What are the tools to calculate the potential of any foreign market?

The following factors are typically taken into consideration when analysing potential markets to determine which are the most attractive;

Market size and growth

• Overall market potential, i.e. market size in dollar terms
• Growth rate of the market in recent years
• Trends and growth forecasts for the type of product
• Import history for the type of product/service;
• Identify competitors, domestic and international
• Comparison of current prices in the market with your planned pricing structure
• Evaluate quality of currently available products and points of difference with your product

Market Accessibility 

• Investigate import duties and tariff rates for the type of product, note that  high import duties and tariff costs can adversely affect pricing and competitiveness in export markets
• Consider distribution channels, it is very important to understand how you will distribute your products, which could be through local distributors, agencies or wholesalers etc.
• Carefully evaluate advertising and promotion options, effective export marketing promotion is critical in building awareness of your product / brand.

Economic Conditions 

• Determine the economic climate within the new marketplace, e.g. is it thriving, in decline or growing steadily?
• Examine the difference in currency value and exchange rate. It is critical to have a full understanding of currency rates and monitor currency fluctuations to appropriately price your products and anticipate any potentially adverse currency rate changes
• Discuss with your bank or financial advisor options to purchase currency exchange risk protection. This type of forward cover can protect you against adverse currency movements.

Cultural, Legal and Political Factors

• Undertake research to identify any potential cultural issues that could adversely affect sales of your product. This could be for example translations of your product name or slogan that could be culturally insensitive.
• Consider the political stability of potential markets and to what level any instability could affect the sales of your product
• Observe whether the legal system is supportive of international trade, this can include factors such as is there enforced protection of intellectual property rights
• Check overseas registration and licensing procedures to identify any potential restrictions or impediments to you getting your product into the market

To evaluate the market potential, to make things very easy, group the required information areas into3; Market conditions, Supply Condition, and Market Size.

1) Market Condition: This would contain the Macroeconomic conditions of the country, political and social environment, regulatory framework, etc.

2) Supply Condition: The current competitive situation in the county; which would include the number of companies operating in the similar business line,  who are the major competitors, what is the role of unorganized players, etc.

3) Market Size: This can be obtained through published reports, news articles, competition annual reports, etc. We can obtain this also through a detailed quantitative research, if budget permits :)