Micro businesses usually know their market and customers quite well, and sometimes even personally, so there is no need for implementation of sophisticated market analysis techniques. In this case, understanding the local market is rather intuitive. However, this is not true when a microbusinesses aims to grow behind its location, especially to markets outside the country. Even though micro businesses usually have considerable limitation of skills, experience and resources, there are several tools and techniques at hand that can provide good overview on potential foreign markets. Most of these are available online, just few mouse clicks away. Thus, this training fiche will provide an overview on available free online tools and techniques that can be used for market research and analysis when exploring potential foreign markets for your products. The tools and techniques have been selected from the variety of existing options to best fit the needs of arts & crafts microbusinesses.

A good knowledge of potential foreign markets can help you to understand main trends, demand, competitors and prices on the foreign market, and adjust your entry strategy accordingly. As you are very likely to use online channels to reach Europe-wide market, online tools are very relevant for your market analysis needs.

Online tools and resources

• Market research is a key component to any business’ growth and success. Without it, you may easily waste time, energy, and resources hoping that your product and message is reaching the right people in the right way at the right time. Nowadays, online technologies play a crucial part in the foreign market analysis for microbusinesses, not just because it is the only way to truly collect and analyse required data, but also because many consumers are using the internet and social media to search, purchase, and review arts & crafts products and makers.

• You can use the following main categories of online tools and resources to obtain some insights on potential foreign markets:

o Online marketplaces - online marketplaces are traditional places where people offer and buy arts & crafts product. They can be grouped into several categories. First, in each country you can find local marketplaces specialized on arts & crafts items, as well as local generic marketplaces where all sorts of products are traded. Second, there are plenty of international online marketplaces specialized on handmade and arts & crafts items (such as Etsy or Dawanda). See some of the resources from bibliography below, or Google “arts and crafts online marketplaces” to look for most relevant marketplaces for you. Third, handmade or handcrafted items are also traded on world’s largest online marketplaces like Amazon or eBay.

o Online tools analysing online consumer behaviour - you may also use some of tools or websites that offer various online consumer behaviour analyses for free. There you will discover what, how or when are different segments searching for and buying online in different countries or regions, what devices they use, what are the hot topics on social media or Google search. Some examples of such tools are:

o The Customer Journey to Online Purchase provided by Google (https://www.thinkwithgoogle.com/tools/customer-journey-to-online-purchase.html)

o Google Trends - analysis of interests in topics using Google search data (https://www.google.com/trends/)

o Consumer Barometer provided by Google - a tool showing how people worldwide use internet (https://www.consumerbarometer.com/)

o Connected Life by TNS - sample results from global consumer behaviour study (http://www.tnsglobal.com/get-connected/connected-life)

o Social Mention - a real time social media search and analysis tool (http://www.socialmention.com/)

o Internet search - you can do internet searches to find different types of information. For example, you can look for information about any state or local regulations or licenses you may need to sell on particular markets. Be aware that there is a lot of stuff out there, so make sure you are depending on reliable sources. Also, you can search for online marketplaces, for potential partners or local distributors, or for various events for arts & crafts makers. Try to make your search as relevant as possible. For example, Google enables you to filter results according to country of origin, language or newness in its search tools.

o Statistical databases - you may use websites of statistical offices - Eurostat (ec.europa.eu/eurostat) or national statistical offices to obtain various demographic data and economic indicators. For example, census data gives you fantastic information about the area, about age groups and occupations. To get information about the local population you may approach local authority websites.

Executing market analysis using online tools and resources

Following the basic steps of market analysis, you can take the following steps when analysing your potential foreign market using the online tools and techniques:

1) Identify trends, lifecycle and market size

• Trends on the arts & crafts market can be analysed using Google Trends - an online tool providing analysis of interests in topics using Google search data. Put simple, it shows you how often a particular search-term is entered. If the trend of interest in your product is constantly declining on the explored foreign market, it is a warning signal. In addition to long-term trend, you can also look at the annual cycles. For example, search for „handmade“ shows a gradually increasing trend, and it peaks every year in November and December. Moreover, this tool enables you to define country you are interested in, time period, category, type of search (web, picture etc.), so you can get pretty relevant results for your target country.

• You should be also interested whether a product you are planning to sell on the foreign market is selling well. There are several options to find it out. First, go to online marketplace and search for the product through product categories directory or fulltext search. Look at the results and try to find an information (if available) on volume of sales (e.g. seller ranking, number of items sold by the seller). If such information is not available, you can get some estimates from number of reviews provided by customers. If there is enough hype around the product, it might be a good chance for you.

• Of course, you should be interested in the price level for your product on the foreign market. Here you need to review online marketplaces (both local and international) to discover the actual price level.

• Another insights can be extracted from the content of customer reviews. Go through the reviews to find out what are customers happy with regarding the product, shipping and packaging, communication with sellers etc.

• Finally, information on trends and development in arts & crafts sector or particular product category can be obtained from articles on specialized websites or on online marketplaces, as well as from other resources found through internet search.

• Information on market size can be obtained mainly from statistical data available on Eurostat or national statistical offices. To find out your total market, in the first round, use this data to estimate the size of your target group according to demographic criteria that you define (age, income, rural/urban etc.) after understanding your customers (see step 2 below). In the second step, try to narrow this set down using information from other resources (e.g. Consumer Barometer to discover online behaviour and habits) or found through internet search.

• To find out your serviceable market, try to find out visits statistics for online marketplaces that you plan to use as your channels on the foreign market. If possible, confront this with demographic and behavioural profile of your customer.

2) Understand your customers

• Even if you will be happy to serve anyone interested in your product, not everyone is your typical customer. Each product especially attracts one or several customer segments. To better adjust your offer to these in order to boost your sales, use online tools and resources to understand demographic and behavioural attributes of your segment.

• First, look at your typical customer from demographic perspective. Who usually buys products that you plan to sell? Consider gender, age, income category. Try to find these information from customer reviews on similar products (you will identify them in your competition analysis) at online marketplaces, social media (using e.g. Social Mention - a real time social media search and analysis tool) or from discussion forums or internet search results.

• Second, behavioural analysis aims to discover reasons why customers choose to buy a product instead of the other alternatives, their interests and buying habits. To discover these, try to use “Customer Journey to Online Purchase“ and “Consumer Barometer“ provided by Google. Also, look into customer review and try to look for common patterns in customers‘ behaviour. Finally, try the internet search to look for articles on buying habits on your taget market. Look at resources coming from the target foreign country, but also from your home country, as some of arts & crafts makers might have shared their experience on discussion forums.

3) Look at your competitors

• Before you decide to enter the foreign market, you should take some effort to map your competition. Start with looking at the same channels that you plan to use (e.g. particular online marketplace) as these are the places where you will face your competition in front of your customers. However, also try to review other online marketplaces (e.g. local marketplaces that do not allow selling from abroad) to obtain a comprehensive picture.

• You can identify your competitors using product category search or keyword search. You should use several most relevant keywords. Try to put yourself into your customer’s shoes - what keywords may he/she use when looking for your product? Also, try the search with keywords translated to local language (if you don’t speak it, use Google Translate). Executing a comprehensive analysis of search results is usually not necessary - looking at first or second page should be enough. However, look at sorting of search results, as you may rather want most popular instead of most recent results.

• Do not forget that in addition to direct competitors you also have indirect competitors. Do not forget to look at them during your mapping. Look at similar product categories or search results for products similar but not same as yours.

• The next step after you identify your competitors is to analyse their offer. What products do they sell? What are their attributes in terms of style, design, quality, materials and techniques used etc. Also. Look at the online presentation of their products. Do they use quality pictures? Is the headline catchy? Are the products described in an attractive way? If the offers of competitors on the first pages are poorly presented, it is a good chance for you. Also, have a look at customer references. Are there many feedbacks? What proportion of them is positive/negative?

4) Consider barriers to entry

• Look at official EU websites (e.g. http://europa.eu/youreurope/) and websites of national/local governments, ministries or trade agencies to discover whether there are any legal barriers.

• If you consider using an online marketplace as your channel, check the requirements and rules related to eligibility for selling, payments, shipment etc. for legal entry barriers.

• Analyse the level of language barrier. Do local online marketplaces have English language mutation, or are they available in local language only? To what extent do people in the foreign country speak English or any international language?

• Find out what are the shipping options and costs. Use internet search to look for companies that can deliver your product to target country (mail service, specialized shipping companies, etc.) After including these, can you still offer a competitive price for your product?

• Finally, try to find whether customers on the online marketplaces you aim to use accept foreign sellers. Try to find foreign sellers (ideally coming from your country) on that marketplace and look at their sales figures and received reviews.

5) Look at regulations

• There are several ways you can find useful information on regulations related to entering the particular foreign market:

o Official EU websites (e.g. http://europa.eu/youreurope/) and websites of national/local governments, ministries or trade agencies provide official and updated information on regulations related with doing business in particular country. EU resources are usually available in all EU languages, while national resources usually provide information in local language and in English.

o Google search - internet search can direct you, besides above mentioned official websites, to other resources that may provide comprehensive information in user friendly form. As always with internet resources, make sure you are referring to up-to-date information.

o Online marketplace regulations - besides legal regulations, online marketplaces also have their regulations that you need to comply. You can usually find them in Terms of service or FAQs sections.

o Experience in coping with the regulations when selling abroad is sometimes shared among arts & crafts makers themselves. Make sure to review discussion groups / forums by your peers on local websites or international online marketplaces.

Technical tips and hints:

• Lot of market data analysis can be done reading product reviews on online marketplaces. Try to go through some of the review on similar products or your competitors (arts & crafts makers selling same product category) to find out what is important for your customers, what they liked and disliked on your competitor (i.e. what are his/her strengths and weaknesses).

• Generally, online tools and techniques require some knowledge of English, as most of international websites are available in English language. So, either try to practice or improve your language skills, or try to ask someone for help. Also, there exist many local websites (such as marketplaces) in different countries, but they are usually available in local language only. Here you might find useful some of the online translators or dictionaries, that are available to you free of charge. A good universal example of such tool is the Google Translate (translate.google.com), but there probably exist other local-based services in your home countries as well. While Google Translate enables translation to/from practically all European languages, local services usually provide translation to/from main international languages only.

• When conducting a Google search, instead of using your country mutation or general Google.com version, you can also use the language mutation for the foreign country you want to analyse. Here, you can filter search results to websites coming from that particular country. Moreover, if you translate the search terms into the local language (e.g. using Google Translate), you usually get relevant and helpful results.

• Specialized online marketplaces usually offer seller support content, such as FAQs or “seller handbooks”, where you can find useful tips, training materials and other contents that you may find helpful when executing market analysis, but mainly when selling your products online.

• You can find information on tools and resources for market analysis on several websites or in online articles. One of great websites is Open Strategy (http://openstrate.gy/) - a great market research resource that compiles up-to-date tools and reports on consumer research, market data, case studies and much more.