The company will need to have a clear understanding of the target market and where its product/service fits into the market. Market knowledge is about understanding the market needs and translating these into products and services. For example, Irish cheese producers need to have an in depth understanding of the tastes and preferences of consumers on the Continent in order to penetrate those markets. Therefore a company who has decided to trade overseas should know how to approach the potential buyer, how often they purchase the product/service, what price they are prepared to pay, and what level of service they require. Research to this extent is obviously going to be an expense but it a necessary expense and will prove to well worth it in the long run.
Effective Positioning of a Product/Service.
To position a product/service effectively in an international market a company must answer three critical and interrelated questions: .
1. What niche will the business's product/service target and what are the margins achievable?.
Businesses must research new overseas markets before market entry. For a small business the costs of new market entry are very high and failure in an overseas market may ruin the reputation of the business. As previously mentioned, research prior to market entry will ultimately save the business money, if not save it completely from failure. SMEs should focus financial and management resources into a niche market. A niche market should be large enough to be profitable for the business but not large enough to attract the interest of large competitors. Striking this balance can sometimes prove to be a difficult task for the business. How best to define the niche market may become a problem. The chosen market may be either too broad for the business to handle and on the other hand it may be too small for the business to survive. However once the target niche market has been successfully identified and defined there are many benefits to be reaped:.
