How international markets differ and why you need to adapt for each one
Exporting to an international market is different to selling in your domestic market. Every market is different and there is no such thing as an average export – as we explain here. You need to appreciate the differences between each market you sell to and have a market-entry plan that is specific to each one you sell to.
You should also look beyond geography at other forms of market segmentation – including age, ethnicity, urban / rural, gender, socio-economic and various lifestyle categories, among other things.
Here are some of the key differentials you need to bear in mind when selecting and selling into new markets.
The English language may seem universal but it isn’t. You should always research the primary language spoken by the majority of customers in each market. Research shows that over 70% of consumers are more likely to buy a product or service when they are being offered or sold it in their own language – so this is a really important market differential and selling point.
You also need to scratch beyond the surface with your research. In Latin America, for instance, Spanish is of course widely spoken, but some further research which show that Portuguese is the main language in Brazil – the biggest market in the region – while French, Dutch and indigenous languages are also spoken in other Latin American markets.
Language skills also differ between generations – for instance, in Europe, the younger generation tend to speak more English than older people. As with anything to do with international trade, research is key.
Another key factor to consider is the business culture of the market you’re selling to, as this will be a significant factor in whether there is an appetite for your product and should also play a key role in shaping your marketing approach. Some messages that work in your domestic market will not work overseas.
While in the UK an anti-hierarchy punk aesthetic has a longstanding heritage, in China this may not work so well. Further, while large cities tend to have more internationalised cultures, if you’re selling something to a rural audience in a remote country, the culture will be more removed from what you’re used to in the UK.
Understanding business culture is also important when meeting partners in your prospective markets, because if you don’t respect their traditions and etiquette, you’ll likely lose out on their business. Things to look out for in this respect include:
- Respect for hierarchy
- Different approaches to punctuality
- Dress codes
- Working hours and the weekend
- Business cards and greetings
- Personal space and tactility
- The length of time it takes for relationships to form
There are other factors of course, but the biggest tip we can give for understanding business culture is again to do your research. Listen to webinars, contact country-specific chambers of commerce for advice and read our ‘Doing Business in’ country guides to gather information.
Read more about the importance of taking a global mindset in international trade.
Following on from the two previous points, you may need to ensure you have an international approach to your online marketing as well. This includes looking at website translation, adopting an international domain and SEO strategy and finding out which ecommerce and social media platforms are popular in each market, among other factors.
There are more guides to consider for your international marketing strategy on our ‘Reaching Customers’ page.
Competition in the market
One of the first things you should research when selecting a market is what the local competition will be, including whether your competitors in markets you already operate in have a presence there.
From this you can discern things like what their online strategies are, what messaging they’re using, their pricing strategies, and how they’ve adapted their own offering for consumers in that market.
All of this is great knowledge which you can factor into your own strategy, either replicating elements which seem important for that market or identifying where you can strike your own competitive advantage.
You may be required to adhere to different standards and local regulations when selling into a new market. This could affect you in different ways. You may need to modify your product to meet local standards, alter your packaging or labelling to meet consumer standards, or attain licenses to send your goods there.
Certain sectors are more likely to be affected in this way, including food and drink, pharmaceutical and drug products, cosmetic products, toys, electrical devices and textile products.
For more information, read our article on finding out which local regulations affect your product.
Tariff codes, duty, taxation
Another key differential between markets is the taxation and import duties that each will charge for certain goods upon entry.
The first thing you’ll need to do is understand what your tariff code is, as this will help you to track what import duty needs to be paid by the importer, and other factors including anti-dumping duty, quotas, inspections and licences.
Different markets will also have different rules relating to VAT. We have two guides on VAT relating to goods and services exports, which are essential reading for new exporters.
When exporting goods to different markets, you could be liable to customs checks, and you will need to ensure you have completed the necessary documentation to ensure a smooth passage for the goods into the country. A failure to do this could result in delays, fines and reputational damage. Different markets may require different documentation to be completed.
If you haven’t already, it’s important to contact a customs broker or freight forwarder for support with this, or you can upskill your staff to be able to complete the documentation internally through online and offline training courses provided by the Institute of Export & International Trade.
The Institute can also support you through its Technical Helpline, which is accessible for a one-off fee or is free for members.
Payment methods and times
Finally, the most important part of international trade is getting paid. Different customers and partners will look to do this in different ways, and payment times can differ in each country, so you need to establish at the outset some expectations and timelines for your international payments.
We recommend using a clear set of international terms and conditions to set things out clearly from the off – something the Institute can again help with – and also suggest you read this Open to Export article in international payment methods.