Executive Staff and direct reports From:
Magazine How to Enter a New Market Once a business is established and thriving in its home market, it is often seen as the right time to branch out into a new market. There is every possibility that the company understands its existing market, its customer base and their requirements and knows how to meet these needs effectively.
If the company enjoys strong sales, has great brand awareness and the business is stable overall, it may be the right time to take the plunge. However, as with all new ventures, there are risks attached to this move and it is not a step to be taken lightly.
A new market will not be so comfortable and there will be new competitors and unknown threats. The key to success is a disciplined approach with the appropriate level of investment into a thorough market analysis.
Commit It is of foremost importance to clearly identify who you will be selling to. This may sound simple, but there is often an overly optimistic need to capture a larger share of a new market.
A smaller market will make it easier to assess customer requirements and ensure that a larger chunk of a smaller market is obtained rather than an insignificant part of a large share. It is also imperative to set a clear timeframe within which the desired target share is to be achieved and results of the move are to be assessed.
Identify Entry Points Once a clear market is identified, it is necessary to identify potential points of entry. To minimize initial investment and maximize future revenues it becomes vital to study key possible entrance points, weigh pros and cons of each and then make an informed decision.
The final choice should also ideally allow for future growth possibilities, both inside the new market as well as into adjoining ones. Any entrance point chosen should be assessed against a set of criteria, such as, does it allow access to an underserved market? Is there a strong need that can be fulfilled?
Are the key decision makers among the target audience accessible and do they have the funding needed to find the new solution attractive? Are there any existing competitors and is the new solution strong enough to counter their resources and knowledge of the market?
Define Market Entry Strategy All the activity thus far leads right into the roadmap for future steps — the strategy for entry into the market. The first step is to price your product.
It needs to strike a balance between affordability for the target audience and feasibility for the business. It also needs to take into consideration existing pricing strategies and how to place the new product within them.
Once the price points are defined, the new product or solution can now be positioned accordingly. How do you want to be perceived by the customer? With this target perception in hand, the communication strategy comes into play, where the target audiences as well as the methods to be used to reach them are identified and consolidated.
All levels of the target audience need to be considered carefully, including influencers, decision makers, media, end users among others.
Assemble Plan Any strategy needs to be followed up with a detailed action plan. This turns a high level plan into an on-ground implementation solution.
This should include details of all required marketing plans and campaigns as well as timelines for all these to be set into motion. Clearly defined milestones such as sales targets, market share etc need to be decided upon with all the key stakeholders.
All campaigns and targets need to be communicated to the relevant personnel and clear ownership needs to be assigned for each of these processes to ensure transparency in evaluations.
Processes also need to be defined and communicated for all activities such as what will be the sales cycle followed and how will leads be pursued and closed.
Research A well planned approach following the steps above should ensure that your risk is minimized. But to further strengthen and support the plan, some basic research can be carried out on a focus group.
Identifying a well-balanced cross section of the target audience and approaching them either in person or via an online survey can help provide some basic results that can provide data to make any changes before a full market entry is committed to.
Test Another risk mitigation strategy is to run a pilot project in the target market. This test needs to be carefully defined so as to ensure that it is big enough to give an accurate depiction of a large scale roll out effort but not so big as to suck in additional resources and commitment.
By reaching a few key milestones in the pilot study, any remaining issues can be ironed out before full deployment. Ramping Up You are now ready for a full scale roll out. Armed with a concrete strategy, a detailed plan of action and results of research and pilot phases, it is now time to grow and try to achieve more market share.
The goal should be to target increased market share and not just increased revenues. A focus on market share will mean increasing both marketing and sales efforts simultaneously. As you sell more, the easier it will to sell because there will be more visibility of your brand in the market and general buzz about the new player.
Exit Strategy The last but extremely important step of this process is to plan for both success and failure. What will you do if you achieve phenomenal success?Porter's Five Forces A MODEL FOR INDUSTRY ANALYSIS.
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