Understanding the Target Market.
Factors influencing the Export Plan.
Analyzing Culture and Economy.
By now, you are ready with the list of countries where your product has the best chance to be exported. We suggest that you have at least five target markets before moving ahead. Once you are done with the selection of your target markets and you are aware of your competition, it is time to go deeper and understand the trends in your target markets.
When we go deeper to understand a particular market, we see that every country is different in terms of demographics, culture, geography, and economy. These factors influence marketing and promotion in every country and, as a result, the leads and their quality. So let's understand this one by one. The first and foremost factor is demographics. It includes the population of the country which affects the overall demand for goods and services. You would prefer to know about the segment of the population which is likely to buy your product. For example, if you want to sell stylish watches then your target will be youngsters and thus, the higher the proportion of youngsters in the population, the better will be the target market. So, demographics will have an impact on your promotional activities.
The next important feature to consider is the culture. For instance, you will not be able to export wheat in Japan easily where people prefer seafood. Similarly, geography also plays an important role. If you are willing to export blankets, then Russia is a more appropriate target market. Geography is also vital for the cost analysis because if the distance between your country and target country is very long then you might have to pay higher transportation charges. And the last and most important factor that influences your leads is the economy.
There are chances of getting more leads from economies of scale like China, the USA, etc. The question which you should ask yourself is whether your product can be sold in bulk or it needs to be customized specifically? A customized product like luxury items gets more leads from economically developed countries. Therefore, the economy also affects leads.
Now once you are done with analyzing your target markets, you would like to look for risks associated with trading in a particular target market. Apart from risks of political instability, there are other risks associated with foreign trade like insolvency, rejection of goods at the port, an increase in tariffs, etc. These risks vary in different countries. Now, the question arises whether your target country is stable? Are the quality restrictions too stringent? Are our tariff rates very high? Does the target country has mechanism to prevent insolvency and clear off dues? All the answers to these questions will help you in having a better understanding of the countries in which you are willing to export. At Ximpex, our trade consultants are there to answer your questions.
Once you have all the information, all you have to do is start looking for the buyers in your target markets. Keep all the challenges and risks in your mind and negotiate with opportunities on the same. Ximpex helps you in deeper understanding of your target markets and addressing the risks and challenges involved.
Author: Sachin Yadav Co-Author: Lisa Goel