| US Market Entry | World Wise | Branding | Co-Branding Strategies | Retail Therapy | Americans Spending | Wealth Effect |
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Why Barriers to Market Entry are Advantages in Disguise US market entry is a complex undertaking. If perception is everything, then it is the complexity of the US marketplace that creates the initial barrier to entry. In the minds of outsiders, this inhibits their desire to first explore the opportunities and to then make an informed decision about US market entry. In working with SME's (small and medium size enterprises) in the US and overseas, the five most often mentioned barriers to entry are its dynamics, size of market, demographic diversity, distribution challenges, and marketing costs. By defining the market in terms of the perceptions that businesses have, its complexity can be simplified by providing a perspective on its dynamics. The barriers to market entry are advantages in disguise. The advantages become apparent because market curiosity often reveals a different result - by reorganizing perspectives, expectations change too. Taking a broad perspective gives latitude to a business' decision making options and expectations. Market Dynamics: The dynamics of population, geographic size, regional differences, urban centers, income, and cultural mix of the US presents unparalleled challenges and advantages to marketers. Market dynamics should be viewed as options. The desirability and performance of your product will most likely vary within each dynamic. For example, regional differences may reveal that your opportunity is significantly greater in the northeastern US versus the south. Some products perform better in urban settings versus rural areas. Market evaluations create an understanding of these dynamics which enable companies to better manage the decision making process for US market entry. Size of Market: The US population is 288,368,698. In reality the size of the market is limited to the potential universe of buyers for your product or service. The question is, how can an SME cost efficiently reach the end user? Depending upon the industry sector, you can utilize a "push-pull strategy" - push the trade to pull the consumer. In this example, potential buyers on the trade side act as gate-keepers or product specifiers. This is an example of "one door opens many" and results in reducing market size in terms of who you need to reach. Product driven niche marketing and communications strategies are important tactical considerations because they may ultimately determine the size of the potential market you need to reach. Demographic Diversity: In the US today there are four major demographic population segments: Whites (69%), Hispanic / Latino (13.5%), Black/Afro-American (13%), and Asian (4%). Each segment has its own level of household income, homeownership, education, geographic dispersion, purchasing habits, and lifestyle attributes. By creating a buyer profile for your product or service, you can identify and target the most likely purchasers by population segment. Distribution Challenges: If where your brand is presented helps to create the competitive difference, then where should you be? Often times, products and services may not realize their full potential because of traditional marketing practices and methods of distribution. Technology has created new avenues of distribution and has empowered consumers by changing their buying behavior in ways unforeseen as little as a decade ago. Consumers are a moving target which means you have choices of how and where to reach them when they shop. If you are a manufacturer of high end apparel or home furnishings it may make sense, for example, to focus on specialty chains versus department stores and mass merchandisers. Specialty chains generally feature higher end products, have lower cost structures and may be more flexible in developing retail programs with manufacturers. For SME's, it may be costly and inefficient from a supply chain perspective to be everywhere at once - therefore you can enter the market on a limited basis and then rollout. By exploring a well thought out niche distribution strategy, businesses can exercise control over their initial marketing and distribution costs for US market entry. Marketing Costs: A focused entry strategy enables SME's to target, communicate and build relationships more effectively with potentially lower costs. The size of the US market offers many media choices. And the growth of specialized media has resulted in media fragmentation. Therefore, advertising can be expensive for SME's to introduce and support their products. However, by understanding who your target customer is, a tactical communications strategy can enable you to reach your customer in a cost efficient manner. For SME's entering the US market, you have to think smart and be a better shot with your marketing dollars. The fact that you can identify the primary challenges makes it easier to find the solution. It's not what you know about the US market - it's what you can do with what you know when deciding about US market entry. |