The following principles have been derived from actual experiences of exporters in developing countries:
Many of the case studies suggest that developing country exporters have to carry on their business under conditions of considerable constraints.
For instance, imported raw materials are often difficult to obtain, the flow of supplies is uncertain, the transport infrastructure is undeveloped. Managers must therefore formulate creative and effective solution to these challenges. It is common knowledge that exporting is not an easy task.
Developing country exporters of manufactured products rarely occupy a dominant position in international markets. The exporter should therefore aim at a market niche rather than at the mass market. One advantage of market inching is that it does not require elaborate and expensive market investigations before market entry.
A simple study of potential customer groups may be adequate. Exporters should seek value-adding product strategies another implication of market inching is that attempting to achieve price leadership may not be the exporter’s best option.
Product differentiation, branding distinctive styling, durable packaging, outstanding customer service, etc., could provide comparative advantages on the export market and therefore eliminate the need to compete solely on the basis of price.
Successful exporting often results from partnering a key intermediary with access to distribution channels in the export market. This intermediary may be an importer, broker, trading company, or the company’s distributor/agent.
Forming a business alliance with a reputable partner who can channel the export products to appropriate distribution points is one of the most important tasks in exporting.
Such a task would fall under what is termed a “push” strategy. A contrast is provided by a “pull” strategy which requires the exporter to be in direct contact with the end-users or consumers. The later is frequently a costly strategy and therefore unfeasible for the small and medium sized enterprise.
The choice of market can make the difference between success and failure in exporting. Exporters should carefully consider their market options and choose the market that offers the best prospects. They should explore the markets where they believe they have a competitive advantage.
They should know why they want to export and set their goals, hopefully, the export venture will contribute to both their profit- seeking and market expansion objectives.
Managers learn the tasks of exporting gradually. Familiarity with export markets is gained over time and the business relationships evolved are strengthened over a period of time. Sustained efforts are therefore essential in export marketing.
The long-term nature of export market development efforts, together with the risks assumed implies that a planned methodical approach to exporting is imperative.
To reduce uncertainty and risks, the exporter must set objectives, analyse strategic alternatives, formulate action plans, allocate resources, set time-tables and monitor performance. Without such a formal approach, the enterprise cannot sustain a profitable export effort.
The cases highlight the fact, that exporting requires expertise, in addition to careful planning and suitable products. Managers sometimes underestimate the complexity of exporting tasks, the risks involved and consequences of failure. A realistic understanding of the commitment required to succeed in an export venture is essential.
Any attempt at exporting, without experience in domestic marketing is bound to fail. Research suggests that enterprises gain important skills, knowledge and confidence at home, which often prove beneficial in the export market as well.
Experience suggests that an export venture is more likely to succeed when a key person in the enterprise is assigned the export task. This person can play a combination of roles as change agent, motivator, resource person, organizer and so on. A wholehearted commitment to the effort can go a long way in terms of success.