Developing Your Export Marketing Plan
The Export Marketing Plan
Key Client Questions and Discussion Points
1 - Taking stock – Realistically assessing your position
Have you done any exporting in the past?
If so, what was the process you went through, from start to finish?
Were you successful? If yes, what worked for you?
If not, what would you have done differently?
What are your reasons for exporting?
You want to boost sales and spread your costs.
You are looking for new markets.
You have unique (USPs)/competitive product/service advantages to gain market penetration.
You have built-up a strong domestic base and want to maintain your rate of growth.
You have an internationally competitive innovation.
Your customers expect you to operate on an international basis.
You want to extend the lifecycle of your products.
You are receiving foreign enquiries or attracting international visitors to your website.
How ready you are as an organization to start exporting?
Do you have the human and financial resources as well as the commitment to support your efforts?
Do you have excess production or product capacity to fulfill export orders?
Are there any new skills your employees will require when handling international business?
Are you able to operate in a new market’s local currency or language?
Do you have the experience / ability to motivate a sales team from a distance?
What key risks / challenges do you anticipate?
Differences in language, currency and business practice can complicate any sale.
Securing payments from customers.
Delivery cycles will be longer than you may be accustomed to.
More people will be involved in any sale.
You may have to deal with regulators, agents, distributors, banks, insurers and carriers.
Long lines of communication mean that overseas partners are likely to act more independently than you would normally expect at home.
Every new and foreign market is likely to pose a risk of some kind.
How aggressively are you prepared to pursue new opportunities?
How aggressive do you want to be in your export sales efforts?
You might decide just to pick up orders from select foreign buyers or from miscellaneous traffic on the web.
Licensing your intellectual property or franchising your business internationally might allow you to profit overseas without extensive direct involvement.
Finding experienced intermediaries can potentially reduce your initial costs and the complexity of the challenge.
You might decide to pursue growth directly and handle all aspects of the export process yourself.
2 - Strategic Questions to consider when developing Export Plan
Where should you focus your efforts?
Geographically, where makes sense?
What is your competitive position and in which international markets are your products likely to perform best?
Choose markets that offer you scope for growth and that you understand.
Selling to a country with a very different business culture may not be the best first step into exporting.
Establishing goals, objectives and budgets
What are you are hoping to achieve in terms of sales, revenue and profitability?
Establish an export budget, clearly indicating how initial expenses should be allocated and when you expect to see a return.
Ensure that you do the analysis and set an export price that covers the additional costs and risks of exporting.
How you will manage your exports?
Who will lead your export activities internally and decide how much time senior managers should allocate to export activities?
Do your employees have the equipment and systems they need to handle international orders?
How will you organise marketing, sales and delivery to your export market – are existing systems suitable?
What are your basic sales terms, including delivery terms and payment method?
3 - Market Research
Find out what you can about export markets from home
What research is available? Have you worked with any government departments?
Do you have any past leads, customer communications or sales history to draw upon?
Are any of your competitors in your target export market? What do you know about the competitive environment in your chosen target market?
Have you spoken to anyone about potential representation?
What do you believe is the ideal profile to handle/sell your product?
Consider checking with international aid agencies for companies that are looking for partners.
Explore foreign markets in person
What trade show do you know of where you could meet potential competitors, suppliers and customers?
Are there any trade missions you have, or could, participate in?
Hiring an in-market guru and bringing him/her here could pay huge market dividends.
Do you know the key market accounts in this market?
You may be able to get funding in the form of a Grant toward the cost of your trip.
4 - Check the legal and tax position
Find out about the key legal issues in your potential export market
Are you aware of any import or local regulations? For example, trade barriers, safety standards, labelling requirements?
What stipulations exist with regard to the selling of Intellectual property? This becomes more complicated when you start selling overseas. UK patents and trademarks only protect you at home.
Prepare a comprehensive sales contract
Do you have a sales contract clearly detailing where your responsibilities end and the buyer's begin?
Do you have agreements in place that outline a clear measure for performance? Warranties?
Are your terms flexible enough to deal with changes in the market?
5 - Market-related considerations
Be prepared to modify your product and your marketing plan in response to local rules and cultural preferences / practices
What are you key market value propositions (what makes you different/better). Overseas customers might think about your product in ways that you do not expect.
Think about how best to reach your target audience in the new local. You might find new and different ways to channel and market your product.
Consider any changes you need to make to your branding and labelling. For example, you may have to rename your product.
Select a channel for selling into the market
You may be able to sell directly: for example, via your website, using direct mail or at trade shows.
Appointing an agent to sell goods on your behalf can be a cost-effective option. Seek advice on your responsibility in regard to their activities and draw up a suitable agreement.
You may find it easiest to use a distributor who purchases goods from you to sell to their customers.
Other options include entering into a joint venture with a local partner, opening a local office or setting up a local subsidiary.
Be clear about how you will deliver your goods
Your choice of whether to use sea, road, rail or air as your mode of transport depends on the type of goods and how quick they have to be delivered.
You will need the right documentation to clear UK and overseas customs, and to avoid any unnecessary tax payments.
Many exporters use a freight forwarder to handle their transport. Choose one who knows the territory and who can handle your documentation.
Check packaging and transport regulations in your destination country.
Aim to offer a service that equals or surpasses local expectations
Reply promptly to any enquiries and sign any letters personally.
Make sure your product has service support.
Do not disappoint importers by failing to ship or meet delivery deadlines as promised.
Keep your contacts informed of any changes to the arrangement.
6 - Finance
Guard yourself against non-payment
Decide how much credit you are prepared to extend yourself or take out insurance.
Always ask whether a prospective customer is a properly formed company and can pay its bills.
Ask your bank about invoice discounting to protect your cash flow.
Have a back-up plan for re-selling your goods if the customer refuses to accept them.
Negotiate a method of payment to reflect the risks you are taking
Advance payment is safest. You are paid before the goods are shipped.
Letters of credit confirmed by a domestic bank are highly secure, but you must ensure that your documentation is absolutely correct. Any error and the bank will turn down payment.
Documentary collections allow you to raise payment directly through your customer's bank.
Will you have a series of contracts, rather than a single project? Consider setting up a line of credit with your bank.
Cheques can bounce and are slow to clear. Banker's drafts and international money orders are safer, but they are more expensive and can still be lost in transit.
Your customer can arrange payment through SWIFT, the standard for inter-bank transfers, to any account you choose.