After the information in the first three sections has been studied, the first step in building a successful export strategy is determining the firm’s readiness to export. The following are guidelines on preparing an export business plan, developing export marketing skills, designing a template for an export marketing plan and considering marketing tools prior to engaging directly in promotional activities.
Being “Export Ready”
“Export Ready” is a term commonly used by export assistance organizations. It indicates that a firm has the character and capacity to export. It often qualifies a company as a more consistent and sophisticated company than one that is still in the process of considering exporting, and without the commitment of financial or organizational resources to enter into foreign markets. Export readiness is often used to describe a company that is willing to take the information, resources and assistance it is provided and use it in a positive and productive manner. The ability to learn more, manage the unknowns and complete each task required to be successful are common traits of an “Export Ready” firm.
Determining Export Readiness
Determining your firm’s export readiness is the first step in establishing an export program. Many of the concepts are similar to domestic business, but as there is an international variable to every aspect of exporting, these concepts must be addressed from a different perspective. Aspects that must be considered while evaluating your export readiness include:
Export Readiness Specifics
Below are some important points for consideration:
Exporting is an integrated process that requires a solid understanding of the fundamentals plus the ability to be flexible to the changing requirements of international buyers. All aspects of the export process have to work together in unison for the operation to succeed. Just imagine yourself as an importer for a moment. What would you want in a foreign supplier? Keep that in mind as you work to be an efficient and successful exporter.
Considerations for Entrepreneurs
If you are just starting your business for both domestic and international sales, it is often wise to wait until you have established yourself domestically before you venture into exporting. Having strong U.S. sales for your products is always a good indicator of potential in foreign markets.
If you are starting out your business focusing entirely upon export, obviously there is no need to wait. In fact, starting out as confidently as possible becomes even more important, so these recommendations have even greater meaning for you. The biggest concern that export assistance agencies (and your government) have is that you never try exporting due to a lack of information or support, or that you start exporting and give it up because the resources available to you were never fully realized.
Entrepreneur Readiness Questionnaire
Smaller firms, including those just starting up, produce a significant percentage of U.S. exports. Export readiness questions differ between new and established firms, because they include those related to operating a business from the onset as well as establishing exports. The following is a list of commonly asked questions for entrepreneurial forms of business:
Whether your business is ongoing or you are just considering starting a business, asking and answering basic questions of your experience is a valuable exercise. The USDA, Foreign Agricultural Service has a short but effective test to determine basic export readiness, which you can access by clicking here.
Generally speaking, exporting involves the same elements that are necessary for business development in the United States. Success in any business usually requires:
The most difficult part of learning to export is figuring out how and where to start. There really isn’t a single answer, as needs and opportunities often present themselves in different ways. For example, if a company has been contacted through their website with an export opportunity, the work would involve responding to that request and checking on regulatory and shipping requirements as well as preparing a quotation through a pro forma invoice. Another company may begin by considering export potential of a product and markets for it based on a seminar or conference they attended to learn about opportunities for expanding their business.
The nature of exporting usually prohibits a company from learning one aspect of a transaction and then moving on to the next step and learning that process entirely as well. It is more common to learn about all the aspects of exporting at the same time, beginning with a specific need or opportunity. A more specific illustration of this could be that a company, in order to respond to that trade lead from their website, will need information about assistance and service providers, terms of sale, cargo insurance, payment mechanisms, regulations, tariffs and transportation before the quotation can be computed. Many businesses feel they are on their heels a little bit when they begin this way, as they are surprised and not prepared for the level of involvement that exporting requires, but it is a very common way to begin for U.S. exporters.
There is a logical approach that allows a business to prepare for their first export transaction by outlining the process and preparing in advance. Once an opportunity does arise, the company is not caught off-guard and is better prepared to respond to the lead. Understanding the export process involves developing an export plan and an export marketing strategy, which serve as guidelines for success over the longer term.
Export Planning
Formulating a cohesive plan for exporting helps ensure your firm’s success in developing business with other countries. A clearly developed plan can communicate the importance of exporting to those in the company and help them support the overall goals. Externally, an export plan is helpful in the areas of assistance and service providers. For example, an export plan can help obtain export-related financing, and is required to qualify for the Branded Program funding through Food Export-Midwest and Food Export-Northeast.
The export plan, if used along with the overall business plan, is supplemental to the strategy of the firm. Export plans, like business plans, are never finalized and are subject to periodic review based on new opportunities and challenges in the environment.
A successful plan should:
There are many management issues and questions involved when making the decision to export. A company should identify some of the key advantages and disadvantages in this arena.
Advantages | Disadvantages |
Enhance domestic competitiveness | Develop new promotional material |
Reduce dependency on existing markets | Forfeit short-term profits for long-term gains |
Gain export market share | Incur added administrative costs |
Increase in sales and profits | Allocate personnel for travel |
Enhance company competitive advantage | Wait longer for payments |
Extend the sales potential of existing products | Modify product or packaging |
Stabilize seasonal market fluctuations | Apply for additional financing |
Enhance potential for corporate expansion | Obtain special export permits and certificates |
Sell excess production capacity | Requires long-term commitment to expansion |
Gain information about foreign competition | Logistics process more complex than for domestic sales |
Export Strategic Plan Outline The following is also available in a printable format so you can reference it while developing your plan. Click here for the outline.
Goal Setting
Purpose of Entering Export Business
Background
Methods of Exporting
International Skills
Personnel
Products
Targeting Markets and Customers
Competitive Analysis
Marketing Strategy
International Overhead Expenses
Financial Strategy
Break-even Analysis
Timetable
Summary
Although it might prove difficult or perhaps too early to provide solid answers for all of these points, it is important to begin developing an outline of what your company’s intent is and supporting it on a daily basis. The export plan contains many attributes of a marketing plan as well, and often they should be considered one in the same. What follows is a much more specific look at how a marketing plan for export is assembled.
Regardless of how a company begins exporting, a well-planned strategy should be implemented in each target market. The export business plan should include how much of a commitment, in terms of time, personnel and funds a firm is willing to make, as well as a basic market entry strategy and control over distribution and sales.
After establishing a strategy, the company should identify marketing and operational skills for development. This list can be longer than the actual set of skills required, and is presented only to provide choices for focus and implementation.
Does your company have the ability to accomplish any of the following? If not, is the company prepared to work on developing the skills not yet in-house?
International Product Skills
Ability to:
International Pricing Skills
Ability to:
International Placement (Distribution) Skills
Ability to:
International Promotion Skills
Ability to:
An export marketing plan supplements the export strategic plan, and may be used with the strategic plan or independently. Although slightly redundant to the strategy, it provides balance to the main goals of the firm. The strategic plan is an external component and the marketing plan is often an internal one. Below is an outline of a common export marketing plan:
Title: (Your company name and product description here)
I. Positioning
Summary Positioning Statement:
This should explain to any interested party what your company does, where it fits in the market and how it competes.
Example: “Primo Popcorn is a family owned and operated business specializing in the production and distribution of the highest quality flavored microwave popcorn in the United States. We are vertically integrated with our own cornfields, located on some of the richest soil in the world. Our innovative technologies allow us to use only the finest kernels of corn and we can adapt the flavoring and colors of the product to match almost any customer preference.”
II. The Product
Evaluate the innovative characteristics of the product as perceived by the intended market.
Summary Product Statement: Describe the relevant advantages and potential challenges to product acceptance, as well as methods of demonstrating value and use for consumers.
Example: “Popcorn is an All-American favorite snack, but it is also gaining popularity around the world. Many popcorn consumers are interested in only the finest available product, which is what we are proud to supply. Our product comes in single-serving sizes and is easy to prepare and consume. Our flavor varieties suit the American market, but with proper support, could also appeal to a much broader international customer base. The biggest challenge to global expansion is ownership of microwave ovens, but research indicates that sales of those are increasing steadily around the world, especially in newly industrialized economies.”
III. Targeting Markets and Customers
Describe the market in which the product is to be sold.
In this section, describe the Differences between your product’s marketing mix and your competitor’s, relative to:
Summary of the Market
Summarize the problems and opportunities requiring attention in your marketing mix relative to your target market, customers and channels of distribution.
Example: “Primo Popcorn is positioned in the higher end of the product lines in the United States, because of the product’s high quality and great taste. A retail price that reflects that positioning is desirable in our targeted markets. Promotions, including sampling in retail and other locations have proven very successful in developing business, and we are prepared to support that function in the export markets we work in. Our usual channels of distribution include wholesalers and distributors who serve regional retail networks, including supermarkets, convenience stores and larger retail outlets. We are motivated to work closely with our international partners to develop a mutually profitable and successful partnership over the long term.”
IV. Marketing Strategy
This section will outline your action plan and detail what you would consider to be the most efficient means of marketing your product into the target market. Proper segmentation, targeting and positioning are the best ways for you to take advantage of the opportunities discovered in Section III in order to maximize profits and market share.
V. Pro Forma Financial Statements and Budgets
Establish an estimate of expenses that you expect over a given time period, most often one year. In order to arrive at a realistic amount for Branded Program funding, for example, a specific Country Marketing Plan with estimated expenses is required.
VI. Recommendations
Based on the marketing plan and your analysis of the market, a company must make a decision. Either the company should market the product in a designated target market or decide not to export the product at this point in time. The choice to begin exporting should align with positioning statements from Section 1. If you decide not to export, then explain your decision. Do not be discouraged if the recommendation is to delay exporting. It is just as valuable for a company to realize they are not prepared to export, as to make the decision to pursue international markets. The plan may also show gaps in the preparation that should be addressed before actively pursuing exports.
Export Marketing Plans require significant consideration and work to complete. However, consider what effect a lack of preparation could have on the firm’s export success and on the bottom line. An attempt at each of the outlined activities above will put your company on a competitive path to success and will give you an edge over many beginning exporters.
“Export Planner” from FAS
The Foreign Agricultural Service has an excellent template for developing an export plan, including a completed example. It is appropriately called the “Recipe for Export Success,” and is easy to use with support functions throughout. To access the template, click here.
Marketing Tools
The following paragraphs provide tips for using different marketing tools. Each tool is designed to form an image and vision of who you are and what you are selling.
Note: Naturally, all of the following can and should be adapted on a continuous basis as you develop experience within the field of export.
Business Cards: Business cards play an important role in exports. The importance of making a good first impression is compounded when making international contacts. Because of cultural differences, proper business card preparation and etiquette is vital. You may want to invest in translating the back of your card into a target country’s local language. Taking the extra effort to have your card translated will convey a message of professionalism and preparedness to potential business partners. Even if you are exhibiting at a U.S. tradeshow, having multi-lingual cards may be something to consider if you would like to expand into a particular market. Learn acceptable ways to prepare and present written materials to different cultures, as it is often a more formal and important process than in the U.S.
Brochures: Product brochures should be consistent with the business cards in design and content. They should be professionally prepared, creative and easy to read. Avoid acronyms and abbreviations that might not be understood. Brochures should be pleasing to the eye and have a unique appeal that represents your company in the best way possible. Try to “internationalize” materials to the extent possible and make reference to international partnerships and the importance of developing global business opportunities.
Customer Testimonials: Testimonials by current customers are helpful, especially if you have international or export-related customers. Testimonials can be integrated into brochures, public relations materials, media kits or can be offered on a stand-alone basis. Expressing ideas about the quality of products, the care your company puts into their products, competitive pricing and reliability as a supplier are key ingredients in customer testimonials.
News Articles: Translating articles may not be warranted at the introductory stage of business. However, being in the press creates a positive company image. Articles about your company can come in a variety of forms, whether about new product developments, awards or contributions to the community. Quotes from articles can be integrated into your brochures and other printed materials. Articles can be listed on your website, and potentially, in the export section of your website.
Awards: Winning an award for having the best product, best packaging or other attribute is a valuable marketing reference. Ideally, publicized awards should be recent (2 years old or less) and the broader the range of competition, the better. Companies should also promote awards for service to a cause, community or industry.
Certifications: Professional and industry certifications are helpful in establishing a company’s adherence to quality control or food regulations. They should be located in printed materials and displayed prominently, especially if they are relevant or vital to the target industry. This could include posting certifications for: kosher, Halal, ISO, organic, GMO-free products, etc.
Videos: Streaming video on a small television at a trade event, on the company’s website or even in the lobby can prove to be a valuable promotional tool. Videos should be professionally prepared and have good sound quality. Some firms use footage of their company shot by local news crews that might include an interview with staff and consumers tasting the products.
Websites: Websites are extremely valuable for companies involved in exporting, as buyers can locate them anywhere in the world, making them a truly global medium. An export- friendly section of the website is imperative. It should be e-mail enabled, have clear pictures of the products as well as export policies and pricing to demonstrate readiness to work with international buyers.
Websites should be up to date, informative, easy to read and not too fancy or difficult to download. If the site is not ready for public consumption, it is important to indicate that the site is under construction. Having a website address that is easy to type and remember is also a benefit, especially for international audiences.
Export Policy
Having a brief outline of the way your company anticipates doing business in export is a helpful tool. This can be available in print and/or located on your website. Although it can be adjusted over time, a simple format could include the following:
Export Pricing List
The export pricing list is also a tool that can be printed for distribution or available on the firm’s website. It can be combined with the export policy, such as on the reverse side of the page. As mentioned in the previous section, competitive pricing for export is imperative due to all of the costs associated with transportation, insurance, customs clearance and delivery the importer must absorb. Point out that all terms are negotiable based on the type of business projected and other circumstances relevant to the buyer’s market.
Here is a simplified example:
Any other specifics regarding labeling, packaging and shipment adaptation can be negotiated based on individual needs of the customer.
Summary This section contains multiple variables from which to determine export readiness and consider and choose an export business plan, export marketing skills, export marketing strategy and marketing tools. It is clear that not all of the information contained in this section is a mandatory for successful exporting, and that each tool is available for your review and selection based on your particular experience, business and skills. Once these tools have been combined to suit your needs you are certainly ready to continue onto the next section, regarding export marketing activities.
For more detailed exporting information relative to your specific business please register for our Food Export Helpline™ service. There are always specific issues and questions that are unique to your company, products, and export markets. With the Food Export Helpline™, you’ll speak with an industry expert who’ll put his more than 20 years of experience to work for you. There are no canned answers, only insightful, customized advice specifically for you.
Click here for the Food Export Helpline.
Or, register for our Market Builder program. This service provides customized, in-market research to help you determine if a market is right for your product. Exporters can find new distributors or importers, receive valuable feedback about their product and gain industry insights on topics such as the distribution process and import regulations and restrictions for 18 international markets.
