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Founder, Mogul Tech International
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3 Points to Consider Before Entering A New Market

3 Points to Consider Before Entering A New Market

Topic: Marketing / Originally Posted on Mogul Tech International's Blog

When we launched our client’s online lingerie store in Australia, Australian buyers were swarming to place their first orders, while in Singapore, where the name “With Ava Intimates” was also known, garnered little reception and rave.

Why did the same brand with the exact same storefront and products serve these two groups in completely different ways? The short answer is localization.

What exactly is localization? Why does it matter when you’re entering different markets? And how do you address this issue of localization?

The Globalization and Localization Association (Gala) defines localization as: 

“the process of adapting a product or content to a specific locale.”

Why localization matters when you’re targeting a different market:

A different market has vastly different cultural values and backgrounds (compared to your original market) that play a significant role in a buyer’s decision-making process.

Whether it’s a difference in prices, promotions, and variation in product offering, your decision to enter a new market will require thorough investigation and research on how you can position your brand and optimize sales when entering a new market.

Here are 3 important points to consider before entering a new market:

1. Research on new market’s perception of your product’s pricing against their cultural backgrounds, values, and competition in your new market.

2. Evaluate reception of product in the new market, taking into account new market’s cultural backgrounds and values, and preferences

3. Globalized vs localized advertisement designs and messages

1. Research on new market’s perception of your product’s pricing against their cultural backgrounds, values, and competition in your new market.

A market’s cultural backgrounds and values, as well as local competition, plays a critical role in how consumers in that market evaluate your product’s prices.

A set of intimates at $49.99 AUD may be better perceived in Australia where individualism and brand experience are valued more so than in an Asian country such as Singapore.

In Australia, With Ava Intimates sold its brand experience and story, and its uniqueness of being a boutique intimates store for intimates of great quality at a low price. This resonated very well with a large percentage of the Australian consumer market. However, in Singapore, where individualism and brand experience were not valued as highly, and competition were offering prices that was hard to beat, With Ava’s Intimates found pricing their unique intimates at $49.99USD to the Singapore market more of a struggle.

2. Evaluate reception of product in the new market, taking into account new market’s cultural backgrounds and values, and preferences

The product is generally the focus in international expansion and implementation. Finding out if it is economically valid to adapt the product to local preferences, based on their cultural backgrounds and values, would be your next point to consider.

In general, you should consider standardizing your brand’s product offer if customer taste and values are similar in the new market, and there is a high demand for products, in order for you to optimize profits.

3. Globalized vs localized advertisement designs and messages

When you’re entering a new market, you will need to decide whether you intend to roll out global advertisements in all of your markets (existing and new) and standardize marketing messages and designs.

There are strategic, economic, and organizational advantages to choosing a global, standardized advertisement and promotional messages. Having one unified message strengthens the brand’s global identity, and saves time to enter the new market, relieving you of the additional time and effort required to research and re-design your advertisements and promotional messages.

A globalized advertisement may also be beneficial in cases where global brand names and brand perception is valued over your market’s perception of local brands. For example, in China’s emerging markets, foreign brands are often associated with greater quality, which is something you can leverage on in your promotional material.

However, it is also important to keep in mind that it can sometimes be hazardous to choose a globalized advertisement if the local market is not receptive to the global message, and cultural differences are significant.

Conclusion:

There are a variety of factors to consider and research you will need to do before entering a new market. By conducting multiple product tests, reaching out to influencers and potential consumer groups, receiving and evaluating their feedback, you’ll be able to gain useful insights that you need to factor into your decision-making process much more quickly and accurately. Engaging at a consumer level also helps gain recognition and possibly ambassadors from the community as well. 

By discovering such diverse possibilities and teasing out important market insights quickly, you’ll be able to know how you can optimize localization of your brand and sales when entering a new market.

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