It is often thought that a new market is an obvious way to expand business operations and thus make more profit. But this declaration is far from true all the time. The answer to the question as to whether your business should expand to a new market is that it depends. And it depends on a lot of different things, so there will not be a 100% clear answer.
If that were the case, then we would all be extremely successful in all of our affairs in business. In reality, the answer is a little more murky than that, as I like to say. Hopefully, in this article, I can eke out the difference between making a good business decision and making a bad business decision when entering a new market.
A mistake that is sometimes made by business people who wish to expand their operations to a new market is that they avoid doing the hands-on research. By this, I mean really analyzing the target market in a way that makes sense. That is to say, if your company sells hamburgers and fries, and merely transports them to a different culture entirely – you might end up losing millions of dollars. The correct marketing strategy must be in place before you enter the target market. It is better to be close to being sure about the research behind your target market before actually launching into a target market. That is because if you say your business is expanding into a new target market, and if your business does nothing else after that announcement, you are doomed to fail. But do not take that the hard way. It should not be a matter of pressure or even of disillusionment. It should be a matter of pride that your business takes the time to research in great depth its wanting to expand into new markets. That is what will bring your business success.
In other ways, businesses have made errors. But not all of these errors were equal in their significance. Let me explain. Errors are not always a bad thing. They exist on a spectrum, rather. There are the more serious errors and the less serious errors. Perhaps the more serious errors are something like what I described before, such as not doing the research into a target market before “launching” a new product in that target market. That is probably a severe error that cannot be retracted very easily. Other things we perceive as errors are worth noting as well. Not all of them are equal, though, as I said. There are errors on a spectrum.
That said, a minor error after the fact is not going to set your business back very far. An example could be something such as the fact that one of your colleagues or you yourself did not greet or say goodbye to someone in a foreign culture to your own in a culturally appropriate way. This, while being a mistake, is not a serious error (in most cases). This is fixable with the knowledge that you have, which is that it is not a serious error and it can be fixed by studying the culture more, interacting with its people more, and ultimately being able to correct that error through study. People sometimes think this does not take hard work to be able to fix small errors. But it is through that process that we become better at what we do.
It is through this type of practice that you will become better at what you do, ultimately leading to success in entering a new market.
In an article written in Inc. Magazine on April 9, 2013 by Karl Stark and Bill Stewart, the authors give some strategies for effectively and intelligently approaching the decision to expand business operations into a new market. Their first point (and one that I suspect a lot of people miss because it is very simple) is to research the target market. The authors suggest “Define the market.” This is incredibly important on the road to business success in new markets. One of those mistakes that I was referring to earlier that would have a negative impact on your business, would be catastrophic, or would be somewhere in between would be the act of not researching the market into which you want to expand your business.
A good translation service is necessary in this process if you wish to obtain new customers who speak different languages. This is, of course, a matter of preference, but many multinational companies hire translation agencies. If your business is considering making the move to expand into a target market in which a different language is spoken primarily, be extra careful with your market research. I say this because sometimes market research can be biased by our own deeply-held cultural beliefs (that are native to our own culture, not the one into which we wish to expand our businesses). And, if you decide to hire translators, make sure they not only are linguistically competent in the target language and the source language, but also, make sure they are competent in the target culture (and source culture, of course). Culturally-aware translators will save you a lot of time, energy, and even money sometimes.
Future Group is a translation firm that can help with your translation needs, employing expert linguists and other industry leaders so that your business can capitalize on what it needs the most.
So, if your challenge is to expand into markets that are either located in different countries or that consist of pockets of people (or businesses) who have a different cultural background than your own, do not despair. The right cultural mediator, translator, interpreter, or international business person can help you get things straight.
Another mistake that is sometimes made by businesses trying to expand into new markets is that they will try to make marketing materials monolingual. This is a mistake if the idea is to expand to a culture that is not your own (provided that a different language is spoken within this culture). It can even backfire if the language is still your own yet the culture is different from yours. A superb way to avoid this mistake is to hire cultural experts early on in the process of expanding into the new market(s). Make sure you have enough cultural savvy on your team in your current and future team. This is paramount to overcoming some of the barriers that expanding into a new market with a different cultural background presents.
And if your goal is not necessarily to expand into a different culture, but rather, to expand into a different market, do not despair, either. This can be accomplished with the right frame of mind and tools as well. The tools you will need (several of which we discussed already) are ongoing market research, attention to details in that market research you are conducting, and the business know-how to realize if your metrics are going south (so that you can correct them).
The first of these, i.e., market research on an ongoing basis, is critical because you will not achieve success if you ignore the market you are wishing to expand into. You should be reading trade journals, newspapers; basically, getting your hands on anything you can use to benefit your capacity to understand your target market. This can help a great deal, and sometimes, business owners do not realize the impact that this may have on their future results.
The second of the concepts, attention to details in the market research you conduct, is extremely important as well. It also ties into the last concept, which is realizing when your metrics are not showing the results you would like them to show.
Attention to detail is always important, but it is particularly important when conducting market research so that you do not fall victim to a piece of data that seems to show that you ought to perform some business action, while in fact this evidence does not show the full picture of what ought to be done. For example, certain misleading graphs can be used to show business performance in a positive light, while the business performance is actually not as good as the graph might purport to show. This, of course, is an extreme example, but the takeaway is that attention to key details and metrics can help you in your efforts to expand to new markets.
To conclude, the strategy you might take when adopting new ideas which will help you expand into new markets will vary based on the industry in which you are based. But there are common mistakes that people sometimes make on which I hope to have shed some light in this article. Perhaps, your company will have some insights to share once it becomes a global success or when it successfully enters new markets in a manner that is consistent with the principles I have outlined (or with other principles).
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