Entering the Chinese market is a strategic priority for many brands. But like any market entry project, whilst the rewards are great, so are the risks. Success relies on conducting nuanced research so you’re able to develop a comprehensive Chinese market entry strategy. In this article, we’ll share our top tips for getting this right based on our experience helping brands across categories break into the Chinese market. You can also conduct our ultimate guide for market entry for further information.

The pros and cons of getting into China

Potential market entry benefits and barriers in China

Benefits to explore	Barriers to consider
There’s money to be made there. It’s a huge and growing economy.	China is incredibly competitive – with both domestic and foreign brands in play.
Consumer appetite is evolving all the time, creating openings for new brands, products and services.	It’s dangerous to make assumptions about the state of the market – and long-term planning can be tough.
Wealth is spreading, creating evolving demand and growth in most categories.	There are still huge differences between the top-tier cities and the rest; and between urban and rural markets.
Chinese consumers tend to like branded goods and seek out quality where they can.	Domestic Chinese brands have upped their game into premium spaces.
“If you can make it there…” Learn the lessons from breaking into China, and you’ll have valuable insights for other international expansion.	China has some unique attributes – including tough regulation of key industries and some long-standing consumer attitudes that might never shift.

All that being said, China is obviously a vast market, with 1,394,000,000 people. That means even capturing a small niche or focusing on one region or even city can result in big revenues.

China has more than 600 cities often broken down into four tiers. First-tier cities including Beijing, Shanghai, Guangzhou, Tianjin and Chongqing are usually classified as having a GDP over $300bn (about the size of the entire South African economy). In these, and the tier-two cities, there is widespread demand for products and services that aren’t being catered for domestically.

And despite the fast development of homegrown brands, for many consumers, overseas brands retain an allure. So although the execution of any brand proposition needs to adjust to the needs of the market – and in a country as diverse as this, market research proves itself invaluable in this respect – a look at China must be a consideration for any growth-minded business.

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When to consider developing a China market entry strategy

We see a few different prompts for brands wanting to explore the Chinese market. One is where similar products or services are performing well there, with attributes that might be replicable. For example, we’ve seen strong demand for premium Korean cosmetics recently – it’s a sign similar propositions might fly. In niche areas such as luxury handbags and cars these is a persistent strong demand for foreign brands.

Those buying patterns are highly visible. But we can also pick up less obvious trends in consumer behaviour that give clues as to potential in China. For example, we’ve seen a growing love among the Chinese middle classes for avocados. (It’s not just 2016-vintage millennial hipsters!) That suggests possibilities for brands that take the time to probe shifting attitudes.

In the first case, then, we’re looking for product features and brand offering. In the second, we’re exploring new consumer behaviours – although in each case we need to evaluate whether this is a fundamental change in consumer mindsets, or just a fad.

Underlying all that needs to be the economic rationale for entering the Chinese market. We might be able to detect strong potential demand. But will the costs of entering and sustaining this vast market – especially given its competitive nature – make sense? Remember that China has a number of regulations on commerce and media. We’ll come back to that later, but it has a bearing on the risks, and therefore the economics, of market entry.

Don’t be arrogant – success in China isn’t guaranteed

It should be obvious by now that one of the biggest opportunities is bringing in a premium, overseas brand to woo and wow the expanding Chinese middle class. But don’t be fooled by that stereotype – and don’t assume that you can just transplant existing brand approaches and expect to deliver results.

For a start, the way you deploy advertising and tailor packaging will be crucial. Chinese consumers will often be swayed by the way brands are presented, so understanding exactly how people are responding to the brand image and packaging can’t be ignored.

Then don’t assume just because you’re a foreign brand that you’ll attain a ‘premium’ differentiation. Fifteen years ago, there was almost an automatic patina of exoticism attached to non-domestic brands; they were more likely to be seen as classy and rare, helping maintain margins. Today, local brands in many categories are considered to be delivering a premium, too. And for many consumers, reliable quality and attractive features are the acid test, not the brand image.

Categories are not universal

Market research can reveal exactly how your brand might be received, and whether or not it’s going to attract any kind of premium. It’s also extremely useful at understanding which parts of any given category represent an opportunity in China – and which might be duds.

At a recent industry conference, we heard how a extremely well-known global drinks brand approached this problem. Ideally it would have rolled out its full slate of premium-branded alcoholic beverages, creating leverage around ad spend, logistics and exploiting halo effects. But while whisky is a strong segment in China, for example, wine is a much smaller niche.

At that point, another decision comes into play: research might show you which sub-categories are worth pursuing. But you also think how to enter these sub-categories. For that luxury drinks brand, for example, do they pitch the quality of the alcohol? Is it trying to project ‘conviviality’ for consumers? Is it the product heritage – seeking that ‘foreign premium’ angle? Or is it the look and feel of the products on the shelf?

The same rule applies the other way around. Yes, there are categories that are highly unlikely to be fertile ground for overseas brands – such as food, for example. It’s intensely competitive, demands a sensitivity to local tastes … but yet there might be openings in the right niche.

Or take transport. In electric vehicles, China is some way ahead of most non-Chinese manufacturers. But outside that sub-category, partnerships with local auto-makers and dealers could yield good results. Research can help uncover where these niches might be.

Learn from others – analysing the China market entry strategy adopted by others can set you up for success

The Chinese market has been growing at pace for 40 years, so at this point there are few areas where someone else in your sector hasn’t had a go at joining the fray. Indeed, many big global businesses will have in-house experience of breaking China – and making sure the lessons from one brand, product, category or local market entry are learned for subsequent attempts is obviously crucial.

Then look at the history of the category – there will almost certainly be rival brands that have tried and failed to launch in China before you (and some that have succeeded). Analysing what they did right and wrong can reveal all kinds of lessons.

Marrying those insights with up-to-date and well-briefed market research is a recipe for success. The phasing goes something like this:

Work out where the existing opportunities lie – what can we see from published market data, the level of competition, and products or services doing well in similar markets (especially in South East Asia – countries such as Indonesia and the Philippines are also fast-evolving, diverse, vibrant and digital)?
Evaluate local competition, emerging players, and regulatory and economic risks. These will include local rules on product specifications, or potential requirements to partner locally.
Work out why there’s a gap – and why you’re well placed to exploit it. Landscape studies should also highlight consumer appetites that will help or hinder progress.
Look at who’s failed doing something similar and why; and who’s made their inroads work, and why.
Research the evolution of the market – things change fast. Who’s up-and-coming? What are the evolving consumer habits? How will you stay on top of changes?

“Can my brand expand in China?”

Regardless of what you want to test, brand is a key issue in Chinese markets. Food, for instance, is a crowded market, so launching a new product to stretch the brand is always tricky. Research can tell you whether halo effects will work in China – and how to exploit (and not devalue) existing brand equity.

For example, we recently worked with a confectionery company on the possible launch of a newly acquired brand in China. We ran taste tests, but also explored what the new brand might mean to Chinese consumers versus how it would be perceived under the umbrella brand of the parent company.

China is a fairly mature market, and there were a similar products in the market. So was it worth bringing in the new brand? Should they use the parent company’s branding to muscle into the segment? A big issue was how the new product might alter the existing overarching brand story if that was the case. Should it be a standalone brand?

We focused on one tier one city to establish the opportunity. In tier three or four cities, responses might have called into question the brand strategy – but the top-tier cities where a particular strategy might work are a very sizeable market on their own. But it’s still worth developing insights to frame that brand strategy, not just tailor a product.

The product’s premium taste and lavish packaging made its core product a hit for gift-giving Chinese, even at premium prices. But this project showed there are important areas for research to test what powers a brand has in new spaces in a market as sophisticated as China.

Research – set a baseline, monitor change

China’s rapid evolution means ‘the future’ is much nearer than many people think, however. We can assess the probable changes over the short term; the plausible over the medium term; and the possible in the long term. But when we research Chinese markets and opportunities, it’s extremely wise to keep an eye on what looks ‘long term’ because it can arrive quicker than in many other markets.

That’s one reason for entering the market with as detailed an understanding as possible is important: yes, it might change quickly – but you need a solid framework for local conditions and consumer attitudes to ensure you can monitor what’s changing, how fast and in which direction.

The good news is that Chinese consumers, very broadly, tend to be very tech-savvy. (The WeChat platform, for example, is more widespread than Facebook – with about a billion active monthly users, it’s near-universal – and has many more practical applications.) This tech-savviness is particularly useful for conducting online research, allowing for fast-turnaround methodologies and investigating consumers outside the big tier one cities. In short, it’s ideal to capture rapid changes from the baseline. And unlike some Western markets, China’s older population seems determined to be digital, narrowing the gap we see in some other countries’ research approaches.

But we would rarely suggest only conducting research online. In the huge markets of the big cities, face-to-face research is still the best way to test behavioural and experiential aspects of consumers’ lives and tailor your approach to their unique expectations and requirements.

Top tips for market research in China

Be open about what you want to achieve in China and be realistic about who the product or service might appeal to. China is huge and diverse, so pace yourself and target realistically.
Calibrate your results. It can feel daunting competing in a crowded marketplace with strong domestic rivals. But it’s a long game: what look like tiny positives from research compared to other markets can be valuable toe-holds, establishing your brand for more serious revenue growth later; or guiding your focus on high-potential niches.
Tailor your questions. You can’t be too assumptive about what people might be prepared to pay for a product or service and asking standard questions in surveys and focus groups might not help. Get your research team to develop a China-specific (and even city-specific) research plan to get into the nuances.
If it’s online, think mobile first. Not everyone has a laptop but due to encountering a “technological leapfrog” most people have a smartphone. You can conduct extensive studies very flexibly with mobile methodologies.
Test the tech. China does have more controls on internet activity than most. Test that the research platform functions properly, especially if running a study from outside its borders.
Work with local experts. Research teams with local knowledge and experience will be invaluable. These tips come as second nature and on-the-ground teams or those in the region with an intimate knowledge of China. They will provide essential depth to research – and frame insights more meaningfully.
Think about the media. Consumers love to use their phones to research brands and products, and especially influencers and social media users. Willingness to try brands often stems from these forms of media.

In most other markets – that are less fast-moving or exciting as China – your traditional strategies can secure your traditional wins. In China, research can tell you how and where you might chip away at competitors to help you target your offering more effectively – winning a slice of this lucrative market. It can also help you create a China strategy where the wins look entirely different – and deliver results that make a real difference.

If you’re considering entering the Chinese market, get in touch to discuss how we might be able to help you to build your China market entry strategy.

According to research from Dentsu, understanding what represents a permanent shift in behaviour versus a temporary change is the top challenge facing marketers right now. Our latest research study sought to answer this question and separate the long-term trends from the short-term fads. In this blog post, we’ll summarize the key trends from the full report: Which behaviours will stick and which will subside in a world without restrictions?

The report identified 4 key behaviours that will stick in a world without restrictions, as well outlining areas that represent opportunity for innovation and those behaviours that are less likely to become lasting changes.

The 4 key behaviours from the report are:

Cooking from scratch
Creating special occasions at home with food and drink
Learning new skills online
Online shopping.

Read the summary below or download the full report to learn where behaviours across a range of categories placed. The report also explores how the key behaviours and areas of innovation explored in this blog post will develop in future, pinpointing trends for brands to capitalize on.

Our approach to understanding sticking power

The research was carried out with 3,400 consumers across 10 markets (US, UK, Singapore, China, India, Indonesia, Japan, the Philippines, Thailand and Vietnam). The approach combined consumer views about the future, with metrics to assess long-term sticking power, namely how well different activities deliver against a range of attributes that are important to consumers when adopting and sustaining new behaviours.

Key behaviours for the future

1) Cooking from scratch

In the food and drink space, the existing trend towards cooking from scratch has been further accelerated and should be considered a key behaviour for the future. When asked what activities they planned to continue doing as a result of doing them more during the pandemic, 85% of consumers said cooking from scratch.

2) Creating special occasions at home with food and drink

Interestingly, the research also found that creating special occasions at home with food is another behaviour that is set to last, suggesting an opportunity for indulgent supermarket dine-in deals and DIY restaurant meal kits well beyond the pandemic. These behaviours have clear implications for hospitality. 57% of consumers say that in a world without restrictions, they expect to be going out for drinks less than before the pandemic and we see a similar picture when it comes to eating out (53%).

3) Learning new skills online

Lockdowns saw consumers learning new skills online as a way to keep themselves entertained. Interestingly, this is key behaviour for the future, although this is a trend that has most potential in Asia. In APAC and South East Asia, online behaviours such as learning new skills digitally and gaming increased to a greater extent than in the US and the UK, despite living under restrictions for a shorter period of time.

Chart showing how the pandemic has impacted digital behaviours

4) Online shopping

Unsurprisingly, online shopping for products other than groceries is another key behaviour for the future. The impact of this on bricks and mortar stores will be significant, with over half of consumers (51%) telling us that in a world without restrictions, they expect to be physically browsing stores less frequently than before the pandemic. There are other challenges for retailers to navigate. With 22% of consumers across the 10 markets we surveyed having moved further away from work since the start of the pandemic (with the exception of Singapore) and 52% saying they intend to use public transport less than before COVID, companies will have to reconsider their retail footprint.

Statistics: Expected frequency of behaviour in the future (after the COVID-19 pandemic)

Opportunities for innovation

The research also revealed opportunities for innovation. These include better supporting consumers with:

Their mental health
Eating healthily
Online video streaming.

These are areas where there is a strong desire amongst consumers to continue the activity, but it doesn’t deliver as strongly against the key attributes that matter to consumers when adopting and sustaining new behaviours. As such, improvement with the existing products and services is needed to see sustained behavioural change, representing an opportunity for brands.

Free report

Which behaviours will stick and which will subside in a world without restrictions?

Download the full report to see where behaviours across a range of categories placed and to learn more about how key behaviours will develop in future.

Download now

Short-term solutions for Covid-only

Activities such as domestic holidays and working from home are likely to be short-term solutions for Covid-only. In some cases, working from home was an enforced behavior and is not feasible in the long term. Only 62% of consumers say that they are likely to continue working from home in future. Whilst working from home is perceived to be time saving and convenient, some consumers don’t find it very rewarding or enjoyable, reflecting much of the current discourse in the media about workers being zoomed out and missing social interaction. As such, flexible, rather than fully remote working is likely to have a more lasting impact.

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Low potential for lasting behavioural change

There’s also low potential for lasting behavioral change in the areas of socializing online, drinking alcohol at home and ordering takeout, which consumers are less likely to want to continue versus other behaviours in the study, and don’t deliver as strongly against the key attributes for adopting and sustaining behaviours.

Download the full report

To read the full findings, download the full report.

Concept testing and test marketing are two very important concepts when it comes to developing new products for the market.

It’s common to confuse the two ideas – indeed there are indeed several significant similarities between the two. Both concept testing and test marketing play a similar role: ostensibly, to make sure a product is ready to launch and to iron out any issues that might have gone undetected during the design and planning phase.

However, concept testing and test marketing are different processes and are used for different reasons. In this article, we’ll take a look at each, exploring both their similarities and their differences. Let’s start with concept testing.

Concept testing

Concept testing is how we test a product idea before it enters the market. As the name suggests, it involves putting the concept in front of real customers and asking them to evaluate it in multiple areas. This helps us find out how real-life customers will react to the product.

Concept testing has a series of powerful benefits for marketers. It allows you to quickly notice and fix potential errors before the product launches for real, brings fresh insights to your project, and gives you data-driven feedback that you can use to get buy-in from other members of your organization.

There are a number of methods for doing concept testing, spanning quantitative and qualitative methodologies. Each has its own pros and cons and they have different applications.

(More information can be found in our comprehensive guide to concept testing).

Now we know the basics of concept testing, let’s take a look at test marketing and how it’s different.

Test Marketing

What is test marketing?

Test marketing plays a similar role to concept testing. Its goal, like concept testing, is to assess how well a product will perform in its market.

However, test marketing has a broader scope. Instead of focusing solely on the concept or product, test marketing aims to evaluate your entire marketing plan. It takes into account advertising, distribution, sales, and many other components of your overall strategy, but it does this without actually fully launching the product and taking on all the associated risks.

In product test marketing, you basically run a mini launch for your product in a selected market and see how it performs. It’s like a crash run of a product launch.

Neither the launch nor the test market is big enough that you would suffer greatly if the product were to fail. The goal is to trial run your entire strategy to get an idea of how it would fare on a bigger scale. This allows you to pinpoint any errors and make any changes in a relatively low-risk way.

What are the advantages and disadvantages of test marketing?

The pros of test marketing

You get real insights into how the product would perform in a natural marketing environment. There are many things you simply can’t predict or anticipate and the only way to highlight these issues is with a real test in a real-life environment.

You can gain an idea of how well the product will sell. This allows you to extrapolate predictions to the wider market, build more realistic budgets, gain buy-in from other members of the company, and make any changes needed.

It helps you determine the most suitable and effective channels for marketing. A small-scale test, as long as it isn’t too small, can give you a solid idea of the marketing channels your target customers respond best to, helping you allocate your resources and effort more wisely when the product launches for real.

It helps you identify the best distribution channels and build a data-driven distribution strategy for when the product launches.

Any weaknesses or flaws in your strategy will be exposed without any disastrous consequences. This way, you can make any changes and ensure your entire plan is on firmer footing when you launch for real. Failing during a test is far more preferable to failing on a grand scale.

You’ll see how customers react to your product, marketing, and other aspects of your brand in real-life scenarios. This gives you real data to work with as opposed to theoretical predictions and second-hand knowledge based on trends.

You’ll get a heads-up if your product is going to fail. Sometimes, despite best efforts, some products simply aren’t meant to be. If your product fails dramatically in your test (due to lack of interest, for example) it may be a sign to cut your losses and move on, avoiding a catastrophe.

The cons of test marketing

Although test marketing can be useful, there are also some major drawbacks. Anyone planning to carry out test marketing should make sure they are aware of these potential cons before they begin.

It’s expensive. Doing test marketing right involves a large-scale project which measures multiple factors across your business. This means that if you want reliable results from your test marketing, you need to be prepared to invest a lot of money.

It’s time-consuming. Again, test marketing is a big project with many different layers. It takes time to set up your test, and you’ll need to run it for a while before you get reliable results. This can delay your product launch, cause frustration among the members of your project team and cost money.

Test marketing can reveal your game plan to competitors. In a test-marketing project, you are revealing not just your product but also multiple crucial aspects of your marketing strategy in the real world. It’s very easy for competitors to view this and simply copy it with their own product before you even get close to launching.

The results can be misleading. With test marketing, there is a lot you need to get just right to yield useful results. If your sample size is too small and narrow, you’ll end up with a one-dimensional view of your market which doesn’t reflect reality. The channels you use to market your product and collect data might exclude certain demographics, too.

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Test marketing vs concept testing: which is best for me?

Test marketing and concept testing share many things in common, but they aren’t interchangeable. In this section, we’ll break down the similarities and differences between the two and help you work out which one is best for your situation.

The similarities

Both test marketing and concept testing are designed to learn about your product before doing a full launch.

Both can be effective ways to reduce the risk of failure, gain valuable insights about your product, and make necessary changes before a full launch.

Both require you to plan carefully in advance and make sure everything is set up right to get the most accurate and reliable results.

The differences

Despite their similarities, concept testing and test marketing are two very different processes. Let’s take a look at the things that separate them:

Concept testing is much easier to carry out. You can complete a solid concept test in a relatively short amount of time, and gain valuable insights from this.

Concept testing is more affordable. Concept tests can be done for a fraction of the cost of test marketing.

Test marketing involves launching a product in the market, even if it’s at a small-scale. As a result, it’s not suitable for early stage testing, where concept testing can play an important role.

Linked to this, concept testing can allow you to test ideas securely before launch. In contrast with test marketing your products are put into the market meaning that there is a risk of competitors getting hold of your ideas.
Test marketing is wider in scope as it takes a broader view of the entire marketing and sales process. It measures many different factors such as advertising effectiveness which can’t be evaluated in concept testing.

Which one should I use?

Whether you opt for concept testing or test marketing depends on your goals, the resources you have available, your product, where you are in the development process and your timeline, among other factors.

Concept testing is much easier and more cost effective to do than test marketing and can yield reliable results at speed. With concept testing, it’s not hard to get reliable feedback on your product and clear direction to inform actionable changes. This allows you to make meaningful improvements to your product and launch much more confidently.

Give yourself the best chance

Concept testing allows you to launch your product with the best possible chance of success. Instead of operating in the dark, guided only by guesswork and opinions, you can lean on real feedback from real customers.

At Kadence, we can help you with concept testing, ensuring your product goes to market with a strong chance of success. To find out how, request a proposal today or get in touch with your local Kadence team to discuss your options.

A usage and attitude study (U&A) is a brilliant way to understand the market for a given product, brand or category. It gives you a snapshot of how things stand, particularly for brands that people are aware of and use. But it’s also a technique that can help you understand what brands they might consider using – revealing important information about the competitive landscape.

Usage and attitude study objectives

We see that brands looking to embark on a U&A study tend to want to achieve one of the following objectives:

1) To inform what to do next

A usage and attitude study is often commissioned by a marketing team that wants to get some real clarity around the position of their brands in order to build a firm foundation for what they’re going to do next. It’s hard to feel confident about big decisions – such as promotions, product changes, advertising or even brand extensions – when you don’t have an up-to-date view of awareness, usage patterns or perceptions of the brand against competitors. Any of these factors could be pivotal in key marketing decisions.

2) To challenge assumptions

We also often see new management teams or marketing leads coming into a group or a brand management role who are keen to test the temperature around usage and attitudes before weighing up their own strategies. It’s extremely useful for senior decision-makers to have fresh data from a usage and attitude study to challenge long-held assumptions within their team.

3) To create benchmarks

A third use-case is running a usage and attitude study as the first phase of a wider project that might include additional waves of research. Here, we’re creating a clear benchmark for the follow-on work. This is often the case with new product development, for example, or a planned expansion into a new or international market. The U&A study can provide valuable background and context for everything that follows.

4) To understand how changes impact your organisation

One other interesting usage and attitude study objective is to measure the impact of events or major changes – not just after a marketing campaign or change to a product, but in the wake of shifts in the environment. Clearly the Covid-19 pandemic is a perfect example. The dislocation to consumption patterns may have lasting effects for particular brands and products, so a fresh usage and attitude study is a valuable tool for resetting baseline assumptions. But we might also be talking about the entry of a new player into the market, or a shift in infrastructure (such as 5G network roll-out or other innovative tech).

This gives us a useful list of applications:

Create a snapshot of consumer attitudes to your brand ahead of key decisions.
Assess the current and potential size of the market.
Place your brand in a competitive context.
Challenge assumptions about your brand and products.
Set a benchmark and context for deeper research.
Measure the impact on brand or product of major change.
Test opportunities for brand extension such as new products or markets based on consumer behaviour.
Spot gaps in the market allied to target consumer attitudes.
Develop a deeper appreciation for consumer engagement.

There are other applications – but at its heart a U&A study is designed to give you a firm foundation for almost any decision around a brand or a product.

Kicking off a usage and attitude study

For us as a market research agency, the first phase of a U&A project is something we call ‘immersion’. We spend time looking at what the client already knows about their customers and markets, exploring any data they have so we can either benchmark the study we’re going to conduct, or identify gaps in their understanding of usage and awareness ahead of the new study.

Immersion can sometimes highlight areas where previous research conducted by the organisation has missed crucial aspects of brand awareness; or where they can’t explain sales patterns showing strengths or weaknesses in key areas. The more detailed the immersion process, the better: it will help shape and focus the brief for the research to come.

Of course, sometimes a huge data dump isn’t available, or it’s a little out of date. That doesn’t mean a fresh U&A project will be less valuable. Far from it: while it’s true a decent picture of the situation can inform how we run a U&A study, starting fresh can be even more valuable, setting a new, up-to-date baseline for the marketing team and creating a foundation for future research projects and performance evaluation.

The phases of usage and attitude research

Just as a usage and attitude study can often set a baseline for further research or marketing decisions, the starting point for a U&A study is also creating a baseline – asking respondents for the products and brands that come to mind in a given category, entirely unprompted.

Clearly U&A research is designed to explore how consumers feel about, or use, specific brands too. So the next stage is to test their awareness of those brands. That ‘prompted recall’ phase might also include information about what brands in the category the respondents have used – or even have considered using. It creates a more colourful picture of usage and attitude patterns in the category.

At this point, you can dive into more detail: which brands are perceived as ‘premium’? Which brands excel in certain areas, and which perhaps aren’t so highly regarded? The aim in this phase is to get an idea of the relative strength of the competition. And it’s here your own brand’s place in the larger landscape probably comes into focus.

You can also ask in more abstract terms about product categories or even specific SKUs to get a more granular picture – which can be very useful as context for insights centred on your own brand.

So the sequence for exploring usage and attitude is pretty straightforward, and actually maps nicely onto traditional conversion models, such as the classic sales funnel:

Unprompted recall of brands or products in the category.
Level of awareness when prompted.
Level of consideration of the brand or product.
Levels of agreement with various statements about the brand.
Usage of the brand or product.
Repeat usage or promotion of the brand.

In most cases, it’s also useful to build out the same funnel – levels of awareness, consideration, usage and advocacy – for competitor brands too. Understanding how they compare – not least in terms of demographics – with the brands in question can be among the most valuable insights for your marketing team.

And for many clients, usage and attitude research can be an essential tracker study, measuring the change in usage and awareness at regular intervals. This is especially useful when you’re conducted major projects such as new product launches or marketing and advertising efforts. Usage and attitude research is a superb way to measure their effectiveness.

Methodology: “measure twice, cut once”

While the questionnaires for usage and attitude research might seem formulaic, there is a good deal of market research expertise that goes into optimising the value of the resulting insights.

A great example is the importance of sampling. In any survey, the sample should be genuinely representative of the population you’re interested in. You need to avoid skewing the demographics towards a younger, more brand-conscious audience, for example, if you’re going to secure a valid perspective of attitudes across your market.

But for very specific categories, sample selection is even more important. We worked recently on a usage and attitude study for a well-known manufacturer of farm machinery. Taking a general sample here is a little pointless. But even if you’re selecting for a particular group – in this case, farmers – you still need to carefully calibrate the sample. We looked at their primary crop types, the size of farms, regional representation and much more – so that the sample was as representative within that group as possible.

The old carpenter’s adage “measure twice, cut once” is the rule here. Getting the sample right (and using proven methodologies more generally) will secure much more compelling and reliable insights later on.

Online methodologies were already an option for usage and attitude studies prior to Covid-19 lockdowns, and obviously they have been critical during 2020 and 2021 when access to people face-to-face has been limited. They’re very efficient, too, but for usage and attitude studies it’s often sensible to augment with CATI (Computer-Assisted Telephone Interviewing) – not least in situations where a highly targeted and representative sample is needed. That’s particularly true, for example, in business-to-business environments.

Remember that research projects can be modular. We worked with one company that wanted to understand where they sat in the range cooker market – and how they stacked up against their rivals. We built a sample of people who already own that kind of cooker – then weaved a net promoter score (NPS) question set into a wider usage and attitude study. It was a good example of how a U&A study can dovetail with other research methodologies and objectives.

One other methodological point: by definition, some of the U&A questions will ask consumers or business decision-makers to be highly subjective and even emotive. That places additional emphasis on qualifying questions and careful analysis of the results.

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Top tips for usage and attitudes studies

Know exactly what you want to learn from the research – it could be general background or highly specific, in-depth usage patterns.
Know what you can change as a result of the research – as well as realistic idea of how the research my shape decision-makers’ thinking. This will help prevent the research becoming unwieldy or over-generalised.
Unambiguous questions are valuable – people should have the same reference point for the survey. A usage and attitudes study should be conclusive, not a topic for never-ending debate about what people meant.
Find a neutral starting point – a baseline – for people’s assumptions and ratings. This will help frame a solid interpretation of the results.
Thinking carefully about the competitor brands you need to understand – it can be risky to ignore smaller brands or niche products.
Think about results presentation – visualising the results (showing brand strengths in different parts of the conversion funnel, say) or making under- and over-indexing against rival brands very clear.

That might mean the translation of survey questions has to be tweaked to be more practical or accessible to users depending on the format or technology being used in the field. It’s another reminder that having a single, integrated agency working on the project – handling the research design as well as the fieldwork and analysis – will bring many benefits.

Looking for support with usage and attitude research?

At Kadence, we have conducted usage and attitudes surveys for a host of brands. Take a look at our capabilities in this space or get in touch to discuss a project.

Concept testing is a crucial stage when developing new products. Before you launch a new product in the market, you must understand how your customers will respond and how the product will perform.

Concept testing helps you avoid costly errors and nasty surprises; it is much better to understand your market and make a more confident and successful product launch. In this article, we’ll show you how concept testing works and how to do it. Let’s start with a more in-depth definition.

What is concept testing?

A concept is a precursor to every great product. It’s a detailed outline of what you’re going to produce, who it’s for, the problems it will solve, how it will work, how much it will cost, and much more.

To ensure your concept is ready to go to market, it’s essential to test it properly with real customers. This process is called concept testing, and in the rest of this article, we’ll talk about why this is so important and how to do it methodically.

The benefits of concept testing

Concept testing is the process of testing your concept before launch, so you can confidently put it into the market with a pretty good understanding of how your customers will feel and how they will respond.

There are several different methods spanning both qualitative and quantitative approaches (which we’ll dive into shortly). Still, they all involve presenting concepts to consumers and getting feedback about different attributes.

(Check out our detailed guide to concept testing for more information.)

There are multiple reasons to do concept testing, such as:

You get real feedback from users. Designers and product teams are often too close to the product to make clear-headed decisions, and they might overlook some crucial things. Concept testing allows you to access honest feedback from your target customers, which you can’t replicate with your internal team.
It helps you notice flaws. No concept has ever been perfect. Testing your product with real users enables you to detect problems that flew under the radar in the design phase, giving you many new pairs of eyes.
It allows you to refine your concept. Before testing, your product is a rough prototype with all the major pieces in place, but it probably needs some extra work. By shedding light on what consumers think, testing gives you some direction for refining and improving your product so that it’s more likely to gain traction when it hits the shelves.

The importance of concept testing

The above benefits are essential for many reasons. Here are some of the reasons why you should consider concept testing in new product development:

It’s easier to get backing for your product. Testing gives concrete data about how customers feel about your brand’s products. You can then use this data to make a compelling case to others in the organization about why you are making certain decisions. With this data, it’s no longer a matter of personal opinion, and it will be much easier to convince others.
It helps you find out what your customers like the most about the product. Concept testing is beneficial not just for that specific product and how to market it but also allows you to make better decisions in the future by focusing on the things that people like most and targeting popular pain points with different products.
Testing can help you segment your customer base. Who should you target with your product? If specific demographics love the product and others are less enthusiastic, this is extremely helpful when focusing your marketing and distribution efforts.
It helps you estimate how many sales you’ll make and the ROI you’ll generate with the product when it goes to market. This is helpful when setting budgets, making plans, and getting financial backing from others in your company.
It allows you to identify a reasonable price point. It’s common to ask users how much they would expect to pay for a product during testing. This helps inform your decisions about how much to price your product.

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How to test concepts: the qualitative and quantitative methodologies

Concepts can be tested quantitatively or qualitatively. Qualitative methods for concept testing include focus groups, online communities, and in-depth interviews that allow you to uncover rich qualitative feedback from current or prospective customers relating to your planned product. Ethnography or self-ethnography are other alternatives, particularly if the concept you’re testing is worked up and in prototype form that consumers can interact with at home.

The primary quantitative method used for testing concepts is an online quantitative survey, an approach that allows you to test at scale.

Different approaches for testing concepts

There are four main approaches for concept testing a new product, each with its pros and cons. It’s best to consider your specific situation and then pick one which works best for concept testing your product.

Monadic testing

Monadic testing is where the audience is divided into groups, and each group is given one concept in isolation and asked to evaluate it via a series of questions.

For example, they might be asked to rate the design, evaluate the price, or give feedback on the packaging.

The pros of monadic testing are:

There is less room for order bias since the concepts are shown and evaluated in isolation.
It’s easier for users — they only have one product to focus on, and all the questions apply to that product.
It encourages more profound feedback as users dive deeply into one concept instead of skimming over several different ones.

On the other hand, the main drawback to monadic testing is that it requires a larger sample size to get enough reliable data. It can be costly to gather all the necessary participants and challenging to find enough people to assess niche concepts.

Sequential monadic testing

In sequential monadic testing, multiple concepts are evaluated one after the other. Each participant sees two or more concepts presented in random order. Participants answer questions about each one in turn.

The main benefit is that fewer people are needed, so this results in the following:

Being cheaper to gather enough people and set up the testing
Taking less time to collect a sufficient amount of data
It also works well with niche markets where there might not be many potential customers

The main downside is that it takes longer to carry out each test since participants evaluate multiple concepts instead of just one.

Comparative

In comparative testing, concepts are shown next to each other, and participants evaluate all of them at the same time. It’s an effective way to find out how one concept compares directly against another in the eyes of your customers.

The main advantage of comparative testing is that it’s suitable for measuring small differences and drilling down into the specific advantages and drawbacks of each product. The main downside is that its comparative nature means it’s not very effective when both products are flawed.

Comparative testing is often used as a follow-up for monadic testing to gain deeper insights into a specific product.

Proto monadic

Proto monadic concept testing is a blend of monadic and comparative testing. Customers evaluate a product via monadic testing and then are shown the same product compared to another.

It’s done to confirm the initial monadic results to gain a more sturdy overall conclusion about a product’s strengths and weaknesses.

What to measure

Once you have settled on a testing method, it’s time to consider what you want to measure. There’s a long list of possible factors to analyze with concept testing, and these might vary based on your chosen method.

Here are some common examples of things to measure:

Overall reaction to the product – this measures how customers feel about the product overall and can be measured with a Likert scale (a series of options from “strongly agree” to “strongly disagree”).
Reaction to different elements of the product – you can also use the Likert scale to rate specific aspects of the product, for example, the packaging, ease of use, battery life, and more.
Need for the product compared to the current market – how much demand does your participant think there is for the product? Is there an urgent need for it, or is the market already saturated with similar products?
Comparison with other products on the market – how does your product compare with what’s already out there in the market? Is it a significant improvement on what exists, worse, or just more of the same?
Likes and dislikes – what are the individual things people like and dislike about the product?
Purchase likelihood – this is where you ask your respondents to rate their likelihood of buying your product. You can use a Likert scale for this (“very unlikely” to “very likely”).
Pricing analysis – how much would your participants be willing to pay for the product?
Likelihood of use – how much of a need does your participant have for the product, and what kind of role would it play in their lives?

(Check out this article for examples of how to test new product concepts.)

Testing your concepts is crucial if you want to release the best products to your target market, market them effectively, delight your customers, and see your revenue soar.

How can we help?

It’s crucial to do concept testing properly, so your new products have the best chance of success when they eventually hit the market. To find out how Kadence can help you deliver this, request a proposal or contact the Kadence team here.

Conducting market research on an international scale is an increasingly common requirement. Global markets are more critical than ever, offering growth to businesses facing domestic stagnation or saturation. But international market research can be a challenge to get right. This article explores the top 5 challenges in international marketing research and our top tips for overcoming these.

What are the top challenges in international marketing research?

#1 International markets are incredibly diverse.

Some brands fail to appreciate the diversity within a region or country. You can only get an accurate picture of what people value and whether your products and services might succeed by rooting out the nuances of different geographical areas, cultures, and consumers.

#2 There can be a temptation to go too broad.

Linked to this, sometimes, when companies set out on international marketing research projects, they make the mistake of going too broad and trying to understand a region as a whole. Another error we see is firms commissioning research to target one market and then using this as a jumping-off point into others with “similar” attributes. This inevitably leads to costly mistakes as brands map their assumptions about one market onto another.

To avoid this, be clear on the emphasis of your research. Where are you looking to focus and why? Looking too broadly across a region of different markets, or exploring how an entire product range might perform, can cloud the picture.

# 3 Finding the right research partner.

The next big question is whether you have the research capabilities to conduct meaningful projects internationally. Most brands and their research partners can run domestic research projects with ease. But if you’re in the US or UK, say, going as far afield as Japan, India, or Germany requires different sensibilities and capabilities. The more international you get, the harder you must look for that kind of experience and expertise.

#4 Bringing together local and global expertise.

Misalignment is one of the biggest challenges in international market research. To overcome this, there must be a collaborative effort and a shared understanding of the mission, methodology, and insights. A research team at HQ might work with a local marketing team to understand how to position a product for success in an emerging market. But if the teams are siloed and don’t have a consistent understanding of the brief, their approach to researching the market and their findings might not help deliver on the challenge.

#5 Ensuring the project is realistic from the outset.

This is where all the other challenges in international market research come together: which markets, what purpose, the capabilities available, and the effectiveness of the output – all within a budget that makes sense. There will always be limits to what’s practical – and the last thing any client needs is to spend large sums testing international markets to no effect.

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Meeting the challenges in international marketing research – tips and tricks from our experience in the field.

Get the brief and the scope right.

The more you can nail down exactly what you need to know and about which markets, the better your international market research will be. The key here is to dismiss the idea that lessons from one market can be overlaid onto other markets. Your approach might not even work in the same region, much less globally. So ensuring the brief isn’t burdened with too many assumptions, and is very clear on objectives, is key.

For research into one new international market, the brief can be clear-cut. You’ve picked a new place to trade, and you probably have some specific questions. Will the branding work? Do we need to alter the packaging? Are there particular features we need to tweak? But as soon as you broaden the scope – to, say, three new markets covering a region – the nuances become more critical in the research brief.

One solution is to ask questions at every stage. Why these three markets? What are they like? What do we need to know about purchaser sentiment there? How will a research project change what we decide to do in each market? Companies that are open with their agencies on operational and marketing strategies – rather than prescribing research about the areas they know matter in their existing markets – will see more effective results.

Understand the cultural nuances you’ll face

Everyone knows instinctively that cultural differences are both a factor in conducting meaningful research internationally – and a major reason for doing that research in the first place. ‘Market immersion’ is a key concept, and that’s all about getting to grips with the cultural context. But local nuances within new markets can catch people out.

In South Africa, for example, there are multiple cultural groups. Having local knowledge of how to tease those out is vital to breaking in South Africa.

That means one of our jobs as global research partners is challenging clients at the briefing stage to ensure these considerations are baked into the research approach and the analysis and interpretation of the results. The good news is that when you have research experts living and working in these markets as we do, cultural nuances are easier to plan around. We use this inside knowledge about people’s lives to help understand opinions, habits, and behaviors.

Don’t think language is just about translation.

Companies are often wise to the importance of understanding ‘culture’ and, as a result, adopt a cautious approach. But one mistake people make in international market research is to assume that ‘language’ is more straightforward – or that it’s just a question of running a survey or its results through Google Translate. But that’s never a good idea. It requires a much more nuanced approach.

Language isn’t just what we say but how we say it. And local variations within international markets – think Swiss German or Quebecois French, but the list is endless – further complicate the issue.

You’ll need the nuance: go regional.

Understanding local culture and language are essential in its own right. They’re also the gateway to getting out of the big cities and understanding the whole market. Tokyo is a true megacity – but it doesn’t reflect all of Japan. Paris is iconic – but its citizens have very different values to those in Marseilles, let alone rural France.

Here’s where you need to understand geography and supply chains. If you’re moving into a new international market in a limited way – or if the distribution is going to be impractical outside conurbations, say – then researching inside big city bubbles might work just fine. But for national penetration and in markets where businesses or consumers are more evenly distributed, understanding attitudes and behaviors across the country is a must.

For brands with an existing presence, existing assets on the ground are a hugely valuable resource for understanding these nuances. That could be local-office marketers or salespeople. Distributors and major customers can also offer insights. We love to work with chief marketing officers (CMOs) who have a helicopter view of a region and are clear about strategic objectives. But triangulating between them, their local marketing teams, and our local research teams in the field tends to generate better results.

Decide on the most effective methodology.

Another significant benefit of having local teams in place like ours is that they have expertise in the best methodologies to use in different markets. This is sometimes a subset of culture, but in other markets, it’s driven by the levels of technology adoption, geography, or working practices. Some examples:

In Indonesia, face-to-face research is considered the norm; telephone in-depth interviews tend to deliver a poor hit rate.
In Japan, groups respond better to moderators of the same gender, and people are more likely to undertake qual work at the weekends.
It’s not acceptable for researchers to interview women in the home one-on-one in Saudi Arabia. And across the Middle East – and many other regions – mixed-sex focus groups tend to be a no-no.

You can read about others in our guide to conducting online market research in Asia.

This is also why more open briefing processes can be valuable in international research. It’s too easy to apply a blanket methodology across a whole region and end up struggling to execute the research. Better to frame the key questions the organization needs to answer and tailor the research study to each key market.

Calibrate your responses.

Cultural and language shape the way you ask questions, and they’re huge factors in interpreting any research results, too. A keyword search on a crude translation of responses could mean missing crucial insights – or, worse, coming to incorrect conclusions.

And don’t think this only applies to qualitative, descriptive research where local idiom, slang, or cultural references might catch you out. International quantitative research also has to be calibrated by analysts with an appreciation for local nuance.

Respondents in some markets are more likely to agree with statements than others. For instance, you’re more likely to see people agree with statements in India than in Japan. Even the way you phrase questions – not just translate them, but the nuance in the question itself – will affect the consistency in scores you can achieve between different cultures.

That’s particularly important for big global brands with a very set idea about how they do their brand equity or NPS studies. The alternative is to develop a more organic approach so that the questions allow you to reflect local nuance. It might be as simple as using a four-point rather than a five-point scale in markets where respondents are most likely to sit on the fence.

Use market research as a tactical, not just strategic, lever.

It can be tempting to seek broad answers from international market research: “Will this product work in this market?” Or: “How should we tweak the service offering to meet this country’s needs?” These will help brands decide on strategic issues. But the more nuanced the approach, the more likely it is that the research will feed into local tactics for a brand, making its international investments work even harder.

That’s a common theme in research: properly granular insights ought to help with several decisions. It’s not just a ‘go/no-go’ binary, but research should inform everything from pricing to choice of distribution channel, support for local sales operations, to targeted advertising.

A new era for international research

We’ve moved on from an earlier era when global brands assumed continent-scale uniformity. Even if a business sees an opportunity in ‘Latin America,’ has an ‘Asian strategy’ or issues financial reports for ‘EMEA,’ serious decision-makers know they need to go, at the very least, to the country level for insights that will help their plans succeed. And they understand that it can be counter-productive to seek out ‘apples to apples’ comparisons between markets when a little nuance can go a long way.

More recently, one factor that’s complicated the picture is the global Covid-19 pandemic. Because so much commercial activity is managed remotely, there’s a temptation to run multi-market studies with a uniform online methodology. If everyone in the world is attending focus groups via the same videoconferencing app, what’s the difference?

The risk here is that the vast advantages of technological solutions are watered down in the hunt for low-cost, ‘big picture’ regional results. Online research can be conducted quickly and flexibly. And clients can immerse themselves in research projects more easily, gaining their own insights into consumer reactions on the other side of the world.

But research that is tailored, for example, to local respondents’ cultural norms will yield much better results. You can quickly adapt a methodology to a market when you have local research expertise and a clear idea of the brand’s mission. For instance, recognizing that in India, you’ll need to avoid any methodologies that rely on lengthy video inputs, and instead, combining text, image-based and short video tasks will get you the insights you need.

The most successful companies understand that an international project is more complex than handing a research agency a questionnaire and generating uniform results across every territory.

You know your product or service better than anyone. We know the right questions and methodologies to get you where you need to go. Our local teams understand the cultural norms, and good translations – culturally and linguistically – can bring it all together. Find out about the regions where we can conduct international market research or get in touch to speak to us about an international project

Have you heard the story about Steve Jobs dismissing consumer market research as a tool to shape new products? The driving force behind the Mac, the iPod and the iPhone famously said in a 1985 Playboy interview, “We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research.”

It is, of course, one of the most widely debunked stories in business. Apple does conduct consumer market research – and is, arguably, in its pre-eminent position precisely because it innovates using insights generated by analysing in incredible detail its consumers’ behaviours and the market appetite for its products. (There’s video of a young Jobs extolling the virtues of market research for these purposes – it’s 90 seconds well spent.)

The fact is, most new products are very similar to things people have seen before. For every genre-busting innovation there are tens of thousands of new iterations of existing ideas, tweaks to brands and updates to proven sellers. In most cases, some kind of market research will have shaped the new iteration and how it was conceptualised; helped stand up the business case for it; framed the marketing; and guided its introduction to consumers. So how does market research help businesses design and launch successful new products?

Using market research for product development at each stage of the innovation funnel

There are lots of different ways to describe the innovation process, broadly broken down into three phases: ideas, concepts and creation. It’s not a science with a standard formula, however, but there are some common steps. For example, some experts recommend breaking the process into 5Cs:

Capture intelligence about market gaps and organisational potential.
Connect opportunities to capabilities.
Convert ideas and available resources into concepts for products.
Confirm these products are viable in the market.
Conclude by executing a market entry plan for them.

Another way of thinking about it is a series of questions that need to be asked at each stage of the product development process. Market research can help answer them all.

1: What’s the opportunity?

Desk research, analysis of existing customer data and some qualitative investigation can help frame likely areas for innovation. In many cases, an organisation will face an internal problem – overcapacity, falling margins, consumer appetites shifting away from existing products – that also frame the need for new products. The output here is an extrapolation of big trends to identify emerging needs, changing behaviours and whitespace for innovation.

2: What ideas might thrive there?

In some organisations, internal R&D will have a ready supply of potential innovations that might be applied to the opportunity. More likely, R&D and marketing teams will benefit from a brief developed from the ‘opportunity’ phase to direct R&D in more concrete areas. This process might include brainstorming inside the organisation or more formal ideation sessions with an external research agency. At this point surveys can be harnessed to give more shape to the ideation process. In the search for an iterative new product (rather than a genuine technological innovation) there might be 30 broad ideas that can be tested in quantitative surveys to thin down the field.

3: What concepts deliver on those ideas?

In the next stage, focus groups and market analysis can clarify which concepts ought to progress further by exploring the strengths and weaknesses of each idea. This is also where the innovation and R&D efforts of the business are properly moulded around consumer and market insights – and some iteration takes place to align the two. Note that research here isn’t just among consumers in the core market. Channel partners, consumers and suppliers in adjacent industries are all valuable sources of insight and inspiration. For example, when Kadence worked with an airline to develop new first and business class seats, we looked to bedding experts, audiophiles and high-end restaurant maîtres d’hôtel to shape the concepts.

4: How might those concepts perform in the market?

By this point, an organisation should have narrowed its ideas down to a small number of solid concepts. At this stage, a large-scale quantitative survey can be used to identify the concept with most potential to take forward, as well as the size of the potential customer base.

5: What’s the investment case for launch?

The insights gained from market and concept testing will allow numbers to be attached to the product at this point. What might revenues be? What’s the cost to produce the product or service? With research around pricing, what’s the margin likely to be? Does this justify retooling a factory or investment in marketing? This is the “go/no go” point for a new product.

6: What should the final product look like?

Using the research on market potential and consumer attitudes to the new idea, a business can shape decisions on final feature set, ancillary products or services (again, both quant and qual market research will illustrate the need or potential for these), packaging, marketing and pricing.

7: How do we get it out to market?

Research can also highlight optimum product launch strategies, including distribution, adverting and partnerships to make the most of both existing markets and potential follow-ons – whether that’s mass-market adoption for a product designed initially for a niche or early adopters; new demographic segments; or launch into different international markets.

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The known unknowns for new products

There are broadly two types of business keen to answer these questions. First there’s the radical innovators, the people who come up with brand new ideas and product concepts and want to understand whether they stand a chance in the market. This group are interested in ‘unknown unknowns’, the broader trends in consumer behaviour that might hint at acceptance of a brand new idea. We’ll come on to these Steve Jobs types later.

The second, much larger, group understands the innovation funnel in more detail and seeks data to optimise a pipeline of new products. They are interested in ‘known unknowns’ and using the answers to justify, shape and execute a launch.

For this group, the challenge is modelling the potential performance of a new product against a number of variables already visible in the market. These organisations often have a sophisticated process in place to test new ideas and are keen to benchmark any new product in order to validate investment. They will have an algorithm for product development. The more variables they can pin down using market research, the higher the confidence in making those investments.

‘Benchmarking’ in this case might be looking at the performance of products within the target market; or evaluating consumer attitudes to particular features or benefits. This makes it a largely quantitative methodology.

This kind of quantitative approach is often applied with good reason. Standardised questionnaires and clear, consistent methodologies can help ensure that the market research process is more reliable and easier to interpret. And for many larger organisations with a wide portfolio of potential innovations, a fixed investment budget and the need for reliable returns, this rigour can be highly valuable.

But beyond simply looking at the “go / no go” result, it’s important to dig into the reasons why products didn’t pass this hurdle. This can provide valuable insights to inform future development.

Competitor analysis can also reveal opportunities for developing successful product iterations. Research might include:

Rivals’ marketing strategies – what’s their targeting and messaging; what are they missing?
Customer satisfaction with competitor products– where are there discontents that might be satisfied by your product?
Other gaps in the market – such as different price points or localised versions for international consumers.
Other competitor strengths and weaknesses – consider brand halo effects or financial status.
Early-adopter behaviours – in similar markets or using new technologies that might be adapted to your own target markets.

A word of warning – New Coke and the importance of taking the right approach to market research for new product development

But it’s not always done right. There’s no shortage of case studies of new product launches that didn’t go well. And often that’s not because an organisation didn’t do any market research. It’s because they didn’t use it deftly enough.

New Coke is a great example. Coca Cola is an innovative business and wields one of the greatest brands in history. In the 1980s, management decided to rebuild its dominant position with a new formula. Clearly this was a huge decision, and as a market research powerhouse, it took no risks. It spent $4m on development and conducted over 200,000 taste tests across the US to research how consumers would score the new flavour against rival Pepsi. And based on those tests, New Coke was going to be a hit.

But management made a series of errors. In a classic case of confirmation bias, they tended to put more weight behind positive views expressed in focus groups, ignoring those who warned a change would turn them off the brand. They discounted emotional feedback on their brand. And they over-focused on differentiation with Pepsi, which had long marketed itself as the sweeter product.

One big mistake was conducting sip tests instead of researching how consumers would feel drinking a whole can of the sweeter formulation. But narrowing down their research focus – ignoring the context for consumption – they ended up launching a product that turned consumers off the brand altogether.

The error, then, was not failure to conduct market research. It was failure to treat research objectively and apply appropriate methodologies. Management sought justification for their decision – not confidence that it was the right one.

The impact of market research on new product development – giving you the confidence to guide a product launch

The key word here is ‘confidence’. Even iterating an existing product entails risks. Using market research for product development helps reveal and manage that risk – and allows decision-makers to test rigorously against hypotheses for new products, rather than head off down potentially blind alleys.

Note that qualitative research plays a crucial role in helping product developers fine-tune their approach and create innovations more suited to particular audiences. And as the New Coke example shows, qual research can capture the emotional components of product change much better than quantitative analysis might. Every new product launch is a balance between gains and losses for the consumer and understanding that balance is vital.

When it comes to qualitative research, organisations shouldn’t just ask themselves whether to conduct it, but how to conduct it. Whilst central location testing for instance, allows you to ensure the product is experienced in a consistent way during the testing process pandemic lockdowns have obviously accelerated this shift towards at-home testing. New technologies are helping. Augmented reality (AR), for example, is an ideal way to help consumers visualise new products even at the concept stage. Using their mobile phones, they can ‘see’ products in their own home or a work setting, providing valuable depth to qualitative studies at even earlier stages. This is something we’ve piloted with Asahi to test their London Pride packaging and are seeing a number of benefits, such as respondents using AR organically noticing and commenting on small visual details that aren’t picked up by other respondents assessing a 2D concept.

Using market research to guide blue-sky thinking

So we can test against quantitative benchmarks to validate new product development. And we have qualitative studies to test emotional reaction to new products and shape their evolution in ways that will make them more successful. There’s also a third way of using market research for product development: coming up with new ideas in the first place.

This is often called ‘ideation’ and it’s an area where market research has played a key role since the birth of the industry – regardless of what Steve Jobs said. He was right that consumers are typically quite poor at predicting what might define or satisfy meet their own future needs. But understanding how R&D and human appetites come together is core to the market research offering.

Take a dairy business, as an example, that’s facing a slow decline in consumption. One solution would be to increase the appeal of organic products. How might they craft a brief to their own product development team?

Working with Kadence, the company use a structured approach to frame where this innovation might gain some traction in the market. Using proven research techniques, they also explored possible options for further innovation. These can be tweaked and repositioned using further research.

This approach can be further optimised if like us, the research agency has an in-house creative team that can quickly visualise concepts based on consumer feedback. We worked with a global beverage brands wanting to relaunch its range to make this happen. Based on focus groups, we were able to redesign the packaging in a matter of hours in a way that capitalised on insights from the research.

One other process to consider: the ideation sprint. Rather than gradually piecing together some R&D, market analysis and internal feedback before gradually building out a new product for consumer testing, this involves getting all the stakeholders into a project group together to develop new ideas within a short timeframe.

Kadence has conducted these sprints with food manufacturers – where that combination of chefs, technicians, marketing experts, salespeople and researchers working in concentrated bursts over a couple of days can see a menu of ideas created, tested with consumers and refined incredibly quickly. And because these sprints are cross-departmental, buy-in for the new product internally is much greater.

Concluding thoughts

Product development is risky even when you’re not launching a category-busting innovation or changing the world. New flavours, revived branding, tweaked feature-sets or version updates can upset existing product performance or result in costly investment in ideas that might not fly.

Far from stifling product development, market research can deliver reassurance and confidence at every stage, helping inform the choice of new products to pursue, their key attributes, how they might be marketed and what contribution they make to a business operationally and financially.

This is an area where Kadence has extensive expertise. Find out more about our product development research services or get in touch with us to discuss a brief.

Whether it’s an entirely new geographical region with a range of cultural, linguistic, and economic factors to consider or just a new age demographic — breaking into a new market is rarely easy.

There are all kinds of risks to try to mitigate and hurdles to overcome. Brands will never manage to avoid every potential pitfall, so a degree of complication should be expected.

Businesses that can minimize these risks and challenges can reap serious rewards. In this article, we’ll look at 5 of the biggest risks and barriers businesses typically face when entering a new market.

Let’s start with the risks.

The risks of market entry

There’s no risk-free way to enter a new market. Some may be easier than others, but problems are always possible. We can break down market entry risks into three main categories — internal, external, and legal.

Internal risks for market entry

Internal market entry risk factors are those that come from within the organization. These are generally easier to control than external risks but are often unpredictable and seriously damaging.

Management and organization

How well is your company structured? In your home market, it’s sometimes possible to function successfully with a flawed organizational structure. However, those drawbacks can become painfully obvious when you enter a new market.

Some common management mistakes include:

Unclear vision from leadership. A lack of coherent vision from the people in charge can lead to widespread confusion and inefficiency. Ensure your goals are established and communicated to everyone on the team.
Sudden staff changes. When a new member joins the team to replace someone else, they must have all the necessary information and direction. Failing to do this can often result in failures in communication and significant setbacks when entering your new market.
Lack of coordination. Working together effectively is critical in a new market — especially one far away from your home market. Your team members must be on the same wavelength, up-to-date with current processes, and in regular communication with each other and leadership.

Human error

Human error is one of those risks that we can’t always control. Mistakes happen in business and life, and while we can’t predict them very accurately, we can certainly say that people will make mistakes.

When entering a new market, a simple mistake can set a project back and send out ripples into the entire process. Usually, one or two small mistakes won’t mean the end of the world, but a series of minor errors can add up.

That could involve failing to convert currency accurately, using the wrong measurement units, or giving incorrect advice about cultural norms. In these cases, one small mistake can quickly snowball into a major setback if nobody catches it.

Logistical issues

Things like delays, accidents, labor shortages, transport and delivery problems, and other logistics and infrastructure challenges can be significant roadblocks for businesses when entering a new market.

These hurdles are especially relevant when expanding into developing countries and regions. Here, infrastructure and technology are often very different from what you might be used to in your home market, so it will be harder to predict delays and disruption.

Markets in developing countries sometimes use more manual processes, so there is often a greater need to work closely with local teams and sometimes the need to adapt your services.

Tech issues

The technology and equipment you rely on as a business won’t always work seamlessly. One considerable risk for market entry involves technology failing to get the job done effectively in a new market.

One example is the Internet of Things devices, which can be powerful assets for businesses when monitoring conditions and optimizing processes in manufacturing. However, if your devices or networks fail, it could cause a significant setback.

If you’re looking to enter a developing country, it’s worth bearing in mind that technological infrastructure can differ greatly from your home country. In some countries, we’ve seen a leapfrog effect, where newer technologies have been adopted to a greater extent, as there are fewer issues with moving away from legacy systems.

Cash flow problems

Entering a new market requires a lot of financial resources, and if the supply of money is interrupted or halted, it can cause major problems for your operation. If not promptly dealt with, internal issues like this can quickly stop a market entry attempt.

External risks for market entry

Businesses must contend with many external risk factors and risks that stem internally within their organization. These can be much more difficult to control and are often unpredictable.

Regulations

It’s essential to be aware of and comply with the local laws in your chosen market. One recent example is Europe’s GDPR law which requires anyone doing business with European customers, or any company based in Europe, to adhere to strict data privacy rules.

Local regulations and requirements are often overlooked — and this can be especially tricky in emerging markets where regulations can be harder to interpret if you’re unfamiliar with the landscape.

Failing to keep up with regulations can be high — the maximum fine for GDPR violations is €20 million or 4% of your annual global revenue. A mistake here can seriously damage your entire company, not just your new market activities.

Politics

Politics can be hard to predict anywhere in the world, although businesses can be reasonably confident that radical changes won’t disrupt their market entry efforts in stable regions.

However, all bets are off in less stable parts of the world. Revolutions, wars, and sudden and significant new legal changes are just some of the political risks you must contend with when entering a new market.

Sudden changes to government can have severely damaging effects on your business. One example is when Fidel Castro’s government took control of Cuba in 1959, seizing hundreds of millions of dollars of US-owned property and companies.

Social unrest

A country (and a market) is nothing without its people. Events involving social unrest and widespread disruption are constant sources of risk for businesses in many markets around the world.

Riots, protests, and revolutions can cause damage to premises and shut down businesses for long periods, while nationwide strikes can leave you without a workforce. It’s crucial to have a plan of action to ensure survival during civil unrest.

Major non-violent social movements and trends can also impact your business. If you fail to show solidarity or are perceived as insensitive to a specific public sentiment, this could cause reputational damage.

Cultural differences

Entering a new market often involves introducing your business to an entirely new culture, which comes with a whole host of new risks.

Brands need to be aware of different customs and cultural nuances. Failing to adapt can impact how your products and services are received in the new market. You’ll need to consider how culture will affect how your new customers will receive your marketing. A television commercial beloved in Western cultures might be perceived as grossly insensitive in more conservative cultures.

It’s easy to get excited about entering a new market and the potential it might offer your business, but you need to do your research upfront. Is there actually a market for your product? Will it need to be adapted for success? And at what point does this become unfeasible?

Knowing when not to enter a market is just as important as knowing when to invest.

Natural disasters

It isn’t just people that businesses have to worry about when entering a new market — nature itself is often working against them. Natural disasters are a significant source of risk when establishing a presence in certain parts of the world.

Hurricanes, earthquakes, floods, droughts, and many other disasters can quickly stop any market entry effort. They can destroy property, interrupt shipping, and close down entire economies in hours. Worst of all, it’s often impossible to predict when the next disaster will strike.

One way to mitigate damage is through insurance, although coverage in developing countries has historically been low. Research shows that only about 1% of natural disaster-related losses between 1980 and 2004 in developing countries were insured, compared to approximately 30% in developed countries.

Market issues

There are several external risks in the market. These can take the form of unexpectedly tough competition, fluctuations in the cost of services and resources your business relies on, and volatile exchange rates, leaving a dent in your profit margins.

Legal Risks

There are many legal risks to consider when entering a new market, and this type of risk encompasses internal and external activities.

Every region in the world has its own set of laws and regulations, which can change significantly even between parts of the same country. For example, it’s legal in many U.S. states to sell cannabis; however, this could carry a severe penalty in others.

Some legal risks to consider are lawsuits, patent rights, and data privacy regulations. To ensure you stay on the right side of the law, you must work with local lawyers in your target market. A major legal setback like a big lawsuit could end your market entry campaign, so ensure you stay on the right side of local laws.

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Barriers to market entry

As well as risks, there are also multiple market entry barriers to consider. Fortunately, these are far more predictable than the risks mentioned above. It’s almost guaranteed you will encounter these obstacles during your market entry journey, so it’s easier to prepare for them.

There are many barriers, but we will cover two of the main ones here – costs and marketing challenges.

Costs

Entering a new market is a costly endeavor. You’ll generally need considerable resources to make this happen, and costs can be much higher than expected.

Some market entry campaigns cost less than others — trying to reach a domestic demographic with your product is more financially workable than establishing a solid presence in a foreign market such as China.

A successful market entry will allow you to make back your investment over and over. But it’s important to understand what costs you might need to consider when entering a new market.

Export and import costs

Moving to a new overseas market typically involves a certain amount of moving goods across borders. Even if you establish a manufacturing base in your new market, there will be costs associated with importing certain materials and goods from your home market.

Switching costs

This refers to the cost involved in switching to a new supplier, brand, product type, or alternative. You might have to do this a number of times when entering a new market, and these costs can add up quickly.

Marketing costs

Reaching your target audience in a new market will require a certain level of expenditure, depending on how well-known your brand is. For example, KFC opening a restaurant in a new region will have less work to do than a smaller and less famous company. Costs include market research, advertising, digital marketing, and analytics.

Access to distribution channels

This is how you make your product available to your customers. Accessing and managing a distribution infrastructure in a new market comes with various costs.

It’s important to anticipate as many costs as possible when entering a new market. Even if you do a great job of this, it’s likely that some costs will still spring up and take you by surprise. Make sure you have the financial resources available to handle these unexpected expenses.

Getting your marketing right

As well as the many costs associated with market entry, another barrier facing companies involves marketing.

Marketing is essential to make your voice heard and your product known in your new market. You need to immediately start connecting with your target customers across various channels and establish your brand as an option.

Marketing in a fresh market comes with a range of challenges. We already covered costs above, but here are some other key marketing considerations:

Demand

Before you even set foot in a new market, do enough people want to buy your product? Your marketing campaign will be an uphill struggle if there isn’t existing demand for your offering. It’s much easier if people are already clamoring for what you have. This is where market research is crucial for helping you to size the opportunity.

Competitors

Entering a new market means — most of the time — walking onto another company’s turf. You’ll need to show your target audience that you can offer something better than your competitors.

Brand identity

Your brand has an identity; it can take a lot of work to import that identity and everything associated with it into a new market. How do you establish yourself in a certain way and send out the right message to your potential customers? Again market research is vital here to understand what to retain and what to adapt.

Customer loyalty to existing companies

We already mentioned your competitors. Many of the customers in your new market will have existing loyalties and strong ties to them. Luring customers away from a brand they have used and loved for decades is much more complex than simply attracting a new customer to your brand. You must stand out, offer something extra, and communicate this clearly. It’s worth paying attention to your competitors and what people like about them.

How will you reach your audience?

Consider how the people in your new target market get their information and spend their time. For example, if you’re targeting an older demographic, investing heavily in influencer marketing might not be a good idea. On the other hand, magazine and TV ads may work to great effect.

Cultural issues

If you’re expanding into an overseas market, you’ll need to consider the differences in culture and how this affects the tone of your marketing. Make sure your messaging doesn’t come across as offensive or inappropriate or appear tone-deaf due to a lack of understanding about cultural nuances and norms. Understanding cultural differences is an area where it pays to work with people who understand the culture intimately. Take the case of Starbucks — whose attempt to break into the Israeli market fell flat due to hubris and a lack of understanding of what the Israeli customers wanted.

Marketing can take a lot of work to get right, which is even more true when entering a new market. The most important thing is to research your new market as heavily as possible and gather as much information as possible before beginning your campaign. Also, be prepared to adapt your approach as you go along in response to data and feedback.

Market entry always comes with a massive amount of risks and challenges. No business can escape this, not even those with a global presence.

But when you get it right, you can reap significant rewards.

Kadence has helped companies of all shapes and sizes research their target markets and gather all the intelligence they need to lead an informed and successful market entry campaign. To find out how we can help you do the same, check out our guide to market entry or get in touch today.

As internet penetration has increased across the world, online market research has seen rapid growth. The COVID-19 pandemic acted as a catalyst for further adoption as restrictions on face-to-face contact meant that businesses had to embrace new research approaches. The result? Many companies experiencing the advantages of online research for the first time. What’s more, the widespread adoption of tech during the pandemic – particularly amongst audiences that were traditionally easier to reach offline – means that online market research is a now a viable way of engaging more people than ever before.

In this guide we’ll:

Explore the key advantages and disadvantages of online market research
Explain the different methodologies available to you and when to use them
Share our top tips for setting your project up for success, moderation and analysis

What is online market research?

As the name suggests, online market research is a type of market research where data collection takes place on the internet. In this way it differs from more traditional forms of market research where data collection takes places offline (either in person or over the phone) such as focus groups or telephone interviews.

What are the main advantages and disadvantages of online market research?

Advantages of online market research include being faster and in some cases, cheaper to conduct than face-to-face market research, meaning that you can obtain results more quickly. One of the major disadvantages of online market research is that it relies on the people you’re trying to reach having access to the internet and as such it may not be suitable for all audiences. Some online qualitative methodologies also require a degree of tech savviness, and a longer time commitment than offline approaches.

Beyond this:

Online market research is particularly useful for global projects. If you’re looking to enter a new market and don’t have boots on the ground, online market research can help you build your understanding without having to fork out for flights and focus groups. It’s also well suited to multi-market research as you can conduct research in a number of countries in parallel to identify common trends.
Online research can help you get closer to customers and bring them to life for stakeholders. In a focus group or a face to face interview, you only have a short amount of time to get to know respondents. In contrast, some forms of online qualitative research take place over a series of days, weeks or even months. This allows us to dig deeper and build a richer understanding of customers and their needs than we might offline. Some methodologies even allow you to set photo and videos tasks. These result in rich multimedia outputs can be used to bring customers to life for stakeholders.
Online techniques allow for a more iterative approach to research. The longitudinal nature of some online qualitative methodologies means that it’s possible to adapt your discussion guide as the research progresses to capitalise on emerging insights. This is particularly effective for product development research. For example, in an online community, you can share initial concepts with consumers, iteratively improve them based on feedback and then put them back into the community for further testing. This approach allows you to build and refine the concepts as the research progresses.
Online market research can be good for sensitive topics. Many online methodologies offer a greater degree of anonymity than face to face research. As such, they can be better suited to discussing difficult subjects such as illness or sex.

What type of business questions can online market research help me answer?

Online market research is extremely versatile and can be harnessed to explore a broad range of challenges, including:

Better understanding your target market
Product or service development
Brand and advertising research to guide marketing strategy
Determining customer satisfaction

What are the main methodologies used in online market research and when should I use them?

There are a number of different research tools you can use to collect data online. They include:

Online surveys

An online survey is the primary method for collecting quantitative data online. Online surveys can be completed by your customers or respondents can be sourced from an online panel (a group of people that have agreed to take part in online research). If you opt for this route you can build a representative sample and extrapolate your findings to the wider population.

When to use an online survey

To understand trends and patterns of behaviour e.g. buying habits
To understand attitudes towards your brand versus the competition
To compare different groups (e.g. by age, gender or market) to understand similarities or differences
To track metrics over time e.g. brand awareness, customer satisfaction

When to avoid an online survey

Projects where you need to qualitatively explore an issue with consumers to understand motivations and the “why” behind behaviours
Projects where you need to co-create with consumers to iteratively improve an idea

Top tips

It can be tempting to pack your survey full of questions but you need to be mindful of time. An online survey should take a maximum of 15 – 20 minutes to complete. Any longer than this and you risk seeing respondent fatigue or a significant proportion of people dropping off before the end. This will mean that fieldwork will take longer to complete.
Mix up the type of questions you use to keep the survey engaging for respondents

Online communities

Online communities are a qualitative technique for exploring a topic over a number of days, weeks or even months. Pre-screened respondents are invited to a secure online platform where they take part in a number of activities each day. This can involve discussing topics in groups, one on one or taking part in video, photo or audio tasks.

When to use an online community

To deepen understanding of a target audience
To explore content preferences and consumption
To test audience attitude and brand perceptions
To test new ideas with consumers – this can be anything from products and services to packaging or new marketing concepts. Online communities are particularly well suited to this. Many platforms enable consumers to mark-up concepts so you can gather in-depth feedback whilst also protecting the confidential nature of the stimulus, through functionality such watermarking or setting videos to self-destruct once they’ve been watched.

When to avoid an online community

When you need to explore a topic with consumers on an individual level

Top tips

Do your research on the types of platforms available. Each offer different functionality so go back to your objectives to ensure you’re selecting most suitable for your project and what you want to achieve.

Digital depths

A digital depth is essentially an audio or video interview which takes places online. These tend to last about 30 – 90 minutes. A typical programme might involve 15 – 20 interviews per market, although this can vary based on your business objectives.

When to use a digital depth

To explore in-home brand or product usage or explore attitudes towards particular brands or products
To gain B2B market insights

When to avoid a digital depth

Projects where you require respondents to share and bounce ideas off each other
Projects that require large sample sizes as running 100s or 1000s of depths online or offline is just not feasible

Tops tips

One of the challenges levelled against online research is that it can be harder to build rapport online. To overcome this, consider pre-tasks that allow you to get to know the respondent beforehand and help them feel comfortable. This can be anything from asking them to complete a short diary task to some quickfire WhatsApp questions before you get started.
Be aware of market differences. In markets that have traditionally favoured face to face methods, using video as part of a digital depth is a must for engendering trust.

Digital ethnographies

The objective of a digital ethnography is to view a consumer’s life as it happens. Ethnography emerged as an offline discipline, but developments in technology mean that it is now possible to conduct ethnography online. From 360 cameras to smart home technology right through to the humble old smartphone, there are a number of tools you can use. And in some cases, these new approaches can uncover insights that you just would not gather when there’s a researcher in the room.

When to use digital ethnographies

To explore in-home brand or product usage or to explore attitudes towards particular brands or products
To identify unmet needs
To understand cultural differences between markets

When not to use digital ethnographies

Projects where you need respondents to bounce ideas off one another

Top tips

Not everyone will be suited to take part in digital ethnography. You need respondents who are open and willing to let you into their lives. One way of doing this is to include a casting phase as part of the project to identify the right people to participate.

Online focus groups

An online focus group is where a group of pre-screened respondents are invited to join a private online platform for a few hours. Like an in-person focus group, a moderator will guide the discussion, which can be either text or video based.

When to use an online focus group

To test attitudes and responses to concepts and ideas at a high level
To sense check ideas quickly with consumers

When not to use an online focus group

To obtain detailed inputs from respondents at a one-to-one level

Top tips

If you are used to running focus groups in person, don’t automatically assume that online focus groups are the next best thing. Depending on what you’re trying to achieve, another methodology may better meet your objectives.
If you’re running a video based online focus group make sure that you’re able to see all of the participants at once. This will help in interpreting non-verbal cues and bringing people into the conversation.

Questions to ask yourself when designing your online research approach

As you can see, there are a number of different online methodologies available to use, each with their own distinct use cases, benefits and drawbacks. To help you design the best research approach, we’d recommend asking yourself 5 key questions:

What am I trying to achieve? Some clients come to us dead set on using a particular methodology. We’d advise against this. By starting with your business objectives and then considering which methodology best allows you to meet these, you’ll be in a much stronger position to design an effective research approach.
Do I need to collect quantitative or qualitative data? If you’re looking to conduct research at scale, you’ll need to opt for an online survey whereas if you want to explore a topic qualitatively, there are a number of different options available.
What depth of insight do I require? Are you sense checking an idea or do you need to explore needs in real detail? This will have implications for the methodology you choose.
Do I need to speak to consumers one-on-one or in a group? Different methodologies and platforms facilitate a different type of engagement with respondents. Think carefully about which you require up front.
Which markets am I exploring? Not every methodology will work in every market. There are cultural factors and connectivity issues you’ll need to consider. For instance, if you’re conducting research in India outside metros or tier 1 cities, you’ll need to make sure your approach is mobile optimised but doesn’t require too much bandwidth. Or if looking to test concepts in China, you’ll need to do so in a one-on-one setting due to the Chinese habit to moderate answers and avoid causing offence in group environments. Our guide to conducting online research in Asia, can help you consider the best approach to take in each market. Remember, if you’re running a multi-market project, you don’t need to use the same methodology in every country. Harnessing an approach that will ensure you can answer your business objectives is more important than consistency of approach.

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Setting your online research study up for success

So you’ve decided on the best methodology for your study. The next step is to get into the nitty gritty of setting up the project. Here there are a number of key things to consider.

Simplicity. When you’re writing your questionnaire or discussion guide, focus on making it as easy as possible to understand. Cut out the jargon to ensure a consistent understanding amongst respondents.
Flexibility. For online qualitative projects, it’s worth building in an element of flexibility into your discussion guide. This will allow you to delve into emerging insights during the course of the research.
Cultural nuances. We talked about the importance of culture when selecting your methodology. It’s crucial to bear this in mind throughout the entire research project. When you’re writing a questionnaire, preparing a discussion guide or designing specific tasks, consider how cultural differences might affect participants’ responses. For instance, in Japan people tend to avoid giving negative feedback so you use a traditional 5 point Likert scale here you’ll find that most people will answer somewhere in the middle, making it hard to ascertain the trend. To get a clearer go / no-go result, you’ll want to consider a 4 point scale in this market.
Testing and training. Some online qualitative research approaches rely on external technology platforms. Make sure you build in a comprehensive testing phase to ensure these work across different browsers and in different markets, particularly if you’re using a tool for the first time. You should also consider preparing training materials for respondents. What might seem intuitive to us as researchers, may be not be as straight forward for the person taking part in the research.

How to moderate online research

Moderation is arguably even more important online than it is offline. So what should you bear in mind?

Don’t forget the basics. Just because the research is taking place online doesn’t mean that you can forget everything you’ve learnt about great moderation. Dress appropriately and try and mimic face-to-face interactions – even something as simple as waving hello at the start of an interview can help to build rapport and set someone at ease.
Read the (virtual) room. Sometimes what people choose not to say can be as revealing as what they do.
Do your homework. Earlier in this guide, we mentioned the value that pre-tasks can bring. Even a short WhatsApp exchange can be useful in helping you to understand more about a respondent and how they feel about certain topics so you can get the most out of them in the session.
Curate the conversation. Unlike a focus group or an interview which might only last 90 minutes, online communities take place over a longer period and therefore require ongoing moderation. Moderators should think about how they curate the conversation by connecting individual respondents up to foster group discussion.
Conduct research in the local language. If you’re running a project in another country, use local language moderators who’ll be able to understand and draw out local nuances.

Analysing online research projects

Online market research is often considered to deliver more bang for your buck than a face-to-face approach because of the sheer amount of data you can collect. This is particularly true of online communities due to their longitudinal nature. As such, you need to carefully structure your analysis, ensuring you’re focusing on the ‘so what’ for your stakeholders.

There are also cultural considerations to take into account when it comes to analysis. You’ll need to bear in mind that consumers in different markets can answer questions differently when you’re interpreting the data. For instance, when asking about interest levels or purchase intent, the figures you see in ASEAN developing countries tend to be higher than in other markets. Even within markets, there can be regional differences to take account of. In Vietnam, for instance, there are cultural differences between consumers in the two major cities – Hanoi in the North and Ho Chi Minh in the South. Those in the North tend to favour products from well-known brands, while those in the South are more open to trying new things, and this is reflected in the data you see from these areas.

Considering harnessing online research in your own organisation?

This is where we’re in our element. Find out about some of our online methodologies like online surveys or online communities or get in touch to discuss a project.

How do you enter a new potential market?

Expanding your brand into new markets allows you to reach potentially vast numbers of new customers and grow your revenue massively. However, the process can be complex and filled with complications.

A market entry strategy maximizes your chances of success when moving into a new market. In this article, we’ll look at some reasons to consider moving to a new market, the differences between domestic and international markets, and some strategies you can use.

Market entry defined

Market entry strategy is a plan to expand the visibility and distribution of a product or service to a new market. Market entry research helps brands to expand into new domestic or international markets where the competitive, legal, political or cultural landscape might be less known.

Market entry research is the path to understanding a new market. It helps brands identify different success factors, reveal potential challenges, and discover hidden potential opportunities.

Why move to a new market?

First up, why should you consider moving to a new market in the first place? It’s challenging and expensive, so what are the reasons that make it worthwhile? Here are some of the main ones:

You’ll gain more customers and make more money – The number one reason to consider new markets is to grow your business and increase revenue by selling more products to more customers.
There might be no more opportunities for growth in your home market – If you’ve maxed out what your local market is capable of in terms of revenue, expanding to new markets may be the only way to grow.
You’ll reduce risk by diversifying your business – If one market suffers for whatever reason, you’ll have others to keep you going.

Domestic markets vs. international markets

Are you planning to enter a new domestic market or take your products overseas to sell in a foreign country? The approach for each of these will be very different.

Domestic markets

Typically, this will be much easier than entering an overseas market. The culture will be the same, everything will be geographically closer, and things will likely be very similar to your existing markets.

International markets

Global expansion is where things become more complicated. You’ll have to factor in several differences in how you currently run your business. These include:

Cultural differences
Administrative differences
Economic differences
Logistical challenges involved in transporting goods abroad

Things to consider

Before you enter any new market, it’s crucial to take some time to confirm whether you can afford the move. Can you afford the costs of exporting, working with intermediaries, tax, and all the other expenses involved? And what proportion of the market can you realistically expect to be able to serve?

You must also consider if the product or service will work in your intended market. Market research (both online and offline) plays an important role here — ensuring demand for your product justifies the export cost.

Risks of entering new markets

There are also numerous risks involved in entering a new market, including:

Country risks, like the possibility of political unrest, sudden changes, or financial issues that could impact your business.
Foreign exchange, such as the possibility of currency exchange rates changing, could seriously affect your bottom line.
Cultural risk, which essentially means the possibility of your new business venture running into challenges due to significant differences in culture and customs.
Weather unpredictability. Are you moving into a market where natural disasters and weather conditions could cause damage to your facilities and cost money?

Once you have carefully researched your new market and weighed the potential risks, you may decide it’s worth entering. If so, there are several different strategies you can employ, each with its pros and cons.

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Different market entry strategies

Direct exporting

Direct exporting is where you ship your products to the new market directly. You’ll have to handle all aspects of the process independently, from transport to payments to operations in the new market.

This method requires more resources and time compared to working with an intermediary. You’ll need to create an exporting infrastructure, train employees, and make and receive international payments, among many other challenging tasks.

On the plus side, this approach maximizes your profits as you don’t need to pay any third parties. You’ll also have complete control over your sales and marketing processes.

Indirect exporting

Indirectly exporting involves working with an intermediary. It has some advantages, such as:

Much lower risk. An experienced third party will take care of the exportation process, which minimizes the risk of failure.
You can focus on your own business and domestic markets without being occupied by your new ones.
Fewer resources are required on your part.

On the other hand

Profits are lower since you have to pay your intermediary.
You’ll be disconnected from your customer base, so you’ll miss out on important insights and lessons.
You’ll lose complete control over sales and marketing abroad.

There are several different options when it comes to indirect exporting. Here are some of the most common ones.

Indirect exporting with buying agents

Buying agents are representatives of foreign companies that want to buy your products. You’ll work through them when selling your products to your new market.

They’re usually paid by commission and will try to negotiate the lowest possible price. Sometimes, buying agents are government agencies.

Indirect exporting using distributors

You can sell your product directly to distributors or wholesalers, who will then distribute the product to retailers.

Indirect exporting through the management and trading companies

Export Management Companies (EMCs) exist to take care of all your export and sales processes in your new market.

It’s worth taking some time to research and find the correct EMC, as most specialize in a particular market and region. They’ll help you identify markets, find customers, handle all shipping and logistics, and more.

Indirect exporting through piggybacking

Piggybacking is where you allow another non-competing company to sell your product. This can work exceptionally well if the partner company already has a customer base and distribution infrastructure in your target market.

You’ll get immediate access to your new market but for a fee.

Producing products in the target market

Another option is to manufacture your products within the target market. This saves you the cost of transport and the many logistical challenges involved in exporting your product abroad.

However, you’ll also need to consider the many challenges in manufacturing your product abroad, legal issues, costs, possible risks, and more. Depending on your situation, this could be a good option.

(For more information on the most effective strategies for entering a new market, check out our top four marketing strategies article).

Franchising / Licensing

While franchising is often associated with fast food or quick-serve restaurants, it can successfully aid expansion in many different categories.

Franchising is where a semi-independent business owner (the franchisee) pays fees and royalties to the franchisor to use a company’s trademark and sell its products or services.

While franchising and licensing are both business agreements where certain aspects of the business are shared in exchange for a fee, a licensing agreement is typically more limited.

Entering a new market can be extremely rewarding and allow your business to move to the next level and achieve new growth. It’s essential to research all the options and ensure the export strategy you deploy is the safest and most effective for you. You’ll also need to thoroughly research the market to understand its potential and position your product for success, something we cover in our Ultimate Guide To Market Entry.

Kadence can help you do that. We have extensive experience assisting businesses by conducting game-changing research to create effective strategies for market entry. To find out more, learn about our market entry services or get in touch.