might have a high Gini index. This means that the income is not evenly distributed and the big cities are likely to have a lot of high-income individuals which might be a perfect market for your product. Especially if you have a niche high-priced product.

Don’t forget the most basic factor - language. The popularly spoken language in a country can heavily influence your final decision. When a business enters a new international market, we’re not only talking about localising interfaces and the product itself, but also all the marketing and branding materials that go with it. This is a high-cost process which is not optimal for every business. For example, if your business is based in Chile, it would make sense for you to expand to the Spanish speaking countries first to save up some money during the transition. Conversely, integrating your product in Israel will be a much more difficult process as even the way the language is written is different: Arabic is written right-to-left as opposed to left-to-right English.

Consider more specific stats, which are applicable to your business. For example, the average pricing of services of your main competitors (easily checked online). If you have a physical product, consider the cost and availability of inventory in the new country. For an offline business, don’t forget the office rent and spendings on personnel.

Collect all of the above information into a table. Organise countries on one side and the above metrics and factors on the other. Choose 3-4 most critical factors for your business and highlight countries with the best performance in these categories. You should end up with 2-3 countries for more detailed research which I’m going to discuss below.

Before the in-depth research, I also recommend investigating the short-listed countries using a [culture map](url https://erinmeyer.com/tools/culture-map-premium/). This tool allows you to click on whichever countries you’ve chosen and receive a cultural mapping of the selected countries/cultures. You can compare how two (or more) cultures build trust, give negative feedback, and make decisions - so use it to compare the target new market country with your country. This will help on the next steps of research.

Now it’s time for more focused research. Perform a competitive analysis which will include things like market share, product pricing and features, differentiation, positioning, value proposition of your competitors. I highly recommend asking a local friend from the target country to help you with this or hiring a native speaking specialist from the target country, because many of the companies might not have a good English representation on the web and they will help you navigate your research correctly. Perform in-depth interviews with your potential clients in the new country. Ask the locals how they are solving the need for products/services which your industry and your company provide.

Based on the research, formulate a set of hypotheses which detail the main advantages of your company and product which will make them competitive in the market. Now, test your hypotheses with quantitative research. Different models can be used, but a popular choice is the Kano model. It’s one of many prioritisation frameworks designed to help product teams prioritise initiatives and optimise their resources during product development. Respondents can be found in a million different ways. You can try finding them at conferences, panels, festivals, etc.

My advice for finding respondents is, if your budget allows it, hire an agency in the target country to conduct the research. For example, [User Interviews](url https://www.userinterviews.com/) has over 350,000 participants globally and can leverage their network of participants to quickly source participants for your research. You can source participants from Australia, Canada, France, Germany, South Africa, United Kingdom, and the United States and apply specific demographic requirements. This is especially useful if you don't have previous experience in international market research.
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ou should have 2-3 confirmed hypotheses which can now be tested via advertising campaigns. Social media, contextual advertising. Try driving traffic to a landing page with a particular offer and record the conversions. This will give a good baseline of the customer acquisition cost. Alter the offers during the testing. Maybe one of the original hypotheses won’t hit bingo, but testing will showcase the general direction of the customer needs and you can come up with a new, successful offer.

Hire a legal consultant and assess the main legal obstacles your business might face in the new market. This might include, but not limited to: taxes, content restriction, additional product certification and approval. Register the costs of all the above. Also, this step is very important, because some countries do not afford non-citizens the same rights to property as citizens. Many of them have confiscated property from international business owners in the past. Choose a country that you are confident you will be able to maintain property rights in. A foreign law attorney or a consultant can help you determine which countries would be best suited to your needs. Basic processes of opening a business vary hugely from country to country. The legislation might be so different that you will have to change your business model in order to comply with the law. This step should be taken lightly.

If applicable, explore what channels of distribution are used by your competitors. Build a database of potential partners. You can start building a network of partner acquaintances remotely. Ask the distribution agents about the main issues they, in general, face in that particular country.

Finally, build a financial plan. With all of the above information, evaluate key values such as the amount of required investments to break even, the stage at which the product becomes profitable. Create a hypothetical profit and loss statement, build your cash flow statement. Don’t forget the liabilities your company will have with a product in a new country.

Consider different strategies for commercialising your product in the new market. You could go with a partnership route where your business will be looked after by a trusted partner from the target country. It goes without saying that it’s crucial to do research on the partner as well. Decide whether you want to attract the investors or raise capital another way. If applicable, franchising might be the best option for you, if you want to do the least amount of work and you have strict franchisee control and quality assurance mechanisms in place.

At this stage, I would recommend visiting the target market country and live there for a week or two. Get a personal feel of the culture and the people. Use the products and services of the competitors and make sure if all of the above research aligns with your personal experience.

Remember, no matter how well prepared you are for the launch in a new market, the chances are everything will not go according to the plan. Be prepared for contingencies, have an adaptable approach and always stay on your toes. The key is to not go full rambo with the cash and bury half of your available money in the new country. If the metrics are not looking good, be ready to close the initiative and redirect your attention to another potential market which might be the dream golden mine for your business. Good luck!