Transcript Export Marketing Notes - KV Institute of Management and

Export - Import Marketing Notes
Section E:
Export Market Selection, Market
Research, Product and Promotion
1
Measuring Sales Potential
• Total population
• Potential market
●Forecast market size
●Forecast your products’ sales
2
Sales Forecasts
1.
Estimates by analogy
- by similar countries
- by similar categories
- by time delays
2.
Direct Forecasts
a) Quantitative
- Market build up
- Time series
b) Judgmental
- Survey of expert opinion
(Focus group or Delphi)
- Buyer intention
- Sales force
3
Sources of Data to Assess Market Potential
Internal data
Microeconomic
(Firm)
• Size
• Product lines
Secondary
data
External data
Macroeconomic
• Balance of Payments
• Currency stability
• Inflation, etc.
• Financial situation
Industry
•Growth patterns
•Analysis of imports
•Local production
Problem
Is there a market for the
firm’s product in an
export market?
How large is it and what
is the possible market
share?
Primary Strengthsweaknesses
data
Compared competitors:
• Corporate
• Product-line
• Specific product
Internal data
Competitors
Strategies
End customers
•Buying behavior
• Substitutes
Secondary
data
Intermediate
• Purchasing behavior
•Financial capabilities
• Distribution channels
External data
Primary
data
4
Market Research for Export Markets
• The first task is to determine what you want to
know before you design the research.
• Generally, the most important task of a market analyst is
to determine the market potential of a particular
product.
• The basic principles of Market Research are no different
than domestic market research – the execution of the
research, however, often varies greatly from market to
market.
5
Market Research Sequence
1.
2.
3.
4.
5.
6.
7.
Define the market
Make a preliminary investigation
Plan the research – Primary data
– Secondary data
Distinguish between • Exploratory and
conclusive research
• Qualitative and
quantitative research
Secure relevant facts
Interpretation of data
Draw logical conclusion
6
Secondary Data
Research already done for another purpose
●
●
●
●
Availability of Data
Reliability of Data
Comparability of Data
Validating Secondary Data
7
Problems of Gathering Primary Data
● Unwillingness to respond
●
Sampling in field surveys
●
Language and comprehension
●
Cost
8
The “trade off” is between quantitative
and qualitative research
Quantitative research
Variable no.
1 2 3 4 - - 1
2
3
Respondent 4
no.
-
Qualitative research
Variable no.
1 2 3 4 - - 1
2
3
Respondent 4
no.
-
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Quantitative vs. Qualitative Research
Comparison
Quantitative (e.g. questionnaire)
Qualitative (e.g. focus group)
Objective
To quantify the data
To gain an initial understanding
Type
Definitive
Exploratory
Flexibility
Low (one-way communication)
High (two-way communication)
Sample size
Large
Small
Respondents
Representative
Target market or experts
Information per
respondent
Low
High
Data analysis
Statistical
Subjective, interpretive
Ability to replicate
with same result
High
Low
Interviewer skills
Low
High
Time consumption
Design phase: high
Analysis phase: low
Design phase: low
Analysis phase: high
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Strengths and weaknesses of the three
contact methods
Questions/questionnaire
Mail
Flexibility (ability to clarify problems)
Poor
Good
Excellent
Possibility of in-depth information
(use of open-ended questions)
Fair
Fair
Excellent
Use of visual aids
Good
Poor
Good
Response rates
Poor
Good
Good
Excellent
Fair
Poor
Poor
Excellent
Good
Low
Low
High
Control of interviewer effects
(no interviewer bias)
Speed of data collection
Costs
Telephone
Personal
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Export Product Strategy
• Product orientation – low cost strategy
● Marketing orientation – involves cost of
modification
research and product
12
Elements of a product
Core product
Functional features,
performance and technology
Standardization
Probability
High
Product attributes
Quality
Brand name
Packaging
Size, color, taste or flavor variants
Support services
Delivery
Installation
After sale service
Low
13
Imported Consumer Products
● Convenience goods
● Shopping goods
● Specialty goods
Imported Industrial Products
● Level of technology
● Level of economic development
● Preferential tariff treatment
14
Product Development Process
SEQUENTIAL
TEAM BASED
Market research
Market research
Product characteristics
Product characteristics
Design
TARGET COST
Engineering
Design
Engineering
Supplier
Price
Supplier pricing
Cost
If cost too high,
return to design phase
Outcome
Lower cost but slower
Target costs for each
component forces marketers,
designers, and engineers from
all departments and suppliers
to negotiate tradeoffs
Higher cost but faster
15
Product and Promotions
Product Line vs. Product Mix
Depth of Line vs. Width of Line
Export Promotional Mix
Personal Selling (direct or through intermediaries)
Advertising (direct mail, commercial media, Internet)
Sales Promotion
Publicity
Sales Strategy — Push vs. Pull
Use of Trade Fairs
• General or Horizontal Trade Fairs
• Specialized or Vertical Trade Fairs
Use of Trade Missions
• Invite foreign buyers to specified location
• Sellers go to buyers location
16
The three brand options
Private
branding
Co-branding/
ingredient
branding
Manufacturer’s
brand
100%
externalizing
external partner takes over
branding of product)
Brand alliance
between two partners
100%
internalizing
(manufacturer keeps
control of branding
17
Illustrations of cobranding
Bacardi Rum
Distributor
End user
Co-branding
alliance
End
user
Co-branding
an ingredient
Coca-Cola
Intel micro- Ingredient Compaq
Processor
computers
supplies
Final
product
Distributor
‘Pull’
18
Retail Supermarket Private Label
Share
%
Northern Europe (Germany, France, UK, Holland, Switzerland)
North America (U.S.A. & Canada)
Scandinavia & Finland
Australia & New Zealand
Southern Europe (Iberia, Italy, Greece)
South Africa
Latin America
Eastern Europe
Japan
24.4
18.7
14.5
13.7
11.7
5.8
2.0
1.4
1.2
Source: El Nuevo Herald Nov. 2000
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Packaging for Export
Protection
Pilferage
Costs
Labeling
20
Labeling of Export Products
1.
Retail Packages
• Imports are generally less regulated than domestic production.
• Local language usually a plus.
• International System of Units requires metric units.
• Health registration must appear on the outside of the package.
2.
Shipping Boxes
• Country of origin
• Consignee
• Port of export and import
• Sequence number
21
Differences between services and
goods
● Definitions and distinctions
- Goods are tangible objects
- Services are performances or actions
- Goods are fixed in form requiring distribution and
services are intangible problem solutions
- The main difference between goods and services in
intangibility. Services are generally more intangible,
personalized, and perishable.
22
Marketing of Service Exports
Key differences compared to Merchandise
1.
Intangibility
(cannot touch or feel or see before purchase)
2.
Inconsistency (delivered service not the same each time)
3.
Inseparability (between service and service giver)
4.
Inventory
(idle capacity and carrying costs)
23
Service Continuum
Servicedominated
Teaching
The theater
Air
travel
Balanced
Fast food restaurant
Automobile
Gooddominated
Dog food
Salt
24
Service classifications
Equipment based
Automated
• Vending
machines
• Automated
car washes
Unskilled
operators
Skilled
operators
• Motion
picture
theaters
•Excavat-
• Dry
cleaning
• Taxis
ing
•Airlines
•Computer
timesharing
People based
Unskilled
labor
• Lawn
care
Skilled
labor
•Appliance
repair
• Guards
•Janitorial
services
Professionals
••Lawyers
•Plumbing
• Management
consultants
• Catering
•Accountant
25
Typical International Services
•
•
•
•
•
•
Banking and financial services
Construction, design, and engineering services
Legal and accounting services
Communication services
Teaching and training services
Management consulting
26
Largest Services Industries
• International tourism is the largest - $64 Billion
•
•
•
•
•
•
spent in the USA; $400 Billion world wide
Transportation
Financial Services
Education
Business Services
Telecommunications and information
Healthcare
27
The International Communication Process
Differences:
• Language
• Economic
• Sociocultural
• Legal/regulatory
• Competitive
HOME COUNTRY
FOREIGN COUNTRY
Channel or
Sender
Firm
offers
Message
Translated to
market
medium
• Media
• Personal
selling
Customer
receives
Feedback (sales, positive brand recall, etc.)
Noise – Competitor – Communications - Distractions
28
Advertising decisions
Set Objective
Budget and Agency decisions
• Percentage of sales/affordable approach
• Competitive parity approach
• Objective and task approach
Message decisions (creative strategy
Media decisions
• Unique selling proposition
• Reach / Frequency
• Standardization versus adaptation
• Types (TV, radio, etc.)
Advertising evaluation – Pretest and sales impact
29
Global Advertising Challenges
Legal and Tax Considerations
Language Limitations
Cultural Diversity
Media Limitations
Production Cost
30
Global Advertising
● Will be resisted by local advertising agencies,
distributors, importers and subsidiaries
● Is not proven to increase impact of selling
messages in all markets
● Will reduce advertising production costs
● Does not change media expenditures
31
Regulations regarding premiums, gifts, and
competitions in selected countries
Country
Category
Australia
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Austria
Denmark
Germany
No
Authorestrictions rized with
or minor
major
ones
restrictions
X
X
General
ban with Almost
important total
exceptions prohibition
X
X
X
X
X
X
X
X
X
X
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