MT Expert - Innovation: How to crack new markets

Harness local insight through partner knowledge, even before you stake your claim in other countries, explains Matthias Mierisch, CEO and chairman, arvato UK & Ireland.

by Matthias Mierisch
Last Updated: 09 Oct 2013

Business leaders often dream of global domination for their company, product or service. But, the complexity of the logistics, infrastructure required, local market differences and sheer hard work needed to support expansion into new markets can dampen the spirits of even the most enthusiastic entrepreneur.

Here's how to do it right:

Target from afar, supply local

The good news is that there’s no need to dig deep straight away to support successful market expansion. The unstoppable growth of smartphones and mobile internet has fundamentally changed the way people purchase. Convenience is key and proximity isn’t as relevant as it once was: as long the customer gets what they want at the right price, at the right time, with excellent customer service, it doesn’t always matter where the supplier is based.

So, it may be that it's your distribution and fulfilment network and customer service functions that need to expand, not necessarily your footprint in new areas.

Research the new market heavily

Knowing your customer is a given, regardless of where they’re based, but understanding particular cultural differences will give you the edge when expanding to new markets.

A partnership approach can help you glean unique insight into particular ‘quirks’ in country specific procurement, logistics models or even customer preferences. For example in France, only one of the carriers has the access codes to deliver packages to apartment buildings; critical if you need to deliver products first time to busy customers.

Payment preferences differ from country to country, so it’s important to consider how these could affect your long term strategy for growth - prepaid cards are popular in Italy, so this could be potentially risky for a business with a monthly subscription model in place as subsequent charges may not be covered after an initial payment. German consumers don’t tend to use credit cards to buy online, so how could this affect expansion for an e-commerce business?

Regardless of what countries you decide to target, getting the customer experience right is essential. Providing multi-lingual customer services based at a central location will ensure that anyone dealing with your company can be confident of getting what they need.

Location, location, location

When your volumes in outside the UK are greater than those within, it may be time to consider investment into dedicated hubs in other markets or scale up your outsourcing programme further in order to support further expansion or greater volumes. But it's important to take a long term view on which locations will best support your business.

For example, while a location such as the Ruhr Valley is perfect to hit German, French and Benelux population hubs, if you find out that your product resonates better with an Italian audience, it could be a costly project to shift a wholly-owned distribution hub and workforce.

A move into new markets is always going to require careful and considered planning, and your time is your most valuable asset. Whether you're looking to gradually expand country by country, or go all out to become an international brand, your focus should still be on what you know best. Get help with the things that are new or untested in your business and make the most of the vital insight that the right partner can provide.

Matthias Mierisch is UK CEO and chairman of outsourcing firm arvato

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