Developing a new market is often a challenging and painstaking task, and usually requires a significant investment of time and resource. For most exporters, an exploratory visit to the market can pay dividends. But without proper preparation, the time and effort can easily be wasted says Tim Hiscock.
There’s a lot we can (and should) do from our desks before countenancing a visit. Much depends on the nature of our business and products/services, but in most cases, there is a lot of easily accessible information that can help us to evaluate and compare market opportunities and, crucially, identify knock out factors that can lead us to dismiss some markets as not currently suitable. There’s also plenty of advice and guidance we can call on from market specialists, trade associations and the like.
But this work can only really help to answer the question where? Once we’ve decided that a market is of interest, we are faced with how, who, what, when and why? The answers to these questions depend on very specific knowledge of the market, and that can often only be acquired from personal experience.
Preparing for a visit to a target market
In preparing for a visit to a target market, firstly gather together and review the information you have. What makes this market interesting? Is the information reliable? Who are the potential end-users in this market, and how might you reach them? Do you need local stocks to be available, in which case you are probably going to be considering working with a distributor (maybe more than one)? Or are your products bespoke or high cost capital equipment, in which case you may need a local sales representative such as a commission agent? Or maybe something else? Possibly you don’t know the answer yet.
Consider the competition in the market. Are there competitors you already know who are active? Are there perhaps local players that are new to you? In the digital age, we can find out quite a lot about them before we leave.
The chances are that the act of reviewing the information will pose a lot of questions. That’s good. Write them down, because they will be the objectives for our visit.
The primary point of visiting a market is to meet people, so think about who you need to see. They could be potential distributors/agents (but in general, we shouldn’t be in a hurry to agree to anything just yet). We may have questions about the competition. Meeting them may not be the best idea, but perhaps we can get to customers or people in their supply chain? Think of all the contacts you already have and see if they can open a door for you. The local Embassy’s commercial section are there to help, so use that contact, too.
It can sometimes be convenient to tie in a visit with a sectoral event such as a trade show. Most such events welcome foreign visitors, and they can be a great opportunity to identify competitors, have a look at their products and what they do. There may also be companies who could be useful to you, perhaps distributors of complementary products.
If talking to competitors, I have found that the best approach is to be open and honest. Tell them who you are, what your company does and why you’re there. Outright hostility is unusual in my experience, in fact they are usually as keen to find out about you as you are about them. At a trade show, try to pick a quiet time, and avoid such conversations on the first day altogether if it’s a multiple day event.
Be very clear about why you’re going, what you expect to find out, and how. If you have made contact with potential distributors/agents, it’s an opportunity to check them out and a keen prospect will be happy to make time to show you around. This can make life much easier, in coping with local transport and language etc. But never allow such a prospect to dominate your visit. If necessary, make an excuse to explore on your own. The prospect will try to ensure that you only see what he wants you to see. You need to form your own opinion.
Make your travel arrangements
Make your travel arrangements carefully. If visiting businesses, be sure about the location, the time of appointments and how you will get there. Take plenty of product information with you and ensure that you are sufficiently informed to answer in-depth questions. And remember you came to understand the market, so prepare your questions, too. We might need to know about what competitors are doing, what their products are like, what their prices are to end users, what their after-sales service is like. Keep your agenda manageable. Many people try to cram in as many meetings as possible, but this can be counter-productive. If I’m having a useful meeting with someone who seems to be potentially useful, that last thing I want to do is rush off mid-conversation. Consider local factors such as climate, transport etc. and don’t try to do too much.
Review your progress, at the very least daily. Write down your thoughts and observations. Don’t be surprised if you are coming up with more questions than answers. Developing a new market rarely comes quickly and one visit will not make you an expert.
Create an action plan
What this visit should do is enable you to create an action plan. If more market knowledge is needed, you will have to find out how to acquire it. The Department for International Trade might be able to help, or perhaps a private consultancy or trade body. If the visit is productive, the questions you are asking yourself are probably changing. Try to keep an open mind. The way the business works in this country might be quite different from what you have come to know. You may need to rip up the rule-book. Don’t trust your assumptions, find out how business is done and why.
Always consider your health and safety. Take advice on travel arrangements, book reputable hotels, and take advice on where to go and where not to go. Ensure you have adequate insurance and remember to carry essentials such as any medicines you might need. Make sure that colleagues and family know your itinerary and keep in touch frequently. Someone at home should have essential details such as a copy of your passport and flight schedules etc. If you’re going to bring product samples, ensure you understand local customs regulations about merchandise in baggage.
Be sure of your next steps before you leave, and write them down. Strive to keep an open mind. It’s quite common to find that a market that you expected to be a great opportunity is looking like it might not be for you. Don’t persevere with a lost cause. It’s a big world and even the most global of businesses don’t operate everywhere.