Export marketing strategies

• Export marketing is marketing activities to sell products/services in foreign markets.
• It factors in understanding international markets and managing the exporting.
• It is more complex than domestic marketing due to the differences in culture, language, laws, and regulations.

Key Aspects of Export Marketing

• Market research is key to identifying viable foreign markets & understanding customer needs
• Adapting products/services is needed to meet local requirements/preferences.
• Pricing strategies consider costs, exchange rates, tariffs, and competition.
• Distribution channels need to be effective at reaching customers in foreign markets
• Promotion strategies need adaptation to suit local culture and media.
• Customer service is key for building long-term relationships with international customers.

Developing an Export Marketing Plan

• Situation analysis assesses company strengths/weaknesses and external market opportunities.
• Export objectives are specific, measurable, achievable, relevant, and time-bound (SMART).
• Target markets are prioritized based on potential and alignment with capabilities.
• Marketing strategies outline the specific tactics a company will use to compete.
• Implementation means putting the marketing plan into action and monitoring.
• Evaluation involves measuring results against objectives and making adjustments as needed.

Market Research in Export Marketing

• Secondary data (government stats, industry reports) can inform on market size/trends.
• Primary data collection (surveys, focus groups) provides insights into customer needs.
• Online tools can identify potential customers, partners, and distributors.
• Trade shows offer opportunities to network and learn about new products/technologies.
• Market visits offer firsthand experience of the local business environment.

Export Pricing Strategies

• Cost-plus pricing adds a markup to the cost of goods to cover expenses and profit.
• Competitive pricing sets prices based on competitors in the target market.
• Market-based pricing sets prices based on what customers are willing to pay.
• Penetration pricing sets a low price to quickly gain market share.
• Skimming pricing sets a high price to maximize profit early in product launch.

Export Promotion Strategies

• International media advertising can reach a wide audience but requires considering cultural differences and language barriers.
• Public relations (press releases, events) can generate publicity and build awareness.
• Sales promotions (discounts, coupons) can stimulate demand and encourage trial.
• Trade fairs can showcase products/services to potential customers.
• Direct marketing (email campaigns, catalogs) can reach targeted audiences.
• Personal selling involves building relationships and providing custom solutions.

Export Distribution Channels

• Direct exporting entails selling directly to customers without intermediaries.
• Indirect exporting means using intermediaries (distributors/agents).
• Licensing grants a foreign company the right to manufacture and sell products.
• Franchising grants a foreign company the right to operate a business.
• Foreign direct investment establishes a physical presence in the foreign market.

Export Finance

• Export finance describes how exporters fund international sales/manage risks.
• It involves securing payment, managing risks, and accessing finance for exports.
• Export finance enables international trade, especially for SMEs.

Key Aspects of Export Finance

• Payment methods (letters of credit & documentary collections) provide security.
• Currency risk management tools (forward contracts, options) manage fluctuations.
• Export credit insurance protects against non-payment by buyers.
• Export financing programs (loans, guarantees) help exporters access capital.

Payment Methods in Export Finance

• Cash in advance requires the importer to pay before the goods are shipped.
• Letters of credit (LCs) are issued by a bank, guaranteeing payment upon document presentation.
• Documentary collections involve sending shipment documents to the importer's bank, which releases them upon payment/acceptance.
• Open account allows the importer to pay at a later date, like 30-90 days after shipment.
• Consignment involves retaining ownership until the goods are sold.

Managing Currency Risk

• Spot rate is the current exchange rate for immediate currency delivery.
• Forward rate is an exchange rate agreed upon for future delivery.
• Currency options provide the right, but not the obligation, to buy/sell currency at a specific rate on/before a certain date.
• Natural hedging matches foreign currency inflows and outflows.

Export Credit Insurance

• Commercial risk covers losses from buyer insolvency or refusal to pay.
• Political risk covers losses from government actions like war or inconvertibility.
• Export credit insurance policies generally cover a percentage of the loss (90-95%).

Export Financing Programs

• Direct loans are provided by government agencies/commercial banks.
• Guarantees are provided to banks, reducing their risk in lending to exporters.
• Working capital loans help finance the production/shipment of goods.
• The Export-Import Bank (EXIM) provides export financing programs to U.S. exporters.
• The Small Business Administration (SBA) offers export financing programs.

Factors Influencing Export Finance Decisions

• Buyer creditworthiness is a key factor in determining payment/financing.
• Country risk assessment evaluates political/economic stability.
• Transaction size/complexity influence financing instruments and risk management.
• Regulatory environment affects contract enforceability and financing availability.
• Company resources/risk tolerance determine risk willingness in transactions.