Export marketing plan for European Union

When a company decides that it is ready to export, it must formulate an export strategy. Strategy
formulation is the core of any business activity. It tells the firm where it is going and how it should
get there. Marketing strategy is often defined as the selection of a target market and the
determination of the product, price, promotion and distribution policies that the enterprise must
implement. A company strategy is in fact a blue print for competing on target-export market. An
explicit export strategy provides a unified sense of purpose, to which the staff of the enterprise
can relate. To implement strategy, a export marketing plan is required. Industrial marketing or so
called 'business to business' marketing may differ somewhat from regular consumer marketing,
but the basics remain the same.

Export Marketing plan: An export-marketing plan is a step-by-step guide to strategy

implementation. It addresses strategic issues and outlines the corresponding operational actions
to be taken. It specifies target dates and provides detailed budgets for each step.

The plan should answer all questions on how the company's export strategy is to be implemented
and direct the enterprise in attaining the strategic objective. A company's marketing plan and its
export strategy are therefore closely interrelated. A plan is only as good as the quality of the basic
data gathered and the analysis undertaken during the planning process. It is important to obtain
the participation of all levels of management in this process and to impress upon them that, to
succeed company wide commitment to export goals is essential.

Steps in developing the export marketing plan:

1. Setting of marketing objectives
2. Market segmentation
3. Market research
4. Product characteristics
5. Export pricing
6. Distribution channels
7. Promotion
8. Budget and Time Table

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Step 1 : Marketing Objectives : The first step in developing an export marketing plan is to
establish export marketing objectives. These objectives should not only be attainable, realistic
and clear but also should be communicated throughout the company. This will determine the
company's directions and its activities. Therefore, management will have to devote considerable
time and effort to setting them. A ‘SWOT’ analysis to examine the strength, weakness,
opportunities and threats based on facts and assumptions about the company is necessary
before formulating the objectives. It is up to the company to plot itself on the graph, based on
several criteria.

SWOT Analysis Graph Internal

Strength
Weakness

Opportunities
Threats

External

A company's strengths are its competitive advantages vis-à-vis its competitors on export
markets. The weaknesses are constraints which may inhibit the company to proceed in
certain direction. For instance, a company may not undertake a large-scale promotional
campaign due to lack of funds. Therefore, assessment of a company's strength and
weakness is essential for competitive positioning. The assessment should at least consider.

o Technology in use
o Design, styling and trade marks
o Product quality, quality control and the product's life cycle
o Completeness of the production line
o Customer service
o Raw Material supplies

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o Distribution Network and cost
The review of opportunities and threats in the market should complement the analysis of the
company's strengths and weaknesses. As the aim is to identify the best business opportunities on
potential markets, the company's opportunities can be evaluated in terms of the firm's export
customers, competing products, the market structure and competing suppliers. Such an
evaluation may reveal complementarities between the company's strengths and market
opportunities. For example, EU has a population of 505 million approx. but the entire population
may not require a particular product. Even there might be competing suppliers as it’s a very
developed market.

Finally, management should examine so-called marketing threats on the markets being
considered. These should include import rules and regulations relating to tariffs, quotas, non-tariff
restrictions etc. For example, strict sanitary and phyto-sanitary norms are considered as NTBs in
EU market. It is also necessary to determine whether the markets under assessment are mature
markets, that is already well supplied and do not therefore provide a readily identifiable niche for
the company's products.

Step 2: Market Segmentation: In a large market, there is a variety of market segments that
differs substantially due to different consumer groups according to income levels, age, life style,
occupation and education etc. To identify the right market segment, the company should
address certain questions such as who are the buyers and why should they buy the products,
what's about their location and their characteristics. The company should also concentrate on
the similarities and differences within the segment(s) and between the segments. The
requirements of the segment should match with the product specification of the company. For
example, if it produces high priced premium cars, its target must be high income, well-educated
people. The target market segment should be large enough to be profitable.

Step 3: Market Research: To succeed in exporting, a company must identify attractive export
markets for its products in them as accurately as possible. Market research and forecasting are
therefore of great importance. Factors to be evaluated include the size of market, the
characteristics of demand in it, consumer requirements, trade channels and the cultural and
social differences that may affect the company's way of doing business with the market.

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Market research in export market being an expensive proposition, it becomes difficult for a small
producer contemplating entering export trade. In such a situation, companies can resort to
published data after evaluating its reliability and accuracy. EU being a developed region of the
world as well as transparent, all necessary information is available from various sources.

Step 4: Product characteristics: The company should next consider the products that it has to
offer. An analysis should be made of any modifications required in the products, packaging
changes required, labeling requirements, brand name and after -sales service expected. As
European Union is particular about packaging material, it should be environmental friendly
and the food sector has to take care of sanitary and phyto-sanitary conditions existing in
the common market. Likewise, the automobile sector has to look into the road safety /worthiness
norms as well as pollution/environment norms existing in European market. Therefore, many
products must undergo significant adaptations if they are to satisfy customer and market
requirements in Europe. After meeting the specific requirement in the EU market, the producer
can make certain changes to improve the appeal of the products, provided the buyer agrees to
such changes.

Step 5: Export Pricing: In setting the export price, the producer /company has to take into
account such additional costs beyond the domestic price such as international freight and
insurance charges, product adaptation costs, import duties, commission for import agents and
foreign exchange risk coverage etc,

Export pricing analysis should begin with these questions: What value does the target market
segment place on the company's product? How do differences in this product add to or detract
from, its market value? Though it is difficult to find out such information regarding price, an
analysis of competitive products may reveal some critical information. The price should comply
with the customer's perception of that value to the product. While calculating prices, a reasonable
margin for a further representative should be allowed as it is difficult to increase the price later
once you have found the right representative.

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Step 6: Distribution Channels: A potential exporter should consider the following distribution
options:
 Exporting through a domestic exporting firm that will take over full responsibility for finding
sales outlets abroad;
 Setting up own export organization, though it's an expensive proposition;
 Selling through representative abroad;
 Using warehouses abroad;
 Establishing a wholly owned sales subsidiary.

The choice of distribution channel will depend on the company's export strategy and the export
market. If the company intends to export a product that has a specific feature likely to be a good
selling point, to a market segment that is well supplied, it may need to create greater awareness
of the product through an appropriate promotional strategy. In such a situation, an agent can be
appointed who does not handle many products and can allocate the time needed to promote that
product. Therefore, distribution channels should be chosen carefully to avoid legal implications
later on while canceling the contract.

Step 7: Promotion: The export marketing plan should provide details on the following aspects of
the promotional strategy: publicity methods, advertising (responsibility and allocation of funds),
trade missions, buyers' visit and local export assistance etc. An export venture will be successful
to the extent that the company provides effective customer support.

An exporter should remember that even the best product may fail without company support to
trade intermediaries and the end user. In addition, customer support creates goodwill and loyalty
to the exporter. Participation in a major European trade fair is - in may cases - a good way to
present the company's products and services to the European trade. Europe is home to
numerous trade fairs, which are product specific. The fairs provide a good deal of exposure as
well as information to the exporters as they attract a large number of importers/buyers. Some
places such as Frankfort, London, Paris, Berlin, Rome, Milan, Hamburg etc. hold fairs at regular
intervals. One should not expect immediate sales, but it does show professionalism on your part

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and allows for the developing of business contacts.

Participation in exhibitions is a costly affair, but it can certainly payoff when the company has
clearly defined objectives of what it wants to achieve at the exhibition and has created the
conditions and methods, which allows for the achieving of these objectives.

Step 8: Budget and Time Table: A budget must be established for the export marketing plan.
This should cover such basic aspects as sources of financing, use of the financial resources and
a forecast of the export venture's financial position after 3 to 5 years. A detailed timetable of
activities must also be drawn up. As Europe is a very developed and sensitive market, timely
delivery of export products is very much required. Developing countries including India
sometimes fail to maintain time schedule due to certain infrastructural problems. In such an
event, the exporter not only looses the contract but also spoils his/her image in the export market.

The aforementioned eight steps will provide a step - by - step guide to approach European
market. However, export marketing plan for a particular product may require some additional
steps to be undertaken. Besides, an export-marketing plan should be constantly revised; in
response to changes in market conditions.

Suggestions for exporters from developing countries: In order to be successful in European

market, exporters in developing countries should take some additional steps. Firstly, the
enterprises can gain important marketing skills, knowledge and confidence at home, which often
prove beneficial in the export market as well. To reduce uncertainty and risks, an exporter must
set objectives, analyse strategic alternatives, formulate action plans, allocate resources, set
timetables and monitor performance. Careful selection of market is very essential. In order to do
this, exporters should study their market options and identify the ones that offer the best
prospects, in which they have a competitive advantage. As EU is a conglomeration of 27
countries with a wide diversity of climate, culture, income, preferences etc. prospects for different
products vary from one place to another as well as within one area. Besides, product
differentiation, branding, distinctive styling, durable packaging, outstanding customer service and
so on can provide competitive advantage on the export market. It can also eliminate the need to

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compete solely on the basis of price. Market 'niching' may be the exporter's best option.
Developing country exporters of manufactured products rarely occupy a dominant position on
international markets. The exporter should therefore aim at a specific, well-defined opening in the
market rather than the mass market. Successful exporting often results from selecting a foreign
partner with access to distribution channels in the export market. This intermediary may be an
importer, a broker, a trading company, a distributor or an agent. Forming a business alliance with
a reputable partner, who can channel export products to appropriate distribution points, is one of
the most important tasks in exporting. Exporters should be creative. Many of the case studies
suggest that developing country exporters sometimes have to carry out their business under"
conditions of considerable constraints. For instance, imported raw materials for manufacturing
export goods may be difficult to obtain, the flow of these supplies may be uncertain or the
transport infrastructure may not be fully developed. The responsibility for a company's export
effort should be assigned to a key person who can play a combination of roles including resource
person, organizer and motivator. Finally, exporters should consider export market development
as a long-term investment. Sustained efforts are therefore essential in export marketing. Although
many different aspects, such as quality management, technical standards, non-tariff measures
etc. play a vital role for exporting to the EU, potential exporters from developing countries must
realize that the costs and risks attached to this venture can be planned for ahead. This way the
company is able to prepare itself by gathering extensive information and setting realistic goals.

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