Export Marketing Plan

Most entrepreneurs are not very keen on planning, which they consider of lower priority than the solving of day-to-day problems. Some seventy percent of all enterprises in the world lack good planning systems, particularly the SME. In developing economies, planning is not always embedded in the local culture, when short term vision might lead to opportunism.

Planning is essentially the main task of management – where strategic vision and operational insight are brought together, translated into action. Management knows where the company should go in the future, management knows the company and is debriefed on the state of business on a frequent, often daily basis. Management is responsible for providing resources but primarily for providing direction (as the new ISO directives postulate). Therefore, the planning methodology should be one of the most important managerial tools.

Since TPO are charged with the health of their business clients, they should make sure that all managerial instruments are available and used well. Focussing on international business, planning is an even more essential instrument because strategy and implementation are separated by a distance which is hard to bridge. The products are designed and manufactured in the home country, their selling (and after-sales follow-up) is taking place abroad. That distance may lead to mistakes. When the distance is great, management can not come and solve problems on the spot. That is simply too far away. So management better think ahead, trying to foresee what will, may and should happen in order to avoid such mistakes. Customers expect no less. A good planning system is vital for exports.

As explained before, all elements of doing business abroad and brought together, combined in a "mix" which through that combination leads to optimal effectiveness of the company"s output. An Export Marketing Plan does just that. It also serves the reliability of forecasting over a longer period of time and provides an estimate on costs (and profits, when calculating feasibility).

Striking feature of an EMP is the chronological sequence of the activities required to prepare the export venture.

1. Purpose, function and form of an Exportmarketing plan

Basically, the Exportmarketingplan (EMP) shows everything you have devised for your commercial operations abroad. Its purpose, function and contents make it one of the most important strategic and tactical documents in your company.

The purpose of the Export-Marketingplan (EMP) is:

• to bring all relevant marketing instruments together in a productive "mix";
• give direction to all your planned activities for optimal effect. That direction is outlined in the objectives;
• estimate when the activities should take place. This timing will clarify the logical sequence. The same applies to the very moment results can be expected. That facilitates good management and sound decision-making;
• estimate how much the activities are going to cost, in order to make the money available whenever necessary;
• estimate the feasibility, deducting all costs from the profit to establish if the results are worth those costs.

The function of the plan is:

• to inform all people involved about the objectives of the export operation;
• to give them specific instructions as to what their contributions to the export activities will be;
• to provide a certain justification for the money that will be spent in the export process. This justification is meant to convince the directors and owners of the company.

The form of the EMP:

• the exportmarketing plan should be in written form (although some advanced Western exporters incorporate export planning in their computer-driven corporate planning). Parts of the EMP can - selectively - be distributed within your company and your Trade Partner"s;
• the plan should be short, factual, precise and complete. It is not a manual nor a short story. Basically, it is a set of instructions, backed up by logical analyses and considerations.

A brief outline for an exportmarketingplan follows hereafter.

2.a. Exportmarketingplan: General contents

EMP structure

1. Background information

• strengths and weaknesses of the organization
• corporate analysis, highlights from Export Audit
• present performance
• "rationale" (arguments and considerations) as the basis for the decision to internationalise.

2. Product/Market Match (or combination)

Specifying which product has been selected to sell to which foreign market; including the motivation for that P/M - selection.

3. Objectives

• Marketing objectives (Turnover or T/O, sales, market share)
• financial objectives (profit/contribution)
• feasibility calculation (1-3 years).

4. Means

• Marketing mix (-instruments)
• organizational support required
• assistance from third parties
• total costs.

5. Action plan

• description of organizational tasks,
• project planning and timing schedule.

2.b. Exportmarketingplan: specification of plan elements

1. Background information

• description of present corporate situation. General commercial and financial situation. Ownership. History (if relevant). Main activity. Main policies / social justification etc. -

1.1. Product

(if not brought under second heading) Including packaging

• specification (type, sort, size, dimensions, weight)
• technical details
• quality
• unique selling proposition / competitive advantage.

1.2. Past performance

• Show 3-5 years" historical performance: sales/turnover/profit/return per market, per product (category).

1.3. Users - (for consumer products: end-users or buyers)

• Profile customer / consumer, motivation for use, buying behaviour, spending power buying frequency etc.

1.4. Market

• Market characteristics (main markets only)
• trends, development, changes
• main competition (plus product range offered and prices quoted)
• general selling and promotion methods used by main competitors.

1.5. Distribution

• General description of distribution channels or methods to reach buyers
• same for entry strategies present export market
• relative importance of these channels / entry methods.

1.6. Promotion

• General description of promotional methods presently utilised at various levels of distribution and entry
• relative importance of those methods.

2. Export product/market match

2.1. Market selection

• Criteria for country selection
• country selection
• criteria for market (segment) selection
• market (segment) selection

2.2. Size of market selected

Total demand in:

• volume (past/present/future)
• value (past/present/future); or:
• derived demand
• hypothetical demand.

2.3. Customer / consumer

Specification of 2.2.:

• numbers
• location
• other details required for market targeting.

Comparison with 1.3.

2.4. Competition

• Competitive suppliers, product range/prices
• possible product substitutes
• comparison strengths/weaknesses vs. own products.

2.5. Export product

Specification (compare with 1.1.)

• special (health, safety and other) regulations and norms governing export market selling. CE marking

3. Objectives

Export Marketing Plan covers at least 1, preferably 3 (operational) years

3.1. Marketing Objectives

• sales volume
• market share
• brand awareness
• product improvement/adaptation/development
• target pricing policy
• distribution channels and entry strategy decided upon.

3.2. Financial objectives

• production costs
• transport and distribution costs
• promotion costs
• gross mark-up (operational)
• operational results.

3.3. Organizational objectives

• organizational measures, organigram
• task descriptions
• communication plan (with trade partner)
• training required.

Feasibility calculation covers 3 (operational) years and should calculate cumulative results / break-even point.

4. Means

• covering marketing mix to achieve the plan"s yearly objectives -

4.1 The export product

• Technical aspects
• quality standards and control procedures
• performance standard, design, colour, flavour etc.
• packaging
• terms of delivery.

4.2. Pricing

• price break-down / bottom-up price calculation
• terms of payment
• insurance
• currency aspects
• credit system selected; costs of interest for suppliers credit.

4.3. Distribution

• target customer / consumer group
• distribution & shipping methods
• description of trade partner(s) selected
• main items trade partner contract
• pre- and after sales services (design, repair maintenance, training etc.).

4.4. Promotion

• brand image / suppliers reputation
• selection of media
• research.

Total promotional costs.

5. Action plan (operational year)

What specific activities to be carried out when by which member in the organization at what costs ("what, when, by whom, how much").

6. Supportive plans (operational year)

• liquidity (assessing liquidity requirements per month)
• debtors (assessing credit to buyers: per month)
• stock (requirements for product in stock per month)

7. Optional: contingency plans

A prudent manager will ask himself what to do if conditions change so much that his plan loses its basis. Examples: the price of raw materials is going up unexpectedly, or the competition suddenly drops its prices strongly, a newcomer is entering the market with a much better proposition, pushing you out of a profitable account.

Most managers can foresee such calamities and decide beforehand what to do if they actually happen, mostly through saving costs, making additional budgets available or introducing a new product variety. Foreseeing implies planning; such plans are called contingency plans ("what happens if...").

JLT 02-2001