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Many at times entrepreneurs underestimate how hard it is to break into a new market. There is actually quite a lot that goes into getting it right, as each market has its own unique set of challenges and peculiarities. Here is everything you need to know about the key activities involved during market expansion for achieving the desired success.
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4 entrepreneurs expanding to a new market crucial market expansion must activities when consider July 7, 2022 Many at times entrepreneurs underestimate how hard it is to break into a new market. There is actually quite a lot that goes into getting it right, as each market has its own unique set of challenges and peculiarities. Here is everything you need to know about the key activities involved during market expansion for achieving the desired success. Expanding of business to new markets is the primary goal for any entrepreneur. And why not as when executed successfully, market expansion provides increased sales, better customer reach, and brand building which in turn drives the valuable revenue growth. But, it is often seen that before taking this leap most of the entrepreneurs find themselves struggling and tangled with questions such as: How should we expand our markets? When should we expand? How to determine that expansion into new market will be a success or not? And, well we cannot say that they are wrong in having such apprehensions on their end. As after all expanding into a new market is an all-new territory, and so it can becomes a risky and a costly effort without the right insights and planning.
Consider eBay for example. They tried to expand into China but failed miserably as they relied too much on their strong brand name and not the offerings. But the good part was that when they tried again with a different approach, which was by partnering with a local Chinese company, they were able to achieve much more success. “The reasons for market expansion vary with the top-cited reason being capturing market share, followed by the desire to expand sales, diversifying investments, and acquiring of top talent.” - ‘Globalization Partners and CFO Research’ 4 crucial market expansion activities to consider before taking the leap Entrepreneurs need to understand and accept that market expansion is a learning process and there are many risks associated with it. And, so plenty of times it happens that everything will not go smoothly at the first go itself. To mitigate some of the risks associated with market expansion, we have identified four crucial activities that as an entrepreneur you should consider for achieving success in new market. 1.Assess the Market You need to first undertake an extensive market-product research as it will provide you with the understanding of whether or not your product is suitable for the new market. Often entrepreneurs are seen to move too quickly into expanding into a new market and do not take the time to first understand the dynamic and unique complexities of a particular market they are entering, resultantly ‘Fail’.
As Ryan Holmes rightly said, “if you form a strategy without research, your brand will barely float and at the speed industries move at today brands sink fast”. So, it is better to examine the new market from the point of view of conducting business and product-market fit, while also recognizing and quantifying any trends in the new arena. Pro Tip: Perform a thorough in-depth study to decide if the conditions of the new market you are looking for expansion are right to succeed. 2. Assess the Competition There are high chances that there is already going to be established competition with whom you will have to compete when you expand into a new marketplace. So, it is wise that you undertake competitor analysis. Start by identifying at least top three of your competitors & gather all the information you can about them especially focus on what they do well and what they don’t. Identify their vulnerabilities and strengths against your own, understand the needs and gaps that your competitors’ product/services are not able to meet. And, possibly you can come with and provide a better solution to your customers than them,
thereby enabling you to build a competitive advantage in market, while also enabling you to identify the trends to assess future market opportunities. Pro Tip: Get your competitive analysis done by an experienced market research consultancy firm than by your own in order to get the exact picture of where do you stand in comparison to your competitors. 3. Carry out Segmentation & Positioning The better you understand who your targeted audience is and why your customers will use your product, the more customer-led positioning you can come up with, thereby making your place in the new market more prominent. Once you have selected your target customers, it is time for you to priorities their needs, desires and wants and validate this with your product that you plan to bring to this new market. For example, consider there is a popular beauty brand that is into production and selling of hair oil products which are popular among people aged 28-35. Now, in an effort to capitalize on the brand’s popularity and loyalty with this demographic, they invest heavily in the production of a new line of hair care products such as shampoo, hoping that the existing target market will adopt it.
Pro Tip: Understand your targeted customers on an individual level and form customer cohorts based on shared traits, demographics, characteristics and requirements and. For this you need to evaluate market-specific data about industry, sub-market, and geography. 4. Choose Entry Option Once you are confident about your target market and customers, then you need to decide your mode of channel or method which basically means as to how you want to get your products or services to market and to the targeted customers. However, this is influenced by number of internal and external factors which includes of product offered, financials of the company, infrastructure, and government policies, to name a few. Depending upon your business, you can consider either one option or even can combine a number of options. Are you ready to expand your business? Knowing you want to expand your business into new markets is just the first step. But you need to contemplate on the overall impact of expanding your business. As Brian Cairns rightly said, “the first question you have to ask is, ‘If I’m going to expand, what makes the most logical sense for me from a cost standpoint, and from a profit standpoint and a revenue standpoint, as well?"
And, so before diving in, you need to plan well in terms of market, resources, research extensively coupled with understanding your targeted customers and routes to market, which will enable you to successfully expand your business through new market development. How do you or plan to assess your market expansion of your business? Share your thoughts by commenting below.
