Starting A Business Abroad: How To Choose Your Target Market Wisely

Posted on 29. Jan, 2010 by Emmanuelle Archer in Blog, Expat Entrepreneurs
4 comments

You’ve been doing a lot of listening lately, and you have gained a pretty good understanding of what the market needs and wants. Now it’s time to choose your target market, that is to say, the kind of clients you’re going to market your products and services to.

Dartboard

Choosing the segment of the market with the most potential is an important and complex decision for any business, but as an expat entrepreneur, there are a few additional factors to bear in mind:

- Do you speak the local language?

If you speak the language well enough to use it with your clients, then you can cast your net wide.
If you don’t, you’re more or less limited to targeting fellow expats who speak your mother tongue, unless you hire bilingual staff you can absolutely rely on.

    - Do you have (or can you make) the necessary connections?

    In some countries, corruption may prevent you from dealing with large businesses or working as a contractor for the government. In other places, you just won’t stand a chance if you don’t come from the right social background or family. And some fields can be notoriously hard for outsiders to break into.

    Before you decide to target a specific industry, find a way to gauge how powerful “the old boys’ club” is. If you’ve still got your mind set on pursuing this particular market, how can you make the connections you will need? Have you considered a joint venture with a well-connected local?

      - Can your prospective clients afford your services/products?

      Don’t overestimate the number of people who can afford what you have to offer. The standards of living in your host country may be lower than what you are used to back home, or the country may have been badly shaken by the recession. Factor this in when you set your sales objectives.

      Outside of the Western world, many countries simply don’t have much of a middle class at all. You may have to tweak your marketing to target the most affluent strata of the local population, or other expats.

        Target mosaic with people standing about

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        Emmanuelle

        Images via Andreika (top) and Martin Deutsch (bottom), via Flickr Creative Commons

        4 Comments »

        1. Many times the Middle Classes are there, but simply living at a lower standard than those back home.

          This was brought home to me when I worked in tourism in Morocco. One day a client commented about Morocco not seeming to have any middle class. I pointed out that they were all the people on motor scooters. My client had assumed those were the very poor. I pointed out that the middle classes had the means to buy motorocycles, and the poor were FAR poorer than that, and were all the people on foot.

          In the past few years, the situation has changed, where the middle classes are now buying a family car, and the poor are now able to buy motor bikes.

          I liked your point above about needing to speak the local language well enough to conduct business in that language, as expats often wonder how WELL they need to speak the local language. In my own case, I speak French quite well enough to communicate about everything; however I would be hesitant to conduct business in French because I really massacre the grammar to the point it would get in the way of being respected as a business person.

          Thank you for this excellent article.

          Comment by Mary — January 30, 2010 @ 4:03 am

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        4. Hi Mary,

          Thank you for your comment – very insightful and thought-provoking, as always!

          You are quite right, we need to get rid of our preconceived ideas of what the middle classes are “supposed to look like” in order to notice that they are, in fact, there. So I guess that the important point for expat entrepreneurs is not to take anything for granted, especially not the fact that the bulk of the population will be able to afford their products.

          Getting your French to the point where you can discuss everything is quite an impressive achievement! I am so very grateful that I grew up with French as my mother tongue, because I wouldn’t want to have to learn it all over again as a second language!

          I feel the same about my Spanish as you do about your French – I used to speak it quite well but haven’t had the opportunity to practice in years. It is now so rusty that I wouldn’t presume to use it with clients, as it would probably be painful for them to listen to!

          Have a great weekend,
          Emmanuelle

          Comment by Emmanuelle Archer — February 4, 2010 @ 5:51 pm

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