10 Things You Need to Know Before Entering a New Market

There is always some risk involved when you decide to expand your business into a new market. You need to lay the groundwork to make sure that your product is viable and your timing is right before you enter the new market "ring." Here are 10 questions you need to have answered before you take the leap:

  1. Does your product actually fill a need in the market?
  2. Do you have enough money to make your venture into a new market a success? Make sure that you incorporate a "fudge factor" into your calculations. Typically speaking, people tend to be over-optimistic about revenues and sales and underestimate costs. In addition, it is important to have enough capital in the event that you are not able to introduce your product as quickly as you planned.
  3. Are you on top of market research news? You have to have a thorough understanding of your competition, their market approach and their pricing. Understanding this will help you decide about how you are going to position your product in the marketplace.
  4. Do you know how the competition reacted to other new product introductions in the past? This information will also help you strategize how the competition will react to your product and how you will respond.
  5. Do you truly understand your potential customer base? You will want to know which clients are healthy financially, who might be interested in your product immediately and who would be long-term targets.
  6. At what point is the lifecycle of the market of your product? If the market is mature, you may be chasing after diminishing returns unless you can position yourself at the high price/niche end. If the market is new, you will have to shoulder all of the costs of developing the market.
  7. Do you have the personnel to handle and support a new product? You have to have people to handle more supplies coming in and more products going out the door.
  8. How much time will it take to train existing personnel as well as any new people that you hire to bring them up to speed on the product?
  9. Does your new product fit within your current product line? It is easier to sell complementary products than it is to sell a widget to one market and a bunch of gadgets in a completely different market using the same sales staff.
  10. How will you distribute the product? Will you sell directly to end users or go through distributors? How does this fit with your current organization distribution plan?

Knowing how to market a product and how to develop an effective marketing plan can make all the difference in having a successful product launch into a new market.

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