Export marketing plan is a part of the overall business plan of a firm. Every business plan should start with firm’s vision. Vision refers to the personal values and the core purposes which are sought to be achieved through business. It is important that the owner of a firm recognizes his personal values and core purposes in the way the firm is conducting its business. It is a proper way of transferring his personal ambition to his business. This makes for 90% of the success of the business firm.
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The vision should be given concrete shape in the form of business plans. The transformation of vision- a dream into concrete plans-is called a strategy. The vision could be “being the best” or “being the biggest”. This vision should be reflected in functional plans drawn for various functional areas of production, finance, research, human resources and marketing.
Export marketing plan is the most interesting part of export business plan. A good product can be completely spoiled by bad marketing (particularly, the promotion). It is thus, important that when a business firm has decided to start its export business then it must formulate an export strategy i.e. a blue print for competing with the firm’s competitors in the target export market. In the development of such an export strategy, import regulations and other trade barriers must be taken into consideration as they have a critical impact on the outcome of the export venture.
Export Marketing Plan Defined
An export marketing plan is a step-by-step guide to strategy implementation. It addresses strategic issues and outlines the corresponding operational actions to be taken. It specifies targets for each step. The plan should answer all questions on how the export firm’s marketing strategy is to be implemented and direct the enterprise in attaining the strategic objective.
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A business firm’s marketing plan and its export marketing strategy are therefore closely inter-related. As the various steps in the plan are put into action, interaction between the two should be continuous.
The development of an export marketing plan requires decisions on the role that exporting is to play in the firm’s growth, the scope and nature of the firm’s product lines and markets abroad, precise export performance goals and the level of management commitment to the export venture.
A plan is only as good as the quality of the basic data gathered and the analysis undertaken during the planning process. It is important to involve all levels of management in this process and to ensure their total commitment for the successful implementation of the export plan.
Contents of Export marketing plan
A typical export marketing plan focuses on the following aspects:
1. Marketing objectives
2. Market segmentation and positioning
3. Market research
4. Characteristics of the product line
5. Export pricing
6. Distribution channels and
7. Promotional strategies
The plan should outline the actions required are sufficient details: It should set out export targets, budgets and activity schedules as well as assign responsibilities for its implementation.
1. Marketing Objectives
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The first step in developing an export marketing plan is to establish export marketing objectives. These objectives should be attainable, realistic and should be communicated throughout the business firm. Since they will determine the business firm’s direction and its activities, management will have to devote considerable time and effort to setting them.
An analysis of the business firm’s strengths, weaknesses, opportunities and threats, or a “SWOT” analysis for short, can provide a guide to management for developing effective and realistic objectives. A SWOT analysis reveals the competitive advantages of the business firm as well as its prospects for sales and profitability. It is usually based on an evaluation on facts and assumptions about the business firm and on market research.
A business firm’s strengths are its competitive advantages that will give it an edge in export markets. Their weaknesses are its constraints, which may inhibit marketing activities in certain direction. For example, a business firm having shortage of readily available funds cannot undertake a large scale promotional campaign.
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The assessment of a business firm’s strengths and weaknesses in relation to the competition is essential for competitive positioning. This assessment from the point of view of the competition should consider:
a) Technology in use
b) Design styling and trademarks
c) Product quality, quality control and products life cycle
d) Completeness of the product line
e) Customer’s service
f) Raw material supplies
g) Distribution structure and cost.
The review of opportunities and threats in the market should complement the analysis of the business firm’s strengths and weaknesses. The aim is to identify the best business opportunities and directions of growth. A business firm’s opportunities on possible markets can be evaluated in terms of firm’s customers, competing products, the market structure and competing suppliers. Such an evaluation may reveal complementarities between the business firm’s strengths and market opportunities.
Finally management should examine the so called marketing threats on the market being considered. These should include import rules and regulations relating to tariffs, quotas, non tariff measures and so on. Management should also determine whether the markets under assessments are mature markets, that is, these are already well supplied and do not therefore, provide a readily identifiable niche for the business firm’s products.
2. Market Segmentation
An export marketing plan is not complete until the business firm has identified its target segment in the export market. Any large market would have different market segments that differ substantially from each other. Different consumer groups exist according to income levels, age, lifestyle, occupation and education. A crucial element of the export marketing plan is to identify the segment of the customers that the business firm intends to reach.
In making this choice, the business firm should answer the following questions: who will buy its products in the export market? Why will they buy these products? Where are these customers located? What are their characteristics?
In this exercise it will be helpful to concentrate on within-segment similarities and between-segment differences. The business firm should choose the segment with the requirements that fit its product specifications best. For example if it produces high-quality premium priced porcelain ware, its target segment is likely to be high-income. Well educated young consumers.
A target market segment should be large enough to be profitable. An assessment of the size of the segment should therefore, be made before a final decision is taken to include it in the marketing plan.
3. Market Research
To succeed in export trade, a business firm must identify attractive export markets and estimate the export potential for its products in them as accurately as possible. Market research and forecasting are therefore, of great importance. Factors to be evaluated include the size of the market, the characteristics of demand, consumer requirements, trade channels and the cultural and social differences that may affect the firm’s way doing business with the market.
A small producer contemplating entering export trade may not be willing or able to allocate resources to expensive data collection methods. Firms in that situation can use published data to assess the market. They should, however, first evaluate the data for reliability and accuracy.
4. Product Characteristics
The business firm should next consider the products that it has to offer. An analysis should be any modifications required in the products, packaging changes needed labeling requirements, brand name and after sales services expected.
Many products must undergo significant modifications if they are to satisfy consumer and market requirements abroad. Other products require changes at the discretion of the producer only to enhance their appeal on export markets.
5. Export Pricing
In setting an export price, the business firm should consider additional costs that do not enter into pricing for the domestic market. These include such items as international freight and insurance charges, product adaptation costs, import duties, commissions for import agents and foreign exchange risk coverage.
Export pricing analysis should begin with these questions: What value does the target market segment place on the business firm’s product? How do differences in this product add to, or detract from, its market value?
In practice, these are difficult questions to research, but analyzing the prices and product characteristic of existing competitive products may reveal critical information. The analysis may so that it is not the cost of materials that determines the product’s value, but rather the customer’s perception of that value.
6. Distribution Channels
The potential exporter should consider the following distribution option:
a. Exporting through a domestic exporting firm that will take over full responsibility for finding sales outlets abroad.
b. Setting up its own export organization.
c. Selling through representatives abroad.
d. Using warehouses abroad.
e. Establishing a wholly owned sales subsidiary.
The choice of distribution channel will depend on the business firm’s export strategy and the export market. An export strategy is a blueprint for selling on target markets. If the firm intends to export a product that has a specific feature that should be a good selling point, to a market segment that is already well supplied, it may need to create greater awareness of the product through an appropriate promotional strategy. In this case, it may be better to appoint an agent who does not handle many products and can allocate the time needed to product.
Distribution channels should be chosen carefully and efforts should be made to maintain good relation between the parties concerned.
7. Promotion
The export marketing plan should provide details on the following aspects of the promotional strategy: Publicity method; advertising (who will be responsible for it, and how much the firm can allocate to it): trade missions: buyer’s visits; other promotional activities (which methods to use, how much to allocate); and local export assistance.
It is important to emphasize that the success of export marketing plan would depend upon adequate customer support and detailed time table for its implementation.
Customer Support
An export effort will be successful to the extent that the firm provides effective customer support. An exporter should remember that even the best product may fail without the customer support to trade intermediaries and the end user. In addition, customer support creates goodwill and loyalty to the exporter.
Timetables
A budget must be established for the export marketing plan. This should cover such basic aspects as sources of financial resources and a forecast of the export venture’s financial position after three to five years. A detailed timetable of activities must also be drawn up.