Useful tips before entering export trade,tips for exporters,tips for starting export business,export marketing plan,market research
USEFUL TIPS BEFORE ENTERING INTO EXPORT TRADE
STRATEGY AND PREPARATION FOR EXPORT MARKETING
When a enterprise decides to enter into export, It is necessary to formulate an export strategy. Strategy formulation is the core of any business activity. It tells the exporting firm where it is going and how it should get there. Marketing strategy is often defined as the selection of a target market and the determination of the product price, promotion and distribution policies that the enterprise must implement. A company strategy is in effect a blueprint for competing on target export markets. An explicit export strategy provides a unified sense of purpose to which the staff of the enterprise can relate. To implement a strategy, an Export Marketing Plan is required.
Export Marketing Plan
An Export Marketing plan is a step-by-step guide to strategy implementation. It addresses strategic issues and outlines the corresponding operational actions to be taken. It specifies target dates and provides detailed budgets for each step. The plan should answer all questions on how the company's export strategy is to be implemented and direct the enterprise in attaining the strategic objective. A company's marketing plan and its export strategy are therefore closely interrelated. As the various steps in the plan are put into action, interaction between the two should be continuous. The development of an export marketing plan requires decisions on the role that exporting is to play in the company's growth, the scope and nature of the firm's product lines and markets abroad, precise export performance goals and the level of management commitment to the export venture. A plan is only as good as the quality of the basic data gathered and the analysis undertaken during the planning process. It is important to obtain the participation of all levels of management in this process and to impress upon them that, to succeed, company-wide commitment to export goals is essential. A typical export marketing plan must focuses on marketing objectives, market segmentation and positioning, market research, characteristics of the product line, export printing, distribution channels and promotional strategies. The plan should outline the actions required in sufficient detail: It should set out export targets, budgets and activity schedules as well as assign responsibilities for its implementation.
Marketing Objectives
The first step in designing an effective export-marketing plan is to establish export-marketing objectives. These objectives, which should be attainable, realistic and clear, should be communicated throughout the company. Since they will determine the Company's direction and its activities, management will have to devote considerable time and effort to setting them. An analysis of the company's strengths, weaknesses, opportunities and threats, or a "SWOT" analysis in short, can provide a guide to management for developing effective and realistic objectives. A SWOT analysis aims to reveal the competitive advantages of the company as well as to analyze its prospects for sales and profitability. It is usually based on a evaluation of facts and assumptions about the Company and on market research. A company's strengths are its competitive advantages that will give it an edge on export markets. Its weakness is its' constraints, which may inhibit marketing activities in certain directions. For example, a company lacking readily available funds cannot undertake a large-scale promotional campaign. The assessment of a company's strengths and weaknesses in relation to the competition is essential for competitive positioning. This assessment from the point of view of the competition should consider:
Technology in use
Design, styling and trademarks
Product quality, quality control and the product's life cycle
Completeness of the product line
Customer service
Raw material supplies
Distribution structure and cost
The review of opportunities and threats in the market should compliment the analysis of the company's strengths and weaknesses. The aim is to identify the best business opportunities and directions of growth. A company's opportunities on possible markets can be evaluated in terms of the firm's export customers, competing suppliers. Such an evaluation may reveal complementarily between the company's strengths and market opportunities. Finally, management should examine the so-called marketing threats on the markets being considered. These should include import rules and regulations relating to tariffs, quotas, non-tariff measures and so on. Management should also determine whether the markets under assessment are mature markets that is are already well supplied and do not therefore provide a readily identifiable niche for the company's products.
Market Segmentation
An export-marketing plan is not complete until the company has identified its target segment in the export market. Any large market has a variety of market segments that differ substantially. Different consumer groups exist according to income level, age, lifestyle, occupation and education. A crucial element of the export-marketing plan is to identify the segment that the company intends to reach. In making this choice, the company should answer the following questions:
Who will buy its products in the export market?
Why will they buy these products?
Where are these customers located?
What are their characteristics?
In this exercise it will be helpful to concentrate on within-segment similarities and between segment differences. The company should choose the segment with the requirements that fit its product specification best. For example, if it produces high-quality premium priced crystal ware, its target segment is likely to be high-income, well educated young consumers. A target market segment should be large enough to be profitable. An assessment of the size of the segment should therefore be made before a final decision is taken to include it in the marketing plan.
Market Research
To succeed in exporting, a company must identify attractive export markets and estimate the export potential for its products in them as accurately as possible. Market research and forecasting are there fore of great importance. Factors to be evaluated include the size of the market the characteristics of demand in it, consumer requirements, trade channels, and the cultural and social differences that may affect the company's way of doing business with the market. A small producer contemplating entering export trade may not be willing or able to allocate resources to expensive data collection methods. Companies in that situation can use published data to assess the market or take assistance of professional international marketing companies.
Product Characteristic
The company should next consider the product that it has to offer. An analysis should be made of any modifications required in the products, packaging changes needed, labeling requirements, brand name and after-sales services expected. Many products must undergo significant modifications if they are to satisfy customer and market requirements abroad. Other products require changes, at the discretion of the producer only to enhance their appeal on export markets.
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