How to do market research?
Market research can be time consuming but in the long term it can reduce exporting risks and help you to avoid costly mistakes. If you don’t research the culture, regulations, customer habits and payment methods that are typical to the market you’re selling to, among other things, you will struggle to sell your product or service there. This what market research is and why it’s important to do it.
To increase the chances to succeed in an international market in the long term you may need to understand in greater depth:
- Your customers’ expectations for the product or service
- Buyer behaviour and decision making process
- Optimum distribution channel
- Competitors’ brand awareness, preferences and loyalty
- Existing customer satisfaction levels.
Types of market research
Secondary research (sometimes called desk research) tends to be the first step in market research and can sometimes be perceived as ‘good enough’. But, as with all steps in the export journey, having a clear objective will make the exercise far more worth your while.
Secondary research tends to rely on published data and the quality of this can vary, depending which part of the world you’re trying to obtain information from. Remember, this data has been collected against a specific brief that you will not be aware of. Importantly, it may not have had your product or information in mind when developed so if fitness for purpose is not clear, use it as a guide only. In Europe, for example, the quality tends to be higher than in African and Asian markets where the information tends to be harder to collect.
Information can be sought from many different places and the cost of information varies depending on the sources. You might like to try:
- Unavailable data: in many developing countries, quality secondary data is often unavailable.
- Out of date data: some companies will provide country reports for different countries which look very similar as they are based on the same document but have been adapted for each country and can be out of date by the time they are edited and published.
- Reliability of the data: before using quantitative data it is important to know about the data collection methodology, the purpose of the collection of the data, the consistency of the data collection and the company responsible for collecting the data. Government data can be ‘tampered with’ to show a more positive view of a country, companies providing ad hoc quantitative market data on your market segment will need to be clearly briefed to provide reliable data.
- Different definitions: industry and product data classifications need to be clearly understood as some country or research companies have broader definitions which then make the data unusable.
These challenges, if ignored, can damage the credibility of your market research, leaving you unable to act on the results.
Primary research or FIELD research
Primary, or field research, is specific to your company’s needs. Rather than scouring through general information, this is research specifically tailored to you, where you can establish exact information about the marketing of your product in the chosen market.
Unless you know what you’re doing it’s important not to go it alone, however, and conduct research either jointly with an agent or distributor, or appoint an external agency.
Primary research can be a very time consuming and expensive exercise so it needs to be well scoped and planned based on agreed objectives. Based on the objectives and the depth or breadth of the information required, the research will seek quantitative (data with objective and measurable properties) or qualitative (data with subjective properties, not of a measurable value) data, sometimes both.
Finding the right market to sell to is key to success in international trade. Taking the time to develop an action plan will produce clarity in your processes and keep you on the right road.