Tags – How to Test a New Market
Are you looking to expand your business into a new market?
If so, you will need to follow a five step process in order to ensure success.
And this process will help you determine whether or not the new market is worth entering. It will also help you plan and execute your entry into that market.
So, what are these steps?
Keep reading to find out!
1. Gather Data
The first step is to gather data.
Simply, you will need to collect both primary and secondary data in order to make informed decisions about your new market.
Primary data is data that you collect yourself to give you good consumer insight. And there should be a match between the answers you want vs the questions you’ve prepared, so take the time to make your market research questionnaire before you start collecting your data.
Some great ways to collect primary data include:
- Questionnaires: construct your own questionnaires with a set of questions to which you need answers. If you know who your customers are already, arrange meetings and ask them to fill it in. If you’re in the B2C market, try to meet customers when they are in the buying phase as they’re more likely to give correct feedback and therefore increase the accuracy of your market research.
- Interviews: personal interviews are similar to questionnaires in that both involve gathering information through interviews. The distinction is that, in this case, the interview will be subjective and you will have the ability to construct your own interpretation of how it went and what it means.
- Social Media Polls: if you have a large fan following on your business page, creating Twitter, Facebook, or LinkedIn polls is a really quick approach to gather initial data. You can also boost the poll as a sponsored post to appeal to a broader audience, such as those who have not liked your company page.
Secondary data is data that already exists: it’s the data that has already been acquired through primary sources and made available for researchers to use for their own study. Some sources of secondary data include:
- Industry Associations: here you will find websites full of useful information, such as an overview of the industry and its history, PR about product and company news, technical resources and reports about industry trends.
- Trade Publications: most news articles make their information available online. They’re a fantastic resource for in-depth product, industry, and competitor data about specific sectors. News stories frequently include insights obtained firsthand from top executives at major corporations regarding emerging technologies, market developments, and future plans.
- Company Websites: public companies will have investor relations sections with annual reports, regulatory findings, and investor presentations that can shed light on both the company’s performance and the industry as a whole. Companies’ websites will usually include information about product lines, market served, geographic presence, corporate structure, sales methods (distribution or direct), customer connections and innovations for public and private
2. Analyse the Data
The second step is to analyse the data, which will help you determine whether or not the new market is worth entering.
To do this, you will need to consider the following:
- The size of the market
- The growth rate of the market
- The profitability of the market
- The competitive landscape
- The regulatory environment
Simply, you need to take all of the data that you have collected and break it down into manageable chunks. Plus, you will need to identify trends and patterns in the data, as well as any potential risks or opportunities associated with entering the new market.
After you have considered all of these factors, you will be able to make a well-informed decision about whether or not to enter the new market.
3. Develop a Plan
Once you have analysed the data and your research is complete, you will need to create a plan for how you will enter the new market.
Here, you might want to reconsider how you go about offering your goods or services to the market.
Do you sell directly to the end-user, or do you work with the “middleman” such as wholesalers or distributors?
And even if you sell directly to a target clientele, do you require the assistance of a local salesperson to “open the doors”?
Lastly, this plan should also include a budget, a timeline and a strategy for overcoming any potential challenges.
4. Brand Awareness
You can’t underestimate the value of brand recognition and trust points in establishing yourself in the new market.
When you enter a new market, no one knows about you, your product or your message.
That’s why you’ll need to use a large number of channels in order for your brand name to be recognised.
And this might be done in a variety of ways, including local partnerships, influencers, public relations, local ambassadors, and feedback on your website.
This is important because you must be seen in a variety of ways by the individuals you wish to appeal to. The most effective approach is to get someone else to suggest you to them.
Another fantastic technique is to urge clients and consumers to offer genuine and honest feedback on your products and services.
Even the most basic form of brand recognition can result in sales, therefore maintaining good communication with your clients and continuing to adapt while using local services is critical.
5. Potential Growth and Exit Strategy
Getting your first sales is wonderful.
However, you must keep in mind the speed at which you may develop in this market. You might be able to triple your budget, but if the market isn’t ready, you may find yourself stuck at any moment.
In the growth stage, you should concentrate on the things that will enable you to expand at the required rate. Select 1 country, 1 channel, and 1 funnel, and double your budget to see how it goes.
Because the transition period may take time, don’t expect immediate sales; also bear in mind that if you reach your limit early on, you might not grow. Don’t expect to understand the market without putting in any effort. You won’t get much traction right away if you try to understand it passively.
That said, there needs to be a plan for both success and failure. What will you do if you become a huge success? You could commit to the long run or cash in while you’re ahead and seek out new markets.
Or if you fail to achieve your targets set in the specified time, will you try to learn and continue or cut out before further resources are wasted? No matter what, an informed decision can only be made if a plan is already in place.
The expense of entering a new market can be a lot, especially if done incorrectly. That said, you may expand your company through new market development by preparing carefully, conducting research extensively and having a go-to-market approach.
For more information, please get in touch today.
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