Manufacturer of unique wooden saunas is expanding to Austria
As soon as your online business on the local e‑commerce market is thriving, you logically start looking for other growth opportunities. One of the attractive options for online shop operators is to expand abroad.
Here, we present one such case. Read how we conducted detailed market research and competition analysis for a Czech company that wanted to expand to Austria.
Saunas are in fashion in the Austrian mountains
A successful Czech manufacturer of wooden garden saunas and bathing barrels turned to us because they wanted to expand to a neighbouring country. They viewed Austria as their biggest opportunity but wanted to test their market potential in terms of hard numbers.
The Austrian and German markets are known for the high demands placed on the sales process, customer service and, last but not least, the quality of the products sold. When entering the market, every mistake is a very costly one. That is why the company approached NK Expand to take a good look at the competition on the Austrian market.
Assignment for competition analysis in Austria
In order to acquire specific data about garden saunas and bathing barrels on the Austrian market, we agreed with the client to perform a detailed competition analysis. The aim was to obtain the most up‑to‑date and relevant information about the competition. In order to get really relevant information, a native German speaker was engaged to conduct the market research. If we had used English, we would not have had access to similarly detailed information.
How did we proceed?
As it was necessary to perform a really detailed analysis of the selected market, we decided to divide the survey into three parts:
1. Basic general analysis of the Austrian market
We started with an overall general analysis of Austrian competition. We selected the most important competitors on the Austrian market, focusing mainly on the following factors:
- the origin and location of the most important competitors
- the forms, methods and costs of transport
- the delivery times
- the offered assembly options for purchased products
- the quality of customer service
To obtain the most objective data possible, we chose a combination of telephone and e‑mail enquiries. We then retrospectively checked the data obtained using the so‑called mystery‑shopping method. We sent a request to the sellers and then measured and evaluated their responses.
2. Detailed product analysis
The next part involved a product analysis, whereby the focus was on the products themselves, namely the garden saunas and bathing barrels, which are our client’s best‑selling products. In the analysis, we focused on several factors:
- the ways product prices are displayed on competitors’ websites and online shops
- the prices of selected products, taking into account a similar composition of accessories
- the possibility of additional discounts
- the methods of payment
- information on whether the competition has products in stock or manufactures to order based on a specific order
3. Analysis of the structure of competing online stores and keyword search
The last part involved an analysis of the structure of competing online shops and the search results for relevant keywords in German. We focused specifically on a detailed survey of the following:
- Website and online shop solutions ‑ there is an increasing emphasis on the look and UX of websites. The fact is that the customers buy similar products primarily through their eyes. The visual presentation can therefore be the key to success, especially in this case. For this reason, it was important to determine what type of web presentation the competition was applying.
- Search results for relevant keywords, level of competition, cost per click, etc. ‑ the information obtained is valuable not only for analysing and estimating market potential, but also for the subsequent localization of an online store, in this case in German, as well as for creating German PPC reports, writing blog articles and many other online marketing activities.
Specific use of market research information
Due to our in‑depth analysis, the client found out who their biggest competitors are in Austria and what business and pricing strategies to apply when entering the Austrian market. They gained a lot of valuable information from the analysis, on the basis of which they were able to create competitive advantages and adapt their business plans to the Austrian market.
For example, in the case of transport, the costs of which play a big role for similarly large sized products, the client has been able to set prices as efficiently as possible for the most popular forms of transport, but also to set them at a suitable level to gain a very clear competitive advantage.
Information on the price level of the best‑selling products has been similarly valuable. The analysis provided our client with sufficient amounts of information on the prices of comparable products from competitors. This has meant that the online shop has been able to price its products exactly to maximise its margins.
Information about stocks, or the conditions relating to production to order was equally valuable. The market research clearly revealed that there was no need to spend additional funds on storage facilities, as all relevant competitors produced exclusively to order.
Are you also thinking about expanding your business abroad? If so, then thorough research of the selected foreign market and an estimation of its size is a must before you start investing your time, energy and finances. In all honesty, when was the last time you invested without considering all the relevant pros and cons? How did that investment turn out?
Contact us! We can conduct thorough research of your chosen market and advise you on the direction to take, how to set your business and pricing strategies, and what to look out for in relation to foreign competition. With NK Expand, you can count on successful expansion.