Research countries and choose destination markets
Information you need to choose a target country
What you’ll learn
- how to create a framework to help you make decisions
- how to balance customer demand and ease of entry
- the channels where you can focus your research
Two key factors
There are many factors to help you decide on the best markets to target. But working out what’s best for your business isn’t a simple tick-box exercise. You should understand these 2 important factors before doing any other research:
- the current export capabilities of your business
- customer demand vs ease of market entry
Be ready to make changes to your target market plans as you find out more information.
Start with the basics
Understand your own business
Knowing where your current export strengths and weaknesses lie will play a big part in your choice of countries to target. For example, if your product relies on a specialised distribution model, you may have a limited choice of routes to market. Do a full audit on your export capabilities, including:
- What is your sales and marketing strategy?
- Do you have enough financial backing?
- Are there particular routes to market you'll use?
- If you don’t have the required skills in the business, how will you bring them in?
Map it all out clearly and use this information to make your choices.
Customer demand vs ease of entry
Another factor that will help you choose your market is the relationship between demand for your product in a market and the ease of entry into that market. A market with the highest demand for your product may seem an obvious choice, but if it's costly or complex to enter, it may not be right for your business.
As you did with your own export capabilities, adapt your target list using this relationship to avoid taking your research in the wrong direction.
Finding your information
You’re now ready to start your research. Desktop research will give you a broad view of all possible markets, and is relatively cost-effective. Once you’ve narrowed your target list with desktop research you can move on to more practical research.
Depending on your product or service, you may be interested in different types of information to help you choose, but in general you'll be looking at:
- market size
- growth potential
- direct and indirect competition
- tariffs and barriers
- consumer trends
- business culture and language
A good source for this information is foreign investment agencies from the targeted country — they usually have guides with detailed, sector-specific information.
Macroeconomic information – GDP, population size, inflation, etc – is readily available for all countries, but can be of limited use to small or medium businesses. Use it for a quick overview.
Sector-specific research is much more valuable, and there are many channels where you can find out what you need:
- trade association websites
- competitor websites
- trade and product forums
- DIT webinars
- DIT online databases
- online searches for products or services
You may also find it useful to research businesses who operate in related sectors to yours, but are not competitors. For example, if you’re exporting luxury chocolate you might research other luxury products in your chosen market.
Practical market research
Once you’ve narrowed your list through desktop research, it’s time to build your network. This is where you can find useful advice from other businesses who are working in the countries you’re interested in. Examples of sources for practical research are:
- trade fairs
- trade associations in the UK and target markets
- customer groups
- channel partners
- distributors and freight forwarders
Set up meetings with as many organisations as you can, and get the benefit of the first-hand experience of your peers.