Identifying an export market
It’s important to define your export target(s) in as much detail as you can, while it’s also vital that you understand your product or service, your sector, and your market.
To identify your target market, you’ll want to gather information on:
- Your chosen country and market.
- The relevant regulations and entry requirements into your proposed market.
- Product liability in your chosen market.
- Freight considerations and required export documentation.
- How you’ll be paid for your exported products or services.
- The risks involved in your chosen target country.
Assess market opportunities
You may have an export target in mind, but how easy will it be to enter into that market?
Begin by looking for market opportunities for your products or services where entry to the market will be easier and your potential competitive advantage can be sustained. Then draw up a list of some possible targets.
Research export markets
When you start researching about the possible export markets you could enter, there will be a wide variety of information you’ll want to obtain, including:
- Demographics of the market.
- Basic economic activity in the country.
- The political situation and general market conditions.
- Transport and communications.
- Political involvement or exchange with the United States.
US Government sites
Add the US Government’s Export Portal to your favorites because you’ll likely be using its resources frequently.
This website has information about international sales and marketing, finance, logistics, regulations, licenses and possible trade problems.
You can search for trade leads and trade events, and view the portal’s market research library. The SBA helps US businesses start, grow and succeed by providing a range of services such as loan guarantees, training, counseling and support.
CIA World Factbook
The World Factbook is an annual publication that provides an overview of virtually every country and territory around the world. It covers topics such as geography, population, government, economy, communications and transport.
Organization for Economic Co-operation and Development (OECD)
The OECD provides comprehensive information on the 30 member countries, plus a range of information on non-member countries (including China and India).
Use customer segmentation
Customer segmentation is the grouping together of certain customers based on their shared similarities. Each segment might be bound together by buying behavior, needs, demographics, tastes, or some other characteristics.
One example of customer segmentation in an export market is if you were exporting hats, you might be able to segment your customers based on what they do in their spare time. Some might play golf, others may go walking, and some could spend time at the beach.
The key for you as a business owner is to determine how you’re going to group your customers in a way that will have the biggest positive impact on your business.
Take into account the potential barriers to exporting
An important part of assessing your target market(s) is to consider all the possible barriers to exporting. These include:
- Import barriers. You may find restrictions for entering into some markets.
- Currency restrictions. The control of foreign currency exchange expenditure for imported goods or services.
- Import quotas. These can apply when your target export country fixes the quantity of one of your imported products.
- Tax. Like in your home country, tax may affect your offering’s pricing and your market prospects.
- Health regulations. For example, food and agricultural products can have health regulations imposed on them.
- Safety regulations. These can apply to a range of products, like appliances and electrical equipment.
- Environmental standards. For instance, if you exported batteries to the EU, there may be some environmental standards you’ll first need to meet.
Regardless of which market you choose try to reduce the risk and cost by test marketing, or running a limited trial or launching online to gauge demand before you commit large amounts of your capital.