Executives try to understand what works and what doesn’t when penetrating and driving growth in new markets. From choosing the right market with the right product-market fit, through generating leads and win first customers, to managing affiliates and distributors.
One of the first steps is gathering the relevant market data, using research and intelligence analysis. Here are five insights that we learned.
Generally, off-the-shelf research reports are never enough.
When you penetrate a new market, you must make five key decisions: the segment you are going to focus on, the product you will sell, the price and payment terms you will require, the distribution channel you will use, and the marketing communications you will operate.
Each decision has its complexities, and comprises a number of sub-decisions.
Market research, performed by a third party for their own considerations, will never be specific enough to allow you to make the "right" decisions for your company. At best, it will provide you with a general understanding of the market. This rule applies to any secondary information you collect.
Before contacting customers, gather information about them.
Before contacting your potential clients you should gather information, and at very least formulate hypotheses, regarding the following five topics:
What is the exact problem of the customer?
How are they solving that problem today?
What are the main benefits they expect from their supplier?
Where do they go to gather information before making a purchase, and who do they trust?
Where do they like to buy a product like yours?
Start by gathering information from visible sources.
The sales process begins with an in-depth collection of information about the customer. You must read everything that’s been written about them and by them, such as their website, their financial reports, any interviews of executives published in the media, and all marketing content published by the company or its executives. You must analyze their digital assets and online activities. In addition, perform keyword research, join active industry LinkedIn groups and forums, and try to talk to analysts covering the specific field and company.
Good business decisions cannot be made without human knowledge (HUMINT).
Today’s easy access to data causes many companies to engage mainly in 'data-oriented market intelligence', online research (competitor publications, information sites, webinars, vendor comparison sites in the mass wisdom model, social networking intelligence, etc.). Sometimes managers will complete knowledge gaps by purchasing publications from research companies, reviewing available analyst reports, and gathering information at exhibitions and conferences.
However, good decision making must be based on human resources that brings with it an understanding of subtleties.
You can tap in to real human experience from the following main sources: interviews with employees and former employees at the potential client organization, interviews with managers who worked for competitors and provide the internal competitor angle, interviews with managers who work for competitors' clients that provide customer perspective, and interviews with partners (technical / business) or distributors of competitors. From distributor knowledge, you can learn about any potential difficulties in selling your product and challenges in positioning vs competitors, etc. Technology partners can give you knowledge regarding the ins and outs of the competing solution. And so on.
There is no such thing as a bad meeting with market players.
There is a huge knowledge gap between you and your new competitors, who have probably been active in the target market for many years. You can learn something from every meeting you have with a player in your target market. Distributors, customers, colleagues, experts, competitor employees, former competitor employees, etc. know everything you don’t know yet - and need to know.
Source: 77 Insights to Successful Penetration of International Markets (Based on the experience of 1000 Israeli exporters)
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