Information on how to get started investigating and compiling market research. This information is part of the U.S. Commercial Service's "A Basic Guide to Exporting".
Last Published: 11/28/2016

Research the Global Market Place


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Because of the expense of primary market research, most companies rely on secondary data sources. These three recommendations will help you obtain useful secondary information:

1. Keep abreast of world events that influence the international marketplace, watch for announcements of specific projects, or simply visit likely markets. For example, a thawing of political hostilities often leads to the opening of economic channels between countries. A steep depreciation in the value of the dollar can make your product considerably more competitive. The opposite can happen when the dollar appreciates, making some markets less attractive.

2. Analyze trade and economic statistics. Trade statistics are generally compiled by product category and by country. Such statistics provide your company with information concerning shipments of products over specified periods of time. Demographic and general economic statistics, such as population size and makeup, per capita income, and production levels by industry, can be important indicators of the market potential for your company’s products.

3. Obtain advice from experts. There are several ways to obtain this advice:
  • Contact experts at the U.S. Department of Commerce and other government agencies.
  • Attend seminars, workshops, and international trade shows in your industry.
  • Hire an international trade and marketing consultant.
  • Talk with successful exporters of similar products, including members of District Export Councils in your local area.
  • Contact trade and industry associations
 
Questions Answered by Market Research
  • What countries/markets are currently buying  products similar to yours?
  • How large are your potential markets?
  • Who are your competitors, and how large are they?
  • What are the required standards, testing,  and certifications?
  • Do your products (or their labeling or packaging)  need to be modified for one or more markets?
  • Is your price point appealing within the market?  If not, what can you do to make it more appealing?
  • What distribution channels are available?
  • What will be your duties, taxes, and other costs  or restrictions?

A Step-by-Step Approach to Market Research

Your company may find the following approach useful. It involves screening potential markets, assessing the targeted markets, and drawing conclusions.

Screening Potential Markets
Step 1: Obtain Export Statistics
Published statistics that indicate product exports to various countries provide a reliable indicator of where U.S. exports are currently being shipped. The U.S. Census Bureau provides these statistics at http://www.census.gov/foreign-trade.

Step 2: Identify Potential Markets
First, you should identify 5 to 10 large and fast-growing markets for your company’s product. Look at trends over the past 3 to 5 years. Has market growth been consistent year to year? Did import growth occur even during periods of economic recession? If not, did growth resume with economic recovery?

Then, take a look at some smaller, fast-emerging markets that may provide groundfloor opportunities. If the market is just beginning to open up, there may be fewer competitors than in established markets. To qualify as up-and-coming markets, these countries should have substantially higher growth rates. Burma (which recently opened its economy after years of economic sanctions) and Morocco (which entered into a free trade agreement with the United States in 2005) are good examples of such markets.

Look also at groupings of countries such as those with which the United States has free trade agreements within Latin America. Or look at regions within large countries such as western Canada or far eastern Russia. The U.S. Commercial Service has regional services that will help you find buyers in multiple countries in, for example, East Asia. If you’re targeting Hong Kong and the Pearl River Delta area, why not stop in nearby Thailand or Singapore?

Step 3: Target the Most Promising Markets
Of the markets you have identified, select three to five of the most statistically promising for further assessment. Consult with a U.S. Commercial Service trade specialist, business associates, freight forwarders, and others to further evaluate targeted markets. 

Assessing Targeted Markets

Step 1: Examine Product Trends
Look at your products as well as related products that could influence demand. Calculate overall consumption of the product and the amount imported. The U.S. Commercial Service offers market research reports that provide economic background and market trends by country and industry. Demographic information (such as population and age) can be obtained from the U.S. Census Bureau (http://www.census.gov/population/international) and from the United Nations Statistics Division (http://www.unstats.un.org/unsd/databases.htm).

Step 2: Research the Competition
Sources of competition include the domestic industry in each targeted market and competitors from other foreign countries. Look at each competitor’s U.S. market share, as well as its share in the targeted market. U.S. Commercial Service market research reports and other competitive assessments are available at http://wwwexport.gov/mrktresearch.

Step 3: Analyze Marketing Factors
Analyze factors affecting the marketing and use of your product in each market, such as end-user sectors, channels of distribution, cultural idiosyncrasies (for example, when translated into the local language, does your product’s name mean something inappropriate?), and business practices. Again, the market research reports and customized market research offered by the U.S. Commercial Service are useful.

Step 4: Identify Any Barriers
Foreign barriers to imports can be tariff or nontariff. U.S. barriers could include export controls. If you make a product that may have both civilian and military uses, you may need an export license. The U.S. Commercial Service can help you determine whether a license is necessary. Most applications are approved.

Step 5: Identify Any Incentives
The U.S. or foreign government may offer incentives that promote exporting of your particular product or service.

Drawing Conclusions
After analyzing the data, you may conclude that your marketing resources would be applied more effectively to a few select countries. In general, if your company is new to exporting, then efforts should be directed to fewer than 10 markets. Exporting to a manageable number of countries allows you to focus your resources without jeopardizing your domestic sales efforts.

Your company’s internal resources should determine what choices you make. The U.S. government, though, has programs that can assist you with exporting to multiple markets within the same region. The U.S. Commercial Service, for example, has regional export promotion programs in Asia, Europe, the Middle East, and the Americas, in addition to country-and-industry-specific resources.
 
The U.S. Commercial Service’s  Market Research Library contains  more than 100,000 industry-and-country-specific market reports, websites, events, and trade directory listings. It covers more than 120 countries and 110 industry sectors


 


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