Global expansion opens many new opportunities for businesses. By extending beyond local borders, you can tap into a wider customer base, diversify your risk profile, and significantly amplify growth and profitability potential.

One important strategy lies at the heart of successful international expansion: comprehensive international market research.

Conducting thorough international market research gives you actionable insights into your target markets, including culture-specific consumer behavior and regulatory landscapes.

In this article, we will guide you through the labyrinth of international market research. We will delve into the key objectives, elaborate on different types of research, and lead you through each step of the process.

Importance and Objectives of International Market Research

As businesses increasingly expand their own borders, international market research has become a crucial element in their strategic growth plans.

Let's delve deeper into the key benefits:

• Identifying profitable markets: Look at factors like market size, purchasing power, and consumer demand to spot the right conditions for expansion. A great example of changing markets as a form of adaption could be seen in Coca-Cola's acquisition of Costa Coffee, largely driven by the potential growth in coffee consumption in the United Kingdom and by British people consuming fewer sugary drinks.
• Uncovering potential risks: Alongside the golden opportunities, global expansion brings many challenges. International market intelligence allows you to uncover potential risks caused by economic and political instability, infrastructure, or law.
• Understanding cultural nuances and behavior trends: If you want to see whether a specific product or service will work well in a new market, you need to have a deep cultural understanding, such as preferences for color in branding, preferred payment methods, or browsing patterns. This way, you can ensure the successful localization of products and create resonating marketing strategies.
• Analyzing competition and future market trends: Take your time to understand the competitive landscape, subsequent strategies, and potential weaknesses. This will help you compete effectively and gain an edge over competitors who might overlook the importance of in-depth research.

Differences Between Domestic and International Market Research

While domestic and international market research share the common goal of gathering critical data, they are two different processes. Exploring these differences can help you prepare for the peculiar demands of international research.

• Social, cultural, and linguistic differences: Foreign markets are shaped by their unique social, cultural, and linguistic nuances. For example, when Disneyland wanted to expand its theme parks in France, they were met with significant challenges: “Disney’s policy of serving no alcohol in the park, since reversed, caused astonishment in a country where a glass of wine for lunch is a given. Disney thought that Monday would be a light day for visitors and Friday a heavy one and allocated staff accordingly, but the reality was the reverse.”
• Legal and regulatory differences: Data collection methods, privacy legislation, and industry-specific laws may vary widely from one region to another. Familiarity with frameworks like the General Data Protection Regulation (GDPR) in Europe or the General Data Protection Law (LGPD) in Brazil is crucial for conducting legal and ethical research.
• Investments in international market research: International market research often requires significant resources, mostly for local experts or purchase access to country-specific databases. However, there are also more budget-friendly alternatives. For example, businesses can use AI-based software to research market conditions or localization tools such as Weglot to break the language barrier more affordably.
• Risk management in international expansion: Given the heightened level of risk involved – due to factors like political instability or market volatility – businesses entering different countries may require more comprehensive research. Predictive analytics or real-time market tracking tools can help you identify, assess, and mitigate these risks.

Primary vs. Secondary Research: Navigating Global Data Sources

Both primary and secondary research are important when identifying new markets for international expansion. By combining customer-driven primary data with broader insights, businesses can gain an understanding of different global markets and customer preferences, ensuring they offer the right things to the right audience.

Primary Research

This uses qualitative and quantitative research methods such as surveys, focus groups, interviews, observations, and field trials to offer first-hand insights and give you a fresh understanding of your specific business goals and local markets.

However, conducting primary research in an international context has its share of challenges, mostly owing to language and cultural differences. Using local partnerships or hiring local researchers can be a reliable method to successfully navigate these cultural nuances, offering invaluable insights during the execution of primary research.

Additionally, leveraging modern technology, such as online surveys or mobile analytics, can help mitigate geographical challenges and reach wider audiences, offering real-time data reflective of your target market.

Secondary Research

Complementing primary research, secondary research involves gathering pre-existing information from various data sources such as government reports, academic studies, business journals, and multinational trade reports.

This method can provide quick, cost-effective access to wide-ranging insights on larger economic trends, consumer behaviors, and market competition in target international markets.

The challenge here comes from the quickly changing market. For instance, data about consumer electronic preferences could be outdated within months due to the fast pace of technological advancement. This can lead to ill-informed decisions, so it’s essential to thoroughly fact-check secondary data sources and ensure they are still relevant.

Key Steps in the International Market Research Process

Expanding your enterprise globally involves researching and analyzing information about your prospective markets, clients, competition levels, and the business environment specific to each location.

Identifying Potential Markets

Identifying the most promising international markets is the first step in this process and requires careful evaluation of key elements. These include:

• Demographic trends.
• Competitive landscape.
• Market size.
• Potential for growth.
• The market's economic conditions and infrastructure.
• Possible barriers to entry.

Thankfully, there are many tools and resources that you can use when analyzing international markets. Online data sources, government reports, globalization indexes, and networking opportunities all offer valuable insights, helping you select the best possible market.

Understanding the Economic, Political, and Cultural Context

This information can help you understand purchaser behavior, uncover legal challenges, and identify potential pitfalls and opportunities.

Implementing primary and secondary market research methods in this step will allow you to build a detailed profile of the targeted markets. Simply put, knowing the local scene really well is like having a secret weapon – it helps you stand out from others and guides you to make smart moves when starting a business in a new place.

A great example of successful localization is KFC.

When they enter a foreign country, they do deep research to understand the local economy, politics, and culture. For example, in India, they learned that many people don't eat beef or pork for religious and cultural reasons. So, they created a menu with some unique local flavors that you can’t find anywhere else.  

This move showed they understood India's economic potential, respected cultural and religious practices, and navigated the local political landscape by adapting to regional dietary laws. Their success in India shows how thorough market research can help an international business adapt and thrive in a new market.

Market Segmentation and Target Customer Profiling

Finding the right group of customers for your product or service is a key part of researching international markets. You need to look closely at how your product fits in, what's happening with the economy, and who else is selling similar things there.

You can split people into different groups based on where they live, their age and lifestyle, what they like, and how they act. For instance, a toy company might focus on parents in a wealthy area if they sell expensive educational toys.

Creating a clear picture of your perfect customer in that market is very important. Think about everything from their age to what they do online, their hobbies, and what bothers them. The more you know about them, the better you can plan to reach them. For example, a sports shoe brand might zoom in on young adults who love fitness and use social media a lot, tailoring ads and products just for them.

Competitor Analysis

Knowing who you're up against in international markets is also extremely important. You need to figure out who your main rivals are and what tricks they're using. There are many things you can learn from them, like what they're doing right, where there's room for you to jump in, and how the market works.

You can also peek at their financial reports to see how they're doing over time and keep an eye on their big news to guess their next moves.

One way to compare yourself to them is by doing a SWOT analysis.

This is where you list their strengths, weaknesses, opportunities they have, and risks they face. Then do one for your own company, compare it with the other business, and see where you can win and what dangers to watch out for.

There are some useful online tools that can help you spy on your competition. For instance, Semrush lets you see what they're doing online, and Owler keeps you updated on their business moves. Using these tools can make figuring out your competition easier and more thorough.

Data Collection and Analysis

Data serves as the backbone of international market research, and it involves the effective use of both primary and secondary research techniques customized for international markets.

So you’ve done the research, and you have the data. What now?

Well, now is the time for data interpretation. Try out statistical and analytical tools like Excel for basic analysis and Tableau for data visualization, or dive deep into advanced tools like Statistical Package for the Social Sciences (SPSS) for complex statistical analysis.

Consider, for example, a U.S. eCommerce brand examining consumer purchasing behaviors in Japan. They find data indicating a high preference for cash-on-delivery payment options in Japan compared to card payments. This insight could be instrumental in designing their payment platform for the Japanese market, improving user experience and conversions.

Formulating a Market Entry Strategy

The ultimate goal of international market research is to use the gained data to create a successful market entry strategy. Insights from your research should guide you to make informed decisions on various strategic areas such as:

• Product Positioning: This refers to how you should present your product in the selected market. This could range from luxury to affordable based on the market's demographic and economic profile.
• Marketing Channels: The most effective channels to reach your target audience – for instance, eCommerce might be more effective in a technologically advanced market versus traditional retail in others.
• Pricing Strategies: Identify the pricing sweet spot that caters to your target customer while keeping in mind the competition and local economic environment.
• Customer Service Practices: Adapt customer service practices to suit cultural expectations; for instance, a culture valuing collectivism may appreciate a community-based approach to customer service.

If you'd like to delve deeper into robust market entry strategies, check out Weglot's guide on foreign market entry strategies. It’s an additional resource you might find beneficial in building a comprehensive market entry plan based on your international market research findings.

Take the Next Step in Global Expansion

Before diving into , it's crucial to do thorough market research. This helps you really understand the local economy, politics, and culture and understand customer demand. Expanding globally offers big benefits like a wider customer base, risk management through diversification, access to global talent, and potentially big profits.

Enter Weglot, a key tool in your journey. It simplifies website translation, letting you focus on other parts of your global expansion and international marketing strategy. Weglot automatically translates your website into 110+ different languages, supports your multilingual SEO efforts, and is easy to use. It's an ideal partner for going global.

Ready to grow your business internationally? Try Weglot for free and see how it smooths your path into new global markets!

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