Calculate customer demand:How to understand your export market size and its segments
What you’ll learn
- what market sizes and segments are
- the impact they can have on consumer demand
- ways to research your chosen market
Market size and segmentation
Market size is the total number of potential buyers of a product or service within a market, and the total revenue sales to those customers could make. Typically, this is measured in terms of GDP (Gross Domestic Product) per capita – a reflection of the average person's economic output.
Market segmentation is how you choose to divide a market. This can help you choose which types of buyer you want to target. Each segment could be made up of a group of people who you think share common features.
For example, they might have the same interests, lifestyle, age, gender, or spending patterns.
Impact on consumer demand
Understanding the size and segmentation of your chosen market can help you predict the demand for your product or service.
For example, if you find a large market with a segment of potential new customers with needs and preferences similar to those you sell to in the UK, there could be a strong chance for trade.
But it can be tricky to make smart decisions about consumer demand in isolation, without knowing a wide range of extra factors. Everything from the culture and local trends to regulations around labelling can impact demand.
Research your chosen market
Before you start your research it’s important to understand how consumer demand works in your own market – and to have clear reasons for expanding into one place over another. If you’re unsure of the country you want to target, a good place to begin is with the Where to export interactive tool on this site.
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Use local knowledge
Another option is to work with experts in your chosen market who can put you in touch with local agents, distributors or partners in the country, or help you join fact-finding visits to trade shows or trade missions.
Online research
You can also do your own online research. For example, you may enter the name of your product, the country you’re targeting and the following search terms:
- “product” + “country” + “market size”
- “product” + “country” + “demographics”
- “product” + “country” + “segmentation”
There are many sources of free and paid-for online market information, such as market research reports. These can give you a good overview of potential size and segmentation for your market.
Using the Where to export tool on this site could be a good place to start.
It’s important not to look at market size and segmentation on their own. You need to see it as part of a wider strategy. You're building up a clear understanding of why you want to enter a new market, and seeing how demand translates in your industry when considering a wide range of connected factors.
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