Exporting Is Fun Workshop Presentation To Ukti Cim Seminar (V2) June 2009


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Presentation at UKTI/CIM Event - "Take it to the World - The Power of Exporting" - Loughborough University, UK, 10 June 2009

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  • Introduction I am here talking to you today at the request of Simon Grandidge, UKTI’s Marketing & Events Manager in the East Midlands. Simon is a member of the Chartered Institute of Marketing and came to one of CIM East Midlands premier events last year, “The Power of Marketing”. He thought that a it would be a good idea for UKTI and CIM in the East Midlands to work together to create this event today. Why am I leading this workshop this morning? Well, I have been involved in international marketing since 1972. Yes 1972!! I am also a Fellow of the Chartered Institute of Marketing and helped to establish the CIM’s branch in Poland, which was the institute’s first branch in Continental Europe. Having obtained an honours degree in Business Studies in 1970, my work in International Marketing started when I was a young export sales representative working for Massey Ferguson. Yes, as you see, it was a long time ago!! I have been involved in international marketing since that time, following my work with Massey Ferguson, I worked for Cargill (commodity traders) as a Countertrader and since 1985 as an international business adviser. And more recently I am also a Programme Director at the University of Buckingham. As I am here today as an honorary member of the Chartered Institute of Marketing’s East Midlands board, I will therefore be looking at exporting from a Marketing Management viewpoint, so let us start with a definition of Marketing.
  • Exporting Is Fun Workshop Presentation To Ukti Cim Seminar (V2) June 2009

    1. 1. <ul><li>Exporting is Fun! </li></ul><ul><li>An Introduction to International Marketing </li></ul><ul><li>A presentation & workshop by Nigel Adams BA (Hons), F.C.I.M. </li></ul><ul><li>Take it to the World - The Power of Exporting </li></ul><ul><li>Loughborough, 10 th June 2009 </li></ul>Nigel Adams & Company Ltd
    2. 2. What is Marketing? <ul><li>The management process responsible for identifying, anticipating and satisfying customers’ requirements profitably . </li></ul><ul><ul><li>Management Process </li></ul></ul><ul><ul><li>Identifying </li></ul></ul><ul><ul><li>Anticipating </li></ul></ul><ul><ul><li>Satisfying </li></ul></ul><ul><ul><li>Profitably </li></ul></ul>Nigel Adams & Company Ltd
    3. 3. International Marketing <ul><li>Exporting </li></ul><ul><li>International Marketing </li></ul><ul><li>Global Marketing </li></ul><ul><li>Services & International Marketing </li></ul>Nigel Adams & Company Ltd
    4. 4. Why should you export? <ul><li>Companies that export: </li></ul><ul><ul><li>Improve their productivity </li></ul></ul><ul><ul><li>Achieve levels of growth not possible domestically </li></ul></ul><ul><ul><li>Increase the resilience of their revenues and profits </li></ul></ul><ul><ul><li>Achieve economies of scale not possible domestically </li></ul></ul><ul><ul><li>Increase the lifespan of their products and services </li></ul></ul><ul><ul><li>Increase the returns on their investment in R&D </li></ul></ul><ul><ul><li>Improve their financial performance </li></ul></ul>Nigel Adams & Company Ltd
    5. 5. Academic research shows: <ul><li>Exporting companies are: </li></ul><ul><ul><li>More productive than non exporters </li></ul></ul><ul><ul><li>Achieve stronger financial performance </li></ul></ul><ul><ul><li>More likely to stay in business </li></ul></ul><ul><ul><li>Proving more resilient during the down turn, </li></ul></ul><ul><li>In a recent study of UK companies: </li></ul><ul><ul><ul><li>Exporters gained a 34% productivity uplift </li></ul></ul></ul><ul><ul><ul><li>Exporters are 11.4% more likely to survive. </li></ul></ul></ul>Nigel Adams & Company Ltd
    6. 6. Internationalisation Motives <ul><li>Proactive Motives </li></ul><ul><ul><li>Profit & Growth Goals </li></ul></ul><ul><ul><li>Managerial Urge </li></ul></ul><ul><ul><li>Technological Competence/Unique Product </li></ul></ul><ul><ul><li>Foreign Market Opportunities </li></ul></ul><ul><ul><li>Economies of Scale </li></ul></ul>Nigel Adams & Company Ltd
    7. 7. Internationalisation Motives <ul><li>Reactive Motives </li></ul><ul><ul><li>Competitive Pressures </li></ul></ul><ul><ul><li>Domestic Market: Small & Competitive </li></ul></ul><ul><ul><li>Overproduction/Excess Capacity </li></ul></ul><ul><ul><li>Unsolicited orders from abroad </li></ul></ul><ul><ul><li>Extend sales of seasonal products </li></ul></ul><ul><ul><li>Proximity to customers/Psychological distance </li></ul></ul>Nigel Adams & Company Ltd
    8. 8. Internationalisation Barriers/Risks <ul><li>Barriers hindering starting exporting </li></ul><ul><ul><li>Lack of finance </li></ul></ul><ul><ul><li>Lack of knowledge </li></ul></ul><ul><ul><li>Insufficient foreign market contacts </li></ul></ul><ul><ul><li>No commitment to exporting </li></ul></ul><ul><ul><li>No distribution channels </li></ul></ul><ul><ul><li>Unexpected costs of exporting </li></ul></ul>Nigel Adams & Company Ltd
    9. 9. International Market Research <ul><li>Deciding whether to go international </li></ul><ul><li>Deciding which markets to enter </li></ul><ul><li>Deciding how to enter foreign markets </li></ul><ul><li>Designing an international marketing programme </li></ul><ul><li>Implementing and controlling the international marketing programme. </li></ul>Nigel Adams & Company Ltd
    10. 10. International MR - Why do it? <ul><li>Helps to create accurate judgements </li></ul><ul><li>Provides an understanding of customers needs </li></ul><ul><li>Allows you to identify and analyse potential markets </li></ul><ul><li>Provides an assessment of global demand </li></ul><ul><li>Reduces your risks </li></ul>Nigel Adams & Company Ltd
    11. 11. Before you start IMR <ul><li>It is essential to know: </li></ul><ul><ul><li>What you are trying to achieve? </li></ul></ul><ul><ul><li>How you will collect data? </li></ul></ul><ul><ul><li>How will the data be analysed? </li></ul></ul><ul><ul><li>What will you do when you have the results? </li></ul></ul><ul><li>In-house or bought-in research? </li></ul><ul><ul><li>Think about cost, resources, commitment, time </li></ul></ul>Nigel Adams & Company Ltd
    12. 12. International MR - Conclusions <ul><li>International Market Research vital. </li></ul><ul><li>Know why you are doing it and what you need to find out from it. </li></ul><ul><li>Don’t forget your internal information. </li></ul><ul><li>Cultural problems and lack of data! </li></ul><ul><li>Remember the value of the Internet. </li></ul><ul><li>Not easy to carry out alone – Use UKTI’s OMIS and EMRS schemes. </li></ul>Nigel Adams & Company Ltd
    13. 13. Practical Market Selection <ul><li>How big is the market/sector? </li></ul><ul><li>Can we price profitably? </li></ul><ul><li>Are there legal restraints? </li></ul><ul><li>What are the distribution options? </li></ul><ul><li>How can we promote our offering? </li></ul><ul><li>How will the competition respond? </li></ul><ul><li>Is it easy to get paid? </li></ul>Nigel Adams & Company Ltd
    14. 14. Practical Market Selection <ul><li>Talk with UKTI representatives </li></ul><ul><li>Meet others experienced in target country </li></ul><ul><li>Commission market research </li></ul><ul><li>Visit target country to meet potential customers and/or distributors </li></ul><ul><li>Use UK Trade Missions </li></ul>Nigel Adams & Company Ltd
    15. 15. Practical Market Selection <ul><li>British Embassy Commercial Section </li></ul><ul><ul><li>Local market knowledge </li></ul></ul><ul><ul><li>Sector expertise </li></ul></ul><ul><ul><li>Research and market support </li></ul></ul><ul><ul><li>Identifying opportunities & partners </li></ul></ul><ul><ul><li>Arranging visit programmes </li></ul></ul><ul><ul><li>Supporting UK Trade Missions </li></ul></ul>Nigel Adams & Company Ltd
    16. 16. Market Selection - Conclusions <ul><li>The proactive and systematic approach to international market selection is to: </li></ul><ul><ul><li>Select the relevant segmentation criteria. </li></ul></ul><ul><ul><li>Develop the appropriate segments. </li></ul></ul><ul><ul><li>Screen the segments to narrow down the list of countries of market segments in countries. </li></ul></ul><ul><ul><li>Develop sub-segments in each selected country or in a range of countries. </li></ul></ul>Nigel Adams & Company Ltd
    17. 17. Factors in Market Entry <ul><li>Key considerations for the Business: </li></ul><ul><ul><li>Speed of market entry </li></ul></ul><ul><ul><ul><li>Acquisition is the speediest </li></ul></ul></ul><ul><ul><li>Costs of entry </li></ul></ul><ul><ul><ul><li>Acquisition more expensive than exporting </li></ul></ul></ul><ul><ul><li>Required flexibility </li></ul></ul><ul><ul><li>Risk factors - political stability </li></ul></ul><ul><ul><li>Investment payback period </li></ul></ul><ul><ul><li>Long term objectives of the business </li></ul></ul>Nigel Adams & Company Ltd
    18. 18. Market Entry - Conclusions <ul><li>Whatever method of entry is used, a number of elements are critical to success: </li></ul><ul><ul><li>Long-term view </li></ul></ul><ul><ul><li>A commitment to “exporting” </li></ul></ul><ul><ul><li>Good representation overseas </li></ul></ul><ul><ul><li>Attention to detail </li></ul></ul><ul><ul><li>Focus on customer service </li></ul></ul><ul><ul><li>Flexibility and patience </li></ul></ul>Nigel Adams & Company Ltd
    19. 19. SMEs - Factors in Success <ul><li>SME success in exporting based on: </li></ul><ul><ul><li>Believing that the world is your market </li></ul></ul><ul><ul><li>Finding/creating a market </li></ul></ul><ul><ul><li>Having an attack mentality </li></ul></ul><ul><ul><li>Being flexible </li></ul></ul><ul><ul><li>Having an entrepreneurial attitude </li></ul></ul><ul><ul><li>Using multiple market entry modes </li></ul></ul><ul><ul><li>Buying in advice, when needed </li></ul></ul>Nigel Adams & Company Ltd
    20. 20. SMEs - Factors in Success <ul><li>Generally export success correlated with: </li></ul><ul><ul><li>Good or new technology </li></ul></ul><ul><ul><li>Expertise in Research & Development </li></ul></ul><ul><ul><li>A commitment to marketing </li></ul></ul><ul><ul><li>Good management. </li></ul></ul><ul><li>Other research points to: </li></ul><ul><ul><li>Government assistance </li></ul></ul><ul><ul><li>Top management backing </li></ul></ul><ul><ul><li>Competitive pricing </li></ul></ul><ul><ul><li>Concentration on 1 or 2 (mature) products </li></ul></ul><ul><ul><li>Good information for control reporting </li></ul></ul>Nigel Adams & Company Ltd
    21. 21. Importance of Networks <ul><li>“… sets of two or more connected exchange relationships” </li></ul><ul><li>Networks provide advice and information which may include quicker access to markets </li></ul><ul><li>The organisation incorporates both business (formal) and social (informal) relationships </li></ul>Nigel Adams & Company Ltd
    22. 22. Conclusions for SMEs <ul><li>SMEs will be influenced by: </li></ul><ul><ul><li>Increasing globalisation </li></ul></ul><ul><ul><li>Increasing “connectivity” </li></ul></ul><ul><ul><li>Heterogeneity (diversity) and complexity </li></ul></ul><ul><ul><li>Customisation of products and services </li></ul></ul><ul><li>It is these influences which SMEs must face if they are to continue to be competitive in international markets </li></ul>Nigel Adams & Company Ltd
    23. 23. Pricing across countries <ul><li>This is a major problem for companies: </li></ul><ul><ul><li>Standardisation </li></ul></ul><ul><ul><ul><li>Set one “ex-factory” price and so prices vary from country to country depending on: distance, foreign exchange rates, duties and taxes. </li></ul></ul></ul><ul><ul><ul><li>Does not gain maximum profitability from market pricing. </li></ul></ul></ul><ul><ul><ul><li>Might be appropriate if selling to international supermarkets. </li></ul></ul></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><ul><li>Each local subsidiary or intermediary sets their own market and cross-culturally related price. </li></ul></ul></ul><ul><ul><ul><li>Results in maximum market related profitability, </li></ul></ul></ul><ul><ul><ul><li>But variable pricing internationally can reflect badly on company and can also result in “Grey markets”. </li></ul></ul></ul>Nigel Adams & Company Ltd
    24. 24. Terms of Payment <ul><li>How and when? </li></ul><ul><li>Influenced by: </li></ul><ul><ul><li>Mutual confidence. </li></ul></ul><ul><ul><li>Buyers financial standing. </li></ul></ul><ul><ul><li>Import regulations. </li></ul></ul><ul><ul><li>Buyers requirements. </li></ul></ul><ul><ul><li>Ability to offer credit. </li></ul></ul>Nigel Adams & Company Ltd
    25. 25. Foreign Exchange Risk <ul><li>Foreign currency sold at: </li></ul><ul><ul><li>Spot rate </li></ul></ul><ul><ul><li>Forward rate </li></ul></ul><ul><li>Price Quotations: </li></ul><ul><ul><li>Domestic currency - Buyer risk </li></ul></ul><ul><ul><li>Foreign Currency - Exporter risk </li></ul></ul>Nigel Adams & Company Ltd
    26. 26. Getting Paid <ul><li>Economic factors: </li></ul><ul><ul><li>Inflation </li></ul></ul><ul><ul><li>Exchange rate fluctuations </li></ul></ul><ul><li>A cultural issue? </li></ul><ul><li>Key barrier to export entry? </li></ul><ul><li>Important to get price right, but don’t compete on price alone. </li></ul>Nigel Adams & Company Ltd
    27. 27. Pricing & Payment - Conclusions <ul><li>International Pricing Strategies </li></ul><ul><li>Delivering value to customers </li></ul><ul><li>International agreements </li></ul><ul><li>Getting paid </li></ul><ul><li>Financing trade & Export Insurance </li></ul>Nigel Adams & Company Ltd
    28. 28. International Marketing Manager <ul><li>To be successful - needs: </li></ul><ul><ul><li>Technical perspective </li></ul></ul><ul><ul><li>Organisational perspective </li></ul></ul><ul><ul><li>Personal perspective </li></ul></ul><ul><ul><li>International perspective </li></ul></ul><ul><ul><li>Cultural perspective </li></ul></ul><ul><ul><li>Inter-cultural negotiating skills </li></ul></ul><ul><ul><li>Ability to understand different: </li></ul></ul><ul><ul><ul><li>Countries, markets, politics, law, cultural frameworks. </li></ul></ul></ul>Nigel Adams & Company Ltd
    29. 29. One final comment <ul><li>Here is some excellent advice for anyone involved in International Marketing from a CEO at Conoco who worked in Russia: </li></ul><ul><ul><li>Be true to your core beliefs and practices. </li></ul></ul><ul><ul><li>Take time to let people know who your are. </li></ul></ul><ul><ul><li>Honour the local history and culture. </li></ul></ul><ul><ul><li>Act like the guest you are. </li></ul></ul><ul><ul><li>Persevere. </li></ul></ul>University of Buckingham
    30. 30. <ul><li>Exporting is Fun! </li></ul><ul><li>An Introduction to International Marketing </li></ul><ul><li>A presentation and workshop by: Nigel Adams BA (Hons), F.C.I.M. </li></ul><ul><li>Web site: http://www.nigeladams.com </li></ul><ul><li>e-mail: na@nigeladams.com </li></ul><ul><li>Telephone: 020 3016 8385 </li></ul>Nigel Adams & Company Ltd