new market entry strategy Archives - Business Intelligence

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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 entry barriers

Market Entry Barriers to the Chinese Pharma Industry

Although expansion into emerging markets is vital for pharma companies to ensure continued growth, both cultural and economic market entry barriers can pose problems. China is one of the most lucrative markets for pharma companies across the globe. China’s growing middle class and an ageing population mean new opportunities for companies to widen their portfolio in this area. However, entrants into the Chinese market encounter several challenges while expanding their operations effectively in the country. For Western companies seeking a foothold in the pharma industry in China, our experts have identified some of the key market entry barriers in the Chinese pharma market and ways to overcome them.

Want to break free from market entry barriers and establish yourself in a new market? Request a free proposal to know how our solutions can help your business.

Chinese market entry barriers

market entry barriersIdentifying untapped market potential

The scale of the country could prove to be one of the key market entry barriers for pharma companies planning to enter the Chinese market. So far, the main focus for pharma companies has been on Tier 1 and Tier 2 cities, those with a population of over 2 million. Physicians in large hospitals in these cities have been targeted by foreign companies as a part of their market entry strategy to venture into these markets. Pharma companies must also identify ways to leverage the potential of China’s rapidly growing Tier 3 and Tier 4 cities. Mergers or joint ventures with established Chinese firms who have built up knowledge and a profile in these areas is one of the best ways to pursue this.

Overlapping demographics

China’s overlapping demographics with each of them requiring a tailored approach poses a severe challenge for pharma companies. Furthermore, inadequate knowledge of geographical and cultural differences in Chinese markets could also prove to be significant market entry barriers for companies in the pharma sector. Even two cities such as Shenzhen and Guangzhou which are in close proximity, speak different languages and represent very different social clusters. Marketing in these two cities or even the case of Tier 1 and Tier 4 cities in the country would necessarily require two separate approaches.

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Planned price restrictions

The Chinese government has recently indicated that they intend to review their current drug pricing scheme, which could increase the market entry barriers for foreign companies. They are planning to dramatically increase the number of drugs covered under the essential drugs list. China’s pharma industry is heavily weighted towards producing generics which are better placed to compete under such criteria, posing major market entry barriers for foreign companies wishing to profit from more expensive branded drugs. Foreign pharma companies can increase their profit margins by targeting consumers directly.

Supply chain

Once the drugs have made its way through the registration process, it will need to be distributed, and the fragmentation of the supply chain makes this a much more complicated process in China. Often, there are several layers of distributors to get through before reaching the customer in Chinese markets, which raises the distribution costs and also diminishes supply chain visibility, making it difficult to monitor the product once it has left the factory, contributing to further market entry barriers.

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Market Entry Strategies: Boost Your Presence in the Foreign Markets

Expanding a business into foreign markets is usually a worthy endeavor and can open up huge growth possibilities, but it does bring new challenges too, such as unfamiliar customer behavior, unacquainted market response to products or services, universal payment methods, cultural differences, and tariffs and export fees.

Without understanding customer behavior, it becomes very difficult for businesses to offer a customer-centric and personalized experience to their customers.  Therefore, for businesses to succeed in the global market, it is crucial to have winning market entry strategies in place to review macro and microeconomic environments and assess a market’s readiness for new offerings. Additionally, companies need to do a proper market analysis to identify the potential risks that they can face in the foreign markets.

At Infiniti Research, we understand the impact that international market entry strategies can have on your business. And to help companies excel in the target market, our team of experts has provided a detailed guide to market entry strategies to help businesses break into foreign markets.   (more…)

Connected Car Technology

Top 3 Challenges Companies Must Watch Out for Before Devising International Market Entry Strategies

Today, in the era of globalization, brands across the world have been compelled to ‘think global’ and expand their reach to international markets. This would eventually boost their growth and profit potential. Doing business in foreign markets is attractive for both big as well as small ventures and this is why robust international market entry strategies play a crucial role in making any brand a global success. But there are several challenges associated with a foreign market entry. Therefore, it is essential for companies to be careful while formulating international market entry strategies since they may overlook certain challenges that might prove to be fatal for the business. In this article, we have listed a few important challenges that companies must watch out for before devising international market entry strategies. To help companies achieve this, we have suggested a few measures that can help companies combat these barriers efficiently.

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5 Things to Consider Before Entering A New Market

Grace

Today, external forces are affecting the success of any business like never before. Experience and conventional wisdom cannot be expected to guide the strategies of the future. This is especially important when it comes to entering a new market. It is aptly said that “One man’s ignorance is another man’s opportunity.” What one organization ignores becomes an opportunity for another. Therefore, to have a strategic advantage, companies should learn about what, where, and why of the market environment before entering a new market. However, before stepping ahead to explore a new market, there are several factors that must be considered. This methodical process of analyzing every potential opportunity and investing resources, time, and effort in market analysis and finally deciding on the entry method to ensure success in the new markets, forms the basis of a new market entry strategy. 
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