A playbook for business expansion into new markets

gigcmo
30/05/2022
Business expansion into a new market or territory is an exciting time for any business. However, lots of companies approach new markets without a properly structured approach. Invariably this is the result of thinking that you can repeat whatever you did in your home market that has resulted in success - a mistake that often leads to failure.
 
In this article, we want to examine why business expansion into new markets needs a strategic approach and how to go about it for the best chance of success.

Why do new markets need their own marketing strategy?

Much like launching a new product, when entering a new market, everything from the marketing messages to the target market can be different to what you've done before. Different countries don't just bring different practical variables, including but not limited to:
  • Infrastructures and legal systems
  • Cultural nuances
  • Consumer values
  • Regional economic differences
It is often assumed that if two countries share a language, they will likely respond to the same sales and marketing strategy. However, that's certainly not a given. The differences between sales in the USA to the UK or Australia are vast. For example, Fractional CMO Ulka Athalye has previously said:
 
"The US consumer has its own unique identity and characteristics. It's a vast and diverse market, more so than in the UK, Europe and even Canada. It's the most heterogeneous, multiracial society, and the customer base has diverging needs, incomes and wants as well, so you have to look for distinct subsets of consumers rather than one homogenous base." 
 
In addition to those contemporaneous differences from one market to the next, you have to consider the time in which your business is expanding. The moment in time that you launched your initial offering has come and gone; that is now an established firm. The social, political, commercial and economic landscape in which you're launching now is not the same, which creates a need to look at the launch of the business with fresh eyes.  

The business expansion playbook

Some businesses already have some of the tools to prepare to launch into a new market. Other businesses don't have any at all. Knowing how prepared you are isn't always clear, especially if you are caught up in your existing market's daily running and success.
 
At gigCMO, we have a business expansion playbook, which includes an audit of your market expansion readiness to assess what you have and what you need to create a marketing strategy for success in new markets. Amongst other things, that includes consideration of your capabilities and knowledge of the following:

Target market

It might sound obvious, but it's essential to define the region you're going into and then segment the market to tailor your marketing strategy to one or more demographic and individual needs.

Value proposition

Data is very much your friend when it comes to understanding the value proposition of your product/service for the new market. Other things to consider include:
  • Does your brand resonate with your target market?
  • Are there any other companies in the new market with the same or similar brand name as yours?
  • Are you planning to use the same brand in the new market?
  • Are there any legal requirements or copyright registration that need taking care of?
  • Are there cultural or language differences that might make it less appropriate in your new market?
Let's not forget the example of Braniff International Airways, which got into trouble in 1987 when it promoted its new leather seats south of the border with the same campaign in the United States. The "fly in leather" slogan translated to "vuela en cuero" in Spanish, which was appropriate throughout much of Latin America but had different connotations in Mexico, where the expression also means "fly naked". It wasn't exactly the impression they were aiming to make. 

Marketing strategy

In the initial instance, do you have a marketing strategy in place? If you do, is it based on data in the new market or assumptions from your existing market? 
It's important to ensure that features are applicable to the target audience in the new market and consider the mechanics of the rollout specifically in the new region: 
 
For example:
  • Is there a strong digital presence?
  • Do they use the same social channels as your existing market? 
The answers to those questions can fundamentally alter the approach that your marketing strategy needs to take. After all, on a very basic level, a campaign on TikTok is not going to work the same way as one on Facebook.
 
An often overlooked area in the marketing and sales strategy is the pricing strategy. This is incredibly important as many organisations simply translate costs into the new currency, but pricing is about more than affordability; it's a highly emotive point for people, and different countries have very different emotional responses to price.

Resource and capabilities 

In our market expansion readiness audit, the final areas that we look at are - resources and capabilities. Things to consider include:
  • Do you have dedicated people to deliver your marketing and sales strategy?
  • Are they familiar with the new market?
  • Are they located in the region, or are they working at a centralised office?
  • What resources do they have?
  • Do you have a set budget, and has it been allocated against the need or what's available? Do you need to raise finance

Our market expansion readiness audit 

At gigCMO, our market expansion readiness audit lays the foundations for a clear and well-organised path forwards. It gives a pathway to understanding what you need (if anything) so that you don't waste money in areas that are not relevant. It also allows you to maximise your marketing and sales efforts and ultimately create a suitable climate for the best chances of success in your chosen new market.
 
It's a point of principle for us that if you have everything you need, then we would not recommend that you do anything else, and we would wish you well. We find that even the most experienced of organisations have at least one blind spot for the most part. 
 
As a result, we are advocates of the importance of an outside perspective to hold up a mirror to your business plans and decision making, if for no other reason than to galvanise your choices. 
 
Are you interested in the market expansion? Read about How To Succeed in New Markets - The CMOs Perspective.