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How to Find Funding for Marketing

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Businesses are regularly instructed to include all the logistic, tariff, tax, finance and insurance costs into the product (or service) price, but often the very important cost of the marketing activities that will drive sales outcomes can be either overlooked or only part-costed. Without a realistic and detailed marketing plan the opportunity for business success in a new market may be severely hampered. Costing a marketing planThe marketing activities that should be included and how much will they cost will be first determined by the product or service itself, the entry strategy selected and the market growth that is planned. Your marketing plan will also depend on whether the intended customers are retail clients, businesses or government buyers. Certainly the consumer market is the most scattered and the most bombarded by conflicting advertising messages, while business and government buyers tend to be more easily targeted. In new markets it may be about first establishing a brand identity. With today’s technology there are also inexpensive options such as direct mail to a targeted market segment, focusing on specific activities such as trade fairs, attending large industry conferences or using social media and other on-line media to build your potential client list. Once you have decided on the best market entry strategy, the marketing cost can be more readily estimated. Take trade shows as an example. As Gemma Hansen of Export Solutions says, "Trade shows are one of the most effective tools for marketing your products internationally, however, they can be costly. Taking account of booth hire, stand costs and travel to the show it could cost you in excess of $20,000 to exhibit. The Export Market Development Grant (EMDG) may assist with some of these costs, providing a rebate of up to 50 percent on your international marketing expenses." Many exporters use commercial agents in their target markets, who will charge an agreed commission on sales and may request a contribution towards marketing expenses to build product recognition. Again the costs can be calculated. What other marketing costs may need to be considered?

  • Perhaps you will require intellectual property protection in the target country. For example, registration of a brand name may be necessary.
  • In some markets, such as the USA, you will require product liability insurance.
  • Perhaps some tweaking of packaging, labelling, use- by dates, colours, designs and inclusion of local language instructions will be needed.

So, having established what needs to be done, and completed a cost estimate, the next step is finding a way to finance your marketing.

Where to access financial help The Export Marketing Development Grant (EMDG) is often a first option. Under this Australian Government scheme, administered by Austrade, exporters can claim approved marketing expenses over a threshold of $20,000, and up to $150,000. Under the scheme 50 percent of valid costs expended on export marketing are payable in the year after expenditure, with the proviso that the scheme, which totals $150million, has sufficient funds. If claims exceed the scheme total they are scaled back and paid on a proportionate basis. Most of the state and territory governments have support funding schemes for various aspects of export marketing. They support activities from marketing plans, to organised visits, attending trade shows and producing and delivering samples overseas. To check terms in your state or territory, www.exportfinance.gov.auis a good one-stop access point. Exporters should also approach their bank, along with a detailed plan of their new market strategy and a specific pay-back forecast. Armed with a good track record of delivering outcomes and a sound plan you will find that your bank is a logical source of help with financing that export initiative. For a big push into a new market, finding a local partner of adequate size and resources may be an option for a company lacking the finance for the necessary marketing costs, especially in markets where you need to establish yourself quickly before the competition catches on. The Export Finance and Insurance Corporation (EFIC) can provide financial support for businesses taking on larger projects overseas that meet certain criteria, which can provide an advantage for those projects generally outside the funding criteria of commercial banks. The key messages are:

  • Ensure your marketing costs are included in your budget for entry to a new market overseas.
  • Build in the cost recovery of that marketing expense to the product (or service) price.
  • Explore available options for Government support, and private sector funding, that will allow appropriate marketing to take place and give your business the best chance of international success.

So with a well researched and realistic plan, your marketing efforts in new markets should pay dividends, and provide a payback within a reasonable time frame.

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