Key Takeaways
- Many businesses still struggle with how to enter a market without exposing themselves to unnecessary risks
- A clear understanding of your ideal customer helps you build a stronger market entry strategy
- Competitive research helps businesses sharpen their positioning, messaging, and pricing
- Ongoing feedback helps teams refine their strategy and improve their chances of success
Now and then, we hear of companies trying to enter new markets. That’s just how business goes. But this does not mean that all attempts are bound to be productive. Market entry is inherently risky, particularly when businesses underestimate differences in customers, competition, costs, and market conditions. Introducing a product or service to a new audience or an entirely new location with a distinct culture is inherently risky. So, how can you enter a market? You need a solid market entry strategy.
When your company grows and flourishes, it’s natural to realise it’s time to look into new markets where you can thrive. However, the confidence that comes with being able to expand often causes managers to ignore potential dangers of new market entry, leading to failure. The key to avoiding this loss is to identify the issues that most often contribute to market entry failure and determine how to protect your company from them.
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In this article, we provide a comprehensive guide for firms launching a new or existing product in new markets. First, we define what a market entry strategy is. Then, we discuss the reasons why certain enterprises fail to enter new markets. Next, we outline the process for entering a market with an effective strategy. Finally, we examine a successful market entry case study.
At Taylor Wells, we believe that a robust market entry strategy can improve the chances of success and prevent excessive losses as businesses enter new markets. By the end, you will know how to boost your brand’s confidence and understand the dynamics of market entry.
How to enter a market: 6 steps
To enter a market successfully, the article recommends six core steps:
- Establish an Ideal Customer Profile (ICP). Define the customers most likely to benefit from your product or service and generate enough revenue to support your profitability.
- Monitor your competitors. Review their product lines, customer feedback, value proposition, and market trends to understand where your offering fits.
- Develop the right campaign message. Use customer and competitor insights to communicate your value clearly and establish your Unique Selling Proposition (USP).
- Outline your budgeting objectives. Set achievable goals and balance internal and external efforts, with the article recommending a 50-50 divide during the initial run.
- Design your strategy. Combine data, marketing tactics, content management, pricing, and partnerships to reach and attract your ICP.
- Enable a feedback mechanism. Keep marketing, sales, and product development aligned so you can identify what works, overcome hurdles, and refine your approach.
Together, these steps provide a practical framework for entering a new market while addressing the research, positioning, budgeting, execution, and feedback needed to support a launch. The following sections explain each step in more detail.
See whether your pricing is under controlHow to enter a market with a competitive strategy
What is a market entry strategy?
A market entry strategy, also known as a go-to-market (GTM) strategy, is an approach that helps you define your ideal customers, align your messaging, and position your product for release. It also puts important business segments on the same page, enabling you to satisfy a market need while refining your product successfully. This is the type of customer that will likely benefit the most from your product or service while also bringing in enough revenue to make your company profitable.
What are the market entry barriers?
1. Insufficient market knowledge
One of the most common errors organisations make when they enter a new market is a lack of research. Analysing your new target demographic is critical not only for promotion but also for selling. For instance, the marketing team may generate valuable interest in your company, but it is up to the sales team to convert that interest into income.
Consequently, having a thorough grasp of your new market’s values and preferred modes of engagement allows your sales department to better understand how to pursue, manage, and close deals in a way that the new market will accept.
2. Failure to convey a distinct message to the market
Some businesses find themselves lost when describing their value to new clients. Ask yourself: What distinguishes you from your rivals, and how does this serve your target market? Often, companies have yet to address this issue because they have never needed to in their current market.
Not knowing your product or service well enough can stymie your expansion into new areas. Remember that understanding why customers choose your brand allows you to communicate more effectively with your new market.
3. Overlooked feedback
Some companies enter new markets despite data indicating a low likelihood of success. Take note that success in one market may not translate into success in a new market. Thus, you need to be aware of the research and data that suggest prospective performance.
Often, business executives may struggle to recognise that their product and market strategies require some adjustments before entering a new market. Without realising it, they are setting themselves up for failure, exposing the company to irreparable consequences.
How can you enter a market successfully?
1. Establish an Ideal Customer Profile (ICP).
The first thing you need to enter a market successfully is an ICP that articulates your ideal customer. This is the type of customer that will likely benefit the most from your product or service while also bringing in enough revenue to make your company profitable.
To design your ICP, you must first know your prospective customer’s identity, which includes their lifestyle or work activities, as well as the issues they experience daily.
What you need is relevant and reliable data. Questionable information can result in unsuitable client engagements, whereas good data helps your teams craft data-driven marketing and sales tactics that target the right people, leading to faster business growth.
In B2B, ideal customers are often those who can utilise your product to raise their income, cut costs, increase efficiency, or boost the productivity and well-being of their employees. Defining your ICP can generate revenue by helping you target the right customers. ICPs can also provide recommendations, customer feedback, and reviews.
2. Monitor your competitors’ product lines and the value they deliver.
Knowing where your product or service fits in the market is critical to any market entry strategy. Understanding what your competitors offer and the value they deliver to their customers helps you position your products and services.
You can begin by reading online reviews about the company and sorting them by applicable market segments, such as small and medium-sized businesses. By doing this, you will know what customers appreciate and dislike most about your rivals.
Another perk is that you can collect more data for your ICP. You can also benefit from studying major and emerging market trends that can affect your launch in the short and long run.
3. Set the appropriate campaign message.
Branding and messaging involve conveying the value of your product or service to your ideal customers in a way that addresses their needs. To do so, you must know them well.
Listen to or watch marketing demonstrations or get information from salespeople. Focus on how they present their offerings, but also notice their flaws. You may even look up certain competitors and see how customers react to them. Complement this by reviewing case studies and online reviews.
Then, turn your attention back to your company and its competition. You must know your competitors’ existing messages on their digital platforms, as well as how they handle the branding and marketing of their offerings. This will allow you to determine your Unique Selling Proposition (USP).
After that, you must create a proposal for executives that includes major insights about your competitors’ positioning compared to your own. Explain how distinctive your product is and how you can better address your ICPs’ concerns.
Finally, to cement your messaging, you must reach a consensus with top company executives. It’s fine if there are several adjustments before you cross the finish line. That is completely normal. It indicates that the final messaging and product branding were filtered and were most likely the best that the team could come up with.
4. Outline your budgeting objectives and your intended results.
All effective market entry strategies have well-defined frameworks. You can create these structures based on the resources or money you have. We recommend that you opt for a 50-50 divide between your internal and external efforts throughout the initial run of your market entry strategy. This way, you establish achievable goals and then evaluate them based on utilisation.
External initiatives to enter a market
For instance, you might have multiple outbound sales agents working on your launch. Their activity can be tracked by evaluating the number of emails they send each day. This allows you to estimate how many appointments each agent can generate. Following this, you should use the appointments to assess and update your agents’ objectives.
This will enable you to develop your full budget and set data-driven metrics and sales targets to strive towards each month. However, if you find yourself falling far short of these expectations, you may have to appropriately revise a component of your market entry strategy, such as your preferred ICP, to boost efficiency.
Internal initiatives to enter a market
Now it’s time to monitor your inbound and marketing efforts. This begins with an estimate of your cost per lead (CPL). Then, throughout the sales pipeline, you must account for expected conversions from one phase to the next. You can also calculate how much money you’ll require to generate the same number of prospects as your outbound efforts.
You can capture these opportunities using a balance of content and paid advertising. Don’t forget that you should vary and explore alternative techniques as part of your market entry strategy.
5. Design your strategy.
To connect with and attract your ICP, you must employ a variety of strategies. These include data, marketing tactics, content management, and partnerships.
Data strategy to enter a market
Quality data, as previously stated, is necessary to reach your ideal customers. Using appropriate data, your sales team may target people who are most likely to purchase your product or service. This will help you craft an effective outbound sales plan.
Marketing tactics to enter a market
Test, experiment, and optimise when developing your market entry strategy.
Begin with an offer. Then, consider tailoring this offer to the lead sources you think are most likely to convert ICP prospects. Of course, you’ll need distinct offerings for the top, middle, and bottom of the funnel. You’ll also have to promote the offer uniquely on each channel.
Start with the most basic campaigns, the bottom-of-funnel campaigns. They’re jam-packed with immediate gains and valuable takeaways. Consider targeting customers on online platforms like LinkedIn, YouTube, and Facebook, as well as developing campaigns on Google and Bing that target highly-searched phrases. After this, you may undertake your top and middle strategies.
New product pricing strategy to enter a market
Pricing is crucial when introducing a new or existing product to a market. The price of your products impacts their appeal to your ICP. A world-class pricing team can help you select the right pricing model.
Taylor Wells research indicates that with the right strategy, set-up, and pricing team in place, incremental earnings gains can begin to occur in less than 12 weeks. Businesses can also capture additional margin as they improve their price management processes and identify previously unrealised opportunities.
Content management to enter a market
While data is the driving force for your outbound lead generation efforts, content drives your internal lead generation efforts.
When developing a content strategy to advertise your product or service, the first step is to conduct keyword research. Although there are free services, paid SEO and digital marketing platforms can provide more advanced keyword research and competitive analysis.
SEO tools like these allow you to examine the keywords that your competitors are already ranking for and identify opportunities where you can compete. Moreover, you may also check the ranking of your target keywords and discuss your performance with the rest of the team.
Partnerships to enter a market
If you’re introducing a new product or entering a new market with little brand recognition, you’ll need to work with partners. Organisations with similar ICPs can assist you, especially if they have significantly greater brand recognition.
Co-marketing efforts will get your product or service in front of the right stakeholders, generating recognition and demand. Collaborative virtual events, white papers, and cooperative digital marketing are some of the most effective co-marketing efforts.
6. Enable a feedback mechanism.
Creating a feedback mechanism among marketing, sales, and product development teams will ensure that the important takeaways from your market entry plan are implemented. To do so, you must hold your team accountable for each aspect of your strategy. Making these individuals communicate their performance and accomplishments regularly can help you overcome hurdles.
Feedback mechanisms will assist you in identifying the right ICP, selecting appropriate channels, attracting customers through marketing, and developing products or services that better address your ICP’s problems.
What’s a good example of entry into foreign markets?
In the mobile phone industry, it’s hardly surprising that people associate quality products with Apple and Samsung. So Huawei, a Chinese technology company expanding its presence in India, had to find ways to strengthen brand recognition. Let’s look at its entry into the Indian market, where the brand encountered some challenges.
To establish a presence in the Indian telecommunications industry, Huawei sought to differentiate itself by developing a distinctive style as well as a reputation for dependability. This presented a major obstacle for two reasons. First, Indians have perceived Chinese enterprises as difficult to work with and Chinese-made items as mediocre and substandard. Second, China and India have strained relations.
Huawei began growing its presence in India by launching R&D and authorised service centres. Along with this effort, the company sought to hire mostly local employees to demonstrate its commitment to creating value for Indians rather than just profit. These investments helped Huawei establish a significant research and development presence in India.
The company also sought to strengthen its consumer brand in India by marketing its phones as aspirational devices and collaborating with local English-language networks to address perceptions of low-quality Chinese products. The takeaway is that building trust, developing local relationships, and demonstrating a long-term commitment to the market can strengthen a company’s position when entering a new country.
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Bottom Line
Entering a market requires a competitive plan of action. A market entry strategy, or a go-to-market (GTM) strategy, is a plan that outlines how a company will interact with customers to persuade them to purchase its product or service and establish a competitive edge. Executives must learn to manage a range of approaches to establish an efficient GTM. Pricing, sales and channel approaches, the purchasing process, new product or service launches, product rebranding, and product promotion in a new market are all part of GTM strategy development.
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