Entering a New European Market – The Importance of Market Research
It is often the case that people have a much better understanding of their home market than overseas markets when they are launching new products and services. But often these products or services can have a global market appeal and can create further successful growth of their business if they are introduced in the right way across the world.
Launching Products and Services Successfully in Europe
Often businesses have a great product or service that is doing really well in its home market, but not getting off the ground in a different European market place and not achieving the level of sales that they deserve. Often there is no obvious apparent reason for the lack of success and it can cause a great deal of frustration back at head office as everyone tries to figure out what’s gone wrong and how to fix it. This can lead to a lot of wasted time, effort and resources with no significant results if businesses are not doing the right things to facilitate a successful market entry to achieve significant global sales.
Taking your products or services to market requires a number of things to happen before you create a Go-To-Market strategy and enter the market. One of the first steps any business should take is thorough market research, both primary and secondary, to ensure they have a wide knowledge of the market they are considering to launch their product or service in.
Primary Market Research:
Primary market research would include a business, who wishes to enter a particular market, doing the research themselves, this could be through research methods like surveys or focus groups in each chosen market. But how does a business know who to include in their focus groups? And who they should ask to fill in their surveys? This is where secondary market research is important.
Secondary Market Research:
Secondary market research is research that has been compiled by people such as government organisations, trade associations and other businesses within the industry about the demographics, psychographics, geographic and behaviouristic characteristics of a specific area. When a business chooses to enter a new market, examining secondary market research is the first step they should take.
- Demographics represents things such as age, family size, religion, social class, income and many other factors. Good demographic research should show you the type of person that will buy the product or service. Are they the parent? Or young adult? Do they earn enough money in order to have disposable income to buy your hedonic product? Or is it a utilitarian product that everybody will need?
- Psychographics represents attitudes, activities, opinions, and interests of the target consumer.
- Geographic research represents the region, population density and climate. This is important as businesses will need to make sure the product is suitable for a certain climates.
- Behaviouristic research will let an exporting business know the benefits sought, usage rate, brand loyalty and readiness to buy. If a country has a 100% brand loyalty rate, a new brand name will struggle to get many sales and gain market share from the competitors, who will already be well established in the chosen market.
It is important that businesses who plan to enter a new market complete both primary and secondary market research in order to work out whether a particular chosen market is suitable or has enough of a demand for the product of service they are offering. And this is why market research is so important:
- Consumers and their needs will vary from country to country across Europe, just because one European country may respond well to your product or service, don’t assume a neighbouring country will agree.
- In each new market, there is the potential of new competitors. For any business in their home market or in new market, it is important to understand what the competition is doing. When entering a new market, a business will be up against already established brands, so knowing what their next steps are could be very useful when it comes to launching a new product or service.
- Some adaptions may need to be made in each new market to make your product or service is attractive to that market’s consumers and so that it measures up to the legal regulations of that particular country. Sometimes it is only a small tweak that is needed, sometimes if an element of a product or service does not resonate with that market, it will need adapting to obtain sales.
- Market research will tell a business where the identified potential customers in each market would expect to go and buy your products or services. It is surprising how often channels are not the same from one country to the next.
European Market Success
The businesses that have the most successful products or services in different European markets, are those that spend the time to thoroughly research the markets they want to enter. They don’t make assumptions and test each market carefully before compiling a Go-To-Market strategy which will result in a much more focused market entry strategy and one which is going to be more successful in the long run.