27/12/2024
Global market expansion isn't for the faint-hearted—let us explain why.
Brands want the same thing as you and I: world domination. Disagree? Question why you clicked on such an intrinsically colonialist title. Yes, we see your lust for power. And guess what? We’re going to feed it.
Elephant-in-the-room addressed. Now, you may wonder what global market expansion is and why it’s relevant to you. From Napoleon to Netflix, let us explain why you need this guide to subjugating your enemies and/or consumers.
What is market expansion and its role in business growth?
In short, market expansion is a growth strategy. It takes into account your product or service and the new markets that might be interested—which is necessary when your original market becomes saturated. The strategy itself consists of an early analysis of existing or future channels for distribution. By the end you should be able to take measures to boost reach and sales for the new market. And, as your market expands, so does your business.
Key factors driving global market expansion
If you’re looking to capitalize on global market expansion, there are a few factors that you’ll need to bear in mind:
1. Economic conditions
The economic climate is important to bear in mind before taking any risks with global market expansion plans. You’ll need to understand inflation, unemployment and economic growth rates in your given market.
2. Competition
Competition don’t just steal your revenue! They can be helpful. Use them to evaluate successes and challenges before incorporating their strategies into your own.
3. Technological change
These days, technological changes are constant and varied. Make sure you understand consumer engagement and how tools like AI can help you achieve your goals.
4. Culture
Understand the cultural nuances influencing your new market of consumers. You’ll be able to tailor your marketing campaigns to specific regions.
5. Risk management
Think about the main characteristics of your existing market and seek something that’s a little different. This diversifies your base of consumers and makes you less susceptible to risk.
Expert opinions are your secret weapon
You should always take expert opinions into account at every stage of your market expansion strategy. But where can you find them? Simple: IE University. We have open events that anyone can attend both online and in-person. We also focus our knowledge into marketing and communication at IE Business School, with many courses on offer to help you get the secrets to industry and success.
If you want to get an in-depth look at what industry leaders from Coca-Cola, P&G, Santander and more recommend for your market expansion strategies, be sure to watch the link below. One of the top cases for market expansion is that of Netflix, which we’ll be looking at in further detail below. Keep reading and you’ll see how all of this information ties into make marketing that can dominate the world.
Developing an effective market expansion strategy
The strategy behind your market expansion is make or break. Here’s a checklist of things you should take into account:
1. Market Research and Analysis
Segmentation: Identify target customer groups.
Competition: List your top competitors and differentiate yourself.
Legal requirements: Know the ins and outs of jurisdiction in your new market.
2. Target market
Regional: Outline the regions, cities or countries you want to target.
Demographic: Be clear about the type of person you’re targeting.
Adaptation: Modify your assets to fit local needs.
Local hiring: Recruit employees with local knowledge and cultural insight.
Brand positioning: Craft a region-specific brand image.
3. Entry strategy
Market entry: Explore avenues for exporting, franchising, partnerships, greenfield investments and more.
Local networks: Partner with local retailers and people of influence.
Logistics: Be prepared to launch with a clear idea of supply-chain and inventory management.
How to identify the right markets for expansion
When working out how to identify the right markets for expansion, you have to start smart. First comes market research, which means evaluating where there’s a clear demand for your product. You’ll also need to study trends to be certain that your given market has growth potential. That means getting into the nitty gritty of consumer behaviors and habits—and ensuring your plan aligns with this. Finally, you should take a hard look at the market’s size and growth rate. If there’s no space for your business to grow, then you’re not looking at a strong strategy in the long term. If there is—great!
Global market expansion strategies for breaking into new territories
When you’re tailoring a market expansion strategy for new territories, there are two terms in which you need to be well-versed. That’s local adaptation and global standardization. Let’s look at the differences and why they’re so important.
Local adaptation
You want to customize your products to the specific needs and cultural characteristics of a market. Change your food flavour, make your product the color of the flag, don’t accidentally say anything offensive based on recent history. The disadvantage of local adaptation is it tends to be more costly and difficult to implement. The benefit is real emotional resonance with the market.
Global standardization
Where local adaptation is all about personalizing your service, global standardization is about trying to find the one size that fits all. This involves a uniformity across branding, with the same campaigns being carried out worldwide. The benefit is that global standardization is scalable and lower cost. The disadvantage is that you might not hit the right tone, which can be fatal if you’re a previously unknown brand.
Case Study: How Netflix successfully expanded into new markets
You might be wondering how all of these factors have been executed in the real world. We present to you: Netflix. As of 2024 this all-conquering company has over 282 million subscribers worldwide—and that’s thanks to its expansion into foreign markets. But how did they do it?
Investing in regional content
Netflix knows cutural sensitivty is key to global growth. In Japan, Netflix created anime like Devilman Crybaby so Japanese viewers could binge-watch familiar content. Netflix navigated the challenges of conservative values in the Middle East by launching an Arabic interface and creating shows like Jinn. For South Korea, Netflix invested in high-quality K-dramas which were culturally relevant. This focus on local adaptation has built a loyal fanbase across diverse markets.
Varied price plans
Streaming is now a global phenomenon. But Netflix knows economies have different requirements. They therefore varied price plans for different areas. Netflix catered for the Indian market, for example, by launching a bespoke mobile-only subscription which cost $2.70 a month. This accounted for almost half of all subscribers in India after its launch. A similar pricing plan was introduced in Brazil. Money talks, but so do integrity and accessibility.
Using big data
Netflix has tapped into user habits by embracing big data strategies for marketing. This helps them cater to audience’s needs through trends, allowing them to get ahead of the curve in providing in-demand content. Netflix rolled out successful launches in Brazil and South Korea by timing releases with increased high-speed internet access. By predicting market behaviour, they can put all other facilities in place to ensure success.
Investing in tech
Tech investment has been at the heart of Netflix’s global market expansion strategy. Top of their list? High-definition streaming on all types of internet. This means adjusting videos to fit each viewer’s internet speed. Netflix also deploy Artificial Intelligence for content recommendations. That’s no mean feat with such a large data pool to choose from. Users are kept happy and keep coming back for more—Netflix makes it statistically irresistible.
Market expansion could mean losing money
Efforts for market expansion could mean losing money—but they don’t have to. While higher education may not have been part of your life plan, it’s certainly worth your consideration. We’ve put together deep insights about our marketing programs at IE Business School to make it easier for you. Click through and see whether your career might benefit from a master’s in marketing.
