Just as every business needs a high-level business plan, every exporter needs an export plan. Developing an export plan forces you to organise your thoughts and identify elements of the business that need to be improved to export successfully.
Preparing an export plan is often a necessary step towards securing funding for your export marketing activities, whether that funding requires approval by your own board or outside investors.
A good export plan illustrates to outsiders that you have a rational, organised process for operating and building the export side of your business. It is a dynamic document that changes over time – and you need to update it regularly to reflect developments in your export program.
The starting point for writing your export plan is to critically assess the strengths, weaknesses, opportunities and threats (SWOT) facing the business in export markets. This analysis allows you to assess the viability of your export ambitions and identify potential problems before they strike. Remember that it is far cheaper to fix a problem, change approach or reconsider your position at the planning stage, before you start spending money.
Austrade offers a number of services to assist you in creating your export plan.
In addition, some state governments have programs to assist you prepare export plans:
Market research is the first step to identifying potential markets for your technology-based products. Market research will assist you identify where potential opportunities for your technology exist, the size of the market as well as any trends, issues, potential barriers to entry and other useful information to help you build your export plan.
The Internet provides a wealth of country-specific information. Start out by searching through the Austrade website, which provides a range of free industry and country information. Other useful trade agency and industry association sites are listed on this site.
An Austrade export adviser can also help you assess potential markets.
It is important that you consider the best methods to get your product or service into new markets. This involves developing a strategy for sales and distribution in target markets, whether independently or with partners. And remember that your international partnering arrangements may be completely different to your domestic approach due to the time and expense required to establish a market presence overseas.
When entering an export market, it is vital to understand how the distribution channel works in that country. You need to know what hierarchies exist, what your company is required to do and what you should expect in return from your distribution channel partners. You may also consider what performance measures you expect from your partners and prepare an appropriate distribution or partnership agreements with your lawyer.
Your branding strategy is also important as you may not be able to maintain the same brand overseas. If you have a vertical application, define your key target industry or market – and try to be as specific as possible.
A number of mainstream sales and distribution options are available for hi-tech exporters:
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Direct sales: This is where you sell directly to your customers, whether by establishing a sales office in the target market or by selling online. This is a costly path into the market, but may be necessary if your product is complex or requires a lengthy sales process and ongoing liaison with the customer.
- Licensing: This is where you license a partner company to distribute or resell your product under their own name or permit them to incorporate your technology or other intellectual property into a product marketed under the partner’s brand.
- Original equipment manufacturer (OEM): A company that uses product components from one or more other companies to build a product that it sells under its own company name and brand. A variation of this concept is original design manufacturer (ODM).
- Distributors: In many cases it is cheaper to sell your product to end customers through distributors. Each target market is likely to have different distribution hierarchies and business arrangements, so take the time to learn how things work.
- Agents: Agents sell products on your behalf in the target country, usually for a commission based on achieved sales.
- Value-added reseller (VARs): VARs are companies that take an existing product, add their own value - usually in the form of a specific application for the product (for example, a special computer application) - and resell it as a new product, package, or value-added services, such as deployment support, customisation, systems integration or complete business solutions.
- Systems integrators: Systems integrators (SIs) are a specific type of VAR. SIs deliver complete business solutions to end-customers, and will sell, deploy and customise your product in conjunction with products from other vendors. An SI is most likely to be interested in your product if it is complementary to other products they deliver and if it fits within their fields of expertise.
- Bundling: If your product forms part of a larger solution, or is complementary to other packages within its niche, it may be worth bundling your product with offerings that extend its capabilities or usefulness to customers. Bundling can be especially advantageous if you can ‘piggy back’ on the success of a better known product or work in partnership with larger established players in your sector.
- Selling online: E-commerce has opened up the possibility of selling your products directly to customers online. This technique is available for almost all products, whether you actually shop for the product online (for example, software) or whether your fulfilment involves shipping the product directly or through distribution channel partners. Read further advice on selling online from Austrade.
Austrade can assist you with partner identification services to identify potential partners in overseas countries.
Exporting can be expensive, so it is vital to have a clear idea of the expenses you are likely to incur to prepare an export marketing budget. It is vital to receive backing for your export plan from your management, board and financiers, including direct endorsement of the necessary expenses you will incur in overseas marketing.
You will need to budget for:
- Commissioned market research.
- Overseas travel, often several times per year.
- Participation in trade events such as trade shows or trade missions.
- Professional marketing collateral, such as brochures, data sheets, product literature, CD-ROMs and sometimes samples.
- Interpreting or translation services, if you are marketing into countries where English is not widely spoken.
- Product customisation to adapt or fine tune your product for the target market. Some expenses you incur in export marketing may be claimable under an Export Market Development Grant. State governments may also provide financial support for selected export marketing activities.