It can be daunting to choose a new market to export to. A marketeer can be of great assistance in the research if he thinks of the following: size and traffic.
Size. Size matters. Depending on the size of the markets you already dominate, one should consider the size of the target market. Bigger is not always better. If one’s home market is small it can be a mistake to enter a market that is too big. An example. A company from Denmark: Holger AS. Suppose Holger AS dominates the Danish market for little reclosable bags. Is it a good idea to enter the bordering German market? Or should they rather go to neighbouring Sweden or Norway?
Comparing population bases
The German competitors of are going to be huge. Danmark has less than 6 million inhabitants. Germany 80 million. Even if the German competitors do not have a strong online presence, once the Holger AS makes big inroads selling reclosable bags Online winning 10 percent of the market, the Germans will have deep pockets to fight back. Simply by imitating the Holger AS webshop and moving a big budget to Google Adwords, they will be well positioned to push up the prices for relevant keywords in the Google Adwords auction and smother Holger AS’ marketing campaigns. It is a better idea, to capture the Scandinavian markets first. Norway with a 5 million population and Sweden with a 10 million population are relatively easy to capture from a Denmark’s 6 million population base. Suppose they can be dominated in 3 years, then Holger AS has a 21 million populations base. That is a much better base to dominate the German market than the hopeless 6 million base.
Looking at the size of the population is a very rough indicator of the potential of a give market. A quick way to estimate a market’s potential is by looking at the traffic for the essential keywords. In this case “packaging”. Entering “packaging in Google’s export tool gives the following results:
Measured by traffic Sweden and Norway add 4.000 keyword searches to Denmark’s 2.900 adding up to a total of 6.900. That is the equal to Germany’s 6.800. This quick and dirty analysis indicates that capturing the other Scandinavian countries is the key to online parity in Germany for Holger AS.