Market profiling considerations
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 11, 2021
Market profiling considerations
One strategy commonly used during the market research process is profiling, which can
help you narrow down the amount of potential markets using a comparison of consistent
aspects. Any factors you choose to evaluate can also be personally weighted according to
the priorities of your company, highlighting the adaptability of the profiling approach. When
profiling markets it is wise to consider aspects that can be compared uniformly across
multiple regions, with examples such as:
Development - This factor indicates the level of economic advancement in the
market, and the extent to which the market presents a mature infrastructure and client
base. This could also include the pace at which the market appears to be progressing
economically.
Political stability - This element refers to the degree of structure and predictability
of the current government within potential markets, and any major political themes that are
present.
Trade relations - The relationship between the foreign and domestic parties involved
in any potential situation of bilateral commerce is very important, considering long term
trading partners will likely offer more lenient shipping and transportation regulations than
countries that do not conduct business as frequently. Major imports and exports between
the two countries and existing tariffs should also be considered.
Economic conditions - Any major trends that are currently influencing the market’s
economy are worth recording, as well as the consistency and duration of these fluctuations.
Ideally you want to export to a nation with a robust economic situation and low financial
risks.
Business practices - Understanding the typical business customs that are followed in
a market will help you adapt your business model to meet foreign standards. Features
included in this analysis could consist of local currency, typical business hours, regulations
placed on multinational firms, and common workplace relationships and structures.
Cultural norms - When conducting international business, it is imperative to
understand the ins and outs of the foreign culture, and to comprehend how differences
between the domestic and foreign cultures may require your company to make adjustments
in order to conduct business seamlessly. Examples of relevant cultural norms could include
conversational attributes, perception of outsiders, and principles that are present in
everyday life.
Ease of access - What may sometimes be overlooked in the process of international
market research is the geographical proximity of potential destinations, and how this will
affect the transportation and shipping costs required to exchange goods. This will also affect
your ability to efficiently conduct primary research, including travel expenses and
accommodations for researchers. This variable could also encompass the availability of
existing foreign warehousing and customer-facing infrastructure.
Common challenges
Market research can be a relatively complicated procedure, especially when it is
performed on an international scale. This means there are a host of challenges that many
companies encounter during the process. Some of these challenges include:
Methodology – A common mistake among companies performing market research
lies within their ability or lack thereof to choose the correct data collection techniques. It is
critical to utilize the methods that will produce data you can base decisions off of, which will
be dependent on the personal needs of your company and the size of your market research
project.
Communication - Difficulties involving communication and interpretation are
common in international market research, due to the simple fact that foreign markets tend
to speak different languages. It is important to recruit individuals who are fluent in the
foreign culture so that your data collection and conversion efforts are not lost in translation.
Financing – Conducting effective international market research will likely not be a
cheap endeavour, and for this reason it is recommended that companies only take on a
scope of research that realistically fits their budget. Doing so will prevent research from
being abandoned before completion and should result in cost-efficiency. An example of this
scenario would involve a firm selecting too many markets to research simultaneously,
leaving them with the dilemma of spreading their resources too thin to cover every market
they planned for. Proper budgeting is an effective way of ensuring that there are no costly
surprises during the market research process.
Scaling – Some companies attempt to replicate successful market research strategies
used by large multinational firms; however this approach does not translate well to small
and medium sized enterprises (SMEs). If you attempt to replicate the market research of a
larger company you will acquire an overwhelming amount of non-relevant data, which in
turn will be almost impossible to interpret accurately and could consequently lead to
skewed decision making. Each international exportation circumstance is unique, and should
be treated as such when it comes time to perform market research.
Sampling – Whenever quantitative research is conducted, there is always an
opportunity for collection errors to occur. In international market research, it is especially
important to make sure you are evaluating the individuals in a market that are truly
representative of the population. Failure to do this accurately could result in a skewed
perception of the market’s demographics and consumer demand, which could consequently
lead to poor decision making. On the other hand, a sample taken properly can provide an
excellent snapshot of what an entire market can offer your company, which is why enlisting
the help of experienced researchers is often a sensible strategy.
Forecasting - Be realistic in your projection of how much market share you can
acquire in a foreign location. It is a common mistake to be overly optimistic when
envisioning your potential market share, which is simply the portion of the market that is
hypothetically accessible. Instead, consider taking a more refined approach and
contemplate the available market for your goods or services. This is the amount of the
target market that can realistically be acquired by your business, rather than simply the
total market that is available
