It can be both exciting and intimidating to consider expanding your company, especially if you’re planning to go global. It’s exciting because you’ll be reaching beyond the American scene to new markets that might view your products with enthusiasm, but it’s also intimidating because you might make some expensive mistakes.
What are some of the things you have to consider when you want to expand your business into a multi-country operation?
Global marketing can be traditional, where you establish an office or build a storefront overseas. It can also be digital where you outsource talent from other countries to help you build an international business. It could also be a blend of both traditional and digital.
Besides deciding how you’ll structure your business, you might also want to find a reputable way to transfer money to your employees in other countries to pay them for their work.
Here are three questions to consider if you’re thinking of starting a global business:
How well will my product sell overseas?
If your product is popular in the US, it’s easy to assume that it will be just as popular overseas. After all, your product sells well because it obviously satisfies consumer needs. While this might be a logical projection, it might not be necessarily true. In the US, for example, your gourmet hamburgers might be selling fast, but in India, which is largely vegetarian, it could be a flop.
Before investing in global expansion you need to find out if your target market overseas is familiar with your product. If they are not, is it something that would be interested in if they realized its benefits?
The only way to find out is to invest in research, including sending someone to the country you’re interested in to do some interviews and run some surveys. Remember, just because your product isn’t well-known in another country, it doesn’t mean that it won’t sell. Perhaps, investing in consumer education about the benefits of your product might make it a bestseller.
Is it a stable country?
It’s possible that your research shows that your product will sell well in a certain country with just a little bit of consumer education to get the word out. However, this verification alone isn’t enough to guarantee success. You also have to look at the cultural, political, and economic aspects of setting up a business in that country.
It’s possible that the country has poor infrastructure or political upheavals or economic troubles. In this case, your employees might incur unnecessary hardships if they set up shop there.
However, even if your research yields negative results, this doesn’t mean that there aren’t other countries that might be perfect for you. It’s important to research a wide variety of target countries rather than simply limiting your options to a few favorites.
Do you have the right strategy to penetrate a new market?
Assuming that you’ve found a country where your product has a good chance of selling well and it is a stable country, you might not succeed if you don’t use the right strategy.
A marketing plan that is working well for you in the US may fall flat in another country. For instance, while American consumers might be focused on pricing, another country might have no interest in price—but are more focused on value.
In the US, for instance, Wal-Mart has become a billion dollar retailer because it promises the lowest price. In Dubai, however, the price of something is not as important as value. So the right strategy will depend on the culture. Just because a strategy works well domestically, doesn’t mean it will work well in other countries.
3 Steps to Take to Go Global
Here are some steps you should take before embarking on a global business venture:
First, do foreign market research to see if your product will sell well. This research should also look into things like cultural values, political and economic stability, and so on.
Second, send a field representative to verify that the research is accurate. Sometimes there is a gap between theory and practice.
Third, create a prototype business to test out different aspects of the market. Do you need to develop consumer education? Will community service efforts improve your brand? What kind of marketing appeals to people and what turns them off? Will social media marketing efforts in that country improve brand recognition?