Market Research - Is it really necessary? In short, yes! Finding out about the market before taking the plunge and deciding to export is definitely worth the cost and should be regarded as an investment.
Effective market research will give you an insight into many things such as your target market's economy, any political risks, credit terms and recommended payment methods. You will also find out which currency you are likely to be able to invoice in.
You can establish the market size and likely product demand. Research can identify the location and number of customers/outlets, and can even go as far as establishing credit worthiness of potential customers.
Market research should also help you to find out who your competitors are and what makes them successful, uncovering the quality and prices of any competitive products already successfully being sold there.
You need to know if there are technical standards that may need to be met, as well as packing and packaging requirements for export, especially in relation to labelling regulations.
Before starting to export, you should also find out which are the most effective distribution channels and methods, such as agents, distributors and wholesalers. You also need to be aware of any tariff or import restrictions within your destination market, such as duties, quotas, taxes on imported goods - knowledge of which is essential for you to realistically price your product in your target market.
Finally, never underestimate the importance of cultural differences. Before spending money on literature and support materials, you should seek the advice of a professional with knowledge of the market as the requirement for translations; the use of certain colours or even the wrong sized paper in some countries may mean the difference between success and failure.
In summary market research is essential, reducing the risks involved in exporting, saving you time and money and giving you that important insight into your target market that could help identify valuable opportunities to start trading internationally.
Blob For more information on the regional support available to assist with market research or organised market visits, contact the Regional International Trade Hotline on 0845 05 05 054.