There is often confusion about what constitutes Eastern vs. Central and Western Europe. The definitions and borders may not be as important as determining which one(s) are more likely to help you meet your expansion goals. Before going any further, a listing and map may be helpfulif you are just beginning to explore this market and its opportunities.
The map above shows the 22 countries that comprise this market. And here, for convenience, they are presented alphabetically:
- Albania, Kosovo, and Macedonia
- Czech Republic
- Lithuania, Latvia, and Estonia
- Montenegro, Bosnia and Herzegovina
- Romania and Moldova
- Ukraine and Belarus
Much political, cultural, economic, social and religious history helps to explain some of the groupings and borders of the countries in Eastern Europe; as such, it is useful to spend some time becoming familiar with the background of this market prior to any entry. As an example, the region contains a few former states of the USSR and some which are now members of the EU. In many ways the countries of Eastern Europe have become westernized in terms of their current politics and economies.
Although today Lithuania, Latvia, and Estonia use the Euro, there are quite a number of other currencies to be aware of and deal with when pricing your products and calculating costs and net profits (e.g. the Serbian dinar, the Hungarian forint, and the Polish zloty).
Have a plan
Even if you know a lot about Eastern Europe, you will more than likely need some professional help to successfully enter and do business in this market.
A good starting point is to identify key factors/questions that your company considers most important, and then rate how each country ranks on them. For example:
- Total Population – What basic demographics apply to your target market?
- Target Market – Which subset of the population might buy your products (or services)?
- Per capita income – to estimate potential sales, how much disposable income does a person or family have, and can they afford to buy what you want to sell?
- Level of need for your product – To what extent does anyone actually desire your product and how does it compare to alternatives/competitive offerings?
Here are some additional considerations before entering the Eastern European market:
- Languages – There are many related, but different written alphabets, and dialects spoken, across the Eastern European countries. Do you know them well enough to conduct any form of market research,and ultimately create local marketing messages?
- Population/size of market – Are you planning to begin with the largest markets (Ukraine and Poland), smaller ones, or the entire region? (Of note, Poland’s population is nearly equal to that of the Czech Republic, Hungary and Romania combined.)
- Infrastructure – The amount and quality of transportation alternatives is critical to the cost and time involved in distributing your products. Some countries are land-locked while others border a sea.
What is a good market entry strategy?
Clearly, the Eastern European market offers large opportunities as well as risks.It is important to address and answer the following:
- What, exactly, are your overall objectives? – e.g. market penetration, sales, improved margins?
- Who are your ideal customers? – e.g. where are they, what are their profiles, and how many of them exist?
- How will your goals be met? — i.e. what is your plan? – what will you do, and how will you do it?
- Will you require third party help? — e.g. do you need a local partner, a consulting firm, a bank, or a market research company that is familiar with that market?
Do Your Research
Though you can readily gather much factual data about a new market you are considering to enter, there are still many unknowns that can best be addressed by doing market research and thereby gaining insights directly from potential customers.
An experienced market research firm that is familiar with international markets and knows the language, customs, policies and attitudes toward research can be hired and help to:
- scope the market by using secondary research/gathering background information that can support your internal staff, or do it all if your resources are limited
- identify competitors, their messages and prices
- conduct qualitative studies such as focus groups or personal interviews
- conduct quantitative research, including online or telephone surveys
Findings from such research efforts can aid your decision making by
- determining the extent of need for your product
- testing your messages and meanings in each language
- estimating potential acceptance/purchase intent
- identifying any concerns or obstacles prior to a full launch
SIS International Research can offer guidance based on similar projects for our clients in the same industries who had common expansion goals and needs.