As a complement to our article “Going global: everything SMEs need to know”, we’ve gathered here all you need to know about finding the right market for your product or service. Because going global is one thing, but knowing where to go global is something else entirely.
Finding the right market is not an easy task. That probably explains why most exporting SMEs only do so in one market. There are a lot of tools out there to help you, like Getting to Global’s Market Accelerator or Google’s Market Finder. But often, the search for the perfect market also requires a lot of self-evaluation and assessment on your side. You’ll find here a list of steps to follow to help you gather all the information you need to find the right market for your product or service.
Working on something you believe in and that interests you is only going to make your work a lot easier. It might seem trivial at first, but think about it… If you’re to dedicate a lot of time, efforts, and money on exporting a product or service, you might as well choose something that excites you, something you truly believe in.
The main question here is: what will motivate your customers to buy your product or service? Identify the needs your product or service is trying to fulfill, what it does and for whom. Don’t hesitate to come up with basic needs. In fact, products or services that fall into proven and broader categories are often more profitable than hot new ones. Proven commodities, like shoes, have “built-in opportunities for repeat business and value-added options in terms of accessories” (source: Entrepreneur). And everybody needs shoes! Trying to sell the last hot piece of technology sounds a lot more exciting, but it also means you’ll have to build everything from the ground up, all by yourself. So, if you can, go safe. It’s always possible to be creative and innovative, even in a proven market.
If your product or service has been on the local market for a few years now, don’t hesitate to survey your customers. Ask them why they use your product, or why they need your service. What purpose do you fulfill? That might help you identify new needs you hadn’t thought of, and by doing so, you might also discover a new audience for your offering.
Marketing to everyone is inefficient and expensive. And that’s why you need to narrow your scope to help you focus on a small portion of potential customers. That step will be fundamental also in your market research. The main question here is: what are your customer’s motives to buy? In other words, who is more likely to have the problem your product or service helps to solve? Now that you know what needs your product fulfills, you need to figure out who has those needs.
Your target consumers can be approached as groups: your product or service could be good for kids, adults, and the elderly. But the way you approach them and the market you choose to penetrate might be different for each. If you decide to export in a country where your product is more likely to be used by one group, you have to make sure that this group has the capacity to buy it, and most importantly, that they need it.
Your target market must consist of people who are more likely to purchase your product or service. And what defines them as a target market is their demographic profile. The demographic information you collect will help you build a broader picture of the target market. So, ask yourself, what are your (future) consumers’ income, gender, age, education, location, language, religion, etc. (sources: Chron and Hubspot). In marketing terms, what you’re trying to do here is to create a list of your buyer persona. These fictional representations of your ideal consumers allow you to identify what their biggest challenge is, and how you can help them solve it.
Let’s now bring together what you’ve done in steps 2 and 3. To define your primary value proposition, make a list of the needs your product or service fulfills (step 2), or, in other words, the core values that your product offers. Next to it, list all your buyer personas (step3). And now, start drawing lines between the core values and the personas that prioritize these needs. What you have there is a representation of why your product is better than others on the market for that specific consumer base. You can then create a statement explaining the measurable and demonstrable benefits of buying your products or service. Ultimately, the goal here is that your consumers perceive your offering has having a greater value.
Knowing who you’re competing with is another way of making sure you’re entering the right market, one that’s not already saturated with products or services exactly like yours.
Start by your primary competitors: use tools like G2 Crowd, agency directories, price monitoring tools, social media, the good-old fashion Google search, or find a third party to help you create a market report (like Forrester and Gartner). Once you’re done, compare your results to your buyer persona:
When you do your research, try to evaluate the number of similar products: a fair number means the market is alive, but not saturated. And make sure to compare the price: is your offer within the price range? This will help you understand where your product or service fits within a specific market, and better confirm if you’re actually filling a need.
You need to know if your product or service is viable. Even if it’s been on the local market for years, for your future customers abroad you are the new kid on the block. That’s when you should offer a trial period or give out free samples. Your prototype must be as close as possible to your minimum viable product (source: BDC) so that all the research you do can be used further down the line. Make a soft launch and get as much feedback as possible through surveys, data analytics, sales, etc.
The secret? Never stop assessing. Early revenue success is good, but it’s not always the result of a good product/market fit. Your company might just have fallen into the trap of creating a specialized product that satisfies a specific niche market. And finding a niche market is not the same as achieving product/market fit. A niche market is a “focused subset of a broader market of consumers and business” (source: HubSpot). And yes, niche markets can help you stand out from competitors and boost your reputation and authority in a specific field of business. But they don’t always foster growth in the medium—and long-term.
In a product/market fit scenario, your product or service is not only interesting, it solves a problem and answers a customer urgency. In a niche market, you’re offering something that appeals to a specific customer, and there is no word of mouth in your customer base (source: Betakit). Another good reason to never stop assessing, is that even if you achieve product/market fit one day, it will never last forever. Market change, and so do consumers. The best way is to adopt a structured process for surveying your customers in a regular manner and track their feedback over time (source: Inside Intercom).
Market fit is usually only a small portion of a larger market, and you should never assume that your fit can easily be transferred to another group of customers.
Ultimately, your best investment will always be in making sure you know your customers. They’re, above all, what will allow you to keep your fit in a market.