From market to marketing research
At this point, you have segmented the world market into two, maybe three, groups of countries:
- Those countries that have potential for your company (your shortlist of countries)
- Those countries that might have potential for your company
- Those countries that offer no potential for your company
You have gone even further and studied the countries on your shortlist in greater detail using desk research and possibly even based on information gathered in the foreign marketplace following on from a trip that you have undertaken to the countries in question. Based on the market information you have gathered, you have identified specific target markets or market segments within these countries that you now intend to focus your export marketing efforts on. But in order to prepare a winning export marketing strategy, you have to undertake more specific marketing research on these target markets/market segments.
Marketing research is about understanding your customer
Marketing research is about getting down to the specifics. With marketing research your aim is to understand your customer. You will want to know for example:
- Who your potential customers are?
- Where do the mostly reside?
- What are their demographics?
- Are they brand conscious?
- Is quality important to them?
- What features are they looking for?
- Is price important?
- What price levels will they buy within?
- What service requirements do they expect?
- Where do they buy?
- What do they use the product for?
- How do they use the product?
- What is the best media channel to advertise through to reach your customers?
- What are the roles of intermediaries?
- What sort of after-sales service and guarantees will you need to provide?
- Do you need to provide financing?
- What is the best means of generating sales?
Marketing research is complex and expensive
Marketing research is the most expensive type of research to conduct because you should speak to the actual customers themselves and you need to reach enough customers in order for the research to be meaningful and reliable. To achieve this, you will probably need to conduct primary in-market research - primary research is basically completely new research and is very expensive to conduct, especially in overseas markets. Interviewing a couple of hundred customers could cost you several hundred thousand rands (or even dollars).
Taking a short cut
You could try speaking to intermediaries (such as importers, agents, distributors and wholesalers) that service the market segment you are interested in. They operate regularly in this market and should be familiar with the needs and peculiarities of the customers they serve. You may learn a lot from an intermediary that is prepared to share his/her knowledge for you. Clearly, they will be expecting you to do some business with them and to use them as your agency or representative otherwise they won't be willing to give out this valuable information for free.
You may also want to take to just a handful of customers to get a very general idea of what they think of your product, but statistically you cannot rely on this information. You cannot assume that by talking to 10 or so customers that they are indicative of all customers - this is a fatal mistake.
You may also want to see if existing marketing research has been done in your field. You could speak with trade associations, chambers of commerce or search the Internet for such research. This research will not have been undertaken with your specific products in mind (and is considered to be secondary research from your point of view), but it may be close enough to be insightful. An example of what is available on the internet can be found at http://www.exportnavigator.com/en.
Who is going to conduct this research for you?
If you decide that you need to undertake marketing research in aprticular foreign market, one of your key decisions will be to decide who should undertake the research for you. Here you have two choices;
- Your firm can do it in-house, or
- You can appoint an outside agency to do it for you.