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Keys for Success in Building an International Market Penetration Strategy

Venturing into a new market is always a ‘tricky business’. Entering markets overseas where consumers think differently, follow different cultural norms, and speak entirely different languages could prove to be extremely complicated and a daunting task for organizations. For companies seeking to venture into and establish themselves in an already competitive and culturally different market from what they currently operate in, an effective market penetration strategy is a must-have. There are several examples of even some of the top international brands who have failed to garner customer support and establish themselves in new markets despite having a strong brand name and displaying business excellence in key markets of the world. The absence of a strong market penetration strategy is one of the prime reasons for the lack of success.

Having a penetration pricing strategy could prove useful in the case of new market entry. But beyond this, there are several factors that businesses must take into consideration for reaching out to a multilingual and diverse audience. Smart brands do their homework and analyze new ways to engage local customers and undertake promotions that resonate with the audience. Here are some factors to take into account while pursuing a market penetration strategy on an international scale.

An untapped market won’t always be the right one for expansion; there are a lot of variables around brand economics, timing, and more that must be considered. Request a free proposal to know how to identify the right markets to invest in and choose an effective market penetration strategy to successfully establish your business in a new market.

International market penetration strategy

market penetration strategyFocus on demographics

It’s always a good idea to deep-dive into the demographics of a market before formulating a market penetration strategy. Businesses must gain a clear idea of how the market breaks down in terms of age, ethnicity, gender, income, and several broader census categories. Once this is done, brands must hone in on individual regions. Although population across a region are often believed to be homogenous, mostly this is not the case. Varying levels of conformity and diversity can be seen in different regions. Gaining a clear understanding of these diversities can helps brands create a successful market penetration strategy. This will also help brands craft native brand experiences that are personalized and speak specifically to a particular market or region. Consequently, helping to ensure that those messages resonate with the local customers.

Identify target customers

When a brand plans to expand its business into a new region or country, this does not mean that the entire population of that country is their target audience. Once the business gains a clear idea on the demographics of the new market, they easily identify their target customers a build their market penetration strategy accordingly. If the target market size is not estimated, then it would eventually skew the other predictions of the company, making it more difficult for their market penetration strategy to become successful.

If you’re planning to enter new markets overseas, you’re likely looking to leverage market penetration strategy s as a means of gaining a foothold. Get in touch with our experts and learn how we can help you achieve this.

Cost-benefit projections

The feasibility of the market penetration strategy to enter a new market should be estimated. Does the decision make sense financially? Will it net more revenue than the costs incurred? These are some of the key questions that businesses must have answers to before going ahead with the implementation of their market penetration strategy.

Localization

Localizing content and strategies are paramount to resonate and be accepted among local audiences in a new territory. Localization entails layering appropriate cultural nuances on top of content translation. Websites and mobile apps should be revamped to suit the taste of local audiences and are easy to use and understand for them. Any touchpoint of interaction between customers and the brand must be natural and meaningful to the target audience.

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Market penetration strategy

Market Penetration Strategy for a European luxury beauty and personal care brand

The US is currently one of the largest markets for beauty and personal care products. In addition, this industry is now growing at a steadier and faster pace in the US when compared to other countries in the world. The lucrative opportunities in the US beauty and personal care sector is prompting several foreign players, especially European companies, to venture into the market. Furthermore, there is an increasing demand for luxury and premium products among American consumers. With ample market opportunities and a robust growth trajectory fueled by the premium segment, the US is now an attractive growth priority for premium beauty brands to expand its global footprint. By leveraging a strong market penetration strategy, businesses can gain a comprehensive understanding of the pros and cons of a new market and become fully equipped to establish their business in a foreign country.

You are just one step away from successfully establishing your business in a new market. Request a free proposal to know how our market penetration strategy for business can help you achieve this.

Business challenge

The client, a European luxury beauty brand retailer, wanted to expand their business into the United States. Although the market for luxury beauty products in the United States looked promising, the client wanted to understand in detail the key challenges and opportunities that the market has to offer before making a move towards market entry.

As the company’s core business is into luxury retail, it is a no-brainer that it would be challenging to appeal to all the customer segments equally. So, with Infiniti’s market penetration strategy, they wanted to understand the demographic conditions in the US and group different customers based on the most profitable segments. Through this, they wanted to gain a better understanding of which customer groups to target for their product marketing strategy and identify the best channels to do so. The European luxury beauty brand retailer also sought to gain an idea of the best distribution models and investment capacity in the US using our market penetration strategy solutions.

An effective market penetration strategy is all you need to win over your target audience. Get in touch with us our experts to know how we can help you formulate an ideal market penetration strategy for your business.

Key challenges in the US luxury beauty market 

market penetration strategy

Highly competitive market – The luxury personal care and beauty market in the US is more consolidated when compared to that of Europe. Unlike the European luxury segment, in the United States, the top 10 companies collectively own a greater share of the premium market segment. This relative consolidation leads to fierce competition and has a major influence over the coveted share of finite shelf space at key retailers.

Distribution channel mix – Due to significant competition and product proliferation, distribution channels play a critical role in both the market entry strategy and growth potential of beauty brands entering the US market. The fundamental difference in the distribution channels here is that US markets demand a localized distribution strategy, which is critical for the growth of European brands in the US marketplace.

Changing consumer preferences – Consumers’ increasing preference for plant-based, organic, and natural beauty products have spurred investment and innovation as companies to capture market share in this growing category. Natural products appeal to modern consumers, both from ethical considerations (concern for environment and sustainability) as well as health concerns (fear of harmful ingredients).

Solutions offered

With over 15 years of experience in serving various industries across the globe, the experts at Infiniti Research helped the client to devise an efficient market penetration strategy to enter the US luxury beauty and personal care market.

  • A thorough market entry research was undertaken to help the client understand the demographic segmentation and demand patterns in the market and plan their market penetration strategy accordingly.
  • As a part of the market penetration study, Infiniti helped the client formulate a comparative market analysis was provided to the client to help them understand the strategies of their key competitors in the US. They were also able to gain insights on the core difference between consumer groups and demand patterns in the European and US markets. This helped them identify the best promotional activities that are more likely to work with their target audience in the US.
  • During the course of the market penetration strategy study offered to the client, we identified the different modes of distribution that can be chosen by the client to quickly leverage local resources, networks, and market knowledge with minimal investment.

Results obtained

Based on our market penetration strategy and insights, the client gained a detailed understanding of the market demographics and competitive scenario in the US luxury beauty and personal care market. They also developed a detailed understanding of the attractiveness of market opportunities for their product and service offerings. The European luxury beauty and personal care retailer was also able to devise a market penetration plan to establish a foothold in the US. Also, with the help of our market penetration strategy analysis, they were able to better understand the current and future market potential, make effective targeted promotions to attract customers, and thereby successfully plan their market entry into the US.

Learn more about the importance of a market penetration strategy for your business

Market Assessment

Key Benefits of Having a Global Marketing Strategy

Businesses around the world are expanding their operations on a global level. This means that core functions like marketing should be backed by a global marketing strategy that are tailor-made to suit different regional cultures and preferences.  A global marketing concept involves the use of new elements in a company’s marketing strategy such as changes in packaging and advertising that are designed to resonate with the local audience across various geographies. However, some elements such as the company logo remain standardized. A global marketing strategy is a component of a company’s global strategy and it encompasses all functional aspects of a business ranging from finance to operations to R&D.

Benefits of a global marketing strategy

If done right, a global marketing strategy can have many benefits for an organization. Start with open and honest conversations about where the company is going. This can help you create a global marketing strategy, build collective commitment, and is one of the many secrets to running a successful and enduring global enterprise. Experts at Infiniti Research have highlighted four key advantages that businesses can gain by adopting a global marketing strategy.

Planning to expand your business overseas? Request a free proposal to know how our experts can help you with the right insights for successful market entry.

Better product and service effectiveness

The more companies grow, their learning must keep pace simultaneously in order to be effective in rolling out a new and improved product or service offerings. Take the example of Facebook for instance. Once the company’s IPO turned out to be a remarkable success in the North American market, their next target region for expansion was India. Studies revealed that internet advertising made up for only less than five per cent in India’s advertising market, compared to North America’s which was close to twenty per cent. Facebook had to improve on their already existing North American strategy to monetize all the users in India in terms of its revenue base and develop its global marketing strategy in India.

Stronger competitive advantage

Although some companies may be natural at competing in a local market, this may not be the case when they are competing with global players in international markets. A brand with a strong global marketing strategy can achieve this, provided the strategy is targeted at the right audience and is well communicated. It also allows for a better-informed and more focused organization as a whole worldwide. Further, it allows companies to adapt quickly wherever needed and keep up with customer demands or other global marketing trends.

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Greater customer awareness

The internet plays a great role in keeping customers around the world connected to their favorite brands. They can track the progress of a brand and their products constantly, helping companies to keep their customers posted on their latest innovations in products or services. A global marketing strategy can help companies identify different elements that can capture the attention of different audiences. They can also promote the “WOW” factor in their offerings through a global marketing strategy that consequently increases customer awareness.

Cost reduction and savings

Economies of scale and scope through standardization can be achieved by focusing on new markets. Furthermore, customers from all corners of the world can find brand using the internet, and they can reach potential customers with one single point of contact such as a website, blog or a Facebook page. The cost savings can help businesses serve customers better worldwide.

Creating a Global Marketing Strategy: Where Companies Go Wrong

What's in it for you?

This resource provides detailed insights on :

Global marketing strategy

  • The common mistakes companies make while formulating market entry strategies overseas
  • The impact of gaps in marketing strategies on your overall performance in a new market
  • Strategies to avoid these mistakes
  • Why businesses must have a tailored marketing approach for different regions.

Although having a global marketing strategy is highly rewarding, the strategies of several companies (even well-known multi-national players) have faced backlash in the past. Download this free resource from Infiniti Research to learn where companies are going wrong while creating their global marketing strategy and how it can be rectified.

Beating the Odds in Market Entry with Competent Market Entry Strategies

New and emerging markets open up numerous opportunities and have limitless potential for growth. However, when to take a closer look at the annals of business history, it shows that for every successful market entry, about four fail. Interestingly, it is not just inexperienced startups that face the heat from new markets while implementing their market entry strategies, several sophisticated corporations also face the same fate. Industrial strategists at Infiniti Research agree that successful market entry strategies depend largely on factors including timing, scale relative to the competition, and the ability to leverage complementary assets. Moreover, it is vital to undertake detailed analysis and market research before entering into a foreign market.

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