Introduction to Export Marketing' - PowerPoint PPT Presentation

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Introduction to Export Marketing'

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To highlight the importance of exporting to the local economy. ... 'Chic shirts stitch up Asia' Wendy Smith. Northern Ireland trading performance. 1999 2000 2001 ... – PowerPoint PPT presentation

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Title: Introduction to Export Marketing'


1
Introduction to Export Marketing.
  • Simon Devlin,
  • Envision Management and Marketing
    Consultants.
  • March 2004.

2
Objectives 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.

3
Agenda 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?

4
Question 1.
  • How good is
  • N.Ireland at
  • exporting?

5
Traditional 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.

6
But 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.

7
But 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.

8
Northern Ireland trading performance
  • 1999 2000 2001
  • Exports 3,127M 3,751M 3,810M
  • Excludes GB sales figures.

9
Northern Ireland trading performance
  • 1999 2000 2001
  • Exports per capita 1,839
    2,206 2,235
  • Excludes GB sales figures.

10
Trading PerformanceNI v ROI
  • 1999 2000 2001
  • NI Excl. GB
  • Exports 3,127M 3,751M 3,810M
  • ROI.
  • Exports. 66,956M 83,889M 92,690M

11
Trading 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

12
Destination 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.

13
Destination 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

14
Macro-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.

15
Question 2.
  • Why should any
  • company consider exporting?

16
Exporting 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.

17
Less legitimate reasons for exporting.
  • Government Incentives.
  • Corporate profile.
  • Everybody else is trying it!
  • Travel the world See the sights!
  • Been there on holiday.

18
Exporting 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.

19
Question 2.
  • Where should you export to?

20
Common 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.

21
Hardly 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.

22
Export market selection should be based on
  • Initial export market screening.
  • Careful export market research.

23
Question 3.
  • What information do you need on
  • a new export market?

24
Case 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?

25
Case 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?

26
Case 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?

27
Case 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?

28
Case 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?

29
Impact 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.

30
The 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.

31
Analysis of macro-environmental factors.
  • Economic considerations.
  • Political considerations.
  • Cultural considerations.
  • Technological considerations.
  • Legal considerations.

32
Examples 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?

33
Examples 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?

34
Examples 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?

35
Sources 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.

36
Core 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?

37
Core 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?

38
Sources 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.

39
Sources 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.

40
Sources 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.

41
Conclusions.
  • 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.
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