This is an outline of factors to consider when evaluating potential export markets.
Market Size – determine the size of the potential export market,
Evaluate the percent of potential buyers within that population, taking into the account incomes;
Estimate the numbers that show how much people spend on your type of product, using per capita GNP data;
Determine whether internal or international competitors already offer a similar product/service. If there are competitors, it is important to determine the price, which your competitors are charging for the product/service, and compare the price and the quality of your product/service – with the competitors one.
Market Growth - to identificate the growth potential
Examine last 4-5 years of import history for your product within a given market, focusing on the number of imports – are they increasing or decreasing;
Examine trends and growth forecasts, making conclusions, what do they tell you about the market and it’s potential for growth;
Examine the change in per capita income – is there / will there be a demand for your product;
Consider the industrial development stage of your market.
Market Accessibility – determine the accessibility
Import duties and tariffs;
How distribution channels work;
How to obtain import permits;
Advertising and promotional practices;
Economic Stability – determine the economic stability
Exchange rate performance;
If currency controls exist;
The balance of payments;
Foreign currency reserves;
Government debt and budget;
Rate of inflation;
Rate of unemployment
Political Climate – determine the political climate
Is the political system of the market stable enough to start export activities (it is important to consider how possible changes could affect you)?
How does the government affect the ability for you to import into the market?
What is the potential export market government's attitude toward the country your product/service is coming from?
Cultural background – define the cultural climate
The main religions in the market;
The meaning of different symbols in the particular culture;
The meaning of numbers in the culture (e.g. in Latvia flowers in even numbers are for funerals);
The meaning of color in the culture (e.g. the white color is a color of death in China and Korea).
Education – educational level of the foreign market can affect the ability to sell product/service. When investigating education level of a market, it is useful to find out literacy rate and computer literacy rate of a particular country. When preparing promotion materials, it may be needed to add more graphics on the brochures and installation instructions.
Language – English is international business language, but, it should be kept in mind, that the customer always prefers to speak in his native language and appreciates your willingness and ability to communicate with him in it. In order to communicate with customers in their language:
It is advisable to translate the marketing literature and product information, in the same time taking into account the correct dialect (e.g. British English vs. American English);
Also foreign language character sets require additional considerations, like double-byte characters or left-to-right vs. right-to-left text writing.
Environmental Factors – the most important environmental factors that affect the demand of the product/service and the performance of it are: temperature, humidity, altitude and sand.
Geographical Factors – the geographical factors that affect costs are: travel time, travel costs, delivery time, and shipping costs.
Legal System – legal factors
Independent judiciary, evaluating the level of judiciary corruption and the quickness of judicial processes;
Right to sue;
Right to own property;
Right to travel.