International Market Research for Canadian Business Owners
When considering potential markets in new countries it certainly pays to do your homework. If you’re a Canadian small business owner looking to grow your customer base by expanding internationally, this is the guide you need.
International market research might sound like a daunting task, but there’s a simple three step process you can use to navigate the process. Using these frameworks will help you make better business decisions to ensure longer-term success — here’s what you need to know about conducting effective international market research.
Step 1: Screen potential markets
To get started, you’ll be collecting data related to your industry. Look at consumption statistics, including import and exports to countries of interest, for your product or service. As you parse through the data, you’ll notice which markets are the biggest and which are growing the fastest. The highest ranking options deserve a closer look, so choose anywhere from 5 to 10 potential markets for further evaluation.
Now, look at how these markets performed during the past 3 to 5 years, asking these questions:
- Was the market growth consistent and relatively steady, or has the growth curve been more erratic, with ups and downs? How might your business weather any changes in growth?
- When the economy slowed down, how did import growth perform?
- If import growth stalled during times of economic recession, did it resume after the economy picked up again?
- Are there any smaller emerging markets that look promising? Can your business benefit from a lack of competition versus competing in a more established market?
As you go through these questions, certain markets will stand out. These are your target markets, and the next step involves studying them in more detail.
Step 2: Assess target markets
It’s time to sleuth out as much information as you can about your target markets. You’ll compare and contrast different international markets against each other, using the data points that are most relevant to your specific small business. Some of the information you gather might include:
- Overall imports of products or services like yours.
- Aggregate consumption rates of your product or service.
- Local market trends that might influence demand, like the economy, local events, tourism, climate, and more.
- Distribution channels.
- Cultural differences, particularly as they relate to business.
- Trade barriers, both tariff and non-tariff. Don’t forget about Canadian barriers either, such as export controls.
While you’re at it, learn more about your competition and research Canadian and/or foreign government incentives designed to promote the export of your product or service. You don’t want to be surprised by a strong competitor who has an established foothold on the market. Certain government incentives can also tip the scale in your favor, and you wouldn’t want to miss out.
Step 3: Draw conclusions and make a decision
This is perhaps the most frightening, but also exciting, step for Canadian small business owners. Now that you’re armed with a comprehensive set of data points and information, you can analyze everything to determine which international markets you’re most likely to succeed in.
Before you make any big decisions, however, there’s one final word of caution: If exporting is a new business endeavor, focus on one or two countries at a time. You can always increase exports once you’ve become more familiar with the process.