East Africa is a region with abundant natural resources and an immense potential of increasing trade to the EU and other developed countries. However, if you want to export successfully to foreign markets, you have to conduct market research to identify the marketing opportunities and constraints abroad and to identify prospective buyers and customers. It is your challenge to to identify the largest markets, the fastest growing markets, the market trends and outlook, the market conditions and practices, and competitive firms and products. You have to bear in mind that foreign markets differ greatly from each other.
Below, you will find a Step by Step Approach to enable you to screen potential markets, and make a proper assessment of them, to decide on which market to target.
1. Screen Potential Foreign Markets Step 1. Obtain export statistics that indicate your product’s exports to various countries. Trade statistics can be obtained from various sources. You may conduct an online (desk) research or consult your local export promotion board, chambers of commerce, foreign missions offices, private consultants rendering trade and investments advisory services and other stakeholders.
Step 2. Identify five to ten large and fast-growing markets for your company’s product. Study the past three to five years data. Has market growth been consistent year to year? Did import growth occur even during periods of economic recession? If not, did growth resume with economic recovery?
Step 3. Identify some smaller but fast-emerging markets that may provide ground-floor opportunities. If the market is just beginning to open up, there may be fewer competitors than in established markets. Growth rates should be substantially higher in these countries to qualify as up-and-coming markets, given the lower starting point.
Step 4. Target three to five of the statistically most promising markets for further assessment.
B. Assess Targeted Markets Step 1. Identify any foreign barriers (tariff or non-tariff) for the product being imported into the country for an analysis of tariff and non-tariff barriers
Step 2. Identify any foreign government incentives that promote exporting of your particular product or services
Step 3. Analyze factors affecting marketing and use of the product in each market, such as end-user segments, consumer behaviour, channels of distribution, cultural differences, and business practices.
Step 4. Examine trends for your company’s products as well as related products, that can influence demand. Determine overall consumption of the product and the amount accounted for by imports.
Step 5. Ascertain the sources of competition, including the extent of domestic industry production and the major foreign countries the firm is competing against in each targeted market.
C. Draw Right Conclusions
Step 1. Analyze the data and draw the right conclusions regarding the most promising market, the market where your offer can make a difference. Normally, if your company is new in the export business, you should direct your efforts to one or two countries. It will allow you to focus your resources without jeopardizing your domestic sales efforts.
Step 2. Determine how you are going to enter the market. What will be your Unique Selling Proposition (USP)? How are you going to differentiate from the competition?
For more information on entering a market, developing a USP and composing the right promotional mix, see the other tips.
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Ms. Shainul Bhanji is a CBI trained export coach, working with Global Investors Consultation Centre, Dar es Salaam. View profile |
