That’s the topic we’ve caught in the Made in Britain Twitter net: 27 May 2021
EVERY Thursday at 1pm Made in Britain hosts #MadeinBritainHour on Twitter. During that hour Made in Britain asks questions of its 21,000 followers and the results are fascinating. Previously this information was enjoyed by the audience at the time and then left to drift away in the Twittersphere, rarely read again. So, we have decided to capture some of the best comments and re-present them for a new audience and easy reference. Some of the responses have been edited but most have been left in their casual Twitter style.
This week we discuss exporting.
Question one: what are the biggest challenges a company must overcome when considering exporting for the first time?
Response: Apart from being able to scale up to service the international demand, there is the market demand, customer behaviours, cultural nuances, logistics, channels to markets, etc, and also the market entry strategy to determine...direct, JV, distributorship, local office, local reps..
Response: Currently, it's getting through customs controls. :( We have just had goods that we shipped out to netherlands on the 8th January returned to us...
Response: Why? What was the reason?
Response: No idea, we are in the process of finding out!
Made in Britain: There is help available with that?
Response: Yeah, sure there is, AEOS Certification is a start.
Response: Quiet a lot to consider, exchange rate, VAT, demand, logistics etc
Response: To make sure that they are becoming an exporter for good 'business' reasons, and that in doing so their export activity will contribute positively to the company.
Made in Britain: What would be an example of a "bad" business reason to start exporting?
Response: Desperation! That would lead to a lot of mistakes... It has to be more strategic to be sustainable. I agree with Phil.
Response: Ego.
Response: Testing destination markets before any large commitment. Use services of the @tradegovuk. Follow country specific Twitter accounts for information. Get advice/training on website internationalisation, set up website to test market.
Made in Britain: Can it be expensive to "test" new markets? I guess that depends on what you are selling?
Response: There are a range of methods to test the market, from third party platforms to your own. The process is critical and provided the destination market is worth going after long term this cost will be recouped over time. Seek training and advice
Response: Going through this now - Identifying markets and understanding routes to market
Made in Britain: How time consuming is it?
Response: We're taking this approach month by month first establishing what it is we want to do/sell and then identifying how we will do it Its going to take some time and careful planning that's for sure
Response: Do you reach out to the local markets to look for contacts, networks and other local organisations, including @tradegovuk_WM who can open doors for certain sectors?
Response: Currently working with our ITA on this as we speak, first establishing market research in the chosen countries we want to trade within
Response: Is that a full time task to do or have you allocated a certain amount of resource/time to it?
Response: Make sure if selling to the EU that you both have the EROI number!!!!
Response: But make sure that you do NOT do any customs. Sell either DAP uncleared of CIF/CIP to port. Let the local customer deal with their local infrastructure/costs.
Made in Britain: Is there a difference here in whether you sell a product you make, or you make a product for some other company (e.g. bespoke manufacture)?
Response: I would say so yes, we've identified two routes to market, each requiring different strategies
Response: and the costs to entry of the two strategies are possibly very different?
Response: Quite probably, especially with regards to distributors and how we deliver goods to the customer
Response: What about maintenance? Have you looked into sending engineers to the destination markets from UK. One client had problems finding engineers to maintain and repair export clients machines. They did not want to travel, no matter what the pay.
Response: Was that through research or from direct requests from the market?
Response: That's through research - we're still fleshing out this research to delve deeper
Response: You've hit on one of the biggest challenges that I often see, which is finding the time and resource to do it properly. It can be a very time-consuming process and can easily overwhelm the day-to-day if not planned properly.
Response: Agreed, its something we don't want to rush! Executing a carefully mapped out plan of action, we believe, is key to the success of an export strategy
Response: I concur. Market Entry strategies are really important and make or break your push to export. Research the market as much as you can, and look for local knowledge.
Made in Britain: Do you see that as a specific (and skilled) role that should be invested in properly then?
Response: Yes I do. Even if it's not investing in the skills side of it (although I'd argue this is important too), just making sure you have enough people hours available is essential. Sometimes it's easy to overlook that people are a scarce resource just like cash.
Response: Between the two of us in our current marketing team, we're allocating hours each week to focus on exporting and really drive this forward
Made in Britain: and also there is the factor of time zones? if you are having calls/zooms with some markets these could well be outside of office hours
Response: Yes that is a very good point. Another reason why planning where and when to export is key, because if you go East and West at the same time initially then you will effectively have a 24-hour operation on your hands almost overnight.
Made in Britain: That can prove expensive, especially if your customers require help desks/support. The question then comes to whether you need to set up operations in the country itself?
Response: When you reach this point then you need the help of the In country ambassadors and their teams. Start with a trade mission. there are many arranged by the UK gov and there is support from them for your own export projects.
Response: In country experience and expertise is vital, as is understanding the culture from the very outset of any comms with the country?
Response: Make contact with the British Embassy. They have teams to help with this.
Response: And that is torture unless you have established your scale up and resourcing to match the time-zones and demands
Made in Britain: Chicken and egg? Will businesses hold off until they see that they need to?
Response: Many will, and this applies not just to this topic. It's easy to see why businesses hold off but not investing ahead of the next growth phase is a recipe for disaster. Planning for it and properly resourcing up front is very important.
Made in Britain: Doing it in a way that mitigates risk? short term lease on facilities, contract staff (depending on regional employment law) or even seconding your own staff there?
Response: Yes - flexibility is key as there will always be a degree of risk in the next business phase. It will be slightly more expensive but the benefits of mitigating the risks outweigh the costs.
Response: Sometimes collaboration is the way to go, other times, you may open a local office...but there are always areas you need to be wary of....
Made in Britain: That can prove expensive, especially if your customers require help desks/support. The question then comes to whether you need to set up operations in the country itself?
Response: When you reach this point then you need the help of the In country ambassadors and their teams. Start with a trade mission. there are many arranged by the UK gov and there is support from them for your own export projects.
Made in Britain: In country experience and expertise is vital, as is understanding the culture from the very outset of any comms with the country?
Response: Shipping and the delays. Learning about correct documentation can be a challenge. Also guaranteeing payments
Made in Britain: Do you think those factors are often overlooked and primary attention is paid to market size?
Response: Deciding which territories to target would be top of my list
Made in Britain: That can be done two ways? deciding which are definitely not of interest could be a first step?
Response: True. It's as important to know what is NOT a good fit as much as what IS a good fit. I think its fair to say many people have little clarity here.
Response: always remember the story one of the ITAs told about someone enquiring about the market size for pork scratchings in Israel.
Response: Finding customers in a different market/ country
Question two: what steps should a business take to determine which export markets have the best potential?
Response: We like to do market attractiveness and competitor analysis to help us determine positioning, market demand, pricing etc. It is a matrix-based tools which we find clarifies a lot of unknowns
Response: Research and research some more. Audience size, market dynamics, competitors, trends in destination country, growth potential, legals, import duties, forms, distribution, finance, culture, language, returns, political stability to name a few areas
Response: You beat me to it. Data, data, data.
Response: Totally agree, lots of data, inc qualitative one (interviews etc) but I insist, you need to look inside the business first. You can't rank 150+ markets if you don't know what you are doing it for or what your priorities and resources are. Many SMEs don't do this...
Response: Absolutely spot on. Exporting, like growth in general, is not an end in itself - it is one available strategy to help deliver the wider goals of the business. If exporting is the right way to achieve it then plan and prioritise it properly.
Made in Britain: Is it sensible or misleading to look at regions rather than specific countries when considering new export markets?
Response: it's a great question. Again, depends on the business. Sometimes it makes sense regionally (synergies, free trade zones, clusters, etc), sometimes esp for small SMEs it's better to go one country at a time.
Made in Britain: I'd suggest that is one of the first things to consider when looking to export. Regions, countries, similarities, differences and economies of scale. Also the point earlier about setting up a regional office
Response: And look for similarities in culture, languages, behaviours, etc...it will make it easier to use/adapt existing collateral, website, etc.
Response: I still think geographical focus can be misleading. We often recommend to clients focusing on end clients rather than geographies. Mining/dairy companies in South America. Where are your potential clients? Target them rather than a country. Clients buy, countries don't.
Response: Know your customer type and find where they are?
Response: Yes, got to be where your customers are. No point hanging out on Instagram but LinkedIn is where the customers are !
Response: True, and many UK SMEs don't realise that their best clients, esp. B2B and esp. "internal clients" like distributors are often not even online in certain export markets liked Latin America, so they keep looking in the wrong place..
Response: It is sector knowledge and insights...but be where your clients are
Response: You beat me to it Noreen. Understand the customer. They are not all the same
Response: Absolutely spot on. Exporting, like growth in general, is not an end in itself - it is one available strategy to help deliver the wider goals of the business. If exporting is the right way to achieve it then plan and prioritise it properly.
Made in Britain: Good point. Maybe we should have posed a question today about when to pull out of export markets as well? Factors change
Response: absolutely - when to pull out and when to just say no. It depends on strategy, resources, expectations, RoI, etc.
Response: Yes - and going back to our earlier point - making sure you have enough flexibility to be able to pull out as painlessly as possible. Planning for all eventualities up front as far as you can.
Made in Britain: Do you think exit/escape strategy and planning is done by companies looking to export for the first time or to new markets?
Response: hardly ever...
Response: Every business should have an exit strategy.
Response: It also depends on how you export, it's definitely more important to plan for exit if you're investing a lot (offices, staff, etc) than if you're just finding a local distributor (careful with pulling out from contracts!).
Response: I don't see it being done in anywhere near the level of detail it should be. Sometimes it translates as launching in a very tentative way, rather than doing it properly but with an exit strategy behind it.
Response: I have only covered a few of the topics. To short circuit the process employ the services of professionals. These can be found through @tradegovuk and British Embassies.
Made in Britain: Finance is a huge one, exchange rate fluctuations and local taxes/duties can be a go/no-go decision
Response: At the moment, this is really a big challenge, especially with EU countries.
Response: Hence the growth of trade with non EU countries. I think there is a pent-up demand to get into the UK market for many countries that were excluded because of EU tariffs.
Made in Britain: That's an important point, keep an eye on the home market competition
Made in Britain: Gaby @uklatinamerica mentioned contracts. That is something that needs very careful consideration - governing laws can be very different in different countries
Response: What is legal in one country can carry a long jail sentence in another. Make sure that you understand the local laws and legislation. Get a professional in to help.
Response: International standards are part of the solution, look at local variations.
Response: This is where businesses need handholding... especially if @tradegovuk expects a lot of SMEs to up their product range and quantity for exports
Response: Market analysis - market size / demand, prices, competition
Made in Britain: Theoretically yes, but what if you have a totally new product?
Response: Identify distributors in similar markets? Marketing costs
Response: We work with UK SMEs who often have something v new to offer. Market research with lots of consultations a must. Also hugely important: understanding what local problem you're trying to solve. Can't impose solutions, but can't impose problems either to export markets
Made in Britain: That must be a big challenge but the potential for a much greater return if you establish something new in a country? first to market etc?
Response: Exactly, it can be resource-intensive but sometimes it pays off (loyalty, reputation, etc). And sometimes it's the only way - if a strong competitor lands first, you're sometimes out for many years (barriers to entry increase inc availability of best distributors)
Response: Hola! Assess first what you are doing it for, where it fits in your strategy, your expectations and resources. Look inside your company first. Then set a criteria, then study markets and rank them but always against a set (even if flexible) criteria. For example, take Latin America, my area of expertise. If you prioritise scale above everything, you need to go for Brazil, Mexico, etc. If you prioritise stability, then Uruguay might be first. Only you can set that criteria, no-one else can.
Made in Britain: That's a really important consideration. Stability in a market, but also gives the opportunity to get some experience in working internationally and exporting?
Response: stability can be a good criterion for first-time exporters and also for SMEs in general but by no means it's the only one, some businesses need scale, some language affinity, some need more specific ones (eg certain crops if you are in agritech, for example)
Response: Identify markets that can be sold into with EXISTING products & marketing expertise. Identify prospects (LinkedIn, DIT). Find a trustworthy local person/company to represent you to begin with; international travel for a year or so isn't a good option.
Made in Britain: Existing products and marketing expertise - would you add to that the need/want for the product was already established in the new export market?
Response: If you have to establish the 'want', at least be absolutely certain that the 'need' is there. Innovation is costly when you get it completely wrong ... hence use existing products only to mitigate risk. (Just my view).
Response: that depends on many factors inc your timeframe/resources - you can introduce something that is not known/wanted/needed yet but you'll need more time/$. Also, do you want to be leader/follower? Both are valid...
Response: On top of other points mentioned (market/competitive analysis etc.), it's worth speaking to someone with expertise in your preferred market area so they guide you through the process & make recommendations
Made in Britain: Local knowledge is essential. Just because it is used, bought, desired in Britain doesn't mean that will be the same in countries X, Y, Z (and of course vice-versa)
Response: Having representatives on the ground is optimal, but can be costly. I'm pretty sure the UK gov offer exporting advice too
Made in Britain: I think both @NigelTPackerand @ExcellMetalSpin mentioned about government help. How specific is this give the diversity of what Britain makes?
Response: It is very good from my own experiences working with clients. provide a detailed brief and keep working with them. There are benefits as there are subsidies available
Response: Unless selling to consumers, the 'target market' isn't 1000's, rarely 100's. If you've not exported, all markets have potential. How hard is it to e-shot 100 prospects in 10 countries? A 1st sale determines best-potential Sometimes we overcomplicate things.
Question three: what are the common mistakes businesses make when trying to enter new export markets for the first time?
Response: The one I see with a few businesses is 'assuming' their products will be successful for what they are I learned in college that Dominos attempted to sell their pizza in Italy. It didn't go down well there
Response: There is another great case study about DisneyWorld Paris..a very harsh learning curve
Response: Yes, a valuable business lesson. That said, I had a great time working there during my degree. Learnt lots!!
Response: "Hope", "arrogance" or just a real lack of research?
Response: It's the likelihood of poor research and not understanding the consumer
Response: And I would add to that, assuming their products will be successful as they are - without making any modifications to suit local demographics
Response: including the name of a product. So many examples of names that don't cross borders very well
Response: 100%. Lots lost in translation
Response: Lack of research for sure
Response: Not taking into account the nuances/differences between separate cultures and languages.
Response: Market research comes to mind as the main thing to action
Response: Paying attention to 'common mistakes' instead of getting in relevant expert support and making decisions specific to your company and goals.
Response: Be an expert employ an expert.
Question four: is it best to initially work with local distributors/agents when entering new export markets?
Response: Sticking my neck out I would say yes, but cautiously. Great way to test local market appeal.
Response: Yes, I agree, try the waters before you invest heavily...
Made in Britain: How do you find a good distributor/agent?
Response: It's one of our key services in Latin America (but only if we see potential, we take months to do a search since you have to go way beyond a Google search)... see for example latest blog post on what to do when best distributors are taken... https://t.co/FUecsR8SbI?amp=1
Response: More research...this is where organisations like chamber of commerce, british chambers, international chambers, international trade communities and obviously ITA and @tradegovuk ...fairs, etc...always better to have a qualified introduction with due diligence carried out as well
Response: True tho one reasonably sized business I've spoken with said they were underwhelmed when they looked to engage with DiT & local chambers for advice
Response: But they do have contacts which is what I would use them for. When they start doing trade visits again, that may also be a good route in.
Response: True, great point!
Response: No quick answer, it depends on your company, set up, strategy, resources, expectations, type of product, the market itself, your goals, etc.. for a very IP-heavy company, for example, it can be tricky...
Response: Makes sense to get the local distributors/agents to guide you in the beginning. Once you get comfortable then you can venture out yourself.
Response: Chambers of commerce and industry would be a start and also the DTI in UK
Response: Yes, we've definitely found it much easier to enter a new export market by partnering with local distributors.
Join Made in Britain on Twitter at 1pm every Thursday for #MadeinBritainHour. We engage with everybody, members and non-members alike (some of whom become members as a result). Hopefully, see you there.
This page has links to all the previous Twitter conversations we have 'caught in the net': CLICK HERE.
By Made in Britain 2 years ago | By Made in Britain