Marketing your product or service internationally can be very different to the strategy you use locally.
Rebecca Spicer explores traditional methods, some new technology-driven options, and the research and planning needed to assess a market before taking the plunge.
The world isn’t getting smaller, in fact it’s getting bigger every day in terms of potential customers. International customers might want your product or service, but first they need to know it exists. And you need to know what it will cost to take it to those markets, what conditions might apply, and how to evaluate your first step into exporting.
Good planning and commitment are key to a successful and rewarding marketing campaign, according to Yunus Ali, senior lecturer in marketing at the Queensland University of Technology. A strong commitment to export and market research will put a business on track to preparing a detailed export plan and a comprehensive marketing strategy.
Once you’ve established the best overseas markets to tackle first, further research will determine how best to promote and prompt interest from potential customers, partners, distributors or agents in those markets. Using the local services offered by Austrade and state governments is a good start, but Ali says Austrade officers overseas can provide more detailed information about the product market, the intermediaries and potential importers. Another avenue is international research organisations such as ACNielsen, who collect information about product markets and sell that information and offer customised research projects to clients.
To get a first-hand feel for the market it’s also worth sending a company representative to the target market to evaluate sales potential, engage in discussions with potential buyers, agents, distributors and government authorities, attend trade fairs and exhibitions, and even do product testing and customer surveys.
So, before exporting, you should research the following:
• an economic and demographic overview of your target market
• cultural and religious factors (a country’s business culture could be different to its social culture)
• basic import regulations, tariffs, taxes and quotas
• packing, presentation, pricing and preferred trading terms
• transport infrastructure and distribution networks
• potential customers and entrenched competition.
From this information, prepare a marketing plan and strategy. Ali advises marketers to have a marketing plan for each product market. “A company might be marketing four or five products locally, but the market for a particular product may not be similar in an overseas market, even product markets within the same country can be different,” he explains. “This is why you evaluate each product market separately and then develop a marketing plan for each.”
In terms of the marketing strategy for each product, he says marketers will need to analyse what sort of modification is required, who are the competitors, who are the consumers, what important intermediaries to sell through, what promotional program is necessary and what pricing strategy would be most appropriate for that particular product market.
As with the local market, there are many marketing channels for exporters, such as direct marketing, promotions, online marketing, advertising, international trade shows, public relations and of course goodwill and word-of-mouth. Typically your marketing strategy will include a combination of these channels, and while it might be tempting to cut and paste your local marketing plan into your export plan, Ali warns against it. “The whole environment is different—legal, political and economic aspects—and the marketing strategists or intermediaries the exporter will be using for the overseas market may be different.”
He says deciding which mode to use will depend upon the objectives and requirements of the marketer, and what resources are available in terms of time and budget. Your chosen distribution channel will also be a deciding factor. For example, if you’re selling directly to overseas customers, your marketing strategy is going to be very different to a company using an overseas distributor who will be responsible for marketing the product themselves.
Knowing how much to allocate in an export budget for marketing can only be determined by a company’s individual situation. While there may be some fixed costs, such as the cost of visiting the intended market, the chosen marketing techniques will vary between businesses. “Realistically the marketing budget could be unlimited or it could be extremely limited,” says Ian Rogers, trade services manager at HSBC. “It comes down to the business owner costing everything into the export and marketing plans, and working out how much they actually want to spend.”
He says an international marketing spend will ultimately come down to how they intend to market and what the actual product or service is. “If it’s a product that can be sold easily over the internet, then their marketing budget may just go as far as developing a good online marketing platform. Whereas if it’s something that requires a lot of pushing in the market, their strategy could involve a lot of overseas trips or participation in trade shows.”
And marketing is one area you can’t skimp on, Rogers stresses. “Without the marketing spend up front you may not get the sales, and so it’s a very important part of the process.”
That said, marketing can be a very costly part of the export process, so financial assistance may be required. Rogers suggests looking to Austrade’s Export Market Development Grants (EMDG) in the first instance. The grants helps SMEs develop export markets by reimbursing up to 50 percent of export promotion expenses above $15,000 incurred in the previous financial year.
Approaching a bank for finance is another option but go prepared with a complete business, export, and marketing plan.
Test & Evaluate
Unfortunately, even the most proactive exporter can never be 100 percent sure the chosen marketing strategy will deliver the desired results. You’ll need to start with what you believe will be the most effective strategy (based on your research, resources and budget), test it in the market and evaluate the results.
Ali says businesses can calculate their return on investment (ROI) in two ways: by looking at how the ROI improved by exporting, and what the ROI specific to export is. “Certainly managers should look at how the ROI improved by exporting. However, this may be a very rough estimate because the export may not be the only thing that’s contributed to the increased ROI. If the company wants to go for ROI specific to export, they should be evaluating how much export-specific investments there are (for example, appointing a special management team for exporting, having a separate office for exporting or adjusting the product for exporting) and how much of the profit is generated by exporting.”
Michael Durie, NSW mail marketing consultant at Australia Post, says while some marketers gauge ROI on a campaign-by-campaign basis, a lot of businesses are now looking at their customers in terms of
lifetime value. “So it’s considering not just the single sales but the repeat sales. It’s more of a long-term strategy and businesses in export should appreciate that because they’re doing something that’s about longevity,” he says.
The internet has opened up a number of affordable marketing options for SMEs. Two new techniques are podcasting and blogging.
Podcasting: According to Paul Buckingham, owner of Class One Productions, podcasting is the concept of downloading or subscribing to a particular series of audio or video files—podcasts—on a subject you might be interested in. “And because of the technology that is part of podcasting, it actually enables you to automatically download those files to your MP3 player or your mobile phone”.
While podcasting is relatively new, and mainly being used by media outlets such as the ABC, Buckingham encourages businesses to use it in two ways: for internal communications to staff, and for external communications to existing and potential customers. He believes podcasting makes it possible for a small business to access new markets in a much more affordable way.
Take the example of an exporter looking to tackle the Chinese market. “It’s possible for us to create a program here in Australia (in Mandarin for example), then set it up on search engines so potential customers in China can subscribe to the series and receive updates on the kinds of services and products your company has and how relevant and useful they are to the Chinese community.”
Blogging: A blog, short for weblog, is an internet journal, or a register regularly updated with information or opinions from individuals on a particular topic.
Ross Dawson from Advanced Human Technologies says, in terms of a marketing tool, businesses can use blogs externally or inside organisations to share information. “Really, they’re about communicating with your community and this could be very much your customers, your potential customers, people who use your products, people interested in the area your company or organisation is working in,” he explains. “You can either use it as a promotional tool or you can simply provide a blog which people find interesting; they become aware of your organisation and you are establishing your reputation and credibility through the blog. It can also be a tool for customers to get a space where they can communicate more effectively with you.”
He believes blogs are almost more relevant to international marketing than domestic marketing because the majority of the English-speaking community are in the US and the UK. “So when people start to link to you and see that you’re doing some interesting things, you immediately start getting taken up in the community,” he says.
Setting up a blog can be quite simple. Blogger.com or blogstop.com allow you to set up a free blog, and there’s blogging software which you can use on your own website.
“For most organisations, if they’re doing it as a corporate blog, it’s probably best to have it as part of their website. The real value of doing that is it improves the website’s performance in the search engines.”