In an increasingly interconnected world, business operators often have immense opportunities to expand their businesses beyond domestic borders. However, venturing to an unfamiliar market can be daunting, leading many businesses to stay put and miss out on new growth opportunities or continuously delay the decision due to uncertainty. Contrary to popular belief, venturing into global markets can be both manageable and affordable, provided business operators have a bulletproof go-to-market (GTM) strategy.
The go-to-market strategy is a blueprint for businesses to successfully reach their target markets and develop a unique value proposition to resonate with their customers. It’s essentially a detailed action plan that lays out how businesses will sell their product or service to reach their target customers and gain a competitive advantage.
By conducting thorough research, partnering with the right people, and implementing a robust go-to-market strategy, business operators can unlock the potential for international expansion. In this article, we’ll walk through the steps you need to consider when creating a go-to-market strategy for your business.
Step 1: Do your research
Before expanding internationally, it is crucial for business operators to research the target market. This entails understanding the local culture, buyer preferences, purchasing behaviors, and competitive landscape. Being mindful of cultural variations and business etiquette when doing business outside of your domestic market will help a product or service to be well received.
To explore, let’s consider a fictitious U.S.-based company, “TechConnect,” specializing in cloud-based software solutions, that plans to expand its operations in the Chinese market. Carefully considering cultural variations and business etiquette in international expansion, TechConnect invests time and effort in understanding Chinese business practices.
They discover that in China, establishing personal relationships and building trust is crucial for successful business dealings. To adhere to Chinese business etiquette, TechConnect sends a representative to meet potential partners and clients in person. This demonstrates their commitment to building face-to-face connections and shows respect for Chinese business customs.
Furthermore, TechConnect modifies its marketing strategies to align with Chinese consumer preferences. They adapt their messaging, visuals, and branding to resonate with the local target audience, considering elements such as colors, symbols, and cultural references that hold significance in Chinese culture.
Step 2: Identify potential customers and buying personas
Once the research is complete, it is essential to identify and understand your potential customers in the new market. This involves defining the ideal customer profile and understanding their demographics, psychographics, and buying habits. Here are a few ways you can segment your target audience:
Demographics: Demographic segmentation is categorizing customers based on factors such as age, gender, income, education level, and occupation. Companies use this to better understand their target audience and develop marketing strategies that resonate with specific segments. For example, a clothing brand might target different age groups with separate product lines or create messaging that appeals to a particular gender or income bracket. Gap’s initial target market was young consumers aged 17-25, but to cater to different age groups, the company’s multiple brands focused on different demographics—Old Navy appeals to families and budget-conscious shoppers, Athleta attracts fitness-focused and active women, and Banana Republic markets to people who don’t mind paying more for fashion.
Behavioral Attributes: Companies also segment customers based on behavioral attributes, such as customer actions, engagement patterns, and purchasing behaviors. Behavioral segmentation looks at factors such as buying frequency, product usage, brand loyalty, and engagement with marketing channels. This enables you to create targeted marketing campaigns, personalized recommendations, and loyalty programs that cater to the specific needs and interests of each segment.
Psychographic Attributes: Psychographic segmentation involves understanding customers’ lifestyles, values, interests, and personality traits. Companies delve into customers’ motivations, attitudes, and aspirations to create segments based on psychographic attributes—customer personas. Customer personas provide a deeper understanding of customers’ desires, pain points, and preferences, enabling companies to create highly targeted marketing messages, product features, and experiences that resonate with each persona. This type of segmentation helps companies understand why customers make certain purchasing decisions and how they perceive their products or services.
Step 3: Review your value proposition
As an owner of a successful business in your home market, you will understand the importance of a value proposition. A strong value proposition is equally critical when you enter a new market. You may need to adapt this for your new target region. A value proposition is a concise statement that explains why a customer should choose a particular product or service and should clearly convey the advantages of your product or service. — Seek to understand the specific pain points and challenges your customers face. A great way to convey your value proposition is through storytelling.
Storytelling is a powerful tool for conveying value and creating emotional connections with customers. Businesses can use storytelling techniques to illustrate real-life examples, case studies, or testimonials that showcase how their products or services have positively impacted customers’ lives. Through compelling narratives, businesses can engage customers emotionally, making the value proposition more memorable and impactful.
Step 4: Price your offering
In your new target market, getting the price right can make a big difference between a failed experiment or successfully entering a lucrative market. Successful businesses often adopt flexible pricing models that cater to different customer segments. This can include tiered pricing, where customers can choose from different packages or plans that offer varying levels of features or benefits. By offering flexibility, you allow customers to select the pricing option that best fits their needs and budget, enhancing their perceived value and increasing the likelihood of conversion.
Consider exploring creative pricing strategies that differentiate your business and meet specific market demands. For example, you could offer introductory pricing for new customers, volume-based discounts for larger orders, or bundle pricing, where customers can purchase complementary products or services at a discounted rate. These strategies can attract new customers, drive sales, and foster loyalty.
Pricing is not a one-time decision – be open to making adjustments as part of a strong go-to-market strategy to optimize pricing strategy and maintain a profitable position in the market.
Step 5: Sell!
Once the groundwork is laid with research, target audience identification, value proposition development, and pricing strategy, it is time to execute on the GTM strategy and start selling to your new market. This involves creating and implementing marketing campaigns, establishing distribution channels, and effectively communicating the value proposition to potential customers to create awareness and generate interest in your products or services.
Set up and activate the distribution channels identified in your GTM strategy. Whether it involves partnering with local distributors, establishing your own physical presence, leveraging e-commerce platforms, or utilizing a combination of channels, ensure the smooth flow of your products or services to customers. Establish strong relationships with your distribution partners, provide them with the necessary support and resources, and regularly evaluate their performance. Successful execution of this step lays the foundation for long-term growth and establishes a strong presence in the new market.
By following these steps and crafting a well-thought-out GTM strategy, business operators can increase their chances of a successful international expansion. A bulletproof go-to-market strategy allows businesses to navigate the complexities of entering a new market, effectively reach target customers, and establish a strong presence that sets the foundation for long-term growth and profitability.