Dynamic Export

Global business requires a global mindset, which is why understanding culture is a key aspect of successful exporting. Here are some considerations for approaching international markets.

In The Art of War, Sun Tzu says: “Know yourself, know your opponents; one hundred battles, one hundred victories.” His advice is as relevant today as it was centuries ago, and is applicable anywhere in the world of global business. As for how to succeed in engaging with offshore counterparts, there’s more to it than visiting your destination market, attending a trade fair, reading a book or paying an agent or consultant. And there’s more to it than acquiring knowledge about the business and social cultures of your destination markets.

Going global should be considered as a campaign with the understanding that you will develop a new market over a one-to-two-year period rather than pursuing a sale. As overseas markets are different from the Australian market, your return must be worthwhile, so select your new markets after doing homework to know that you have a sustainable competitive advantage in developing it. This homework typically involves a partnership between external experts and in-house talent to analyse your products and how they meet customer needs.

Once you have identified the new market and have begun developing an export roadmap, it is time to become savvy to how your new market operates: how customers think and buy products or services, how distribution works, what marketing messages or colours are important, what the best beach head (initial market entry) approach is, and what channels are best to develop the new market.

Here are a few examples of lessons learnt and ways you can avoid errors. Or as one colleague said: “Exporting is like navigating a mine field: it is much easier if you have the right equipment to avoid the mines rather than trying to run across the field full tilt, screaming ‘look at my new product’!”

Adapt marketing materials

An Australian company went to a US trade show, and invested in marketing collateral printed on glossy A4 paper. Following the show they followed up via phone and email; when asked ‘what did you think of our brochure and the case studies?’ prospects would respond, ‘oh, sorry we threw out your brochures as they don’t fit in our files’.

Lesson learnt: When in Rome, think and act like a Roman. US businesses use US letter-sized paper and their file cabinets are set up for that size; A4 does not fit, and it is easier to throw the brochure away than to scan it. While this is a basic example, potential customers think that if you can’t adapt your marketing materials to their market, what are the chances you will adapt your product and systems to support their needs? Learn how the market operates by asking someone who lives and/or works there, or has sold into the market.

Lead with relationships

An Australian wine company went to the Middle East to promote their products as their first foray outside of the UK and USA. When they arrived, they went to the hotels and what they thought were the major providers of wine in the market only to find that they were given a polite but uninterested response.

Lesson learnt: Market entry in the Middle East is based on relationships more than the product. To enter the alcohol market—a niche market due to the cultural views in the region—they required someone who knew the landscape and knew with whom to build a relationship. Australians love to promote their product, its features and how it compares against competitive products, while in the Middle East, the channel buyer wants to know the person and the company and build a relationship before discussing or purchasing products.

“We find that too many Australian companies are product-centric with little appreciation for why consumers in new markets buy, or don’t buy, their products,” says Scott Gillespie of ExpatriateConnect (EC). “Understand the needs of consumers and redefine your products or services to fill those needs. This is more about marketing and communication than re-engineering products. Little new business gets developed without a campaign approach, which starts months before an overseas trip and continues for months after the market visit.”

Find the channels to market

After nearly a decade of development, capital raising and proof of concept, an Australian food and beverage company had gained sales in Australia and proven their product worked, but had stumbled at going global. The company wanted to go overseas but couldn’t find a distributor or agent to take their product until they had a larger installed base, and they didn’t have the internal resources to go global themselves. They finally found a global food and beverage player that would further develop the product in Australia and then resell it overseas themselves.

Lessons learnt: Going global with a partner that knows the channels to market and focusing on developing and servicing products are often effective approaches to developing global markets. Leverage industry players with global experience or trading houses that buy in one market and sell into another.

Less than six percent of Australian businesses export, according to Austrade; Australia has to work harder to learn about foreign markets than the English and the Chinese, who have had legions of traders for centuries cultivating relationships, and understanding channels to markets.

Plan to preclude poor performance

Just prior to a trade show, a company contacted government agencies and chambers of commerce and said: “We’re leaving in 10 days’ time. Match me up with an in-market resource and make sure they can get us into the C-level people at the following companies…” The short answer was: “I’m sorry we can’t provide you instant access in a country that values relationship building and cultural sensitivity.”

Lessons learnt: The five Ps of marketing, restated, is ‘Proper planning precludes poor performance’. Gaining introductions to build relationships, and ultimately sales, requires a strategy, time and exchange. Some compare exporting with dating, where few get what they are looking for if they rush in without doing their homework or showing interest in the other party.

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