Running a business is similar to anchoring an event. The way you enter the market determines the way you will be received by the audience.
If you make a dramatic entrance, everyone will be on their feet, smiling and clapping as you get on stage. If your entrance performance is dull and lifeless, people will respond in a similar tone and in a worst-case scenario, you may be jeered and booed off off the stage.
In the same vein, your market entry strategy plays a huge role in determining the performance of your business in a new market.
As you already know, starting a business isn’t so easy, but the hardest part isn’t starting but growing the business and sustaining the momentum despite challenges. As a matter of statistics, about 20 percent of small businesses fail in their first year. And unless you want to fall into that category, you should create a plan that will help you launch your business in a grand style.
In this post, Sami Raja, the CEO of Sami Raja Consultancy will be highlighting the importance of market entry strategies and the 3 most important things to keep in mind when creating one for your business.
First of all, what is Market Entry Strategy?
Simply put, the market entry strategy is a detailed plan on how a new company’s products or services will be distributed or delivered to the target customers or audience. It can also mean a planned process for the distribution and delivery of an existing product or service to a new target market.
For companies involved in import-export business, it can also imply the establishment of a presence in a new location and management of contracts.
At this point, it is important to state that developing a workable market entry strategy is far more than just writing down figures based on some market report on CNN or Bloomberg. It involves a thorough analysis of your potential competitors and customers, evaluating your potential market share as well as customer behavior so as to create a strategy that will position you to gain a sizable market share.
Overall, an effective market entry strategy can only be created after a thorough market assessment. This will involve looking at some fundamental components of the potential market, some of which include trade barriers, competition, price localization, localized knowledge, and export subsidies.
Why You Should Create A Market Entry Strategy for Your Startup
In our introductory statement, we emphasized why it’s important to have a detailed market entry strategy. We also highlighted the likely consequences of having a poor strategy or not having one at all.
1. When entering a new market two things are required for success. A marketing strategy that taps into the emotion and preferences of the potential audience. The second part is a perfectly crafted product or service that they will be willing to keep consuming, even after the initial sales or trial.
An effective market entry strategy will provide you with the steps and action plans that will allow you to make a good impression on your potential customers. Once this is achieved and your product is good enough, the rest is history.
2. There is more to marketing than seeing success and failures. A good marketing plan will provide you with the KPI to evaluate your success and failures. These metrics will also allow you to review your performance and compare with what is obtainable in the industry. Knowing what is working and what is not is the first step to optimizing future plans. This is exactly what a good entry strategy should arm you with.
3. In every society, there are usually four components of marketing – your USP, competitors, customers, and government policies.
Unfortunately, the last part is often overlooked by entrepreneurs when entering a new market. First and foremost, you should employ the services of a local market researcher or business consultant to determine the suitability of your product for a market.
Secondly, you should be aware of government policies in your industry of interest and how it affects the sale and distribution of your products in that locality.
In addition, you should make sure that your products and marketing campaigns follow stipulated government policies.
In a nutshell, not having a market entry strategy is the perfect recipe for failure. It means that everything you will be doing will be based on guesswork since you do not understand the market.
Even if you do understand the market, chances are that you will still fail because you do not have a tailored plan to conquer the market.
Worse still, you do not have KPI to assess your performance and make adjustments when necessary.
About Sami Raja
Sami Raja is a serial entrepreneur with global corporate management experience in challenging and emerging markets. A renowned consultant, he is the Founder and CEO of Sami Raja Consultancy, a Dubai-based business consulting firm specialized company formation, tax management, business restructuring, and marketing.