Lecture 1: Introduction to Export Marketing

1.1 Introduction to Export Marketing

Lecture 1: Introduction to Export Marketing

1.3 Introduction

Introduction
AFTER COMPLETING THIS LECTURE, PARTICIPANTS WILL BE ABLE TO:
- The concept of marketing;
- The differences between marketing and branding;
- The fundamentals of achieving marketing success;
- The way in which SMEs can participate in export marketing;
- What to expect in terms of challenges and risks with regards to export marketing; and
- The common mistakes made by SMEs in export marketing.

1.4 Ask the expert

http://www.youtube.com/embed/mqZyg2XAmDk?rel=0&cc_load_policy=1
1.5 Answer the question

Correct Choice

X Although marketing is an extension of sales, sales are still the main focus
of marketing.

Marketing is a much broader activity than sales as it touches on a number

of components affecting how an organization is perceived.

Feedback

Although marketing is an extension of sales, sales are still the main focus of marketing.
1.6 What do marketers do?

What do marketers do?

A brand is more than just design and symbols: it also contains values and many more elements.
The marketing process combines several activities and involves various functions.

Market Analysis is an ongoing, systematic process to collect and analyse data and information on customers,
competition, products, and channels in specific markets or segments in order to correctly understand the
perceived values of customers.

Product development is based on product feedback from customers and is used to successfully promote and
sell a company’s products in different markets. It is usually conducted together with an R&D team, and
includes planning, developing, and launching new products.

Branding consists in building and managing a company’s brands in a consistent way. This is not limited to
products, but includes brands as a whole.

Sales support consists in a close collaboration between sales and marketing teams to win new customers
and strengthen relations with new and existing clients. Typically, marketers provide tools and presentation
materials to the sales teams.

Promotion is an important part of marketing. Promotion refers to all communication activities aimed at
reaching target customers with appealing messages using various tools, such as advertising, websites, emails,
trade fairs, public relation management, as well as digital and social media.
1.7 What is a brand?

What is a brand?
A brand is more than just design and symbols: it also contains values and many more elements.

“A brand is the set of expectations, memories, stories and relationships that, taken together, account for a
consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business,
a buyer, a voter or a donor) doesn’t pay a premium, make a selection or spread the word, then no brand
value exists for that consumer”. Seth Godin - author of Linchpin

The American Marketing Association defines a brand as a “name, term, sign, symbol or design, or a
combination of them intended: to identify the goods and services of a seller or group of sellers, and to
differentiate them from those of other sellers”. Most people feel that buying branded products is a safer bet
and don’t mind paying more for them, which enables additional margins for the selling company.

Brands have numerous functions:

1. They help save shoppers time, effort and worry.
2. They are a promise of quality and reliability: most people feel that buying branded products is a safer bet
and don’t mind paying more for them, which enables additional margins for the selling company.
1.8 Creating a brand

Creating a brand
Please read the definition below:
"Branding is the process involved in creating and helping manage a unique name and image for a product in
the consumers' mind, with a consistent theme. Branding aims to establish a significant and differentiated
presence in the market that attracts and retains loyal customers".
New Zealand Honey has cleverly associated itself with the country name and the All Blacks rugby team (black
colour with silver fern symbol).

Absolut Mango is part of the Absolute label which was made famous with “Absolut Vodka”. This brand is not
only the name, but the familiar typeface of the letters and the shape of the bottle.

1.9 Achieving marketing and branding success

Achieving marketing and branding success

Any company wanting to claim a place in world markets must consider a marketing strategy to govern the
ways in which they want to communicate their product or service offering to the world. Marketing strategies
have several essential elements.

https://www.youtube.com/embed/vlbrqKSe4gM?rel=0

1.10 Excellence in branding

Excellence in branding
Below you will find a list of good examples with excellent Branding projects:
1. VALUE DRIVEN Successful brands have strong values of purpose, and origin at their core.
Kampot pepper gets its name from the southern province of Kampot in Cambodia.
The region was accorded a GI for pepper in 2010.

These pepper lovers, smitten with their product, proud of their traditional values and definitely looking into the
future, are the keepers of an ancestral know-how, of a way of production where the man and his land make
one with a unique goal: producing the highest quality pepper

2. CUSTOMER OBSESSION A passion for providing the best products and innovating to satisfy the customer
and differentiate from competition. Customers who buy a pair of the Brazilian brand’s Slim Flip Flops and a
Bourjois nail polish at one of the participating stores will receive a complimentary pedicure. Have the choice
to match your shade to one of the many fabulous and fun Bourjois shades, or clash with your flip-flop colour
choice to create a totally fashionable and stand out look: “Create the ultimate look this season.”

3. PRODUCT PASSION Successful brands make a significant investment understanding customers and in
serving their needs. The school of tea was conceived and designed by a family of teamen, whose
appreciation of the is founded on a lifelong commitment to tea; that is the passion of Dilmah Founder Merrill J.
Fernando, who devoted his life to tea. That commitment brings with it a unique and undiluted perspective on
tea.

4. CHANNEL MASTERY Channel mastery. Being where the customer is… and increasingly that means digital.
Mastery of e-commerce and digital media - see examples blow

1.11 Ask the expert

Video lesson
https://www.youtube.com/embed/vlbrqKSe4gM?rel=0

1.12 Read the descriptions and match them with the activities on the right.

Correct Choice

Creating symbols, packaging designs, BRANDING

logos etc. with a view to representing the
company's value

Clearly understanding what the company VALUE DRIVEN PURPOSE

is trying to achieve and who it is

Always trying to innovate and improve the PRODUCT PASSION

product

Making sure the distributors are operating CHANNEL MASTERY

in the best way possible

Constantly interacting with customers to CUSTOMER OBSESSION

identify their needs

Feedback

- Creating symbols, packaging designs, logos etc. with a view to representing the company's value - Branding

- Clearly understanding what the company is trying to achieve and who it is – Value driven purpose

- Always trying to innovate and improve the product - Product passion

- Making sure the distributors are operating in the best way possible - Channel mastery

- Constantly interacting with customers to identify their needs - Customer obsession

1.13 True or false?

Correct Choice

X YES

NO

Feedback

A brand is much more than just a logo; it is the image of a product or service in a consumers' mind, and
typically includes the promise of quality or high performance.
1.14 Introducing export marketing

Correct Choice

X YES

NO

Feedback

Although both use all of the basic marketing principles, export marketing poses additional challenges to SME
exporters. Let's explore what these challenges could be.
1.15 Domestic vs export marketing

Domestic vs export marketing

Below you will find the differences between domestic and export marketing:
DOMESTIC MARKETING
A domestic market is a market that is within the national borders of an SME’s home country. From the point of
view of a developing country or LDC, the domestic market is relatively small, the per capita income is usually
much lower than most of the potential export markets, and competition from other similar products is
probably limited. The domestic market is familiar to SMEs in terms of culture, language, tastes, trends etc.

EXPORT MARKETING

Export markets include any market that is external to the national borders of an SME's home country. The
most lucrative export markets are developing and developed economies. The per capita income of these
markets is higher than that of the SME's domestic market, and the market size is far larger. This therefore
attracts a great deal of competition from SMEs in other developing countries and LDCs, as well as producers
from other developed countries. Competition is therefore fierce and it is very difficult to make an impact in the
export market unless it is done in a very effective and efficient manner.
1.16 The benefits of exporting

The benefits of exporting

There are very clear benefits for SMEs in considering marketing to international markets. These benefits
include:
 Size. The domestic market may be saturated or too small. Export marketing could increase sales and/or sell
products that are underutilized in the domestic market. Greater economies of scale could allow for more
competitive prices or greater profits;

 Diversification. Developing export markets decreases dependence on domestic sales and can compensate
for a stagnating domestic market; and

 Learning. Competition in international markets stimulates SMEs to adapt their products to the needs of these
markets, leading to an improvement in their level of technology know-how.
1.17 Domestic vs export marketing

Domestic vs export marketing

A decision to embark on an export marketing drive must be done with a clear understanding of the ways in
which export marketing is different from domestic marketing.

Product Development
 Export markets often require more stringent safety and environmental standards.
 They may also have additional labeling requirements.

Branding
 There is a high level of “noise” in many of the lucrative export markets, and it is very difficult to make an
impact in them on a national or international scale.
 Targeting a market, segmenting a customer group within that market, and finding a way to communicate
with that group in an effective manner can be difficult and requires specialized expertise.

Market analysis
 Market analysis in a foreign environment and, possibly, across several markets can be expensive and time
consuming.
 Although certain statistics can be obtained relatively easily, market intelligence is important and usually
costly.
Communication
Going into export markets could means having to translate materials and communications into multiple
languages.
Messaging must be culturally aware and sensitive.

 Sales support
Sales staff may be required to travel to, or may alternately be directly employed in the export markets to sell
or interact with customers.
Distances to the export markets can be significant.
1.18 Answer the question

Correct Choice

Lack of export marketing skills in the enterprise

Lack of opportunities in export markets

Lack of financial recourses to carry a long term approach with additional

costs such as travel

X Lack of product readiness where the product does not meet international
standards, or must be approved by standards authorities in the export
country
Feedback

There is certainly no lack of opportunity in export markets, as there is always a market or a segment of a
market somewhere in the world that could become a good customer an SME's product. All of the other points
are examples of challenges faced by SMEs.

1.19 Challenges faced by SMEs

Challenges faced by SMEs

SMEs face several challenging situations when exporting to another country. Some examples are:

Lack of export marketing expertise. Within SMEs, export marketing is usually left to enterprise owners, who
may have had success in domestic markets through their salesmanship and networking. Embarking on an
export drive may require a more organized and structured approach and may require the need to hire external
expertise.
Lack of financial resources for additional expenses required. These include hiring external expertise,
performing product development or changes (such as creating new packaging and labeling), paying for
testing, sending samples, and participating in marketing activities such as trade shows.
Sometimes, marketing is too successful, and supply capacity is unable to meet unexpectedly large demand
from international buyers. International buyers (large supermarkets, for example) often require quantities that
are far greater than the production capacity an SME.
Production processes might not be able to easily accommodate necessary changes for products. Old
equipment may restrict an SME's ability to accommodate new requirements.
Finding the correct channels, partners, agents, or distributors can be a challenge. It requires careful research,
interactions, meetings, and legal services to make sure that it is done correctly and not to the future
disadvantage of the exporter.
1.20 Risks in export marketing

Risks in export marketing

There are risks that must be understood and taken into account when embarking on an export marketing
exercise.

- Pricing could be unexpectedly be affected by fluctuations in exchange rates, which may decrease or
eliminate profits, or even result in losses.
- In case of non-payment or other contractual problems, there may be issues with taking legal action, as doing
this would require acting in a foreign country, which could be

expensive and time consuming.

- Instability in a target country can lead to losses from war, civil strife, or nationalization.
1.21 Common mistakes made by SMEs in export marketing

Common mistakes made by SMEs in export marketing

The following are the most common mistakes made by small enterprises as they begin to export:

 Failure to obtain qualified export counseling and to develop a master marketing plan and international
strategy before starting an export venture;

 Insufficient commitment by top management to overcome the initial difficulties and financial requirements of
exporting;

 Inadequate care in selecting overseas sales representatives or distributors

 Seeking orders from around the world rather than concentrating on one or two geographical areas;

 Neglect of exports to foreign markets when the domestic market booms

 Unwillingness to modify products in order to adapt to the regulations or cultural sensibilities of foreign
countries.

 Failure to print service, sales, and warranty messages in foreign languages

 Failure to consider the use of an export management company if the enterprise cannot afford its own export
department

 Failure to identify intellectual property and to protect intellectual property assets;

 Failure to provide readily available after-sales services for the product.

1.22 Key points

Key Points
Remember:
Marketing is a process that involves a number of activities, including market analysis, product development,
branding, sales support and communication.
Branding is a component of marketing and is vital for export marketing.
The four fundamentals of marketing success are having a value driven purpose, a customer obsession, a
product passion and channel mastery.
SMEs can embark on effective marketing and branding. These are not just for larger companies.
There are some distinct differences between domestic and export marketing.
There are challenges and risks to embarking on an export marketing strategy.
SMEs can learn from the mistakes of others.

1.23 Thank you for completing the lecture