What is the target market?

The target market comprises all countries and potential customers who may be interested in a particular product or service. It represents the entirety of the markets in which companies can export, import or market their products. The target market thus defines the potential customers and regions on which a company focuses in order to be successful in foreign trade.

Why is the target market important?

1. Focus on the right customers

   • By defining the target market, companies can use their resources more efficiently and target high-potential customers.

2. Sustainable business development

   • The target market forms the basis for long-term, profitable and stable business development.

3. Reduction of risks

   • A thorough target market analysis helps to minimize risks by enabling companies to identify markets with low competition and high demand.

4. Increase in profit and profitability

   • Concentrating on markets with high purchasing power and stable economic conditions increases profit margins.

How is the target market determined?

Determining the target market is a strategic process that involves several steps:

1. analysis of your own situation

• What products or services does my company offer?
• What advantages do my products have compared to the competition?
• What problem do my products solve for the customer?

2. assessment of market conditions

• Demand: In which countries is demand for your product particularly high?
• Market size: How big is the market potential in the target countries?
• Import growth: Are the import markets in the target regions growing?

3. competitor analysis

• Which companies are already active on the market and how successful are they?
• Which countries export similar products?
• What distinguishes your products from the competition?

4. take economic indicators into account

• Import tax rates: How high are the customs duties for your product?
• Inflation: How stable is the economy in the destination country?
• Per capita income: Do customers have the purchasing power to buy your product?

5. analyze customer preferences

• What cultural or regional characteristics could influence the purchase of your products?
• Are there specific requirements for your product, such as local standards or certifications?

Important questions for target market analysis

To define the target market precisely, you should answer the following questions:

1. Demand and purchasing power

   • In which countries is your product most in demand?
   • Do customers in these countries have the financial means to buy your product?

2. Competition and market size

   • How big is the market and how much market share could you potentially achieve?
   • How strong is the competition in this market?

3. Economic and political stability

   • Is the market stable enough to enable long-term profits?
   • Are there any political or economic risks that could make trade more difficult?

4. Import conditions and customs regulations

   • What regulatory requirements do you need to fulfill in order to export your product to the destination country?
   • Are the duties and taxes for your product competitive?

Important criteria for target market selection

1. Low competition and high profitability

   • Focus on markets with little competition but high demand for your product.

2. Sustainability and growth potential

   • Identify markets that offer opportunities not only in the short term, but also in the long term.

3. Fast market launch

   • Choose regions where you can launch your product with minimal hurdles and costs.

4. Market prices and cost structures

   • Check the price sensitivity of the market and the costs for transportation, customs duties and distribution.