How market research drives successful international expansion

Imagine you are away for holidays and have just boarded in a fabulous accommodation in a countryside chateau. 

The night comes, and as you enter your room, the electricity shuts down, plunging it into pitch darkness.

You want to reach for your flashlight. You packed it specifically for such events, but you’re not familiar with the space yet, so you stub your toe on the side table, stumble…[insert grunting here]... You fall over the armchair and bump your head.

This is what it must feel like trying to expand your footprint in a new market you know nothing about. 

New market expansion can be a daunting task; it requires significant resources (capital, manpower) to approach a market with little to no brand awareness.

And while the potential reward is high, so is the risk. 

This is where market research comes into play. 

Spend enough time to understand the market(s) you are considering, understand the customers’ behaviours and preferences, as well as what the competition offers, to help you pragmatically identify an area of the market where you can successfully play and win market share in that new geography. 

What types of market research are there, and which ones do you need?

Without turning the article into a master's thesis on research, here are the different terms you’ll come across:

• Primary research is a type of analysis you conduct on your own and is designed to answer the very questions you are trying to clarify - customer interviews, focus groups, surveys. Although it can be more expensive and time-consuming, it offers the benefit of being tailored to your requirements.
• Secondary research involves studies conducted by others, including research organizations, official government bodies, and consulting firms. It’s already available, sometimes free to access, but it will only partially give you the answers you seek.
• Qualitative research - it’s research that answers the question “what is going on?” and helps you identify customers’ preferences, pains, patterns, or behaviours. 
• Quantitative research, on the other hand, will help give you a scale of findings in your qualitative study - how many customers have a specific preference or attitude? 

Let’s now dive into the process we use to uncover market insights here at STOICA, for clients that look to tap into new territories.

The step-by-step research process we use at STOICA for market expansion 

1. Moment zero: spend time understanding our client 

Before conducting any research on the target market, we spend time understanding our client’s business: 

• What they offer
• What are the advantages and benefits of their product/services
• How is their offering different from other competitors 
• Segments of clients they work with
• Problems and jobs-to-be-done that their customers try to solve
• How the buyer journey looks from the client’s perspective
• What are the arguments that make prospects seal the deal 
• Typical concerns and objections in the buying process

On top of understanding their business, it’s essential to learn the client’s internal context and the resources they can mobilize, as that will guide future recommendations (eg, target one market, one segment, or one market but two segments at the same time?).

In exploring our client’s offering and differentiators, we use the Brand Asset Management (BAM) framework to uncover and then organize findings, and later use them in crafting the service or product positioning in the selected target market.

2. Get a sense of the overall market

First things first, we aim to get a sense of the market our client is considering expanding into: 

• How big is this market? (estimate on the number of potential clients in this market, how much is the market worth  / how much do companies spend on the products or services that our client offers?)
• How busy is the market? How many competitors serve that market, and which are the main ones?
• Overall market trends: Is this an economy that is growing or stalling? How about the particular sector you are in?
• What are the main barriers to entering the market? Is having a local presence mandatory? Do you need to speak the local language to do business there? What is the general business climate? How easy is it to access official data?
• Review any other relevant criteria for our client. Each business has its particularities, so we’ll explore with our client any particular criteria we need to investigate, such as leveraging existing partnerships into the new market, for example.

We aim to answer all the questions above through desk research, which involves collecting information from online databases, official government data, Eurostat (if applicable to an EU market), and other reputable research sites such as Statista, Grand View Research, and IBIS World. 

Other significant sources are secondary research conducted by consulting companies such as McKinsey or industry analysts such as IDC, Forrester, and Gartner.

We organize all the collected data into a spreadsheet to make it easier to analyze, and then summarize the main findings.

One caveat here: it’s never easy to find all the information you need, especially when it comes to analyzing several markets. Most of the time, we need to access several sources (3-4 in general) to find the same piece of information, compare the figures, and decide on what data to include. 

While the purpose of the research is to give you precise data, when finding that data is not easy or possible, we’ll make estimates and work with those. 

Our goal is to make educated decisions based on the best available data rather than getting stuck on not finding the perfect answer. 

For example, there might not be available data on how much companies in a specific country spend on marketing services. Still, you could assume that the more they spend on digital advertising, the more they spend on marketing services as well.

Another critical aspect to consider is how easy it is to do business within a particular market, and some aspects we investigate (but not limited to) are:

• The ease of doing business (the World Bank provides an Ease of Doing Business Score for all countries)
• The DESI (The Digital Economy and Society Index) index provided by Eurostat (which measures EU countries’ digital performance)
• The country’s English proficiency level

One final exercise we take is to segment the market. 

Oftentimes, our clients will work across several industry verticals and serve companies of different sizes (SMBs, enterprises, etc). 

Segmenting the target market based on relevant criteria (such as industry, annual revenue, and number of employees) provides a clear picture of which segments are most promising in terms of potential customers and potential revenue. 

Other data sources include national chambers of commerce, which, although free, have limitations in terms of filtering options and the criteria available for search.

3. Get to know the customers in the target market

The next step after understanding the market as a whole is to look at the customers’ preferences, needs, motivations, and buying behaviour. 

There are various methods for conducting customer research, but the approach ultimately depends on the available budget and time constraints. 

In an ideal scenario, we would conduct qualitative research first, involving 3 to 5 in-depth interviews with actual customers within the target market. This would provide us with initial insights into their attitudes, preferences, problems they aim to solve, challenges they face, and their approach to researching and selecting vendors.

Having the qualitative insights, we would then run a quantitative survey on a representative sample of the market to measure the scale of the findings (in other words, how many customers have the same pain point or experience similar attitudes?).

However, when we are talking about a new market, it’s hard to get a foot in the door, especially with B2B buyers in management positions, so interviewing them could not be feasible. So, a good proxy is to interview our client’s sales team and a few of their customers in other markets. 

The sales team will already have had contact with prospects in that market and can share their findings. Additionally, customers in different markets will share similarities across borders, making these good starting points.

We then continue with desk research and learn as much as we can online. Desk research involves analyzing conversations in directories such as Reddit, product or services reviews on directories such as Clutch, G2, or even by checking competitors' testimonials on their websites. 

We aim to understand the pain points customers seek to address and what they value most about their chosen vendor. These insights will help us create a buyer persona profile and subsequently refine the service or product positioning.

4. Get to know the local competition  

Having learned about the overall market and the customers, we now move on to analyze the competition. 

Our goal is to understand what main competitors offer, how their products/services are different, their strong points, and what their positioning sounds like. 

If your positioning is similar to existing competition, it’s challenging to persuade local customers to make the switch. Therefore, we aim to identify how we can differentiate our client in that market.

We start by putting together an extended list of competitors: sometimes our clients can name some of the competitors (that they come across in other markets, or were mentioned during conversations with prospects). Otherwise, we start from scratch, looking into the leading business directories in that market and identifying the top 10-15 competitors.

We then collect different data points from their website, their social channels, reviews directories, or business directories:

• Company data: number of employees, revenue 
• Offering: what services and products they offer, pricing 
• Clients they serve: logos, as well as their size and industries 
• What are their differentiators and strengths 
• What clients say about working with them 

We then narrow down to analyze in more detail the 5 main competitors, selecting those that have a similar offering or target a similar market segment.

We aim to understand their positioning attributes and cluster their claims, making it easier to visualize where competitors and our client stand with a positioning map.

5. Time to piece everything together and draw conclusions 

The outcome of this extensive research process is a strategic report that highlights:

• Recommendations on which market to target, if the client is considering several markets  
• An overview of the target market
• Recommendations on which segment(s) to target
• Recommendations on how to differentiate their offering in the new market 
• A buyer persona portrait for each of the recommended segments
• Positioning statement and attributes 
• A high-level go-to-market plan

This report is supported by the deliverables of all previous steps, including market overview, competitor analysis, buyer persona profiles, and positioning exercises conducted using the BAM framework.

The ultimate goal of our research process is to make sense of the various possibilities that exist: what country to target, which segment(s) of customers, how to position their offering so they will stand out, and give recommendations backed up by data and facts.

If you’re looking to tap into a new market and need the clarity research provides, drop us a line and let’s discuss how we can help.