YorPower supplies diesel generator systems to the power sector for standby, emergency and temporary power requirements. Based in Yorkshire, the business was established in 1989. Initially, the focus was on installation, maintenance and servicing; new ownership in 2009 expanded the business into production turning YorPower into one of the largest UK manufacturers of diesel generators.
With this new manufacturing capability, YorPower was keen to expand their export business. “Selling someone else’s products can be a race to the bottom on price”, explained Ben Whitmarsh, YorPower’s International Sales Director, “but with our own manufactured products, we knew we could control price, quality and branding to succeed overseas”. YorPower had enjoyed initial export success by selecting sole distributors in key markets and supporting them well. “This strategy had worked well for us but, once the list of key opportunities was exhausted, we wanted to explore where next”, said Ben.
YorPower’s market selection strategy had been to target export markets where their largest competitors, were already established: typically markets with an existing power-generator dealership and significant public and private expenditure in the market. “We knew that, where our competition existed, there was often a sector of the market who wanted quality products but who also liked to buy independently, not being tied to a big dealership. Our UK manufactured products are never going to compete solely on price, but we pride ourselves on our high quality”, explained Ben. Desk research and some speculative marketing ‘email-shots’ had indicated that Iraq could be a lucrative market for YorPower, however Ben wanted further information before gambling the business’s resources in a new market. “I wanted to make sure we really understood what the market needed so we could create the best position for YorPower in the market. We find a ‘targeted’ approach is much more effective than simply ‘scatter-gunning’ your products into a market!”
YorPower had worked with UKTI for many years, enjoying the support of their International Trade Advisor, Stephan Stahl. It was Stephan who recommended the Export Marketing Research Scheme (EMRS). The EMRS provides professional advice and funding to help businesses understand the dynamics of a potential overseas market before creating an appropriate launch strategy and there is a nationwide team of professional Research Advisers to support individual companies.
Ben was contacted by Richard Gilbert, the region’s Research Adviser. Through a telephone advisory, Richard helped Ben to identify the decisions the business wanted to make as a result of the research visit and to plan a trip to elicit the required information. Clearly, YorPower needed to understand whether they should enter the Iraq market at all, they needed to decide what sort of representation they needed in the market, what USP (unique selling point) they required to differentiate them from other competition in the market and finally they needed to determine which sector they should target.
Ben travelled to Iraq in August 2013 and spent 5 days talking with distributors and other market experts. He described how the matched-funding from the EMRS enabled YorPower to stay a few more days in the country than they might otherwise have done, investing additional time with each person and broadening the number of people with whom they spoke, “when you spend more time with people, listening to their views, they’re more likely to share insightful information with you, rather than seeing you as ‘just some sales guy’!”
The results were illuminating. Ben found out that there were two key sectors in the Iraq market: one mainly targeting large, government projects seeking quality products and dominated by the core brands, and one, more ‘cut-throat’ sector competing on price; it was clear YorPower would need to compete in the higher quality sector. The research also enabled them to work out their USP in this sector: they found that many distributors wanted the option to deal with an independent manufacturer rather than be tied to ‘the big boys’. By selecting an appropriate price point, with a suitable distributor support package and with a strategy to communicate clearly the quality of the YorPower product, it was apparent to Ben that they could compete directly with the larger companies.
Shortly after the research trip, having selected a suitable partner and signed a Memorandum of Understanding, YorPower received their first order in the region to supply a significant public sector project. Customer confidence resulting from this initial contract has also led to broader private sales. “It’s taken two and a half years from the outset”, said Ben, “but it was the right decision to enter the market in this strategic manner: Iraq is now one of our top 4 export countries, accounting for a significant amount of our turnover!”
“The EMRS really made us think about what our objectives were for our research visit”, explained Ben. “Rather than simply jump on a plane and see what you can find out, having someone to ‘hold your hand’ and guide you through the research process makes sure you find out exactly what you need to create a successful launch strategy”.
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Topics: Export Planning and Market Research