SAMED Presentation to Portfolio Committee on Trade and Industry BBBEE Amendment Bill 8 March 2013.
SAMED · International organisations’ research reports (e.g. International Trade Centre)...
Transcript of SAMED · International organisations’ research reports (e.g. International Trade Centre)...
SAMED
Export Development / Orientation / Information
Workshop
18 January 2017
Program Contents
International Trade:
Is exporting for you?
Getting ready to export
Finding the right market
Other basic export issues
Who can assist you?
Export Challenges
Not nurturing enough exporters
Fly-by-night exporters!
Lack export commitment
Little or no preparation
Start before being export ready
Going about it in wrong way
Not allocating the required resources
Aim of the programme
Expected and desired outcomes
Gain an understanding of the export process
Obtain an overview of export marketing basics and what is involved
Gain understanding of the export marketing planning and process
Main categories of export barriers
1. Motivational - a belief that it is:
Easier to do business at home
More cumbersome, time consuming and costly to
export
Impossible to compete internationally
2. Informational
Companies lack detailed information regarding • market opportunities
• market size
• prices of similar products
• quality requirements
• packaging requirements
• distribution channels
• payment terms
Main categories of export barriers (continued)
3. Resources
The average company simply does not have the
resources to always actively pursue the export
market in terms of: • manpower
• time
• money
Is exporting for you?
To answer if exporting for you consider following
What is exporting?
Why should you export?
Advantages of exporting
What are the risks of exporting
When is a company export ready?
Export assessment (exercise)
What is involved in an export process?
What is Exporting?
Entails the provision of goods/services across our borders and there are two types of exporting:
Direct Exporting
- Deal direct with importers overseas
- Appoint agents and/or distributors to sell
Indirect Exporting
- Happens in SA through a third party
- Trading houses, local agents or merchandisers
As a country
Use of national resources more effectively
Increase level of technological development
Expand and develop economy beyond local market limits
Increase job opportunities and reduce unemployment
Earn foreign currency
Foster economic growth
Slogan: “EXPORTS UP OR SOUTH AFRICA DOWN”
Why export?
Why export? You as a business:
Sell more and increase profit
Expand market opportunities
Obtain economies of scale
Spread risk
No seasonal fluctuations sales all year
Improve efficiencies and product quality
Learn to run bus more competitively
Improve your competitiveness
Gain know how & new technology
Benefits of exporting?
Country’s prosperity depends on it!
Develop additional sales
Optimising prices
Maximise resources – capacity utilisation
Levelling seasonal demand
Distribute risk i.e. when local downturn
Capitalise on unique product or technology
Improved competitiveness - exposure
Gain know how &combat foreign comp’s
Risks of exporting? Long term investment with many potholes!
How long – don’t expect quick results
Financial
Payment
Cash flow
Currency by quoting in Rand & fluctuations
Working capital to buy more raw materials
Intellectual property
Insurance claims – product liability
Inadequate resources i.e. time, money and people
More Risks
Slow payers
Additional plant facilities
Driver and administration of activities
Product not accepted in export market
Adapt catalogues, brochures & materials
Packaging & labelling requirements
Quality standards
Accreditations i.e. HACCP
Typical company growth
Stage 1: Establish a local market presence
Stage 2: Develop national market or export?
Stage 3: Grow in local market or export?
Stage 4: Expand by product diversification or export?
Stage 5: Move into exports
Stage 6: Become international player
Stage 7: Become global player
Basic export options In the beginning
Produce to export goods direct
Produce and sells goods to an export trader in South Africa
Produce exports as part of a group or co-operative or Joint Action Group (JAG)
Later
Franchise or license the product/service in foreign markets
Establish operations in one or more foreign markets
Why exporting is different
People-related differences
Different culture, language and customs
Consumer and user preferences
Distance from your country:
– different transport arrangements
– longer lead times
– communications
Competition is tougher
Buyers are demanding and have one chance to prove yourself
Why exporting is different
Legal framework
Different laws
Different product standards
Health and sanitary regulations
Foreign currency issues
Tariffs and taxes involved
Paperwork is more cumbersome
Are you export ready?
Export Ready Factors
Company
Production – capacity, range,
Marketing plan, info & skills
HR – skills, experience, etc.
Financial Resources
Many aspects to consider
Does it fit in with your company goals?
International experience
Management and staff
Production capacity
Quality & standards
Packaging & labelling
Financial capacity
Export readiness: Is the company export ready?
Management commitment
Production capacity
Marketing planning
Financial resources
Export admin skills
Export readiness: Is the product exportable?
Does it meet a customer need?
Is it a ‘quality’ product?
Does it offer value for money?
Does it have any special features?
Could the enterprise modify it to meet individual requirements?
Will it travel well?
Can the enterprise produce it in sufficient quantities to make exporting possible?
Export readiness: Production facilities?
Do you have spare capacity?
If so what volume? If not?
Sufficient production space?
Technology used
Good manufacturing practices
Packaging, labelling & storage
Export readiness: Financial resources?
Can you fund an export order
What payment terms
Machinery for expansion
Market development expenses
Certification/accreditation cost
Export readiness: Marketing?
Export market information
Competitor information
Target market info
Marketing plan
Identification agent/distributor
Marketing skills and experience
Export readiness: summary
Do you have and acceptable product
Ado you have spare production capacity
Production efficiencies
Price competitiveness
Business and communication systems
Access to finance
Export market experience & knowledge
Management commitment
Time and staff resources
Determining a company’s export readiness – YOUR TURN
Test your export readiness
Export audit/readiness
Score Indications
90% plus – ready should be exporting
80 -89% - Export ready
70 – 79% - Specific aspect to work on
60 -69% Several areas require attention
50 -59% - Not export ready and lot of work to be done
Below 50% - Far from export ready
The Export Process Many aspects to the process:
Feasibility analysis – SWOT, capacity, capabilities, profile markets, consult trade specialists, register and apply
Preparation
Plan foreign market entry i.e. seek funds
Market research, evaluate markets, comply with requirements, methods of distribution, pricing & costing and develop marketing plan
Implementation
BASIC EXPORT PROCESS SOUTH AFRICA
FOREIGN MARKET
EXPORTER
Order
IMPORTER
Enquiry
3
Appoint agent? Promote product
2
Research markets, identify
standards, find buyers
1
Decide if export ready
Goods
Produced
Pro-Forma
Invoice or quotation
CUSTOMS IN
IMPORTING COUNTRY
Goods in transit
Check price,
delivery
Documents SHIPPING /
FWD AGENT
Documents
CUSTOMS IN
SOUTH AFRICA Documents
CARRIER
Payment
Documents
Getting ready to export
Register as an exporter
Start preparation – main reason of export failure!
Obtain market information
Develop export marketing plan
Identification agent/distributor
Allocation of resources
Components for an export marketing plan
SWOT analysis
Product portfolio
Features and benefits
Target market segments
Export objectives readiness & SMART
Marketing strategies to achieve obj’s
Marketing planning basics
Market analysis
SWOT analysis
Situation analysis
Capacity analysis
Competitor analysis
Key marketing issues
Market Information
Market segmentation
Competitive advantage
Marketing orientation
Customer service
Marketing Planning
Sales Force Productivity
Exports
Marketing basics: What is marketing?
“The management process by which
customer requirements are identified, anticipated and
satisfied profitably.”
What is Marketing?
Marketing starts with:
Real knowledge of the market place
Real knowledge of your customer
Real knowledge of your competitors
Effective marketing information is a key weapon in combating the impact of competition and changes in market conditions
Marketing basics: The four Ps of marketing
Product
Price
Promotion
Place (distribution)
Foreign environment (uncontrollables)
Economic
forces
Competition
Technology level Distribution
Geography, infrastructure
Culture
Political,
legal forces
Controllable and uncontrollable elements
Domestic environment
(uncontrollables)
Economic
climate
Competition
Political,
legal forces
Place
Product
Promotion
Price
Controllables
Four P’s of strategic marketing
Probing: Researching the market you’re interested in
What is the market like?
Who’s in it?
What do they need and want?
Partitioning: Customers are not all the same
Cluster into different groups
According to customers different needs
Four P’s of strategic marketing (continued)
Prioritizing: Make choices about which segments to target.
We don’t have the resources or capabilities to service every need!
Positioning: The image we want to create
Who we are & what do we stand for?
What level of service quality, price and other key deliverables are we offering
Export planning basics: What is a marketing plan?
A set of objectives, decisions and actions
that takes the business from where it is
to where the owner wants it to be
IN
?
YEARS NOW
Export planning basics: Why planning is important
It helps to
– decide if the objectives are realistic
– decide what resources (machinery, people, money, skills) are needed to reach the objectives
– know what time period is necessary
– keep focused
Banks, DTI and other bodies need to see your business and marketing plan
Export planning basics: What makes up a marketing plan?
Mission statement: Why the company is in business
Company /market audit and SWOT analysis:
Knowing where the company is
Objectives: Knowing where the company wants to be
Strategies and action plans: Deciding the right actions to achieve objectives
Budget: Working out how much it is going to cost
Controls and reports: Measuring performance
Framework for an Export Marketing Plan
Business/marketing plan structure
Presentation
Introduction
Situation analysis
– Mission statement
– SWOT analysis: opportunities and benefits
– Market audit
Objectives
Strategies and action plans
Budgets
Export marketing planning process
SITUATION
ANALYSIS -
WHERE YOU
ARE
MARKETING
OBJECTIVE -
WHERE YOU
WANT TO BE
MARKETING
STRATEGIES -
HOW TO GET
THERE
COST OF
ACTIONS -
MARKETING
BUDGET
Market
feedback Sales
reports
MONITOR
PROGRESS - MAKE
SURE YOU GET
THERE
4 P’s of marketing
Product/market grid
Market research
Adapt product
Set price Distribution
Promote product
Sales
Personnel
ACTION PLANS -
WHO DOES WHAT,
WHEN
Mission statement
Market audit
SWOT
Identify problems
Decide action
Learn from
mistakes
FEEDBACK
AND
CORRECTIVE
ACTION
Sales targets
Target markets SWOT
Who can help you?
Help with specific products:
Export councils
DTI industry sector task teams
Industry associations
SABS & CSIR
Who can help you?
With research & market planning:
Parastatals – ARC, CSIR, Seda, TISA
DTI
Business & industry association
International trading companies
International Trade Centre (ITC)
CBI - promote imports of dev countries
Consultants, banks, freight forwarders
Information resources
Seda, DTI, SABS, CSIR
Export councils
Business & industry association
International trading companies
International Trade Centre (ITC)
CBI - promote imports of dev countries
Consultants, banks, freight forwarders
Information sources Trade statistics, government regulations
International organisations’ research reports (e.g. International Trade Centre)
Newspapers and journals
Commercial directories and reviews
South Africa’s trade representatives abroad
Foreign embassies and trade offices in South Africa
Chambers of commerce and industry and trade associations
More information sources
Market research organisations
Export promotion organisations
Banks and other export service companies (e.g. freight forwarders)
Consumer organisations
Local companies
Some useful web sites Cargo Info: www.cargoinfo.co.za
CBI (Centre for the Promotion of Imports from Developing Countries), The Netherlands: www.cbi.nl
CIA World Factbook: www.odci.gov/cia/publications/factbook/index.html
FXTOP s.a.r.l.: http://fxtop.com
International Trade Centre: www.intracen.org
International Trade Centre product maps:www.p-maps.org (register at http://mas.admintools.intracen.org/accounts/ registration
More useful web sites
SA Department of Trade and Industry: www.thedti.gov.za
SA Revenue Services: www.sars.gov.za
UK Statistical Office: www.statistics.gov.uk
World Bank: www.worldbank.org
World Trade Organisation: www.wto.org
World Travel Guide (Columbus Publications) www.worldtravelguide.net
Also see sites listed in EOC Annexure 1
CBI market surveys Fresh fruit and vegetables
Fishery products
Preserved fruit and vegetables
Health foods
Cut flowers and foliage
Gifts and decorative articles
Toys and games
Stationery items, office and school supplies
Domestic furniture
CBI market surveys cont
Electronic components
Hides and skins
Chemicals
Essential oils and oleoresins
Packaging materials
Sanitary ware and ceramic tiles
Natural ingredients for cosmetics
Computer software and IT services
Finding the Right Market
What does SA export?
To which countries do we export
How to choose right product
Where to find info and reports
Ways to enter export markets
How can you be represented
Overview of international trade
What is international trade? How does it take place? Who are the main players?
The WTO, GATT and ITC
What is the role of governments?
What is the role of the private sector?
What restricts international trade?
Agreements
SADC
EU
AGOA
COMESA
China Textiles
World Trade Organisation (WTO)
Is international body to:
– implement the General Agreement on Tariffs and Trade (GATT)
– resolve international trade disputes
– facilitate multilateral trade negotiations
Was formed 1 January 1995 after Uruguay
Round
Has 158 member countries, with 30
observers/ applicants
Principles of GATT
Trade between WTO members should be non-
discriminatory (Most-Favoured-Nation concept)
Progressive reduction of tariffs and other trade
restrictions.
Domestic industries should be protected only by
tariffs and not by non-tariff barriers.
Generalised System of Preferences (GSP) for
developing countries.
International Trade Centre (ITC)
Formed by UNCTAD (UN Council on Trade and Development) and WTO
Role is to help develop international trade of developing countries
Provides assistance, training, information through government departments of developing countries.
Role of government
Negotiating trade agreements
Government-to-government and multi-
lateral interventions
Creating a favourable trade environment
Encouraging investment
Assisting business / export development
Supporting export education
Creating & providing export incentives
Promoting exports
Role of the private sector
Organised private sector provides export
promotion and support services
Export service companies provide banking,
insurance, freight forwarding, transport and
other services
Individual companies gear themselves to meet
the challenges of international trade
Individual co’s strive to become export ready
Restrictions on international trade
Import duties of various types
Quotas and restraints
Government procurement policies
Technical regulations
Special interest groups
Sanctions and boycotts
Restrictions on international trade
Especially in developing countries:
Poor physical trade infrastructure
Poor services infrastructure
Lack of business acumen
Lack of foreign exchange
Lack of funds
Customs classification: tariff structures
Customs Co-operation Council
Evolution of classification systems
Harmonised System of classification for tariff purposes
Principles of HS classification system
22 basic classification sections - do not form part of number system
Each section consists of chapters - 98 in total
Each chapter consists of headings - 1241 in total
Each heading consists of sub-headings - 5019 in total
Sub-headings may be further sub-divided by individual countries
Tariff structures
General rates of duty
Most-favoured-nation (MFN) rates of duty
Preferential rates of duty
Excise duties may be levied in addition
Import surcharges may be levied
Anti-dumping and countervailing duties
Dumping: selling in export market below domestic market price or at unfair price
Anti-dumping duty against specific exporter
Countervailing duty against all exporters of specific products from particular country providing export subsidies
South Africa’s regional trade: 2012
REGION IMPORTS RM
EXPORTS RM
Africa 61 161 103 925
Europe 238 102 216 512
Americas 97 543 81 591
Asia 313 474 194 044
Oceania 15 526 13 481
Unclassified 1 846 52 860
Ships’ stores 0 687
TOTAL 727 632 663 100
Regional market opportunities
Western Europe
traditional trading partner
wide range of goods established
emphasis on quality, price and service
niche markets
EU programme includes partnership concept for SMMEs
Eastern Europe
traditional buyers of SA raw materials
food products developing
many selected other goods
Payment issues? Language issues?
generally difficult market area for SMMEs
Regional market opportunities
Regional market opportunities
North America
major consumer and industrial market
diverse demand
regional approach
niche markets essential
may be too large for SMMEs unless specific outlets identified
South America
selected SA products are well established
opportunities for JVs in other areas
more liberal trade regimes aid imports
similar regional integration aims and small business development as SADC, language and culture differences
Regional market opportunities
Far East
rapidly growing trade with SA
established buyers of SA raw materials
aggressive marketing needed for manufactures
highly competitive area; unique product features needed
Regional market opportunities
Australasia
trade is growing from a small base
economic synergy creates some opportunities
gateway for SA to Pacific Rim
SA is gateway into Africa
competitive market with supplies from Far East
Regional market opportunities
Africa
25% growth p.a. in trade for more than a decade
SA has major competitive advantages
Africa takes wide range of SA goods, especially manufactures
Regional market opportunities
SA companies have production and marketing JVs
Aid-funded projects now open to SA companies
Natural first export region for SA firms; good prospects for entrepreneurs; some resentment of SA
Regional market opportunities
South Africa’s main trading partners: 2012
Total two-way trade
South Africa's imports from…
South Africa's exports to…
R millions R millions Rank R millions Rank
Germany 129 846 82 417 1 47 429 3
United States 123 710 58 147 3 65 563 2
People's Rep of China 117 655 82 411 2 35 244 5
Japan 107 069 40 603 5 66 466 1
United Kingdom 69 630 29 529 6 40 101 4
Saudi Arabia 48 657 45 946 4 2 711 19
Netherlands 38 416 10 074 18 28 342 6
India 37 465 18 813 10 18 652 7
France 31 367 20 778 9 10 589 17
Italy 30 770 17 726 11 13 044 13
Angola 29 687 22 349 8 7 338 21
Iran 28 649 27 374 7 1 275 20
Belgium 26 109 9 374 19 16 735 8
Australia 25 749 13 550 15 12 199 16
Rep of Korea 24 274 11 952 17 12 322 15
South Africa’s advantages & challenges
ADVANTAGES
Trade agreements
Diverse economy
Political stability
Flexible producers
Good trade relations
Fair physical
infrastructure
Good service
infrastructure
CHALLENGES
Distance from major
wealthy markets
High cost of transport
Lack of skilled
supervisors and labour
Labour costs
High production costs
Power supplies & cost
Crime
How can you be represented?
Commission agent
Distributor
International trading house
Branch marketing office
Buying houses and import agent
What is difference between agent & distributor?
Commission only
Distributor adds margin
Can control agent but not distributor
Distributor more access to market?
Agent may be well connected and “hungry”
Amount of commission earned
Distribution channels
Options
Manufacturer
Foreign
Agent
+ 10%
Retailers
+ 120%
Distribution channels
Option Manufacturer
Foreign
Agent
+ 10%
Distributor
Retailers
+ 100%
Distribution decisions in international
marketing
Short
channels
Manufacturers of
consumer goods
Consumer
Long
channels
Agents
Retailers
Wholesalers
Retailers
Retailers
Retailers
Wholesalers
Agents
Channel options in each market
Agency agreement
Commission
Area applicable
Expenses
Marketing and promotion
Service
Other Issues
Intellectual property (IP) and types
Business etiquette in different countries
What are quality standards?
Financial needs for exporting
Adjusting packaging and labelling
Amount of commission earned
What is quality?
Quality is product’s ability to satisfy stated and implied needs
Quality management is setting quality policy, objectives and responsibilities and implementing them effectively
Quality control refers to techniques and activities to fulfil quality requirements
Dimensions of Product Quality
o Quality Killers
Reliability
Conformance
o Quality Drivers
Performance
Durability
o Quality Enhancers
Features
Serviceability
o Quality Aesthetics
Appearance
Reputation
Export Marketing and Investment Assistance Schemes (EMIA)
Funded by DTI, through EMIA who is part of TISA
Partially subsidise marketing and investment promotion activities
Marketing activities:
– primary export market research, including promotional items
– outward selling trade missions
– inward buying trade missions
– exhibition assistance – individual or national pavillions
– industry sectors
EMIA Program Objectives
Provide marketing assistance to develop new export markets and grow existing export markets
Assist with the identification of new export markets through market research
Assist companies to increase their competitiveness by supporting patent registrations, quality and product marks
Increase the contribution of black-owned business and SMMEs to South Africa’s economy
EMIA: who qualifies?
SA manufacturers of products
SA export trading houses
SA agents representing 3 or more SMMEs and/or HDI-owned firms
SA export councils
Industry associations
Joint Action Groups (JAGs)
EMIA: Eligibility Criteria?
All entities should have traded for more than 1 financial year
Must be a legal registered entity except sole proprietor and partnerships
Must be a tax payer in good standing
Must submit applications in time – 2 months
For events must submit 6 months prior to event
Entities applying may be subject to a site visit
EMIA: classification of companies
HDIs, at least 51% owned, must be SA and SMMEs
SMMEs, private and independent, and:
– less than R40 mil turnover a year
– total assets, excluding fixed property, less than R15m
– fewer than 200 full-time workers
Other companies
Note a new category: Emerging Exporters (similar to HDIs, less than R5 m t/o year)
Financial support Assistance is provided on the following basis:
Air Travel (economy class)
Daily subsistence
Transport of samples for specific events
Development of marketing materials for specific events
Exhibition costs relating to stand rental, stand design, services and set up costs
Costs of brochures & marketing
EMIA: general requirements
Applicant must be viable, some experience/training, product/supply capacity, export ready, etc.
Must be registered with Customs & Excise
Applications must show marketing plan
Application must be on current form
Must be export ready
Must apply months in advance
EMIA: Generic Application Docs
Export registration certificate
Certified copy of Certificate of Incorp or certified copies of ID
Comprehensive colour brochure or DVD
Latest financial statements or 3 months bank statements
Export marketing plan
Three air ticket quotes from 3 SP’s
Three freight quotes from 3 SP’s
EMIA: applying and claiming
Apply before the activity; note the required notice i.e. 2 months for PMR & 3 months for individual exhibitions & 6 months pavilions
Specific application form for each scheme
Keep all documentation showing costs
Claim after completion on combined claim form
Attach all required documentation
EMIA: Generic Claim Documents
Original / copy of air ticket
Copy of passport with depart & entry stamps
Original / certified copies of invoices for transport of samples
Original / certified copies of invoices for exhibition cost
Valid tax clearance certificate
Credit order instruction form (verified by bank)
EMIA: preferred service providers
Certain travel agents and freight forwarders appointed
Eligible travel/freight costs reimbursed only if preferred providers used
Cancellation fees levied if tickets cancelled
EMIA: PMR compensation
Primary market research:
– airfares: for HDIs & SMEs - 100% to maximum of R13 000;
– Other companies - 50% to a maximum of R6,500
– subsistence: all companies R2,000 per day
– transport of samples: R1, 000
– Marketing materials designing & printing of export brochures, promotional videos or CDs R10,000 per annum
– Product registration – 50% of the actual costs to a max of R100,000 per annum; 50% of the cost relating to registration of a product in a foreign market such as patents, trade marks and quality marks
Individual exhibition compensation
Individual exhibitions:
– airfares: HDIs & SMMEs - 100% to maximum of R17 000;
– subsistence: HDIs & SMMEs - R2,300 per day
– transport of samples: HDIs & SMMEs - R20, 000
– Exhibition costs – HDIs, SMMEs and other size – 100% of the exhibition costs to a maximum of R50,000 including foreign VAT (including the costs of marketing material within the R50,000 limit up to a maximum of R50,000)
Individual mission compensation
Individual mission assistance:
Business or economy class airfares:
– 100% for HDIs to maximum R13 000;
– 100% for SMMEs to maximum R13 000
– 50% for other size & maximum R6,500
– subsistence: R2,000 per day (Up to 5 days)
– Rental of vehicle – R200 per day (Up to 5 days)
SSAS (Sector Specific
Assistance Scheme)
All benefits will be paid up-front for qualifying individuals or entities – definition of emerging exporter is a business or individual that: Is an SMME owned by persons of SA nationality Has EMIA qualifying product or service Has traded locally for at least 12 months Must have been involved in limited or NO exports and At least 51% must be owned by black person(s), woman or
disabled (HDIs) The company or person should have annual turnover of
less than R25 million
SSAS Eligible Project
Coordinator
: The following entities qualify for assistance: Export councils
Industry associations
Provincial Investment & Economic Development Agencies
Business Chambers
Small Enterprise Development Agency (Seda)
Local Municipalities
Metropolitan Councils
SSAS Limitation of
Assistance Offered
Assistance limited to entrepreneurs only – staff and consultants are excluded
Entities will participate 4 times annually in programme Focuses on exhibition participation & missions only Minimum 7 to max 20 entities will be assisted in project Product must have minimum local content of 35% All applications must be submitted at least 4 months
prior to the commencement date of the vent Participants will be allowed to arrive 1 day prior to the
exhibition official starting date Only projects evaluated and supported by TISA will be
considered
SSAS Financial
Contribution 100% to a maximum of R1,9 million per project on:
Local and international airfares
Accommodation breakfast and dinner
Ground transport
Marketing materials
Transport of samples
Exhibition costs
Specialized training i.e. product development, design, colour trends, project management, ect
EMIA information
Keep up-to-date; use latest application and claim forms
Visit DTI web site:
http://www.thedti.gov.za and follow links
to exports incentives EMIA
Ask seda for assistance
Other incentives
Import duty drawbacks, refunds and rebates
Export credit insurance
Financing schemes through (IDC) Industrial Development Corporation
Regional industrial development programmes
Various small business assistance schemes
Range of DTI incentives
Specific export barriers
1. Lack of commitment
Approach is half hearted
2. Lack of perseverance
Giving up too easily
3. Lack of sufficient capital
You need money
4. Fairweather exporters
Only when local conditions are bad
5. Lack of international exposure
Past isolation
6. High protection (import tariffs) of the past
Specific export barriers (continued)
7. Lack of information and knowledge
8. Lack of experience
How to go about it
9. Not segmenting export markets
Shotgun approach
10. Following wrong strategies
Choice of • distribution channels
• appointment of agents
• payment terms
Market orientation
What is it?
What is its impact?
How do we achieve it?
Relationship between marketing orientation and commercial success?
Marketing has moved center stage in successful companies world wide – we should too!
Export Orientation Quiz! Name the 4 P’s of marketing?
Name the 4 P’s of strategic marketing
Name main reason for export failure
List 3 main export barriers
Why do you need an export marketing plan
What and who is EMIA, WTO, GATT, TISA
What export incentives are you entitled to
List factors contributing to export success
What is most important to be export ready?
Export Value Chain Map
How does a VC affect you competitiveness
Draw a export value chain map for consumer goods
What is a market niche or segment?
A market niche or segment
is a group of end-users
that is large enough to be profitable
but small enough to be served efficiently
and where the exporter can be the sole
or preferred supplier
What makes a market niche?
Income level
Age level
Gender
Cultural and/or religious issues
Shared life style e.g. sport, hobbies, leisure activities, health focus
Physical location or size
Other common needs or preferences
Importance of niche marketing
Adds focus to export marketing activities
Allows scarce resources (people, time, money) to be used more effectively
Provides opportunity for even a small exporter to be an important player in selected markets
Relieves pressure on price
Enables market research to be targeted
Product factors
Product: design, quality, materials, compliance with international standards, accreditation, etc.
Packaging, labelling and brand name
Service: instructions on use and care, servicing and repair (if relevant), spares, efficiency of manufacture and delivery
Price factors
Price setter or taker?
– Product differentiation
– Market demand
Local, regional, global pricing?
Quantity pricing?
Other aspects i.e. technology
Only four ways to higher profitability
Sell more of your product at right price
Sell at higher prices
Speed up your stock turn or
Cut costs
What is Competitive Intelligence?
CI is actionable recommendations arising from a systematic process involving planning, gathering, analyzing and disseminating information on the environment for opportunities & developments that have the potential to affect a company’s competitive situation
Competitive advantage
Grows out of improvement, innovation and change
Learning faster than your competitor
Distribution resources & coverage
Product differentiation
Customer service orientation
Quality or uniqueness of products & services
Competitive intelligence resources and application
Manufacturing and management expertise
Customer loyalty
More the jockey than the horse
Understand the sources of competitive
advantage
Specialized knowledge
Customer orientation
Trade relationships
Technical expertise
Flexible management
Market Coverage
Economies of scale
Financial structure
Shared experiences
Market information
SUPERIOR POSITION
Costs
Differentiation
Protected niche
SUPERIOR SKILLS
SUPERIOR RESOURCES
Examples of SFP Personal selling in South Africa
Average time selling 27% (11-50%)
Average time traveling 20%
Time spent on admin/office 53%
On top of this 60% of time spent with LP customers
Selling cost as % of sales is increasing
Product Positioning and Market Share
Product-Price Position, Marketing Efforts,
and Market Share
Potential positioning
Market share
leader
Quality leader
Service leader
Technology
leader
Innovation leader
Customizing
leader
Prestige leader
Expertise leader
Bargain leader
Value leader
Marketing Plan Framework
Marketing Mission –what business? Product /Service Portfolio Target Market Segments per product Market Potential per TMS Export Marketing Objectives Marketing Strategies - Product - Price - Promotion - Place Implementation & Control of the Plan
Action plans
Each strategy requires certain actions
Each action must have a date and a person responsible
Important to identify all actions for budget - actions cost money!
Place/distribution policy Sell direct to retail outlets.
Identify possible specialised chain stores/outlets: Marcia by Internet, telephone calls, within 6 weeks.
Contact selected outlets and set up meetings for Ricardo: Marcia within 2 months.
Market research on wood and design preferences: Ricardo; within 4 months.
Research on technical regulations regarding fittings: Marcia via SABS, within 2 months.
Research to determine mark-ups at retail level: Ricardo on market visit within 4 months.
Calculate export costs to CIP suitable named place in the UK: Marcia within 2 months.
Objective Develop
market for small lamp
bases in the United
Kingdom: Sell 2 500
units within 18 months
Product policy: Research to determine type of wood, fittings, other preferences, regulations, etc. Then firm up policy.
Pricing policy: Aim at low-volume/medium price market. Determine volumes with selected retailer. Delivery term CIP suitable named place. Quantity discount on early payment?
Promotion policy:
Direct marketing to identified specialised outlets in southern England.
Print new brochure.
:
Research to determine retail pricing levels: Marcia through Internet within 2 months.
Apply to EMIA for primary market research assistance for brochure: Marcia within 2½ months
Plan UK market visit and obtain quotations from travel agent; decide on samples to take: Marcia within 2 months.
Contact graphic designer for new brochure: Ricardo within 1 month.
Marketing planning process diagram
Test your customer service quality commitment
Does your company/do you Yes No
Have a mission – or vision statement that includes customer service?
x
Have image/position in the market-place that includes customer service i.e. expect excellence?
x
Conduct regular, ongoing customer service surveys x
Set standards for each customer service contact point
x
Audit service levels x
Test your customer service quality commitment
Does your company/do you Yes No
Know the total cost of acquiring a new customer and cost of losing a customer?
x
Provide ongoing customer service training? x
Include customer service bonuses or incentives as part of your compensation program?
x
Have a quality improvement process to provide error-free service to clients?
x
Test your customer service quality commitment
Does your company/do you Yes No
Track why customers start/stop using your products and provide easy access for customers to voice complaints?
x
Regularly thank customers for their business? x
Regularly evaluate customer complaints? x
Communicate to all employees through meetings, speeches or newsletters the importance of customer satisfaction?
x
Score on Service Commitment Test
Yes
Answers
10 - 13 Customer satisfaction STAR. Your company has probably received recognition for its service levels – a rare achievement for a South African company. Your company should be honored by a National Quality Award.
7 - 9 Customer satisfaction in sight. Not there yet, but something is starting to happen. Moved from vision to making it reality
3 - 6 Inconsistent at best. Sometimes it’s good, some times it’s bad. Neither employees or customers are getting a clear message.
0 - 2 Customer service is mostly lip service