What To Consider as a Business Before Venturing Into New Markets
Every business desires to grow and expand their geographical outreach, with the ongoing plans to make Africa a free trade area, many businesses will be able to sell their products to new markets in countries within Africa, however, businesses ought to be careful when choosing the market they will be entering into with their products.
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The opportunity could look so promising but at the same time if not systematically considered business will fail to be accommodated by the new market. Therefore, there are also a number of factors producers and business owners should be aware of before making the great leap.
- Choose the right country.
For market research, they should ask themselves; where is the demand strong? And where is supply week? First, select one country rather than entering into several countries’ markets, However, if you want to tap into a broader market, choose a region that shares a common language, similar cultures, and ethics that are associated with your products or is with closely bound by trade agreements.
- Prepare a plan.
Effective and sustainable business is established with a clear plan, there’s no need to go overboard with the details, but make sure you’re covering the essentials: your market entry strategy, export budget and contingency, key dates in your export calendar, your marketing plan for the new market, your sales targets and with it your expected return on investment.
- Know the market.
Before venturing into new markets first as a business owner you need to conduct market research and familiarize yourself with the market you want to venture into and determine the size of the potential available market. You need to have an idea of your target market’s tastes and buying habits, how new products are marketed in the new region and the local prices, and how are individuals to be moved through awareness, desire, and the decision to buy?
- Analyze the local competition.
Analyze and evaluate your competition within the chosen country, Find out which businesses or doing well and which aren’t, and try to establish why this is the case. If the competition is particularly fierce, then perhaps a better foot in the market would be to form a partnership with one of the local businesses. More often than not, this is the safer, more cost-effective approach.
- Determine what the marketing trends are.
Try to determine if your new target market is growing, stable, or declining. You may be able to compete successfully for a good market share now, but if the market trend shows declining demand for your products or services, then the future may not be promising. It is better to enter a market that shows healthy growth trends.
- Choose your mode of entry.
Choosing how you enter the new market is very essential, you don’t just enter blindly, look for any initial entry barriers that prevent your business from developing to the fullest, you need to rethink how you get your products or services into the market, are you going to sell directly to the final consumers? Will you use intermediaries such as wholesalers or distributors? And even if you sell directly to a target clientele, do you require the assistance of an in-country sales agent to facilitate your sales?
Other ways could be: Using the services of an in-country distributor or agent, acquiring an existing local business, or partnering with a local business. This can take various forms, such as franchising, licensing, a joint venture, co-production and cross-manufacturing, and opening a physical presence. This can be anything from buying or renting an office to hiring a local representative, selling through online marketplaces, offering direct sales through your e-commerce site, or selling indirectly to a target market through another company that exports your products or uses them as components.
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It’s essential to be realistic when thinking about the opportunity space. There are segments that seem to present great opportunities but which, on closer inspection, turn out to have some fundamental reason that will make it difficult, or impossible, to sell to them.
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