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Keys to Incorporating Market Research for International Business

Avila University’s online Bachelor of Arts (B.A.) in International Business program equips students with the skills to engage in foreign trades and navigate global markets. It emphasizes acquiring a comprehensive knowledge of marketing, business law and finance to foster collaboration in international business endeavors.

By integrating fundamental business principles with a liberal arts perspective, the coursework prepares graduates for diverse and promising business career prospects worldwide. With the rapid pace of globalization, a vital aspect of this educational journey involves cultivating an in-depth understanding of international market research.

Understanding International Market Research

Conducting international market research is crucial for finding profitable new markets. It involves a critical evaluation and analysis of the demand for your product or service to be exported, along with various factors related to the target destination.

The goal is to determine the existence of a viable market, assess your competitiveness considering the landed cost and identify the most efficient and cost-effective export strategy. Uncovering relevant information can cost-effectively optimize your company’s global market potential, revenues and profitability.

To identify viable markets, you must narrow your focus to markets where products and services like yours have greater demand than supply. You must understand local standards for such products, including testing and certifications. Knowledge of local procedures is especially crucial if there are safety or environmental concerns, as with electronics and automobiles.

In addition, because certain factors may be economically prohibitive to operating in a particular market, you will also need to research duties, taxes, tariffs and other applicable costs such as shipping, and whether you can price these costs in and still market your product or services profitably.

Once you do determine which markets to investigate further, here are some of the critical data points relevant to your research efforts:

  • Size
  • Conditions
  • Opportunities
  • Competitive landscape
  • Distribution channels
  • Potential business partners
  • Economic challenges
  • Cultural challenges
  • Regulations
  • Trade agreements
  • Industry and product classifications

Methods and Sources for Conducting Research

Primary and secondary sources are common in international market research. Primary research involves gathering information directly from the foreign marketplace through interviews, surveys and engaging with representatives and potential buyers. Attending conferences and industry events provides valuable opportunities for gathering data through primary research, such as face-to-face (or online) discussions, surveys, attitude scales and experiments. The advantage of primary research is its customization to suit your company’s specific needs and ask targeted questions. However, it can be time-consuming, expensive and may not provide a comprehensive overview.

Secondary market research involves obtaining information from reliable existing sources such as trade statistics, country and product reports, business reports, government records and information from NGOs. This type of research is generally more cost-effective and often is available for free. Secondary research provides valuable insights and data to complement primary research findings. It offers a broader perspective and helps clarify market trends, competition and consumer behavior.

How International and Domestic Market Research Compare

International market research differs from domestic market research in several ways. International research requires a comprehensive understanding of the cultural, social and economic factors specific to the target foreign market, including language barriers, local customs and unique consumer preferences. It also involves a deeper knowledge of global trade regulations, import/export restrictions and legal frameworks governing the foreign market.

Navigating complex and unfamiliar logistical challenges, such as distribution channels and supply chain complexities, is crucial in international research. The scope of data collection expands to include factors like international competition, geopolitical dynamics and exchange rate fluctuations. The complexity and diversity of these considerations make international market research a much more intricate and nuanced process than domestic market research.

Primary Difficulties in International Market Research

The relative intricacy of international market research introduces obstacles that make the process challenging. These include:

  • Language and culture: Understanding information requires you to deal with a skilled translator who can decipher local jargon and idioms, as well as when particular words and phrases do not have a direct translation. Cultural differences also make understanding a market difficult, especially when considering local behavioral norms and conventions and the nuances of communications and possible interpretations. Understanding cultural differences requires developing mutually beneficial, trusting relationships with local business partners who can provide valuable insights.
  • Access in primary research: In the U.S., conducting studies is a fairly straightforward process because existing technology and techniques allow access to target markets through a variety of communication channels. In lesser developed countries, it may be more difficult due to a lack of access to postal services, the Internet and phones.
  • Expense: Dealing with these challenges requires more resources, time and expense, which may be prohibitive for many organizations. Cutting corners could result in investments in unprofitable markets.

If you are interested in conducting effective international market research in your career, one of the courses in the Avila University online B.A. in International Business program that will benefit you most is International Marketing. This course exposes students to the comprehensive marketing management process, including assessing market opportunities, understanding markets and overcoming the challenges of profitable global expansion.

Learn more about Avila University’s online B.A. in International Business program.

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