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Ten Tips: Export Failures and Lessons Learned

Export Failures

By: Greg Seminara,Export Solutions
Topics: Export Failures

What are the major reasons that export initiatives fail? The chief reason is that manufacturers obtain a case of “international amnesia” and forget the fundamental steps that are required to build a brand in any country: Research, Marketing, Investment, and Selecting the right sales partner.

Listed below are Export Solutions Ten Tips on why export programs do not meet expectations.

1. No market or category research prior to launch
Every market is different and you need to gain basic category information prior to committing to a launch strategy. Basic market research can be sourced by conducting a few store checks with likely retail customers. “You won’t get a good grade if you don’t do your homework!”

2. Failure to establish a meaningful USP ( Unique Selling Proposition)
Retailers scrutinize every new product offer to stock brands that deliver true innovation. With the increased visibility of private label, it is becoming tougher and tougher for a new brand to “break through” to retailer acceptance particularly in Western Europe & North America. What “news” does your product bring to the category ? Is this “news” important to the consumer ?

3. Lack of a strategic launch plan
Unfortunately, many launch plans consist of a product catalog and price list. Some manufacturers sell an initial container to a distributor with few clues on how the distributor intends to build the brand in his market .

4. Insufficient Due Diligence to select the Right Distributor/Partner
Too many distributors are selected based upon a quick meeting at a trade show without extensive due diligence. Would you select your wife after only one date ? Every country has a wide variety of distributors of different sizes and specialties. Export Solutions distributor database tracks an average of 63 distributors/brokers per country. Proper partner selection should include consideration of at least three candidates, interviews with the company in their home office, local store checks to measure presence of their current brands, and reference checks with their existing brand partners.

5. Wrong person at the distributor leading your business
Careful attention should be placed at selecting the person who will manage the “day to day” issues on your business at the distributor. The company owner controls distributor resources , but may have little time to dedicate to your business. An energetic college graduate may have great ideas, but limited clout to influence the distributor organization. Manufacturers should always request to meet the person who would manage their business during the distributor interview process to determine if the proposed brand manager is a good “fit”.

6. No/Limited Investment in Consumer Awareness Activities
You can not maintain high expectations for your brand to sell well without marketing investments. I remember a proud colleague boasting of sales to an international Walmart division. However, the brand did nothing but gather dust on the shelf without any activity to attract consumer interest. Sales expectations should sync with your investment in brand support.

7. No Investment in Trade Incentives
There is a cost of doing business in every market. The retail trade is in the business to make a profit and “trade spending” is an important source of income. Distributors can stretch your dollars, but they can not create miracles without the appropriate investments to “play the game”.

8. No Focus on Store Level Presence
Some distributors and manufacturers feel that their work is complete once they have secured headquarter authorization for their new product. Certain markets are more organized than others, but in most cases the job has just begun. Brand owners invest in huge merchandising teams to fight the battle for shelf space at store level. If your distributor does not have retail sales coverage or there is no focus against shelf objectives, you will lose at the critical “point of sale”.

9. Brand Owner does not visit the market
Some export managers manage “the world” and find it difficult to visit markets on a regular basis. Distributors require the active participation and presence of the brand owner to optimize shipments. Failure to visit, leaves the distributor free to direct their resources against brands with higher visibility.

10. Unrealistic expectations
Manufacturers that fail to do their advance “homework” may have unrealistic expectations on market potential. Most brand owners and distributors are overly optimistic. Unfortunately, investment levels do not match the levels required to meet shipment expectations. For a new brand, a “crawl, walk, run approach “ may make sense.