When developing your export marketing strategy, the route or routes into global markets are multiple and the route you choose will ultimately determine your success when trading overseas. With that in mind, it’s worth understanding the 13 common export marketing methods that are available to SMEs, plus the advantages and disadvantages of each channel…
First off, the international trade language is English, so you have to learn English as well as possible if it is not your first language. Don’t forget, everybody who wants to trade globally will speak English, to a greater or lesser extent, so after the initial communication, English will be the language of trade.
If our first language is English or we know English well. So we have to make the effort to communicate in multiple languages and learn new languages. You can choose your target market’s language or most common languages like Spanish, Arabic, or French to learn.
In this article feature, I will discuss 13 marketing methods to export that I have split into ‘Traditional’ and more current 21st Century methods to export markets that weren’t open to SMEs prior to the digital age. This is not to say that new is better than traditional because all methods to an export market are valid, provided you make a profit utilizing whichever routes to market you choose. The routes we will discuss are illustrated in the graphic below.
The comments in this article are based on our own experiences of growing our own export sales, which led to our companies (SOLAR SOLENTURK and FUTURESIA Global) growing year by year. It’s this success that inspired us to develop Export Port. So, there are comments from the trenches, from people who have actually created and grown B2B export sales.
Ready? Let’s dive in. Here’s what to expect in this article:
7 Traditional Methods of Export Marketing
1 – Setup an office in the overseas territory
2 – Work with an agent or Independent Reps
3 – Resellers, Dealers, VARs, Retailers and Stockists
4 – Find a Distributor
5 – Go direct to clients or customers
6 – Attend international tradeshows and exhibitions
7 – Trade missions
The 21st Century, Digital Methods of Export Marketing
1 – Own international website in English
2 – Own dedicated website in local language and localised for territory
3 – Mini site of your English website (.com)
4 – International B2B marketplace in multiple languages
5 – E-market place
6 – M-commerce (mobile) and S-commerce (social – big in Asia)
Let’s look at the advantages and disadvantages of 7 Traditional Export Marketing Methods:
1 – Setting up an office in the overseas territory
This is a high-cost, high-risk venture as you will be trying to manage a remote office, possibly several thousand miles away, and also in a different time zone. The best way of implementing this route is to find somebody within your current organisation’s home market.
They will know your products and methods of selling, however, this person then needs to learn the different cultural nuances of the target market.
There are generally two problems in sending somebody to head up the overseas office:
- It is not always possible to pull a trusted member of staff out of a role in a SME.
- Lots of people don’t want to relocate to a new country.
However, the benefits of having localised staff is that you have an excellent presence and appear as a committed local company.
Establishing a base in an international territory tends to be a long-term goal for SMEs. Once you have built up your experience of exporting indirectly, setting up a permanent presence could become a viable option for you.
Advantages of Opening Overseas Office:
- Customers feel you’re committed to their market for the long-term
- Easier to provide after-sales support
- You present as a local committed company
- Greater autonomy for doing business and recruiting staff
Disadvantages of Opening Overseas Office:
- Huge costs involved
- Cultural clash between home market and export office ways of doing business
- Increased overheads and tax requirements
- Substantial man hours to plan the logistics and manage remotely
2. Work with an Agent or Independent Reps (Popular in North America)
An overseas sales agent would be ‘the face’ of your SME in international markets. They introduce you and your products to customers and then invoice directly. Agents and independent reps are usually paid on a commission-only basis for introducing you to potential customers. Commission fees tend to range between 2.5% and 20% depending on your industry sector.
Also, if you would like to learn more about an import-export agent, here is a link to our article how to become an import-export agent.
Advantages of Working With an Agent:
- You get an agent’s extensive knowledge of your target market
- They manage and control all local payments and documentation
- Agents will likely have established relationships with potential buyers
- You circumvent the recruitment, training and salary costs of using your own personnel to enter export markets
- Good agents will be ‘in position’ to identify and take advantage of opportunities
- Having an agent on board means that you retain more control over final price and brand image, when compared with using a distributor
Disadvantages of Working With an Agent:
- The agent owns the customers and route to market
- If you fall out with the agent it can be expensive to terminate an agent’s contract as they have a legal right to be compensated. This doesn’t hold with independent reps unless written into the contract
- Selling through an agent means that after-sales service can be complex
- Equally, keeping a record of stock inventories can be costly
- You will potentially lose some control over marketing and brand image when compared with entering markets yourself
- Managing an agent can be challenging
3. Resellers, Dealers, VARs, Retailers and Stockists
Stockists will sell your products across their stores – both bricks and mortar and online.
Advantages of working with Resellers, Dealers, VARs, Retailers and Stockists:
- Will buy, stock, market, sell and support your product in their country or territory
- You can choose between large multinational or specialist independent companies
- Likely to have multiple stores in multiple countries
- Products will be sold across all stores whether bricks and mortar or online
- Often have complementary products particularly true for VARs and Dealers
Disadvantages of working with Resellers, Dealers, VARs, Retailers and Stockists:
- Marketing and pricing of your products is out of your control
- Likely to demand a discount
- Volume of annual orders might not meet expectations
- As a small to medium-sized business, you’re likely to be further down the queue in terms of priority and focus, so may not get the marketing effort or sales training that your product needs or deserves
4. Find a Distributor
A distributor will buy your products from you and then sell them to customers via multiple third-parties. Distributors make money by purchasing your product and selling it on at a higher price.
Advantages of Finding a Distributor
- Access to all the Distributors dealers and resellers
- No need for SME to setup offices in overseas territories, saving you money
- Much of the risk is absorbed by the distributor
- You only need to track the accounts of one distributor rather than several different customers
Disadvantages of Finding a Distributor
- The activities of your distributor are out of your control, i.e. marketing and pricing
- As an SME, you are unlikely to get the marketing and sales effort your products and brand deserve because the distributor will concentrate on the top 5 to 10 selling lines that generate the majority of their income. You’re likely to be further down the queue in terms of priority and focus
- Distributors will expect substantial discounts when buying your products
- Often you will be asked to contribute financially to any marketing of your products in addition to the larger distribution discount
- Distributors will often require an extensive period of exclusivity
5. Go direct to clients or customers
You can go direct to businesses or the consumer by getting on a plane and visiting potential customers face-to-face.
Advantages of Going Direct to Customers
- Keeps you close to your customers
- You can set your own prices to maximize profits because there’s no third-party involvement
- Multiple channels to reach customers directly
Disadvantages of Going Direct to Customers
- Extensive amounts of paperwork and a requirement to support a sale through to completion, while providing after-sales support and managing returns
- Responsibility for the entire export process rests with you, i.e. marketing, selling, stock levels and shipping
- Difficulty of working across time zones with no local presence
6. Attend international tradeshows and exhibitions
Visiting overseas exhibitions is potentially one of the quickest and relatively cost-effective ways to research new markets, local competitors, customers and test the waters for demand. They’re particularly useful for products that ‘need to be seen to be sold’ or for services that need face-to-face explanations.
However, on a per lead basis, exhibiting overseas is generally expensive (based on our own experiences, exhibition leads can be 8 times the cost of a lead generated through digital marketing) and they generally only happen once a year so it’s a feast or famine of new prospects for your sales team and products.
Advantages of Attending International Trade Shows
- Puts a ‘face’ to your brand
- An opportunity to market products and services to a ‘motivated’ audience who are interested in exhibits
- An opportunity for market research and to check out the competition
- Government support in the form of grants or supported exhibition space is sometimes available
- An opportunity to network and establish key connections
Disadvantages of Attending International Trade Shows
- Relatively expensive
- Your success at exhibitions depends on the success of the exhibition itself
- Lots of logistical preparation
- Depending on the length of the exhibition, extensive man hours are required
- Generally trade shows are an annual event, making marketing and lead generation disjointed
7. Trade missions
Trade missions, often supported by funding from the government, are overseas programs for companies looking to explore and pursue export opportunities by meeting with potential clients in their industry sector.
They generally involve meetings with foreign industry executives, networking events and site visits to facilities that may require your products and services. These can be cost effective ways to research a potential export market, provided the trade mission is for an industry and territory that you plan to sell to.
Advantages of Trade missions
- Access to high level business executives
- Opportunities for one-on-one appointments
- Opportunity to network and connect with likeminded companies
- The potential for media coverage
Disadvantages of Trade missions
- Very niche. The scope for doing business is limited
- Trade missions tend to be overshadowed by political issues
The 21st Century, Digital Methods of Export Marketing
Digital Marketing Overview
The options that open up for SMEs to export with digital marketing are growing every month, with new platforms and ways to build links with prospects and customers.
Increasingly, SMEs are recognising the value of digital marketing and the opportunity it represents to reach customers directly in international markets. Arguably, generating leads has been the single biggest export challenge for small to medium-sized firms in years gone by.
There are over 3 billion people already online and with digital marketing you can have a direct conversation with all of them. There has never been a better time for SMEs to reach out and develop new markets.
Online channels offer a route into exporting that’s not only cost-effective, but minimises the risks associated with so-called old school methods, enabling SMEs to ‘test the water’.
For instance, more and more SMEs are leveraging the power of their website as a lead generation tool. With 90 per cent of Europeans performing internet searches in their native language, the importance of having a version of your website in the mother tongue of a target territory is crucial.
Once potential customers have found your website, many are more than happy to communicate and trade in English as it is the international language of trade and has become key to reaching international customers online.
With English being the ‘Global Language of Business’, classified as the official language in an estimated 75 territories worldwide, it has become common practice for SMEs to perfect their online export marketing strategy for English speaking nations and then replicate the model for other international languages.
Why? Most export ‘buying’ is done in English, but ‘selling’ in international markets is done by localising content. This gives your company more credibility, establishes trust and increases the likelihood of a sale.
It is this desire to be approached in your own language, and the fact that 90 per cent of all searches start in the person’s mother tongue, that having a web presence in the local language is essential if you truly want to make progress in export markets.
To enhance their visibility in local search engines, as well as localised websites, SMEs have established a localised social media presence or had themselves listed on a local stockist’s or distributor’s website.
Meanwhile, partnering with online international lead generation companies and selling on high profile sites such as…
- eBay – 27 language sites
- Alibaba – 15 languages
- ExportWorldwide.com – 20 languages
- Amazon –14 language sites
- Direct Industry – 9 languages
Have proven to be popular routes to exporting for SMEs.
Advantages of digital marketing as a route to exporting:
- Full autonomy over your route to market
- Almost instant search engine visibility
- Your export marketing strategy is manageable from one central point
- Low-risk, low-cost entry into export markets
- Identify ‘hot’ markets much quicker
- All geographic limitations are removed
- The internet is 24/7
Disadvantages of digital marketing as a route to exporting:
- Competitors could potentially replicate your international digital marketing strategy, but this is true of all marketing channels. The challenge is to always be two steps ahead of your competition, so start today while your competitors are still thinking what ‘should I do?’
- Despite being 24/7, worldwide time zones could be problematic, i.e. establishing immediate contact with leads
While not discounting so-called old school routes to exporting, digital marketing is arguably at the forefront of breaking into overseas markets, especially for SMEs.
The appeal of online is that it’s cost-effective, low-risk and is an arena in which small to medium-sized firms can win new business, rather than vying for a share of the market dominated by multinational corporations.
However, digital marketing can complement other routes to exporting.
1. Own international website in English
Your own international website in English can target prime English speaking territories such as Australia, Canada and North America, to name a few. It’s an opportunity to present your products and services that are successful in your domestic market in new, English speaking markets to test the waters at low-cost and low-risk to you.
Localising or ‘localizing’ the content increases your credibility with ‘local’ customers. Developing a ‘replica’ of your website means you will increase the chances of being found via online search engines. Equally, it’s an opportunity to develop fresh content and keywords as part of a search engine marketing strategy that will boost your search engine rankings.
- Boosts your search engine rankings
- Easy to replicate a .co.uk or .com site for other English speaking nations
- Cost and time effective to setup
- Present old products in new markets
- No overseas office setup required
- Management and maintenance of multiple sites can be time-consuming
- English speaking territories are extremely competitive markets
2. Own dedicated website in local language and localised for territory
70 percent of the world doesn’t speak English [Source: Tech.co], while 57 percent of websites contain only English. Therefore, one of the key advantages of developing and optimising a website for local languages is that you can reach a segment of the international market that others aren’t.
Plus, having international sites in different languages increases your credibility with customers in your target market and boosts your online presence, while helping you to develop new content and use new keywords to boost your search engine rankings.
- 90 per cent of internet users in the European Union search in their native language (Source: EuroBarometer)
- A low-risk entry point into export markets
- Entering into multiple markets reduces dependence on your domestic market
- Managing and maintenance of multiple sites can be time-consuming
- Long-term costs for translators and hiring mother tongue speakers
3. Mini site of your English .com
Having a mini version of your English .com site gives you most of the advantages of a full site in English speaking territories, but is easier, quicker and cheaper to build initially and can be expanded on an ad hoc basis. A mini site usually consists of a ‘subset of the products and pages of the main international site,’ and are often easier to navigate.
A mini site could also be used as a subdomain [an Internet domain which is part of a primary domain] as opposed to a national, top level domain (TLD).
- Can be expanded as and when needed
- Easy to manage and maintain
- Easier, cheaper and quicker to build than ‘complete’ websites for entry into overseas markets
- Easier to navigate and user-friendly for international visitors
- A lower cost, low-risk entry point into English speaking export markets
- Doesn’t fully represent your products and services to international customers
4. International B2B marketplace in multiple languages
International B2B marketplaces such as Alibaba and Direct Industry are online virtual exhibiting sites that serve to complement any existing domestic and international websites. They’re an opportunity to showcase your business to new markets. With features such a multilingual content, and unlimited uploads, such channels help to boost your online presence and generate more leads.
- Works alongside existing websites to generate international leads creating additional marketing channels,
- Quickly identify market demand and interest for your products and services in worldwide markets
- For companies without an international site, they’re a ready-made platform to reach new markets 24/7, 365 days a year
- Easy to get started.
- Tried and tested export model.
- Some require heavy service user input
- Some aren’t export specific
- Some platforms are limited to product-based businesses
5. E-market place
Tying in with the digital marketing strand, there has been a boom in the use of e-commerce as a route to exporting. E-commerce refers to transactions made online. A recent study found that 40 per cent of respondents buy goods from another country based on factors such as price, availability and selection.
As a result, there’s been a surge in companies offering you the ‘best e-commerce platform money can buy,’ as more SMEs recognise the value of cross-border selling through commerce.
E-commerce routes into exporting require you to think about several key criteria including the platform you will choose, whether it will take a portion of profits and whether it can manage the size and quantity of transactions you want to make. There’s also the localisation of your content and payment methods to think about.
Most well know e-commerce platforms are:
- Low operational costs
- No geographical limitations
- Faster buying and selling process
- 24/7 buying and selling
- No need for international office setup
- Potential delays on the delivery of goods
- Privacy and security issues
- Requires internet access
- Lack of personal interaction
6. Finally, the new kids on the block, M-commerce (mobile) and S-commerce (social – big in Asia)
More recently, the emergence of S-commerce (social) and M-commerce (mobile) have provided additional commerce routes into export markets, particularly in Asian and far-eastern nations such as China, Thailand that have smartphones as their main internet access. Although these routes may appear similar to other web-based routes, they require a completely different platform, optimisation and approach.
Social commerce is the marriage between social media and e-commerce, the next evolution of online shopping, where consumers fuel the purchasing funnel of your brand, buying and selling of products and services online.
In my experience, social is very difficult to get to work for B2B products. It is important as a ‘signal’ to Google and BING for their ranking algorithm, but as an actual generator of sales, social is not very effective. The one social exception is LinkedIn and the access that can be leveraged by using LinkedIn.
If you want to reach your prospects, it’s critical to be where they are! Smartphones in hand, customers aren’t waiting for your company to decide to build a mobile website or app, so planning for mobile search and M-commerce is going to become more important.
- Faster buying and selling process
- Rapid and personal feedback
- No geographical limitations
- 24/7 buying and selling
- Strong engagement with prospects and customers on an individual basis
- Requires internet access
- For S-commerce, significant effort for currently poor returns
- Privacy and security issues
Overarching all this digital marketing is the opportunity for paid advertising to drive traffic to your website, mini-site, lead gen platform or e-market platform. This comes in many forms – PPC (pay per click), display ads, re-marketing, video ads etc. All these ads can be placed on Google, BING, Yandex, Baidu, Facebook, eBay, YouTube and many more. Paid advertising is too large a subject to cover here and requires an article dedicated to it because it can be both an excellent lead gen tool, but it can also eat mountains of cash with very little return.
Why 21st century digital marketing is such a good option for SMEs?
Online channels have certainly made routes to exporting far more accessible to SMEs. Old school methods tend to carry a higher cost-burden and risk for smaller enterprises. In many cases, SMEs don’t necessarily have the resources to launch a full assault on international markets using traditional methods.
That said, old school methods can’t be written off completely and it is likely that what will work best for you will be a combination of a number of routes to market and the buying practices of your target markets will effect this.