Improve your international chances with market research

You can find out a lot online. But you often only really get to know a foreign market when you visit the country. So before you start exporting, do extensive market research. You can do this yourself or hire a specialist. First ask yourself, “Why am I actually exporting?” This will help you understand if all the work you have to do will be worth it.

Why are you exporting?

Exporting is not something you just do casually on the side. You often need 2 to 3 years before you are known in the market as a provider and can make regular sales. Before you begin your market research, describe why you want to export. It could be because you want to grow your business. Sometimes you do have to look for new markets because exporting to your current export market is now impossible. For example, because of economic sanctions.

Mapping out businesses and markets

Use a SWOT analysis to map out your business and the export market. In this analysis, you put your company’s strengths and weaknesses alongside opportunities and threats in the international market. This allows you to see at a glance where opportunities lie for your business, and what needs extra attention.

If you have a sales order from a foreign customer only a few times each year, market research and an export plan will be of no additional value. They are useful if exporting is an integral part of your business.

Select markets with opportunities

You may have several markets in mind for your products. Make a list of the minimum requirements that your ideal market should meet. Once you have done that, select the countries that seem to offer you the most opportunities. This will give you an initial feel for your foreign market.

Minimum requirements

When deciding on your number one country, keep the language and cultural differences in mind. Furthermore, you can base your comparison on:

• Import restrictions and high import duties in the exporting country. These make imports more difficult and expensive for your customer.
• Transport costs. Longer distances mean higher costs.
• The level of wealth and the economic situation in the country you are exporting to. Countries with high levels of prosperity and growing economies spend more money.
• Demographic characteristics of the country you are exporting to. The various aspects of the population should match your product.

You can ask the Netherlands Enterprise Agency (RVO) to help you with market exploration. This will include, for example, what the market and sales channels look like for your product or service. With this information, you determine your entry strategy into the foreign market. This is the way you sell. For example, working with national partners.  

International market research

After comparing the countries, you do further work related to the most interesting export markets. For this, choose the first 2 to 3 countries on your list. If you do not want to hire additional staff, launching in 2 or 3 countries each year is the most you will be able to manage. Your day-to-day work will go on and, based on the results of your market research, you will have to create an export plan. You will then implement this plan.

Research questions

Research questions will give you a good idea of the foreign market in question. Consider questions such as:

• Is there a demand for my product?
  Gather market information and review market trends and developments.
• Can I sell my product in the exporting country, or should I adjust it?
  Check the product requirements and regulations in the country.
• What do my potential customers and my target audience look like?
  Gather market information about the exporting country and contact local buyers.
• Which entry strategy works best for the client and me?
  Sell from the Netherlands directly to your foreign customers or work with local partners.
• What is the price level of my products in the market?
  Gather price information and see whether you can match the local price levels. Perhaps prices are higher in the country you are exporting to. In that case, go with that price level. Your customers may not trust a lower price. And that way, you have a higher margin yourself.
• What competitors are there?
  In your external analysis, gather information on other providers with similar products. Get to know your competitors and see how they market their products. These can be local providers, other foreign providers, and Dutch providers.

Types of market research

You can gather information in several ways. For example, by carrying out 'desk research' and 'field research', both common marketing terms.

Desk research

Desk research involves gathering as much market information as possible from behind your desk, such as by phone and online. In telephone research, you conduct interviews with companies in the market. About the price level and other suppliers, for example. Because you can steer the conversation, the results are of high quality. That is why you call it qualitative market research. You often combine telephone research with online market research. 

Online research

You can find a lot of information on the internet. For example, about the competition, the market, and product requirments. A basic knowledge of the local language is helpful in your online search. For example, if you only search in English, you will not always find what you need to know. In your online market research, search for words that are important for your product and industry.

Another form of online market research is sending out questionnaires. You ask companies in the market if they want to answer these questions. This is also called quantitative market research.   

Field research

You will not find all the information you need online. So you should also get out and about and do some field research. Visit the country and get a feel for the market. Compare the local range with your offerings, and find out which parties offer those products locally, and at what price. It might turn out that you need to adjust your product offering or your prices.

Resources and tools

To collect information on foreign markets, you can use several sources and tools.

Resources

• Country information (in Dutch). With information about the country, trade figures and do's and don’ts.
• Contact the Dutch embassy or another party in the overseas network (in Dutch). Besides getting to know each other personally, you will gain information directly about doing business in the country concerned and promising sectors.
• Search for sector information (in Dutch). Local trade associations may have market and industry reports online, or put out trade magazines.
• Join an inbound or outbound trade mission (in Dutch), or visit a trade fair abroad. This is how you get to know local contacts and build a network.
• Statistical information can be found for the Netherlands at Statistics Netherlands (CBS). The country you are exporting to may have a similar organisation. In Germany, for example, it is the Statistisches Bundesamt (in German), and in Belgium Statbel.
• Find information on economics, politics, demographics, geography, and other statistics at The World Factbook, The World Bank, and Eurostat.
• If you are working within Europe, the market reports from the Centre for the Promotion of Imports from Developing Countries will help you further. The CBI informs companies from developing countries about opportunities for their products in the European market. These reports also have information for Dutch companies that have export plans focused on other European countries.
• Search online for market reports that have been published. For example, RVO has published several market reports (in Dutch) on its website.

Tools

• KVK module legislation and regulations (in Dutch) in the Export Guide. This module gives you information on requirements and rules related to the export of products or services.
• Access2Markets tells you all about product requirements, documents, import restrictions, and tariffs abroad, among other things. Watch this video to see how to use Access2Markets. 

Support

Explore financial support schemes such as Support International Business from RVO. This will help you with a coaching programme, for instance, or can help you cover the costs of a lawyer or a tax expert. In addition, RVO could conduct a market survey for you. A complete overview of schemes can be found in the RVO Subsidy and funding guide.

Outsource your market research

You can also outsource market research to a market research company specialising in the country you choose. Using a research agency costs money. On the other hand, an agency will often have experience and a network in the foreign market.

Individual research questions can also be put to a tax or legal expert in the country itself. These parties have local knowledge and a network. They know the latest developments in local laws and regulations.

You can also hire a student from a Dutch university of applied sciences for an internship or a graduation project lasting several weeks or months. This is how you bring in new knowledge and ideas. This takes extra time because you have to supervise a student.