How to do market research?

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market research

Lesley Batchelor OBE is an expert on international trade and a passionate champion of UK exporters. She is also the Director General of the Institute of Export, the professional membership body representing and supporting the interests of everyone involved in importing, exporting and international trade.

What is market research?

Confucius once said “if you don’t know where you’re going, any road is the right one” which, if given a positive spin, can apply when you’re wondering where to start in terms of researching your potential overseas market. The trick can often come down to beginning somewhere!

Market research can be time consuming but in the long term it can reduce exporting risks and help you to avoid costly mistakes. If you don’t research the culture, regulations, customer habits and payment methods that are typical to the market you’re selling to, among other things, you will struggle to sell your product or service there. This what market research is and why it’s important to do it.

If you want to read more about the advantages of doing it, I’d recommend reading this article on the importance of market research when exporting overseas.

What do I need to consider when researching a market

To increase the chances to succeed in an international market in the long term you may need to understand in greater depth:

  • Your customers’ expectations for the product or service
  • Buyer behaviour and decision making process
  • Optimum distribution channel(s)
  • Competitors’ brand awareness, preferences and loyalty
  • Existing customer satisfaction levels.

Types of market research

Secondary research or DESK research

Secondary research (sometimes called desk research) tends to be the first step in market research and can sometimes be perceived as ‘good enough’. But, as with all steps in the export journey, having a clear objective will make the exercise far more worth your while.

Secondary research tends to rely on published data and the quality of this can vary, depending which part of the world you’re trying to obtain information from. Remember, this data has been collected against a specific brief that you will not be aware of. Importantly, it may not have had your product or information in mind when developed so if fitness for purpose is not clear, use it as a guide only. In Europe, for example, the quality tends to be higher than in African and Asian markets where the information tends to be harder to collect.

Information can be sought from many different places and the cost of information varies depending on the sources. You might like to try:

  • National organisations providing support to the UK exporters: Chamber of Commerce, Department for International Trade (research services available), and the Institute of Export
  • Specialised industry organisations or associations
  • International company information providers such as Dun and Bradstreet. However, before purchasing such information understanding the collection and updating process of the information will determine the value of the data and the usability for your sales and marketing
  • Other private sources such as  banks, consultancy firms and specialised press
  • International organisations (see table):
International statistic organisation Embassies International Monetary Fund (IMF)
United Nations Commodity Trade Database WTO and/or OECD Statistics Portal Data from European Union International Trade in Goods and/or Services
European Union Exports and Imports (sub-collection of the National accounts
statistics)
Food and Agricultural Trade Data by FAO International market reports: Euro monitor (Industry report by country for the consumer market) or  IDC for Information Technology

 

There can be a few challenges when doing secondary research in an international market so it pays to be aware of the following:

  • Unavailable data: in many developing countries, quality secondary data is often unavailable.
  • Out of date data: some companies will provide country reports for different countries which look very similar as they are based on the same document but have been adapted for each country and can be out of date by the time they are edited and published.
  • Reliability of the data: before using quantitative data it is important to know about the data collection methodology, the purpose of the collection of the data, the consistency of the data collection and the company responsible for collecting the data. Government data can be ‘tampered with’ to show a more positive view of a country, companies providing ad hoc quantitative market data on your market segment will need to be clearly briefed to provide reliable data.
  • Different definitions: industry and product data classifications need to be clearly understood as some country or research companies have broader definitions which then make the data unusable.

These challenges, if ignored, can damage the credibility of your market research, leaving you unable to act on the results.

Primary research or FIELD research

Primary, or field research, is specific to your company’s needs. Rather than scouring through general information, this is research specifically tailored to you, where you can establish exact information about the marketing of your product in the chosen market.

Unless you know what you’re doing it’s important not to go it alone, however, and conduct research either jointly with an agent or distributor, or appoint an external agency.

Primary research can be a very time consuming and expensive exercise so it needs to be well scoped and planned based on agreed objectives. Based on the objectives and the depth or breadth of the information required, the research will seek quantitative (data with objective and measurable properties) or qualitative (data with subjective properties, not of a measurable value) data, sometimes both.

Things to bear in mind when designing a research survey in a new market

  • How similar is this culture to yours?
  • Don’t ask too many questions – make each one valuable
  • Cover the most sensitive areas (such as income or age) last

Having established what sort of questions you will ask, you then develop a framework from which to draw your sample.

  • If you’re talking to major players, how many? How many are there overall? Is this representative?
  • What is the size of the market? What would be a fair representation?
  • Can you use quota sampling?

Conclusion

Finding the right market to sell to is key to success in international trade. Taking the time to develop an action plan will produce clarity in your processes and keep you on the right road.

Knowing the way you’re going to approach a new market will help you prepare from the initial enquiry at a trade show to the launch of your product in a new international market. As Gary Player, the well known golfer, once said, “the harder I practise, the luckier I get!”

For further reading, I’d recommend reading more Open to Export articles on the things to consider and the best practices of market research, including our checklist of 5 things to research when selecting a market and our guide to how to budget for launching in a new market.