Understanding Export Marketing
As an exporter, you would want to sell your products to a buyer of a different country . (Assuming) Somehow, you have not been able to do so. For, either you did not attempt any export marketing or you do not know how to run an effective export marketing campaign.
If so, go back to the first line of this blog and concentrate on the two focused phrases; a buyer and a different country. Clearly, these two things are fundamentally essential for an export sale. Now, the former one (the buyer) is culturally and characteristically a lot different than your domestic buyers. Likewise, the latter one is also in a geographically different region from your business location. Again, you must coincide them (market & buyer) at same place to make an effort for the sale. You can consider this as export marketing.
Ideally, companies run export marketing campaign to find global buyers and global markets.
In simple words, the activities you do to find buyers from global markets can be viewed as export marketing. Though it sounds simple enough to be optimistic, marketing is the most difficult job in export business.
Let’s get started and find out how to do export marketing. I would like to present a framework and a formula for that. First of all;
What to find first; buyer or market?
Face these two questions:
Where in the world your products might have a demand?
Who are the buyers who will be interested to buy from you?
Buyers are all over the world. If you arbitrary walk in to an international trade show, you will find thousands of buyers there. However, they might be or not be your potential buyers for your products. Logically, your potential buyers must underlay in the markets having potential demand for your product.
For instance, let’s assume, you have leather products to export. Instead of finding buyers first, primarily you start to try finding markets in the world for leather goods. Afterwards, you find by market research and analysis that Guangzhou, China is a very potential export market for leather goods. Evidently, if you attend a trade fare in Guangzhou, the chances of finding potential leather goods buyer are higher.
(The Answer is: Market first!)
I have found markets then what ?
The size of international market is enormous and nevertheless the competition is also overwhelming. Consequently, in some market you would expect to face trade barriers and in others find opportunities. Thus, as an export marketer it is wise to narrow down the markets to find opportunity. Sometimes, even starting with a single market or region would be wise.
The question is “How would you find that narrowed market”? A market, for instance, which has room for you. Most importantly, a market-which has a demand for your product and an opportunity to make profit out of it.
In truth, the best practice is to find the markets which are price competitive for your product. That would make space for you to penetrate into the market. Again, if you go with price competitiveness, you would still end up with number of markets around the world. Therefore, you must filter more. Finally, it would be smart move for you to select the easiest markets to enter from your country. This process is also known as Market Segmentation.
The Export Marketing Formula to Generate Sales
I have promised earlier to present a framework for export marketing and sales. The discussions so far are the grounds for the framework. With this in our gear, I think we are ready now:
This is it! Let’s delve into the one line formula of ours. Apparently, the process diagram shown above are visibly consists of two parts, Lead generation and Lead conversion. If you are not familiar these , don’t worry. In a while, I would incorporate our discussion so far with this formula and the terms mentioned in the diagram.
Lead generation: Finding Buyers
First of all, what is a lead? In the context of our business here, a lead is simply a potential buyer who has shown interest for your product. For you, a lead is the global buyer who will buy from you.
Let’s assume again, you are that hypothetical exporter of leather goods attending in a trade show in Guangzhou, China to find buyers. Generally, some of the thousands of buyers might come to your stall in the trade show and initiate inquiries about your products. If the simple inquires ends up with exchanging contact information, the interested buyer is your lead. In the meantime, you have already (hypothetically) generated a lead! Well done!
Considering our Formula
Now, let’s reverse our journey here. To generate this lead, you at first ran through a market research and analysis. Later, you segmented Guangzhou as a potential market for your products. Furthermore, you found that Guangzhou also would be the easiest market to penetrate for you.
Correspondingly, these are the first two steps of lead generation shown above diagram. In the following step, you used an export marketing tool named: an international trade fair held in Guangzhou to enter in that market. After successfully entering into the market, you eventually generated sales leads.
Moreover, as you try a number of export marketing tools, the number of leads generated will be also higher.
Now, we will see the second part ofthe formula; lead conversion or converting leads into sales.
Lead Conversion: Converting leads to sales
Normally, an international sales takes a considerable amount of time to close. For instance, our hypothetical buyer here must not buy from you immediately. In reality, this lead must want be very sure to make any buying decision. To remain in the game, an exporter must follow up the customer for a long time.
You would expect to exchange a lot of information regarding products and sales terms . Sometimes you might just share personal information for the sake of friendship building. Most of all, the communication between you and the lead must be consistent in this phase.
Gradually, a sense of commitment and friendship should begin to grow. The friendship would garner confidence in buyer’s mind to make a buying decision. Consequently, ; when the quality and price you offer match with the ones with buyer, a sale is like to materialize. This is lead conversion.
Measuring Your Export marketing KPI (Key Performance Indicator)
Measuring results of an export marketing campaign is also very crucial for an effective marketing plan. In this case, only the number of leads and the number of conversions are important to justify the efforts of export marketing.
Therefore, a brilliant marketing idea or a great marketing content are not important to consider as factors to measure KPI. Specifically, the number of leads, e.g. 40 leads and the number of sales e.g. 2 sales, really matter for your concern. Henceforth, your KPIs of export marketing campaign are the number of leads and the number of sales.
So far, the discussion above pinpoints the basic understanding of export marketing. Our other blogs will help you to understand more about the other aspects of export marketing.