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In the process of preparation for the exports, the companies need to conduct a research that will help them choose a market which will contribute to the maximization of the benefits and minimization of the risks. The same research will also help the managers decide not only on the markets to enter but also on the modes of entry. When deciding on these issues, the companies need to gather information on the following parameters:
- Information on the market availability: This should be the first phase in the process of research. If the result of the research shows that there are many barriers for entry on a certain market, then the company should reconsider the decision to go on that market. This is the phase where companies should collect information on the trade policy, tariff and non-tariff barriers, regulations regarding the exports and imports of the country, developed trade relations with different countries and trade groups etc.
- Information on the business environment: The second phase in the process of research is analysis of the business climate and environment of the potential markets. At the same time, this is the most critical stage in the information gathering process as it helps in the development of clear picture of the markets in the selected countries and the opportunities that are offered. The most important components to be analyzed are the economic and political-legal environments and their factors affecting the operations of the companies.
- Information on the size and potential of the markets, referring to the wealth of the market and the purchasing power of the consumers with the following most important indicators that should be analyzed: demographic characteristics of the markets (number of inhabitants, growth rate, population density, age structure), geographic characteristics (area, climate, topography), economic parameters (gross domestic product, GDP per capita, GDP growth rate, purchasing power, income level, average salary, consumption of different category types, economy growth, industry growth), technological parameters (actual production technology, planned technological development, investments in technology, Internet users, level of development of the information and communication network, investments in hardware and software), educational characteristics (educational system, students enrolled in high schools, students enrolled at faculties, foreign languages learned in schools, graduated students, graduated students according to the level of education, number of master students, number on PhD students) and socio-cultural characteristics (dominant religion, dominant values, life style, ethnical groups etc.).
- Information on the economic and market infrastructure, including information on the availability of resources, costs of the resources, availability and qualification of the workforce, availability of capital, insurance etc.
- Information on the communication infrastructure, including information on the road network, air transport, telecommunication conditions, logistics centers, logistics network, distribution systems, availability, importance and power of media, opportunities for promotion, retail infrastructure, wholesale etc.
- Information for the market of the specific product: sales and availability of the specific product, use of complementary or substitute products, competition etc.