Exporting – Steps to Success
What are most suitable alternatives for your company to manage and establish a viable approach toward planning, and implementing an exporting strategy that provides a sustainable competitive advantage? For markets to flourish, it is recommended that all stakeholders participate in the forming of a proposed strategy that includes market research, market screening, entry strategy, market segmentation, product adaptation, and implementation preparation.
These steps can be used for international markets that your company may want to enter.
- Market Research – export market research includes data on the country or countries you are looking to export to, data on the industry in those countries, and data on distribution channels available. If you have the opportunity to go to the countries (which can be worth it in the long run), meet with distributors, make visits to retailers, wholesalers, customers, government, and others that may impact the sales channel. Also take the opportunity to experience the culture of country as many a business’s success or failure can be based on the differences in culture. Also, see what similarities are between your current market and the foreign market to determine what can be transferred into the potential market.
- Market Screening – understanding whether the market you want to go into is profitable can be objectively determined by again researching a number of aspects of the market you want to enter. These include the need of the target market, existing competition, political stability, laws, sociocultural (including differences in language), or financial (including taxes). As a result of the screening, you may find that the markets you are looking at should not be entered.
- Entry Strategy – there are various methods of entering markets. Indirect or direct exporting, licensing, joint ventures, direct investments all have levels of control and risk that require assessment. As part of the entry strategy, a promotional strategy would need incorporating into the overall plan.
- Market Segmentation – if you plan to enter a number of countries or markets, variables that factor into segmentation include demographics, geographic, behavioral, and economics. Putting these variables against your home country can also provide some indication on what can be translated into that country. Entry into a chosen market will not succeed without a suitable marketing strategy, whether or not segmentation is necessary.
- Adaptation – through the cultural, financial, segmentation process, you will need to determine whether your products need adapting. Everything from the product features, brand name, labeling, colours, prices, distribution, and promotion will need to go through the standardization versus adaptation test. Again, there are risks and costs associated with whether you adapt or not. All aspects need reviewing to decide the extent of adaptation needed (if any) to ensure foreign market entry is successful.
- Implementation – once you have done your research, made your decisions, then implementation is the next step. If you have found that the markets you have looked at are a ‘no-go’ then your implementation plan may include the action plan of looking at other markets.
By taking the time to do your research, assess the risks versus the rewards, and plan a strategy, companies have an increased chance of success when exporting. If a country looks appealing on paper, take time to do as much as possible on the ground in the country you want to enter as first hand research can be much more valuable than statics of countries, or reading about cultures. The global marketplace has opportunities for growth that your domestic market may not be able to offer, but before you make that leap, do the legwork.
