Export market selection:  science or art?

One of the most daunting steps when determining if you will export is the process of market selection. Market selection requires you to research the demand and suitability of your product or service for an overseas market. The reality in most business scenarios is that the best use of your time and limited financial resources will involve dedicating time to desktop research.

Desktop research involves both an analysis of the market and the product. This process incorporates consideration of facts (the science) and lateral thinking to identify appropriate opportunities (the art).

When researching country information you need to consider the obvious such as the cultural fit. If you intend to send bikinis to the Middle East, it is unlikely that you will achieve export success based on the science of market analysis. You then commence your product specific research – this can sometimes identify a market opportunity. Whilst bikinis are not acceptable attire for the beaches of the Middle East, an Australian company developed a range of active lifestyle wear for Islamic women incorporating a range of hood-shaped Hijab – this is where art is introduced to the decision of market selection.

Throughout the research process, you need to consider for each potential market:

• What is the culture and business etiquette?
• Is your product or service a logical fit?
• Is the market prohibitive to enter, either because of protective tariffs or being geographically expensive to access?
• What is the demographic? Is there potential for growth in your new market?
• What are the local regulatory requirements and import duties for your product?
• Who are your competitors and will you be price competitive?
• Can you afford to visit the market?

To verify your research, a visit to the selected market is recommended. Use your market visit to study potential local customers, networks, distribution and marketing channels, and start building relationships – appreciate the ‘local art’.

Grant Thornton has access to the latest trade statistics and market research. We can share information from credible sources and can provide access to the invaluable local knowledge from our colleagues in the Austrade overseas network. We can also arrange the identification of qualified contacts for you to meet while you are travelling overseas.

While market selection isn’t rocket science, it does take time to do thorough research, and a little art.

Author: Michael Pittendrigh, September 2009

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