Your company may find the following approach useful. It involves screening potential markets, assessing the targeted markets, and drawing conclusions.
Screen Potential Markets
Step 1.
Obtain export statistics that indicate product exports to various countries. Published export statistics provide a reliable indicator of where U.S. exports are currently being shipped. The U.S. Census Bureau provides these statistics in a published format. Trade statistics also can be obtained using the National Trade Data Bank (NTDB).Step 2.
Identify five to ten large and fast-growing markets for the firm's product. Look at them over the past three to five years. Has market growth been consistent year to year? Did import growth occur even during periods of economic recession? If not, did growth resume with economic recovery?Step 3.
Identify some smaller but fast-emerging markets that may provide ground-floor opportunities. If the market is just beginning to open up, there may be fewer competitors than in established markets. Growth rates should be substantially higher in these countries to qualify as up-and-coming markets, given the lower starting point.Step 4.
Target three to five of the most statistically promising markets for further assessment. Consult with a Department of Commerce Export Assistance Center (see www.doc.gov), business associates, freight forwarders, and others to further evaluate targeted markets.Assess Targeted Markets
Step 1.
Examine trends for company products as well as related products, that could influence demand. Calculate overall consumption of the product and the amount accounted for by imports. The National Trade Data Bank (NTDB)and the National Technical Information Service (NTIS) offer Industry Sector Analyses (ISAs), Country Commercial Guides (CCGs), and other reports that give economic backgrounds and market trends for each country. Demographic information (such as population and age) can be obtained from World Population (Census) and Statistical Yearbook (United Nations).Step 2.
Ascertain the sources of competition, including the extent of domestic industry production and the major foreign countries the firm is competing against in each targeted market by using ISAs and competitive assessments. This information is available from the NTDB and the NTIS. Look at each competitor's U.S. market share.Step 3.
Analyze factors affecting marketing and use of the product in each market, such as end-user sectors, channels of distribution, cultural idiosyncrasies, and business practices. Again, the ISAs and Customized Market Analyses (CMAs) offered by the Department of Commerce are useful.Step 4.
Identify any foreign barriers (tariff or nontariff) for the product being imported into the country (see Service Exports for an analysis of tariff and nontariff barriers). Identify any U.S. barriers (such as export controls) that affect exports to the country.Step 5.
Identify any U.S. or foreign government incentives that promote exporting of your particular product or service (see Service Exports).Draw Conclusions
After analyzing the data, the company may conclude that its marketing resources would be applied more effectively to a few countries. In general, if the company is new to exporting, then efforts should be directed to fewer than ten markets. Exporting to one or two countries will allow the company to focus its resources without jeopardizing its domestic sales efforts. The company's internal resources should determine its level of effort.
Back to Developing a Market Plan
More about Exporting:
Introduction
Developing an Export Plan
Developing a Market Plan
Methods of Market Research
A Step-by-Step Approach to Market Research
Sources of Market Research
Export Advice
Methods/Channels
Making Contacts
Technology Licensing /Joint Ventures
Preparing Your Product for Export
Service Exports
International Legal Considerations
Shipping Your Product
Pricing, Quotations, and Terms
Methods of Payment
Financing Export Transactions
Selling Overseas
After-sales Service
