Julie Macken (a trainer for UKTI, delivering its Export Marketing Research Scheme) gave a webinar for Open to Export. She covered the key considerations for choosing countries to target and the pros and cons of different market entry strategies.
Here are the key points:
Focus: Small to medium sized enterprises (SMEs) should initially focus on one market at a time in order to see greater profits; often businesses that attempt to export to a large range of countries will find it harder to make any profit.
Categorize your target countries: Using the Market Selection Tool (which is an online resource) you can categorize countries with high potential, find additional countries you may have overlooked and establish a long or short term strategy for addressing their markets.
The 7Ps of marketing:
- Product: consider what product or service you are offering.
- Price: consider what price your business should charge the customer and middle-men (such as agents and distributors).
- Place: Consider what sector and what type of people your business should aim to target.
- Promotion: Consider what your business’s unique selling point should be (USP).
- People: Decide what sort of people you want to have representing your business in your target market.
- Process: Elect a process of delivery so the product or service is shipped and paid for effectively.
- Physical evidence: Consider if you require any physical evidence in the market, for example a warehouse or a specific website.
Find information: You can gather information by visiting markets and websites, and also by talking to distributors, agents, retailers and competitors with knowledge of your market.
Select routes into your market: There are various routes a business can take in order to break into a market. For example business-to-business, using distributors or agents, or by forming or joining a franchise or joint venture. Consider which one will work best for your business.
Questions and Answers
Here are some of the questions asked by the attendees at the end of the webinar. The times in which the questions were asked have also been given.
How do you identify how regulatory requirements vary by country? (29:35)
Using the Market Access Database Website you can find information on regulatory requirements (although it does tend to focus on countries located in the EU.) There are multiple helpful organisations available with further information, such as UK Trade & Investment.
When considering exporting to countries where there is greater political risk is there a way to mitigate against uniformed or twisted views? (31:24)
You could visit a marketplace yourself or commission someone to research it for you; multiple UK organisations will also have accessible information about different countries. Often developing countries do not produce their own stats but there are aid organisations who collect stats on their behalf.
If you receive an order from a particular country, does this confirm there is a market for your product in this country? (45:22)
This is a typical way in which businesses start exporting, although it is not necessarily a recipe for success. It shows obvious interest in your products, but you do not necessarily know if there really is a large customer base or just a few individuals. Use the Market Selection Tool in order to research what is driving the market for your product.
Do you need to speak the language of your target country? (48:58)
It is not a disadvantage because English is a business language of the world and it is straightforward to find a translator who speaks the local language. It is more important however to try to have an understanding of the local culture.
How many countries can you research at one time? (52:38)
This varies depending on your business. In general, businesses exporting everywhere do not make as big a profit as those with a more focused market. Most SMEs typically look at between 1-3 countries.
For more information about all the different things to consider when selling overseas, check out our webinar archive.