Are you thinking about exporting for the first time, but not sure how to go about it? For more than 40 years, New Zealand Trade and Enterprise (NZTE) has been helping New Zealand businesses grow internationally. NZTE customer director Carole Wright shares some tips for companies looking to export.
Export for the right reasons
Be clear about what the opportunity is, and why you’ll be exporting. Be sure you’re exporting for the right reasons, rather than reacting to a vague idea of international trends, or to offset falling sales here in New Zealand.
Be aware that it generally takes twice as long and costs twice as much to be successful in a new market.
You must have robust planning and commitment – breaking into new markets takes time and money. You’ll need a clear, focused go-to-market strategy, and a realistic budget to support it.
Focus on the market and the customer
Researching the market that you’re moving into will help you decide whether your company is targeting the right country – is there actually a demand there for what you’re selling? Is your product or service the right fit for the market? Replicating what the business does in New Zealand may not be the best way to approach other markets.
And don’t just go by a friend or family member’s suggestion or jump at the first distributor or contact that shows interest in your product. Finding the right partner is crucial.
Have a point of difference
Select markets where you have a competitive advantage and can customise a product or service to fit.
Other ways you can differentiate yourself from your rivals are:
• After-sales service
• Sales margins
• Product customisation
Good marketing and storytelling are a big help. Stories are proven to be 22 per cent more memorable than facts.
And what’s your pitch? You need to be able to convince overseas buyers that your product or service is better than your competitors’ – and do that clearly and concisely.
What is your point of difference – how do you solve a problem for customers in your selected target markets? Remember it’s not just about price.
Understand your customer
Whether you’re planning to enter your first market or your fifth, good research is critical.
Research can often be done from your desk. Be strategic. Concentrate on one market at a time, and choose a low-risk target first to test your strategy.
Analyse your target markets to see whether your product or service will meet the needs of customers. Establish what you need to do to tailor your product or marketing for that market.
Assess your likely market position in your target market – your market position here does not always translate into new markets overseas.
Have a focused go-to-market strategy
Businesses that invest in upfront market information can gain valuable and often game-changing insights. They can avoid what could have been costly pitfalls.
Try not to make your approach too broad, as this could spread your efforts too thinly.
Decide how you’ll enter the market – will you just leap in, use agents or distributors, form a partnership with locals, or set up an overseas office?
Invest in the resources you need
A capital and resourcing plan is essential. Understand the new skills you may need in the business. Give yourself and your staff enough time to acquire these and develop your capabilities in building export markets.
Don’t rush. Be prepared to invest in market research and promotional material that are relevant to that market. Undertake many market visits. You can expect that the further away the market is, the greater the cost of setting up will be.
Consider the impact of these expenses on your cash flow in the set-up phase. It can take at least six to 12 months to see any returns from exporting.
And think about how you’ll hire and use the right people to support your international expansion, without putting your New Zealand operations at risk.
Understand the importance of a strong board
Good governance equals strong decisions. A good board will help you make the toughest decisions faced by your business. These decisions could include when to hire someone, how to distribute your products, or how much money to spend on marketing.
There are many experienced business leaders in New Zealand, but you may also like to consider potential board members who operate in the market you’re targeting.
Leverage your NZ story
Use your ‘New Zealandness’ to build a story for your products. The 2014 Country Brand Index identified that “people actively prefer products and services when they are from specific countries”. Check out New Zealand Story (www.nzstory.govt.nz), which is a free business toolkit with resources to help you promote your business overseas.
You can find online resources to help you with your export journey at www.nzte.govt.nz.
Most of New Zealand Trade and Enterprise’s (NZTE’s) services are free. NZTE can help with research, overseas connections, strategy, raising capital to transform your business, governance structure, help for pitching, and much more.
NZTE’s relationship with a company always starts with a conversation, so it can get to know you better and match the right support to your needs. Its customer adviser team is a free phone call away, on 0800 555 888. Or email NZTE at www.nzte.govt.nz/en/contact-us/general-enquiries/ to discuss your plans.
First published 16 November, 2016
By Carole Wright
The editorial below reflects the views of the editorial contributor only and content may be out of date. This article is sourced from a previous JUNO issue. JUNO’s content comes from sources that it considers accurate, but we do not guarantee that the content is accurate. Charts are visually indicative only. JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions.