Narrowing down the field
The first step in your research process is to identify between two and five potential countries abroad that you can focus and do research on. Because of the distance, complexity and cost involved in undertaking market research in foreign markets, it is essential that you focus on only one or two (maybe three at the most) countries that truly offer your firm the potential for achieving export sales, and not spread yourself and your firm too thin.
Preparing a shortlist
To identify one or two countries as your target countries, you will need to begin with a short list of about five countries. This short-list you will identify through means of an evaluation of environmental factors that you consider to be meaningful to your firm and that are relatively easy to obtain. This is a very general evaluation which you will do in your office using mainly secondary sources (such as the Internet, trade magazines, directories, etc.). It is unlikely that you will use a market(ing) research agency to do this research or evaluation for you! You will probably make use of a broad range of information and statistics on issues such as gross domestic product growth, population size, literacy levels, cultural and language similarity, political concerns, legal issues, etc.
Your objective is to exclude those countries which clearly offer no opportunities for your firm to export to, while, at the same time, trying to identify countries with real potential for your firm. This is an interim evaluation – once you have identified your shortlist of countries, in the next step of the export process, you will evaluate these few countries in more detail in order to narrow down the list even further.
Focus on countries with potential
To achieve this, you will begin by considering all possible countries and, through a process of logic, commonsense and an evaluation of selected environmental factors that would be meaningful in comparing countries with each other, you will narrow your selection down to only a handful of countries to examine more closely. So, what factors are we talking about?
Well, this will depend entirely on your company and its products. Are you interested in countries that are well-off and technologically advanced, or are you more interested in countries that are still developing? Is literacy important to you, or does per capita income have more meaning for your firm? Are you looking for a country with an extensive road system, or one that has a major mining industry? Are you looking for a country with political stability because you require a long-term market to succeed? The answers to these questions will indicate what factors are important for you to look out for.
If you are looking for a well-off nation, then per capita income may be important. If you are interested in a fast growing country, then population growth and population size may be two good measures to use. If you are interested in a country with a significant mining sector, then mining figures will be of interest to you. So where will you find these figures or statistics to use for comparison purposes?
Sources of information to help you select countries
There are many different types of statistics and other figures available that you can use to help you segment the global market into groups of countries that have potential for your country and those that don’t. The sort of figures that you may or may not be interested in, include:
Once you have gone through this exercise, you will probably end up with three groups of countries. Those that are well suited for your products; those that may have some potential for your products; and finally, those that have very little potential for your products. It is this first group that you are interested in and which you will need to study more closely.
- Population size
- Population growth
- Population profile
- Size of labour force
- Level of education
- Gross domestic product (which reflects the size of the economy)
- GDP per capita
- Interest rates
- Exchange rates
- Size of exports and growth
- Size of imports and growth
- Major trading partners
- Political stability
- Strength of currency
- Cultural diversity
- Telephones per capita
- Internet users
- Availability of electricity
- Distance from South Africa
- Size of the industry in question
- State of development of the industry in question
These are only some of the factors you might want to consider. Which set of factors you choose, as we said, will depend on your company and its products. The sources of this information can be found by clicking here. You might also want to read up on doing desk and secondary research.