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Research countries and choose destination markets:Understanding customer demand vs ease of entry in an export market

What you’ll learn

  • the relationship between these factors and your choice of market
  • how to record and analyse these factors using graphs
  • how to use your analysis to help you choose the right markets to target

How they're different

Customer demand

Customer demand, also known as market demand, is the amount of customer interest within a market for a certain product or service. To find this out for each market you're thinking of exporting to, research:

·         sales of similar products or services

·         customers in the market

·         imports of similar products or services

·         online sites for market size and characteristics

Read more on how to work out demand in our customer demand lesson.

Ease of entry

Ease of entry is the ability to take your business into a new market and get a return on your investment, taking into account any significant barriers to trade.

You can read more in our ease of entry into a new market lesson.

However, one of the most useful things to understand when looking at potential markets is how the interaction between these 2 factors could affect your exporting.

Customer demand vs ease of entry

For each market you’re interested in, plot ease of entry against customer demand on a graph. For some markets this may be fairly easy to work out, but others may need more research.

You'll probably find that some markets have a high demand for your product, but are hard to enter. Others may have virtually no barriers to entry, but low demand. However, for many markets ease of entry and demand for your product are somewhere mid-range.

In the example below, the points represent individual markets. Those in the top right-hand quadrant score highly for both ease of entry and customer demand for the product, and therefore show the markets which have the best export potential.

Graph showing ease of entry verses customer demand

In some cases you may wish to work with a professional market researcher to complete this activity for you or to review your own research before you proceed.

The market with the most demand for your product isn’t always the market with the best potential. There are so many factors that can reduce the ease of entry, so do your research and make sure you get the balance right.

International trade adviser

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