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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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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: </li></ul><ul><li>e-mail: </li></ul><ul><li>Telephone: 020 3016 8385 </li></ul>Nigel Adams & Company Ltd