Let’s consider typical mythes, trends and realty in choosing the initial target markets for Your products.
After a general decision to go abroad the second critical choice to be made is – where exactly to go? Many companies have a tendency to go after the largest markets first and expect that market size also define the potential pay-off. However it is not aleways the case or at least not always the case in terms of the budget, time and other resources to be invested in these market.
There are many factors that must be determined for choosing the best initial region, including:
- Language requirements – can the product be sold and used in Your local language or English? How big are investments into localization? What exactly muct be localized (will it be enough to translate just some marketing, interface or the full and complete documentation is a must to start in that region)?
- Size of the population – does the product sell to a broad range of individual users? is the total population a good indication of the market potential for Your product?
- GDP per capita and average spending in your vertical – is the relative wealth of a country and the amount of spending in Your vertical is a good indicator? Are the segments you specialize in are fully developed or rapidly growing?
- Number of potential clients in Your segment – will you have enough audien
ce and growth potential in the new region.
- Presence and type of competitors – are there in that market already your international competitors? With office or via sales channels? Do they have stocks or not? Are their products localized or not? Are there local players? How strong they are? Are there any governmental lobby for local producers?
- Piracy rates and respect of intellectual property – if your product do have a low protection or can be easily replicated – the piracy rates, laws and general respect of intellectual property, brand protection etc – are especially important. Thus China might be quite attractive in terms of size, growing rate etc., but with 90% probability that Your product will be duplicated – would you still expand there? Or at least consider the protection mechanisms.
- Time zone and support requirements – if your product is complex and require installation support, it may influence where you expand and how fast and easy you can react on the incoming requests to keep partners and customers happy.
- Technology adoption – is the market an early adopter? Are there already similar technology and infrustructure exists for your product? Are you ready to wait and even delevop and educate market about the new technologies?
- Transferable references – did you already made deals with local clients or at least their international offices? Is it possible to get a foothold in the market where you already have some success-stories?
- Exit strategy – you need also to have a clear understanding of what your exit strategy might be, it has a strong impact on market selection.
GloBAS Group will be happy to make a target analyzes and comparison of the initial markets you are thinking of.
How to start business in the new regions? To be continued…