Whether you’re formulating a new international market entry plan or you’re already operating on a global scale, here’s an essential piece of advice. When considering a potential new market, you need to analyze data at the country level, not the regional level. If you only pay attention to the region, you’ll miss key signals from your most important markets. On the other hand, looking at things at the country level will have the biggest impact on your overall international efforts.
The United States Is a Unique Market
If you are based in the large, basically homogenous economy of the United States, you might overlook the fact that the US is a rather uncommon market in this respect. Where your international growth is concerned, it’s important to keep in mind that the “norm” of the US market is an anomaly in most of the rest of the world. Here are some examples of how not to look at your international market entry strategy.
Generalizing About Europe
The economies of Europe vary widely. For example, the continent includes the following:
- Extremely wealthy developed markets.
- Some small emerging markets.
- One BRIC country (Russia).
- Markets that are English speaking.
- Non-English speaking markets.
- Many different currencies.
- Countries that have or do not have trade agreements.
There’s an enormous number of other nuances and diverse aspects pertaining to each country’s culture, economy, and laws. It’s common to place European countries into sub-groups when determining an overall sales territory. However, for effective data analysis, it’s far more critical to decouple each market from the sales territory it may have been placed in.
A SALES TERRITORY IS NOT A MARKET; A COUNTRY IS A MARKET.
Taking a Look at Latin America
Spanish-speaking Latin America is a large geographic area that is linguistically mostly homogenous. And, it is true that its various economies and currencies are more interconnected than those of other regions. However, the region includes a country like Brazil, which has a different language and a unique market. You need to break out Brazil from the rest of the Latin America region when doing your international market entry data analysis. However, Brazil isn’t the only country you should separate out. You should also include your largest markets (countries), such as Mexico.
Ignoring the Diversity of Asia
Few major geographic regions have more diversity than Asia. The continent has forty-eight countries and a population of approximately 4.5 billion people speaking more than 2,300 languages. (By comparison, Europe only has 741 million people and around 200 languages.) Even the sub-region of Southeast Asia has countries as diverse as Malaysia, India, Vietnam, and Thailand. Each of these country markets has dramatically different languages, writing scripts, and religions. Because of its complexity, Asia is a region where country-specific data analysis is essential.
International Market Entry – Analyzing Data at the Country Level
Looking at data at the country level will enable you to narrow your focus and market your brand more strategically. If you focus on a level higher, your analysis will be spread too thinly, and you will miss essential cues from the most profitable markets.
Simplify Your Marketing Strategy
Analyzing at the country level doesn’t necessarily mean you have to go forward in each country. If you have the data, it enables you to opt into, ignore, or spend a minimal amount of time on, any market that turns out to be relatively insignificant. Therefore, if a country appears to contribute a very small percentage of your total possible regional customer base, you probably shouldn’t spend too much time on it.
Your International Data Analysis
For the majority of US-based businesses, the domestic market is likely to make up a large percentage of their total global revenue. The remaining large chunk of revenue is generally going to come from approximately twenty countries. There may also be a much longer list of countries accounting for a much smaller percentage.
This means you can refine your analysis by looking at your top twenty international country markets, as opposed to attempting to glean insights from broader regional groupings. Your top twenty markets give you the most impact! Don’t let the marketing signals of these valuable countries be hidden in a regional grouping.
An Example of the Importance of Country-Specific Analysis
A company based in the US had attempted to figure out why their conversion rates for Europe were so different from that of the US. They had tried various packaging and pricing experiments for Europe to no avail. However, they had never separated out their conversion rates by country. When they finally did so, they discovered that a single country – France – had a much lower conversion rate than all the other country markets.
A review of their sign-up page in French revealed many elements that seemed highly American and unfamiliar to French visitors. They worked to improve the localization of the page, and their conversion rates improved. With this international market entry lesson learned, they took a look at improving their localization in other markets.
- By focusing on one country and the localization issues that were having a negative impact, they raised their conversion rate for the whole European region.
Top Countries Lift All Markets
Broader, geo-level data analysis does have its place, but it’s most useful for territory planning and regional sales’ head counting. It should not be the driver for your overall international market entry planning. The sooner you focus on country-level data analysis, the easier it will be to make the best decisions to improve your global marketing.
Don’t Allow Country-Level Data to Be Obscured
By only focusing on regional data analysis, key market signals pertaining to specific countries will remain muted, and perhaps even lost, in your data. Moreover, you’re more likely to spend time looking at insignificant trends without any real understanding of which country is driving them.
It’s not necessary to focus on all markets at once to be successful with your international market entry strategy. Focusing on too many markets simultaneously, or clumping them together too broadly, will dilute your focus and spread you too thin. It’s far more important to focus on your top markets instead, and you can only identify them via country data analysis.
Once you have your data, you will have a deep understanding of how to localize your marketing efforts in each country. You will also need a quality translation/localization management system (TMS) to put your localized international market entry strategy into effect. This is where Localize comes in – book a call with us to learn more.