International Market Research
International market research refers to the services and solutions that assist global companies to gain an overall picture of the business and financial climate in a foreign country. It helps companies successfully enter into a new market and cost-effectively expand their operations.
This type of market research aims to support global companies in making well-informed business decisions and avoid a learning curve that could cost the company significant resources. Indeed, when venturing into a new market, it is vital to conduct as much research as possible in a wide range of areas to launch a successful entry and pinpoint extraordinary business opportunities,
In addition, international market research typically comprises the market size, competitive information, consumer behavior, and various other data that may impact the potential growth and success of a business’s products or services. It is generally undertaken through a range of methodologies such as focus groups, surveys, and expert interviews to collect reliable information to develop appropriate strategies for marketing the products or services in the targeted foreign market.
Why is international market research important for global businesses?
International market research plays an increasingly valuable role for global companies since it provides in-depth insights into the business and financial climate of foreign markets. This data helps enterprises in making business decisions about their entry or expansion into international marketplaces. This information includes the identification of prospective customers, evaluation of the regulatory and cultural gaps, and the overall understanding of the competitive landscape.
When conducted correctly, market research can be instrumental to the overall success of a company and can deliver a vast amount of business intelligence. On the other hand, without this initial research, global companies are likely to rely on incomplete information or assumptions to guide their decision-making, which could result in costly mistakes.
Furthermore, international market research is a powerful tool to develop a cost-effective marketing strategy as it identifies the most suitable channels for reaching potential customers and tailors their messages to local cultural standards.
Benefits of conducting an in-depth international market research
Particularly, performing thorough international market research may bring several advantages to businesses that will increase their chances of succeeding in a new market, including:
- Finding emerging market opportunities: International market research findings can make it easier for companies to pinpoint potential growth opportunities, which would allow the business to expand securely and reliably.
- Gaining an understanding of the competitive landscape: Research provides a comprehensive grasp of the competitive environment in a given foreign market. This includes the strengths and weaknesses of competitors and an overview of the competitors’ products and services.
- Customized marketing strategies: Researching local consumer behavior, cultural standards, and government regulations is an invaluable source of information that can help companies adjust their marketing strategies to be more effective in a particular foreign market.
- Mitigate risks: By conducting exhaustive research, organizations can gain a better sense of the risks associated with entering a foreign market, including political risks and legal issues, and any other variable that has not been previously taken into account.
- Legal and regulatory compliance: By identifying potential issues and challenges upfront, firms can prevent potentially costly mistakes and avoid unnecessary risks, which may lead to cost savings.
- Operational cost savings: When identifying key issues and potential business opportunities in advance, enterprises can prevent expensive mistakes that are easily avoided by performing a study of this nature.
- Building relationships: Undertaking thorough research may also help companies build relationships with local partners, which can be advantageous when growing their operations in a foreign country’s market.
For this reason, carrying out international market research has many more advantages than disadvantages. It can even be considered an essential step before investing in a foreign market of which a given company does not have sufficient knowledge.
However, it has a few drawbacks since doing research abroad can increase costs because it might involve hiring local staff and performing interviews in a different language.
What type of deliverables can you get from international market research?
The results of international market research can vary depending on the precise goals and methodologies applied. In any case, a few typical examples of international market research deliverables are:
- Detailed reports that present an overview of the market size, growth prospects, and competitive landscape.
- In-depth research on consumer behavior, preferences, and attitudes.
- Industry trends and data from industry-specific sectors such as retail, healthcare, automotive, and electronics, among others.
- A competitive market analysis that includes precise competitive landscape information and the unique advantages and disadvantages of competitors.
- Go-to-market strategy with precise considerations on the most appropriate routes to enter or expand into a target foreign market, including details on distribution channels, strategic marketing approaches, and prospective suppliers.
- Market segmentation and profiling of key market niches, which include demographic data and psychographic information.
- Forecasting with precise projections of sales, potential revenue, and projected growth.
- Presentations with major insights and actionable steps for entering a foreign market successfully.
How clients can implement findings from international market research
With all the benefits and comprehensive results of international market analysis, companies can implement the findings through various approaches such as:
- Building a successful market entry strategy: Clients can leverage research results by designing a targeted foreign market entry strategy.
- Adapting products to specific markets: Research results can be effectively applied to tailor existing products or services and suit the needs of customers in the foreign market.
- Identifying target segments: Clients may apply research findings to determine relevant market segments and address their unmet needs.
- Customizing marketing campaigns: By adapting marketing campaigns to local cultural and consumer behavior patterns, clients can easily generate revenues from the start.
- Building local partnerships: Leveraging research results to identify potential business suppliers in the local market is a valuable asset for the company’s operations.
- Complying with regulations: To use the research results to make sure that the company meets all relevant laws and regulations in the foreign market to mitigate the risks of entering the market with products or services that could lead to legal issues.
- Team building: Clients can leverage the research evidence to assemble a staff with the relevant expertise and skills needed to operate successfully in the foreign market.
- Monitoring the local market: Clients can use the results of the research to set up a system for tracking the market and following up on the company’s performance.
- Preparing for logistical challenges: The logistical hurdles of entering a foreign market can be considerable. And research enables companies to assess suppliers, staff, find suitable locations, understand the payment and financial infrastructure, and comply with import and export requirements, among many other considerations.
- Developing a robust strategy and budget: A comprehensive strategic plan and budget is a vital starting point for any market entry process. The only reliable way to accomplish this is to conduct careful market research.
International market research best practices
Despite all the advantages of international market research and its convenience for global companies, it is worth noting that certain procedures must be followed, and international market research best practices include the following:
- Identifying clear research goals: By defining the objective of the research, analysts will ensure that the research is both focused and meaningful.
- Understanding of the target market: The research should provide the specific segments that constitute the target market and the key players in the marketplace. It will ensure that research is conducted on the proper audiences.
- Choosing appropriate research methodologies: By using appropriate, hybrid and multiple research methods, clients can obtain a complete picture of the market and highlights all the data and opinions of potential customers.
- Consideration of cultural background: Recognizing cultural factors and how they affect the research requires careful attention to cultural sensitivities. Analysts should cover language barriers, local cultural rules, and different communicative habits.
- Local expertise: By hiring local research partners such as local market consulting firms, clients will have in-depth knowledge of the local market and can provide valuable information that may not be apparent to outsiders.
- Investment in data privacy and security: Data privacy is a critical part of international market research, and marketers must invest in data security solutions like encryption tools to protect sensitive clients’ information.
- Validation of research outputs: All research results should always be confirmed to verify that they are reliable and consistent. It is essential to conduct further research or to obtain feedback from subject-matter specialists.
- Compliance with local regulations: Knowledge of local applicable laws is a must to comply with all relevant regulations and avoid any legal violations.
International B2B & B2C market research
International B2C and B2B market research have many similarities but also differences that make it effective in different situations, especially for different groups.
First, international B2C market research centers on finding out detailed knowledge about the needs, insights, behaviors, and expectations of individual consumers in foreign markets. This specialized type of research is typically conducted by businesses that sell consumer goods through focus groups, surveys, and interviews.
The research may be performed in person or online depending on the specific needs of the client and market, and the nature of the research.
On the other hand, international B2B market research aims to gain an accurate understanding of companies’ needs and market drivers. One of the main characteristics of the B2B market is that it happens between companies, the volume of orders is quite high and includes large budgets.
Additionally, the decision-making process for B2B market research is complex compared to B2C market research. It frequently involves a group of people with different roles and responsibilities that discusses extensively which decision to adopt. Whereas discussions in a B2C market will usually involve the decisions of individuals.
The importance of culture and social factors in international market research
Cultural awareness and social considerations are critical in international market research because they influence the behavior of consumers.
In international market research, cultural aspects are a major factor because they can shape the way consumers understand and respond to products or services, and they also impact the way people do business in a particular foreign market. Culture reflects the widespread beliefs, core values, behaviors, traditions, norms, customs, and shared assumptions that distinguish a particular group.
Likewise, social research addresses variables such as social class, education, or income. These factors also shape consumer behavior and the effectiveness of a company’s products or services.
Therefore, when carrying out international market research, it is essential to be aware of cultural and social factors. For example, how negotiations are handled or how products are sold because these elements make the difference between providing services that connect with the local population or being an outsider that cannot bring its ideas to the market effectively.
The critical role of regulatory factors in international market research
Regulatory factors can have a substantial impact on a company’s potential to enter and successfully operate in a foreign country’s market. They vary widely from country to country and can represent a barrier to entry as they are often influenced by political stability, cultural norms, and economic conditions.
Therefore, when performing international market research, it is critical to consider these factors. If regulatory considerations are ignored, the company may encounter substantial legal challenges, including fines, penalties or even being excluded from operating in the market.
Most important industries for international market research
The main industries for international market research vary according to the prevailing economic and business climate. However, some notable industries are usually considered relevant.
- IT: As technological developments are constantly evolving, international market research helps companies keep ahead of the curve by spotting new trends and identifying new opportunities in foreign markets. This is critical to identify where to place investments and monitor trends that have the greatest potential for future growth.
- Healthcare: The healthcare industry is highly regulated, and international market research has the potential to assist companies in navigating the complex regulatory landscape and recognizing growth opportunities. In this industry, the support of consultants is crucial in evaluating the best ways to operate in the market and avoiding time-consuming paperwork.
- Consumer goods: Companies in this industry strongly depend on consumer demand, and research can help them target new markets, and understand consumer trends and preferences in foreign markets.
- Automotive: The automotive industry is a leading global economic growth contributor and international market research helps businesses identify new business opportunities for growth and gain an overall understanding of the competitive landscape.
- Energy: The energy industry is also an important contributor to global market growth, and international market research can make all the difference in this complex industry. It can determine when to invest according to the local economic trends and financial expectations.
International market research is a fundamental process before venturing into new markets that are unknown. Without feedback from local experts and consumers, it is unlikely to have a well-developed strategy for communicating effectively with local buyers and suppliers.
In consequence, investing in comprehensive international market research can be one of the best long-term strategies for a global company that intends to enter a new market and explore its possibilities.