Exporting f undamentals

NZTE customer director Terry Allen and Beachheads advisor Morag McCay offer their insights to companies considering offshore expansion.

Exporting isn’t simply about selling your product overseas. Morag McCay says it’s about committing to international market development, which takes time, patience and hard work.

Make sure you have a solid-base business before you contemplate exporting, she cautions. The cash, time and resource commitment is big, so ensure you have the capacity and capability.

“Be clear, too, about where your uniqueness lies,” she says. “Because New Zealand is small, our companies tend to broaden what they offer to grow here. In mature, developed markets, you may find many companies specialising in different facets of your domestic business. To compete with them, and to have sufficient impact to gain traction and cut-through, you need to focus on what you do that is special – to go ‘narrow and deep’.”

McCay also warns against jumping on the exporting bandwagon because everyone else is, or because you got a few overseas inquiries on your website.

“People think there’s a market, but they haven’t actually gone there and done the legwork and homework themselves. Verify that your perception is the reality. It comes back

To have never been to a market you’re trying to sell into is insane. Getting on the ground gives you a sense of who’s in the markets. What products? Where are they in store? How competitive is the space? What sizes are popular?

pricing?” What’s the pricing?

to identifying what customers need and want that you can do well, knowing that what you do is competitive in an international market. Carefully researching markets before you get into them is critical.” Researching and clearly validating your target market is essential, says Terry Allen.

“Your product or service may appear on the surface to translate clearly into a market and the opportunity might look significant,” he says,“but you need to understand the competition and channels to market.”

McCay suggests using your creativity when sourcing information. It’s about identifying not just the size and number of customers in a market, but also where your knowledge and access to information are best developed.

“It’s critical to consider where your best connections are so you’re not flying blind. Understand where you might get that information from. Supplement the structured, formal information provided by business associations, NZTE or other government departments with the different types of insights you can get through your own personal networks – business contacts, friends, colleagues, family, other companies trading in that market.”

The more information you have, the better you can manage risk, she says.

“Knowledge is power, and doing international development is about committing people and thinking time to go and do that sort of squirreling.” With your homework done, visiting your market is essential so you can see where your customers live and shop, and what retailers and distributors might service your category.

“To have never been to a market you’re trying to sell into is insane,” says McCay. “Getting on the ground gives you a sense of who’s in the markets. What products? What brands? Where are they in store? How competitive is the space? What sizes are popular? What’s the pricing?”

It’s also crucial to know exactly who and where your customers are, and to realise that the word ‘market’ does not mean ‘country’. While New Zealand and Australia are quite homogenous, large countries like China