Market entry consulting is a service that provides companies with strategic advice and implementation support for doing business in a new market or region. Market entry consulting can help companies analyze the opportunities and risks in the target market, formulate appropriate entry models, select partners, build local teams, and deal with challenges such as competition and regulation. However, there are also some common misunderstandings and traps in market entry consulting, which cause enterprises to fail to achieve the expected results or suffer heavy losses. From the perspective of consulting companies, this paper summarizes the four misunderstandings and four traps of market entry consulting, and analyzes the causes and consequences of these misunderstandings and traps, and how to avoid or overcome them. The purpose of this paper is to provide a clear market entry consulting framework for enterprises to help enterprises make better use of the expertise and experience of consulting firms to achieve successful market entry.

Market entry consulting is a common consulting service that provides companies with strategic advice and implementation support for doing business in a new market or region. With the development of globalization and digitalization, more and more enterprises are facing market opportunities that cross national boundaries or industry boundaries, and also face more complex and changeable market environment. As a result, market entry consulting has become an important area for many companies to seek external expert support.

However, not all market entry consultations have achieved the desired results. Some companies will fall into some common misunderstandings and traps when conducting market entry consulting, which will lead to the inability to make full use of the professional knowledge and experience of consulting companies, and even cause unnecessary losses. As an internationally renowned consulting firm focused on strategy, operations, organization and digitalization, Shaper Consulting has provided high-quality market entry consulting services to hundreds of clients over the past decade and has accumulated a wealth of case studies and experience. In this article, we will summarize the four common misunderstandings and four traps in market entry consulting from the perspective of consulting companies, and make a specific analysis through the customer cases we have served, with a view to providing a clear market entry consulting framework for enterprises to help enterprises better make market entry decisions and implementation.

Four Common Mistakes in Market Entry Consulting

Myth 1: There are no clear and measurable goals

Many companies do not have clear and measurable objectives when conducting market entry consultations. They just want to explore a new market or region to see if there are opportunities or potential, without setting specific time, budget, benefits, risks and other indicators. This leads to two problems: first, the consulting firm is unable to provide appropriate consulting solutions and methods according to the real needs and expectations of the client, and second, the client is unable to evaluate the effectiveness and value of the consulting project, nor can it effectively supervise and feedback the work of the consulting firm.

For example, we once provided China market entry consulting services for a European auto parts manufacturer. The customer does not have any experience and resources in the Chinese market. He just wants to know the basic situation of the scale, competition, demand and policy of the Chinese market, and whether there are suitable partners or channels. We provide customers with a comprehensive market analysis report, including market overview, competitive landscape, customer profile, policies and regulations, entry mode, etc., and recommend some potential partners or channels. However, the client did not conduct an in-depth research and evaluation of our report, nor did he discuss with us the next action plan, but put the report aside and continued to look for other consulting companies or sources of information. In the end, the customer did not make any progress in the Chinese market and did not give us any feedback or evaluation.

In order to avoid this situation, we recommend that companies conduct market entry consultations with clear and measurable goals, such:

How much sales or market share do we want to achieve in the target market or region?

How many branches or partners do we want to establish in the target market or region?

How many customers or users do we want to have in our target market or region?

How many brand recognition or word of mouth do we want to gain in the target market or region?

How much time and money are we willing to invest in our target market or region?

How much risk and uncertainty can we take?

In this way, the consulting firm can provide more targeted and effective consulting solutions and methods according to the client's objectives, and the client can evaluate the effectiveness and value of the consulting project according to the objectives, as well as provide effective supervision and feedback on the work of the consulting firm.

Myth 2: Not taking full advantage of the consulting firm's expertise and experience

Many companies do not make full use of the expertise and experience of consulting firms when conducting market entry consulting. They only see the consulting company as an information provider or data collector, not a strategic partner or solution provider. They only ask the consulting company to provide some superficial data or information, not in-depth analysis or suggestions. They only listen to the advice of the consulting company, not communicate or discuss with the consulting company. They simply accept the results of the consulting firm, rather than co-executing or following up with the consulting firm. This leads to two problems: one is that the consulting firm cannot give full play to its professional and experience advantages, and the other is that the client cannot obtain truly valuable and useful consulting results.

For example, we once provided Indian market entry consulting services for an e-commerce platform in the United States. The client faced strong local competitors and a complex regulatory environment in the Indian market and needed to develop an effective market entry strategy and execution plan. We provide customers with a consulting solution based on in-depth market research and competitive analysis, including target customer base, differentiated positioning, cooperation model, operation model, marketing strategy, etc., and put forward some specific action suggestions and implementation steps. However, customers did not carefully read and understand our consulting program, nor did they fully communicate and discuss with us, but directly entered the market according to their own ideas and experience. In the end, the customer encountered many difficulties and setbacks in the Indian market, and did not give us any feedback or evaluation.

In order to avoid this situation, we recommend that companies make full use of the expertise and experience of consulting companies when conducting market entry consulting, such:

What kind of data or information do we ask the consulting company to provide? How is this data or information collected and analyzed? What are the limitations or assumptions of this data or information?

What kind of analysis or recommendations do we ask the consulting firm to provide? What theories or methods are these analyses or recommendations based on? What are the advantages or disadvantages of these analyses or recommendations?

How do we communicate or discuss with the consulting company? What questions or opinions do we need to put forward or feedback to the consulting company? What needs or expectations do we need to express or communicate to the consulting company?

How do we implement or follow up with the consulting firm? What resources or capabilities do we have to share or collaborate with the consulting firm? What difficulties or challenges do we have to ask the consulting firm for support or assistance?

In this way, the consulting company can give full play to its professional advantages and experience advantages, and customers can also obtain truly valuable and useful consulting results.

Myth 3: Cultural and social differences in the target market or region are not taken into account

Many companies do not take into account the cultural and social differences in the target market or region when conducting market entry consultations. They just copy their successful experience and model in the original market or region directly to the new market or region, rather than making appropriate adjustments and innovations according to the characteristics and needs of the target market or region. They only regard the target market or region as a single whole, rather than a diversified structure composed of different groups, regions, industries, channels, etc. They just treat the target market or region as a static status quo, not a dynamic change. This will lead to two problems: one is that the consulting company cannot provide consulting solutions and methods that are in line with the actual situation and development trend of the target market or region, and the other is that the customer cannot obtain a good brand image and customer satisfaction in the target market or region.

For example, we have provided consulting services for a Japanese cosmetics brand in the Brazilian market. The customer has a high brand awareness and loyalty in the Japanese market, mainly to natural, gentle, moisturizing and other characteristics to attract consumers. We provide customers with a consulting solution based on in-depth market research and consumer insight, including target customer base, differentiated positioning, product portfolio, price strategy, distribution channels, etc., and put forward some specific action suggestions and implementation steps. However, the customer did not seriously consider the cultural and social differences in the Brazilian market, but insisted on using their own successful experience and model in the Japanese market. In the end, the customer encountered many problems in the Brazilian market, such:

The customer's product characteristics do not match the needs of Brazilian consumers. Brazil is a tropical country, consumers pay more attention to sunscreen, oil control, whitening and other functions, rather than moisturizing, mild and other characteristics.

The customer's pricing strategy is not compatible with the spending power of the Brazilian market. Brazil is a developing country, where the income level of consumers is low, and the price of customers' products is high, which prevents customers' products from entering the mass market and competing with competitors in the high-end market.

The customer's distribution channels are not in harmony with the distribution structure of the Brazilian market. Brazil is a country with a vast territory and an unevenly distributed population, and consumers have different buying habits and channel preferences. And customers just rely on traditional retail channels and do not take advantage of emerging channels such as e-commerce or direct sales.

In order to avoid this situation, we recommend that companies consider the cultural and social differences of the target market or region when conducting market entry consultations, such:

Do we need to understand the historical, geographical, political, economic, legal and other background and current situation of the target market or region? What impact or enlightenment do these background and current situation have on our market entry?

Do we need to understand the culture, values, beliefs, customs and other characteristics of the target market or region? What impact or enlightenment do these characteristics have on our brand image, product characteristics and marketing methods?

Do we need to know the characteristics of consumer behavior, psychology, preference and so on in the target market or region? What influence or enlightenment do these characteristics have on our target customer group, differentiation positioning, product mix and price strategy?

Do we need to understand the competition pattern, industry rules, channel structure and other characteristics of the target market or region? What impact or enlightenment do these characteristics have on our competitive advantage, cooperation mode and operation mode?

Do we need to understand the development trends, changing factors, risk factors and other characteristics of the target market or region? What impact or enlightenment do these characteristics have on our market opportunities, innovation space and coping strategies?

In this way, the consulting company can provide consulting solutions and methods that are in line with the actual situation and development trend of the target market or region, and the customer can also obtain a good brand image and customer satisfaction in the target market or region.

Myth 4: There is no effective internal communication and collaboration mechanism

Many companies do not have an effective internal communication and collaboration mechanism when conducting market entry consulting. They just put the market entry consulting project in the hands of a single department or team, rather than involving and supporting the entire organization. They only treat market entry consulting projects as a temporary or external task, rather than a long-term or internal strategy. They only use the results of the market entry consulting project as a reference or recommendation, not a decision or action. This leads to two problems: first, the consulting firm cannot obtain the customer's internal information and resources, and second, the customer cannot achieve the continuity and effectiveness of the market entry consulting project.

For example, we once provided European market entry consulting services for a Chinese clothing brand. The customer has a strong brand influence and loyal consumer group in the Chinese market, and wants to enter the European market to expand its international influence and income sources. We provide customers with a consulting solution based on in-depth market research and brand positioning, including target countries, target customer groups, differentiated positioning, product mix, price strategy, distribution channels, etc., and put forward some specific action suggestions and implementation steps. However, the client did not establish an effective internal communication and collaboration mechanism, but only the marketing department was responsible for the market entry consulting project, and other departments such as design department, production department, finance department, etc. were not involved and supported. In the end, customers encountered many problems in the European market, such:

The customer's product design does not meet the aesthetic and needs of European consumers. The design department did not make appropriate adjustments and innovations according to the characteristics and trends of the target market, but followed its own successful experience and model in the Chinese market.

The customer's product quality is not consistent with the standards and requirements of the European market. The production department did not carry out strict control and improvement according to the specifications and inspection of the target market, but followed its own production process and methods in the Chinese market.

The price of the customer's product does not match the spending power and the level of competition in the European market. Instead of making reasonable pricing and budgeting based on the costs and benefits of the target market, the Finance Department has followed its own pricing strategy and financial model in the Chinese market.

In order to avoid this situation, we recommend that companies establish effective internal communication and collaboration mechanisms when conducting market entry consultations, such:

How do we organize the team responsible for the market entry consulting project? How do we assign the roles and responsibilities of the team members? How do we manage the progress and quality of the team members?

How do we communicate and collaborate with other relevant departments? How do we share information and resources? How do we coordinate opinions and decisions?

How do we communicate and report to senior management? How do we get support and empowerment? How do we feed back results and evaluations?

How do we align market entry consulting with the overall strategy and goals of the organization? How do we align market entry consulting with the day-to-day operations and management of the organization? How do we align market entry consulting with the culture and values of the organization?

In this way, the consulting firm has access to the client's internal information and resources, and the client can achieve the continuity and effectiveness of the market entry consulting project.

Four Common Pitfalls in Market Entry Consulting

Trap 1: Too much reliance on third-party data or information

Many companies rely too much on third-party data or information, such as industry reports, market research, and web searches, when conducting market entry consultations. They believe that these data or information are objective, authoritative and comprehensive, rather than subjective, limited and one-sided. They believe that this data or information can be used directly to guide their own market entry decisions and execution, rather than requiring verification, analysis, and interpretation. They believe that these data or information can replace their own market observations and consumer insights, rather than the need to supplement, deepen, and innovate. This leads to two problems: the inability of the consulting firm to provide consulting solutions and methods that truly meet the needs and expectations of the client, and the inability of the client to gain a real competitive advantage and market opportunities in the target market or region.

For example, we once provided China market entry consulting services for an Australian dairy brand. The customer has a high quality and reputation in the Australian market and wants to enter the Chinese market to seize the fast-growing consumer demand for dairy products. We provide customers with a consulting solution based on in-depth market research and competitive analysis, including target customer base, differentiation positioning, product portfolio, price strategy, distribution channels, etc., and put forward some specific action suggestions and implementation steps. However, the client does not fully listen to our advice and recommendations, but relies too much on some third-party data or information, such:

Customers rely too much on the forecasts of the size and growth rate of the Chinese dairy market in some industry reports, without taking into account the complexity and diversity of the Chinese dairy market, as well as the differences and potential of different product categories, regions, channels and other market segments.

Customers rely too much on the description of Chinese consumers' demand and preference for dairy products in some market research, without taking into account the influence factors of Chinese consumers' consumption behavior and psychology of dairy products, as well as the differences and opportunities of different consumer groups, scenarios, purposes and other subdivided situations.

Customers rely too much on the information of competitors and partners in the Chinese dairy market in some web searches, without taking into account the changes and trends in the competitive landscape and cooperation models of the Chinese dairy market, as well as the strengths and weaknesses of different competitors and partners.

In order to avoid this situation, we recommend that companies use third-party data or information appropriately when conducting market entry consultations, such:

How do we select reliable and authoritative sources of third-party data or information? How do we verify and compare third-party data or information from different sources?

How do we understand and interpret the logic and assumptions behind third-party data or information? How do we analyze and evaluate the limitations and biases of third-party data or information?

How do we supplement and deepen third-party data or information? How do we innovate and use third-party data or information?

In this way, the consulting firm can provide consulting solutions and methods that truly meet the needs and expectations of the client, and the client can gain real competitive advantages and market opportunities in the target market or region.

Trap 2: Trust your intuition or experience too much

Many companies will trust their intuition or experience too much when conducting market entry consulting, such as personal feelings, inherent concepts, and success stories. They believe that these intuitions or experiences are accurate, valid, and universal, rather than wrong, outdated, and special. They believe that these intuitions or experiences can be used directly to guide their own market entry decisions and execution, rather than the need to test, update, and adjust. They believe that these intuitions or experiences can replace the consulting firm's expertise and experience, rather than the need for reference, learning, integration. This leads to two problems: the inability of the consulting firm to provide consulting solutions and methods that truly meet the needs and expectations of the client, and the inability of the client to gain a real competitive advantage and market opportunities in the target market or region.

For example, we once provided China market entry consulting services for a French luxury brand. The customer has a high brand status and reputation in the French market and wants to enter the Chinese market to seize the fast-growing consumer demand for luxury goods. We provide customers with a consulting solution based on in-depth market research and brand positioning, including target customer base, differentiated positioning, product portfolio, price strategy, distribution channels, etc., and put forward some specific action suggestions and implementation steps. However, the client did not fully listen to our consulting solutions and suggestions, but rather trusted his intuition or experience too much, such:

Customers believe too much in their feelings about Chinese consumers' demand and preference for luxury goods, without taking into account the influence factors of Chinese consumers' consumption behavior and psychology on luxury goods, as well as the differences and opportunities of different consumer groups, scenes, purposes and other subdivided situations.

Customers believe too much in their own inherent concepts of competitors and partners in the Chinese luxury market, without taking into account the changes and trends in the competitive landscape and cooperation models of the Chinese luxury market, as well as the strengths and weaknesses of different competitors and partners.

Customers believe too much in their successful cases in the French market, without taking into account the cultural, social, legal and other differences and characteristics between the Chinese market and the French market, as well as the different reactions and expectations of consumers in different markets on brand image, product characteristics, marketing methods and so on.

In order to avoid this situation, we recommend that companies use their intuition or experience appropriately when conducting market entry consultations, such:

How do we test and compare our feelings and perceptions about the target market or region? How do we analyze and assess our misunderstandings and prejudices about the target market or region?

How do we update and adjust our knowledge and information about the target market or region? How do we learn and learn from other successful or failed cases and experiences?

How do we integrate and leverage the expertise and experience of consulting firms? How do we communicate and collaborate with consulting firms?

In this way, the consulting firm can provide consulting solutions and methods that truly meet the needs and expectations of the client, and the client can gain real competitive advantages and market opportunities in the target market or region.

Trap three: too eager for success or delay

Many companies are too eager or procrastinate when conducting market entry consulting, such as time pressure, cost pressure, and risk pressure. They see market entry advice as a simple, fast, low-risk process rather than a complex, slow, high-risk process. They see market entry consulting as a one-off, stand-alone, closed project rather than an ongoing, relevant, open-ended project. They see market entry consulting as a deterministic, linear, stable project rather than an uncertain, non-linear, changing project. This leads to two problems: the inability of the consulting firm to provide consulting solutions and methods that truly meet the needs and expectations of the client, and the inability of the client to gain a real competitive advantage and market opportunities in the target market or region.

For example, we once provided China market entry consulting services for an educational institution in the UK. The client has a high quality and reputation in the UK market and wants to enter the Chinese market to capture the rapidly growing demand for education. We provide customers with a consulting solution based on in-depth market research and educational positioning, including target customer base, differentiated positioning, curriculum combination, price strategy, distribution channels, etc., and put forward some specific action suggestions and implementation steps. However, instead of following our advice and recommendations to enter the market, the client is too eager or procrastinating, such:

The customer was too eager for success. Without fully understanding the Chinese market and consumers, he hastily chose a partner and signed a contract that was not conducive to him. As a result, the partners did not carry out course promotion and sales according to the customer's requirements, but used the customer's brand reputation to attract consumers, and then referred to other low-quality or high-priced courses.

Customers procrastinate too much and have been revising their course content and pricing strategies without fully evaluating the Chinese market and competitors. As a result, customers miss the best opportunities and opportunities in the Chinese market, and consumers are confused and doubtful about their brand image and product characteristics.

In order to avoid this situation, we recommend that companies appropriately control their time and costs when conducting market entry consultations, such:

How do we set a reasonable and feasible market entry timetable? How do we balance the speed and quality of market entry?

How do we develop a reasonable and feasible market entry budget? How do we balance market entry inputs and benefits?

How do we formulate reasonable and feasible market entry risks? How do we balance market entry opportunities and risks?

In this way, the consulting firm can provide consulting solutions and methods that truly meet the needs and expectations of the client, and the client can gain real competitive advantages and market opportunities in the target market or region.

Trap four: too dependent on consulting firms or their own

Many companies rely too much on consulting firms or themselves when conducting market entry consulting, such as division of responsibilities, resource allocation, and decision-making power. They believe that market entry consulting is the exclusive domain of consulting firms or themselves, rather than the common domain of both parties. They believe that market entry consulting is the sole responsibility of the consulting firm or themselves, rather than the joint responsibility of both parties. They believe that market entry consulting is the final decision of the consulting company or itself, rather than the joint decision of both parties. This leads to two problems: the inability of the consulting firm to provide consulting solutions and methods that truly meet the needs and expectations of the client, and the inability of the client to gain a real competitive advantage and market opportunities in the target market or region.

For example, we once provided China market entry consulting services for a German medical device brand. The customer has a high level of technology and innovation in the German market and wants to enter the Chinese market to seize the fast-growing medical demand. We provide customers with a consulting solution based on in-depth market research and technical positioning, including target customer base, differentiated positioning, product portfolio, price strategy, distribution channels, etc., and put forward some specific action suggestions and implementation steps. However, instead of following our consulting programs and recommendations for market entry, the client relies too much on the consulting firm or itself, such:

Clients rely too much on consulting firms and enter the market in full accordance with our consulting solutions without fully understanding the Chinese market and consumers. As a result, the client found that although our consulting program was correct in theory, it was not feasible in practice, because we did not take into account some special circumstances and factors in the Chinese market, such as policies and regulations, hospital management, doctor habits, etc.

Customers rely too much on themselves, without fully evaluating the Chinese market and competitors, they enter the market completely according to their own technical level and innovation ability. As a result, customers find that although their technical level and innovation ability are advantages in the German market, they are disadvantages in the Chinese market, because there are many more advanced and innovative competitors in the Chinese market, and Chinese consumers' technical level and innovation ability are not the most important buying factors.

In order to avoid this situation, we recommend that enterprises should appropriately balance the responsibilities, resources and decisions of the consulting company and their own when conducting market entry consulting, such:

How do we divide the responsibilities of the consulting firm and ourselves in the market entry project? How do we monitor and evaluate the quality and effectiveness of the work of the consulting firm and ourselves?

How do we allocate the resources of the consulting firm and ourselves in the market entry project? How do we share and coordinate the information and capabilities of the consulting firm and ourselves?

How do we determine the decision-making power of the consulting firm and ourselves in market entry projects? How do we communicate and negotiate the opinions and suggestions of the consulting firm and ourselves?

In this way, the consulting firm can provide consulting solutions and methods that truly meet the needs and expectations of the client, and the client can gain real competitive advantages and market opportunities in the target market or region.

Conclusion

Market entry consulting is an important type of consulting service that can help companies to do business in a new market or region. However, there are also some common misunderstandings and traps in market entry consulting, which cause enterprises to fail to achieve the expected results or suffer heavy losses. From the perspective of consulting companies, this paper summarizes the four misunderstandings and four traps of market entry consulting, and analyzes the causes and consequences of these misunderstandings and traps, and how to avoid or overcome them. The purpose of this paper is to provide a clear market entry consulting framework for enterprises to help enterprises make better use of the expertise and experience of consulting firms to achieve successful market entry.