Entering a new market is always tricky. Entering a new market in a country filled with customers who think differently, have different cultural norms, and speak an entirely different language is very tricky, and perhaps can appear daunting from the outside. A market penetration strategy is often the go-to in this situation, but if that new market brings with it a set of languages, customs, and ways of looking at the world that are new to your brand’s current way of thinking about marketing, more consideration needs to be taken.
There are countless examples of otherwise successful U.S. brands that have attempted to expand into new regions only to retreat because they couldn’t enter or create a market for their product or service, and there are as many reasons why global expansions can fail. Maybe the messaging didn’t resonate, or the local incumbent was too entrenched.
But the one that is easiest to avoid is failing to put in the time and effort beforehand to plan and research new market opportunities, and making sure you’re reaching out to multilingual audiences in a way that will resonate with them. Smart brands that do their homework and engage new cultures with localized content and native brand experiences that reflect how different audiences live, act and speak, can reduce the risk of market penetration (which is normally associated with higher capital expenses) while potentially increasing the reward by attracting and retaining new customers, and thus, driving global growth.
Here are three key things to keep in mind when pursuing a market penetration strategy on an international scale:
Finally, you need to make the call on whether or not the market penetration strategy makes sense financially. Is it likely to net more revenue than it will cost to successfully enter? Even if the market is right and there’s a demand for your product or service there, the timing may not be. But also keep in mind that the benefits in the future may be worth a higher cost up front.