Page 109 - Export and Trade

Marketing Strategy

StepOne:towhittledownglobalmarketstoa existing knowledge or the detail required in your decision
VKRUWOLVW RI ¿YH WR WHQ IRU GHHSHU LQYHVWLJDWLRQ making processes. It will help to rapidly eliminate any
Given the vast number of potential markets, the key is markets that do not meet your criteria, allowing the
XVLQJ EURDG ¿OWHUV WR HOLPLQDWH WKH PDMRULW\ RI PDUNHWV business to focus on validating the opportunity in one or
6RPHRIWKHVH¿OWHUVLQFOXGH EXWDUHQRWOLPLWHGWR two markets.
markets with;
•Similarmatchesinculture,heritage,politicsand Market validation
religion. Investing in the wrong international market or the
• A geographic match in terms of proximity and physical right market with the wrong partner, or even targeting
requirements. the wrong end user, is an expensive exercise. Most
•AdvantageoustradezonesandFTAs. LQWHUQDWLRQDO PDUNHWV DUH ¿HUFHO\ FRPSHWLWLYH 0DUNHW
‡)DFWRUVWKDWDUHPRUHVROXWLRQVSHFL¿F OLNHDPDULQH segments are sliced thinly and serviced by specialists.
hardware not being suitable for landlocked countries. By necessity many New Zealand businesses are
‡(QJOLVKDVD¿UVWODQJXDJH generalists to achieve scale domestically. To thrive
Thisprocesswantstobeasswiftaspossible.Youwill internationally they need to identify what niches in
UHÀHFW RQ \RXU H[LVWLQJ EXVLQHVV SODQV WR KHOS GHYHORS target markets to focus on and what parts of their offer
your criteria for these markets. Information sources will are relevant.
include existing knowledge of your industry, speaking The costs of being broad and unfocused are high.
to other New Zealand businesses, online resources and <RX PXVW IDFWRU LQ WKH FRVWV RI ¿QGLQJ DQG RSHQLQJ WKH
resources from trade and industry organisations. market, the opportunity costs of poor sales over time
6HOHFWLQJ ZKLFK PDUNHWV WR HQWHU LV D VLJQL¿FDQW and the time and cost of exiting partnerships before
decision that will affect several other areas of the being able to commit to a more suitable arrangement. It
business model. The selection will be a major driver becomes apparent how important it is to validate whom
of other activities the business will undertake. Thus, you should work with and what segments and channels in
a careful execution of the market selection process is the market you should focus on.
integral.Itwillhelptonarrowthecompetitivescope
and provide insights that will aid in framing the value What is market validation?
proposition in those selected markets. “Do I have clear, objective proof that a large enough
number of people are willing to pay me money for the
Step Two: conducting a Market Opportunity product or service I propose to sell?”
$VVHVVPHQW 02$ RQWKH¿YHWRWHQSULRULWLVHG This is the question that Texas University Professor
markets. Rob Adams, the world’s leading authority in market
7KH REMHFWLYH RI WKLV VWHS LV WR SULRULWLVH ZKLFK PDUNHW V validation, challenges all aspiring exporters to answer.
youwillcommittoexploringindepthtoidentifywhere Validation is the essential step to increasing the
your offer will deliver best value. likelihood of success and direct entry into a new market.
The MOA scores each market based on a weighted It reveals what to sell, where to sell it, and to which
score developed from ranking different factors. These customer.
factorsare categorisedintoMarketAttractivenessand Market validation leads to an understanding of the
Business Competitive Strength factors. market landscape, which is often unique and nearly
• Market Attractiveness factors include those which you always distinctly different to New Zealand. This
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Such as geography, demography, GDP, language, market will be most interested in the product or service,
culture, economic trends, legal and regulatory factors. and in turn the value proposition will be built around
• Competitive Strength factors include those elements ZKHUH WKH UHDO PDUNHW QHHG KDV EHHQ LGHQWL¿HG
WKDW \RXU EXVLQHVV ZLOO EH DEOH WR LQÀXHQFH VXFK DV
existing relationships and opportunities, conducting The key validation questions:
market research for international business, global There are two phases in the validation process.
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and price support. resources to build a comprehensive picture of the market
This is an effective tool to analyse markets and can be as quickly as possible. You can then make a ‘go/no go’
done quickly or in great depth depending on your level of decision on whether to invest in the more valuable and

NZ Export & Trade Handbook 2018 107