Export Marketing

Globalization and e-commerce have all contributed to a recent influx in international trade. What used to only be attainable by large-scale businesses is now accessible to small companies and those in the business of resale. Products and services are often performed internationally at greatly reduced costs, making international expansion and production outsourcing a suitable option for businesses. But many people still don’t understand the benefits of global business in their industry, and even for those who do, they struggle to find where to start.

Export marketing is the practice by which a company sells products or services to a foreign country. Products are produced or distributed from the company’s home country to buyers in international locations. But there is a difference between products that are available to foreign countries and products that are specifically marketed to foreign customers. This where the importance of an export marketing plan comes in.

Businesses today are often doubling or tripling products by expanding to product sales on an international level. But you can’t assume that foreign markets will be as interested in your product as local customers. Cultural differences, shipping costs and transit time, politics, and international trade policies all contribute to a marketing communication barrier between suppliers and foreign buyers.

So why do you need export marketing? Simply put: Google translate is not enough. You need to know the buying behaviors, interests, and needs of your foreign customers. All of this can be addressed in an export marketing plan. An export marketing plan is created to address a specific strategy that can be utilized to make product both available and enticing to international buyers.

The only difference between an export marketing plan and a regular marketing plan is the location in interest. The same type of market research performed for locating an optimal domestic market must be completed on an international scale. Here is how an export marketing plan should be built.

1. Foreign Country Selection

The first and most obvious step in building an export marketing plan is selection of a country. While this is the “simplest” step, it is also the most crucial. Start by focusing on continents. Although every country is different, many cultural differences and buying behaviors can be attributed to continents as a whole. After selecting a continent, do some research on the top 3 locations of your preference. This should give you more insight into what country you should sell to.

2. Natural Conditions Research (Optional)

The relevance of this factor will depend greatly on the product you are selling. Information such as the weather, land size, environment, ease of mobility (mountains, roads, etc.), and various other factors will all contribute to the success of your international expansion. For example, selling perishable goods to mountainous regions where transport is difficult may mean your products will expire before they are sold.

3. Socioeconomic Research

This should go without saying, but your products must fit the socioeconomic demographics of the region you plan on selling to. Fashion clothing may be too expensive for certain countries in Africa or Asia. The quality of materials you build your product with may have to change in an international market in order to accommodate the benchmark prices and quality of goods in the foreign location.

Define first what class of consumers you plan on selling to. Lower-class, middle-class, upper-class, and businesses will all have different price point and quality expectations, and these may not reflect those of U.S. standards.

4. Competitor Landscape

This is the one place in which competition is good. International business and trade has existed for hundreds of years – any profitable international business endeavor that has a promising return has already been done. Thus, you can use the density of competition in a foreign country to disseminate whether or not it is a profitable industry to be in.

Make sure that your competition density research comprises research on local companies in the foreign country as well as international businesses. Just because there is a market for, say, tires in China doesn’t mean that there is a profitable market for foreign tire manufacturers to sell there. See if any companies in your home country are selling the same type of product or service in the country of question.

 

Global trade and international expansion offer can offer great returns to businesses. However, it can also mean steep losses and costs. Keep in mind: there is a major difference between making your products available to international buyers and marketing to specific international markets. Addressing the latter is your only chance at success in international expansion. Export marketing can help to do this.

Development an Export Marketing Plan

Every successful marketing plan begins with thorough market research. Your first market research project is usually the toughest because it’s all unfamiliar terrain. But once you have collected the data you need to predict how a specific type of product will sell in a specific geographic location, you can use the information over and over again as a guideline for exports of similar products. As you build your personal information database on global markets and learn to keep yourself up-to-date on developments in international trade, it will become less of a chore to determine where to take your product.

You will find that market research is a powerful tool for exploring and taking control of your global territory.

Here is a good way to get started and organized: Keep the research summary to one page, and break it into four manageable parts. The purpose of this exercise is to establish a broad scope of your research market analysis but not so broad that you overwhelm yourself. Try to begin with the end in mind: Where do you want to go and how will you know that you have arrived?

1. Explore the Top Three Overseas Markets That Appear to Have the Best Potential for Your Product or Service Offering

You can conduct market research online, meet in person with an international trade, or you can test your product or service by exhibiting at a local (domestic) trade show. Trade shows provide potential customers from all over the world without you having to analyze a thing. For example, if you sell hardware tools and exhibit at a hardware show, you might get a lot of interest from attendees from a particular foreign market, such as Australia. Then you know there must be a market there, for why else would these attendees be asking for information? From there, you can address those inquiries, learn as you grow, and conduct further research.

2. Analyze the Market Factors and Conditions in Each of the Selected Countries

Delve into each country further by reviewing cultural attributes, geographical characteristics, political stability, demographic characteristics, market size, and growth rates. The goal here is to conduct a sound assessment of a foreign market.

What might the barriers be? What makes it a good market to enter? How will the local culture influence the sales of your product or service offering?

Such in-depth market research information is necessary for sound marketing decisions, and it must be done with each new market entry.

3. Determine the Pros and Cons of Conducting Business in Each Market

Look at potential language barriers, legal restrictions, logistical challenges, and payment problems that might get in the way of doing business in a particular market. Include all relevant variables in your assessment.

Analyze your strengths and weaknesses in a selected market. Will your product or servicing offering be in the low, middle or high-end pricing level? Is there a similar product or service offering currently available in the selected market? If so, who is making it? Where are they based? Can you compete? Why would you? How would you? The more pros you have for entering a new market, the better your chance of success. If you can draw on the perspective of a native (better yet, an actual prospective customer) of the country where you are keenly interested in doing business, then do so. Nothing beats an on-the-ground assessment.

4. Select One Market and Get Going

Now you are ready to interpret your findings in light of the stated objective: Where do you want to go and how will you know that you have arrived? At this juncture, you should have enough data and experience (e.g., the trade shows) to decide which market is best for you to begin. Hold the other two country options for future market entry, and don’t go there until after you have proven success with the first overseas market. If the first selected market doesn’t work right away, say after six months or a year, move on to the second market, and so on. Don’t muddy the waters. You don’t want to do too many things at once because you might end up not doing any one thing right.

5. Final Note

The most difficult aspect of developing an export plan is determining the demand for a product or service offering in a foreign country. It’s one thing to know a product can be sold in a market – after all, that’s why you selected a particular market. However, it is a different ballgame when it comes to forecasting how much you can sell and over what timeframe. Assume that demand for a product develops in direct proportion to economic development in each country. This might be a useful way to think about it, especially when data might be unknown.