Point of Market Entry

Rafat Abushaban

- Business #  O 7.1K views   اقرأ بالعربية

Summary:The point when customers are ready to receive an offer
Market entry

Understanding your potential and current customers is a crucial factor in a business's success. Here, the Point of Market Entry helps you pin-point when customers are prepared and ready to receive the offer of your business.
Here, two elements are of essence:

Market Entry

Market Entry describes the point in time when a customer enters the market by purchasing the product/service. Note that this has a "Market focus", so businesses try to compete in offering their goods as the most promising products and services to get customers accomplish what they need.
Startups should be interested in knowing the market entry point with the aim of targeting new customers to expand their sales base, as the market entry point constitutes the beginning of the target customer’s contact with the market, and therefore companies and commercial enterprises consider it important to present themselves in a strong and convincing manner and precede the competition to obtain this customer.

Market Exit

Market Exit describes the point in time when a customer leaves the market by either fulfilling their intention of the product/service, or finding an alternative.
At this moment, startups have two ways to go: Either try to keep the customer in the market for the longest possible time in order to continue benefiting from the customer, or provide an alternative offer that makes it easier for the customer to exit the market and enter another market. The example below illustrates this concept further.

Example on market entry & exit

Take expecting a baby for example. When parents expect a new born, they suddenly start caring about the best baby-care products for their coming babies- this is the Point of Market Entry for them.By the time this baby becomes three and is growing to four years old, their care for baby products start declining until they leave this market completely. This is the point of Market Exit.

Market entry point: Companies target expecting mothers and fathers with promotional packages in hospitals and clinics, knowing that they are near the entry point to the newborn market. This way, companies build customer loyalty to their products and reduce the impact of competition on customers.
The point of exit from the market: When the newborn grows to an age when his/her needs of infants of diapers, food and toys for infants are no longer needed, companies provide alternatives to help get parents out of this market, and as the child is on the verge of entering a new market (children market) with new requirements from school, consumers, etc. The exit point from the market is also the entry point into another market that companies try to utilize by providing various services and products based on the loyalty that they have built over the past period with parents.

Planning for market entry

It is essential for startups to have plans for their audience as they enter the market. Here, entrepreneurs identify how their businesses will reach and sell certain products and services to a certain audience as they enter the market.
Looking at the business model of a company, it is essential to spot three main things here: Customer relationships, channels, and partners.

  • Customer relationships will layout the nature of relationship needed to be built with customers even before they enter the market, such as building early loyalty.
  • Channels will specify where these target customers will be found and reached, through hospitals or shopping malls, or other outlets.
  • Additionally, identifying potential partners to help reach such audiences is key here.

How to properly develop a market entry strategy?

Declare clear SMART goals

Determine exactly what you want from the new market, including the level of sales you expect to reach. This is done by developing realistic and strategic set of goals using the SMART goals technique that we describe here.
Target market research and evaluation

The evaluation of any new market that the startup targets is essential. This includes a procedure of a detailed market research and evaluation.
How does the competition look like?

Competition analysis based on your research and assessment of the target market will assist you in making important decisions related to modifying your product or service. To understand this more, it is necessary to address the competitive advantage of your startups and your value proposition.

Rafat Abushaban

Founder of Riable and consultant to several international organizations in entrepreneurship education and researcher in innovation systems and seed funding methods with 10+ years of practical experience in the MENA region, Europe, US and S.Korea
Facebook Profile Linkedin Profile Follow on Twitter