The advent of e-commerce, or simply the desire to expand territories and markets are both strong drivers in broadening a business’s horizons.
Your business should have a marketing strategy anyway, and if you have international pretensions, these should be in it. Otherwise, it is more likely to become a Friday afternoon or Cinderella aspect. Trading overseas is complex and that is not a good place to be!
Ignoring all the associated aspects such as currency, export documentation, and so on, there are still plenty of core Marketing issues you need to be considering. Taking each of the traditional 4P’s of Marketing as a structure, you may need to consider:
- Is the product saleable in your territory of choice? Does its composition or ingredients comply with local regulations?
- Is the packaging suitable? Both for the task of getting it to market undamaged, but also so that the pack copy is compliant and appropriate to local regulations? And is the pack size appropriate? In the ‘States, people have garages. In Hong Kong, space is absolutely at a premium.
- Do you have the rights to sell your brand in your chosen territory (see below)? Does the brand travel well? We all laugh at ‘Krapp!’ toilet tissue or other faux pas, but brands need to be distinctive for the right reasons.
- Why is the territory you have chosen right for you? How do you know the people there want or need your product? Is it easy to get it there? Is the political regime stable? Do you know the exact route to market (see below)?
- Is the territory best serviced ‘on the ground’ or via e-commerce?
- Are you going to test market? If so, where? What’s your plan?
- What are the implications of BREXIT for you?
- What control will you have over pricing? How long is the distribution chain and who is taking a cut of the profits?
- How do you insulate retail or final pricing against currency movements?
- Remember, no matter how well known you are in your home market, you are starting all over again.
- Who is your salesforce and local spokesperson? No one knows your products and business as well as you – but then you can’t be in two places at once.
- Be clear on your objectives: is the proposition relevant? Are you going after the right targets or just replicating what you’ve always done?
- Are you going to hard or soft launch? Have you set a budget? Do you have local expertise and contacts?
- Are there any cultural issues (alcohol, religion, politics etc) that might need special attention?
Example One: Cracking the US
This company had had several attempts in the past to ‘crack’ the USA. Each had ended in dismal failure until a different approach was taken. We formed a Joint Venture with a large domestic player. Our products dovetailed perfectly with theirs and by adding to their range we immediately had a sales force, a customer base and established distribution. They had their own skilled marketing team and recommended test marketing in a defined area they knew well. We had not previously done this. They had some firm views on how to get decent publicity for a modest outlay. However, we were keen to retain control of the trade selling as we knew the product best, and we wanted to understand the relationship dynamic for ourselves. My role was to act as the interface between the two parties and also oversee the Marketing we were doing. The launch succeeded and for the first time we were trading in the ‘States. The insight gained from our own studies and the local partner was invaluable in truly understanding the market. We also quickly came to understand why previous attempts had failed. At last we could move forward on firm foundations.
Example Two: Why brand protection matters
We had been selling into this distant ex-colonial territory for many years. After a strategic review, we decided that the territory was ripe for further development – particularly in the retail channel. We planned a new range tailored to local requirements and were on the point of going live when we discovered by chance that we couldn’t trade using our brand. This one territory was unique in us having long ago signed over the territory brand rights to what had been a former subsidiary. We had to abandon the entire launch. The story ended happily as we instead decided to fulfil demand by going down the private label route and volumes rose very rapidly due to the overall success of the retailer concerned, but it proved that brand protection matters, plus it is good to have considered contingency plans in case something goes wrong.
Example Three: Never assume!
I have covered this example in another sheet (Pricing, Sales Promotion and Category Management), but suffice to say, when launching through a channel you know extremely well in your own market – in this case multiple grocery retailing – do not assume that it works the same way in other territories. And leave NOTHING to chance in ensuring that your product actually makes it onto the shelf. As they say, ‘Retail is Detail’. I’m sure the same is true elsewhere.
International trading by nature can be complex. Consider teaming up with a trade association, The DTI, your local Chamber or other networks that understand the issues and can offer advice.
Bonfire Consultancy Services bonfiremarketer.com 07742 110018