Developing a Marketing Plan

A clearly written marketing strategy offers six immediate benefits:

1. Because written plans display strengths and weaknesses more readily, they are a great help in
formulating and polishing an export strategy.
2. Written plans are not easily forgotten, overlooked, or ignored by those charged with executing
them. If deviation from the original plan occurs, it is likely to be due to a deliberate and thoughtful
choice.
3. Written plans are easier to communicate to others and are less likely to be misunderstood.
4. Written plans allocate responsibilities and provide for an evaluation of results.
5. Written plans are helpful when seeking financial assistance. They indicate to lenders that you
have a serious approach to the export venture.
6. Written plans give management a clear understanding of what will be required of them and thus
help to ensure a commitment to exporting. Actually, a written plan signals that the decision to
export has already been made.

This last advantage is especially noteworthy. Building an international business takes time. It usually
takes months, sometimes even several years, before an exporting company begins to see a return on its
investment of time and money. By committing to the specifics of a written plan, top management can
make sure that the firm will finish what it begins and that the hopes that prompted its export efforts will be
fulfilled.

Market Research

To successfully export your product, you should examine foreign markets through research. The purpose
is to identify marketing opportunities and constraints abroad, as well as to identify prospective buyers and
customers.

Market research encompasses all methods that a company can use to determine which foreign markets
have the best potential for its products. Results of this research inform the firm of: the largest markets for
its product, the fastest growing markets, market trends and outlook, market conditions and practices, and
competitive firms and products.

Your firm may begin to export without conducting any market research if it receives unsolicited orders
from abroad. Although this type of selling is valuable, the company may discover even more promising
markets by conducting a systematic search. If your firm opts to export indirectly (see Chapter 4) by using
an intermediary such as an Export Management Company (EMC) or Export Trading Company (ETC), you
may wish to select markets to enter before selecting the intermediary. Because many intermediaries such
as EMCs and ETCs have strengths in certain markets, it is valuable to select the intermediary after
deciding on markets to enter. You may also want to do market research if you export indirectly.

A firm may research a market by using either primary or secondary data resources. In conducting primary
market research, a company collects data directly from the foreign marketplace through interviews,
surveys, and other direct contact with representatives and potential buyers. Primary market research has
the advantage of being tailored to the company's needs and provides answers to specific questions, but
the collection of such data is time-consuming and expensive.
When conducting secondary market research, a company collects data from various sources, such as
trade statistics for a country or a product. Working with secondary sources is less expensive and helps
the company focus its marketing efforts. Although secondary data sources are critical to market research,
they do have limitations. The most recent statistics for some countries may be more than two years old.
Moreover, the data may be too broad to be of much value to a company. Statistics may also be distorted
by incomplete data-gathering techniques. Finally, statistics for services are often unavailable. Yet, even
with these limitations, secondary research is a valuable and relatively easy first step for a company to
take. It may be the only step needed if the company decides to export indirectly, since the intermediary
firm may have advanced research capabilities.

Methods of Market Research

Because of the expense of primary market research, most firms rely on secondary data sources. The
three following recommendations will help you obtain useful secondary information:

1. Keep abreast of world events that influence the international marketplace, watch for
announcements of specific projects, or simply visiting likely markets. For example, a thawing of
political hostilities often leads to the opening of economic channels between countries.
2. Analyze trade and economic statistics. Trade statistics are generally compiled by product
category and by country. These statistics provide the U.S. firm with information concerning
shipments of products over specified periods of time. Demographic and general economic
statistics, such as population size and makeup, per capita income, and production levels by
industry can be important indicators of the market potential for a company's products.
3. Obtain advice from experts. There are several ways of obtaining this advice:

 Contact experts at the U.S. Department of Commerce and other government agencies.
 Attend seminars, workshops, and international trade shows.
 Hire an international trade and marketing consultant.
 Talk with successful exporters of similar products.
 Contact trade and industry association staff.

Gathering and evaluating secondary market research can be complex and tedious. However, several
publications are available that can help simplify the process. The following approach to market research
refers to these publications and resources that are described later in this chapter.

A Step-by-Step Approach to Market Research

Your company may find the following approach useful. It involves screening potential markets, assessing
the targeted markets, and drawing conclusions.

A. Screen Potential Markets

 Step 1. Obtain export statistics that indicate product exports to various countries. Published
export statistics provide a reliable indicator of where U.S. exports are currently being shipped.
The U.S. Census Bureau provides these statistics in a published format. Trade statistics also can
be obtained using the National Trade Data Bank (NTDB).
  Step 2. Identify five to ten large and fast-growing markets for the firm's product. Look at them
over the past three to five years. Has market growth been consistent year to year? Did import
growth occur even during periods of economic recession? If not, did growth resume with
economic recovery?
 Step 3. Identify some smaller but fast-emerging markets that may provide ground-floor
opportunities. If the market is just beginning to open up, there may be fewer competitors than in
established markets. Growth rates should be substantially higher in these countries to qualify as
up-and-coming markets, given the lower starting point.
 Step 4. Target three to five of the most statistically promising markets for further assessment.
Consult with a Department of Commerce Export Assistance Center business associates, freight
forwarders, and others to further evaluate targeted markets.

B. Assess Targeted Markets

 Step 1. Examine trends for company products as well as related products, that could influence
demand. Calculate overall consumption of the product and the amount accounted for by imports.
The National Trade Data Bank (NTDB)and the National Technical Information Service (NTIS)
offer Industry Sector Analyses (ISAs), Country Commercial Guides (CCGs), and other reports
that give economic backgrounds and market trends for each country. Demographic information
(such as population and age) can be obtained from World Population (Census) and Statistical
Yearbook (United Nations).
 Step 2. Ascertain the sources of competition, including the extent of domestic industry production
and the major foreign countries the firm is competing against in each targeted market by using
ISAs and competitive assessments. This information is available from the NTDB and the NTIS.
Look at each competitor's U.S. market share.
 Step 3. Analyze factors affecting marketing and use of the product in each market, such as end-
user sectors, channels of distribution, cultural idiosyncrasies, and business practices. Again, the
ISAs and Customized Market Analyses (CMAs) offered by the Department of Commerce are
useful.
 Step 4. Identify any foreign barriers (tariff or nontariff) for the product being imported into the
country. Identify any U.S. barriers (such as export controls) that affect exports to the country.
 Step 5. Identify any U.S. or foreign government incentives that promote exporting of your
particular product or service

C. Draw Conclusions

After analyzing the data, the company may conclude that its marketing resources would be applied more
effectively to a few countries. In general, if the company is new to exporting, then efforts should be
directed to fewer than ten markets. Exporting to one or two countries will allow the company to focus its
resources without jeopardizing its domestic sales efforts. The company's internal resources should
determine its level of effort.

The next section describes the publications that have been mentioned as well as additional sources.
Because there are many research sources, the firm may wish to seek advice from their local Export
Assistance Center