Exporting Your Services

Choosing Export Markets

The following nine questions and answers can help you in evaluating possible export markets:

What makes an export market attractive for my service?
How will I know if my service will sell in a particular market?
What is the difference between primary and secondary market research?
What is the most useful information to identify when doing secondary market research?
What is the most useful information to identify when doing primary market research?
Where can I get information on a particular market?
Where do I find information on market entry restrictions?
Where do I find information on industry regulations and standards?
How can I best choose among potential markets?

What makes an export market attractive for my service?

Factors that make a particular market attractive will vary in importance, depending on who you are, and what you have to offer. First and foremost, there is the issue of where your firm can most quickly build credibility. So you will want to consider markets where:

  • You already have local contacts
  • Your staff already have family/friends
  • There will be a major industry event (e.g., international conference) soon

 

Then, in evaluating a potential market, look for markets with the following characteristics:

  1. A good cultural match to your firm

  2. Few or no major competitors

  3. A growing market where:
    • Your service sector is growing rapidly.
    • There are clear market demand indicators related to your service.
    • Canadian government officials have good contacts.
    • A potential local partner has good contacts.

  4. Easy to reach:
    • Direct air flights from Canada
    • On the way to a market in which you are currently supplying services

  5. Easy to establish “local presence” through:
    • A local partner you already know
    • A local partner you still need to locate
    • A commercial “mini-office” arrangement
    • A World Trade Centre complex

  6. Easy to provide service at a distance through:

    • An “800” number that is inexpensive to access
    • An e-mail address
    • An Internet website

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How will I know if my service will sell in a particular market?

You will want to ask questions like the following:

  1. Are there customers with needs similar to our current customers?

  2. Are potential customers complaining they cannot get the type of service we offer?

  3. Are potential customers likely to buy our type of service from a Canadian firm?

  4. Are potential customers willing to pay for our type of service?

Remember you can have a great service and one that people need, but you will not make a sale unless potential customers believe you can meet their needs. So make sure you have referral links to local decision makers in order to maximize your credibility.

What is the difference between primary and secondary market research?

Secondary research involves the use of data previously collected by other sources, many of which can be accessed for free and is generally conducted before primary research. Typical sources of information consulted include periodicals, studies, books, surveys, and statistical analyses, many of which are now available on internet.

Primary research consists of collecting market information and intelligence through direct contact with a range of information sources, and normally takes the form of interviews, either in person or via telephone or e-mail. Primary research may be costly and time-consuming but enables you to collect specific detailed information.

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What is the most useful information to identify when doing secondary market research?

Secondary research is important in allowing you to narrow down your list of potential markets to one or two target markets and to identify potential entry challenges.You will want to use it to determine:

  • The size of the market
  • Recent market trends
  • The technology infrastructure available and its usage
  • Preliminary information on cultural factors in doing business
  • Business entry requirements
  • Regulations and certifications
  • Professional credentials required
  • The best single information source

What is the most useful information to identify when doing primary market research?

Primary research is critical for designing an effective market entry strategy. Networking and/or selecting an appropriate local partner may provide you with this information. Your primary research should identify:

  • Market leaders
  • Degree of competition from government agencies
  • Degree of Canadian presence and attitudes towards Canadian service providers
  • Cultural factors in service design and delivery
  • Key intermediaries for referrals
  • Critical benefits to offer
  • Influencers in decision making
  • Key service industry and trade associations
  • Role of the media
  • Key publications
  • Possible local partners

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Where can I get information on a particular market?

The source of information that will be most helpful will depend a great deal on how you plan to enter the market. Increasingly, much of the information you will want is available through internet. One of the best initial websites is the CIA World Fact Book website. Other good initial sources include The Economist and globalEDGE™.

You will also find useful data on regional and national websites.

If you plan to set up a local office, the local investment agency or a World Trade Centre can probably supply you with information you need such as:

  • Availability of literate skilled workers
  • Typical business expenses and conditions
  • Percent of foreign ownership allowed
  • Licensing requirements

You will also want to register with Canada’s Virtual Trade Commissioner Service to get help regarding which international firms are present (that might be potential competitors) so you can research their best practices, and also whether or not the government competes with the private sector in your industry. You may find your sister industry association is an excellent source of such information.

Where do I find information on market entry restrictions?

Information on the General Agreement on Trade in Services (GATS) is available at the World Trade Organization website, by searching for commitments of various countries, as outlined below.

  • Click on “Documents Online Search Facility”
  • Choose either “simple” or “advanced” search
  • In the section entitled “Document Symbol,” type: GATS/SC
  • In the section for “countries,” type the country that you want
  • Click on “Search”
  • The country’s schedule of commitments and all the supplements will be listed.
  • Download the file in the format and language desired.

Other sources of information include:


There are also specific NAFTA requirements governing business travel between Canada and Mexico and the U.S.

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Where do I find information on industry regulations and standards?

First check with your service industry association. Your next best source of information will probably be the website of the relevant service industry association in the target market, if one exists, or a local strategic partner. In some instances, the U.S. industry association’s website has a comprehensive list of links to regulatory agencies in a wide range of countries. Other sources of information include trade officers posted in Canada from various trade markets, as well as Canadian Regional Trade Commissioners.

How can I best choose among potential markets?

The most important factor in making a decision about where to export is the strength of your contacts and networks in getting initial customers in your target market. All other factors being equal, you will want to select the market that fits best into your “portfolio” of markets and helps you to:

  • Minimize your vulnerability to market changes.
  • Maximize your use of resources.
  • Maximize your financial returns.
  • Maximize customer loyalty and retention.
  • Enhance your image as a worldclass provider