Globalization and e-commerce have all contributed to a recent influx in international trade. What used to only be attainable by large-scale businesses is now accessible to small companies and those in the business of resale. Products and services are often performed internationally at greatly reduced costs, making international expansion and production outsourcing a suitable option for businesses. But many people still don’t understand the benefits of global business in their industry, and even for those who do, they struggle to find where to start.
What most companies are looking for is a guide for international business, otherwise referred to as export marketing.
Definition of Export Marketing
Export marketing is the practice by which a company sells products or services to a foreign country. Products are produced or distributed from the company’s home country to buyers in international locations. But there is a difference between products that are available to foreign countries and products that are specifically marketed to foreign customers. This where the importance of an export marketing plan comes in.
Why Do I Need Export Marketing?
Businesses today are often doubling or tripling products by expanding to product sales on an international level. But you can’t assume that foreign markets will be as interested in your product as local customers. Cultural differences, shipping costs and transit time, politics, and international trade policies all contribute to a marketing communication barrier between suppliers and foreign buyers.
So why do you need export marketing? Simply put: Google translate is not enough. You need to know the buying behaviors, interests, and needs of your foreign customers. All of this can be addressed in an export marketing plan. An export marketing plan is created to address a specific strategy that can be utilized to make product both available and enticing to international buyers.
How to Build an Export Marketing Plan
The only difference between an export marketing plan and a regular marketing plan is the location in interest. The same type of market research performed for locating an optimal domestic market must be completed on an international scale. Here is how an export marketing plan should be built.
Foreign Country Selection
The first and most obvious step in building an export marketing plan is selection of a country. While this is the “simplest” step, it is also the most crucial. Start by focusing on continents. Although every country is different, many cultural differences and buying behaviors can be attributed to continents as a whole. After selecting a continent, do some research on the top 3 locations of your preference. This should give you more insight into what country you should sell to.
Natural Conditions Research (Optional)
The relevance of this factor will depend greatly on the product you are selling. Information such as the weather, land size, environment, ease of mobility (mountains, roads, etc.), and various other factors will all contribute to the success of your international expansion. For example, selling perishable goods to mountainous regions where transport is difficult may mean your products will expire before they are sold.
This should go without saying, but your products must fit the socioeconomic demographics of the region you plan on selling to. Fashion clothing may be too expensive for certain countries in Africa or Asia. The quality of materials you build your product with may have to change in an international market in order to accommodate the benchmark prices and quality of goods in the foreign location.
Define first what class of consumers you plan on selling to. Lower-class, middle-class, upper-class, and businesses will all have different price point and quality expectations, and these may not reflect those of U.S. standards.
This is the one place in which competition is good. International business and trade has existed for hundreds of years – any profitable international business endeavor that has a promising return has already been done. Thus, you can use the density of competition in a foreign country to disseminate whether or not it is a profitable industry to be in.
Make sure that your competition density research comprises research on local companies in the foreign country as well as international businesses. Just because there is a market for, say, tires in China doesn’t mean that there is a profitable market for foreign tire manufacturers to sell there. See if any companies in your home country are selling the same type of product or service in the country of question.
Global trade and international expansion offer can offer great returns to businesses. However, it can also mean steep losses and costs. Keep in mind: there is a major difference between making your products available to international buyers and marketing to specific international markets. Addressing the latter is your only chance at success in international expansion. Export marketing can help to do this.
You need to be fully informed on the natural conditions, socioeconomic status, and competitor landscape of the country you plan export marketing to. You should also be well aware of additional, out-of-the-ordinary costs you may encounter in foreign countries (extra tariff costs, transportation, etc.) If you are interested in global expansion or the development of an export marketing plan, call us at Interlog USA and we would be happy to help! We work with customers who ship to overseas offices on a continual basis and have relevant tips and suggestions for anyone looking to sell their products overseas.