Importance of Market Research
Unquestionable market research is also essential for determining marketing strategies, medium- to long-term strategies, and investment amounts for overseas expansion, such as in Europe. If market research is inadequate, companies may end up formulating strategies that are not in line with local realities and incur significant losses in the initial stage.
In reality, however, many companies make market judgments based on information provided by domestic market research firms or by domestic administrative agencies. This information often does not reflect the latest market trends, and in many cases, companies are unable to respond to rapid changes in the European market and updates to new regulations.
IN PARTICULAR, CERTIFICATION SYSTEMS SUCH AS CE MARK, RECYCLE MARK, AND CPNP (COSMETICS REGULATION) ARE FREQUENTLY REVISED AND HANDLED DIFFERENTLY IN EACH COUNTRY. THEREFORE, IT IS DIFFICULT TO OBTAIN ACCURATE INFORMATION QUICKLY WITHOUT COOPERATION WITH LOCAL SUBSIDIARIES OR LOCAL SPECIALIZED ORGANIZATIONS. MANY COMPANIES LOSE THEIR COMPETITIVENESS AS A RESULT OF MISINTERPRETING MARKET REGULATIONS AND CONSUMER PREFERENCES, AND AS A RESULT, THEIR INITIAL INVESTMENT IS WASTED.
Therefore, in order for companies to succeed in the European market, they must conduct their own market research and stay abreast of local trends. In addition, working with partners who are familiar with local laws and business practices can facilitate regulatory compliance.
What is Market Research?
Market research is the process of analyzing customer needs, the competitive environment, and economic trends in a particular market. Accurate market research is essential for companies to enter new markets or to strengthen their competitive position in existing markets. There are two types of market research: quantitative and qualitative, each using different methods to collect and analyze data.
- Quantitative research: Obtain numerical data through surveys and statistical data analysis to forecast the size and growth rate of a market.
- Qualitative research: Utilize interviews and focus groups to gain a deeper understanding of consumer thinking and purchasing motivations.
By conducting market research, companies can identify trends in their target markets and develop effective marketing strategies.
What is the European market?
THE EUROPEAN MARKET CONSISTS OF ECONOMICALLY DIVERSE COUNTRIES, CENTERED ON THE EUROPEAN UNION (EU), OF WHICH 27 COUNTRIES ARE MEMBERS. IN PARTICULAR, WESTERN EUROPEAN COUNTRIES SUCH AS FRANCE, GERMANY, THE UNITED KINGDOM, ITALY, AND SPAIN HAVE LARGE ECONOMIES AND ARE IMPORTANT TARGET MARKETS FOR INTERNATIONAL COMPANIES. ON THE OTHER HAND, EASTERN EUROPEAN COUNTRIES ARE ATTRACTING ATTENTION AS GROWTH MARKETS AND ARE CHARACTERIZED BY HIGH COST COMPETITIVENESS.
Characteristics of the European market
High diversity - cultures, languages, and consumer preferences vary from country to country.
Strict regulations - In addition to EU-wide regulations, there are also country-specific laws and regulations.
Increased digitization - e-commerce and fintech sectors are growing rapidly.
Increased environmental awareness - greater interest in sustainability and increased demand for eco-friendly products.
Market Research Basics
The following steps are important for successful market research
1. clarify the purpose of the survey
Without a clear objective for market research, the data to be collected and the analysis methods to be used cannot be properly selected. For example, the research approach will differ depending on whether the purpose is to "evaluate the market adaptability of a new product" or to "conduct a competitive analysis.
Set the target market
Because the European market is so broad, it is impractical to target every country. First, select your target market based on the following criteria.
Largest markets: France, Germany, UK
High-income countries: Switzerland, Monaco, Luxembourg
Growth markets: Eastern European countries (Poland, Czech Republic, Hungary, etc.)
Determine data collection method
Market research involves a variety of data collection methods.
Primary data (collected directly in-house): surveys, interviews, field research, etc.
Secondary data (leveraging existing data): public statistics, industry reports, competitor financial data, etc.
4. analyze the data and obtain suggestions
Once the data is collected, it is analyzed using statistical methods to assess the needs and competitive environment of the target market. In particular, it is important to understand consumer purchasing trends and price sensitivity.
5. formulate a strategy based on the survey results
Based on the survey results, specific marketing and sales strategies are developed. For example,
Adjust your pricing strategy (for the premium or mass market)
Determine the direction of the advertising campaign (digital advertising, influencer marketing, etc.)
summary
Thorough market research and regulatory adaptation are essential to success in the European market. In particular, it is important to establish local subsidiaries and collaborate with specialized organizations in order to keep up with regulatory changes. The European market is highly country-specific and requires constant attention to changes in consumer needs, preferences, and regulations.
IT IS ALSO ESSENTIAL TO RESPOND TO FREQUENTLY UPDATED LEGAL REQUIREMENTS SUCH AS CE MARK, RECYCLE MARK, CPNP REGISTRATION, AND COUNTRY-SPECIFIC REGULATIONS. TO REMAIN COMPETITIVE IN SUCH A COMPLEX MARKET ENVIRONMENT, IT IS ESSENTIAL TO HAVE A SYSTEM IN PLACE THAT ALLOWS YOU TO OBTAIN THE LATEST INFORMATION IN REAL TIME AND FLEXIBLY MODIFY YOUR STRATEGIES.
In particular, the establishment of local subsidiaries, cooperation with local partners, and the use of specialized agencies are effective ways for Japanese companies to succeed in the European market. This will enable the collection of accurate market data, faster regulatory compliance, and a better understanding of consumer needs.
In addition, the use of digital marketing and the implementation of localization strategies are also important. The European market is becoming increasingly dominated by online sales, and by making full use of digital measures, a competitive advantage can be secured.