You’ve established your franchise domestically, and now you’re looking to take the next big step — venturing into international waters. Owning a global franchise can be lucrative, but it also requires considerable preplanning and research.
InnoVision Global Marketing understands the intricacies of owning and operating a global franchise, and we want to help you understand them too. We’ll break down the considerations to take into account and the tools you can use to narrow down which parts of the world hold the most market potential for you.
Assessing Market Potential
Any savvy business owner starts by doing their research. So, before you even think about expanding your franchise globally, there are a few things you should be watching closely. Read on for a breakdown of what you should keep an eye on and some resources to help you better understand global consumer behavior.
Demographic Trends
The demographic trends of a particular region can tell you a lot about that area’s potential for economic growth. For instance, whether the population is booming, aging or remaining stagnant is often a key indicator of market strength and stability.
According to the United Nations, the median age of the global population is on the rise. The UN projects that the median age of the worldwide population will increase from 31 to 36 between 2020 and 2050. Meanwhile, 82 counties will also see a net increase in the ages 15 to 24.
These demographic trends have important implications for the working-age population, which can be a powerful gauge in evaluating market potential. As the UN notes, a large working-age population often drives economic growth and productivity and stimulates consumer demand.
Consumer Spending Habits
Consumers in each part of the world have their own unique values. Study consumer spending habits in different global regions to assess whether your franchise is likely to align with your target audience.
For example, some people love to splurge on high-priced luxury goods, while others prefer utility and functionality over name-brand designs. Deloitte ConsumerSignals is one resource you can leverage to get a pulse on consumer spending behaviors in certain countries as well as overall global financial well-being.
Competitive Analysis
Consumer demand alone is not enough to assess your franchise’s market potential. You also have to analyze current supply through competitive analysis. When you conduct a competitive analysis, you should seek to identify key competitors, assess their strengths and weaknesses and identify any gaps that support market entry, such as the opportunity to capitalize on consumer needs not currently being met.
Appraising Market Potential
Once you’ve identified regions for potential expansion, you can use certain methodologies to take your analysis a step further.
Market Segmentation
Understanding consumer behavior is key to the success of any business. Market segmentation allows you to collect more nuanced data on a particular subset of consumers who are likely to behave and respond to marketing efforts similarly.
For instance, you may want to segment consumers according to demographic characteristics, such as age, gender, race and income level. Likewise, you may segment consumers based on their behavior, such as product preferences and past spending habits.
Studying the behavior of a particular set of consumers enables you to better tailor your marketing efforts to that specific audience. If there’s an opportunity to capitalize on a certain area of the market, this methodology may be useful for strengthening brand differentiation and loyalty among that target group.
Feasibility Studies
Collecting data and analyzing patterns in consumer behavior trends is an integral part of business expansion efforts. Although the data may look good on paper, it can only go so far. This is where a feasibility study comes into play.
A feasibility study weighs the potential risks and rewards of implementing your plan. In addition to market potential, it may examine the environmental, legal and cultural implications of expanding to a particular region.
Feasibility studies may involve expert consultation, consumer feedback, technological and financial considerations and a projected timeline for plan implementation — among other logistics. Since findings are tailored to your specific business, feasibility studies often provide practical recommendations for whether, when, how and where your franchise has potential for global success.
Local Market Assessments
If you’ve conducted a feasibility study with promising results, you may want to conduct a local market assessment to identify the best approach for market entry. As previously discussed, a market assessment should include analyzing market demographics, consumer spending habits and leading competitors. However, it should also take into account the region’s values, customs and traditions.
Refine your business model and adapt your messaging accordingly. While you want to maintain a strong brand identity, you should be able to adjust your marketing strategy to align with local language and cultural sensitivities.
Modify your approach as necessary to maximize authenticity and truly connect with your audience wherever they are across the globe.
Actualizing Market Potential
Owning and operating a successful business often comes down to having the right team by your side. The same is true when it comes to expanding your franchise.
Market research is an investment of time, energy, and resources. So partner with global marketing experts like InnoVision Global Marketing to ensure you’re getting insights you can trust. Our team of experts will help you assess the risks and rewards of expanding into a global franchise and identify regions that hold the most market potential and opportunity.
Reach out to our team to get started. We’ll learn more about your business goals and discuss how to take your franchise from a household name to an internationally recognized brand. If you’re interested in expanding to international waters, we have the expertise to help you make waves across the world.
