Brand managers and marketing managers tasked with business expansion often look to enter new markets and expand their business through market development.
An exciting space, business expansion nevertheless can be risky for a business. It brings unfamiliar challenges and new competitors, but with the right approach and the right market development strategy, entering new markets can give your business increased reach, more awareness, and more profits.
We talk you through four tips on how to enter a new market successfully.
1. Determine Your Goals
Success is only achieved if you know what you are aiming for. Be clear about why you are entering new markets and why this is the right strategy over other options like new product development or extension of existing markets. By being able to clearly articulate the why, and what success looks like, you will have a clear focus for the rest of your planning.
These goals need to be both reasonable and measurable business goals and work across both the short- and long-term.
What timeframe will you set your brand to launch?
What timeframe to scale?
How much market share do you seek to gain and where will this market share come from?
What will the business expansion contribute to underlying brand value?
Other than revenue, what will the brand expansion provide?
Inevitably in many organisations, the short-termism of revenue and target achievement trumps the long-term view of brand development, brand value and equity. However, a marketer needs to establish goals and a strategy to build long-term brand health over 5-10 years, and support those goals with the investment to achieve them.
Ensure the marketing team, executive team and board are all aligned around your business goals to provide support in achieving the short- and long-term business goals.
2. Research the New Market
Arguably the most critical step in conquering new markets, research will underpin the strategic development and operational execution of the brand expansion.
You need to understand your new market - and your existing offering in relation to your new market - better than all of your competitors to successfully extend your brand into a new market.
When investing in research and intelligence for new market development, understand and define the pain point you are solving with your product or service, as it relates to that new market. It is essential to discard assumptions you might have about the direct and easy transferability of the product into a new space.
Cultural and societal differences can impact the perception of your brand and offering.
Identify your new audience in the new market:
- What problem are you solving for them?
- What is the job they need doing?
- Where are they located?
- What are their interests?
- What are their ethnographic traits?
- How would you define them demographically?
Align with a good research partner who can deliver both qualitative and quantitative research.
Sit down with your future customers in new markets and have in-depth conversations with them.
Map the ideal customer, personas, customer journey and go to market strategy and test this as part of your research.
3. Keep an Eye on Competition
Part of your research will be competitor research.
It is crucial to perform an in-depth competitor analysis to study existing businesses in your nominated new market. A strong understanding of your competition, their brand promise, their value proposition and their offering will ensure you better understand the market and the environment in which you will need to compete.
Your value proposition, offering and go-to-market strategy need to be strong enough to beat out and withstand established competition. If your only differentiator is price, and you will need to buy extensive brand awareness, it is a higher risk proposition for the business to enter this market.
Use your research to determine if there is anything your business should change or improve before entering the market.
4. Decide How You Want to Enter the Market
Once you know what success looks like, who your audience is, and what the competitive situation looks like, you can build your go-to-market strategy.
As part of your decision to enter a new market, you need to look at your brand hierarchy and architecture and determine if it is suitable as is or whether you need to invest in a new brand. You may even want to enter into a partnership with a brand that already exists in that market.
Controlling your brand presentation and visual identity for a new audience is vital, to help them understand and recognise you in crowded markets. A platform like Outfit allows you to take existing collateral and templates and customise it for new markets using automated meta-data among other things. Functionality like this makes it cheaper and faster to build out market position
Entering a new market is a costly exercise, doubly so if done poorly. By planning well, researching extensively and knowing your go-to-market strategy, you will be able to expand your business through new market development.