Market Analysis and Logistics for International Marketing

by Christine Harrell

American companies hoping to penetrate European markets must take several key steps in consulting market research to analyze these markets and determine distribution strategies. The most logical starting point is establishing a target market. A corporation's target audience in Europe should be similar to the one in the United States. For example, a company that sells primarily to people over 35 should focus on the same age demographic in Europe. Other important demographics include income and gender. A higher-priced product will likely appeal to wealthier European residents, just like in the United States. The same holds true for products traditionally purchased by men or women.

American businesses must next determine the potential success of their products in Europe. This is best accomplished by conducting market research. The American organization should hire a market research agency in the European market to conduct the surveys. Phone surveys would be the recommended methodology, coupled with some focus groups. The key is for the American company to ensure that their product will be widely accepted by European consumers within the specific target segment. The questionnaire should include at least one question on likelihood of purchase. For example, the corporation may ask consumers how likely they would be to purchase their products on a 5-point scale, with 5 being the highest and 1 being the lowest.

Logistics is also a key consideration during the consulting market research process. The business should decide whether to send any executives overseas to set up operations, or export their products to European customers directly from the United States. The latter may be a recommended strategy for an online retailer or mail order catalog distributor. Those who want to produce products overseas have several options. One is to create a licensing agreement, according to the Food and Agriculture Organization of the United Nations. A licensing agreement grants a foreign manufacturer the right to produce the American company's products. Licensing is less expensive than setting up operations abroad. It also always saves the American company time to determine how well its products sell abroad before investing additional money toward manufacturing.

A consulting market research firm may also recommend a joint venture with a European manufacturer. A joint venture would entail sending American production workers abroad to train and work with the Europeans. A joint venture may be the only option for entering a European market. The profit potential is greater for joint ventures than licensing agreements. The American company may later set up manufacturing operations in Europe, once they learn the countries' customs and laws.

Author is a freelance copywriter. For more information about consulting market research, please visit http://www.go-eurobridge.com

Article submitted Friday, November 25, 2011 & read 2 times.

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