Title: Introduction to Export Marketing'
1Introduction to Export Marketing.
- Simon Devlin,
- Envision Management and Marketing
Consultants. - March 2004.
2Objectives of the lecture.
- To highlight the importance of exporting to the
local economy. - To provide an introduction to the practical
issues involved in export market research.
3Agenda for tonights lecture.
- How good is N.Ireland at exporting?
- Why should any company consider exporting?
- What do you need to know about a new export
market?
4Question 1.
- How good is
- N.Ireland at
- exporting?
5Traditional View.
- Exporting? ..... Thats for the big companies.
- Exporting? ...... Sure, theres enough here to
keep up busy!. - Exporting? ..... I dont need to - Sure, Ive
already got a BMW and can afford to have 2
holidays every year.
6But things are changing .
- Maghera Company brings touch of Irish crack to
Berlin. - Specialist Joinery Fittings.
- How Fastank brings water to the desert.
- Fast Engineering.
- Tyrone negotiates Japans crystal maze
- Tyrone Crystal.
7But things are changing .Contd.
- Trump Card for Printer with American deal.
- Post Card Co. in Omagh.
- Total Design wins slice of Russian deal.
- Total Engineering.
- Chic shirts stitch up Asia
- Wendy Smith.
8Northern Ireland trading performance
- 1999 2000 2001
- Exports 3,127M 3,751M 3,810M
- Excludes GB sales figures.
9Northern Ireland trading performance
- 1999 2000 2001
- Exports per capita 1,839
2,206 2,235 - Excludes GB sales figures.
10Trading PerformanceNI v ROI
- 1999 2000 2001
- NI Excl. GB
- Exports 3,127M 3,751M 3,810M
- ROI.
- Exports. 66,956M 83,889M 92,690M
11Trading PerformanceNI v ROI
- 1999 2000 2001
- NI Excl. GB
- Exports per capita 1,839 2,206 2,235
- ROI.
- Exports per capita 19,130 23,968 26,560
12Destination of NI Products Manufacturing and
tradable services 2001 02.
- N.Ireland 3,085
- GB 3,168
- ROI 1,068
- Rest of EU 1,234
- Rest of World. 1,749
-
- 10,304 million
-
- 78.5 of all NI sales are generated by companies
employing gt 50 people.
13Destination of NI Products 2001 02
- Export Sales Excluding GB.
- ROI 1,068
- North America. 703
- Asia. 499
- Netherlands. 269
- Rest of EU. 237
- Germany. 217
- France. 214
- All others. 844
-
- Totals. 4,051
-
14Macro-environmental factors likely to impact on
NI companies over the next few years
- Britain and the Euro.
- EU enlargement
- Opportunities.
- Threats.
- Unprecedented levels of competition from China
following entry to WTO. - General rise in wage levels in Western Europe.
- General decline in manufacturing in Western
Europe. - Shift of manufacturing to lower cost regions.
15Question 2.
- Why should any
- company consider exporting?
16Exporting The NI Economy
- Why consider exporting in the first place?
- To increase turnover - in order to contribute to
overheads and in turn increase profitability. - No option - the home market is saturated/increased
local competition in the local market. - Development of a suitable market spread.
- Get better prices/margins.
- Less competition.
- Better payment terms.
17Less legitimate reasons for exporting.
- Government Incentives.
- Corporate profile.
- Everybody else is trying it!
- Travel the world See the sights!
- Been there on holiday.
18Exporting The NI Economy
- Some Barriers To Exporting
- Cost - financial, time and effort.
- Unfavourable economic conditions.
- Fear of not getting paid.
- Lack of knowledge about markets outside Northern
Ireland. - Language/cultural barriers.
- Too much red tape/hassle.
- Psychological/Fear of the unknown.
19Question 2.
- Where should you export to?
20Common reasons for international business failure
- Wrong export market chosen.
- Lack of good good market information.
- Difficulty in finding the right partners.
- Lack of commitment / perseverance.
- Lack of resources.
- Lack of senior management commitment.
- Costing / pricing issues.
- Lack of planning.
- Lack of skills / professionalism.
21Hardly surprising when .
- Approximately 190 countries in the world.
- 45 countries in the Continent of Europe.
- 16 Lander in Germany.
- 50 States in USA.
- Initial market screening essential so that
resources - can be properly focused.
22Export market selection should be based on
- Initial export market screening.
- Careful export market research.
23Question 3.
- What information do you need on
- a new export market?
24Case Study.
- Mulholland and Bailie makes cuddly teddy bears
and rocking horses. - The company wants to break into the German
market. - What information does it need to make a decision
about whether it can do so successfully?
25Case Study.Background statistics .
- How many children are there in Germany between
the ages of 4 15? - Approximately how much is spent on toys per annum
in Germany? - What is the breakdown of this between technical
games etc and traditional toys? - What is the perception of British toys in
Germany? -
26Case Study Contd.Suppliers of similar
products in Germany .
- Other manufacturers of rocking horses / push
along dogs in Germany? How many? Who are the
leaders? - What materials are used? What about quality? What
designs are used? - How much are these sold for?
- How are these promoted? Where are they sold?
27Case Study Contd.Potential buyers for M B.
- Which shops are these products sold in? How many?
- What is the usual route to market for these
products?
28Case Study Contd.Other information.
- Are there major toy exhibitions in Germany?
- What magazines / trade journals are read in the
toy trade? - Who are the toy experts in Germany?
29Impact of the market research findings for M B.
- Had to develop a new product range for the German
market. - Increased their prices.
- Amended their promotional strategy.
- Altered their plan to sell through distributors.
30The export market research process.
- Analysis of macro environmental considerations.
The Big Picture in the export market in
question. - Analysis of micro environmental considerations.
Factors relevant to your specific product and
its chances of success in the export market in
question. 2 means of gathering this information - gt Initial desk research.
- gt Primary research.
31Analysis of macro-environmental factors.
- Economic considerations.
- Political considerations.
- Cultural considerations.
- Technological considerations.
- Legal considerations.
32Examples of .economic considerations.
- Stability of the currency in question. Do you
invoice in Sterling or the currency of the
overseas market in question? - Wage rates. What is the likely wage bill of
indigenous suppliers of similar products how is
this likely to impact on their pricing? - Trade balance. Is the target market in question
importing more than it is exporting or vice
versa?
33Examples of .political considerations.
- Is the target market in question part of the
E.E.C.? - V.A.T and exporting to Belgium v. Switzerland.
- Does the target market in question have a stable
government? -
-
34Examples of ..legal considerations.
- Are there legal requirements / standards laid
down in the target market in question for your
products? - Are there any taxes / import duties which will be
applied to your product in the target market in
question? - What is the law concerning, for example,
employment of nationals by a foreign company?
35Sources of macro-environmental information.
- Quality newspapers and mags. Sunday Times /
Economist. - Dept. of Industry Country Desks.
- Customs and Excise Import / Export statistics.
- British Embassies.
- Publications in business libraries / Internet.
36Core micro-environmental issues..Competition.
- Who are they?
- How many of them are they?
- Where are they based?
- Who are the market leaders?
- What is the approximate market share?
- How good is their product?
- How much do they charge for their products?
- How do they promote their products?
- Do they sell direct to the customer or through
agents / distributors? -
37Core micro-environmental issues .. Potential
buyers.
- Who are they?
- How many of them are there?
- What types of similar products do they currently
purchase? - How often do they buy?
- How much do they spend?
- What influences their purchasing decision?
38Sources of micro-environmental information.
- Desk Research Basic identification of key
players in a target export - market.
- gt Suppliers of similar products in the
export market. - gt Prospective buyers.
- Primary research More specific / useful
information on that target market. -
39Sources of export market information desk
research.
- Overseas telephone directories.
- Trade directories, such as Kompass.
- Trade magazines relevant to your product type in
the export market in question. - The Internet / Electronic databases.
- Exhibition catalogues relevant to your product.
40Sources of export market information primary
research.
- Straight from the horses mouth!
- gt Price lists.
- gt Brochures.
- gt Samples of product.
- Speaking to people in the business.
- Attending trade exhibitions.
41Conclusions.
- Market research is not difficult - It is simply
about gathering the right information. - Determine what information is required.
- Assess where you can most easily find this
exhibition.