Summary Export management
College 1
The significance of export to the Netherlands economy
1600 – 1700: the Golden Age and VOC:
• The Netherlands: a democratic, more liberal society: room for free entrepreneurship, free
development of ideas / innovation
• Dutch trade grew: agricultural products (grain) sold over Europe
• Bank services developed: loans to businessmen; investments in the V.O.C.;
Difference between usual risks and export risks:
Usual entrepreneur risks Export risks
Market risks (market size / growth; customer Market risks (market size / growth; customer
wishes/needs change) wishes
Economic risks (buying power, inflation, etc.) International conflicts (wars, embargo’s)
Technological risks (your products become Logistic risks (accidents, even modern sea
“outdated”) piracy)
Climatological risks (Hurricane etc.)
Cultural “risks” (product names may be
insulting in other countries)
Finding your products “copied” (China,
Indonesia)
Export with SME’s (small medium enterprises)
- Usually start considering export after getting some unexpected requests for an offer from a
foreign country;
- Usually start with entering an “easy” country:
o Low psychic distance: hardly differences in culture, political system, language,
education level and industrial development
o Low cultural distance: ‘we share the same culture’ usually a part of psychic distance
o Low geographic distance: neighbour country like Germany
- Have no experience
- Have low budgets / resources
- Usually sell to ‘global accounts’ and they expect the goods to be delivered in multiple
countries.
Export with LSE’s (large medium enterprises)
- Usually are already present on foreign markets;
- Have branch offices / agents / distributors;
- Have experience
- Have resources (capital and labour)
As a result LSE’s can be more proactive and easier access to information they need for exporting.
,Preparing for the International market selection
Definition of ‘international markets’=
1. A country or group of countries
2. Or a group of customers with nearly the same characteristics
International marketing books focus on a country or group of countries for the following reasons:
1. International data commonly sorted on a nation-by-nation basis
2. Agents and distributors are also organized nation-by-nation
Keep in mind that boundary lines are the result of political agreement or war and do not reflect
similar separation in buyer characteristics among people.
Outline for the IMS model
, Step 1 and 2: defining criteria and developing segments
In general, the criteria for effective segmentation are as follows:
- Measurability: degree to which the size and purchasing power of resulting segments can be
measured
- Accessibility: degree to which the resulting segments can be effectively reached and served
- Profitability: degree to which segments are sufficiently large and profitable
- Actionability: degree to which the organization has sufficient resources to formulate
effective marketing programmes
Ah high degree of the above factors indicates more general characteristics as criteria and vice versa.
More than one measure can be used simultaneously in the segmentation process. There are general
and specific characteristics of a country.
General characteristics:
- Geographic: e.g. where to sell airco systems? Scandinavia or middle east?
- Language: think of translation risks and brand names. Languages also provides automatic
insight into relevant culture
- Political factors: industry laws, ownership laws, EU- membership (y/n)
- Demography: e.g. selling baby food in a country where the population is getting older and nr
of infants per thousand is declining.
- Economy: electric dishwashers need to have a certain level of economic development. Think
of: GDP, inflation rate & employment rates
- Industrial structure: a lot of small retailers or large-scale manufacturing activities in a country
etc.
- Technology: degree of technological advancement, internet user rates etc.
Specific characteristics:
- Cultural characteristics: values, attitudes etc. think of Hofstede dimensions
- Lifestyle: activity, interest and opinions are factors that are typical for lifestyles. Also think
about food.
IMS procedure
1. Select general environmental criteria
2. Select more specific criteria
3. Split up the criteria in OPPORTUNITY variables and THREAT variables
4. Give all criteria a weighing factor
5. Be careful! The screening will be done in two steps:
a. 1st screening general criteria (step 1)
b. 2nd screening more specific criteria (step 2)
6. Collect the data
7. Turn the data into scores (1 to 10). Note that a ‘high
inflation rate’ is a low ‘score’
8. Calculate all scores x weights. Now you have the total
scores of opportunity and risk factors.
9. Make a diagram with 1-10 axes and plot each country.
10. Choose the best countries (in green area). Note that
with more than 6 variables, another round needs to be
added.
College 1
The significance of export to the Netherlands economy
1600 – 1700: the Golden Age and VOC:
• The Netherlands: a democratic, more liberal society: room for free entrepreneurship, free
development of ideas / innovation
• Dutch trade grew: agricultural products (grain) sold over Europe
• Bank services developed: loans to businessmen; investments in the V.O.C.;
Difference between usual risks and export risks:
Usual entrepreneur risks Export risks
Market risks (market size / growth; customer Market risks (market size / growth; customer
wishes/needs change) wishes
Economic risks (buying power, inflation, etc.) International conflicts (wars, embargo’s)
Technological risks (your products become Logistic risks (accidents, even modern sea
“outdated”) piracy)
Climatological risks (Hurricane etc.)
Cultural “risks” (product names may be
insulting in other countries)
Finding your products “copied” (China,
Indonesia)
Export with SME’s (small medium enterprises)
- Usually start considering export after getting some unexpected requests for an offer from a
foreign country;
- Usually start with entering an “easy” country:
o Low psychic distance: hardly differences in culture, political system, language,
education level and industrial development
o Low cultural distance: ‘we share the same culture’ usually a part of psychic distance
o Low geographic distance: neighbour country like Germany
- Have no experience
- Have low budgets / resources
- Usually sell to ‘global accounts’ and they expect the goods to be delivered in multiple
countries.
Export with LSE’s (large medium enterprises)
- Usually are already present on foreign markets;
- Have branch offices / agents / distributors;
- Have experience
- Have resources (capital and labour)
As a result LSE’s can be more proactive and easier access to information they need for exporting.
,Preparing for the International market selection
Definition of ‘international markets’=
1. A country or group of countries
2. Or a group of customers with nearly the same characteristics
International marketing books focus on a country or group of countries for the following reasons:
1. International data commonly sorted on a nation-by-nation basis
2. Agents and distributors are also organized nation-by-nation
Keep in mind that boundary lines are the result of political agreement or war and do not reflect
similar separation in buyer characteristics among people.
Outline for the IMS model
, Step 1 and 2: defining criteria and developing segments
In general, the criteria for effective segmentation are as follows:
- Measurability: degree to which the size and purchasing power of resulting segments can be
measured
- Accessibility: degree to which the resulting segments can be effectively reached and served
- Profitability: degree to which segments are sufficiently large and profitable
- Actionability: degree to which the organization has sufficient resources to formulate
effective marketing programmes
Ah high degree of the above factors indicates more general characteristics as criteria and vice versa.
More than one measure can be used simultaneously in the segmentation process. There are general
and specific characteristics of a country.
General characteristics:
- Geographic: e.g. where to sell airco systems? Scandinavia or middle east?
- Language: think of translation risks and brand names. Languages also provides automatic
insight into relevant culture
- Political factors: industry laws, ownership laws, EU- membership (y/n)
- Demography: e.g. selling baby food in a country where the population is getting older and nr
of infants per thousand is declining.
- Economy: electric dishwashers need to have a certain level of economic development. Think
of: GDP, inflation rate & employment rates
- Industrial structure: a lot of small retailers or large-scale manufacturing activities in a country
etc.
- Technology: degree of technological advancement, internet user rates etc.
Specific characteristics:
- Cultural characteristics: values, attitudes etc. think of Hofstede dimensions
- Lifestyle: activity, interest and opinions are factors that are typical for lifestyles. Also think
about food.
IMS procedure
1. Select general environmental criteria
2. Select more specific criteria
3. Split up the criteria in OPPORTUNITY variables and THREAT variables
4. Give all criteria a weighing factor
5. Be careful! The screening will be done in two steps:
a. 1st screening general criteria (step 1)
b. 2nd screening more specific criteria (step 2)
6. Collect the data
7. Turn the data into scores (1 to 10). Note that a ‘high
inflation rate’ is a low ‘score’
8. Calculate all scores x weights. Now you have the total
scores of opportunity and risk factors.
9. Make a diagram with 1-10 axes and plot each country.
10. Choose the best countries (in green area). Note that
with more than 6 variables, another round needs to be
added.
