Market research is an essential activity for companies of all kinds. When entering a new local market or category, it’s crucial to do as much research as possible in many areas to ensure you’re as prepared as possible to launch successfully, with minimal risk.

Market research is even more important when entering an international market, as the stakes are higher, and you’ll be facing entirely new market conditions.

This article will examine international market research, how it typically differs from what you’re used to in your domestic market, and some of the main reasons companies need to do it.

What is international market research?

International market research is a blanket term for all the research and preparation on a new market, usually before entering it. Unlike domestic market research, international market research focuses on an overseas market, often with different cultures, business conditions, and consumer behaviors.

There are many different methods and stages involved in international market research. In some cases, the particular methods and techniques are the same as domestic market research, but your overall strategy will likely be very different.

What are the objectives of international marketing research?

International market research is a way of understanding a new, overseas market before you launch a product or service there. The main objectives are to understand your target customers, identify any challenges, get familiar with your competitors, and do anything else to boost your chances of success and avoid unpleasant surprises.

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How is international market research different from domestic research?

There are several key differentiating factors between domestic market research and international market research. Here are three of the key differences:

1. You’re entering a market with social and cultural differences

Domestic market research is already tricky, but the often vast differences between your home country and your target country make international market research much more challenging in many ways.

Often, the reasons for this difficulty are the same reasons why you need to research in the first place — you need to learn as much as possible about a region and culture that may be entirely unlike your own. 

The differences between countries can create many challenges for researchers. For example, a research method like one-on-one interviews that work well in western countries like the UK and US may fail miserably in other parts of the world where it is considered suspicious.

2. There may be more restrictions around research

In addition to cultural and social differences, international markets also come with legal differences. While you might have a good understanding of how the law (as it relates to market research) works at home, the reality abroad may be very different.

You’ll need to be aware of an entirely new set of rules to avoid breaking them and ending up in legal trouble. One example is the USA’s TCPA, which forbids calling a cellphone using an automated dialing system.

Legal differences make it imperative to conduct legal research and coordinate with lawyers in your target market before beginning any research. Ending up on the wrong side of the law could be catastrophic.

3. It requires more investment

Conducting market research on your home soil can often be undertaken relatively cheaply. However, costs can quickly skyrocket doing research abroad. Seemingly simple things like hiring venues, running telephone interviews, and gathering people to interview can become exponentially more complicated when you’re doing it in a foreign country with people who speak another language.

You may find yourself needing to hire a small army of staff on the ground to help you carry out these tasks. To make things even more frustrating, the cheaper market research methods like email and online surveys don’t work nearly as well in developing countries with less widespread internet access.

8 reasons why companies need to research their international markets

Despite the additional challenges involved, international market research is simply unavoidable if entering a new market overseas. Here are some of the reasons why.

1. Differences in culture

The culture of your overseas target market may be completely different. Failing to research the culture of your target market adequately could result in serious blunders, which could seriously harm your market entry and brand reputation.

Cultural differences don’t have to be vast to cause significant problems. For example, in many African countries, containers are labeled with a picture of their contents. When baby nutrition company Gerber entered this market with their jars labeled with photos of babies, the reaction was understandably negative and seriously impacted sales.

2. Differences in laws and regulations

Laws and regulations don’t just have an impact on your market research methods. They can affect every part of your market entry process and how you conduct your business in your new market.

If you enter a new market without a comprehensive understanding of the law concerning your activities, you risk getting into legal trouble.

There are many different potential legal pitfalls to consider when entering a new market. Some examples are environmental regulations, tax laws, and laws that pertain to hiring new staff. On top of this, rules can change quickly, and what was legal five years ago might be a no-go today. 

Understanding legal and regulatory differences is where one-off research isn’t enough — you’ll have to conduct regular and ongoing research as well as work with legal experts in your target market.

3. Differences in customer preferences

Customers in one country may have completely different preferences to those in another. Cultural differences can be due to the earlier issues, but they can also result from other factors.

When China began allowing its citizens to buy and own homes a few decades ago, US do-it-yourself chain Home Depot quickly capitalized on this new opportunity. Six years later, they closed all their Chinese stores, never to return.

The reason — they opened all their stores in the suburbs, but most middle-class Chinese citizens tend to live in apartment blocks in the cities, homes that don’t require or allow much renovation. This simple misunderstanding due to incomplete research led to the failure of Home Depot’s market entry attempt.

4. Understand the competition

When you enter a new market, you’ll need to compete with already existing brands. Brand competition is not easy — you’re already at a significant disadvantage compared to companies that have been established in that region for a long time and are well-known to the local consumers.

It’s essential to understand who you are competing against and — more importantly — how they have been able to succeed. What exactly is it that customers like about your competitors? What keeps them coming back? What has allowed them to gain and maintain a hold in your target market?

Answering these questions through research will give you valuable direction on what your brand must do to succeed. It will also highlight weaknesses in your competitors that you can address in your marketing.

5. Mitigate risk

Entering any new market is a risky venture, and that risk increases when you expand abroad. According to the Harvard Business Review, companies operating abroad faced far lower Return on Assets than those in domestic markets. Many of these companies do not survive the attempt.

Market research allows you to mitigate your risk by being as prepared as possible for the many challenges of entering a foreign market. You’ll better understand your customers and what they want, be more prepared to take on your competition, avoid legal issues, and have a more viable strategy. 

Entering a new market overseas will never be risk-free, but research allows you to minimize that risk.

6. Logistical challenges

The logistical challenges involved in entering a foreign market can be enormous. Everything from selecting and evaluating suppliers to finding ways to transport your products around your new market, there are many things to consider.

When entering a market in the developing world, these challenges become compounded. Regions without well-established transport infrastructure, financial systems, labor laws, government, and so on can create an endless series of logistical challenges.

To prepare for this, you’ll need to research your new market rigorously. Understand all the potential issues facing you so you have time to prepare and aren’t caught unawares by a problem that might set back your operations by a significant amount.

7. Prepare a solid strategy and budget

A well-established strategy and budget plan is an essential starting point for any market entry process. The only way to do this effectively is through diligent market research.

Market research allows you to understand the costs of your new market, including unexpected expenses. It also helps you anticipate obstacles and challenges and flesh out your strategy in a way that boosts your chances of success.

Suppose you need to win the support of high-level stakeholders in your organization. In that case, a well-prepared and financed strategy is an excellent way to convince them that your market entry attempt is well-placed to go ahead.

8. Find available marketing channels

Marketing your product in a foreign market comes with a unique set of challenges and considerations. Channels that work well in your home country may fail abroad — for example, digital marketing in a country with poor internet access.

On top of that, your messaging will need to consider all the cultural and linguistic characteristics of your target market. An advertising campaign that works well at home may very well perform terribly on the other side of the world.

Market research is a great way to identify the marketing channels and approaches that typically work well for similar products in your target market, helping you plan an effective marketing strategy and boost your chances of success from the start.

Market research is an essential and unavoidable task if you want to enter a foreign market successfully. Done right, it can help reduce the many risks involved and give your product the best possible chances of succeeding in a market that may be radically different from the ones you currently operate.

Contact Kadence to learn more about how we can help you with international market research, along with all other kinds.

Considering expanding into an overseas market? If so, you’ll need to do international market research, but be warned, there are many different methods involved and choices.

The difference between good and bad market research can make the difference between the success or failure of your product launch. This is even more true when launching in foreign markets.

All the various challenges and obstacles of market entry are compounded when you enter a market with different cultures, customs, languages, laws, and infrastructure to what you’re used to dealing with in your domestic market. 

Without conducting rigorous research beforehand, you risk being unprepared for an already challenging process.

This article will look at some of the most effective methods for international market research and what you’ll need to consider compared to domestic research. 

The three main types of data

Before we explore the methods available to researchers, it’s essential to look at the three main types of data you will be aiming to collect:

1. Secondary data

Secondary data refers to data not collected specifically for the task at hand (in contrast with primary data). It can involve things like government records, business reports, information from NGOs, and scientific publications. 

Secondary data is usually the easiest to collect and makes a good starting point for your international market research. When researching a foreign market, it’s crucial to consider linguistic differences and that specific data may be less accessible for political reasons.

2. Survey data

Survey data is a blanket term for all the data you gather through speaking to real people in your target market. There are many ways to collect it, including face-to-face surveys and interviews, electronic methods like email surveys, via telephone, and more.

When dealing with an international market, surveys can be highly effective as they offer a direct connection with your target customers in your new market. However, there are challenges to overcoming language barriers and cultural differences.

The best way to conduct an international survey is to appoint a research firm with direct market knowledge and experience.

3. Experimental data

Experimental data is gathered through an experiment. In market research, this can take many forms. For example, you could divide customers into groups and offer one a full-price product and the other a discounted product, then measure which has more uptake.

Once again, experimental data is a helpful tool when researching an international market since it yields real-world findings and allows you to draw concrete insights about how the market will respond to your product.

It’s worth noting that primary data refers to any information collected solely for the task at hand, so survey data and experimental data can be considered primary or secondary depending on the source.

9 of the most effective methods in international market research

Now, let’s explore some of the most effective methods available to market researchers when getting started in a new, overseas market.

1. Overseas business research

The research conducted by other businesses can be a good starting point for your market research. Companies in your space may have already collected this data. It may have been collected by businesses based in your target market or a nearby location.

Business research is valuable because it’s an example of another organization that has done some of its work for you. You can learn a lot about business trends, cultural differences, markets, laws, and more from the research of other companies.

However, this is always just a starting point. No business in the world will have the same set of questions, challenges, and needs as yours, and nobody will have the same product and audience for it. For effective market research, you’ll have to do your own work too.

2. Collecting foreign government information

Governments collect a tremendous amount of information about their populations and the business within their borders. This includes demographics, geography, and culture, which can be extremely useful when planning your marketing and choosing where to sell your product.

In addition, government data can provide valuable insights on the legal challenges you might face when entering a new market and the various regulations you’ll be required to comply with as you market and launch your product. Much of this information is readily available on government websites.

3. Collecting information from NGOs

Non-governmental organizations like charities can be excellent sources of data due to their work in research. NGOs may provide more accurate and up-to-date data than governments in developing regions of the world, which can lack the infrastructure to collect information properly.

4. Face-to-face research

One-to-one interviews and focus groups can both be highly effective market research methods. They afford you a direct insight into what your customers think, what they want, as well as what concerns them, what their pain points are, and how they feel about your competitors, among many other things.

However, doing face-to-face research in an international market comes with a unique set of challenges. The logistical demands are higher — you’ll need to locate and hire venues and work with interviewers on the ground, which may be more complex than doing so back home. You’ll also need to consider linguistic differences, which means hiring interpreters or locally-based staff.

Another challenge is cultural differences. For example, some Middle Eastern cultures treat interviews with suspicion, and it may be not easy to gather a meaningful sample group. 

5. Attitude scales

Attitude scales — like the Likert scale — allow respondents to give a score on how they feel about a question or statement, usually on a scale of “Strongly Disagree” to “Strongly Agree”.

There are many benefits to using this type of research method in international markets. It tends to transcend language, and questions are easily translated. It’s also easy to distribute and can quickly be done either in person or electronically.

However, there are still challenges. Some cultures, such as Japan, may be unwilling to give strong responses, leading to many neutral answers and no meaningful takeaway.

6. Text message (SMS) survey

Text message surveys involve sending out a series of questions to a group of respondents via SMS. It’s quick, easy, cheap, and allows you to reach a large number of people. You won’t get detailed responses from this kind of survey, and it tends to miss out on nuances, but it’s potentially an excellent way to get lots of feedback with minimal effort.

The drawbacks are that it’s dependent on mobile access. Many countries worldwide lack this — Laos, for example, has a mobile phone penetration of just 53.4%. This makes it harder to distribute your surveys to a significant number of people.

7. Online survey

There are many different types of online surveys available to you when conducting international market research. Email, social media, and web forums are just a few examples of places you can connect with respondents and distribute surveys and questionnaires.

Online surveys are one of the cheapest and easiest ways to gather information and can be done from anywhere globally with no need to hire additional staff or deal with logistics in your target market. You’ll get fast responses, and surveys are also easy to translate into multiple languages.

There are some challenges involved, however. Anything involving the internet is dependent on internet access in your target market, which may be very low in some parts of the world. This method works well in North America and Europe but is poorly suited to countries like Eritrea, where only 14% of the population uses the internet.

8. Mobile web survey

This method involves distributing surveys via smartphones through applications or some of the other online methods mentioned above. In many countries, smartphone ownership exceeds computer ownership, making this a valid alternative.

In other countries, however, very few people own smartphones. Pakistan is one example — smartphone penetration here is just 18.4%. However, if your target market has a high smartphone penetration, this can be a reliable research channel.

9. Remote Face-to-Face

In recent years, we’ve all seen an explosion in the use of video chat software like Zoom and Microsoft Teams. Today, this is used regularly to communicate with friends and family, attend work meetings, and even see your doctor. The COVID-19 pandemic accelerated this trend and forced us to rely on remote communication for almost all of our social interactions.

This technology applies to market research and is ideally suited to researching foreign markets. Now, face-to-face interviews and focus groups can take place entirely digitally, removing the need to send team members abroad or hire people in your target market.

There are still limitations, of course — it relies on your audience having access to electronic devices which can lead to skewed results (for example, you end up interviewing only younger and more affluent people). It should be combined with other methods for best results.

Market research is an essential but often challenging process, and it becomes harder when you try to do it in a completely new market far from home. Fortunately, market researchers today have access to a wealth of methods and tools, many of which did not exist even in the recent past.
Get in touch to learn how Kadence can help you conduct international market research as effectively as possible, allowing you to mount a confident and informed market entry.

Big data and advanced analytics are hot. Voluminous sets of data can be processed automatically using technology. But the data becomes useful only when it is converted into meaningful information. While Big Data has become the buzzword today, it is of little use if it’s not profitably analyzed.

The global Big Data and Analytics market is worth USD 274 billion. Around 2.5 quintillion bytes worth of data is generated each day. There are currently over 44 zettabytes of data in the entire digital universe.

So what is big data exactly, and how does it impact companies?

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Big data refers to large sets of data obtained from multiple sources, like medical records, government records, customer databases, mobile applications, search engines, business transactions, social networks, and other massive data sources. Big data may be structured or unstructured, allowing brands to manage large amounts of data more efficiently. Many organizations are moving away from legacy systems and consolidating data to make the research process seamless, cost-effective, and efficient. 

Technologies like text analytics help market researchers examine large amounts of information and data in real-time to track consumers’ sentiments and detect potential brand reputation issues before they become serious. 

Big data market research is invaluable for brands as it combines consumer and behavioral data with advanced analytics to enable faster decision-making that yields improved business outcomes. When big data and market research converge, everyone wins because it results in better, more relevant products and services for the consumer and a competitive advantage for the brand.

Big data and market research convergence allow brands to dig into data to uncover the “why” behind the numbers. Let’s say, for instance, a brand uses data mining to discover a sudden decline in the market share for a high-end product in a specific market. Using market research methodologies, it studies a sample of consumers that have exhibited a change in buying behavior to unearth what led to the change. Was it a new product that entered the market, or did they reduce spending due to the economic climate?

These reasons are not presented in the data, and market research can help uncover the “why” behind a data set. 

Today, the digital consumption of information, products, and media makes everything measurable on a large scale. Social media analytics is an example of big data used on a massive scale globally. 

How does big data impact business?

A 2020 study showed that around 94 percent of organizations believe data and analytics are essential to growing their brand and supporting digital transformation. The study also found that the financial, hospitality, telecoms, and retail industries invest the most in big data and analytics. 

Big data in the Banking and Financial Services sector

The application of big data analytics has allowed financial services companies and banks to become more efficient, customer-centric, and competitive. This industry utilizes big data to make transactions, trading, and financial activities seamless for their employees and customers.

Retail and eCommerce

The eCommerce and retail industries collect data through their Point of Sale (POS) systems, loyalty programs, and website browsing behavior. It also helps with inventory replenishments. 

In the eCommerce industry, knowing your customers can unlock conversions and profits. Big data on real-time consumer behavior, purchase history, and consumer preferences can help online stores recommend the most relevant products and offer them to consumers at the right time. Big data enables e-stores to conduct competitive analyses and pricing to lure consumers. Above all, technology allows online retailers to offer personalization, superior customer service, and experience.

While these industries invest heavily in big data, they are not the only ones. Many sectors like manufacturing, logistics, media, oil and gas, and healthcare are investing large sums of money in adopting this technology to manage their data efficiently. 

Big Data analytics for the healthcare industry is expected to reach USD79.23 billion by 2028. 

For most companies, data is fragmented, and brands are looking for people who can analyze and use data to optimize all business processes and functions. 

Big data impacts not only the private sector but also the public sector. For governments, big data has many applications, including health-related research, financial markets research, fraud detection, public safety, transportation, and environmental protection, to name a few. 

Advantages of Big Data 

Massive organizations like Google, Facebook, and Amazon have proved how big data can build big brands. These organizations have capitalized on big data mining and analytics to grow their brands and boost market valuations. 

One of the most significant advantages of big data is the ability to make informed decisions based on hard data and facts. 

Big data is valuable for consumers too. In the information age, the consumer can access ratings, product reviews, and an easier means of providing instant real-time feedback. This allows consumers to make informed choices. 

What are the challenges with big data and analytics?

As recently as last year, Facebook’s Mark Zuckerberg, Google’s Sundar Pichai, and Jack Dorsey of Twitter had to testify before Congress about the steps they have taken to deal with data privacy. 

Consumers have become more data savvy and are concerned with privacy issues and breaches. <add stats on #s ready to share data for more relevant messaging)

Business outcomes are only as good as the data; high-quality data (link) is of utmost importance. Researchers and brands must be cautious about the data sources and methodologies to obtain the most accurate, reliable, and relevant data. 

The big data market is poised for phenomenal growth in the coming years. With the development of technology penetration across all areas of life, digitization, and the widespread use of smartphones globally, large amounts of data are produced every second. This has led to the need for data analysis and big data. 

As brands apply big data, they make data-driven decisions faster and can respond quickly to market changes. This has a direct impact on their bottom line. But data is not enough; there has to be a fusion of data science with marketing science to help market research become more effective.

Kadence International helps leading brands make game-changing decisions. If you are looking for a research partner to help better understand your customers, we would love to help. Fill out our Request for a Proposal here.

In this guide we explain how to do international market research, exploring the key considerations to set you up for success.

Why is conducting international marketing research so important?

Whatever you think of it, globalisation is now a fact of life. For more than half a century, the biggest brands in the world have operated on a truly international scale. But in the past 25 years – the internet era – an ability to service global markets much more easily has made an international footprint even more compelling.

Near-universal penetration of the internet – often via a smartphone, equipped with GPS locators, camera and microphone – has created low-friction access for brands into markets they didn’t even know existed. Global supply chains and logistics make serving overseas markets easier than ever. And although there have been notable blips – in the form of sanctions, national protectionism and policy decisions such as Brexit – the overall trajectory is towards fewer tariff and non-tariff barriers to trade.

All that adds up to international business no longer being the preserve of multi-billion dollar blue-chip names; or even mid-corporate specialists and cool brands. Any company can now expand beyond their local market. International marketing today is a much more open field.

But the Covid-19 pandemic has also reminded us that within that global picture, markets evolve unpredictably. And they have always been subject to rapid change driven by local conditions, culture and consumption patterns.

That’s made multi-market insights even more useful for global brands already operating internationally – and any business planning to grow ‘overseas’ for the first time. Marketing research is important even at ‘home’. But in brand-new target markets with high potential, it’s nothing short of critical.

Finding a balance – with pertinent local insights or the one hand, and global uniformity for brand consistency on the other – can be a huge challenge. Marketing textbooks include plenty of examples of a failure to localise products and services, mistranslations of brand messaging (some of which are urban legends…) and other cultural blunders.

That’s made market research a crucial tool for business looking to foreign markets, both to help generate insights that can be benchmarked across their global consumer base; aggregated to inform global decisions; and ensure international progression isn’t tripped up by nuances that demand locally tailored marketing or even products themselves.

Big world, small questions – How to embark on an international market research project

So what does it take to run an international market research project? One fundamental truth about market research holds true whatever you want to find out: the tighter the brief, the more useful the results.

That’s not to say brands could, or should, never conduct wide-ranging and open-ended research studies to test general attitudes or behaviours on a global scale. But while that kind of ‘scene-setting’ work can be very valuable in one location, country or even cultural context, it can be much harder to come up with firm conclusions when you’re trying to be ‘global’. International market research might start out with the intention of finding global commonalities or appetites, but the data collected will rarely reveal universal insights.

It’s more a question setting out the kinds of insights that might drive operational, product design or branding decisions for different markets. Country specific norms for consumers and logistics will affect the brief. And different nations, cultures and infrastructure will dramatically affect the available research methodologies, too. Again: it’s not impossible to design international research projects that have perfect consistency in methodology – but for many situations, it’s also not necessarily going to deliver the biggest return on investment.

There is significant value in getting inputs from research professionals even before setting the brief. Getting those right at the outset helps the market researchers you work with get a clearer idea of how they might target their investigations and sets expectations about what’s possible – whether you’re looking at a single overseas market, the potential for an entire region or tailoring local research work to evaluate global possibilities for your brand.

International, regional or global? Approaching international market research

That decision – one or two new markets, a region (perhaps opened up thanks to changes in logistics infrastructure) or a global snapshot – probably won’t be defined by the research process itself.

For the biggest brands, global methodologies (which you can learn more about here) such as brand trackers might seem to be universal. But you still need to localise the process to draw broad conclusions. This isn’t simply a question of ensuring that two completely different markets generate results that can be compared at the global level to inform business decisions. National and regional situations are constantly evolving, adding different contexts that research should be able to factor in. Just like running focus groups around a large country, the broad methods might be the same, but the way you ask questions and interpret answers needs finesse.

The biggest global brands – such as Starbuck or McDonald’s – often undertake localisation work on their products and services, too. The Tsukimi Burger is alien to anyone outside Japan, for example. Research conducted to support these market-specific development projects is usually undertaken by local teams. But decision-makers at these companies’ HQs will still expect research supporting those decisions to meet their global standards.

For companies breaking into foreign markets for the first time, similar rules apply. They will have a standard of insight they demand from research; but they will benefit hugely from working with research teams or agencies who understand the local cultures, dialects and the most productive research methodologies.

So right at the inception we need to ask some basic questions:

  • Are we looking to assess products that present uniformly across the globe? (An iPhone is the same everywhere; a chocolate recipe might not be.)
  • How would we tailor products or positioning for a local audience? (Is this just packaging, for example, or tweaks to the features to adapt them to local conditions or cultural norms.)
  • What are the financial implications of these decisions? (Tailoring research to local markets and contextualising the outputs against your global strategic objectives is usually fascinating work. But will it create valuable enough insights to offset the cost of both the research itself and the tailoring?)

Speaking our language

One of the biggest issues for research internationally is translating your project into different languages (we explore that in detail here). That means not just the questionnaires or scripts that you use, but the brief (so local fieldwork teams understand your intent), the responses and insight reports.

In the era of Google translate (and, to a lesser extent, the use of English in many markets) this might not seem so difficult. But the nuances of language can be a major pitfall for brands and for research projects. Remember, even dialects and local idiom can affect both the meaning of a survey response, a focus group transcript or even the focus of a question.

Language and culture across South East Asia is incredibly diverse, so you can’t simply treat it as a homogenous region. Even in India (see our article on breaking the markets there) there are dozens of languages and cultural identities. And in Canada, for example, you need translators who know Quebecois, not just French. Making small mistakes can undermine engagement and trust, and it’s usually a relatively easy thing to get right if you know what to look for.

These language traps are particularly acute for qualitative work assessing softer or more descriptive product features or emotional product branding –especially if there is a very strong global brand identity that needs to be maintained around any local variation.

Working with local teams to ensure the meaning of questionnaires and responses is captured, not just literal translations, helps ensure marketing decision-makers aren’t trapped. Specialist translation services and research teams on the ground but who are in on the initial project brief are hugely valuable.

Two women having a conversation

Realities on the ground – how cultural nuances can influence your choice of methodology for international market research

There are huge variations in the cultural acceptance of different research methodologies too. In some countries, certain methodologies simply don’t work that well. You might find a survey on WeChat in China works well; but in some markets, you may need to spend more time building rapport with consumers – and allow them a sense of anonymity to build the confidence they need to be open with you. This worked well on a recent project in Saudi Arabia, for example, where we conducted an online community.

Some societies have historically been more open to face-to-face research rather than online approaches (although this is changing as a result of the pandemic), so we often recommend a blended approach to get to comparable levels of insight versus other markets where this might be attainable exclusively through online methodologies.

Even between Germany and the UK the research context varies hugely.  A lot of cultural nuance is rooted in history, too. In eastern Germany, for example, the folk memory of the Stasi is still recent history for many older people – which informs attitudes towards research and certain methodologies. So what you ask, how, where and when will differ in Leipzig compared to Paris or Birmingham, say. (And in much of the US, respondents will typically tell you much more than you need to know!)

And even well-understood quantitative methodologies – that you might think don’t require that linguistic nuance – need to be properly calibrated. For example, point scales vary around the world. In China, people are more open to giving 8s, 9s and 10s; in the UK, these are much rarer. If that’s not factored in it can skew important localisation decisions.

Research projects also need to account for infrastructure and social norms. If you’re investigating the relative strength of a drinks brand, for example, knowing how many people have access to refrigeration at home or whether drinking in the street is frowned upon will be important.

Online – not entirely global

Culture, history, consumption patterns, economics, language and infrastructure aren’t the only variations that need to be taken into account for an international research project. Technology has a potentially huge impact on the types of research you can conduct and how well it works.

The rate of adoption of devices and quality of connectivity in each market is a big factor. In some developing countries, you’ll need to tailor a more light-touch experience, with lower bandwidth requirements for online and mobile methodologies; in others, you can use more data-intensive approaches that are demanding on bandwidth and storage.

The smartphone has flattened out some of the methodological variety between markets, it’s true. Take Indonesia, for example. It was always very much a face-to-face market. But that is changing, as the need to inform faster decision making grows, with research through online panels– like our KOINS panel – taking off.

But there are still very clear cultural differences that mean it’s not simply a question of getting every market to download the same app, for example. Yet again, local knowledge is key – not just of those cultural or technological norms, but also of regulation. Data protection laws vary widely, for example.

Online survey methodologies can also lay traps on language. A couple of years ago, lots of brands were interested in the idea from Scandinavia of ‘hygge’ – a king of super-relaxed personal indulgence. There is also a word in Dutch to imply a notion of ‘coziness’, but it’s a different concept. If that crops up in responses, is it the same thing or not? Automated keyword searching and the surging use of AI analytics might not give you the whole picture.

In short: think global, research local

The smartest headquarters’ marketing teams already understand what needs to be tailored locally and what of their global branding they can apply in existing or new export markets. Knowing you can apply product branding across different markets can mean finding huge economies of scale in creative execution and being able to hook local variation into a wider brand image.

They will also trust either local marketing teams, or research specialists with local knowledge, to adapt both marketing and product sets to the conditions in their target markets. They need to know for each market what’s driving the local nuance and how to marry those with the logistical, economic and branding issues around that market.

And they know that whether it’s the attempt to tests global opinions, the openness of local consumers to existing products and branding or to uncover creative and value-creating local adjustments to products and messaging, there is no substitute for in-the-field expertise of a research partner capable of delivering to brief with the most appropriate methodologies.

The old phrase ‘think global, act local’ might be a tired truism. But when it comes to the way research is conducted to optimise performance in global markets, it’s still the number one rule.

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Market research is critical for driving growth. It can inform strategy development, product development and marketing, setting you up for success. But it’s even more important when it comes to growing your business in countries outside of your home market. 

The global market research process looks different from domestic market research and requires a different approach in order to get the best results. In this article, we’ll break down why global market research is so important, the challenges involved, and how to do it as effectively as possible.

What is global market research?

Global market research is an umbrella term for the collection and analysis of information that companies undertake in a country that isn’t their domestic market. This includes designing the study, conducting the fieldwork, analysing the data and reporting the results – and can pertain to anything from customer understanding to product development research. It differs from market research that takes place domestically, with an understanding of cultural differences being crucial to its successful execution. 

Why is global market research important?

Global market research serves a number of important purposes. It helps companies understand their current or potential customers in international markets. These markets — and the people in them — are often radically different from your domestic market in many significant ways.

Failing to understand the often subtle distinctions between different global markets and gain a solid understanding of them before you launch a product can be a critical mistake that costs companies dearly.

Market research is equally important in global markets where you already operate. Here, it helps companies feel out new potential product launches and marketing campaigns, understand how numerous factors in those areas may have changed since they last conducted research, and better understand the feelings of their customers internationally.

Here are some of the main reasons to prioritize global market research:

What works well at home might fall flat abroad. You may have heard of Starbucks. It’s one of the most successful businesses in its home market of the US and is a hit with customers in many other countries across the globe. In many cities around the world, you’ll find a Starbucks almost on every corner.

In Italy, however, its presence is more limited. This is because the Italian coffee culture is profoundly different from what Starbucks offers, and the Italian public simply doesn’t have much of an appetite for the brand. The fact Starbucks has been able to gain a foothold there is an impressive achievement in itself and was only possible by significantly altering its product range — a change driven by extensive market research and collaboration with local businesses. 

It allows you to improve operations and save costs. Market research helps you gain a more thorough and clear understanding of your new markets and the logistical and practical steps involved in operating there.

This allows you to get your operations right the first time, avoiding expensive mistakes and delays and streamlining the process so you can maximize your chances of overall success.

It helps you understand your competition and what you’re getting into. When it comes to new global markets and expanding into different cultures, competition is a huge factor. Market research helps you understand your competition so you can compete effectively and avoid being completely eclipsed by more popular brands.

When Best Buy attempted to move into the Chinese market, it failed miserably, closing all its stores in the country just five years later. Why did this attempt fail so badly? Ultimately, it was due to local competition.

Local, smaller Chinese electronics companies were able to offer similar products at a much lower price by paying staff less and offering fewer benefits. They also had stores in more accessible locations, catering to a more bike-based and less car-based customer population.

Had Best Buy spent more time researching the local market, they may have taken a different approach, or opted not to expand into China at all.
It allows you to identify new opportunities you may not have otherwise considered. By better understanding your market through research, you’ll be able to pinpoint new opportunities to grow, generate ideas for new products and strategies, and innovate in a way that increases your chances of success.

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The challenges of global market research

Doing market research on a global scale can be much more challenging than doing it domestically and there are many more factors and variables to consider. Much of your market research will involve speaking to customers in markets that differ from your home country. This can be difficult for many reasons:

Cultural

Some international markets will be home to a vastly different culture from your domestic market. This can make research difficult. It’s important to respect cultural norms and take these differences into account both when designing your research approach and analysing your results. 

For example, in some cultures, like in China, people might be more inclined to moderate their views in a group setting, making it harder to get to the heart of an issue in a focus group, for instance. Understanding this can help you determine which methodology to choose, along with how to probe, and what to look for when you’re analysing the data.

Linguistic

Carrying out customer surveys, focus groups, in fact, anything involving interviews and questions poses obvious linguistic barriers in foreign markets. This makes global research particularly challenging. You’ll need to be able to connect with respondents and understand their views in the local language. Understanding nuances and ensuring key details aren’t lost in translation is vital, so it pays to work with native speakers to help you navigate these issues. 

Logistical

Finding appropriate facilities to conduct research in a different market can be tough, particularly if you’re working on logistically challenging projects such as central location tests or taste tests, where you also need to factor in transporting products for consumers to test in person. For this, it’s important to plan ahead so you can anticipate problems and delays that might not exist in your home market.

Legal

In many parts of the world, there are laws and regulations in place that you’ll need to consider when designing your research approach. For example, Europe’s GDPR or Singapore’s PDPA.

(More information on the challenges of global market research and how to overcome them can be found in this article).

The right way to do global market research

Learn as much as possible about the regions you’re targeting

Before you start actually speaking to people and conducting market research, it’s essential to gain a thorough understanding of the region you’ll be working in. This helps avoid or mitigate many of the cultural and linguistic challenges mentioned above.

Find out as much as possible about the demographics, laws, culture, language etc of your chosen region. Publicly available resources can help with this. You may be able to access government statistics or reports that can give an illuminating view of the business landscape for companies in your industry in your chosen market and what other firms are doing. This can provide you with a solid base for your research before you even start talking to your target audience.

Design an effective research approach, rooted in your understanding of the market

You need to design a research approach that works in the context of the market. Every region of the world is different, sometimes in quite startling ways, from your domestic market. It’s important to make sure your research is designed in a way that reflects that.

This is important when you’re considering what methodology to use. For instance, you’ll need to ensure that if you’re conducting online research in China, the platform will need to be mobile-first due to the technological leapfrog the country has  experienced. 

(For more information about conducting online research in Asia, read our best practice guide)

It’s also important when thinking about sampling. For example, when conducting research in Vietnam, it’s essential to understand the striking cultural differences between North and South. People in the North tend to favour well-known brands, whereas those in the South are typically more open to new experiences,Make sure you think carefully about who you want to research at the outset, and if you are exploring an entire country, beware that these nuances do exist. 

One of the best ways to really immerse yourself is by working with an agency that has boots on the ground, and offices in the location you want to explore. This allows you to build a research strategy that is adapted to your new market, helping you to obtain valuable insights.

Collect the data and analyse the results, bringing cultural understanding to bear 

Once you’ve designed your approach, you’re ready to embark on the research itself. 

There are multiple methods you can use here, such as:

  • In-person interviews
  • Online surveys
  • Focus groups
  • Online or mobile research 

Each method has its own pros and cons, and the best research strategies will contain a blend of several approaches. Again, cultural understanding is really important here. 

This can impact the way you approach every element of your research. For example, when writing a questionnaire in Japan, it’s important to acknowledge the cultural aversion to giving negative feedback. Here, if you used a typical 5-point Likert scale, responses might tend to end up right in the middle, giving an unhelpful result. Instead, try a 4-point scale to give a clear indication of attitudes or intent. 

The next step is analysis, where again, a deep understanding of the market is critical to be able to properly interpret the results and to compare between countries. In Vietnam, for instance, it’s common for Vietnamese respondents to show high interest levels when asked about their likelihood to purchase a product. But these responses are not always realistic — many Vietnamese people will enthusiastically signal their desire to buy a product even when they don’t have the economic means to realistically do so. It’s important to cross-reference these results with other market data for a more reliable result. 

Remember to account for translation or working with native speakers at this point to ensure success too.

Looking to embark on a global market research project?

Global market research is an essential process for any company looking to expand into different international markets or grow their presence in existing ones. It allows you to optimize your chances of success when trying new things in markets that may be profoundly different from your domestic market in numerous ways. It also helps you understand those markets much more keenly so you can better serve your customers there.

There are lots of variables that can make the research process for global market research projects much more challenging. It’s important to take the time to understand your new market before you begin the research process.

However, if done right, global market research can be a critical factor in mounting a successful market entry attempt, marketing campaign, or product launch allowing you to expand your brand across the world and reach entirely new levels of growth.
At Kadence, we help businesses all over the world expand into new global markets by carrying out in-depth and localised research. Contact us to find out more about how we can help you do the same.

Market segmentation — the process of breaking your market into segments according to factors like needs, past behavior, and more — is essential if you want to gain a clear understanding of your customers and target them effectively.

Companies that use market segmentation successfully can access a whole range of benefits. Segmented marketing performs significantly better, and many of the world’s most successful brands have rigorously segmented their markets for decades. 

However, market segmentation is also wrought with challenges. Depending on the scale, it can be a major operation requiring many resources and work. In this article, we’ll look at five main challenges facing companies as they conduct market segmentation and how to mitigate them.

Why market segmentation is so important

Market segmentation allows you to divide your market into smaller groups, which has many powerful benefits. Here are some of the main advantages:

Market segmentation gives you greater focus. 

You can target the right groups with the right products by segmenting your market. The alternative is taking a one-size-fits-all approach, targeting a vast range of different people with the same product and marketing message, which is far less likely to convert any given person.

With segmentation, you can use a different strategy for each group, tailoring your approach so your customers get more choices and a higher chance of getting what they want exactly — or at least much closer to what they want, as you can offer.

Market segmentation can give your brand a stronger identity. 

Brands and products that try to appeal to everyone often satisfy nobody. Look at highly successful brands like Coca-Cola and McDonald’s — they know who they are appealing to and the needs they want to meet, and they don’t try to pretend otherwise. Nobody is drinking a coke or eating a Big Mac to be healthy or lose weight; they do it for taste and convenience.

These brands can forge a strong and memorable brand identity by focusing on specific segments of the market and their specific needs: in this case, people who want a refreshing and tasty beverage on the go and people who want fast, convenient food. They’re not trying to appeal to healthy gym-goers or people looking for an expensive sit-down meal, so they can focus their marketing and product range exclusively on their true target market. This allows them to build a clear and unmistakable brand.

Market segmentation reveals opportunities for innovation. 

Segmenting your market can illuminate new areas for innovation that you may have missed otherwise. You’ll notice ideas for new products, tweaks you can make to existing lines, and new campaigns to create.

When you divide your market into smaller segments, you’ll notice that some groups demand specific things. If you treat your entire market as one block, these distinctions can easily get lost in the noise.

Market segmentation provides more accurate and targeted marketing.

When you segment your market, you can speak to your customers in each respective group more directly. This allows you to create marketing campaigns and use channels that are much more tailored to your audience.

For example, some customers might respond exceptionally well to TikTok content, whereas it may completely miss others. Segmenting your market helps you avoid wasting money by targeting the wrong people, so you can optimize your marketing budget and maximize results.

Market segmentation can help expand your brand’s reach. 

Entering a new market is fraught with challenges. Segmentation can help you hone in on a target audience when launching your brand in a new market to give you a better chance of success. Segmentation allows you to target consumers with precision. You can then tailor your approach to the specific customer groups in that country rather than simply using the same strategies you used in a different place.

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The challenges of market segmentation

Market segmentation, while incredibly useful, can be challenging to conduct and implement. Here are some of the main challenges you’ll likely encounter when segmenting your market, with our top tips on how to overcome them:

#1 Cost

Segmentation is an investment. Splitting your market into groups means you’ll have to do some things, for instance, marketing campaigns, multiple times in different ways. This can be more time-consuming and expensive than running a campaign aimed at a single market.

There is no way to avoid this challenge. The cost of market segmentation will always be an investment, but if done right, the extra revenue you will generate from targeting the segments that represent the best opportunities for your brand will more than pay for the initial investment.  

#2 Understanding that people can belong to multiple segments 

It’s easy to fall into the trap of thinking that each potential customer belongs solely in one specific segment. However, this is an oversimplification. 

Imagine you’re selling a brand of wine. One of your segments might be wine connoisseurs who enjoy drinking at bars with friends. Another segment might be those who drink to unwind at home.

One person could fall into both of these segments, depending on factors like the time of the week and their current social schedule. People are individuals, and their habits and desires can change based on their environment and mindset. 

Bear this in mind when approaching a segmentation, particularly in FMCG, and consider segmenting based on occasions, asking people about different scenarios to ensure their diverse needs are represented. 

#3 Keeping segments precise

Segmentation only works when segments are clearly defined and distinct from one another. If your segments are too broad and vague, you’ll lose out on many of the benefits of market segmentation because you’re unable to tailor your approach precisely enough. 

To ensure your segments are narrow and clear enough, it helps to create detailed personas for each one. A persona is a fictional profile that encapsulates the core qualities of each segment, including their needs, behaviors, and motivations, based on initial research. The purpose of personas is to bring to life the segments and demonstrate how they differ from one another.

For example, if you’re selling a brand of bottled water, one of your personas might be “Healthy Harry” who buys water to drink during workouts or sports events. His persona profile would contain a range of information, from what motivates him to what he’s looking for in a product. The more detail, the better — this helps you create precise and tailored segments.

#4 Selecting the right segments to focus on

It can be easy to overlook some potentially promising groups when segmenting your market.

For example, you might disproportionately target one segment that makes up a significant section of the market when another might be a more natural fit for your product.

Remember, the benefit of segmentation is that it can enable you to be incredibly precise and personalized in your approach. This means that even when targeting segments that make up smaller proportions of the market, you will still see significant returns. 

It’s essential to take your time in this phase of the segmentation process to ensure you identify the right market segments, or you’ll risk missing out on some lucrative avenues for growth.

#5 Embedding the segmentation in your organization

When people try to anticipate the difficulties in running a segmentation, the research approach is often the first to come to mind. But the real challenge for many organizations is in embedding the segmentation. This is crucial if the segmentation is to drive change and growth for the business.

A segmentation is only as powerful as its internal champions. Fail to get stakeholders on board in the beginning, and you’ll have a tough job getting people to harness the segmentation to inform strategic decisions and realize the resulting benefits. 

We recommend taking an active approach to stakeholder management, making this a crucial element of the study’s design. Start with stakeholder interviews to secure buy-in to the project, then keep these people involved throughout the process. 

Toward the end of the project, visual outputs can bring segments to life and keep them front of mind when stakeholders are making decisions. 

Workshops can also be a valuable tool for taking the segmentation and using this to inform your strategy. 

Market segmentation is a powerful tool for businesses. It allows you to improve your product range, tailor your marketing, and increase your chances of connecting with customers and growing your brand.

Although the process can be challenging, it’s well worth taking the time to anticipate the potential barriers and work around them. At Kadence, we help companies of all kinds with market segmentation, mitigating the challenges while boosting their chances of success. Contact us to find out more about how we can help you do the same.


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 exploreBarriers 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 behavior 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 behaviors – 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 has a 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.

Cars at night, China

Learn from others – analyzing 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). Analyzing 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.

Shopping mall in 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 behavioral 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. 

Market research is hugely valuable to any organization. But understanding how consumers and decision-makers think and behave is rarely more important than when you’re trying to understand non-native markets. International business is big business – but it’s also a big investment. There are a host of issues to consider when you’re conducting international market research (for more, read our article on the topic). But getting the language right is perhaps the most obvious hurdle.

So how is international market research affected by language differences?

Language is defined as a system of communication used by a community or country. In some countries, there are many different languages in use. For example; Indonesia is second in the world with 710 different living languages used within the country. To make languages even more complicated, there are also dialects, regionalized versions of a language spoken within a region.

Understanding the common language used, including colloquialisms and dialects, can make research finding more accurate and profound. It lessens the likelihood of misunderstanding what the research is trying to convey and learn. It also minimizes “survey abandonment”, when a survey participant reads a survey that does not translate locally they may consider the survey flawed, or worse unprofessional, and decline to participate.

Imagine you’re running a brand tracker to understand how your organization is perceived across the world. You’ll need to localize the research in dozens of markets and yet still be able to draw broad, universal conclusions. For this, you’ll need to translate the survey into many different languages, while maintaining consistency of meaning and controlling for different emotive weights in the various dialects. Fail to do this, and the results you’ll get back could be misleading.

Even in countries where the language commonly spoken is English, you may need to create surveys into American English, British English, Canadian English and Australian English.

Why language matters

It’s not just language, of course. According to research from Columbia Business School, there are: “important cross-cultural differences in the processing, evaluation, and judgment of brand and product information. Much of this work suggests that cultural differences stem from pervasive socio-cultural … factors. For example, a good deal of research demonstrates that people have broad, culture-specific cognitive dispositions … which can guide consumer behaviour.”

But the same paper also stresses that language is a huge factor: “in recent work conducted in a consumer behaviour marketing context, we have found that structural aspects of a language can in fact critically affect one of the most basic aspects of consumer behaviour – categorization of products. Grammar, phonology and semantics are fundamental building blocks to a linguistic system and should therefore have an impact on consumer behaviour.”

It’s not just what you say, then – but also how you say it, and to whom. All of which adds up to language, localization, translation and interpretation as crucial building blocks of any international research project. Getting it wrong can be disastrous …

When language goes wrong

Many brands have learned the dangers of ignoring local idioms when they move into new markets. When Coca Cola first entered the Chinese market signs for ‘ko-ka-ko-la’ (the closest phonetic translation) were understood by locals as ‘bite the wax tadpole’ or ‘female horse fastened with wax’ depending on the tone.

This real-life example highlights important language considerations, both in terms of asking the right questions and understanding the meaning of the answers when you’re working abroad.

Speaking their language

But hang on a second: isn’t all this slightly moot in the age of instant machine translation? Google Translate can handle dozens of languages, and even Microsoft Word now has a built-in translation function. While machine translation is improving in quality, it lacks subtlety, it struggles with idioms, and it misses the emotional salience that’s important to both qualitative and even quantitative research.

That’s even more important now that AI-type systems are being deployed to pull out topics, themes and even sentiments from research results. With systems like these, the meaning of local dialect or cultural implications could be missed. From a semiotic perspective, then, there are huge challenges with using AI for translation and analysis.

Another option could be to hire a language graduate to translate your surveys and responses. It’s true this is a step-up from the automated approach. But even if you can find a translator you trust, ensuring they understand the subtleties of local dialects and cultural nuances (see below) and the technical aspect of market research language is much harder. That’s where market research agencies like Kadence – with international offices across the globe and native speakers in-house – come in handy. Having team members who instinctively understand the need to localize language and know how to do it is a major plus. After all, language and meaning evolve even over short time spans so keeping up to date with trends and sayings is massively valuable. In Germany, for instance, 1200 new words and counting have come into being over the course of the pandemic.

The devil in the detail

The reason why all this is important is that just as culture varies widely between and within international markets, language has local subtleties. Even within English, there are layers of meaning that illustrate this point. Take the word ‘love’. He loves popping down to the store with his buddies on Saturday afternoon. She loves it when Leeds United score. They love their mom. She makes love to her sweetheart. They bask in God’s love. These are all very nuanced – and to a competent English speaker, their varied meanings are obvious.

Then lots of countries have multiple languages – China, Malaysia, Belgium, Switzerland… there’s a very long list of places with minority language groups that a research project approached in the wrong way could marginalize. (Wikipedia has your back.)

Even when the language is clear, the nuances might not be. In Canada, for example, you need translators who know Quebecois, not just French. If you’re running field research in Mexico, you could stick to Spanish; try to ensure the Spanish translation is appropriately localized for Mexican idioms, or even think about the indigenous languages that are still spoken by a minority of the population.

In the Philippines, Filipino and English are designated official languages. But Spanish is commonly spoken (a legacy of its own colonial role), as well as Tagalog, Minna and even Arabic.

That poses interesting questions about how your sample might be affected by language choice. Remember: you might only be interested in affluent consumers in a given market, say, and that means choosing the dominant language is no problem. But for a genuine look across a country – regionally and socially – a different approach might be needed.

Tone and culture – how these differences can affect international market research

Then tone has to be calibrated, too. Understanding why emotions are triggered in different cultures or regions is really important. In eastern Germany, for example, the long history of the Stasi secret police means that even though the country reunified 30 years ago, suspicion about intrusive questions lingers. That means a deftness in your translations will be important.

In France, questions about sexuality or religion are usually considered unacceptable unless you carefully rephrase the survey to yield the information you need. It’s true even in English: what’s the difference between ‘a hobby’, ‘a pastime’ and a ‘personal skill’? How might asking about those different categories affect the kind of responses you’d get?

Cultural salience is also a stumbling block. Someone in a focus group might quote a nursery rhyme to evoke a particular emotion or assumption. A native might pick up a lot of meaning; a foreign translator might understand the context, but a machine translation is just going to give a verbatim that lacks any appropriate meaning.

Practical considerations when it comes to language differences in international market research

When it comes to qualitative research, a lot of the nuance you need comes from non-verbal cues, and those are much harder to evaluate. Here, it’s not even a question of your translation services, you need ‘boots on the ground’.

From a quant perspective, there are practical considerations around research-specific translations. Some text will appear much longer when translated. For example:

ا هي المدة منذ زيارتك الأخيرة للطبيب؟

自您上次看医生以来有多长时间？

Wie lange ist Ihr letzter Arztbesuch her?

How long since your last visit to the doctor?

Berapa lama sejak kunjungan terakhir Anda ke dokter?

Gaano katagal mula noong huli mong pagbisita sa doktor?

¿Cuánto tiempo ha pasado desde su última visita al médico?

Combien de temps depuis votre dernière visite chez le médecin?

நீங்கள் கடைசியாக மருத்துவரிடம் சென்றதிலிருந்து எவ்வளவு காலம்?

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.

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Beyond language – thinking about local context in international market research

We’re always mindful that when a global brand puts forward a research hypothesis, not only do we need to translate the language, but we need to be able to contextualize that hypothesis for individual markets. Equally, you also have to be able to take local outputs and fit them into a balanced global interpretation. A lot of that depends on the purpose of the research. Are we looking to assess uniform global products? Work out which markets to target? Tailor products or positioning for a local audience? That will shape how we make insights actionable for a brand.

This is where brands and their research agencies need deeper levels of understanding. Exposure to local culture, language, attitudes and even research norms make a big difference to the value a project can deliver.

Ultimately, research projects need to be localized, not just translated. Miles in the US and UK; kilometres mostly everywhere else. That applies in a host of areas, not just weight and measures. Most people outside America are familiar with the frustrations of ‘US Letter’ being the default paper size in many software products! Ask a French sample how many pounds they would like to lose on their next diet, and you might get some confused responses.

Aiming for transcreation

With so many factors on top of the raw translation, many brands choose to ‘transcreate’ their research projects for new counties, not just translate them.

What is transcreation in translation?

Transcreation is “the process of adapting a message from one language to another while maintaining its intent, style, tone, and context. A successfully transcreated message evokes the same emotions and carries the same implications in the target language as it does in the source language.” (Thanks again, Wikipedia.) This makes it the go-to approach for the many research projects that seek to reveal consumer attitudes or emotions to particular brands, products or categories.

In research terms, it means identifying the purposes of the research – looking at the brief and how the insights will be used within the organization – and asking how best those requirements can be met within different countries or regions.

Clearly, many of the outputs may need to be standardized. But if the local research team understands the brief and the outputs, if they can parse the emotional intent of the research, they can recreate the desired level of investigation and effectiveness in another language. That might mean changing the actual content well beyond simply translating.

But it does also mean that the intent of the research project is translated, not just the words of a survey. Ultimately, marketers will get more value from their international research if they work with an agency that can deliver against the broad brief and desired outputs from a project using people with a deep understanding of different markets.

Looking for support with international market research?

At Kadence, we have offices in 10 countries across the world. We’re proud of the diversity within our offices too – with project teams spanning colleagues from Sweden to Taiwan. To understand how we can help you navigate the challenges of international marketing research, take a look at our international market research capabilities or get in touch to discuss a project.

Whether it’s a completely 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 and mitigate, and hurdles to overcome. No business will manage to avoid every potential pitfall, so some degree of complication has to be expected. 

Businesses that can minimize these risks and challenges can reap serious rewards. In this article, we’ll take a look at 5 of the biggest risks and barriers that 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 there’s always the possibility for problems.

We can break down the risks of market entry into 3 main categories — internal, external, and legal. Let’s start with internal risks.

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. When you enter a new market, however, those drawbacks can become painfully obvious.

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. Make sure your goals are not just clearly established, but also communicated to everyone on the team.
  • Sudden staff changes. When a new member joins the team to replace someone else, it’s crucial they have all the information and direction necessary. Failing to do this can result in communication failures and major setbacks when entering your new market.
  • Lack of coordination. When working in a new market — especially one located far away from your home market — working together effectively is critical. It’s essential that your team members are on the same wavelength, up-to-date with current processes, and in regular, clear communication with each other and leadership.

Human error

Human error is one of those risks that we can’t really control. Mistakes happen, in business as well as life, and while we can’t predict them very accurately, we can say for certain 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 be the end of the world, but a series of minor errors can add up.

That could involve something like failing to convert currency accurately, using the wrong type of 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, problems with transport and delivery, and other challenges related to logistics and infrastructure can be significant roadblocks for businesses when entering a new market.

These kinds of hurdles are especially relevant when expanding into developing countries and regions. Here, infrastructure and technology is 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 are sometimes characterized by more manual processes, a greater need to work closely with local people on the ground, 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 big risk for market entry involves technology failing to get the job done effectively in a new market.

One example is the Industrial Internet of Things devices, which can be powerful assets for businesses when it comes to monitoring conditions and optimizing processes like manufacturing. However, if your devices or networks fail, it could set your plans back significantly.

If you’re looking to enter a developing country, it’s worth bearing in mind that technological infrastructure can be very different to 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 less issues with moving away  from legacy systems.  

Cash flow problems

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

External risks for market entry

As well as risks that come from within your organization, businesses also have to contend with a plethora of external risk factors. 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 example here is Europe’s GDPR law which requires anyone doing business with European customers, or any business 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 not familiar with the landscape. 

The cost of failing to keep up with regulations can be high — the maximum fine for GDPR violations is either €20 million or 4% of your annual global turnover. 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 in stable regions businesses can be fairly confident that radical changes won’t disrupt their market entry efforts.

However, in less stable parts of the world, all bets are off. Revolutions, wars, and sudden and significant new legal changes are just some of the political risks that you have to 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.

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

Major non-violent social movements and trends can also impact your business. If you fail to show solidarity or are perceived as being insensitive to a certain public sentiment, this could cause reputational damage that you may never recover from.

Cultural differences

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

There will be different customs and cultural nuances to be aware of. This will impact how your products and services will be received. It’s easy to get excited about new market entry 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. 

You’ll also need to think about how culture will impact the way your marketing  will be received by your new customers. A commercial that is beloved in Western cultures might be perceived as grossly insensitive in more conservative cultures.

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 major source of risk when establishing a presence in certain parts of the world.

Hurricanes, earthquakes, floods, droughts, and many other disasters can quickly put a stop to any market entry effort. They can destroy property, interrupt shipping, and close down entire economies in a matter of 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 a number of external risks around 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 take into account when entering a new market, and this type of risk encompasses both internal and external activities.

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

Among the legal risks to consider are lawsuits, patent rights, and data privacy regulations. To make sure you stay on the right side of the law it’s essential to work with local lawyers in your target market. A major legal setback like a big lawsuit could end your market entry campaign, so make sure you’re staying on the right side of the law.

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Barriers

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

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

Costs

Entering a new market is not a cheap 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 an older domestic demographic with your product is much more financially workable than trying to establish 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 any other kind of alternative. This is something you might have to do 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 already 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 here encompass things like 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 a wide range of costs.

It’s important to clearly 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 in order to make your voice heard and your product known in your new market. You need to immediately start connecting with your target customers across a range of channels and establish your brand as an option.

This comes with a range of challenges. We already covered cost 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? If there isn’t an existing demand for what you’re offering, your marketing campaign is going to be an uphill struggle. 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, and it can be hard 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 harder than simply attracting a new customer to your brand. You need to stand out, offer something extra, and clearly communicate this. 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, it might not be a good idea to invest heavily in influencer marketing. 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. This is one area where it definitely pays to work with people on the ground who understand the culture intimately.

Marketing is always tough to get right, and this 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 you can 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 huge amount of risks and challenges. No business in the world can escape this, not even those with a global presence. 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. But if 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 simply get in touch today.

How do you enter a new potential market?

Expanding your business to new markets allows you to reach potentially vast numbers of new customers and grow your revenue massively. However, the process can be difficult 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 when expanding your company, the differences between domestic and international markets, and some strategies you can use.

Why move to a new market?

Now, let’s delve into the reasons why entering a new market is a strategic move worth considering. Although it can be demanding and entail significant expenses, the following factors make it a worthwhile endeavor:

  1. Expanding customer base and boosting revenue: The primary motivation behind entering new markets is to expand your customer reach and increase profitability. By accessing untapped customer segments, you can sell more products or services and achieve higher revenue streams.
  2. Exhausting growth opportunities in the domestic market: If your business has reached its maximum revenue potential in the local market, exploring new markets becomes imperative for sustained growth. Expanding into new territories allows you to tap into fresh customer segments and unlock additional sources of revenue.
  3. Diversifying business and reducing risk: When you venture into multiple markets, you decrease the risk associated with relying solely on one market. By diversifying your operations across different markets, you can mitigate the impact of market fluctuations, economic downturns, or unforeseen circumstances that may adversely affect one market but not others.
  4. Leveraging competitive advantages: Entering new markets provides an opportunity to capitalize on your competitive advantages. These advantages can include unique product features, technological expertise, brand recognition, or operational efficiencies that give you an edge over competitors. Expanding into new markets allows you to showcase and leverage these strengths to attract customers and gain market share.
  5. Accessing new resources and talent: Expanding into new markets can grant you access to valuable resources, such as raw materials, production facilities, or distribution networks that may not be readily available in your current market. Additionally, entering new markets may enable you to tap into a diverse pool of talent, fostering innovation and driving business growth.

What are the signs that it might be time for your brand to enter a new market?

Timing is everything when it comes to expanding your brand’s reach into a new market. But how do you know if the time is right to expand? The list below is just some signs that your brand might be ready for this move:

  1. Strong demand: The brand has received positive feedback from customers in other markets and has a solid reputation.
  2. Market saturation: The brand has reached its maximum potential in its current market and is looking for new growth opportunities.
  3. Positive market trends: The market you are considering is experiencing growth and presents a favorable economic environment for the brand.
  4. Competitive advantage: The brand has a unique selling proposition or advantage over competitors in this market.
  5. Resource availability: The brand has the financial and human resources needed to enter and succeed in the new market.
  6. Market fit: The brand’s products and services align well with the needs and preferences of the target audience in this market.
  7. Appropriate market entry strategy: The brand has a clear plan for entering the market, including a tailored marketing strategy and an established network of partners and suppliers.

What are the different frameworks for entering a new market?

  1. Market development: This involves expanding the brand’s presence in existing markets by offering new products or services. Pros include leveraging existing customer relationships and brand recognition and being less risky than entering completely new markets. Cons include potentially limited growth potential in existing markets and increased competition.
  2. Market penetration: This involves increasing the brand’s market share in existing markets through promotions, advertising, and other marketing efforts. Pros include leveraging existing infrastructure and relationships and being relatively low risk. Cons include limited growth potential and increased competition.
  3. Market diversification: This involves entering markets with existing products or services or developing new products to meet the demands of the new market. Pros include reducing dependence on a single market and product line and increasing growth potential. Cons include increased risk and the need for significant investment in product development and market research.
  4. Product development: This involves introducing new products into existing markets to replace existing products or meet new customer demands. Pros include the potential for increased sales and revenue and the ability to remain competitive in existing markets. Cons include the need for significant investment in product development and the potential for failure if the new product does not meet customer demands.
  5. Geographic expansion: This involves expanding the brand’s presence into new geographic regions through exports or new operations in the target market. Pros include access to new customers, increased market share, and the ability to diversify revenue streams. Cons include increased cultural and regulatory challenges and the need for significant investment in infrastructure and relationships.
  6. Mergers and acquisitions: This involves acquiring or merging with another brand or company to gain a foothold in the new market. Pros include the ability to enter quickly and access to established customer relationships and market share. Cons include potential cultural and operational challenges and the risk of overpaying for the acquisition.
  7. Joint ventures: This involves partnering with a local company or brand to enter and succeed. Pros include access to local expertise and resources and reduced risk and investment compared to going it alone. Cons include potential disputes over control and revenue sharing and the need to find a compatible partner.

Each framework has its advantages and disadvantages, and the choice of which one to use depends on the brand’s goals, resources, and the characteristics of the market you are entering.

The choice of the framework will depend on various factors, such as:

  1. Company goals and resources: The brand’s overall goals and the resources it has available, such as financial resources and human capital, will play a significant role in determining the best framework.
  2. Market characteristics: The size, growth potential, competition, and regulatory environment of this market will also be important considerations.
  3. Industry factors: The state of the industry, including trends and technological advancements, will also play a role in determining the best framework.
  4. Company strengths and weaknesses: The brand’s strengths and weaknesses, including its existing infrastructure, brand recognition, and reputation, will be important factors in choosing the most appropriate framework.
  5. Customer preferences and needs: Understanding the target audience and their preferences and needs will help the brand determine which framework best suits them.

By considering these factors, a brand can determine which framework best suits its goals, resources, and the characteristics of the new market. It is also necessary to adjust the framework over time as the brand gains more experience and insight.

Questions to ask when considering entering a new market?

  1. Is there a strong demand for the brand’s products or services in the target market?
  2. Is the target market growing and presenting a favorable economic environment for the brand?
  3. Does the brand have a competitive advantage over other brands in the target market?
  4. Does the brand have the financial and human resources needed to enter and succeed in the desired market?
  5. Is the brand’s product or service offering a good fit for the target market and its customers’ needs and preferences?
  6. Does the brand have a clear and well-defined market entry strategy?
  7. Has the brand conducted thorough market research and competitor analysis in the target market?
  8. Does the brand have the necessary local partners and suppliers to succeed?
  9. Does the brand have the necessary infrastructure, including distribution and customer support, to support its entry into this market?
  10. Does the brand need support from key stakeholders, including employees, investors, and board members?

10 questions a brand should ask itself when considering the feasibility of entering a new market or “can I enter?”

  1. Are there any regulatory barriers to entry in the target market?
  2. What is the level of competition in the target market, and does the brand have a competitive advantage?
  3. What is the cost of entry into the target market, including setting up operations, marketing and advertising expenses, and distribution costs?
  4. Does the brand have the financial resources and funding to enter and succeed?
  5. Does the brand have the necessary human resources and expertise to support its entry into the new market?
  6. Does the brand have the necessary distribution channels and partnerships to reach customers in the target market effectively?
  7. Does the brand have the necessary marketing and advertising capabilities to promote its products or services in the target market effectively?
  8. Is the brand’s product or service a good fit for the target market and its customers’ needs and preferences?
  9. Does the brand clearly understand the target market’s cultural and language differences, and is it prepared to accommodate these differences?
  10. Does the brand clearly understand the target market’s economic and political landscape, and is it prepared to navigate any potential challenges?

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 probably be geographically closer, and things will likely be very similar to your existing markets.

International markets

This is where things become more complicated. You’ll have to factor in a number of differences compared to 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 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.

Steps to consider when entering a new market

  1. Conduct market research: Determine the size and growth potential of the market, as well as the cultural and legal factors that may affect the brand’s success.
  2. Identify target customers: Define the demographic and psychographic characteristics of the target audience.
  3. Analyze the competition: Evaluate the strengths and weaknesses of competitors in the market and determine how to differentiate the brand.
  4. Develop a tailored marketing strategy: Based on the research findings, create a marketing strategy specific to this market and addresses the target audience’s unique needs.
  5. Establish partnerships and networks: Build relationships with local suppliers, distributors, and other partners to help the brand enter and succeed.
  6. Plan for cultural adaptation: Take into account cultural differences in the market you are considering and make necessary adjustments to products, marketing materials, and other business practices.
  7. Prepare for any regulatory requirements: Research and understand any legal or regulatory requirements that may impact the brand’s operations.

Risks of entering new markets

There are also numerous risks involved in expanding, 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 drastically, could seriously affect your bottom line
  • Cultural risk, which essentially means the possibility of your new business venture running into challenges due to major 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 desired market and weighed the potential risks, you may decide it’s worth entering. If so, there are a number of different strategies you can employ, each with its own pros and cons.

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Different market entry strategies

Direct exporting

This is where you export your products into the new market directly. You’ll have to handle all the aspects of the process independently, from transport to payments to operations.

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 a number of advantages, such as:

  • Much lower risk. An experienced third party will take care of the exportation process, minimizing 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 full control over sales and marketing abroad

There are a number of 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.

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 take care of distributing the product to retailers.

Indirect exporting through management and trading companies

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

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

Indirect exporting through piggybacking

Piggybacking is where you allow another, non-competing company to sell your product. This can work extremely well if your target market already has an existing customer base and distribution infrastructure.

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

Producing products in the target market

Another option is to manufacture your products in 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 an unexplored market, check out our top four marketing strategies article).

Entering an unknown market can be extremely rewarding and can allow your business to move to the next level and achieve new growth. It’s important 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 helping businesses carry out research and create effective strategies for market entry. To find out more, learn about our market entry services or get in touch.