How to Export Successfully Lecture

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This is a lecture I gave some time ago highlighting some of the key aspects to be considered if planning to develop international markets. I hope you find it of interest.

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How to Export Successfully Lecture

  1. 1. International Commercial Management CONFERENCE by Christian Bungard CEO, Jumping Frontiers Ltd. MADRID – SANTIAGO – BUENOS AIRES - DUBAI INTERNATIONAL BUSINESS DEVELOPMENT INTERNATIONAL SALES
  2. 2. INITIAL STEPS TO EXPORT A) The decision to export. Why to go international? B) Barriers in international business C) The export driven D) SWOT matrix in international business E) Quality, Quantity and Continuity to export
  3. 3. The decision to export. Why to go international? <ul><li>Are we sure we want to take the step? Are we ready? </li></ul><ul><li>Which international market to we approach and why? Is our objective market vertical or horizontal? </li></ul><ul><li>Design a complete, thorough and effective Marketing Plan. </li></ul><ul><li>Control all legal, fiscal, and operative aspects related with the commercial transactions and shipments. </li></ul><ul><li>Cleverly use Internet during all the process. </li></ul>Product Diversification Strategy New Market penetration Strategy Your company expansion
  4. 4. The export driven Export Department Sales and Marketing Logistics Back-Office MANAGEMENT Production Legal Financial Resources Human Resources & Recruitment R+D
  5. 5. SWOT Matrix in international business Your Client THREATS OPPORTUNITIES WEAKNESSES STRENGHTS
  6. 6. Quality, Quantity and Continuity to export <ul><li>COST </li></ul><ul><li>QUALITY </li></ul><ul><li>TIME TO MARKET </li></ul><ul><li>FLEXIBILITY </li></ul><ul><li>CUSTOMER SERVICE </li></ul><ul><li>INNOVATION </li></ul>COMPETITIVE VARIABLES
  7. 7. HOW TO CHOOSE A MARKET TO EXPORT <ul><li>Global strategies </li></ul><ul><li>International market research </li></ul><ul><li>Useful sources of information </li></ul><ul><li>Commercial research </li></ul>
  8. 8. HOW TO CHOOSE A MARKET TO EXPORT HOW TO CHOOSE A MARKET TO EXPORT
  9. 9. Global Strategies NEW MARKETS <ul><li>Company Vision </li></ul><ul><li>Market approach </li></ul><ul><li>Value Chain capacity/limits </li></ul><ul><li>Financial capacity </li></ul>Novelty SIMILAR TYPE DIFFERENT TYPE SAME TYPE SAME ONES SIMILAR DIFFERENT CONGLOMARATED DIVERSIFICATION NEW PRODUCTS HORIZONTAL DIVERSIFICATION VERTICAL INTEGRATION CONCENTRIC DIVERSIFICACTION
  10. 10. Global Strategies Geographical Segmentation Channels to Market Client Segmentation TARGET MARKET ABC Classification . The most recommendable. MARKETS CLIENTS PRODUCTS
  11. 11. Geographical segmentation (example)
  12. 12. Geographical segmentation (example) <ul><li>General observations: </li></ul><ul><li>Urban: Large cities like Madrid or Barcelona. Market concentration, high level of competitive tension. </li></ul><ul><li>Not urban imply geographical dispersion, higher associated costs. Etc. </li></ul><ul><li>Regional: explicit and particular consumer habbits and trends. Specific rules and regulations., </li></ul><ul><li>Coasts: Disperse populations although high density. Disperse homogenous consumer groups. Influence of both national and foreign tourism. Permanent population of foreign residents. </li></ul>MARKET SELECTION CRITERIA. FASES: INITIAL GENERAL SEGMENTATION MATRIX AND VARIABLES ANALYSIS ABC ACTION PLAN FOR EACH TARGET MARKET URBAN NOT URBAN REGIONAL COASTS
  13. 13. Industry/Sector segmentation (example) RETAIL HORECA INDUSTRY Hand in hand with the geographical segmentation, we will identify the most adequate market channels for the our products, considering factors like competitive position, profitability or market growth potential.
  14. 14. <ul><li>Market share that we aim to achieve. </li></ul><ul><li>How long before first order </li></ul><ul><li>Sales projections Vs Sales potential. </li></ul><ul><li>Potential product demand previsions. </li></ul><ul><li>Operative costs in the selected destination market. </li></ul><ul><li>Level of required investment. </li></ul><ul><li>Estimated percentage of benefits. </li></ul><ul><li>International risk factors (laws, strikes, Gov.) </li></ul><ul><li>Degree of flexibility related to the product/consumer. </li></ul><ul><li>Management efficiency. </li></ul><ul><li>Market exit strategy. </li></ul><ul><li>Collateral damages to our Brand and or product </li></ul><ul><li>Export activity impact on the rest of the comp any </li></ul>Difficult aspects related to export
  15. 15. International Market Research <ul><li>Qualitative Market research </li></ul><ul><li>Quantitative Market research </li></ul><ul><li>Market entry and Distribution research </li></ul><ul><li>Competitors analysis </li></ul><ul><li>Product/services and life cycle research </li></ul><ul><li>Buying habits, promotional and sales motors generally used and accepted </li></ul><ul><li>Economical environment research </li></ul>
  16. 16. Useful sources of information <ul><li>Internet </li></ul><ul><li>Chambers of Commerce </li></ul><ul><li>Export promotion institutions </li></ul><ul><li>Trade Fairs </li></ul><ul><li>Commercial Missions </li></ul><ul><li>Consultancy services </li></ul><ul><li>DB suppliers </li></ul><ul><li>Product demos </li></ul><ul><li>Mystery shopping </li></ul><ul><li>Specialized media </li></ul><ul><li>Benchmarking </li></ul>
  17. 17. Commercial research – In local market <ul><li>Macro-economical data. </li></ul><ul><li>Population distribution, age, geographical, income. </li></ul><ul><li>Economy motors and evolution. </li></ul><ul><li>Consumer habits. </li></ul><ul><li>Communications. Infrastructures. Ports of entry. </li></ul><ul><li>Market trends. </li></ul><ul><li>Product life cycle. </li></ul><ul><li>Overall 4P aspects (Product, Price, Place, Promotion) </li></ul><ul><li>Legal and fiscal regulations and restrictions. </li></ul><ul><li>Commercial Information. </li></ul><ul><li>Trade agreements. </li></ul>
  18. 18. Commercial research – Market structure Concentrated Atomized Disperse Distribution platforms
  19. 19. Commercial research – offering a product line What happens when we export? Local Vs Destination
  20. 20. Commercial research – offering a product line <ul><li>Production costs and capacity </li></ul><ul><li>Branding regulations </li></ul><ul><li>Packaging A </li></ul><ul><li>Packaging B </li></ul><ul><li>Labeling </li></ul><ul><li>Variety, depth and range </li></ul><ul><li>Shipping and logistics </li></ul><ul><li>Shelf Life </li></ul><ul><li>Promotional back-up </li></ul><ul><li>Guarantees </li></ul><ul><li>Sales channels and support </li></ul><ul><li>Payment terms </li></ul><ul><li>Devolutions / Claims </li></ul>‘ In the factory, we make cosmetics; in the store, we sell hope’. Who are my target buyers?
  21. 21. Offering a product line – the importance of pricing Expected price Cost + margin price life cycle price JF
  22. 22. Commercial research – Distribution channels Level Zero Level One Level Two Level Three MANUFACTURER E N D C O N S U M E R National distribution chart Direct Long Short retailer wholesaler commissioners retailer retailer wholesaler
  23. 23. Commercial research – Distribution channels <ul><li>Export Manager </li></ul><ul><li>Customs Agent </li></ul><ul><li>Agents </li></ul><ul><li>Importers </li></ul><ul><li>‘ Prescriptors’ </li></ul><ul><li>Buying Centrals </li></ul><ul><li>Regional Integral Logistic Platforms </li></ul><ul><li>Wholesales </li></ul><ul><li>Large Retailers </li></ul><ul><li>Small Retailers </li></ul><ul><li>Franchising and Licensing </li></ul><ul><li>Direct supply </li></ul><ul><li>e-commerce </li></ul>
  24. 24. Level Zero Level One Level Two Level Three MANUFACTURER E N D C L I E N T Industrial distribution chart Direct Commercial research – Distribution channels Sub distributor Industrial wholesaler Manufacturer representative Direct Sales branch
  25. 25. Commercial research – Brand identity BRAND POSITIONING Positioning is in our minds … But it is our responsibility to build it managing Positioning affects our marketing mix at all levels How can we achieve it? Efficiently combining segmentation with Differentiation
  26. 26. <ul><li>The Brand is the companies most valuable asset. </li></ul><ul><li>We consume products, but we buy brands. </li></ul><ul><li>A Brand must be different and original, attractive and convenient, vital. </li></ul><ul><li>International brands carry advantages and disadvantages –most of these out of our control. Make the best of what you have around you that can help sell your product. </li></ul>Commercial research – Brand identity
  27. 27. <ul><li>PRODUCT </li></ul><ul><li>Versions </li></ul><ul><li>Quality level </li></ul><ul><li>Uniformity </li></ul><ul><li>Product life </li></ul><ul><li>Reliability </li></ul><ul><li>Reparability </li></ul><ul><li>Style </li></ul><ul><li>Design </li></ul><ul><li>Innovation </li></ul><ul><li>SERVICES </li></ul><ul><li>Delivery </li></ul><ul><li>Installation </li></ul><ul><li>Training </li></ul><ul><li>After-sales </li></ul><ul><li>Technical service </li></ul><ul><li>Repairs </li></ul><ul><li>Others </li></ul><ul><li>STAFF </li></ul><ul><li>Competent </li></ul><ul><li>Solution-solving </li></ul><ul><li>Courteous </li></ul><ul><li>Credibility </li></ul><ul><li>Confidence </li></ul><ul><li>Responsibility </li></ul><ul><li>Communication </li></ul><ul><li>Languages </li></ul><ul><li>IMAGE </li></ul><ul><li>Symbols </li></ul><ul><li>Media </li></ul><ul><li>Internet </li></ul><ul><li>New launches </li></ul>Commercial research – Brand identity DIFFERENTIATION Attribute - Benefit – Origin - Use – Application – User competence – category – quality - price
  28. 28. Sales Force: International approach <ul><li>Manage efficiently and lead the international sales team. </li></ul><ul><li>Assure the permanent flow of information between market-company-market. </li></ul><ul><li>Control and watch the movements in the marketplace. </li></ul><ul><li>Asses and control the fulfillment of the agreed projections, proposing corrective measures when necessary. </li></ul><ul><li>Project the company’s image to the market. </li></ul><ul><li>Anticipate and act, rather than react! </li></ul>
  29. 29. <ul><li>Flexibility to different timetables. </li></ul><ul><li>Prepare your agenda and your plan of meetings. </li></ul><ul><li>Have a predefined strategy. </li></ul><ul><li>Be tolerant and accept the role of stranger (foreigner) </li></ul><ul><li>Understand the customs, habits and culture of the country or region we are visiting. </li></ul><ul><li>Adapt yourself to the work rhythm of the country. </li></ul><ul><li>Be entrepreneur. </li></ul><ul><li>Establish and maintain personal relationships. </li></ul><ul><li>Order and file all the information obtained during your trip. </li></ul><ul><li>Consider from the beginning the possibility of a NO-agreement. </li></ul><ul><li>Begin to build your relationship once the agreement has been signed. </li></ul>Sales Force: International approach
  30. 30. <ul><li>The mentality of the company owner. </li></ul><ul><li>Lack of knowledge and preparation. Frequent trials + errors. </li></ul><ul><li>Objectives set to a very short term period. </li></ul><ul><li>Lack of support to the international commercial research. </li></ul><ul><li>Lack of finance for export. </li></ul><ul><li>Insufficient authority of the export manager to take decisions. </li></ul><ul><li>Passive export policy rather than active. </li></ul><ul><li>External uncontrollable factors such as the international country image. </li></ul><ul><li>New international competitors. </li></ul><ul><li>Lack of commercial researches in new potential markets. </li></ul><ul><li>Lack of diplomatic and commercial presence of Jamaica abroad. </li></ul><ul><li>Lack of logistic strategies and structure. </li></ul>Sales Force: Common errors
  31. 31. EXPORT PLAN a) Ways to introduce my product? b) Determining your distribution channel c) Franchising the best way to export? d) Mailing export a tool to export? e) Need of product innovation, production and marketing f) Pricing strategies
  32. 32. Initial Phase: Strategic Analysis and Planning. Operational Phase: Execution, Development and Control. 6 7 8 9 10 Export Plan. Laying the paves. International Marketing Plan International Commercial Action Plan Financial Planning Costs/Objectives Previsions Budgeting Control of the International Commercial Results Revision of International Programme Business Diagnose Analysis Market Segmentation Target Market / Products Internal Analysis SWOT Competitive Strengths OBJETIVES Strategic Qualitative Quantitative International Strategy Plan 1 2 3 4 5
  33. 33. Value for our clients <ul><li>Collaboration agreements between companies. </li></ul><ul><li>Temporal unions between firms for the fulfillment of concrete projects. </li></ul><ul><li>Strategic alliances. </li></ul><ul><li>Export Associations. </li></ul><ul><li>Distribution agreements. </li></ul><ul><li>Export Consortiums. </li></ul><ul><li>Outsourcing export departments. </li></ul><ul><li>Joint-ventures. </li></ul><ul><li>Franchising. </li></ul><ul><li>Technology transfers. </li></ul><ul><li>Licensing. </li></ul>
  34. 34. Strategies and Abilities - Measures <ul><li>Create and support policies that help project a positive image of the country internationally. </li></ul><ul><li>Stronger collaboration between industry sectors. </li></ul><ul><li>Deliver market approach strategies to client-sectors. </li></ul><ul><li>Aim at less saturated and mature markets. </li></ul><ul><li>Plan international commercial missions to help optimize costs (even under private initiative) </li></ul><ul><li>Prepare informative reunions to help introduce products and/or services in unfamiliar marketplaces. </li></ul><ul><li>Support the creation of logistic platforms to help improve costs and increase the market penetration of smaller operators. </li></ul><ul><li>Bring together the interests of the companies with those of the logistic operators. </li></ul><ul><li>Establish industry sector agreements with international sales operators. </li></ul>
  35. 35. The export leaders strategies and abilities What to do when your negotiation has come to a standstill <ul><li>Although it may sound absurd, take a break! </li></ul><ul><li>Separate reality from fiction, data from fantasy. </li></ul><ul><li>Identify the grey areas. Topics, noises, confusion, … </li></ul><ul><li>Leave your temper and anger outside. You always loose a lot more than you gain! </li></ul><ul><li>Agree over principals. Emotions and silver tongue out! </li></ul><ul><li>Plan the strategy with your team; the stages, goals, your achievements and fails. Be in control of the situation. </li></ul><ul><li>Search for new information that can revive the negotiation. </li></ul><ul><li>Suggest a new meeting place. </li></ul><ul><li>Separate your vision from your goals (L/T from S/T). </li></ul><ul><li>Brainstorm between everyone. Make it obvious the purpose of all is to advance and achieve a win-win situation. </li></ul>
  36. 36. <ul><li>Companies from the same industry sector. </li></ul><ul><li>Complementary product lines and ranges. </li></ul><ul><li>Compatible distribution channels. </li></ul><ul><li>Financial capacity and compromise. </li></ul><ul><li>Similar business philosophy and vision. </li></ul><ul><li>Management commitment with the project. </li></ul><ul><li>Export manager selected and recruited with the approval of all integrating firms. </li></ul><ul><li>Physical location separate and independent from the companies. </li></ul><ul><li>Estimated initial required investment: 3 years. </li></ul><ul><li>Master Plan and Business Development Plans essential. </li></ul>Export Consortiums
  37. 37. Why export culture <ul><li>It is Free! </li></ul><ul><li>It serves as an Umbrella Identity </li></ul><ul><li>You can create an emotional link between you and your potential customers. </li></ul><ul><li>Unique life-style. Friendly approach. </li></ul><ul><li>You should work on a realistic SWOT analysis to help you impulse your identity strengths and distance yourself from what you could consider a threat –or simply a negative aspect. </li></ul><ul><li>Don’t fight against brick walls. If you are different, make the best of it! </li></ul><ul><li>More Differentiation. </li></ul>
  38. 38. Successful business cases <ul><li>Barrabés – Hobby and distribution </li></ul><ul><li>Lola Oranges – Distribution and New consumer habits </li></ul><ul><li>Tecnospot – New technologies </li></ul><ul><li>Spanish Traditional Cheese Consortium – Consortium </li></ul><ul><li>TSK Innovations – Technological Specialization </li></ul><ul><li>GEOX – Introducing new trends </li></ul><ul><li>Catenon – Creative solutions - Sales program software </li></ul><ul><li>Real Madrid – A lot more than football </li></ul><ul><li>SIMPLE SOLUTIONS FOR COMPLEX IDEAS </li></ul><ul><li>POSITIONING!! </li></ul>
  39. 39. <ul><li>Clearly identify our business idea and our value proposition. A business plan is a must! </li></ul><ul><li>Which strategies are the most appropriate. What can we use best out of our current business situation? </li></ul><ul><li>Manage the change. Plan and prevent it’s impact on the organization. </li></ul><ul><li>Market segmentation is a must. We cannot approach ALL! </li></ul><ul><li>Develop a communications plan. </li></ul><ul><li>Benchmark other experiences. </li></ul><ul><li>Piggy-back can be a very effective solution for expansion. </li></ul>VALUE PROPOSITION
  40. 40. <ul><li>Impulse consortiums. Act together. Establish representatives abroad. Work together in those markets where there are potential customers for our products. Where we can offer value. </li></ul><ul><li>Specialize ourselves (according to our product life cycle) by types of product (lifespan, FMCG, private label, equipment, industrials, semi-transformed, commodities, distribution channel, etc.) </li></ul><ul><li>Specialize our offer by the differentiation of our services. </li></ul>VALUE PROPOSITION
  41. 41. <ul><li>Search for strategic alliances, collaborations, special agreements, … </li></ul><ul><li>Intermediation contracts (agency, distribution or franchise) </li></ul><ul><li>Technological transfers. </li></ul><ul><li>Factoring contracts (services). </li></ul><ul><li>Joint-Ventures; </li></ul><ul><li>Build international operative and distribution networks. </li></ul><ul><li>Make the best of the opportunities that Internet offers (B2B, B2C, B2G,). </li></ul><ul><li>ESPECIALIZATION MEANS DIFFERENTIATION. You cannot pretend to approach all. Otherwise, the perceived quality and by the buyer in minor. </li></ul>VALUE PROPOSITION
  42. 42. <ul><li>We must understand the World is changing and there is no point in delaying the inevitable. </li></ul><ul><li>We do not only have to understand the change, we have to join it, and even better, drive it! </li></ul><ul><li>Chinese saying: ‘there are two ways to react to strong wind. One is to build walls to stop it. The other one is to build windmills. </li></ul><ul><li>Churchill said: “the pessimist sees problems in each opportunity. The optimist sees opportunities in each problem.” </li></ul>Thoughts
  43. 43. <ul><li>Show the World all the marvelous things you have to offer. </li></ul><ul><li>What would Wal-Mart be on a deserted island? You have to be seen, communicate, search for your costumers… there are a lot of strengths to be shared. </li></ul><ul><li>Le the international sales experts do their job and have their word. It is not an easy role. </li></ul><ul><li>To succeed: BELIEVE IN IT! The World is waiting. </li></ul><ul><li>“ Person do not live together for nothing, but to achieve great projects” (Ortega y Gasset). </li></ul>
  44. 44. Thank you for your time and interest. Please feel free to ask any questions. [email_address] Christian Bungard CEO. Jumping Frontiers.
  45. 45. Jumping Frontiers , your partner in international business. Jumping Frontiers, S.L. María de Molina St., 32 -3 28006 Madrid (Spain) Tph: +34 914 11 52 11 Fax. +34 915 610 972 www.jumpingfrontiers.com [email_address] Jumping Frontiers is member of the Spanish Association of Foreign Trade Consultants (ACOCEX)

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