Research findings are of little or no value until they can be applied to solve problems and help make decisions. International trade research is especially valuable when it is used to decide the following:
- Which markets are good international trade opportunities
- When and how to enter international markets
- Whether to adapt products, processes or services for a new market
- How to adapt marketing to new opportunities
Determining when and how to enter a market requires examining many different aspects. Perhaps the most important one is deciding on the nature of the service or product that should be offered to a promising market. In taking a product or service into a foreign market, your company has several distinct options about how to proceed:
- Your company can sell the product or service as is with no modifications or changes.
- Your company can create several modified versions of the existing product or service, each one aimed at a different market.
- Your company can create new products or services for different markets.
- Your company can incorporate all required changes into one product or service to address the global market.
- Your company can introduce modifications to the processes by which a product is designed, manufactured, sold and delivered to the marketplace.
- Your company can modify the services accompanying the product or service to better accommodate market requirements.
Which of these options your company chooses will depend on the information researchers have gathered about the target market and the market intelligence that has been developed from it.
Do you have a universal product?
Occasionally, modifications to products, services or processes might not be necessary.
Your company might be able to export the same product and use the same processes as it does for its domestic market.
This situation can occur when your company:
- deals with customers who want a product because it is the same in all worldwide markets, such as jeans;
- supplies generic components, such as tires or computer chips;
- produces a unique product that is sold based on its status or foreign appeal, such as Gucci watches
- produces a product that is sold exclusively on a commodity or price basis, such as iron ore or wheat.
In other cases, intelligence gathered by researchers will indicate that a product is unsuitable for a market and cannot be modified to make it suitable. For example, water skis are unlikely to find a mass market in desert countries and air-conditioning units are not required in Greenland.
Some product-market mismatches might be eliminated over time. For example, many Asian countries do not commonly use milk or milk products, but this could possibly change with the right product and marketing approach.
However, such an attempt would require a lot of time and investment and would have no guarantee of success. Another example would be that of a mobile phone provider that does not want to expand into a market without wireless infrastructure.
To begin applying your research take a high level perspective
Applying trade research to product design and modification involves considering the whole production and export process and comparing it to what has been learned about customers in the target market area.
Your company should think of the following factors:
- How its products and services are advertised and sold
- How they are designed and, in the case of products, manufactured
- What happens when orders are received from customers
- How products are stored and shipped
- The speed and reliability of delivery and the comprehensiveness of any after-sales service
Research and the resulting product or service modification must not be viewed as a one-off project. Applying market intelligence should be a process of improvement.
Every aspect of your venture can be evaluated and improved, even if the product or service does not require modification or cannot be modified.
Exporters will never have a perfect product or perfect process. Their products or services will always be at the mercy of competitive pressures, changing market preferences and emerging new technologies. Success depends on understanding and anticipating change through continual improvement.
Case study: Improving packaging in response to market demands
In 2007, Novartis, a Swiss agribusiness, chemical and drug company, announced that all food products made from its genetically engineered crops would be labelled to indicate the presence of genetically modified ingredients.
Genetically engineered products made by Novartis are used on many farms to increase milk production and reduce the amount of herbicides or insecticides used on corn, soybeans, cotton and potatoes. Foreign genes have also been introduced into tomatoes to prolong their shelf life.
There has been widespread opposition to genetically engineered foodstuffs for several years, but Novartis has been unable to change its product to respond to these concerns. However, Novartis decided to improve its product offering in response to numerous customer surveys that have shown that U.S. customers would prefer to know when the food they are eating comes from genetically altered crops or animals.
Use your data to see what your customers want
Products can be standardized, adapted or created for a foreign market. Regardless of which approach is chosen, there are certain common characteristics that all products should have.
They should all be:
- fit for the purpose for which they were intended;
- efficient, safe and reliable;
- devoid of features that might offend customers;
- appealing; and
- in conformance with all regulations in the target markets.
To develop a clear picture of what the target market really wants and what can realistically be provided, your company must interpret market intelligence by sorting through and weighing a variety of factors.
Customers might express interest in a wide variety of features, some of which might appear contradictory: low price, high quality, timely service, expanded functionality, rapid delivery or excellent after-sales service. Not all of these requirements will have equal weight. Their significance will depend on the product being considered.
Your company must decide how to weigh, select and trade off customer requirements to achieve an optimal mix.
It might not always be easy to define or predict what motivates customers to purchase a particular product. For example, Apple has had immense success in recent years, despite its computers and iPods being more expensive than rival brands. What has led to the popularity of its products is good design and a clever marketing strategy that emphasizes that an Apple product is more fashionable than others and that people who own an Apple Mac computer are more creative than PC owners. Younger customers feel that there is a cachet in being seen with an iPod rather than other MP3 players.
Break your market intelligence into 4 distinct categories
The market intelligence developed from international trade research can be divided into four broad categories:
- Political and legal environment
- Market description
- Product-specific market data
Each of these categories contains descriptive information about a different aspect of the target market. That information can be examined and evaluated for indications of where some modification is required to your company’s product, service or processes. It can also identify potential areas for growth, perhaps by exposing an unmet customer need.
As well as identifying where products or company business processes might have to be altered to meet customer and market needs, this intelligence can help researchers evaluate the attractiveness and viability of a market that is being considered as an international trade opportunity.
Market intelligence is essential not only for guiding business decisions about whether to engage in international trade, but also for indicating ways in which products, services and business processes must be adapted or changed in order to become successful in a market.
This intelligence can be invaluable for guiding companies towards unexploited markets in which a small and inexpensive change to their product will generate new demand. It is also helpful in identifying markets that seem to be profitable opportunities but will in effect be difficult to sell to without extensive product modification.
Market intelligence is also valuable for guiding how products and services should be promoted and advertised to different cultural markets and can help organizations avoid potential loss of reputation from cultural mistakes.