Entering a new market is not only a great way to grow, but often a vital step toward reaching your business potential. In fact, 87% of U.S. companies agree that international expansion is necessary for long-term growth. Yet growth without a market expansion strategy is a recipe for disaster.
What is a Market Expansion Strategy?
A marketing expansion strategy is a business plan that involves launching products or services in a foreign market when a company’s sales growth has peaked in its domestic market.
The global market offers unlimited opportunities to reach new customers and increase sales. But not every local market offers the same growth opportunity, which is why you need an expansion strategy to help you decide where to launch.
By developing one, you will:
- Reduce costs. Targeting customer segments who are most likely to buy will save you money on marketing and production costs.
- Decrease risks. Market expansion always involves risks, but careful planning helps you avoid unforeseen challenges.
- Reach more markets. A focused expansion strategy helps you uncover more opportunities and better allocate resources to markets with the highest ROI.
- Improve tax compliance. With proper research, you can mitigate expenses and enjoy local tax advantages.
How to Create a Market Expansion Strategy
Now that you know more about the benefits of a market expansion strategy, here’s how you can develop one in six steps.
Step 1: Define Your Goals
Like all marketing plans, you should start by defining your goals for the expansion. To ensure they're attainable, we recommend using the SMART method. SMART is an acronym for:
SMART goals are attached to key performance indicators (KPIs) such as revenue growth, profit margin, marketing sourced pipeline, and customer satisfaction. Each one focuses on a specific KPI, how to quantify it, and how long it takes to achieve it.
As you develop a growth strategy, ask yourself:
- Which KPIs do I want to target?
- Which projections will I use to assess new markets?
If you don’t know what you want to achieve, you probably aren’t ready to launch internationally.
Step 2: Conduct an Audit
Next, you need to audit your current domestic practices. Although this step is often overlooked, it's an essential part of ensuring a successful launch.
During the audit, you should identify:
- Your target market and their demographics
- Products and services that are most popular amongst your target market
- Elements of your growth strategy that have led to the most success
- Elements of the business that are gaining traction and losing traction
- Friction within operations and management
If you discover any issues, it’s important to find solutions before you replicate the same strategy abroad.
An audit will also help you identify the core business components you should focus on at the beginning of your expansion. If you try to expand to too many areas or offer too many products and services, you may spread your business too thin.
Step 3: Market Research & Cultural Considerations
Now it’s time to determine which areas you want to expand into.
Thorough market research will help you evaluate demand, competition, and country-specific considerations such as business regulations and cultural preferences. Tools such as Google Trends and SurveyMonkey can help you uncover insights into buyers’ wants and needs, and build location-specific buyer personas. This will help you define your international target audience.
As you research, take local language and cultural nuances into consideration, and adapt your marketing plans accordingly. For example, let’s say you want to launch in Brazil. That would require adapting your website and other marketing materials to reflect the local culture. This process, which is known as localization, would include:
- Translating all content into Brazilian Portuguese
- Adapting website elements such as currency, payment options, and address formats
- Adapting images and cultural references
This ensures Brazilians feel as though the product is being marketed specifically to them.
Lastly, don't neglect secondary markets. As you conduct your audit, you may find your domestic market speaks multiple languages. For example, if you're domestic market is in the US look into the Spanish speaking populations and whether or not serving them in Spanish can impact your business objectives.
Step 4: Competitor Analysis
Another often overlooked step, competitor analysis lets you evaluate how competitors position themselves. If you want to take a portion of the market share, you need to know who you're taking it from. Consider the following:
- How they position themselves – are their websites translated? What languages do they provide? Are they local or international?
- Their strengths and weaknesses.
- How you can capitalize on their weaknesses and ensure you don’t make the same mistakes.
Understanding how your competition operates in these areas is crucial. Once you know this, you can begin to make final decisions regarding how you'll expand.
Step 5: Adjust Business Structure and Operations
Now that you’ve identified the market, target audience, and competitors, it’s time to determine how you’ll deliver your product or service to consumers. Common methods of international expansion include:
- Global Strategies
- International Strategies
- Multi-domestic Strategies
- Transnational Strategies
- Join ventures
While you evaluate your options, ask:
- How will it impact operations?
- Will you need to hire international employees?
- How will you ship products?
- How will you provide international customer service?
And don't forget to address customer communications and marketing. The channels you choose will depend on local preferences, but some of the most popular include:
- Paid and organic search
- Paid and organic social
- Media planning and buying
- Email marketing
You should also localize this content for every market because 76% of consumers prefer purchasing products with information in their own language. Yet this can be costly unless you have an automated system in place. With MotionPoint, you can use translation services to localize multichannel assets such as social media, email, and more—quickly and affordably.
Step 6: Execute, Analyze, and Optimize
Implementing your strategy is just the beginning. You need to continuously monitor operations to ensure everything is running smoothly. How you analyze and measure performance depends on how you expand, but you can:
- Segment your website and marketing data by location
- Evaluate conversion rates, CPCs, CPAs, and more
Remember, the metrics you choose to track should be in line with your SMART goals.
Let MotionPoint Assist in Foreign Market Expansion
As you can see, a market expansion strategy is an essential part of an international launch. It not only enables you to choose the best markets for your brand, but also helps you with marketing considerations.
However, customer communications are rarely one and done. You need to provide ongoing messaging to maintain brand loyalty. That’s where MotionPoint comes in. In addition to our turn-key proxy website translation services, we offer ongoing multichannel localization that will keep customers engaged—in any language.
Ready to develop an effective market expansion strategy that keeps customers coming back? Contact MotionPoint to get started.Letzte Aktualisierung: 12. August 2022