RESEARCHING THE MARKET

International Market Research

International market research is the gathering of information necessary to make sound international marketing decisions. International market research reveals the political, economic and cultural factors which affect operating in a foreign market. Effective market research facilitates the market selection process and enhances your chances for a successful export venture.

Developing Your Market Research Plan

The objective of this module is to provide you with a framework which will enable you to conduct your market research. It describes various types of research data, suggests a number of options for collecting such data, and offers tips and techniques. There is access to numerous links to selected Internet sites from which you can collect valuable information on your target markets. By researching your target market, you will be in a position to more clearly understand your customer’s requirements, which in turn will help you to build your international marketing plan. The Market Research Plan can be used on an on-going basis as you continue to expand into new markets.

The market research process includes the following elements:

• objectives of the market research
  
• process for gathering the information
  
• collection of the necessary information
  
• data analysis and interpretation
  
• decision-making, based on the information obtained
  

Types of Market Research

There are two main types of market research: primary and secondary.

Primary research consists of the collection of market information and intelligence through direct contact with potential customers or other information sources, and normally takes the form of interviews, either in person or via telephone, focus groups or surveys. Primary research may be costly and time-consuming but, it enables you to collect very specific and detailed information.

Secondary research involves the use of data previously collected by other sources. Typical sources of such information include periodicals, studies, books, surveys and statistical analyses, many of which are available via the Internet.

Conducting a Research Interview

The following tips may be of assistance during research interviews:

Set objectives:

• Collect information that would increase return on investment, or help reduce risks.
  
• Identify some must-know questions in case time is limited.
  
• Ask questions of more than one source to increase reliability.

Revise objectives:

• Given that objectives of an interview can change as you progress, analyze and resize questions as required.
  
• Probe further in subsequent interviews.

Ask simple, open-ended questions and probe responses:
Stay away from asking questions that may be answered by a simple yes or no. Ask questions such as the following:

• "What type of services are contracted out in your industry?"
  
• "What particular information would be required?"
  
• "What barriers/irritants do you face?"

Help the respondent to be specific:

• Help respondents quantify answers if they can.
  
• Try to avoid "a lot" or "big" answers, as they will be of little value in assessing opportunities.

Make it interesting:

• Most people like to talk about their business or their country, so give them an opportunity to open up, while guiding them to keep to your agenda.

Keep it short and simple:

• Take only as much of the respondents’ time as you absolutely need.
  
• Cover the key points quickly and encourage the respondents to keep talking if they want.

Start with the least important interview:

• Your interviewing skills improve with experience.
  
• Save the most important interviews for when you have polished your approach.

Keep track:

• Take good notes or record the interview if the respondent agrees.
  
• Half the value of an interview is lost if notes or content are not reviewed within the week.

Market Information

Sources of Market Information

• Trade Data Online

• International Trade Statistics Data

Market Information by Sector

• Country/Market Information

Market Information by Region and Countries

• Country Profiles

• Country Reviews & Market Research

• International Financial Institutions (IFI)
  
  • Asian Development Bank
    
  • European Bank for Reconstruction and Development
    
  • Inter-American Development Bank
    
  • International Finance Corporation
    
  • World Bank
  
  

Prospecting for Opportunities

Demand Indicators Based on Market Trends

While you are conducting market research, be on the lookout for some of the following indicators which may reveal potential opportunities for your firm:

1. Announcements that create business opportunities for service firms:

• new economic initiatives
  
• major municipal/state projects to be put out to bid
  
• winning of large contracts by a local firm (who may need subcontractors)
  
• athletic or cultural events that will need support services
  
• upcoming bond elections
  

2. Trends that create business opportunities for service firms:

• environmental clean-up initiatives
  
• health care management & cost containment
  
• workforce literacy and re-skilling
  
• corporate or government downsizing, with associated contracting out
  

3. Characteristics of the market:

• Media hub
  
• Major industry concentration (e.g., presence of the largest insurance firms)

Demand Indicators for Selected Service Sectors

Architectural Services

• new regulations regarding environmental requirements for buildings
• indications that existing infrastructure is wearing out
• plans for new infrastructure (signaled through bond elections, bills tabled in parliament, etc.) such as airports, rail, power
• bidding opportunities for a major international event (e.g. Olympics)
• pressure towards more leisure activities
• pressure towards independent living for physically challenged
• pressure towards independent living for seniors
• natural disasters that require rebuilding
• low vacancy rates
• increase in the level of construction activity
• increase in the level of renovation activity
• level of activity of foreign contractors/suppliers

Commercial Education and Training

• high illiteracy rate in work force
• increase in labour costs
• increased pace of adopting new technologies
• high unemployment rate among youth (need better transition from school)
• government-led labour force initiatives (e.g. new accreditation requirements)
• new social policies on literacy development, or lifelong learning
• focus on improving productivity
• shift to a demand economy
• new curricula being introduced in schools
• increase in quality standards (e.g. ISO 9000 requirements, Total Quality Management TQM)
• government initiative to upgrade public education (need for "train the trainer" expertise)
• shift of routine tasks to automation (need to reskill)
• rising unemployment in traditional industries (need to reskill)

Environmental Services

• new environmental legislation imposed and enforced by governments (companies, factories, etc. have to get their systems up to standards)
• large congresses like the Rio Summit
• introduction of new technology
• "mega" projects where environmental impact needs to be addressed
• presence of strong environmental advocacy groups
• natural disasters, requiring environmental clean-up
• closing of military bases and/or weapons depositories

Geomatics

• new technologies (e.g. RadarSat)
• increase in demand for forestry or mining products
• introduction of conservation measures
• new environmental laws, regulations, or policies
• major transportation or utility projects
• technology modernization initiatives (e.g. mapping, remote sensing)
• market characteristics: shift to market economy (land rights need to be established)
• provision of emergency services in rural/remote communities

Health Care Management Services

• government announcements of restructuring and/or cutbacks in public health care
• privatization of health care systems
• increase in demand for specialized health care facilities (e.g. nursing homes)
• budget pressures for cost containment

Interior Design

• new regulations regarding environmental requirements for buildings
• bidding opportunities for a major international event (e.g. Olympics)
• IFI project announcements
• pressure towards more leisure activities
• pressure towards independent living for physically challenged
• pressure towards independent living for seniors
• natural disasters that require rebuilding
• increase in the level of construction activity
• increase in the level of renovation activity
• level of activity of foreign contractors/suppliers

Information Technology/Computer Services

• increase in expenditures on IT in a given industry
• pressure for increased productivity (and therefore use of IT)
• pressure to reduce costs (and therefore use of IT)
• increased public use of on-line service delivery (e.g. Internet, e-mail)
• key vertical markets to observe: banking and finance, business services, education and training, health care, insurance, wholesale & retail trade, government, utilities

Management Consulting

• trends toward deregulation, privatization, down/right-sizing
• reform of the tax structure (how to finance, strategic planning)
• shift from owner-managers to professional managers
• pressures for increased productivity
• pressures for private sector changes in competitive positioning
• IFI announcements
• development of the consulting profession itself

Selecting a Target Market

As you complete your preliminary assessment of potential markets, you will need to narrow your search to the most promising markets. A more detailed study of each of these markets will assist you in preparing for the next steps in the export cycle, specifically that of selecting your target market and eventually creating a marketing plan.

Market Types

Market Type 1 - Fast-paced, competitive economies.

• Efficient service delivery, excellent quality assurance and a media profile are critical to success.
• If you are not fluent in the language, you can work through a local partner to handle linguistic and cultural differences/challenges.

Market Type 2 - Relationship-based, relatively affluent economies.

• Interpersonal communication skills, cultural sensitivity and linguistic fluency are critical for developing a business relationship with a local partner.
• Relationships typically need to be developed first at a senior staff level.

Market Type 3 - IFI-funded economies.

• Developing or changing economies.
• Market development takes time.
• Flexibility and being politically astute are major requirements.
• It is helpful to have experience working with a third party funding organizations (e.g. CIDA or one of the international financial institutions such as the World Bank).

Market Profiling Template

The following table may be used to summarize your findings and to compare three selected potential target markets.