Export Connect’s Director Najib Lawand reveals 6 essential steps to succeed in export. Part 2 discusses how to set your goals for exporting and how to identify the best markets to focus your resources on.
Setting your goals in 2019
Where do you want your business to go?
Looking ahead to five years time, where do you want your business to be sitting? This is your overarching aspirational goal. Knowing clearly where you want to go is the first step to getting there.
Key point: Make your goal sustainable and realistic. Exporting to the international market is a significant investment. The foundations for success are a strong home base, and a strategic approach that is carefully thought out and managed.
Review your performance
If you are already exporting internationally, now is a good time to review your performance in different markets. Even if you are new to exporting, doing this exercise for your home market is crucial in understanding your strengths. Identify the countries where you are performing well (leading markets) against those where performance is lower or hasn’t met your goals (lagging markets). Look at performance across multiple indicators:
- Sales per capita – how well are your products performing in that country?
- Market share – is your brand breaking through?
- Growth in your category – is this a country with a growing market for your goods?
- Increases in sales – are your tactics for distribution and promotion delivering?
At home and abroad, identify both the factors you need to improve, and the achievements you can build on.
Who are you?
In setting your future goals, and especially for growing your business in the international market you need a strong sense of who you are as a brand. What is it that makes your brand unique, that gives your products the competitive edge over your competitors?
And who do you want to be in your future markets – are you aiming to become the market leader, or one of several players slip-streaming in the leader’s wake? Is your appeal niche or broad? Is your MO premium quality or price point? Remember your expectations need to be in line with the resources and investments that are sustainable for your company.
Prioritize your markets (with your head, not your heart)
There are hundreds of market opportunities around the world and trying to break into them all isn’t going to work. The key to successful exporting is focusing on the right markets for your products. That might be the buzzing market of the moment, or it might be somewhere less well known, but ideal for your category. Look at these factors when assessing market suitability.
- Sociodemographic factors:
Population size, and gross income, disposable income, and expenditure on food per capita. Look at the factors most relevant to your brand. Which markets have the income and expenditure to favor your product?
The growth of the “global middle class” is a hot topic in exports. This is a population of consumers who are seeing their disposable incomes rise and want access to quality products. The good news for Australian exporters is that this new demographic are concentrated on our doorstep in Asia.
However, money isn’t everything – consumers with the cash to buy your product are no use if you can’t break into the market.
- Market opportunity:
How big is the market for your category in each country of interest? What’s the volume and value? Is it decreasing or increasing in consumer demand? And what’s the average price for your category of products in that market? How does that stack against your costs?
How are retailers and suppliers concentrated in the market? What % of the market share is held by big 5 retailers or manufacturers?
In some otherwise favorable countries the market is locked down by local or international giants. You don’t want to be competing with these big businesses on their home turf. Look at other exporters’ behavior in these markets – if Australian companies aren’t operating in your category, research why not. For example, not much Australian chocolate gets exported to Belgium, and for good reason!
- Is the market open to trade?
The complex mass of trade deals around the world mean it isn’t a level playing field. Which countries are open to trade from Australia? Which have customs issues, which charge high import tariffs on your product category? Know the customs codes, categories and requirements for your products.
Investing time and resources to do this analysis properly is crucial. Launching your export business into the wrong market will be costly, damaging your sustainability at home and abroad. On the flipside, get it right, and the route to reach those goals will become clear.
Where to from here?
Part 1 in this series looked at the reasons to export in 2019, and now you should have an idea of how to work to set your key goals and identify the most appropriate markets to invest in.
Next up, we need to look at how to allocate your resources to break into or expand your presence in those markets. Parts 3-6 will cover Target Consumers, Markets & Channels; Market Entry Strategies & Selecting Partners; Brand Activation; and Support Available. It’s going to be a great year – if you’d like to learn more, or simply start the conversation, reach out. I’m always happy to connect.