New Market Entry / Go To Market Plan

One of the most important decisions when preparing your company and products for new market entry is correctly evaluating your go to market plan or strategy. Any mistake you make at this phase can cost your company both time and money. With so many different options for new market entry, it is crucial to have a defined strategic plan before embarking on any type of marketing activity. 

One thing you need to be certain of before you take this journey is that your new product launch and market entry strategy will deliver the sales you need in order to make your new product a success. New products are crucial to any company in order to remain a compelling force in the marketplace. 

New products must have highly sought after benefits and enough potential customers to make the offering economically feasible. New products require a large number of potential customers who are ready to use and purchase the products and they also need to offer greater value than competitive offerings
.
There are many things that need to be taken into consideration when strategizing for new market entry: 

Which target market provides the best short / long term opportunities and in which geographic location 
Legal barriers such as special licenses 
Intercultural differences 
Exporting requirements 
Company resources 
Exporting (direct or indirect), licensing, joint venture or offshore production 
Pricing strategy 
Distribution strategies 
Competitive analysis 
Strategic partners 
Pre-sales, post-sales and overall support strategy 
First-hand insight into you potential target market 
Go-to-market plan 
Establishment and maintaining of market presence and more…

New market entry is a highly challenging process and the information provided in this blog only scratches the surface of this comprehensive subject. 

Recommended reading: 

Go To Market Strategy: Advanced Techniques and Tools for Selling More Products to More Customers More Profitably by Lawrence G. Friedman 
Market Entry Strategies: Text, Cases and Readings in Market Entry Management by Christoph Lymbersky 
Managing Channels of Distribution: The Marketing Executive's Complete Guide by Kenneth Rolnicki

We would appreciate your feedback on this blog post. Please click here to take our very short survey

Read about 3Sixty's New Market Entry Services

If your company wants to break into a new international market or many markets for that matter, then chances are you’ll be facing some major business decisions. 

What are your Business Objectives? 

You need to start by thinking about your objectives for entering a new market. Do you want increased revenues/profits, brand awareness, business stability, market share, or a potential merger? Only by deciding on your key objective(s) can you start to develop the right strategy. Your decision will also be guided by financial resources, the product lifecycle and the product itself. However, before you decide on your market entry strategy there are many other strategic considerations when it comes to your marketing or business plan. Three of the most important will be: 

• Which country / countries do you choose?
• Targeting which customer segments?
• How to effectively create the right Marketing Mix?

Once you know which market segments you want to attract, what does the tactical go to market plan look like?

Your decisions here will be influenced by the current market – are you one of the first companies to offer this product or a late starter that needs to outshine the competition.

How do I get my products into new markets? 

The decision needs to be made whether to make the products in your own domestic market and ship to the new one(s) or to buy the products in the target market or another cheaper alternative. Don’t forget that distribution, customs and VAT will eat away at profit margins if you decide to ship from home. 

Market entry: Going alone .v. with a partner 

It can definitely be tempting to go it alone and enjoy the fruits of your own success. However, it may be prudent to think about a joint venture, a global partner, or even to buy / merge with a local company. Remember to think about long-term as well as short term.


What market entry strategies should I look at? 

There are a number of market entry strategies that you can utilize but some of the more popular strategies outlined in general business theory are outlined below. The decision that you will adopt is 100% related to your companies specific circumstances. There is no “one size fits all” approach. 

Exporting Strategy
 
This is a strategy where you decide to sell to another country working only from your home base i.e. without any marketing or production overseas. There are many advantages and disadvantages to exporting such as: 

Exporting Advantages:
Increase in sales & profits, an increase in market share, the ability to stabilize any seasonal fluctuations and to grow your company. 

Exporting Disadvantages:
Increased costs for exporting, cash flow – you may need to wait longer for payments, production – you might need to modify your product or packaging and let’s not forget the red tape! Export licenses, Insurance, VAT, and Customs etc.

Franchising Strategy 

If your business is suitable for franchising then it can be an attractive option. Franchising allows you to expand your business without the need for a huge financial investment, basically enabling you to control the risks. 

If you wish to franchise you will still need to do some serious planning to develop a sound plan for growth. This plan needs to take into consideration: speed of growth, geographical development, support services for franchisees, staffing and fee structure, to name but a few of the issues. 

So, is your business suitable for franchising? Your business needs to have certain characteristics if it is to be a successful franchise: 

1. Is it credible? Do you have experienced management, a known brand, and a history of success in your own market? Is your product or service proven to be wanted or needed?
2. Is it unique? Is your product or service different from the competition with a strong USP (unique selling point)?
3. What about ROI? Can your business bring a 15 to 20 percent return on investment? If not then the offering is less attractive to franchisees.
4. Is it teachable? Can you teach someone to run your business in a few weeks? If your business is extremely complicated then it may not be suitable for franchising.


Licensing Strategy
 
Licensing is an agreement that permits a foreign company (the licensee) to use property (i.e., brands, patents, trademarks, and copyrights), technical knowledge and skills, product formulas etc and many more areas from the licensing company (the licensor) for an agreed fee. 

There are many advantages to the licensing approach because it can be done with little initial investment provide a good return on investment and help remove certain export barriers such as tariffs and quotas. 

However there are some downsides such as lack of control over the business and the licensee may potentially become a competitor.

Joint Venture Strategy 

A joint venture is a partnership formed for a specific business purpose by two or more companies (from more than one country) sharing ownership, control and profit/loss. 

What do you need to consider? First you need to set your objectives and decide what you want to achieve from this joint venture. Then it’s time to do research. You need to find companies that are also interested in the same objective or goal that you are. Then it’s all about approaching them and presenting your company and objectives in the best way possible.

How does the Marketing mix work in new market entry?

Once you have decided upon your market entry strategy you need to think about the Marketing Mix (Product, Price, Place, Promotion, People, and Processes) and how you want to implement it. This is incredibly important when tackling a new market. Are you setting a low price to steal market share? Are you selling direct or via retailers or distributors? Are you sending people from home or recruiting local talent? These questions and many more need to be thought about to make the correct decisions.

Read about 3Sixty's New Market Entry Services