This document discusses the key dimensions and perspectives that should be considered when conducting a market analysis for a new market entry. It recommends taking a systematic approach that begins with a macroeconomic snapshot of the target market. It then discusses understanding the market from the perspectives of consumers, distributors, manufacturers, industry experts, and local advisors. Considering these multiple perspectives provides a more comprehensive understanding of market size and structure, customer needs, distribution channels, competition, and opportunities. The document concludes by emphasizing the importance of communication with stakeholders and flexibility to modify the analysis based on findings, in order to develop actionable recommendations and an implementation strategy tailored to the local market context.

1. Topic
Market Analysis:
Launch and
Forecasting
market
researchMagazine for Market Research and Marketing www.pua.de 1/2013 D11700F
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Consumer Goods:
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Smart Market Research
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2. Topic Market Analysis 13
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Recommendation
purple: market snapshot; blue: market understanding
Macroeconomics
Consumer
perspective
Market size and
structure
Distributor
perspective
Manufacturer
perspective
Industry expert
perspective
Local advisor
perspective
Figure: The Dimensions of a Market Study
© Rzepka/Kondaszewski; p&a international market research 1/13
Marcin Rzepka is a market researcher with experience in
both market research agencies and the client side; he
heads PMR’s Research Division. His industrial expertise
focuses on the financial sector, FMCG, telecommunica-
tions, IT and construction. He specialises in customer
satisfaction and segmentation research, as well as product
optimisation issues. Prior to joining PMR, he worked as a
Senior Researcher at TNS Pentor and at PKO Bank Polski.
✿ marcin.rzepka@pmr-r.com
Bartosz Kondaszewski is a business consultant, experi-
enced in new market entry and acquisition growth advisory;
he heads PMR’s Consulting Division. His functional exper-
tise focuses on both buyer- and seller-side transactional
advisory,valuationandbusinessmodellingprojects,aswell
as commercial due diligence for investment decision purpo-
ses. Prior to joining PMR, he worked for Poland Corporate
Finance and Citi Group in its Risk Assessment Department.
✿ bartosz.kondaszewski@pmrconsulting.com
3The Authors
N
ew market entry studies can be
understood by market stakehold-
ers in a variety of ways, for exam-
ple macroeconomic analysis, cus-
tomer needs analysis, under-
standing of the distribution chain setup,
go/no-go decision-making support, etc. There
is a certain range of choices to be taken into
account while deciding upon the execution of
an analytical project on the market of interest
and certain decision routes to obtain the best-
suited result for the particular company sit-
uation.
Stages of Analysis
When adopting a top-down approach while de-
ciding on the market analysis focus, the first
area of consideration should be geography, that
is if a particular single national market, wider
region covering several countries or perhaps
only a specific country region is of interest. It is
important to not simplify countries into re-
gions, as often two markets that seem similar at
a first glance might behave according to differ-
ent motivations and stimuli, which we will il-
lustrate with examples later in this article.
The second stage of consideration should be a
proper summary of current market knowledge
and experience. Different market studies and
analyses should be adopted if we do not know
the market at all, if we know it as a neigh-
bouring country, if we know it via partners or
distributors or if we know it directly through
our own activities. This will have a major influ-
ence on the depth and practicality of the in-
formation and recommendations, as different
input is required, for example, on the assess-
ment level of the general market attractiveness
and on optimisation of current distribution
channels.
While defining current market understanding,
it is also worth asking theoretically obvious
questions such as: what need is my product
satisfying, who am I competing with and what
substitutes constitute my competitive envi-
ronment. This is directly linked to the core of
the initial market study consideration. These
objectives might be defined in variety of per-
spectives, such as:
í Do we want to satisfy new clients’/custom-
ers’ needs to extend our radius of operation?
í Do we go with the whole portfolio at once,
or do we want to test one or a few selected
products?
í Are we ready to change our current market-
ing mix to appeal to local requirements?
í Are we targeting becoming one of the top 3
players in the short term, or are market
existence and development by evolution of
more importance?
í Do we want to retain the current brand
communication or launch a local one?
í Do we want to establish our subsidiary on
the desired market or do we want to oper-
ate via business partners/distributors?
í If we have decided to have a local subsidi-
ary, will it happen via green field or acquisi-
tion, or is it currently undecided and eco-
nomic calculations should reveal the solu-
tion, etc.?
Getting Started
Whatever the aim is, the first crucial step to a
successfulmarketentrystudyistostatethings
explicitly and communicate them to all project
parties before commencement of the project.
We should verify if we have included all rele-
vant perspectives in our research plan. This
kind of cross-check should be done with those
who potentially benefit from it. It is especially
Entering New Markets
Analysis and Recommendations

3. 14 Topic Market Analysis
www.pua.de p&a international market research issue 1/2013
3Abstract Combining market research and advisory perspectives on a daily basis, we wanted to shed light
on selected aspects of a new market entry study that we find relevant and insightful based on our experi-
ence. We present the market study as a systematic process containing a range of angles and stakeholders,
starting from a high-level macro perspective and streaming all the way through the value chain down to
the final consumer. The emphasis we are trying to make refers to market research as part of a comprehen-
sive analysis that, only when exhaustively executed, enables a thorough market understanding and the
extraction of actionable business recommendations.
important regarding the structure of the re-
search project, where once the survey is
launched there is usually no possibility of re-
doing it. Should a new idea or project ap-
proach come up afterwards, the process
would need to start from square one.
One approach to defining the scope of the
market study is to treat it as a puzzle where
we would have the full picture if we could use
all of the puzzle pieces, whereas we can only
choose a selection to achieve a focus on the
most desired aspects of the big picture. The
key analysis blocks are: macroeconomics,
market size and structure, consumer per-
spective, distribution perspective, manufac-
turer perspective (CI, substitutes), expert
perspective and local advisor perspective.
Furthermore, macroeconomics and market
size are mainly a snapshot of the presenta-
tion of the market. All other abovementioned
blocks can be combined into one aggregate
which we can call market understanding. The
big picture of the market study process is
presented in the figure, where the market
snapshot is purple and the market under-
standing is blue.
The Whole Picture
From the market overview perspective, its
content depends on whether the project is in
a B2B or B2C market, i.e. there are different
indicators and market drivers such as the
number of residents and their disposable in-
come, industry indicators such as production
output, employment, average salary, number
of enterprises, import/export values, etc.,
starting from the obvious ones. It is crucial,
though, to be persistent enough to end up
with a fairly comprehensive view, touching
on a variety of angles and at the same time
being comfortable with a synthetic and ap-
propriate set of indicators. For such an ap-
proach, data taken directly from statistical
offices is usually not sufficient. The beauty of
this part is not only to gather and combine
indices, but to be able to shape a comprehen-
sive background for further market consid-
eration.
Once macro environment analysis facilitates
further discussion, we should consider our
market not only via the available markets
currently served, but also consider opportu-
nities in the total addressable market and
potential available market, depending on
the competition and the definition of sub-
stitutes (according to the PAM/TAM/SAM ap-
proach).
Including the Consumer
After completing the macro part, we should
have a consistent set of data as the first part of
our puzzle. The next step will be to proceed
with the consumer perspective. It is rather
easy to argue that this part can be skipped for
two reasons: Conducting consumer research
as an additional part of a market entry study is
time-consuming and requires additional in-
vestments. Some might argue that macroeco-
nomics and the market landscape should be
sufficient for making the strategic decision of
whether or not to enter a new market.
Why is market understanding so important
from a customer’s point of view, and what
areasshouldwecoverfromthatperspectivein
conducting our market entry study? Starting
with the client’s preferences, we should be
abletoprepareaprecisediagnosisofdifferent
customer strategies. The more irregular the
consumption of a particular product is, the
more multichannel the distribution of this cat-
egory is, the more substitutes are available to
cover the same needs, the more we need to
underline the importance of this part, includ-
ing factors like preferences, consumption
model including frequency, social context of
consumption, taste evaluation and brand per-
ception.
Even in the quite homogenous region of Cen-
tral Europe there are several differentiating
factors like the social context of consumption.
The need for belonging could strongly modify
brand and taste preferences, and brand pref-
erences could be driven by the social context –
let’s take the consumption of beer, for exam-
ple: drinking beer at home allows us to make
more independent choices, whereas going out
with friends imposes certain patterns of beha-
viour, not exactly aligned with individual pref-
erences. Another example might be pastries
and the in-store bakery concept. Quite suc-
cessful frozen & warmed up convenience
meals in the Czech Republic do not equally
address the needs and preferences of Polish
customers.
Clarifying the Distribution
Once customer needs and preferences are put
inanunderstandableframework,thenextstep
would be to become familiar with how the
market is arriving at the customer’s door, what
the distribution value chain across the indus-
try is and how we can find our route to market
on this map.
Depending on the industry we are operating
in,wewillfaceavarietyofdistributionmodels
in terms of vertical and horizontal structure
and the number of hierarchical layers we will
directly or indirectly work with. To give two
examples, let us take the distribution of con-
struction materials versus drugs (including
Rx/OTC/VMS). In first case, manufacturers
usually cope with one group of wide-tier dis-
tributors which are DIY, wholesalers (GBM,
SBM) and purchasing groups, whereas in the
second example we have a homogeneous
structure of a direct distributor group, but
manufacturers need to have direct communi-
cation with the whole product distribution
value chain, that is wholesalers, pharmacy
chains and doctors.
Analysing the Competition
To complete this picture, we bring manufac-
turers which are viewed mainly as the compe-
tition into this discussion. Aside from the pure
profiling of competitors, understanding their
portfolios, distribution models and produc-
tion setups, we want to emphasise two impor-
tant aspects that provide central insights and
context understanding, which are consumer
awareness and perception and thorough fi-
nancial analysis. This first part provides rele-
vant context on how corporate brands are per-
ceived by consumers and how they view com-
petitors offering something appropriate
compared to our market proposition. The sec-
ondpart,coveringcorporatefinance,provides
strong context on the way competitors are
conquering markets, how heavily they are in-
vesting, how they manage their working cap-
ital and how both activities are financed. Fur-
thermore, it covers whether their liquidity en-
ables further expansion and if there is
additional room for business leveraging. The
most important aspect is the legal corporate
setup that might provide advantages or disad-

4. Topic Market Analysis 15
www.pua.de p&a international market research issue 1/2013
vantages compared to the competition in dif-
ferent jurisdictions. Putting these two aspects
of analysis together, that is accessing whether
our competitors are able to provide compell-
ing communication and offers to the market
and are able to convert this into high customer
equity, we will be able to access if some exist-
ing competitors have a strong offer, and if this
is because of a systematic advantage of theirs
or transaction myopia of the rest. On top of
that, we trust our brand and product/service
to meet benchmarks with the current land-
scape to access opportunities and overcome
market entry barriers.
Atthesametime,theproductportfolioanaly-
sis should be supported by and cross-
checked against the brand awareness and
perception results taken from the consumer
puzzle. This part of a new market entry study
should be conducted carefully, with a strong
focus on brand understanding, including
brands of producers and brands of products,
and the local context of brands especially in
terms of brand image. Not all of the pieces of
our puzzles must fit together perfectly. This
part of the analysis allows us to discover
potential gaps or niches. The final product
description, together with the implementa-
tion strategy, should be created by the com-
bination of market stakeholders and opinion
leaders.
Experts and Advisors
Experts usually try to combine all available
sources into one compact picture, but of
course they do not have full access to all
sources or their specialisation isn’t as narrow
as required. The reason we strongly recom-
mend including expert interviews as a part of
themarketentrystudyisfirstofalltoverifyall
previousfindings,andsecondofalltoidentify
potential niches and question marks for fur-
ther development.
Dependingontheareaofourstudy,wecanuse
a wide range of professionals for the expert
interviews. At the same time, we can use top
executives from both the production and dis-
tribution sides, researchers, consultants, in-
dustry journalists, etc. The biggest advantage
of experts is the ability to create a synthesis
between opinions and facts. Such a compre-
hensive approach should be directly connect-
ed with all other perspectives and lead to rec-
ommendations.
Next Steps
One of the most direct outputs of market
entry studies are sets of recommendations.
This key request leads us to the preparation
of market entry scenarios divided into steps,
milestones and decision points. To be able to
prepare a relevant set of recommendations,
we should begin discussions with our client
as early as possible. One of the most common
mistakes, confirmed in research studies with
huge companies in Central and Eastern Eu-
rope, is waiting with discussions until the
final presentation. Based on discussions with
the client, we should be able to include in-
ternal knowledge of our client, eliminate al-
ternative scenarios or options which are im-
possible from the client’s perspective and
eventually provide our client with one strong-
ly recommended scenario.
On top of the statement of whether the market
is attractive or not, whether there is room for
additional products, qualities, needs, etc.,
there is a long line of very important conclu-
sions including very practical dilemmas: do we
have our own factory, are we renting facilities,
are we rather looking for a contract manufac-
turer or do we perhaps produce in other loca-
tions and only have to find a local distributor,
are there any tax incentives and special eco-
nomic zones or other solutions encouraging
foreign direct investments in a particular coun-
try, if we are going to invest in a particular
country are we doing it on our own, or is it
recommended to establish a JV with a trusted
local partner because of local specifics, etc.
Conclusion
To sum it up, here are some tips and tricks
from a local advisor perspective:
a. Trap of regional simplification:
Preconceptions on regional similarities and
simplifications. Be careful with transferring
strategy assumptions or results to all coun-
tries in a particular region. As already men-
tioned, there could be significant differences
betweencustomerseveninquitehomogenous
regions. It’s too easy to follow your own expe-
rience or common knowledge as a source of
simplification.
b. Temptation to copy & paste solutions
from other regions:
All recommendations, especially parts of the
implementation strategy, should be created
with local understanding. We should focus on
finding new, customized solutions, and not
just verify the applicability of the model test-
ed in another market.
c. Lack of multi-perspective cross-check:
It is important not to terminate the analysis
having executed a macro analysis and custom-
er needs analysis. There are a variety of angles
that always bring value and insight, such as
distributors and manufacturers, and this is
critical especially if we are supposed to draw
up a strategic or even tactical plan.
d. Constant communication with analysis
stakeholders:
Even if project objectives seem to be exhaus-
tively defined at the commencement of the pro-
ject, regular communication with key project
stakeholders enables us to first of all verify if
partial results address key questions and pro-
vide initial solutions, and second of all to po-
tentially decide to amend or modify initially set
objectives based on partial project findings.
This article only covers selected issues; our
goalwastoshowanewmarketentrystudyasa
process, underlining the most important ele-
ments and perspectives. Irrespective of the
area,wealwaysstartanew,keepinginmindall
of the points mentioned above. The last, but
not least important, factor to be aware of is
that irrespective of how many research pro-
jects you have successfully executed, a new
one might bring new and unexpected chal-
lenges. 7

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