The key to exporting successfully is preparation, and the best way to ensure this is to have a clearly written plan, with stated goals, the timeframes by which you hope to have achieved them, and tasks assigned to specific people or teams in your business. You should draw up this plan once you have completed your market research.
The advantage of having a plan is that it allows you to identify whether you are executing according to it, or veering off course, and to decide what action needs to be taken as a result. The more detail in your plan, the better you will be able to measure against its success. It can also help you if you are seeking financial assistance, because it shows external investors that you are serious about exporting.
Having your aims clearly communicated in written form also ensures everyone involved with the plan is literally on the same page, and knows what their own roles and responsibilities will be. This section provides a template to follow when creating your own export plan.
A. Market selection
1. Target markets
Detail your target markets and the key characteristics that led you to choose them. This should be kept to a few key markets to begin with, because spreading your resources – both human and financial – across many markets often results in low return on investment.
Using an Ansoff matrix such as the one illustrated here can be a useful way of putting your strategic plan down on paper. This example shows how you might map your company’s current offering to your intended customers, along with the risks and benefits of each option.
2. Market positioning in target markets
Your market position in all markets may not be the same. A mass-market product in one market may be very high-end in others given import duties, freight costs and so on. Your plan should provide positioning for each target market.
3. Competitor analysis
Focus your research here on where your competitors sit in the market compared with where your product or service will sit. Completing this section requires a great amount of research to understand your competitors. Provide details of competitors in each target market.
4. Distribution methods
Outline how you will get your product or service to the end customers in each target market.
5. Sales goals
Write down your forecasts for sales figures and the timeframe by which you expect to reach your target.
1. Products/services for export
Include the key features and benefits of your products or services that make them attractive to potential export customers.
2. Changes to product/service required for export markets
Outline changes that will need to be made to your product or service for export markets. These changes could include packaging design or size, branding, labelling, design changes or redesigning content etc.
3. Production capacity
Provide details of your spare production capacity including any seasonal fluctuations. This will form a basis for important discussions with potential customers or partners and will help ensure you can deliver on orders accepted. If you have low levels of spare capacity, then address how you plan to increase capacity in order to meet potential sales. Waiting until you receive an order is likely too late to consider this issue.
C. Pricing strategy
This part of the export plan should address your pricing and how you will manage pricing under different circumstances such as foreign currency fluctuations or a competitor dropping its prices. Your export price calculation should include a list of costs need to be included. Here is an example:
- Potential costs
- Raw material cost
- Production cost
- Market entry cost
- Communication cost
- Export credit insurance (customer insolvency, bad debts, overdue accounts, commercial risks and political risks)
- Total export costs
- Profit margin (for example 25 per cent) based on the export cost
- Safety margin (for example 12 per cent)
- Margin for negotiation (for example 10 per cent)
- Export tariffs
- Total export price
D. Market entry
This section of your plan should outline your market entry strategy, including whether you plan to sell via wholesale or retail channels, if you intend to use a partner such as agent or distributor, set up an office or enter into a joint venture.
E. Promotional strategy
Include details here of how you plan to support your customers and partners such as agents or distributors. This should include the number and timing of market visits – you will need at least one, if not two each year per target market, and potentially more depending on the nature and demand of the market. You should also outline your plans for training in-market partners, preparing promotional materials – including translation if necessary – and advertising.
F. Action plan
Use this sample action plan to provide timing for following-up with those responsible for tasks in the export plan.
G. Management review and follow up
To give your exporting efforts the best chance of succeeding, management oversight is essential to review the plan and its outcomes. Reflecting on your sales performance regularly allows you to adjust the plan in response to what you measured against. Include key performance indicators that will be used to monitor export performance.