How to Export Successfully Lecture

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International Commercial Management

CONFERENCEby

Christian BungardCEO, Jumping Frontiers Ltd.

MADRID – SANTIAGO – BUENOS AIRES - DUBAI

INTERNATIONAL BUSINESS DEVELOPMENTINTERNATIONAL SALES

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INITIAL STEPS TO EXPORT

A) The decision to export. Why to go international?

B) Barriers in international business

C) The export driven

D) SWOT matrix in international business

E) Quality, Quantity and Continuity to export

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The decision to export. Why to go international?

Are we sure we want to take the step? Are we ready?

Which international market to we approach and why? Is our objective market vertical or horizontal?

Design a complete, thorough and effective Marketing Plan.

Control all legal, fiscal, and operative aspects related with the commercial transactions and shipments.

Cleverly use Internet during all the process.

Product Diversification Strategy

New Market penetration

StrategyYour company expansion

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The export driven

Export Department

Sales and Marketing

Logistics

Back-Office

MANAGEMENT

Production Legal

Financial Resources

Human Resources & Recruitment

R+D

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SWOT Matrix in international business

You’re Client

inbound logistics outbound logistics

engineering

design

manufacturing

testingInfrastructure

commercialafter-sale service

Resources

R & D

Human Resources

SUPPORT

Procurement

You’re Client

inbound logistics outbound logistics

engineering

design

manufacturing

testingInfrastructure

commercialafter-sale service

Resources

R & D

Human Resources

SUPPORT

Procurement

THREATSOPPORTUNITIES

WEAKNESSESSTRENGHTS

Your Client

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Quality, Quantity and Continuity to export

COST

QUALITY

TIME TO MARKET

FLEXIBILITY

CUSTOMER SERVICE

INNOVATION

COMPETITIVE VARIABLES

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HOW TO CHOOSE A MARKET TO EXPORT

• Global strategies

• International market research

• Useful sources of information

• Commercial research

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HOW TO CHOOSE A MARKET TO EXPORTHOW TO CHOOSE A MARKET TO EXPORT

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Global Strategies

PRODUCTS

MARKETS

CURRENT

NEW

CURRENT NEW

Novelty SIMILAR TYPE

DIFFERENT TYPE

SAME TYPE

SAME ONES

SIMILAR

DIFFERENTCONGLOMARATEDDIVERSIFICATION

NEW PRODUCTS

HORIZONTAL DIVERSIFICATION

VERTICAL INTEGRATION

CONCENTRIC DIVERSIFICACTION

NEW MARKETS

Company Vision

Market approach

Value Chain capacity/limits

Financial capacity

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Global Strategies

Geographical Segmentation

Channels to Market

Client Segmentatio

n

TARGETMARKET

ABC Classification. The most recommendable.

MARKETS

CLIENTS

PRODUCTS

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Geographical segmentation (example)

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Geographical segmentation (example)

URBANNOT

URBANREGIONAL COASTS

General observations:

Urban: Large cities like Madrid or Barcelona. Market concentration, high level of competitive tension.

Not urban imply geographical dispersion, higher associated costs. Etc.

Regional: explicit and particular consumer habbits and trends. Specific rules and regulations.,

Coasts: Disperse populations although high density. Disperse homogenous consumer groups. Influence of both national and foreign tourism. Permanent population of foreign residents.

MARKET SELECTION CRITERIA. FASES:

INITIAL GENERAL SEGMENTATIONINITIAL GENERAL SEGMENTATION

MATRIX AND VARIABLES ANALYSIS

MATRIX AND VARIABLES ANALYSIS

ABCABCACTION PLAN

FOR EACH TARGET MARKET

ACTION PLAN FOR EACH

TARGET MARKET

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Industry/Sector segmentation (example)

RETAILRETAIL

HORECAHORECA

INDUSTRYINDUSTRY

Hand in hand with the geographical segmentation, we

will identify the most adequate

market channels for the our products,

considering factors like competitive

position, profitability or market growth

potential.

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•Market share that we aim to achieve.

•How long before first order

•Sales projections Vs Sales potential.

•Potential product demand previsions.

•Operative costs in the selected destination market.

•Level of required investment.

•Estimated percentage of benefits.

•International risk factors (laws, strikes, Gov.)

•Degree of flexibility related to the product/consumer.

•Management efficiency.

•Market exit strategy.

•Collateral damages to our Brand and or product

•Export activity impact on the rest of the company

Difficult aspects related to export

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International Market Research

• Qualitative Market research

• Quantitative Market research

• Market entry and Distribution research

• Competitors analysis

• Product/services and life cycle research

• Buying habits, promotional and sales motors generally used and accepted

• Economical environment research

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Useful sources of information

• Internet

• Chambers of Commerce

• Export promotion institutions

• Trade Fairs

• Commercial Missions

• Consultancy services

• DB suppliers

• Product demos

• Mystery shopping

• Specialized media

• Benchmarking

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Commercial research – In local market

• Macro-economical data.

• Population distribution, age, geographical, income.

• Economy motors and evolution.

• Consumer habits.

• Communications. Infrastructures. Ports of entry.

• Market trends.

• Product life cycle.

• Overall 4P aspects (Product, Price, Place, Promotion)

• Legal and fiscal regulations and restrictions.

• Commercial Information.

• Trade agreements.

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Commercial research – Market structure

Concentrated Atomized

Disperse Distribution platforms

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Commercial research – offering a product line

What happens when we export?

Local Vs Destination

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Commercial research – offering a product line• Production costs and capacity

• Branding regulations

• Packaging A

• Packaging B

• Labeling

• Variety, depth and range

• Shipping and logistics

• Shelf Life

• Promotional back-up

• Guarantees

• Sales channels and support

• Payment terms

• Devolutions / Claims

‘In the factory, we make cosmetics;

in the store, we sell hope’.Who are my target

buyers?

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Offering a product line – the importance of pricing

MayorCalidad

Precio AltoBaja Sensibilidad

MenorCalidad

RGX

Servicomerce

iniexport

e-exteriorGMS

Hightronic ACECOMEX

Inex

IberChina

Sector de la consultoría

Precio BajoAlta Sensibilidad

Asesores Independientes

MayorCalidad

Precio AltoBaja Sensibilidad

MenorCalidad

RGX

Servicomerce

iniexport

e-exteriorGMS

Hightronic ACECOMEX

Inex

IberChina

Sector de la consultoría

Precio BajoAlta Sensibilidad

Asesores Independientes

Expected price

Cost + margin price

life cycle price

curva del ciclo vida de los servicios de RGX España

introducción

crecimiento

madurez

declive

Formación

Asesoramiento

E-Business

JF

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Commercial research – Distribution channels

retailer

wholesaler

commissioners

retailer

retailer

LevelZero

Level One

LevelTwo

LevelThree

MMAANNUUFFAACCTTUURREERR

EENND D

CCOONNSSUUMMEERR

wholesaler

National distribution chart

Direct

Long

Short

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Export Manager

Customs Agent

Agents

Importers

‘Prescriptors’

Buying Centrals

Regional Integral Logistic Platforms

Wholesales

Large Retailers

Small Retailers

Franchising and Licensing

Direct supply

e-commerce

retailerretailer

wholesalerwholesaler

commissionerscommissioners

retailerretailer

retailerretailer

LevelZero

Level One

LevelTwo

LevelThree


EENND D

CCOONNSSUUMMEERR

wholesalerwholesaler

Short

Long

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Sub distributor

LevelZero

Level One

LevelTwo

LevelThree


EENND D

CCLLIIEENNTT

Industrial distribution chart

Direct

Industrial wholesaler

Manufacturerrepresentative

Direct Sales

branch


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Commercial research – Brand identity

BRAND POSITIONING

Positioning

is in our minds

…

But it is our responsibility to build it

managing Positioning affects our marketing

mix at all levels

How can we achieve it?

Efficiently combining segmentation with

Differentiation

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The Brand is the companies most The Brand is the companies most valuable asset.valuable asset.

We consume products, but we buy We consume products, but we buy brands. brands.

A Brand must be different and original, A Brand must be different and original, attractive and convenient, vital. attractive and convenient, vital.

International brands carry advantages International brands carry advantages and disadvantages –most of these out and disadvantages –most of these out of our control. Make the best of what of our control. Make the best of what you have around you that can help sell you have around you that can help sell your product.your product.


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PRODUCT• Versions

• Quality level

• Uniformity

• Product life

• Reliability

• Reparability

• Style

• Design

• Innovation

SERVICES• Delivery

• Installation

• Training

• After-sales

• Technical service

• Repairs

• Others

STAFF• Competent

• Solution-solving

• Courteous

• Credibility

• Confidence

• Responsibility

• Communication

• Languages

IMAGE• Symbols

• Media

• Internet

• New launches


DIFFERENTIATION

Attribute - Benefit – Origin - Use – Application – Usercompetence – category – quality - price

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Sales Force: International approach

•Manage efficiently and lead the international sales team.

•Assure the permanent flow of information between market-company-market.

•Control and watch the movements in the marketplace.

•Asses and control the fulfillment of the agreed projections, proposing corrective measures when necessary.

•Project the company’s image to the market.

•Anticipate and act, rather than react!

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•Flexibility to different timetables.

•Prepare your agenda and your plan of meetings.

•Have a predefined strategy.

•Be tolerant and accept the role of stranger (foreigner)

•Understand the customs, habits and culture of the country or region we are visiting.

•Adapt yourself to the work rhythm of the country.

•Be entrepreneur.

•Establish and maintain personal relationships.

•Order and file all the information obtained during your trip.

•Consider from the beginning the possibility of a NO-agreement.

•Begin to build your relationship once the agreement has been signed.

Sales Force: International approach

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•The mentality of the company owner.

•Lack of knowledge and preparation. Frequent trials + errors.

•Objectives set to a very short term period.

•Lack of support to the international commercial research.

•Lack of finance for export.

•Insufficient authority of the export manager to take decisions.

•Passive export policy rather than active.

•External uncontrollable factors such as the international country image.

•New international competitors.

•Lack of commercial researches in new potential markets.

•Lack of diplomatic and commercial presence of Jamaica abroad.

•Lack of logistic strategies and structure.

Sales Force: Common errors

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EXPORT PLAN

a) Ways to introduce my product?b) Determining your distribution channelc) Franchising the best way to export?d) Mailing export a tool to export?e) Need of product innovation, production and marketingf) Pricing strategies

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International Marketing Plan

International Commercial Action Plan

Financial Planning

Costs/ObjectivesPrevisions Budgeting

Control of the International Commercial

Results

Revision of International Programme

Business Diagnose Analysis

Market Segmentation

Target Market / Products

Internal Analysis SWOT

Competitive Strengths

OBJETIVESStrategic Qualitative

Quantitative

International Strategy Plan

1 2 3 4 5

Initial Phase: Strategic Analysis and Planning.

Operational Phase: Execution, Development and Control.

6 7 8 9 10

Export Plan. Laying the paves.

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Value for our clients

•Collaboration agreements between companies.

•Temporal unions between firms for the fulfillment of concrete projects.

•Strategic alliances.

•Export Associations.

•Distribution agreements.

•Export Consortiums.

•Outsourcing export departments.

•Joint-ventures.

•Franchising.

•Technology transfers.

•Licensing.

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Strategies and Abilities - Measures

•Create and support policies that help project a positive image of the country internationally.

•Stronger collaboration between industry sectors.

•Deliver market approach strategies to client-sectors.

•Aim at less saturated and mature markets.

•Plan international commercial missions to help optimize costs (even under private initiative)

•Prepare informative reunions to help introduce products and/or services in unfamiliar marketplaces.

•Support the creation of logistic platforms to help improve costs and increase the market penetration of smaller operators.

•Bring together the interests of the companies with those of the logistic operators.

•Establish industry sector agreements with international sales operators.

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The export leaders strategies and abilities

What to do when your negotiation has come to a standstill

•Although it may sound absurd, take a break!

•Separate reality from fiction, data from fantasy.

•Identify the grey areas. Topics, noises, confusion, …

•Leave your temper and anger outside. You always loose a lot more than you gain!

•Agree over principals. Emotions and silver tongue out!

•Plan the strategy with your team; the stages, goals, your achievements and fails. Be in control of the situation.

•Search for new information that can revive the negotiation.

•Suggest a new meeting place.

•Separate your vision from your goals (L/T from S/T).

•Brainstorm between everyone. Make it obvious the purpose of all is to advance and achieve a win-win situation.

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• Companies from the same industry sector.

• Complementary product lines and ranges.

• Compatible distribution channels.

• Financial capacity and compromise.

• Similar business philosophy and vision.

• Management commitment with the project.

• Export manager selected and recruited with the approval of all integrating firms.

• Physical location separate and independent from the companies.

• Estimated initial required investment: 3 years.

• Master Plan and Business Development Plans essential.

Export Consortiums

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Why export culture

It is Free!

It serves as an Umbrella Identity

You can create an emotional link between you and your potential customers.

Unique life-style. Friendly approach.

You should work on a realistic SWOT analysis to help you impulse your identity strengths and distance yourself from what you could consider a threat –or simply a negative aspect.

Don’t fight against brick walls. If you are different, make the best of it!

More Differentiation.

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Successful business cases

• Barrabés – Hobby and distribution

• Lola Oranges – Distribution and New consumer habits

• Tecnospot – New technologies

• Spanish Traditional Cheese Consortium – Consortium

• TSK Innovations – Technological Specialization

• GEOX – Introducing new trends

• Catenon – Creative solutions - Sales program software

• Real Madrid – A lot more than football

SIMPLE SOLUTIONS FOR COMPLEX IDEASPOSITIONING!!

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• Clearly identify our business idea and our value proposition. A business plan is a must!

• Which strategies are the most appropriate. What can we use best out of our current business situation?

• Manage the change. Plan and prevent it’s impact on the organization.

• Market segmentation is a must. We cannot approach ALL!

• Develop a communications plan.

• Benchmark other experiences.

• Piggy-back can be a very effective solution for expansion.

VALUE PROPOSITION

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•Impulse consortiums. Act together. Establish representatives abroad. Work together in those markets where there are potential customers for our products. Where we can offer value.

•Specialize ourselves (according to our product life cycle) by types of product (lifespan, FMCG, private label, equipment, industrials, semi-transformed, commodities, distribution channel, etc.)

•Specialize our offer by the differentiation of our services.

VALUE PROPOSITION

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Search for strategic alliances, collaborations, special agreements, …

Intermediation contracts (agency, distribution or franchise)

Technological transfers. Factoring contracts (services). Joint-Ventures;Build international operative and distribution networks. Make the best of the opportunities that Internet offers

(B2B, B2C, B2G,).

ESPECIALIZATION MEANS DIFFERENTIATION. You cannot pretend to approach all. Otherwise, the perceived quality and by the buyer in minor.

VALUE PROPOSITION

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We must understand the World is changing and there is no point in delaying the inevitable.

We do not only have to understand the change, we have to join it, and even better, drive it!

Chinese saying: ‘there are two ways to react to strong wind. One is to build walls to stop it. The other one is to build windmills.

Churchill said: “the pessimist sees problems in each opportunity. The optimist sees opportunities in each problem.”

Thoughts

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Show the World all the marvelous things you have to offer.

What would Wal-Mart be on a deserted island? You have to be seen, communicate, search for your costumers… there are a lot of strengths to be shared.

Le the international sales experts do their job and have their word. It is not an easy role.

To succeed: BELIEVE IN IT! The World is waiting.

“Person do not live together for nothing, but to achieve great projects” (Ortega y Gasset).

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Thank you for your time and interest.

Please feel free to ask any questions.

[email protected]

Christian Bungard CEO. Jumping Frontiers.

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Jumping Frontiers, your partner in international business.

Jumping Frontiers, S.L.María de Molina St., 32 -3

28006 Madrid (Spain)

Tph: +34 914 11 52 11 Fax. +34 915 610 972www.jumpingfrontiers.com

[email protected]

Jumping Frontiers is member of the Spanish Association of Foreign Trade Consultants (ACOCEX)

Documents

How to Export Successfully Lecture