After our initial blog post on Target Market selection, we wanted to revisit the topic with some fresh data. See the original post here: https://www.entrymapper.io/post/target-market-selection-ai
Expanding into a new market can unlock major growth opportunities for your company – but choosing the right target market is one of the hardest and most critical decisions you’ll make. Get it wrong, and you risk sinking time and money into an expansion that flops. In fact, a recent survey found 73% of business leaders admit that identifying and entering new markets is challenging (advertisingweek.com). It’s no wonder: with nearly 200 countries (and countless customer segments) to choose from, the target market selection process can feel overwhelming.
73% of business leaders admit that identifying and entering new markets is challenging.
The good news is that a strategic, data-driven approach can remove much of the guesswork (and risk) from market selection. This guide will walk you through how to select the right target market for your international expansion. We’ll cover why target market selection is so difficult, key criteria and steps for evaluating markets, and how better data can help you avoid costly expansion mistakes. By the end, you’ll have a clear process to confidently choose your next market – and a blueprint to expand with far more certainty.
Expanding into the wrong market is more than just a missed opportunity – it’s a potentially costly mistake. Targeting a market that isn’t a good fit can result in wasted budget, slow growth, and even a failed expansion. For example, companies that take a one-size-fits-all approach to new markets often waste 30–40% of their marketing budget targeting regions or customer segments that don’t respond to their offering (veeomarketing.com). The stakes are high: choosing the right market can literally make the difference between international success and an expensive flop.
Why is target market selection so challenging? For starters, it’s complex. There are many factors to weigh – from market size and growth potential to cultural differences, competition, regulatory hurdles, and talent availability. As one expansion consultancy notes, “Factors like business costs, infrastructure, regulations, and talent availability can impact your success.” (gigcmo.com). Each potential market has its own landscape and unknowns, making apples-to-apples comparison difficult.
Moreover, internal biases and limited visibility can cloud decision-making. Company leaders may be tempted by “gut feeling” or anecdotal info, rather than hard data. It doesn’t help that reliable market data (on customer demand, local talent pools, etc.) is often hard to find or scattered across sources – a pain point many COOs and founders know well. All this contributes to uncertainty. No wonder three in four business leaders worry about the challenges of entering new markets (with language barriers and local competition among the top concerns) (advertisingweek.com).
Yet despite the difficulty, getting target market selection right is absolutely worth it. Global expansion is a proven growth driver – half of all corporate growth in the last decade came from foreign markets (mckinsey.com). The right market can rapidly accelerate your revenue and diversification. The key is mitigating the risks by doing your homework up front. In the next sections, we’ll break down a systematic approach to de-risk market selection.
When weighing potential target markets, it helps to break the decision down into clear criteria. By evaluating each market against a set of criteria, you can compare apples-to-apples and identify which market best aligns with your goals. Here are some market selection criteria commonly used in expansion decisions:
Market selection example: Let’s say you’re a SaaS company eyeing two target markets – Country A, a large emerging economy with high growth but complex regulations, vs. Country B, a smaller market with moderate growth but very business-friendly environment. Using the above criteria, you might score Country A high on market size/growth, but low on ease of doing business and higher on competitive risk. Country B might score lower on size but higher on ease, talent availability, and cultural fit. This structured comparison (often in a market scorecard or matrix) helps quantify which market is a better strategic fit. In this example, if quick setup and lower risk are priorities, Country B might emerge as the right target market selection – whereas if sheer growth potential trumps all, Country A could still win out. The takeaway is to evaluate multiple factors, not just one or two.
So how do you actually select your target market? While there are different frameworks out there, most successful expansions follow a similar market selection process. Below we outline four key steps in selecting a target market for international expansion:
These four steps – set objectives, research broadly, analyze deeply, and validate on a small scale – provide a structured roadmap for target market selection. Importantly, this process forces you to use data and evidence at each stage, rather than gut feel. By the end, you should be equipped with a clear choice and justification for why that market makes sense.
It’s worth noting that “target market selection” can refer to not just geographic markets, but also customer segments. In marketing terms, a target market is a specific group of customers you aim to serve. There are four main types of target market segmentation that businesses use to define their ideal customer group.
Understanding these segmentation types is useful because even after you choose a new geographic market, you’ll likely need to narrow down the target customer segment within that market. For example, if you expand to Germany, will you target tech-savvy millennials in Berlin (demographic + geographic) or perhaps middle-class suburban families (different segment)? Early in your expansion planning, think about which segment in the new market is most likely to embrace your offering. The more precisely you can define your target customers, the better you can tailor your marketing and product positioning to win them over.
What is an example of a target market selection? In practice, this could look like a company analyzing various customer segments and deciding, for instance, to focus on “health-conscious urban millennials” as their target market – an example of selecting a specific demographic + psychographic segment to prioritize. In an international expansion context, a target market selection example might be a fintech startup choosing to enter the UK market targeting small business owners after finding that this segment has high unmet demand for their product.
Given the complexity and high stakes of target market selection, leveraging data is your best ally. A data-driven approach can replace guesswork with facts, helping you avoid the common pitfalls that lead to expansion failures. Consider a few ways that better data can tilt the odds in your favor:
How EntryMapper can help: This is where platforms like EntryMapper come in. EntryMapper is designed to help growth-stage companies expand with data-driven market and talent mapping. Instead of manually cobbling together data from dozens of sources, EntryMapper’s Expansion Intelligence platform provides a one-stop, data-rich view to guide your decisions. For instance, EntryMapper’s Market Navigator module can compare up to 20 countries or industries at once – using 15+ weighted criteria that matter for your business – and score them to identify the best fit. All the underlying data (from economic indicators to talent supply to competitive benchmarks) is available at your fingertips, so you can dig deeper into why a market scores well.
By leveraging such a data-driven toolkit, you can approach target market selection with the same rigor as any other strategic investment. You’re not just guessing or going on hunches; you’re making an informed decision backed by evidence. This dramatically reduces the risk of expansion because you can anticipate challenges and head them off (or choose a different market) before you’ve committed major resources.
Selecting the right target market for international expansion is challenging, yes – but it’s a challenge you can overcome with the right approach. To recap, start by getting clear on your objectives and criteria, then systematically research and compare markets using data. Consider all the angles (from market size to cultural fit), and make your decision based on evidence. By following a structured process and leveraging data-driven tools, you’ll replace uncertainty with confidence. Expansion will always involve some unknowns, but you can avoid the biggest mistakes and surprise pitfalls that have tripped up so many others.
Ready to remove the guesswork from your expansion strategy? EntryMapper’s data-driven platform helps you confidently answer “Where should we go next?” with clarity instead of complexity. Book a free 15-minute call with our Expansion Intelligence team to see how we can help you map your target market, de-risk your decisions, and set your company up for global success. Let’s make your next market entry a winning one – backed by insight and intelligence every step of the way.
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Common evaluation criteria include market size and growth, customer demand, competitive intensity, regulatory barriers, cultural and language fit, talent availability, operating costs, and political or economic stability. Scoring markets across these dimensions helps compare them objectively and choose the best fit for your goals.
Many companies rely on gut instinct, anecdotal input, or partial data when expanding. Internal bias, limited visibility into local dynamics, and underestimating cultural or regulatory challenges often lead to costly missteps. A structured, evidence-based selection process helps avoid these traps.
Relying on data helps remove internal bias, highlight hidden risks, and make expansion decisions more efficient and defensible. It allows you to compare markets objectively, uncover demand signals, and avoid costly missteps. Solutions like EntryMapper streamline this process by delivering structured market comparisons and risk analysis from day one.
The four key segmentation types are: (1) Demographic (e.g. industry, company size), (2) Geographic (country, region), (3) Psychographic (values, preferences), and (4) Behavioral (purchase habits, product usage). These help refine your audience even after choosing a geographic market.
The selection process involves four key steps: (1) Define your expansion goals and non-negotiables; (2) Generate and research a list of candidate markets; (3) Compare top options using a scoring model based on factors like size, regulation, and cultural fit; (4) Run small tests to validate your choice before committing. This structured approach helps remove bias and guesswork.
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