Analysis of foreign markets
Depending on the nature and the specific characteristics of the project with which your company decided to enter the Russian and the CIS market, ITERLUME offers a complete research of a specific foreign market. The analysis is carried out, taking into account the source data and the direction of activities of your company.
The following questions should be carefully studied before your company decides to enter the Russian or the CIS market.
Market volume
It is necessary to learn whether the demand for products in this particular country will be significant, that is, whether the decision to promote the company’s products to this market will be justified.
Barriers for entry and exit
It is necessary to answer the question of whether there are obstacles for entering the country’s market that may require serious material investment for your company. Those are legal or other barriers that make the cost of entering this market far too high. Even in the initial stages, it is necessary to foresee probable risks and answer the basic questions. For example, does freight and the passenger transport work normally in this country? What will be the types and methods of distribution of goods – simple or complex? Are there other circumstances that can make the price of goods in this market simply uncompetitive?
Study of competition in the market
Before investing in the promotion of goods into new markets, it is necessary to examine the level of competition that exists there. You also need to get an answer to the following serious questions:
- How many domestic manufacturers of the similar products work in the market and how many companies sell the similar products?
- Are your competitors doing well in this market?
- Do foreign and local distributors work successfully in this country?
- How fully can they reach the buyers in this market?
Market environment
In this segment, the components of the external environment of the company are analyzed, namely: who is the main consumer of the company’s products, how large is the population of the country, how state bodies work and what is their attitude to innovative products, how to build the relationship with the credit organizations, how trade unions relate to the working population state, what are the possibilities of the local products and the trade organizations.
Target audience
Knowledge of the target audience is a key issue that influences the success of the business. Who is the possible buyer of your company’s products? What is the age of those people, their social status and occupation? Based on the habits, needs and other characteristics of your potential customers, you need to develop an effective market entry strategy.
Surrounding markets
Often, in order to expand their business, companies begin to enter the markets of the neighboring countries. In some countries, the company’s products may be sold almost at a loss, but this market may become a springboard for penetrating the markets of neighboring countries, where profits may be more significant. For this reason, the market of a particular country should be considered taking into account the fact that the goods could be sold also to the neighboring countries.
Consumer preferences
The inhabitants of different countries of the world are distinguished by their tastes even in relation to the same product. Such preferences are influenced by the local customs, time, religions, and other factors. While entering the market of another country, the company must first determine whether the goods will be sold there in the same form and quality as in their own country, or do they need to modify the product so that it is adapted to the tastes of the local consumer? For example, will it be necessary to translate the product instruction manual and packaging into the language of the country in which the company starts sales?
Business infrastructure
Is it easy to sell a product or a service in a particular market? It depends on many factors, namely: is there any seaports and good roads in this country that are necessary for an efficient logistics? Are there many airports? Does Internet as well as other means of communication work properly? If we are talking about perishable products, the presence of transport and cargo terminals with the refrigeration equipment meant for storage in the country is very important.
Business climate and level of corruption
Shadow operations in the economy of the country and the high level of corruption increase the risks of doing business there, making companies dependent on their personal relationship with the local elite. This kind of relationship, as a rule, requires huge additional costs. Bribes and kickbacks exist along with the business activity, and, unfortunately, in all regions of the world this is a very significant factor. ITERLUME will show the management of the Client’s company the degree of risk in this matter, and the management of the Client’s company itself will decide on the expediency of doing business in this country.
Political risks in the country
As a rule, business is far from politics, but even in this case, one cannot ignore the political risks existing in the country whose market your company plans to enter. The relations between your country and Russia and the CIS, whose markets you are entering, can seriously influence the business atmosphere through radio, television and other means of mass media.
Financial and credit organizations.
A company entering a foreign market must be ready to answer the following key questions:
- How does a country’s central bank influence the financial processes in business?
- How stable is the national currency?
- Are local banks credible, are they able to competently conduct a transaction using a letter of credit, bill of exchange or other payment instruments?
