Market research is a vital aspect in determining success of an offshore project. The most important factor that needs to be considered before starting any overseas business is to invest time in researching about the offshore market with respect to the products. A properly structured market research could be beneficial in various ways.
It can be helpful in locating potential market segments where the product can be best sold, be helpful in getting a fair market price on the product and also provide an analysis regarding various domestic and international competitors available for the similar product.
There are basically two types of market research conducted by various business firms. They are the primary market research and the secondary market research.
Primary market research involves collection of primary data directly from the source. Data is mainly gathered from the offshore market through telephonic interviews, economic surveys and a direct communication with the customers and suppliers. Primary market research is an elaborate process primarily custom-designed for each individual product. It is an expensive and time consuming process.
Small business firms, who are unable to invest money in primary research, generally do their market analysis through secondary market research. Secondary market research involves collecting data through published international trade reports, Trade and economic statistics and through different trade agencies.
There are several steps involved while conducting a detailed market analysis about a product. Some of these include:
Classifying the product for the purpose of gathering information regarding similar product – There are various classification systems that are in practice. These include Harmonized system (HS), Standard international trade classification (SITC), standard industrial classification (SIC) system and North American Industry Classification system (NAICS).
Identification of potential markets: This involves information regarding fruitful markets where the product is being exported, data containing details of competitors, the actual market size of the product pertaining to the amount of product being shipped and its trade value and its trade history.
A typical exporter usually combines the data received through both primary and secondary market research. The final analysis about the foreign market is confirmed using the data from Trade managers and export specialists.