In our continued pursuit of new markets, we are excited to announce that we will be exhibiting at Creativation by Namta in Columbus, OH, from April 2-4, 2023. In a previous blog, we discussed “parallel play” as a strategy to navigate your chosen new market. But how do you decide which new market to enter? That’s what we’re trying to answer here.
So you know you want to expand your business, and you believe there are other untapped markets for your products. What now? An article from Inc. suggests 5 steps…
1. Define the Market
This may seem obvious, but it’s critical not to skip this step. This is really just a list of attributes that potential customers in this new market may have; they include “demographics, location, and common interests or needs of your target customers.” In other words, who are these customers?
So, who is Namta? What is Creativation? Let’s define this market. Namta is an association of art/creative materials industry members. Or, put another way, Namta members are resellers of arts and crafts products. Creativation is the tradeshow Namta puts on to introduce its members to suppliers of arts and crafts products. For us, as a supplier, we have to consider more than just Namta members; we also have to consider their customers, the end-users, because it’s those customers that really make up the market. Demographics vary widely. People of all ages, genders, ethnicity, income brackets, etc., can be artists, so demographics aren’t really a defining factor here. (Side note: if you break this larger market down, you can find various segments that do offer some unique demographic characteristics, but for the purposes of this blog, we’ll take a wider, more generalized approach). Artists and crafters are located around the world, so no help there. Common interests are what define this market. And what are those common interests? Well, the fact that they’re artists and crafters, of course. As such, we can identify/target these people by their hobbies, jobs, and schools.
2. Perform Market Analysis
Research is crucial before entering a new market. “You’ll want to develop an in-depth understanding of market growth rates, forecasted demand, competitors, and potential barriers to entry.”
The arts and crafts market is expected to grow 3.9% annually through 2026 when it will be valued at $54,530 million. This tells us there’s an opportunity for our products here.
Forecasted demand can be quite tricky. How do you put together a forecast when you don’t yet know how customers will react to your products? This is where market research comes in. You’ll want to put together consumer surveys, hold focus groups or depth interviews, and observe potential customers with your product. You’ll also want a healthy mix of qualitative and quantitative research. The bottom line is that you need feedback to determine how customers feel about your product and how best to market it in order to create a forecast.
Knowing who your competitors are, their strengths, and their weaknesses are among the most important hurdles to entering a new market. The competition is established; you’re the new kid on the block. If you want to enter the market successfully, you’ll need to find your place in it, your niche. As we enter the arts and crafts market, we’ll be looking at the craft side as opposed to fine arts. We determined our products are more likely to compete there.
Navigating potential barriers to entry is, in this blogger’s opinion, the biggest challenge here, and this is because they come in so many forms. Some common barriers of entry are “technology challenges, government regulations, patents, start-up costs, or education and licensing requirements.”
For entry into the arts and crafts market, we must consider various certifications and other market-driven forces. We must consider whether the product would be more successful with an AP mark, CE mark, acid-free, Prop. 65 compliant, RoHS compliant, anti-microbial, and more. For us and our products, we determined that AP certification, Prop. 65 compliance, and acid-free are the most important certifications, given the age groups (mostly adults), region (the U.S.), and consumer needs that our products fill. Patents…we have. We are not a start-up. And, there are minimal education and licensing requirements.
3. Assess Internal Capabilities
Every organization has limits, no matter the size or structure. You should ask yourself the following questions: “How much of our core competencies can we leverage? Do we have sales channels/infrastructure/relationships in place? What time-to-market considerations exist?”
Since the earliest days of Shachihata, we have been hyper-focused on quality and service. We see no good reason to approach this market any differently, as these values resonate with resellers and consumers everywhere. As a firmly established organization, we already have a myriad of sales channels/infrastructure/relationships in place. Unfortunately, however, we do not have them in this market. Still, we will leverage our years of experience and will create/forge new infrastructure and relationships. Fortunately for us, we don’t have any time-to-market considerations as our current product line-up has long been available in other countries. We simply need to bring that product to the U.S. for distribution.
4. Prioritize and Select Markets
In this step, the organization must find its niche in the new market. The organization should find the areas or categories within the market that provide the best strategic fit(s) with our products, as well as our ability to serve them. “Are there gaps in this marketplace that we can fill (and do so better than our competitors)? What value do we deliver to this market and how much are they willing to pay for it?”
We have identified the crafting portion of this market as the best fit for our products. A key here is that the organization must be honest with itself. There are some great companies out there that produce really good fine art markers in an insanely large variety of colors and nib sizes and shapes. We understand that’s not our strength. However, we do manufacture some of the highest-quality marking instruments that crafters could only dream of. We have a variety of brush markers and pens in the SUPREME, StiX, and Decorite lines. Our metallic ink markers (including those available in a calligraphy-style nib) are on every crafter’s must-have list. And our poster markers have been satisfying consumer needs for more than 30 years!
Now, as to the question of value… Again, our commitment to quality is always our starting point. Our goal is always to produce a quality product at a reasonable price. We do not aim to be the cheapest on the market. We aim to be the best. And we do this while trying to maintain a sensible price point that consumers will appreciate. That’s the value you can expect from Artline and Shachihata.
5. Develop Market Entry Options
This is the final step. It’s where the rubber meets the road…or perhaps, the marker meets the paper. We’ve defined and analyzed the market, assessed our internal capabilities, and selected the appropriate segment(s) within the market for our product. What now? Now, we determine the best market entry mode for the firm. There are many types of market entry options depending on the circumstances of the entry. The most common modes of entry are direct investment, acquisition, joint ventures, and licensing. We won’t define each one here. That’s what Google is for :).
As an organization founded more than 50 years ago in the U.S. and having had existing and wide-ranging knowledge of the marking industry, we will use direct investment. Which brings us full circle. The first step in that direct investment will be exhibiting at Creativation by Namta. We will be bringing our craft-marking instruments to the show, and we can’t wait to meet all the wonderful attendees (and other exhibitors). We have many exciting activities lined up for the show. So, stop by booth 260 to try our products out for yourself!