Successful Export Marketing for SMEs

If a small company is to embark on an export driven development program, the issues of globalization would not be on how to protect local markets, but on how to compete in an open market and succeed.

 Unlike in countries such as Australia and Canada with large mineral resources to export, or The Middle East with extensive oil reserves, or China with extensive land and labour resources, a small company in a developing nation with only limited resources needs to look at added value to exploit export opportunities.

 With the opportunities in a fast growing global market and the developments in IT, small companies can be successful in a free global economy by, adding value and strategically managing export development and by embracing IT as a competitive weapon for the export marketing process.

 Strategic management and IT opens the door for export marketing to small and medium scale enterprises as well as to large scale operators. Economies of scale in export marketing as well as small scale niche markets offer many opportunities to small organization with strategic management capabilities.

 The global market needs to be analyzed using statistics and case studies within a global operator perspective. Strategic management tools should be used to analyze macro and micro economics effecting export marketing, including effects of globalization on local and export market competitiveness.

 Effects of FTAs and protectionist policies with examples from existing export markets plus potential new markets needs to be considered when using strategic analysis tools. Recent statistics show how Political, Social, Environmental, Economic and Technological changes affect both local and global markets.

 The use of IT and internet, needs to be taken into consider market research and statistical analysis and why information management becomes a vital factor in market analysis. The emphasis will be on how IT can affect bargaining power amongst the five forces and along the value chain.

 The importance of product development with “knowledge based research investment” that can create the most powerful competitive tools and barriers to entry can be discussed. A company’s ability to make sufficient profits to invest in continuous developments in products and markets needs to be considered when embarking on an export marketing strategy.

 An important question that every SMI needs to consider is “why export?”

 “Nations can be industrialized not by building factories, but by creating markets”.

A company must identify and develop marketable products and create a market to trade successfully. Gone are the days when one product sells anywhere. Today the product must meet global standards and local needs. With globalization comes global-localization. That is to service local needs globally.

 With the need for global localization comes the need for CRM using IT.

 Finding buyers for your services depends on the 4 P’s of your marketing mix plus the most important strategic P that is your “Partner/s”. Are you looking at existing distribution channels or do you need to create new channels? What would be the cost of creating and maintaining such channels?

 Negotiating to sell your goods and services depends on one important factor. That is Information. Information about your buyer, the consumer or end user, the market and most importantly, the knowledge of the service you can provide.

The quality of service can be defined as fitness for purpose. The value of the product and service you provide includes “when available”, “where”, and “for how long”. Discuss if the value you offer could be provided profitably in your target area.

The use of IT in database management and the ease of use and security should be considered. How valuable are your information and how secure is it?

 The products and services promotion should be targeted to be efficient and cost effective. Unless your organization has clearly defined your target market this cannot be done and a large part of your promotional budget may be going to waste. Internet should be used in conjunction with other market research and promotional tools to target your market. Getting to the decision maker is the most important aspect in export promotions and marketing.

 Some organizations embark on an export promotions project but abandon after one or two shipments. This is mainly due to a lack of initial planning and market research. Export promotions fail mainly due to problems in one or more of the following areas

                        Cash flow, profits and seasonal adjustments

                        Quality and economies of scale

                        People, standards and procedures

                        Managing information and marketing channels 

 Cash flow has become one of the main causes for exports promotions to fail because it is significantly different to local sales and distribution. Large chunks of cash gets tied up with one or two orders. As a result, part of the profit margin goes for financing cash flow difficulties.

 Export insurance policies usually do not cover against any quality problems or quality related disputes. Quality of service must be understood by both parties and ensuring that goods are received by the customer in the expected quality is the responsibility of the exporter.

 Managing your people, standards and procedures should not be a cumbersome and restrictive process. They should not stifle human creativity, but at the same time should set down levels of expectations. Empowerment should not be taken as relegation of responsibility, but delegation of authority. It should lead to creativity and improved productivity.

 Any organization engaged in export management should consider the value of information and how it is managed. Export marketing is about information and the application of IT would ensure longer term competitive advantage. What ever product you export, export marketing is about providing a service and managing information.

Managing marketing channels is also about managing information. The intrinsic value in any organization’s partnerships and marketing channels is based on the effectiveness of information flow.