There are numerous factors to consider when evaluating potential export markets, which can be generally grouped into 11 categories:

Market Size – in order to determine the size of the potential export market, you should start with overall population determination, basing on which you should:

  • Evaluate the percent of potential buyers within that population, taking into the account incomes;
  • Estimate the numbers that show how much people spend on your type of product, using per capita GNP data;
  • Determine whether internal or international competitors already offer a similar product/service. If there are competitors, it is important to determine the price, which your competitors are charging for the product/service, and compare the price and the quality of your product/service – with the competitors one.

Market Growth – to identificate the growth potential of a potential export market you should:

  • Examine last 4-5 years of import history for your product within a given market, focusing on the number of imports – are they increasing or decreasing;
  • Examine trends and growth forecasts, making conclusions, what do they tell you about the market and it’s potential for growth;
  • Examine the change in per capita income – is there / will there be a demand for your product;
  • Consider the industrial development stage of your market.

Market Accessibility – in order to determine the accessibility of a market, things mentioned below should be needed to know:

  • Import duties and tariffs;
  • Product standards;
  • Local suppliers;
  • Foreign suppliers;
  • How distribution channels work;
  • How to obtain import permits;
  • Pricing methods;
  • Advertising and promotional practices;
  • Credit terms.

Economic Stability – in order to determine the economic stability of a market, points marked below should be needed to know:

  • Exchange rate performance;
  • If currency controls exist;
  • The balance of payments;
  • Foreign currency reserves;
  • Government debt and budget;
  • Rate of inflation;
  • Rate of unemployment

Political Climate – in order to determine the political climate of a market three main things should be found out:

  • Is the political system of the market stable enough to start export activities (it is important to consider how possible changes could affect you)?
  • How does the government affect the ability for you to import into the market?
  • What is the potential export market government’s attitude toward the country your product/service is coming from?

Cultural background – in order to define the cultural climate of a potentila export market, it is advisable to know:

  • The main religions in the market;
  • The meaning of different symbols in the particular culture;
  • The meaning of numbers in the culture (e.g. in Latvia flowers in even numbers are for funerals);
  • The meaning of color in the culture (e.g. the white color is a color of death in China and Korea).

Education – educational level of the foreign market can affect the ability to sell product/service. When investigating education level of a market, it is useful to find out literacy rate and computer literacy rate of a particular country. When preparing promotion materials, it may be needed to add more graphics on the brochures and installation instructions.

Language – English is international business language, but, it should be kept in mind, that the customer always prefers to speak in his native language and appreciates your willingness and ability to communicate with him in it. In order to communicate with customers in their language:

  • It is advisable to translate the marketing literature and product information, in the same time taking into account the correct dialect (e.g. British English vs. American English);
  • Also foreign language character sets require additional considerations, like double-byte characters or left-to-right vs. right-to-left text writing.

Environmental Factors – the most important environmental factors that affect the demand of the product/service and the performance of it are: temperature, humidity, altitude and sand.
Geographical Factors – the geographical factors that affect costs are: travel time, travel costs, delivery time, and shipping costs.

Legal System – legal factors that will affect the decision which export market better to enter, are:

  • Independent judiciary, evaluating the level of judiciary corruption and the quickness of judicial processes;
  • Copyright protection;
  • Trademark protection;
  • Right to sue;
  • Right to own property;
  • Right to travel.

When deciding which export market to enter, we suggest to:

  • Select the path of least resistance – it should be noticed that international markets are highly competitive and difficult to enter. So, firstly start with a small and then enter more tough markets, after obtaining some experience;
  • Select the markets that fit your resources – foreseeing also periodic visits to develop commercial relationships;
  • Select the markets for the long run – staying focused on the target market and working hard on the development over time;
  • Avoid stagnation by doing regular analysis – realizing that in market research can be correct answers and absolutely perfect export market.