How to write a solid market entry plan
Starbucks failed to get its pricing right before opening up in Tel Aviv. Uber massively overestimated the demand for a cheap taxi alternative in Seoul. After launching in Myanmar, Facebook was blindsided when its platform quickly became a propaganda tool. (We could go on).
These examples are reminders that no brand is immune to blunders and setbacks when moving into a new market. To tip the prospects of success in your favour, you need a disciplined plan, backed by thorough research.
So what should this market entry plan include? Here’s a quick snapshot…
Set out your goals
Like any plan, you need a set of clearly defined outcomes. In other words, a market entry plan needs to set out what you are attempting to achieve, the steps needed to achieve it, and what success looks like for each of those steps. Key elements here include the following:
- The business rationale for the initiative
- The specific product or service you will be exporting
- The target market
- Your unique value proposition in this particular market
- The steps you will be taking, and a timetable for actioning them
- Budget allocation for each step
- Targeted level of sales, along with realistic projections for achieving it
False assumptions are easy to make: for instance, where a company assumes that since their product has been successful in market X, the same success can be achieved in market Y, with few deviations from the original plan.
Research and analysis prevents you from falling prey to these assumptions and biases. Information you need includes:
- An evaluation of market size
- Growth projections for your customer base, with realistic market share
- Customer trends, needs and preferences that you are solving for
- The competitive landscape and positioning spectrum – and how you can differentiate
- Examination of the pricing landscape to inform your pricing decisions
- Identification of growth inhibitors and barriers
Mode of entry
There is no universal right or wrong method of new market entry. Your choice will be dictated by a range of internal and external factors, including product type, regulatory landscape, budget and attitude to risk (to name just a few). The main modes of entry are as follows:
Exporting: fast entry with relatively low risk, but with potentially very low control over the actions of distributors.
Franchising: Again, fast entry and low risk, but the legal and regulatory framework must be robust if you are to exercise appropriate controls over licensees.
Strategic alliance: can be useful for gaining trust with a new customer base. However, sharing a partner’s expertise and brand value will inevitably come at a financial cost.
Acquisition: good for fast entry, but comes at high cost.
Suggested plan layout
Taking into account the above, the basic structure of your plan might be as follows:
Mission statement. Your goals for the market entry initiative. What the plan is designed to achieve, and the proposed date for achieving it.
Situation analysis. This will cover the areas raised in your research and analysis (above). A SWOT (strengths, weaknesses, opportunities, threats) summary may be useful here.
Opportunity size. A high level estimate of the scale of opportunity you’ll be tapping into (e.g. the number of people/ businesses within your target market, and approximate spend on products or services like yours).
Why us? What unique advantages do you plan to bring to bear in this market? Are there synergy opportunities? Are you addressing an unmet market need?
Proposition and Pricing
Mode of entry plan. This will set out your preferred mode of entry, the reasons for choosing it over others, and the costs/challenges associated with it.
Timeline. The specific steps to be taken to action the plan: i.e. who is to do what, and when.
Budget. Expense budget by month/year as well as financial targets.
Need help fleshing out your plan? To avoid damaging assumptions and potentially costly miscalculations with your new market strategy, speak to White Space Strategy today.