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EXPORT MARKETING GUIDELINES

A Practical Guide for Companies in The Home Decoration Sector Aspiring to Launch or Enhance its Exports

Prepared by: Mr. Reinhard Werner With the contributions of Mrs Samridhi Chauhan Mrs Aileen Brindle Mr. Thong Nguyen Overall supervision: Mr. Koen Oosterom

March 2013

Table of Contents
Foreword by VIETCRAFT ........................................................................... 5 1. Introduction ........................................................................................... 7 Purpose of this manual ................................................................................. 8 How to use this manual ................................................................................ 8 Why should you take the export plunge? ..................................................... 9 Are you ready? ........................................................................................... 10 2. Identifying Your Target Market .......................................................... 13 The global market for crafts ........................................................................ 13 Changes in the world market ...................................................................... 14 Understanding international market research............................................. 14 Information Sources - Where shall we get our information?....................... 15 Questionnaire ............................................................................................. 17 3. Export Marketing Plan ........................................................................ 19 The elements of your export plan ............................................................... 20 Understanding market expectations ........................................................... 20 4. Market Entry Strategy ......................................................................... 23 Methods of market entry ............................................................................. 23 Price implications of working with different distribution channels ............... 26 Pricing strategy ........................................................................................... 28 Choosing an intermediary........................................................................... 28 5. Positioning and Target segments ..................................................... 31 High/Mid-high-Market segment .................................................................. 31 Mid Market segment ................................................................................... 31 Low Market segment .................................................................................. 32 Niche segments .......................................................................................... 32 Identication and visualisation of the prospective buyer ............................ 32 Proling your customer ............................................................................... 34

6. Market Access Requirements ............................................................ 37 Legislative Requirements ........................................................................... 37 Non-legislative requirements ...................................................................... 38 Corporate social responsibility.................................................................... 38 Benchmarking the home decoration sector ................................................ 39 Labels ......................................................................................................... 41 7. Promotion ............................................................................................ 43 Promotional materials ................................................................................. 43 Direct mail................................................................................................... 43 Personal visits ............................................................................................ 45 Internet ....................................................................................................... 45 Brochures and Catalogues ......................................................................... 46 Some tips on visual materials ..................................................................... 46 8. Trade shows ........................................................................................ 49 State of the market ..................................................................................... 49 Which trade fair? ........................................................................................ 49 Costs of Trade Fairs ................................................................................... 50 9. Trends .................................................................................................. 53 Megatrends................................................................................................. 53 Micro-trends................................................................................................ 56 Recurrent trends ......................................................................................... 57 Where to nd trends? ................................................................................. 60 10. Product Development ......................................................................... 63 Product life cycle ........................................................................................ 64 Important Product Attributes ....................................................................... 64 Product Collection ...................................................................................... 65 Product development strategy .................................................................... 66 Developing a Design Brief .......................................................................... 69 Annexes..................................................................................................... 71 Annex I: Web-links...................................................................................... 71 Annex II: Interior Magazines ....................................................................... 74 Annex III: Primary Trade Shows ................................................................. 77 Annex IV: Template Customer Survey ........................................................ 81 Annex V: Observations of key buyers and sourcing agents ....................... 83 Annex VI: Comparison of voluntary standards ........................................... 85

Foreword by VIETCRAFT

These Export Marketing Guidelines are made possible by the International Trade Centre (ITC), within the context of the joint programme Green Production and Trade to Increase Income and Employment Opportunities for the Rural Poor and in close partnership with the Vietnam handicraft exporters association VIETCRAFT. The programme is funded by the MDG Achievement Fund. Recognizing the need to increase income and to promote employment opportunities for the rural poor in Viet Nam, the Government of Viet Nam and the United Nations launched a Joint Programme on Green Production and Trade to Increase Income and Employment Opportunities for the Rural Poor in 2010. The programme supports the handicrafts sector, recognizing its importance as a major source of income for smallholder farmers and landless poor, and has a high potential for creating employment opportunities in rural areas by promoting entrepreneurship and sustainable production. The programme used the value chain approach to develop better integrated, pro-poor, and environmentally sustainable green value chains, enabling poor growers, collectors and producers to improve their skills and products, and to link these to more protable markets. Within the handicrafts sector, value chains that are of particular importance and relevance to poor target groups were considered for upgrading, and Bamboo/Rattan, Sericulture, Sea Grass, Lacquer Ware, and Handmade Paper were selected as the target value chains of the programme. The complex challenges faced by the ve value chains include depletion and limited availability of raw material, limited expertise on Good Agricultural Practices and lack of farmer extension services, low understanding and skills in cleaner production, product development and sustainable design, lack of basic business management or entrepreneurial skills, poor labour and working conditions, lack of support services, and limited ability to nd and analyse trade information and build sustainable market linkages. Due attention is given to introducing appropriate labour standards and ways to improve working conditions towards productivity and competitiveness. In addition, the programme stimulates entrepreneurship at grassroots-level, strengthen business skills, life empowering skills and group formation. Similarly, the programme strengthens the entrepreneurial skills of export-oriented crafts SMEs and works on improving vertical supply linkages between SMEs and producer groups. The programme furthermore builds capacity on market requirements and opportunities, market trends, design innovation, and strengthening of market linkages, which are seen as the main bottlenecks for value chain growth. The present Export Marketing Guidelines must be seen within this context. This guide provides a step by step approach, a practical guide for present and future manufacturers, for potential and current exporters interested in raising their export competitiveness and positioning of their goods in foreign markets.

Mr. Le Ba Ngoc Secretary-General AND Vice-Chairman Vietnam Handicraft Exporters Association (VIETCRAFT)

1. Introduction

During the last years the craft industry has become one of the most vital sources of income for developing countries which are rich in supply of natural bres and raw materials that lend their resourcefulness to talented artisans. However, with increased globalisation products are becoming more and more commoditised, with manufacturers facing increased competition from producers all over the world, particularly from China and other Asian countries. Moreover, the challenges of deteriorating economic conditions and frequently changing market trends strongly inuence consumer purchasing patterns which make it particularly difcult for craft exporters to successfully penetrate global markets particularly in the United States and Europe. On the other hand, it can be argued that with globalisation, these markets also offer unique opportunities for local artisans as the demand for unique hand crafted, ethnic goods continues to rise. This can be attributed to more educated and socially responsible consumers who directly inuence the value chain, and the growing number of products that are being demanded by a more lucrative segment of the craft market. Consumers are demanding goods which are unique, decorative, functional and less and less homogenised. It is therefore imperative that Vietnamese producers begin to address a number of their shortcomings. There must be a greater willingness to tailor designs to match buyer requirements, provide timely production and delivery, and improve on quality and efciency in view of increased price competition and consumer expectations. In addition, Vietnamese exporter must take into consideration that in order to meet these expectations it may require further nancial and physical investment on their part as they would most likely need to improve their working methods. Handicrafts are unique expressions of a particular culture or community through local craftsmanship and materials. The representation of a sense of identity, culture, through craft traditions is particularly strong in Vietnam as are the sectors skills, product and creative diversity.

Strength and Opportunities of Viet Nam


There are many strengths and opportunities which have been identied within the sector that can be nurtured and built upon to realise the overall goals of improving and expanding the market for mono artisans and SMEs. In summary, the following strengths of the sector enable it to positively contribute to the promotion of handicrafts as part of marketing a cultural identity: Strong well established craft tradition Diverse production skills and product offering Strong sense of identity and culture Vast resource of cultural motifs and traditional designs Rich historical information and references Sophisticated sensibility and creative energy within sector Good range of local raw materials Established export market

Export Marketing Guidelines

Handicrafts in general are an important productive sector, income generating and export commodity for Vietnam. The sector contains many strengths/opportunities which will enable it to be further expanded and developed including: Established and growing interest from export market Recognition of the importance of the sector and support by Government bodies Existing associations/bodies throughout value chain Concentration of sector within specic geographical areas Opportunities for outsourcing Potential for developing/promotion green sustainable products Established roles/key players within Value Chain

Have you ever thought about doing business in overseas markets? If not, or you thought it too difcult, then you might want to think again
Exporting can help you survive and grow. There are real opportunities to trade internationally; Vietnamese creative products continue to be in demand across the world. There are opportunities both in traditional, established markets such as Europe and the US, and the high--growth economies of countries such as China, India, Brazil and Russia. This guide aims to help you grow your business internationally. If you havent exported before, you will probably have lots of questions. As this guide sets out, there is a lot of expert assistance available. EXPORT MYTH I cant compete overseas Thats not necessarily true. Even if your product has no obvious foreign market as yet, the world is a big place with many needs and appetites. And remember, price isnt the only selling pointother factors such as need, utility, quality, service and consumer taste can make you competitive even if your prices arent the lowest in the market.

Purpose of this manual


The Export Marketing Guidelines are published for the benet of all business people, especially small and medium enterprises (SMEs), operating in Vietnam. All parties engaging in export activity, however, will hopefully nd the content useful. The handbook captures the current ofcial export process and provides additional considerations for a successful export business. The goal of the SME Export Handbook is threefold: 1. To provide a clear step-by-step guide for new and established exporters, 2. To reduce misconceptions about the complexity of exporting, and 3. To open the world of exporting to the private sector. This guide provides a step by step approach, a practical and useful guide for present and future manufacturers, for potential and current exporters interested in raising their export competitiveness and positioning of their goods in foreign markets. Based on the export opportunities the manual will also provide practical information on market access opportunities and limitations in International markets, how to penetrate these markets, and how to establish important points of contact.

How to use this manual


The manual can be read and re-read in whole or in part, it is simple and practical in its linear progression; you may use and apply the information that best adapts to your specic business needs at any given time. It is envisioned that the concepts shared in this document will allow current and potential exporters to analyse the potential market for their goods, and the strategies needed for accessing and establishing a presence in International markets.

Its Time to Go Global

Why should you take the export plunge?


Doing business overseas is a different experience for every company and its benets will vary greatly depending on the personal prole of each rm. As well as opening access to new sources of revenue, trading internationally will allow you to spread risk across a wider range of customers, extend the market for specic products and ensure that you are First of all, do your homework aware of international competition. In some cases companies and know yourself. Realise that it are able to offer much more interesting roles for their staff, and to is a commitment for a long, long recruit better people as a result. Exporting can also be a catalyst term. Know your strengths Do for innovation. In many cases you will see new ideas and your research on your product or opportunities overseas which will spur you to develop new and your service and then go for it. modied products to meet the needs of international customers. Exporter This can help you to gain and retain a competitive advantage in Vietnam as well. Research conrms that exporting companies: 1. 2. 3. 4. 5. 6. 7. 8. 9. Achieve levels of growth not possible domestically Increase the resilience of revenues and prots Spread nancial risk Achieve economies of scale not possible domestically Increase the commercial lifespan of products Increase the returns on investment in R&D Improve nancial performance Improve productivity Boost their prole and recognition internationally

Exporting does require you to deal with a variety of challenges, but you can surmount them through careful preparation and planning. Among these challenges are:

Increased costsan exporting venture means youll have to meet many short-term costs for things such as extra travel, production of new marketing materials and perhaps additional staff. You may have to modify packaging, or your products or services, to adapt them to markets abroad. Level of commitmentit takes time, willingness, effort and resources to establish and maintain yourself in foreign markets. Staying in for the long haulwhile exporting holds great economic promise for most companies, you can expect months or even several years to pass before you see a signicant return on your export investment. Cultural differencesyoull need to familiarize yourself with the differences in language, culture and business practices in your target market. If you dont, you risk in advertently offending your potential customer and losing a sale. Paperwork youll have to get used to it. Both Vietnamese and foreign governments require a lot of documentation from exporters of products and services. Accessibilityyou have to be easily available to your foreign clients and able to speak their business language mostly English Competitionyou must be sure youre thoroughly familiar with the competition in your target market.
Source: Adapted with from the Forum for International Trade Training, Going Global.

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Export Marketing Guidelines

Are you ready?


An export-ready business is one that has a marketable product, and the capacity, resources and how to make it happen. Your rst step is to think about the resources and knowledge your business already has. The export market presents many opportunities as well as challenges for your business. If you are considering the export market, your success will depend on how well prepared you are to meet them. We assume that a craft enterprise has the following components in place before entering the export market: An understanding of the expectations of the export market An export product line and a strategy for new product development Competitive and sustainable export pricing Professional export marketing materials Adequate production capacity Effective quality control systems An understanding of export distribution channels and a strategy for positioning yourself An export marketing plan A nancial strategy for export activities, including access to nancing Human resources. An export marketing team capable to represent the company in foreign business culture

Export Readiness Checker


CBIs (Centre for the Promotion of Imports from Developing Countries) from the Netherlands, export readiness checker consists of 15 questions. You will get the immediate results on-line after completing the test. Please bear in mind that it is a test and not an ofcial audit. The test results can guide you in ne-tuning certain aspects for your Export market preparation. Explanations, recommendations and hyperlinks are provided for further preparation. http://www.cbi.eu

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Export quiz: Are you ready?


Is your business ready to start exporting? Take the quiz, check your score and be sure. 1. Is your product already available? A. currently in production or being developed B. at the prototype stage C. at the idea stage only 2. Is your product selling in the market? A. selling, and market share is growing B. selling, but market share is low C. selling only one or two customer 3. Do you have the surplus production capacity to meet increased demand for your product? Yes / No 4. Do you have the nancing required to adapt your product to suit your target market and to promote it? A. nancing is in place B. nancing is being arranged C. no nancing available 5. Is your management committed to sustaining your export effort? Yes / No 6. Does your rm have a good track record of meeting deadlines? Yes / No 7. Does your management have experience in export markets? Yes / No 8. Does your product have a distinct competitive advantage (quality, price, uniqueness, innovation) over your competition? Yes / No 9. Have you adapted your packaging (labelling and/or promotional materials) for your target market? Yes / No 10. Do you have the capacity and resources to provide after-sales support? Yes / No

11. Do you have a Free on Board (FOB) or Cost, Insurance and Freight (CIF) price list for your product? Yes / No 12. Have you undertaken any foreign market research? A. completed primary and secondary market research, including a visit to the target market B. completed some primary and secondary market research C. no research 13. Is your promotional material available in the language of your target markets? (Business cards, brochures, websites) Yes / No 14. Have you started marketing your product in your target market? Yes / No 15. Have you engaged the services of a sales representative/distributor/agent, or partnered with a local rm? Yes / No 16. Have you hired a freight forwarder? Yes / No

HOW DID YOU SCORE? If you selected A, or answered Yes to 1216 questions, congratulations! You understand the commitment, strategies and resources needed to be a successful exporter. At the very least, you have the foundation in place to take on the world and succeed. 711: Not bad, but there are weaknesses in your export strategy. It may be wise to seek advice and guidance from experts, export consultants or the international trade branch of your nancial institution. Less than 7: Youll need to do more homework before you export. Consider getting help from the sources mentioned in this chapter.

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2. Identifying Your Target Market

The global market for crafts


The global market for home accessories is estimated to be at least US$ 100 billion according to a study done by US Aid on the Global Market Assessment for Handicrafts. The United States of America remains the largest importer of the home accessories with a total value of US$ 67 billion. According to the U.S. Department of Commerce, the United States market has a strong desire for the unique, the interesting, and products with a history. However, the US market is very price sensitive, and hence the price per unit realized in this market tends to be lower than in other countries. Nevertheless, the US remains traditionally a strong market, and continues to grow, fuelled by multiethnic immigration.

Market and Industry Trends in the EU


The EU is one of the most lucrative markets of gifts and decorative articles in the world. In fact, the EU ranks among the top consumers of this product category in the global market. The succeeding chapter will discuss the trends in the market and the industry, reecting its current state and the promising future that the EU market holds for the gifts and decorative articles sector. Due to the divergences in tastes and interests there is an enormous diversity in home decoration and accessories in Europe. According to Eurostat statistics, total EU-27 consumption of home decoration and accessories amounted to 13 billion in 2007. The EU-27 ranks among the leading markets for home decoration and accessories in terms of consumption. Germany was the country with the largest share of consumption (23%) of the total EU-27 for 2007. Italy was the second largest market for home decoration and accessories, amounting to 16%, followed by United Kingdom (13%), France (13%), Spain (11%), The Netherlands (3.9%), and Poland (3.5%). Branch related forecasts about consumption developments for the home decoration and accessories market indicate that in the coming years the market will decrease slightly or show almost no growth. This is mainly due to the worldwide economic crisis and specic problem in Europe i.e. nancial difculties in Spain, Greece and Italy. Despite consumption showing no growth, the EU remains a very sizeable market, and sufciently segmented to offer interesting niches, also for value rather than price offers. Most positive are the forecasts for products that are marketed as gifts, because people do not economize much on the presents they give. Additionally, products with identity are in line with current trends; these are products with cultural or social values incorporated, authentic products, products that use innovative techniques and craftsmanship or combine art with functionality. This trend, combined with the fact that more and more Europeans are interested in exotic cultures, presents opportunities for producers from developing countries. EU-27 imports of home decorations and accessories were valued at 8 billion. Countries which experienced the largest increase in imports in terms of value over the lasts years were Romania, Bulgaria, Slovakia, Latvia, Poland and Lithuania. Countries which experienced a decrease in imports in terms of value were Portugal, Luxembourg, Spain and Italy.

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Export Marketing Guidelines

The developing countries are playing an increasingly important role in the import of Home decorations and accessories within the EU-27. In 2007, 35% of total imports into the EU-27 of Home decoration and accessories came from developing countries; up from 33% in 2003. Imports from developing countries have increased in terms of absolute value as well.

Changes in the world market


Crafts are part of a much larger home accessory market, which includes handcrafted, semi-handcrafted, and machine-made goods. This market is strongly inuenced by fashion trends, consumer purchasing patterns, and economic conditions in the end markets. The growth of international markets for Home accessories, and an increased interest in global goods, sustainability, social and environmental awareness have opened up new market opportunities for artisans and handmade, handcrafted products. However, although the market is slightly growing, changes in the world market have affected the opportunities for Vietnamese crafts in the international marketplace, which can be broadly summarised as follows: The ood of less expensive goods from China in the market Changes in legislation/certication processes affecting export/sale of certain product groups Financial crisis resulting on a downward pressure on price points and reduced capacity of importers to take stock risk Need within market for more streamlined cost effective buying practices Rise of retail direct-import buying practices Negative perceptions about process, communication, services, amongst some international buyers International travel concerns generally High competition in the sector internationally Relatively complex supply chain compared to competitor sectors, and growing concern amongst importers/ consumers regarding supply chain management/costs and sustainability(fair trade/environmental) issues Lack of conduit and coordinated approach to sector to meet market needs, build capacity of artisans, and realise market potential through clearly developed promotional plans appropriate to specic segments. Low level technology, and lack of new technical innovations in the craft production area

Understanding international market research


When nishing your export plan, market research becomes the most important contributor to international business success. There are about 190 countries in the world, and you would want to pick the right one(s) for your product. To do this, you need information that will provide a clear picture of the political, economic and cultural factors affecting your operations in a given market. For example, you may already be aware of an opportunity in a foreign market, but need specic information to take advantage of it. Or perhaps you have a target market in mind and you want more detailed knowledge of the demand for your product. Sound market research is the key to understanding your opportunities. It can conrm that an opportunity actually exists in a particular market and can help you analyze the markets characteristics. It can give you insight into how a new market can be developed. Most important, it helps you discover whats important to your potential customers and what may inuence their buying decisions. Although theres usually a lot of detail involved, the three basic steps of international market research arent particularly complex. They are: Step 1: Screen potential markets Collect statistics related to your sector that show product or service exports to various countries. Identify ve to ten large and fast-growing markets for your product. Look at them over the past three to ve years. Has market growth been consistent year by year? Did import growth occur even during periods of economic recession? If not, did growth resume with economic

TIP: Eastern European markets might offer great opportunities: growing markets, less competitors, your products might be very new......

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Its Time to Go Global

recovery? Select some smaller emerging markets that may hold ground-oor opportunities for you. If the market is just beginning to open up, you may not have as many competitors as you would in an established market. Target three to ve of the most promising markets for further study. Step 2: Assess target markets Examine trends that could inuence demand for your product. Calculate the overall consumption of products like yours and identify the amount imported. Study the competition, both domestic and non-domestic. Look at each competitors market share. Identify what affects the marketing and use of the product in each market, such as channels of TIP: Exploring foreign markets can distribution, cultural differences and business practices. Identify take longer and cost more than you any foreign barriers (tariff or non-tariff) for the product being expect. Be prepared for additional imported into the country, as well as any barriers (such as expenses for market research, export restrictions) affecting exports to the country. Search for product launches and personal Vietnamese or foreign government incentives to promote the visits. export of the product. Step 3: Draw Conclusions After analyzing the data, you may decide that you should restrict your marketing efforts to a few countries. In general, new-to-exporting companies should concentrate on fewer than ve markets. One or two countries are usually enough to start with. With these conclusions in hand, you can then begin to develop your marketing strategy1. There may be a part of the market you dont know how to access, or you have an idea for a product but dont know if it would sell well. The rst step is to translate the problem into a market research question. This is done in the form of questions that dene the information we need and how we can nd out. Example: A prototype product has been developed by the design team, however, management is not sure if the product is competitive in price with the comparable products already in the market. The problem may be whether or not to launch a new product at a certain time. The research problem could be to decide whether the market would accept the new product at the suggested price. For good results we need a clear AIM. Before you begin to investigate the market, be clear what it is you want to know. Ask the following questions: What is the purpose of this research? What knowledge do I hope to gain from investigating these buyers/this market? How will that help me to achieve better sales?

Information Sources - Where shall we get our information?


There are many ways to study a market, so the second step of your international market research may take different forms. You might sometimes rely on a gut feeling, and at other times use sophisticated statistical techniques. The more detailed and objective your research, however, the better. There are two main types of market research, secondary and primary.2

1 2

Source: Adapted from Western Economic Diversication Canada, READY FOR EXPORT: Building A Foundation For A Successful Export Program Some parts were adapted by Handicraft Sector Design and Business Development Manual, Bronwyn Blue; Cambodia ILO 2006

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Export Marketing Guidelines

Primary data
This is the information that is collected directly from wholesale and retail buyers. Common types of primary data are: Demographic and socio-economic changes Lifestyle information; Opinions; Awareness and knowledge - for example, brand awareness; Intentions - for example, what people want to buy; and Motivation

Primary data can be obtained by: Observation - recording of actions, which is performed by either a person or some mechanical or electronic device, like cameras; and Communication - surveys (verbally or in writing) and emails. (Communication is often faster and less expensive than observation.)

Secondary data This is information such as sales invoices and records. It can also be published information, such as information found on the internet. This system has the advantages of secondary data include saving time and costs. The disadvantages are that the data may not perfectly t the research question. Secondary Data can provide insight into information such as: What are the businesses best selling items? Where the businesses buyers nationalities? What are the fashions and trends in those countries? The latest colour trends.

When using secondary data, keep in mind a couple of issues: Is this information relevant to our aim /questions? How current is the information? Is it accurate? Who is providing the information?

After completing your secondary research, you move on to the primary research phase. Here you collect market information through direct contact with potential customers or other sources. Primary research almost always demands direct, personal involvement through interviews and consultations. Your foreign or domestic contacts will be able to help you better if you state your companys objectives at the outset and present your questions clearly. TIP: Ask your current customer about emerging trends, new product functions, design ideas Set bookmarks in your internet browser to enable easy access to trend and market information, including retail websites Research and visit additional retail websites that relate to your products and target markets Review these retail websites, looking at product functions, pricing, and dimensions. Review industry magazines online, looking for information on trend, product functions, and potential new customers. Visit trend-watcher websites to look for emerging trends that could affect your products. Use search engines like Google to research trends and products, looking at forms, colours, patterns, functions, pricing and dimensions (some trends may be fading, avoid imitating competitors). Research the competition, e.g. through Alibaba, to see what products your competitors offer and against which prices.

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Questionnaire
The questionnaire is a very important tool for gathering primary data. Thought must go into preparing the questions, as misunderstandings can invalidate the research data. The questionnaire should also be tested prior to conducting the survey. Many of the questions in a market research survey are designed to measure attitudes. Attitudes are a persons general evaluation of something. A buyers attitude is an important factor in market research.

Whom do you ask?


The sampling frame is the group of people that you invite to answer your survey. For many businesses in the handicraft sector, current and potential buyers are the best sample frame for information about your most immediate market. When creating a sample frame, it is better to survey as many relevant people as possible to address your TIP: How to do a successful market specic research question. research. The manual digging for gold of CBI will give a lot of tips and can be used. The more responses you collect, the better you can understand http://www.cbi.eu your buyers needs and the more targeted is your market offer. Furthermore, the number of surveys distributed will be more than the number of responses collected, as not everyone will fully complete or even begin to complete it. For this reason, it can be useful to provide your participants with an incentive to complete and return the surveys. Providing your buyers with the information that your survey serves to learn more about their needs/demands, and in turn provide them with better service, this alone may be enough incentive to complete and return your survey. However, it may also be effective to offer a small discount on their next order. Depending on the nature of your survey questions, the responses may provide insight into: What kind of products your buyers are looking for? What are the problems they have experienced dealing with your staff or business? What trends will they be investing in for the next season? Using this information, you can respond by: Developing appropriate products according to the buyer feedback, Aim to address challenges that buyers have had working with your business Utilise their knowledge of upcoming trends to develop buyer orientated products A template for a customer survey is included in Annex IV.

TIP: There are many free survey tools available on the Internet, which could possibly be used to make your survey more professional and user-friendly. One commonly used is called Survey Monkey: http://www.surveymonkey.com

Some Tips were adapted from the Canadian Trade Commissioner Service publication, Expand Your Horizons.

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3. Export Marketing Plan

Why plan?
If you plan your export project thoroughly, youll have a better chance of doing well in your target market. Bad planning (or no planning) will undermine your prospects of success, and keep in mind that a major failure abroad could severely damage your domestic operations as well. Financial institutions and other lending agencies will not normally provide funds to a business that lacks a well developed export plan. At other stages of the export process, potential partners and investors may commit themselves only if your plan clearly sets out your objectives along with the processes and resources youll use to achieve them. In short, youll get nowhere without an export plan. This chapter will help you create one. An export marketing plan (EMP) is a very useful tool for newcomers in the arena of internationalisation, as well as for entrepreneurs who already have a market presence in foreign markets. For both types of companies, it is a marketing and management instrument that helps to make sound, logical and fact-based decisions. It is a tool for structuring and systemising your approach of new markets or your expansion efforts in existing markets. As such, it is an integrated part, or extension, of your companys business plan. At the very least it is a tool for fully appropriating opportunities at the lowest possible cost. When preparing for export, the rst thing to do is to put things into perspective and to prepare an introduction that includes a short historic track record and a brief statement on your current position and performance: who you are, what you do (business concept), and the markets you cover. This is what we call the sense of location. Subsequently, you include the companys mission statement, which is like a company charter. The mission statement should summarise your company goals and your companys strategy: where you want to go and how you want to get there. This is what we call the sense of direction.

EXPORT MYTH Exporting is too complicated It can seem that way, but remember that you dont have to do everything yourself. You can use outside experts such as overseas agents, foreign distributors or freight forwarders. While youre getting established as an exporter, they can represent you, nd overseas customers, manage sales orders, handle paperwork and deliver the goods.

A good export plan begins at home, and is built on a comprehensive business plan that accurately reects your current domestic operations. If your business plan is out of date, now is the time to review and renew it. If you dont have one, this is denitely the time to create one.

TIP: Contact your industry association (Vietrade/Vietcraft) to nd names of successful exporting companies in your sector and target market. You can then set up a network of business contacts who can provide you with practical advice.

Once youve polished up your business plan, you can start creating your export plan. It isnt something youll nish in a week, though, and even after youve begun exporting, youll need to update it regularly.

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Export Marketing Guidelines

The elements of your export plan


An export plan is really just a business plan that focuses on International markets. It identies your target market(s), export goals, necessary resources and anticipated results. Your export plan should contain the following: Introduction Organizational issues Products and services Market overview Market entry strategy Regulatory and logistical issues Risk factors Implementation plan Financial plan

TIP: The CBI interactive EMP builder guides you step by step in preparing an Export Marketing Plan (EMP) http://www.cbi. eu (Export tools: Export Marketing Plan)

Building a strategic Export Marketing Plan involves identifying your target customer, dening your target market, and planning where to market your products. A successful export marketing plan will help you identify and approach your target customer. Your marketing plan will direct you to properly service your current customer base while also cultivating new customers. An export marketing plan should also forecast your marketing and promotional activities for at least two to three years, and yet be exible enough to adjust to market and customer reactions.

Understanding market expectations


A major issue to emerge between buyers and international producers is trust. Without this essential ingredient, a workable business relationship simply cannot be sustained. Trust develops over time and requires that both the buyer and the seller communicate their expectations effectively. Often, cultural barriers contribute to a lack of understanding. Overcoming these barriers takes a commitment to developing a relationship and an openness to nding creative solutions together.

What are the typical expectations of buyers?


Quality The quality of your shipment will conform to your original samples Products will conform to safety standards Price Prices are competitive Prices reect the quality and design of the product Prices are guaranteed for at least 6 months Delivery Delivery will be on time You are prepared to work over-time, and anytime (weekends, even holidays) to meet delivery deadlines Documentation will be correct Goods will arrive adequately packed and undamaged You will make every effort to produce re-orders on time Service You have a fundamental understanding of business, and keep accurate chronological les of your business transactions You intend to give good, professional service You want your customer to be satised You will keep your promises Business will be conducted in English Communications (including bad news) will be timely and frequent, preferably by e-mail or fax The opportunity for success and prot motivates you You have a credit policy in place prior to accepting an order You will arrange nancing for production prior to accepting an order

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Commercial buyers conduct business on the assumption that competition is abundant. If a supplier cannot provide the product, quality, price, delivery and customer service that the buyers expect, then they will look for other suppliers who can. In Annex V you will nd an overview of observations and requirements as indicated by buyers and sourcing agents in Vietnam following a survey by the research team.

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4. Market Entry Strategy

You enter your target market


Based on your market research, youve chosen the most promising markets for your product. Using what you know about these markets, you next decide which entry method best suits your needs. Developing a market entry strategy simply means nding the best methods of delivering your goods to your market and of distributing them there. Some factors to consider are: How is business conducted in your target market What are your companys export strengths and weaknesses? What is your companys nancial capacity? What product are you planning to export? How much service and after-sales support will your customers require? What trade agreements or barriers apply to your target market?

Methods of market entry


The traditional means of market entry fall into several broad categories: direct exports, indirect exports, partnerships or co-maker ship. Well examine each of these and then look at the question of intermediaries, agents, distributors and other go-betweens.

Direct exports
Direct exporting has advantages because it can: give a higher return on your investment than selling through an agent or distributor; allow you to set lower prices and be more competitive; and give you close contact with your customers. It also has disadvantages, because: you dont have the services of a foreign intermediary, so you may need longer to become familiar with the market; and your customers or clients may take longer to get to know you, and such familiarity is often important when doing business internationally. TIP: A good opportunity in case you have an excellent logistic. Negotiate with DHL, FedEx or other courier services to get the best price for small deliveries. Deliver door to door smaller customer like it because they are not experienced in custom clearance Smaller exporter/artisans should look at www.etsy.com

Indirect exports
You market and sell to an intermediary such as a foreign distributor. You can also retain a foreign agent or representative who does not directly purchase the goods. For many new exporters, an intermediary may be the best way to enter a market. DID YOU KNOW: Nine out of ten exporter -manufacture from Developing Countries do Indirect Export

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Intermediaries
While you may be sure that the direct-exporting route is best for your company, dont be too quick to jump on a plane and start knocking on doors. Think rst about using an intermediary, because the right one can save you an enormous amount of time and money. They come in several types: agents, representatives, trading houses and distributors. My Dream: bringing my product directly to the consumer. But I need help: these are the intermediaries

Agents and representatives


Agents and representatives arent exactly the same. An agent secures orders from foreign customers in exchange for a commission. A representative is a specialized agent who operates within a specic geographic area and who sells related lines of goods. Both may be authorized to enter into contractual sales agreements with foreign customers on your behalf. Normally you pay them a commission only when they sell your product or service. An agreement with a foreign agent or representative immediately gives you a presence in your target market. This is usually less costly than setting up your own direct sales operation. Your representative can also make more TIP: good agents do not need frequent sales calls than you probably could. Finally, such an new suppliers especially if you do arrangement gives you control over the product and its price not yet have sales in the market. an important advantage. Good foreign agents or representatives Nevertheless in many countries can help you in many ways. They can research markets, you will nd associations of Sales advice on nancing and transportation options, clear goods Agents.: For examples www.cdh.de though customs, provide access to potential customers, make in Germany. It is essential to make collections, and supply information on local business practices, contracts with agents laws and cultural traditions.

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Importer/wholesaler
The most interesting distribution channel for developing country exporters of Home Decoration and Handicrafts are importers. The importer is familiar with local markets and can supply considerable information and guidance to the overseas manufacturer in addition to the primary business of buying and selling, such as the administration of import and export procedures and holding of stock. Furthermore, they have strong relationships with suppliers and buyers all over the world. These intermediaries have long-established links with their customers and are in a better position (than foreign processors) to know the requirements of the local market and of individual end users. It is strongly recommended to trade with different importers in order to minimize risks.

Department Stores
Large department stores buying directly from foreign suppliers has become popular, since it cuts out several intermediaries, thus reducing costs and enabling retailers to offer the product at a lower end price. These large chains have their own purchasing staff, buying from all over the world. Doing business with these powerhouses is not easy for suppliers in developing countries. The importers are strict in their demands; they set the terms, and they are the one in control requesting sharp prices, big volume, and just- in-time delivery. However, these big players are nevertheless on the lookout for partnerships with reliable suppliers. It is in their interest to build a lasting relationship with suppliers who can uphold the image of the company in the market, an image of reliability, quality and high moral (social and environmental) standards.

DID YOU KNOW: For smaller exporter it is becoming more and more interesting to deliver even directly to retailers or retail chains. Today also retailers want to cut the middlemen and increase their margin. This can be achieved by offering perfect and low price logistic and short lead times. There is also then the possibility of working directly with design teams on customised collections.

Retailers
Retailers are the resellers of the imported product to the nal consumer. Some retailer, especially the larger chains, are importing directly from their suppliers in developing countries, others order at home, from wholesalers of brands. Retailers come in many sizes: some are big, part of a chain, other are small and independent. There is a tendency for consolidation in retail, with big retail brands becoming more spread out over Europe or The States and becoming more lifestyle (offering home decoration and textiles, as well as fashion accessories and furniture). Smaller independent retailers will be more specialist and carry collections that are closer to the needs of the local consumer. They buy from wholesaler or agents representing brands, and usually do so by visiting trade fairs. They will also buy from local manufacturers. These specialists still represent the highest proportion of distribution in most countries and would be the best channel to sell your products to a targeted consumer group. They need small quantities and need it as soon as the shelf is empty. As such they cannot usually be serviced effectively by an exporter directly.4

Mail-order/On-line Stores
Mail-order companies are in the US and Europe, especially in Germany important and strong business partners with a fairly large slice of the market. Their selling structure distinguishes itself from others as marketing This segment is only interesting if you are able to provide a high level of design and service, often on a one-off basis. Prices and quantities can be favourable depending on the type of project.

CBI.eu CBI market channels and segments for Home Decoration, August 2012

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(catalogues) represents an important share of their selling costs, being signicantly higher than those of a retail shop. Nevertheless, the consumer expects to pay the same if not a lower price as with the retail shop. This pricing can only be achieved through large orders and therefore also price negotiations with wholesalers and manufacturers. In brief one can say that mail-order companies purchase their goods at better rates than retailers but charge similar consumer prices, due to a higher mark-up. In case of direct import, the mark-up will be subsequently lower.

Price implications of working with different distribution channels Importers / Wholesalers


When importing, the wholesaler / importer has to reckon with procurement costs, on top of the wholesale price (selling price of the manufacturer). These costs involve freight, customs and bank fees but also carrying charges, management charges and selling costs - like trade fairs, commissions for sales agents and advertisement. The wholesaler distributes his goods mainly to retailers. The selling price consists of the wholesale price + procurement costs + prot. In general the wholesalers calculate a net mark-up of approximately 80% to 100% on the cost price (wholesale price + procurement costs). A universal equation for the procurement costs does not exist, since they can vary according to the volumes of purchasing, the transportation means (see or air) or the country of origin. Nevertheless a rule of thumb says that the procurement costs of the importer vary between 25 % and 30 %. Example of calculation: Table Runner FOB 10.00 Wholesale price (selling price of manufacturer) Freight costs proportional Financing Bank fees Cost price 80 % mark-up on the cost price Wholesalers selling price Wholesalers selling price to retailer round up

10,00 2.00 0.20 0.10 12.30 9.84 22.14 23.00

Retailers
The costs serve as a basis for the pricing of the goods. The main costs for a retail shop are the rent and the staff, which leads to almost the same mark-up everywhere. Differences are only marginal and are due to factors like the region, the style and the assortment. The mark-up for handicrafts, textiles and small furniture varies in general between 120-150 % on the net selling price (price of the wholesaler), 19% VAT (here: Germany Depending on the country) inclusive. In rare cases, it can drop down to 100 % Example of calculation table runner: Selling price (= cost price) 100% mark-up for cost covering and approx. 10 % prot Total VAT 19 % Consumer price Round up

23.00 23.00 46.00 8.74 54.74 54.50

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Retailer or Department Store Direct Import


Should the retailer import the goods by himself from a foreign country which is becoming more popular the mark-up on the wholesale price (price of the manufacturer) will come to 250 to 300%, cumulating the mark-up of the wholesaler and the retailer. Wholesale price (selling price of manufacturer) Freight costs proportional Financing Bank fees Cost price 250 % mark-up on the cost price Wholesalers selling price 19% VAT Consumer Price 10.00 2.00 0.20 0.10 12.30 30.75 43.05 8.18 51.23

MailOrder
Wholesalers cost price 20% discount due to large quantities Total cost price 150% mark-up for costs and approx. 10 % prot Total 19 % VAT Consumer price 23.00 5.00 18.00 27.00 45.00 8.55 53.55

In order to assess the market potential of a product, it is necessary to keep in mind that the consumer price will be in general 5 to 6 times higher than the wholesale price.

Setting prices
Strategic pricing is one of the most important factors in achieving nancial success in your export business. Part of setting a realistic export price, and therefore an appropriate prot margin, is to examine production, delivery costs, competition and market demand. You should also understand the variables of your target market and other export-related expenses such as: currency exchange rates; market research and credit checks; receivables/risk insurance; business travel; international postage, cable and telephone rates; translation; commissions, training charges and other costs involving foreign representatives; consultants and freight forwarders; and product or service modication and special packaging.

Remember that currency valuations affect your prot. Your pricing should try to accommodate currency uctuations.

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In domestic markets, few companies can set prices without considering their competitors pricing. This is also true in exporting. If you have many competitors in a foreign market, you may have to match or undercut the going price to win a share of the market. If your product is unique or new to a market, though, you may be able to set a higher price.

Pricing strategy
How will each market affect your pricing? To begin with, you have to include things like product modications and probably shipping and insurance in your calculations. And as mentioned above, you cant ignore your competitors pricing. Refer to your market objectives when setting your price. For example, are you trying to penetrate a new market? Looking for long-term market growth? Or pursuing an outlet for surplus production? You may have to tailor your marketing and pricing objectives to market segment. For example, pricing strategies for low-end market, where price competition is erce, will differ from your objectives for high middle segment of the market.

This all means that you have several pricing strategies available: Static pricing Flexible pricing Full cost-based pricing Marginal cost Penetration pricing Market skimming charging the same price to all customers. adjusting prices for different types of customers. covering both xed and variable costs of the export sale. covering only the variable costs of production and exporting, while you pay overhead and other xed costs out of domestic sales. keeping your price low to attract more customers, discourage competitors and gain quick market share. pricing the product high to make optimum prot among high-end consumers while there is little competition.

After youve determined your costs and chosen your pricing strategy, establish a competitive price for your product or service that gives you an acceptable prot margin.

Choosing an intermediary
You can obtain information about potential intermediaries from trade associations, business councils and banks. Talking with other Vietnamese exporters or potential foreign customers also can help you identify prospective agents or distributors. Once youve developed a list of candidates, you should visit the market to meet them. Talk to several rms and then carry out your due diligence to make certain theyre reputable. You can also protect yourself by entering into a limited term trial agreement. If the foreign intermediary does not meet your expectations, you can nd an alternative once the trial period is over. To evaluate a prospective intermediary in detail, use the questions below. Be sure to tailor it to your companys particular needs and the characteristics of your chosen market

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5. Positioning and Target segments

The market for handicraft, home textiles and accessories can be divided into 4 price categories: high, mid-high, moderate and low. The same categories apply to the retail sector.

High Mid-High

Product: exclusive (one-off or limited edition) and innovative (hand-made, custom-made), statement pieces providing status Price: premium, consumer price insensitive Place: brand stores, design stores, department stores Promotion: brand communication, personalized communication Product: mass, but some designed added, functional as well as decorative, trendy Price: good value for money, consumers shop around for alternatives Place: general retail, private label and retail brands, gift shops, malls Promotion: focus on trendiness and lifestyle, affordability, home magazines

Mid-Low

Product: everyday basics, seasonal products, inexpensive gifts Price: good value for money, not much mental or physical effort made by consumer Place: always around the corner, general retail and retail chains, g garden centres Promotion: offered in sets/volumes, seasonal sales

Low-End

Product: everyday basics, functional, but not alway durable, no originality Price: available to all, discounted, price-sensitive consumers, cheap impulsive purchasing Place: always y around the corner, , supermarkets p and hypermarkets, and other one-stop shopping places, discount outlets Promotion: door-to-door leaflets, direct mail, disco and sales events

Source: CBI.eu CBI market channels and segments for Home Decoration, August 2012

High/Mid-high-Market segment
Most up-market stores offer quality brands and round-up their assortment with high prole newcomers, who stand out due to exceptional design or quality. Unique pieces are to the fore and take precedence over mass production. Precious materials and a perfect nishing are a must in this genre. Customers for this type of items are to be found in the high income levels with an exclusive taste.

Mid Market segment


The majority of the retailers though belong to the moderate price level. An important characteristic of their selling strategy is the individuality of their assortment and the theme around which they are presented. The middleclass customer often an open-minded and young public expects to nd here special items of good quality but as reasonable/affordable prices. In this case, innovation, aesthetic and functionality are more relevant than brands. A number of established high street retailers belong to this category as well as an increasing number of fair trade shops.

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Low Market segment


Low price retail shops dene themselves over the price and stand in competition with a lot of other stores offering similar goods. Low prices are achieved through large quantities and a high stock-turn over. Quality and uniqueness play a secondary role. The products originate mostly from low-income countries. On this price level one will nd basically larger retail or chain stores.

Niche segments
There are several growing niche segments (becoming increasingly mainstream) relevant to the sector. These are, among others, fair trade, eco-chic/environmentally friendly and hand-craft collectors or concept stores. Value for money This describes the relationship or balance between the price of a products and its perceived value in terms of: Functionality Design Quality of materials and nish Brand identity

This has become one of the most important factors inuencing purchase decisions of EU and US customers. This means it is not only the price of product that counts.

Recommendation for Vietnam It is recommended to follow the trend: cut the middlemen. This does not necessarily mean that small exporters/manufacturers should directly target retailers independently, however there could be a coordinated effort from Vietnam through a consolidating exporting organisation targeting retailers or department stores directly, rather than working through an importer. This should be focused on the mid to higher market segments to achieve also a better margin. Giving extra value for money in terms of design, eco friendly production and products and fair trade will also improve chances of success. It is recommend that the following key factors are considered in positioning Vietnam crafts in the EU market Authenticity Differentiation from competing suppliers Design Oriented (authentic and modern) Quality/durable Sustainable (Fair trade/eco friendly (inc natural and recycled materials) Ethical

Identication and visualisation of the prospective buyer


TIP: Buy international magazines search the internet look at websites of relevant trade fairs go to the website of your existing customer and identify potential business partner in your segment. As soon as you know how the company looks like you will nd many more in other places.

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HIGH-MID MARKET SEGMENT

MID MARKET SEGMENT

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LOW MARKET SEGMENT

Proling your customer


The right information will let you build up a useful prole of your customers. This typically includes: Who they are What they think and believe what interests them their opinion of you and your product their purchasing behaviour which products they buy, where they buy them, when, and how they pay

Some general tips: You will nd the information via their website and questionnaire (see under questionnaire above) Making customer information available to employees can make them more productive You need to decide what information different employees might need, and how to make it available to them. You can share correspondence and other information on your computer network Its important for information to be accurate. Update records regularly!

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Company ABC Belgium Mr. Steve Z Managing Director 0032-3-..... Email: hp://www.xxxxxe

Company ABC Belgium Mr. Steve Z Managing Director 0032-3-..... Email: hp://www.xxxxxe/

Started in 1992 as a ceramic and glass wholesale business business. Export wen went full ull speed and the number of clients grew steadily. The success is the result of a unique collecon, pure and linear, which radiates their own creave vision regarding trends and decoraon. The showroom is now 600sqm, the warehouse 4000sqm and the oce 400sqm. Contribuon to the creaon of contemporary collecons. Importer, wholesaler, distributor exhibing at M&O, Deco Brussels, Ambiente and Macef appr. 600 retail clients mainly y furniture stores, department p stores, ower bouques, q design g stores ceramics, glassware, vases, bots, planters Segment: high Style: contemporary product development: own design department endconsumer: d b hi hi income, 30 urban, high 30-50y, 50 f/m, f/ design d i l led, d t trendy,cool d l purchase: directly from manufacturer, mainly Asia and East Europe sourcing: visits several fairs in Asia and Europe, Internet, visits suppliers buying criteria: design conciousness, CSR, eco friendly, knowledge of EU regulaons 2x per y g cycle: y p year y for shipment/inhouse: p March and Sept., p sampling p g 12 months in advance. Lead me Buying 60 days. Producon and pre-producon samples. Labelling: own brand Exlcusivity: on products in Europe Turn-over: 20 mio , payment: L/C 30 days,

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6. Market Access Requirements

As a manufacturer in a developing country preparing to access EU markets, he/she should be aware of the market access requirements of his trading partners. Requirements stem from legislation and labels, codes and management systems. These requirements are based on environmental, consumer health and safety and social concerns. Exporters need to comply with legislation in the USA and EU and have to be aware of the additional non-legislative requirements that the trading partners might request.

Legislative Requirements
At the moment, the most important environmental and health issue in trade is product legislation. The bestknown example in relation to this is the EU legislation on Azo dyes. Textiles are subject to constant developments in the eld of product legislation, since these products are in contact with the skin, legislation is set to protect consumers health. Product legislation for textiles is complex and highly subject to discussions and modications. Therefore, many producers choose to have their products tested according to labels, such as ko-Tex 100 or SchadstoffGeprft. These labels cover a whole set of restrictions, including the most stringent product legislation in the EU and its member states. Hence, it functions as a guarantee for compliance with product legislation.

TIP: You nd information on 36 legislative requirements for different products of Home Decoration and Home Textiles on http://www.cbi.eu/marketintel_platform/Home-Decoration/136093/mar Complying with the Made in USA labelling standard: http://business.ftc.gov/documents/bus21-threading-your-way-through-labeling-requirements-undertextile-and-wool-acts Federal Trade Commission Homepage: http://www.ftc.gov The FTC publishes free brochures on many consumer issues.

Textile labelling
The European Commission has harmonised legislation regarding the names, composition and labelling of textile products in order to ensure adequate information for consumers and prevent differences in national legislation.

FOR MORE INFORMATION ON STANDARDS ORGANIZATIONS ISO (International Standards Organization), Internet: http://www.iso.org GINETEX (Groupement international detiquetage pour lentretien des textiles) Internet: http://www.ginetex.net/ginetex/ Eco-label organizations are among others: ko-Tex Association: Internet: http://www.oeko-tex.com

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Non-legislative requirements
Besides legislative requirements, producers are being confronted with additional requirements. Buyers want more information from producers, for example about their social conditions at production sites. Although the requirements in this eld do not make part of ofcial legislation and have no legal basis, it is recommended to take them into account in order to be competitive. These can be related to CSR, vendor audits, fair trade certication, FSC (if not legislative)

EXAMPLE

buyer requirements does not leak no cracking when boiling water is poured in easy to handle when pouring tea from pot bamboo surface must be smooth no breakage during transport no mould in bamboo upon arrival healthy environment for workers in factory fair wages paid to workers environmentally friendly production

legislative requirements

will not contaminate water/tea glaze lead and cadmium free

Corporate social responsibility


Corporate social responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. It is about enterprises deciding to go beyond minimum legal requirements and obligations stemming from collective agreements in order to address societal needs.

Why is CSR important?


CSR can contribute to public policy objectives: a more rational use of natural resources and reduced levels of pollution through eco-innovation, voluntary adoption of environmental management systems and labelling;

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a more positive image of business in society: more favourable attitudes towards Entrepreneurship; greater respect for human rights, environmental protection and core labour standards, especially in developing countries; poverty reduction.

I do not understand how anyone in our industry can fail to see the value of becoming more green in our marketing and in our work habits. This is not some radical idea that only a few are going to grasp. Green is here to stay. David Perry, Furniture Today, USA

Nationally and internationally operating companies have a responsibility towards their employees, customers, as well as their supply chain Customers ask for information. Employees would like to know. Consumer magazines report on CSR. Analysts and investors show interest. NGOs question the corporate approach Globalization/free ow of information

Benchmarking the home decoration sector


Benchmarking means comparing a competitors performance or product on pre-dened criteria with ones own performance or product. The objective is judging ones own performance compared with other similar companies, in order to learn, improve and rate the performance of a sector as a whole.

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TIP: A good tool to research relevant voluntary standards is ITC Standards Map: http://search.standardsmap.org/

Which one can you tick?

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Labels
Why do we have labels? To identify best in class To show compliance with specic social requirements in all markets To market your product in niche markets To market your product in main stream markets social lables are increasingly integrating environmental requirements (and vice versa)

The Business Social Compliance Initiative is a leading business-driven initiative for companies committed to improving working conditions in the global supply chain. They unite more than 900 companies around a development-oriented system applicable to all sectors and sourcing countries An auditing system, not a certicate Background: adequate laws are in place - but not properly implemented and enforced. So far retailers conduct social compliance audits in their purchasing markets mainly on the basis of different audit systems and criteria. Self assessment forms are available on its website: http://www.bsci-intl.org/

An initiative by companies, non-governmental organisations (NGOs) and trade unions in the United Kingdom with the aim of guaranteeing working conditions at companies, which operate within the Chain ETI is specically set up for traders supplying the British market Like: Sainsburys and Tesco http://www.ethicaltrade.org/

TIP: Making Private Standards Work for You: A guide to private standards in the garments, footwear and furniture sectors Buyers and producers are faced with many overlapping but non-aligned standards. According to some estimates, more than 1,000 codes of conduct and management systems exist. But most companies in developing countries do not have much tangible information. Making Private Standards Work for You: A guide to private standards in the garments, footwear and furniture sectors is expected to provide producers in the footwear, garments and furniture sectors who would like to start or continue a business relationship with a global brand and/or retailer with some clarity in terms of the abundant, but not readily accessible, information available on private standards and with guidance for turning private standards to their advantage. It should also be helpful for exporters in other sectors Download the guide: http://www.unido.org/index.php?id=1001204

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7. Promotion

The outcome of your promotional strategies can make or break your export venture. In this context, promotion refers to all the communications tools you use to convince people to buy your product or service.

Promotional materials
You may need to redesign your marketing materials and packaging to remove elements that are inappropriate, offensive or meaningless in the target market. Youll also need to translate these materials into the native language or common business language, so be prepared to hire a professional translator with experience in commercial and business writing. And before you use the translation, have it double-checked by a native of the country.

Direct mail
A targeted direct mail campaign can be very effective. Research and experience in your target market will help you build a base of potential buyers and clients to whom you can direct your companys message. TIP: Do not send mass e-mailings. You might get blacklisted and your emails end in the spam lter of your potential buyer

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TIP: Do not send such emails: Too many attachments nobody will open

TIP: Do send emails with short text and embedded lifestyle photo. Do not talk too much, make the reader curious about your company. He should come back to you and ask questions

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TIP: Ask if you can send some photos

Personal visits
Personal contact with potential clients is perhaps the best means of promotion. Many cultures value such contact in their business relationships. Your attention to it can impress your foreign contacts. TIP: organise your own business trip. Try to combine 3-4 meetings in one region. Buyers are more committed and the success is mostly outstanding

Internet
Its generally assumed that a business will have a website. A well-designed site can help your export venture in many ways, from promotion to customer service. Be prepared to commit time and money to keeping the site up-to-date, thoughan outdated site can do your enterprise more harm than good.

TIP: Analyse your website www.statcounter. com or google. Learn how many visitors to your website and where they come from.

TIP: In 2 seconds you have to attract a visitor on your website. Invest in great photos to attract buyers so that they stay on you site.

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Brochures and Catalogues


Do not invest in expensive printed catalogues they might be out dated within a short time. Create on-line catalogues and print only yer. TIP: Tell stories. Today you are not selling products you sell the story behind the product.

Some tips on visual materials


Getting your marketing tools right is crucially important. Heres a list of things to remember about them: Business cards should be: professionally designed and of high quality; easy to read; in the appropriate language; consistent throughout your rm; distinctive and informative; and up-to-date and complete, including area codes, country, telephone and fax numbers, postal code, e-mail and website addresses. Brochures should be: creative and appealing; informative and easy to read, highlighting your

How do potential clients know you even exist? How will these potential new clients nd you? Theres a good chance the rst thing theyll do is google the name of your business. And then what?

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uniqueness; professionally designed and printed; and visually pleasing.

Customer testimonials should: show that your company is highly recommended; represent your best customers; be from top executives; and be included in your brochure. News articles should be: clear in stating that your company is a recognized leader; quoted in your brochure; reproduced on your letterhead; displayed in your ofce; and sent to potential clients. Videos should be: sophisticated and interesting; professionally produced; oriented to the quality and benets of your product clear and concise; and easily available. Websites must be: comprehensive and informative; professionally designed; visually pleasing; up-to-date; e-mail enabled; and capable of allowing online purchasing (if appropriate)

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8. Trade shows

Attending or participating in international trade shows is an excellent promotional method. It also allows you to check out the competition and do market research. If its difcult for your company to take part in a trade event, consider teaming up with other Vietnamese companies, or joining a delegation.

State of the market


In the past years participating in a trade fair was an efcient and TIP: If it is not possible to get effective way of stimulating direct exports. Against relative low subsidised trade fair participation or costs, participants were able to contact a range of interesting funds for participating, small and micro new business contacts in a few days. However, the level of enterprises should consider other more success depended strongly on good follow-up; making contacts cost efcient market access strategies. at the fair is often only the start of a lengthy process which could lead up to sales or license agreement. This has changed dramatically. During the last years the well known trade fairs are not any longer order fairs. Direct sales but also expected orders became smaller. Buyers seem to buy not anymore only on trade fairs. They travel to international fairs worldwide, source through the internet or visit their suppliers personally.

Which trade fair?


Seasons and themes are very important in the Home Deco sector; therefore, timing is of the utmost importance, as well as the market segment and the aimed context. For Vietnamese exporters it may be very attractive, and cost-efcient, to exhibit in Vietnam at Lifestyle Vietnam (http://www.lifestyle-vietnam.com).

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Some of the most important fairs in Europe are: Ambiente (http://ambiente.messefrankfurt.com) Maison et Objet (http://www.maison-objet.com) Heimtextil (http://heimtextil.messefrankfurt.com)

The following fairs could assist handicrafts exporters with their U.S. business development: New York International Gift Fair (www.nyigf.com) San Francisco International Gift Fair (www.sgf.com) Atlanta International Gift and Home Furnishings Market (www.americasmart.com) High Point Furniture and Home Furnishing Show (www.highpointmarket.org)

Depending on the market and product some other national and/or smaller fairs could also be interesting. There are many national and local markets which focus on a specic sector and could be quite interesting. Other (retail) trade fairs aim to sell directly to the end consumer. In the US there are specialty shows that focus on promoting and selling master artisan products like the Santa Fe Folklife Festival.

Costs of Trade Fairs


The next table will give an idea of the type of costs you may encounter per trade fair participation. It should be noted, however, that the amounts indicated will not apply to each participation and will vary according to the trade fair selected.

EXAMPLE TRADE FAIR BUDGET Standard rate 160 per sqm - here 20sam Incl. 130 W/m2 electricity & 1 spot light per wall, overhead TL lighting (build-up charges included) ADDITIONAL EQUIPMENT AND SERVICES Chair/Table Counter Refrigerator Water & drainage Plumber/1 visit Display panel 200x50 cm Wall shelf 100 x 50 cm Display cube Show case with light & glass panels, 100 x 100 Visitor accreditation reader, to be connected to PC Telephone on stand, incl. 30 of consumption Additional phones ADSL incl. Wi-Fi Fax on stand, excl. calls Daily Waste disposal & cleaning per day

US$

4,171 27 126 73 233 33 85 29 52 261 385 261 141 1,207 300 7

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Hostesses (local) per hour, German & English language Civil Liability Insurance Parking space per car BOARD AND LODGING Single room per day, incl. breakfast Double room per day, incl. breakfast Meals per day TRAVEL AND TRANSPORT Return air ticket Taxi ride from hotel to exhibition (3pp) Air transport of exhibits per kg Customs handling exhibition goods, per single exhibitor PROMOTION & PR Advertising in trade magazines per ad Company brochures each..(minimum: 500) Leaets or Product sheets each Identication and mailing to top buyers each Photographer at fair per picture Entertaining/catering for visitors Tie-in costs with fair promotion Press Information, photos (per pack) Special reception Additional workshops (incl. space, equipment etc) per event, full costs Post-fair promotion (follow-up) costs TOTAL

34 65 39 196 274 52 782 39 52 130 1,043 3 1 7 98 652 23 978 1,955 2,607 16,418

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9. Trends

Trend forecast is not about creating something new. It is the observation of what already exists and the interpretation of peoples behaviour and moods. It tries to anticipate the future needs of consumers - what will people want? how will they want to live? what will be important to them? Trend forecaster tends to create inationary slogans every season to describe the latest trends. Dont get too much impressed by slogans like urban jungle, retro future, techno folk or dark poetry. Its a slang, using catchphrazes to describe a source of inspiration. Only few big inuential companies are able to set new trends and inuence the market in a certain direction. Take the example of Apple: they have set new standards in the electronic industry with the introduction of the Macintosh, the i-pod, the i-phone and the i-pad. Although there are many providers of smart phones on the market, everyone wants to have the new i-phone because of its aesthetic, because it is cool and so are you if you own it. For all other companies, trends are a tool to understand the needs of their customers. They give you a framework within which designers / companies can work, without having to follow each trend by the book. Following the ow reduces the risk of bringing a product on the market for which there is no demand but on the other hand it increases the competitiveness between the providers. Some trends evolve much slower and last longer, they reect the values of a global society and have an impact on all aspects of life. They last on average 30 years and can take backlashes and crosscurrents. In that case we talk about Megatrends. Some trends are short-lived and subject to moods and fashions. They last a season, sometimes one or two years and then lose popularity. They are more of a marketing construct, creating a need for a product that one does not necessarily require but would be nice to have because everyone else wants to have it at a particular time. They are called Microtrends.

Megatrends
Health / Wellness As the world around us becomes increasingly complex and people mentally over-challenged, we have a greater longing than ever not only for more safety, but for a feeling of comfort, calm and balance. In this context, the home is gaining signicance. The way we live turns into a conscious decision of ever-greater importance. Home is a safe haven into which we can withdraw and pamper ourselves, surrounded by things that give oneself a sense of stability, relaxation and balance. Taking a major vacation each year will no longer be as important as having a bit of a vacation feeling on an everyday basis a holiday everyday creating our own wellness world at home.

Sustainability The concept of sustainability rests on three pillars: social, ecological and economical sustainability. In the context of resource scarcity sustainability has gained in priority. It has called for a rethinking of our consumers behaviour. The growing awareness of ecological issues has led to an increasing demand for hybrid cars, alternative energies, organic produce, textiles or cosmetics, recycled products, etc. and paved the way for new business ideas and niche markets. Consumers want to know where the items they buy come from, how they are made and how it can affect their health or wellbeing. They are also concerned about the social impact of their consumption: was child labour involved? Are the weaker links of the production chain paid fair wages?

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Sustainability, Fairtrade, Social responsibility, Organic are all phrases used by the growing awareness of the customer. Customers are well-informed and increasingly conscious of their responsibility and ability to inuence the market with their day to day purchase choices. People tend to ask more questions about the source and quality of a product. Historically this has been driven by a core group of fair trade importers (members of EFTA) but in recent years there has been a signicant growth in newer smaller fair trade importers who have a stronger focus on design and wholesaling and retail, rather than traditional catalogue sales often used by the traditional fair trade organisations. This new emerging fair trade market is particularly active in USA, France and UK. However the concept of fair trade is also being used by more and more established, main-stream importers and retailers to offer products that meet this growing demand of their customers. Importers who have no experience in a particular country, or TIP: Most fair trade organisations and existing tradition relationships, often require new suppliers to be importers have their own purchasing a member of WFTO, or require a referral from another WFTO criteria but this largely follows criteria member. Larger retailers however historically have favoured Fair set by EFTA (European Fair Trade trade label accreditation such is applied to commodity products Association - www.european-fair-tradesuch as cotton, coffee, tea, etc- In order to communicate its association.org) and WFTO (World Fair Fair Trade values, smaller producers could consider to become Trade Organisation - www.wfto.com) members of the WFTO or consider fair-trade labelling in the future. (There is also a new labelling system being developed for non-commodity products relevant to craft products. This is still in the process of being implemented (SFTMS) but will become increasingly relevant). It is also important to say however that more and more Fairtrade buyers are very design, quality and price conscious and no longer solely rely on their fair trade credentials to expand their markets. Most fair trade organisations are positioned in the mid-market segment which is also very price sensitive. Therefore it is important to stress that design, price and reliability in terms of quality, delivery and communication remain more important to both the fair trade and mainstream markets than any other issues. Global vs. Local Although the world population has quadrupled in the last century, through modern information and communication technologies, the world has become a village. Globalisation has led to the standardisation of products and has blurred the boundaries of national identities. One can nd the same brands all over the world no matter where you are and one does not need to travel to nd unique designs from around the world. Trend researcher forecast that the global style is coming to an end, people are tired of mainstream. They are in search of unique and authentic products reecting their individual taste. When you buy a product from another country, you want the origin of the product to be recognisable. The biggest challenge for manufacturers will be to rediscover their own heritage and traditional skills and give them a modern twist

The biggest challenge for manufacturers will be to rediscover their own heritage and traditional skills and give them a modern twist

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The example of the newly rediscovered African heritage has shown us that traditional designs can be adjusted to modern days by either using new materials in combination with traditional shapes (picture left) or by applying traditional techniques - herer hand-weaving of plastic threads used for making shing nets for new purposes (picture right)

In Africa, telephone wires are recycled to make colourful plates and bowls (picture left). This technique has been used in the vases and the table on the right. The vases have been adjusted to an urban taste by using modern patterns whereas the table is innovating by using this technique in combination with a sleek design

These African ceramics in traditional earthen tones (left) have borrowed their retro shapes to 1950s Scandinavian ceramics (right) Mobility / Flexibility In the course of globalisation individual trafc has substantially increased and we are overcoming distances like no other generation before us. We spend parts of our lives at different places due to a new job or a new relationship or have more than one domicile. The limits between work time and leisure, between family and friends are blurred. Intelligent multifunctional products, modular furniture, items that take space scarcity into account (e.g. foldable) are responding to these new needs. Aging society Life expectancy has dramatically increased in the past 50 years while birth rates have declined. The average age of the world population is therefore rising. In Japan the average citizen is aged 42. What about Germany? Consequently the consumption patterns are meant to change: while fast moving consumer goods are bought

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by a younger demographic - responsible for the success of cheaper retail brands - older people generally spend more but on less items. It is therefore expected that the quality of the consumer expenditure could improve in the future while volumes would decrease. And while younger generations tend to spend more on clothes and leisure, older generations however spend more on housing, food and travel. Many companies have discovered in the meantime the more afuent 50+ target group. Nevertheless the consumption power of the 50+ may be reconsidered in case of a pension crisis when the younger working population cannot support the growing retired population anymore. Safety / control Climate change, nuclear catastrophes, terrorism, epidemics are new threads to our societies, making us long for more control and safety. In this context stronger regulations are being introduced: car seats for children until 12, the smoking ban, or the motorbike helmet in Vietnam, are just a few examples. It is the same with consumer goods: safety rst. Consumer protection and product safety are issues that every company has to deal with. Individualisation Prosperity, education and mobility lead to a shift of values towards independency and self-fullment. There is a clear trend towards mass customisation clients emancipate themselves from mass production and want to have an inuence on the manufacturing of their products. Behind the longing for the special and the unusual is the desire to stand out from the crowd. Special, unusual products are evidence of the owners individual taste and character and thus earns him recognition. In this context, a valuation for hand crafted products - that convey personality rather than perfection - and a return to old craftsmanship are noticeable. The do-it yourself movement is also gaining popularity: homemade preserves, hand knitted items, grow-your-own, etc.

Micro-trends
Style trends in general are not of a long duration. Colour schemes change from season to season and patterns or shapes will not last more than 1-2 years. It is important to understand that there is not just one trend but there are various trends evolving within each style (contemporary design, retro/vintage, ethnic, country, etc.). Beauty is in the eye of the beholder so it would be a mistake to assume that every trend is endorsed by every consumer. Every trend has literally its own anti-trend. Buyers and consumers alike have grown accustomed to be shown new products at short intervals, reducing the life-time of a product to a few months. An end-consumer wants to have a new experience every time he enters a retail shop. For this reason, the retailer needs to redecorate his shop on a regular base and make sure to have new things on display, when his client returns. Even if a product is fast-selling, the retailer might not want to take the risk of reordering it again and will prefer to source new eye-catchers. An unhealthy dynamic has developed, reducing the product lifecycle. The Home Decoration sector has adjusted over the years to the fashion industry and it is most common that companies in this eld bring out two collections a year: Spring/Summer and Autumn/Winter. A collection is often built around a theme that makes the collection coherent and provides a sense of lifestyle. Lifestyle does not mean that all product categories must match in colour or pattern the times when your wall paper had to match the curtains and bed linens are long gone. If you get your inspiration from a Japanese zen minimalism or from a Scandinavian 50s design wed expect to nd this inspiration in each and every product of your collection. Trends represent also a risk for the manufacturer: Has he picked the right trend? Has he interpreted it the right way? Has he set up a harmonious colour range? To minimise the risks of every new collection, many companies chose to have two or more lines in their programme covering several market segments: for example, a basic line products in various plain colours that run independently from any theme but that could complement them, a more colourful and experimental line that suits the taste and budget of younger generations and an elegant, high-end line for the settled and high-income consumer groups.

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An innovative product range with a strong identity and recognition value that is able to offer a surprise effect to the eye of an oversaturated consumer can stand by itself, independently from any fashion trend. This is often the advantage of a newcomer over a more established company, since buyers are constantly looking for new and special items to catch the attention of their clients and be ahead of their competitors. Unfortunately it is very hard to maintain the wow-effect over the following seasons, unless you are able to renew yourself over and over again. It is therefore important that you remain true to your style - so that your customers know what your company stands for - while introducing regularly new products, adjusting your colour range from season to season and introducing your own design elements that distinguish you from any other competitor.

Recurrent trends
Although trends come and go and are associated with changes and novelties, there are elements that always stay or return every year, according to the seasons. Thats why we called them recurrent themes. For example, it is a fact that the colour schemes are lighter and brighter in Spring / Summer and darker and soberer in Fall / Winter. This basic rule will apply to any trend that comes and goes. The images that people associate with a season are not likely to change either, because it is part of their culture. Winter is generally associated with cold and snow and summer with sun and warmth. Trends will have to include and work around these themes in a different way every year but they cannot reinvent Winter or Summer all the time nor must you. Recurrent themes can inspire you and help you minimise your risks, when working on a new collection.

The seasons and their colours


It is difcult for those countries whose climate is divided in wet and dry seasons to relate to the atmospheres and themes that are associated with Winter, Spring, Summer or Fall. However the 4 seasons play a very important role in trends. The change of season sets the consumers in a different mood and inuences their needs and longings. Since all four seasons come back every year, the consumer goes through the same mood swings over and over again. Hereafter we have tried to describe the atmosphere typical for each season. Winter Winter is the coldest season, where temperatures can drop below zero. The days are short - in some Scandinavian countries there are only 6 hours of daylight and the sky is mostly grey. The trees are bold, there is hardly any foliage to be seen. Life takes place mainly indoors. During this period of the year people will try to make their home cosy and warm. They will want to cuddle in a soft woollen blanket, warm up in front of an open replace or light up some candles. They will invite friends to their homes rather than meet outside, cook rich earthy food and drink heavier wines or warm-ups like tea or coffee. The materials are heavier (textiles like felt, wool, velvet), chunky (knits), smooth (wood, horn), soft and cuddly (woollens, cashmere, eece, sheep skin or other furs). The colour scheme is darker - warm earthen colours are prevailing, conveying the feeling of warmth and cosiness. Subdued natural colours ranging from cream to dark chocolate or from cloud grey to charcoal give an elegant touch. Here are some ideas of what winter is associated with (not an exhaustive list): Fire, logs, candles Chalets (wooden houses found in mountain areas), log houses Mountains, snow, skiing, ice skating Snow akes, ice akes, icicle Deer, reindeer, deer head (horns), moose Holly, mistletoe, r tree, r cone, red mushrooms, hellebores or Christmas rose Walnuts, oranges, cinnamon, red apples Checked patterns reminiscent of Scottish tartan, tweed, herringbone design Christmas: Santa Claus, Christmas tree, bubbles, angels, holly, stars, moon, nostalgic Christmas pictures (e.g. Victorian Christmas pictures), presents, ribbons, amaryllis, poinsettias (although very old fashioned), Advent wreath, Advent calendar

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Spring Spring epitomises the awakening of nature after a long winter sleep. The days get longer and warmer, the sun shines through more often, you can hear the birds singing again, the trees start budding and blossoming (magnolia, camellia, cherry) and the rst owers (snowdrops, crocuses, daffodils, primroses, ) shoot out of the earth. After a long period of grey, it is an explosion of colours that has an energetic and revitalising impact on people. The rst rays of sunshine drag people outdoors, in open spaces, cafs or parks. How does spring translate into interior design?

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Fresh crisp colours, especially tonic colours like grass greens, yellows, oranges but also pastel colours bold and playful prints related to nature, like owers, birds, blossoming trees but actually almost any print would do Easter: eggs, bunnies, lambs, hens, lilies of the valley Strawberries, cherries Vichy checks (little checks) are reminiscent of French country life

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Summer Summer is considered by many the best and friendliest time of the year. Its warm, sunny and the days are longest. Its the time of the great outdoors (balcony, garden, country side, beach, swimming, cycling) and the season of plenty, in terms of vegetables, fruits, owers. Its also associated with holidays and therefore with sea and beach. Gardening has become very popular, even in urban areas and it is also the picnic and barbecue season. Summer is associated with: Lots of bright colours, sorbet colours (lemon, mint, orange, rose, coral, pistachio) and colour mix. Romantic country side, wildower meadows, butteries, picnics and picnic hampers, orchards, all types of berries, farmers markets, ea markets and anything related to country life Flower motifs in any variation: small prints, bold prints, naturalist / botanical designs, abstract designs, photo prints Stripes in various colours; think deck chairs or hammocks Every shade between emerald green and turquoise blue, reminiscent of water, sea, beach holiday; think maritime themes like sailing boat, sailors knots, all types of shes, star sh, sea shells, turtles, corals, blue and white stripes Garden/balcony: a place of your own in the sun has become very desirable, even if they are just a few square meters. Outdoor furniture, gardening tools, ower pots, photophores (tea light holder), barbecues, bird houses and anything that would make your outdoor life more enjoyable have become very popular.

Autumn Autumn is the passage from the warm to the cold season. The temperatures are dropping and the days get shorter. Varying from year to year, it can be a prolongation of the summer (Indian summer) or the beginning of a damp weather (cold, rain, fog). One of the main characteristics of autumn is that the trees turn gold, red, brown before losing their leaves. Autumn is associated with: Forest, leaves, hazelnuts, acorns, chestnuts, mushrooms Squirrels, foxes, owls (these themes are very popular at the moment) Hunting season: hunters, hounds, feathers, deers, wild ducks, rabbits, pheasants Dahlias, sunowers, dried owers, eglantine or sweet briar Pumpkins (Halloween), apples, quince Prevailing colours are: moss green, ochre, mustard, rust, dark orange, brown, aubergine/plum Rain, rubber boots, umbrellas

Nature
Nature is a recurrent theme in interior design; with wood leading the way, natural materials (like natural stone, ceramics, leather, fur, bamboo, rattan, cotton, silk and any other natural bres) are strongly in demand because they exude a feeling of authenticity, of real values - in contrast to articiality. Natural materials combined with traditional craftsmanship convey personality rather than perfection and are associated to green production and sustainability - even if it is not always the case. Nature is an endless source of inspiration not only for the materiality of the products but also for their shape: coat hangers in the shape of trees, oor cushions or candles in the shape of stones, chairs or lamps in the shape of owers, tables with bird legs, plates in the shape of leaves, vases in the shape of bamboo, its really up to your imagination. Nature related graphics naturalistic or abstract are now all over and can be seen on wallpapers (e.g. owers, trees, birds), on fabrics (going towards a lot of ower prints but also jacquards), on ceramics or paper ware.

Where to nd trends?
Trend Books it is the classical tool used by professionals in product development. Trend books offer mood boards, a kind of collage combining expressive photos, key words like urban poetry, ethnic chic or bohemian rhapsody and texture samples, like a piece of fabric or paper. Trend books reect in an abstract way the spirit of the day but it is up to each company or designer to decrypt the message and let it ow in their own product development. In other words, trend books dont offer ready-to-go collections, patterns, designs or colour schemes. You need to understand the design language and share similar cultural references to make full use of them. They also require a signicant investment since they can sell for as much as EUR 2,000,- per book and season. Trend Books can be purchased either online or during trade fairs.

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Trend shows can be found on most relevant trade fairs, giving you an overview of the most creative products on the market and what your competitors have on offer. Unfortunately they give you a picture of what already exists on the market and dont help you anticipate what will come next. They are basically trend shows for buyers rather than producers. Trend Seminars leading trend agencies, like Trend Union, Trendbro, WGSN, Promostyl, Cscout, Inuxinsights and many more offer twice a year audiovisual presentations, showing the trends in colors, patterns, fabrics, silhouettes, consumer attitudes, beauty, lifestyles, architecture, well-being, etc. one year ahead. Trend Guru Li Edelkoort from Trend Union charges EUR 350,- for a 3-hour-presentation. Trend seminars can also be found on trade fairs and tend to cost less. Interior Magazines - to thumb through international interior magazines is an inexpensive way of keeping in touch with trends and forming your eye to foreign aesthetics and lifestyles. Elle Decoration (or Elle Decor or Elle Interior according to the language) is a good start. It is published in 24 countries Asia being represented by the Chinese, Japanese, Thai and Indonesian issues. Elle Decoration UK, Elle Decor Italy and Elle Decoration Holland are the more edgy ones. Elle Decor USA and Elle Decoration France are more on the classical side. Other magazines like Marie-Claire Maison (France and Italy), Ct Sud (France), House and Gardens (UK, Germany), Homes and Gardens (UK), Vogue Living (Australia) or World of Interiors (UK) should also be considered. All of them can be partially viewed online via their website. Trend Blogs - there are endless trend blogs and sites on the web, making it really hard to nd your way through. One thing needs to be said about them: anyone can be a trend blogger and everyone has an opinion on fashion, design and lifestyle. If you nd a style blog that just suits your taste then stick to it and use it as a source of inspiration but bear in mind that this is the taste of a particular individual and not necessarily a general trend. Professional trend forecast found on the net is never for free. There is a lot of work behind it that wants to be remunerated. Websites of leading retailers can also help you get an idea of what your potential customers are looking for. IKEAs website www.ikea.com is a good start because, despite being very price conscious it is nevertheless also very trendy and has a website for each country it is operating from, showing you the differences from country to country. Pottery Barn www.potterybarn.com gives a good insight into American mid-high lifestyle and has seasonal displays online. In Europe Habitat www.habitat.co.uk (England) or www.habitat.fr (France) is a very trend-conscious company in the middle-price segment addressing young professionals and families whereas The Conran Shop www.conranshop.com is operating in the high-end brand-conscious segment. Anthropologie www.anthropologie.eu (UK) or www.usanthropologie.com (USA) is also an interesting website because it is combining various ethnic styles in a colourful and playful way and could be inspirational for Vietnamese producers.

TIP As a general rule, fashion trends hit the interior sector one year later. So follow the fashion trends through fashion magazines (Elle, Vogue, Marie-Claire, In-Style, Grazia, etc.) fashion blogs, major fashion retail companies to know what is coming next. They give you a hint on colour combinations, prints, patterns, themes, etc. Colour forecast: the clothing fabric show Premire Vision held twice a year in Paris for the fashion industry is also a good source of inspiration for home textiles. Their colour trend cards are highly recommended and can be purchased at a price of EUR 90,- after the show or online. Premire Vision has also shows in Beijing and Shanghai. Pantone, the renowned provider of colour matching systems, offers various tools online (also available as apps). Have a look at the Pantone Fashion Colour Report for Spring 2012, shade card of 10 colours including the colour of the year 2012 Tangerine Tango. http://www.pantone.com Small companies nd it hard or too expensive to purchase international magazines. Setting up a library with your sector association would split the cost and spare the burden of research. Have a look at Li Edelkoorts free trendblog www.trendtablet.com for inspiration. Try also the website www.europaregina.eu/trends.htm, for fashion, interior design and colour trends. They have good links to the trend tables of several trade fairs, like Heimtextil Frankfurt for interior design textiles or Maison et Objet Remodelista www.remodelista.com is a stylish platform and an online source book for decoration and gardening. It is like thumbing through a free lifestyle magazine

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10. Product Development

Product development occurs in many different ways, but is usually directed in part or entirely by the buyer. Many large retailers have specic concepts in mind based on customer preferences and various trend indicators from around the world. They develop their own designs, then look for vendors to execute them at the best possible prices. Even at discounters such as Home Goods and Cost Plus World Market, where buyers often react to offers in lieu of initiating product development, the process is frequently collaborative. Buyers see an item they like, suggest changes or adaptations, then review samples from the producers. With the exception of repeat orders and purely ethnic items (such as tribal masks), it is rare for a product not to be tweaked for U.S. and European markets. At the wholesale importer level, buyers fall more or less into two groups: those that prefer to alter little in order to preserve cultural authenticity, and those that pursue a broader audience by merging indigenous skills and design with contemporary aesthetics (as noted before, this is often referred to as global style).

Casey Riddel, owner of the retail store Its Cactus in Carmel, California, and its wholesale arm of Beyond Borders, is regarded by many as having achieved a successful balance between indigenous designs and contemporary styling. She gathers ideas from trade shows, other retailers, open marketsessentially from everywhere she travels, sketchpad in handand sends her designs and photos to the artisans, who then interpret these in their work. She also adapts original designs from the artisans themselves. The result is a broad selection of products that are distinctive in their handiwork and origin, but contemporary enough to t into a wide range of retail stores and consumer homes. While she offers some purely ethnic pieces, the majority fall into the global style category. http://www.itscactus.com/

Markets for both exist, but opportunities for contemporary designs with indigenous accents are far greater in both the United States and Europe. In general, there is less of a market for non-functional items with a very strong ethnic appearance. More often than not, this translates into active participation in product development by Western buyers, designers, and consultants.5 Many of the other wholesale importers interviewed conrmed that their approach to product development is very similar: they adapt indigenous motifs and applications to create unique, contemporary products that offer broad market appeal.

Designing for Global Style At many companies, particularly smaller ones, the owner and/or employees perform most of the design work; at larger companies, however, product development consultants are hired to provide fresh designs that acknowledge current and upcoming trends. All concur that the biggest market opportunities for handicraft producers in developing countries lie in merging indigenous designs with contemporary aesthetics and functionality Source: Interviews with designers: Ton Haas, Frederic Alcantara, Carla Peters, and Mark Phillips. USAid Global Market Assessment for Handicrafts Volume

USAid Global Market Assessment for Handicrafts Volume I, 2006 by Ted Barber and Marina Krivoshlykova of Development Alternatives, Inc.

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Product life cycle


All products have a life cycle. The life cycle may last twenty or more years, or it may last no more than six months. Whatever may be the case, no product maintains consistent sales indenitely. Moreover, product lifecycles tend to become shorter and shorter. Therefore it is needed to introduce regularly new product ranges.

Source: Mr. Mark Kwami

PLEASE REMEMBER: A successful craft business has new products in development as sales from their current products reach maturity and before they start to decline. New product lines will be ready to enter the market when the older lines are fading. Allow at least nine months to develop a new product line.

Important Product Attributes


Design, quality, and price are the three key product attributes by which buying decisions are made, for both companies and consumers. One important aspect of design, particularly in home accent products, is functionality. While an item can be purely decorative, especially if it is unique and well made, product development in general is more successful when designs are both functional and decorative. For example, lacquer ware plate may be

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appealing as wall dcor, but it is both appealing and functional as a picture or mirror frame. Other important product attributes include: A storyinformation about the origin of a products design, the way it is made, or the artisans and their culture; Optionsmultiple sizes, colours, prices, and so on; Packaginga unique and attractive presentation; and Ease of shipping.

While for some retailers providing the story behind a product may have little impact on sales for others it is essential. Cost Plus (USA) www.worldmarket.com does it, and it is especially good in gift stores and www. changemaker.com (Switzerland). A hang-tag (attached label or card) is the ideal format because it is easy to read and less likely to be lost before sale. Instead, the idea is to provide context and information that helps a customer relate to and talk about a product. Buyers often put together collections of products with a specic scheme of price points and presentation in mind. They look to match some items, differentiate others, and achieve a colour palette that may follow a market trend or is particular to their region or customers. Products offered with multiple size, price, colour, and other options help buyers to envision and assemble their collections.

Product Collection
Families, groups or sets of products that have common elements of design linking them to each other e.g. decoration, shape, nish. Within each range you may also have families or groups of products called collections. These are groups of products that have common elements of design linking them to each other. This is likely to be how they are decorated, colored, shaped or nished. Collections might be formed in a number of different ways. For example: The same nish or decorative technique can be applied across a complimentary range of products. The same shape and style product can be offered in different sizes. The same size and shaped product can be decorated in a variety of coordinated ways. The same product, nished and decorated in the same way can be offered in a variety of different shapes.

Product development among producers is generally viewed as weak, with little innovation that recognizes current trends. Buyers remark (often with frustration) that they see few new ideas, a situation they suggest is due largely to isolation from end-markets. Producers often bring new products, but lack the ow of market information that is required to develop products for the United States, Canada, and Europe. Thus, investing in technologies that signicantly increase capacity is seen as less a priority than upgrades in equipment, skills, and information access that will enable producers to reliably deliver modest quantities of unique, highquality goods destined for higher-end retail stores.

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The following visuals illustrate how these different methods have been used to form collections. 6

same product but different shapes and colours

same but different forms

same but different patterns

same style but different sizes

Product development strategy


On-going product development is essential to the long term success of your business. You cannot rely on past success for your future sales, because buyers are always looking for something new. By providing continual updates to your export collection, you can stay current with market needs and trends and offer an attractive, market-ready product line to your buyer. Investing in product development can also help you to achieve the following results: TIP: Be prepared to invest in Design Design is not a quick-x! Design costs money! but is a protable investment You need to use design strategically in order to recover your investment

Maintain the interest and loyalty of customers by offering them new products on a regular basis Increase overall sales by expanding products lines that are selling well Attract new clients and penetrate new markets by introducing products in a new product category, new price point, or a new look Increase prot margins on products by achieving higher perceived value at lower costs

Product development strategies vary from company to company. For smaller companies, the process may be spontaneous and quick, while for larger organizations the process may be more calculated and time-consuming. You may contract with an independent designer to develop new product lines, or employ an in-house designer whose sole responsibility is developing new products. Regardless of the size of your company, you need a structure in place for developing new products. Product development is often a team effort that requires the recommendations of producers, designers, buyers, and marketing staff throughout the process.

USAid Global Market Assessment for Handicrafts Volume I, 2006 by Ted Barber and Marina Krivoshlykova of Development Alternatives, Inc.

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TIP: A very useful guide for Product Development Strategy in 12 steps by CBI; The Netherlands, written by Aileen Brindle, UK. free download : http://www.cbi.eu

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Step 12

Business Review Market Research Creating a Critical Path Range Strategy Range Structure Product Review Range Building Range Planning Developing the Design Brief Design and Sample Development Product Selection Range Presentation

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Example timeline product development. 7


TIMELINE PRODUCT DEVELOPMENT PLAN: EXAMPLE Example Date line JAN 08 Action Business Review Team meeting Revisit SWOT analysis Market Research: Customer questionnaire Promotion research Review competition/growth areas Trend review Dening Range Strategy; Team meeting Sales analysis Dening Range Structure: Team meeting Product Review Range Building/Visiting suppliers Range Planning Creating Design Briefs Design and Sample Development Sample Costing Sample testing Sample evaluation Revising samples Packaging development and costing Product Selection Final costing and pricing and coding Promotional planning/stand design Photography of samples/production of duplicate samples Development of promotional material and price lists Pre-launch Web/email promotion Pre-launch mailing Shipping of samples for international trade fair Trade fairs (Ambiente and Delhi) Person responsible Marketing Director with team (design and sales) Product manager Sales manager Product manager Design manager Budget

JAN/FEB 08

MAR 08 MAR 08 APRIL 08 APRIL 08 MAY 08 JUN 08 JUN 08 JULY/AUG/SEPT 08 SEPT 08 SEPT 08 SEPT 08 OCT 08 OCT 08 NOV 08 NOV 08 NOV 08 DEC 08 DEC 08 JAN 09 JAN 09 JAN 09 FEB 09

Team as above Product manager Team as above Product manager/design team Designers Designers Design manager Designers Designers/Product manager As above Designers As above Designers/Product manager Sales and Design team Product Manager Sales team Product manager Sales team Sales team Sales team Product Manager Sales team

Developing a Design Brief


Whether you are designing products yourself, or brieng another either in-house designer or external designer, you will need to be very clear about the requirements of your range plan. Communicate your thought and analysis to the designer. Designers need to have creative exibility but within given parameters in order to create what you have clearly envisaged. This can be achieved by creating good quality design briefs. The design brief can be either developed for individual products or for product collections. It should include all relevant details of a product i.e. Theme Colour palette Finish Price Dimensions

CBI Guide on Range and Product Development - Workbook

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Technical requirements Legislation

Critical Path: during the brieng it is essential to communicate the details of the critical path in order that there is an agreed point of contact and agreed deadlines for the process. (see above)

Start by presenting the themes/concepts and describing the relevant planned promotions for a range to the designer. In order that the designer understands how any new products need to t in with the whole range, this should be followed by discussing the range plan. Refer to the template and working example of a design brief in the Product Development Plan These should be completed for each new range or product adaptation required The design brief template includes agreed deadline dates.

Example Design Brief


DESIGN BRIEF Name of Designer: Description of important elements of theme Raw material to be used Brief description of product PRODUCT DEVELOPMENT PLAN: EXAMPLE Theme: NOSTALGIA Collection: Glassware 1 (Jali)

Delicate pretty feel with aged nishes, intricate patterning, soft antiqued colours, traditional shapes Glass items with cutwork (jali) metal outer The glass items sit in a cut metal (jali) sleeve with base. The jali outer should cover 2/3 of the glass product. The base section, lids of the jars and rims of the bottle and candleholders should be in silver coloured metal. Large bottle Medium Storage jar Small storage jar Medium candle holder Small candle holder Large bottle = 35cm x 20cm Medium Storage jar = 20cm x12cm Small storage jar = 17cm x 11cm Medium candle holder = 12cm x 9cm Small candle holder = 10cm x 7cm Clear glass with a hint of blue/green Antiqued cream/white cut metal work Silver coloured metal base and rims to jars and candleholders

Number of products required in collection

Approximate dimensions of each product

Colour ways required

Type of Finishing required

Glass: Body- clear, Base and rims silver shiny metal Jali Metalwork brushed antiqued nish

Important requirements regarding legislation and quality Target Fob prices:

Cut Metal must not be sharp, white paint must non-toxic

Large bottle - 18$ Medium storage jar 8 $ Small storage jar 6 $ Medium candle holder 6.5$ Small candle holder 5 $ Signed: Date approved:

Contact person Deadline: for concept/sketch approval Deadline for rst samples

Date of brieng: Date required:

Date required:

Date approved:

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Exclusivity
A commitment to agreed terms, especially exclusivity, is another attribute valued by buyers. It is not uncommon for designs to be passed around, or for a producer to sell one clients products to another without modication. While tolerable when the clients are in different markets (such as Europe and the United States), it can considerably diminish a buyers interest in working with a producer when the clients are in direct competition. Buyers may terminate a relationship, sometimes without the producer understanding the reason why. Good designs are, naturally, copied in the marketplace; it is an indicator of success that forces buyers and suppliers to be constantly moving forward in their product development. However, when the culprit is a buyers own supplier, the likely result is a swift reduction in orders.

Be careful giving exclusivity on your design Buyer should rst proof capability to generate sales Globalization: it is difcult to give regional or national Exclusivity: no borders anymore Give only short contracts so that your market is not blocked for a longer period

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Annexes

Annex I: Web-links
Design Blogs and other inspirational sites
www.designboom.com www.designspongeonline.com http://www.trendsnow.net/trends_now_/ http://elledecoration.co.za/ or co.uk; de ; fr, www.bloesem.blogs.com www.decor8.blogspot.com www.printpattern.blogspot.com www.ohjoy.blogs.com www.color-stripes.blogspot.com www.whipup.net www.modish.typepad.com www.cruststation.wordpress.com www.lotushaus.typepad.com www.designklub.blogspot.com www.rangdecor.blogspot.com www.anindiansummer-design.blogspot.com www.indie.com.au www.delightfulblogs.com www.craftscurator.com www.trends--unpicked.com

ETSY is an interesting marketing platform for handmade products... shows some very unique products: www.etsy.com look also at: www.pinterest.com

Websites of leading Design Magazines


http://www.framemag.com/ http://www.wallpaper.com/ http://www.pointclickhome.com/elle_decor www.furnituretoday.com www.homeaccentstoday.com

Design websites showing collections of top design collections.


Allows you to search for Product groups, Materials, Manufacturers or designers. Also have News sections with reports on recent design events... www.stylepark.com www.designers-digest.de For inspiration and current trends, you can also visit the websites of the major Trade Fairs: www.maison-objet.com http://ambiente.messefrankfurt.com/

Websites of selected leading design stores


www.rossanaorlandi.com www.vincon.com www.frozenfountain.nl www.momastore.org www.thefutureperfect.com www.modernity.se www.lawsonfenning.com www.viaduct.co.uk www.cheesoontzgerald.com www.caravan.fr www.mintshop.co.uk

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Colour trends...
http://www.pantone.com/pages/pantone/pantone.aspx?ca=4&pg=20378 http://www.fashiontrendsetter.com/content/color_trends.html http://www.colourlovers.com/

Material trends websites..


http://www.materialconnexion.com/ http://www.stylepark.com/srv.do?op=show_material_samples&site=stylepark&lang=en

Examples of importer websites


http://www.dmdepot.be/ www.helioferretti.com www.xenos.nl www.cemile.com.tr http://www.coin.it/ http://www.butlers.de/ www.contento.com www.vf-furniture.com www.bahne.dk http://www.t-boxx.com/ www.oakom.it http://www.habac.com/ http://www.marcopoloeurope.com/ www.iblaursen.dk http://www.fairtrade.nl/ www.moebelkolonie.com www.habitat. http://www.ninelives.de http://www.housedoctor.dk/ www.cultathome.de http://www.okversand.com www.theafricahouse.com www.traidcraft.co.uk www.becleverltd.com www.kazuribeads.co.uk www.uniqueco-designs.com www.cruselita.com www.indiajane.co.uk www.contigo.de www.kenty.it www.bombayduck.co.uk www.pollardharris.com www.lambert-home.de http://www.harveynichols.com/ http://www.potterybarn.com/ http://www.target.com/

Major International Trade Fairs


http://www.productpilot.com http://www.maison-objet.com http://ambiente.messefrankfurt.com/ http://www.auma.de/ www.nyigf.com www.sgf.com www.americasmart.com www.highpointmarket.org

Exporthelp: market information, requirement, statistics etc.


http://www.exporthelp.europa.eu/ http://www.intracen.org/ http://www.cbi.eu http://www.newapproach.org http://www.tradepoint.org/ www.emarketservices.com

Finance currency convertors.


www.xe.com/

e-marketplace
www.e-trade-center.com www.foreign-trade.com http://www.v-deutschland.de/ http://www.bundesrmenregister.de/ http://www.europages.com http://www.kompass.com http://www.tgreurope.com http://www.alibaba.com https://tigertrade.com/

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Agents
http://www.handelsvertreter.de

Fair Trade
www.fairguide.com/ www.fairtrade.net/index.html http://www.fairtrade.org.uk/

International organisation for export promotion


www.cbi.eu http://www.sippo.ch www.intracen.com

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Annex II: Interior Magazines

I.D. (International Design) reports the latest trends and technologies for design professionals seeking to stay up-to-date in a global economy. The magazine presents fresh ideas in a new, arresting format that matches the visual sophistication of the readers and subjects. I.D. is the only newsstand publication to emphasize product design. It also touches on related disciplines--architecture, interior design, graphics, interactive design, and branding. This mix reects the increasingly interdisciplinary nature of todays design practice, serving to inspire as well as educate. www.id-mag.com Elle Decor This magazine showcases the most advanced international fashion designers and their innovative ideas in architecture, home fashions and the decorative arts. It provides the latest information on the top interior designers and architects and offers a detailed shopping guide in each issue. You will get the Elle Decor Italy, Germany, Dutch, France and UK. They are different. Look where your target market is. www.elledecor.com World of Interiors Original and innovative magazine where interior design and fashion meet. Serves as an invaluable source of inspiration and reference for design and decorating ideas. http://www.worldonteriors. co.uk/ Vogue Living A magazine about interior design, homes and gardens, and architecture and art. Also, includes reports on international trends, coverage of the worlds most beautiful homes, and details and practical elements about turning your fantasy home into a reality www.vogue.com Plaza Magazine International is an international publication, focusing on design, interior decoration and fashion with a hip Scandinavian perspective. Plaza Magazine is published 6 times per year by Plaza Publishing Group AB, and is sold is over 40 countries worldwide. Plaza Magazine was founded in Sweden 1994. The 200+ page magazine contains articles on fashion, design and interiors geared for the rich and glamorous FX is an UK trade magazine for the contract interior design industry, published by Progressive Media Publishing. It has an ABC audited circulation of 15,055.FX Magazine organizes and promotes the annual FX Awards for

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contract designers and design projects, which are recognized by the Design Council as the leading awards for the contract interior design industry. Country Homes & Interiors is published by IPC Media, part of Time Inc. and is a magazine which focuses on country style interior design. Each issue features country houses from around the UK plus accompanying photographs and owner proles; country style decorating; interior design ideas; gardens and planting advice; and seasonal food and entertaining. Other articles include Earning a living which proles small country-based businesses. House & Garden was an American shelter magazine published by Cond Nast Publications that focused on interior design, entertaining, and gardening. Foreign editions of the magazine are still published in the United Kingdom (as of October 2009) and South Africa. The British edition is edited by Susan Crewe, and is very successful and inuential, as well as protable. A Greek edition was launched in November 2007. Ideal Home is the best-selling homes magazine in the United Kingdom, (ABC-audited circulation of 233,630, January-June 2007) and has a readership of over 1,015,000. Published since the 1920s, the magazine focuses on home interior decoration articles; reader homes; high street shopping news and consumer advice. In every issue there is a dedicated 20-page kitchens and bathrooms section. Agitate, published in Milan, Italy, is one of the worlds best known design magazines,[1] devoted to architecture, interior design, furniture, product design and graphic arts. It is bilingual in Italian and English.[2]

Germany: Monthly home, garden, kitchen, and entertaining magazine. 12 issues / yr.

Germany Monthly magazine follows the latest trends in design and architecture. 12 issues / yr. Price and circulation of selected Magazines in Germany
Price black/w 1 Magazine HOUSE AND MORE IKEA FAMILY LIVE SCHNER WOHNEN* AM SONNENPLATZ WOHNIDEE* LISA WOHNEN & DEKORIEREN* LIVING AT HOME* LANDLUST ZUHAUSE WOHNEN LAURA WOHNEN KREATIV* WOHNEN & WOHLFHL SELBER MACHEN ELLE DECORATION Sold edition 2.080.503 1.829.465 1.780.310 506.330 283.489 223.090 216.566 214.303 207.857 201.561 181.119 162.655 138.170 130.105 116.801 page in 29.940,00 26.020,00 27.760,00 11.900,00 27.625,00 kam. 21.616,00 10.300,00 16.650,00 9.600,00 20.500,00 7.640,00 5.000,00 16.900,00 16.700,00 Price color 1 page 50.900,00 39.640,00 50.100,00 11.900,00 27.625,00 10.450,00 21.616,00 10.300,00 16.650,00 9.600,00 20.500,00 7.640,00 5.000,00 16.900,00 16.700,00

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Middle East

Gulf Interiors is a monthly magazine that has been published for 18 years. Each issue is sent to 12,000 names professionals within the interiors industry, including architects, designers, furniture retailers and species, hotel and restaurant owners and governmental buyers. Gulf Interiors offers the perfect environment for companies looking to advertise their products to the most important furniture/furnishing buyers in the region.

Arabesque Magazine has inspired its title from the implications of its name, whose various meanings include whatever is relevant to architecture, decoration, Arabic engravings, wood engraving which share the eld of arts and creativity. Arabesque Magazine is a quarterly magazine, founded in 2003 and considered to be the rst specialized magazine in decoration and design in the UAE. www.arabesquemag.com

ASK Magazine is an Egyptian monthly magazine published in English; specialized in interior design, landscaping, architectural design, ne art and furniture as well as home accessories and appliances. In addition, we cover the latest trends and designs for products like cars, accessories & jewellery. Our publication also reports on different events such as exhibitions and national fairs as well as new design establishments by designers and architects. Facebook group: http://www.facebook.com/group.php?gid=15983377610&v=wall&ref=ts

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Annex III: Primary Trade Shows


The most important trade fairs in Europe for the sector are: Ambiente Internationale Frankfurter Messe, Germany Ambiente Frankfurt is one of the biggest and best trade fairs for consumer goods listed above in the world. There are three separate shows; clearly arranged into product areas: o Dining - focuses on the world of the table, kitchen and household items, o Giving - is devoted to the creative world of gift ideas, o Living - concentrates on the exclusive world of the home, furnishings and decorations. Location at the fair is very important some halls are more related to retail business others are more volume business some higher segments, some lower segments; some design oriented others mass market Participation is mostly not successful at rst appearance. At least 3 participation are needed. Since a decade Ambiente is not anymore an order fair. Intensive follow-up is needed. High competition from Asia: many Chinese exhibitors 2010: 229! Design oriented stands. Stand design and decoration is very important. Its all about lifestyle-concepts. Ambiente competes with Maison & Objet in Paris. M&O is very trendy, but business is still done in Frankfurt. Recommended for exporter

Maison & objet, Home Decoration, Giftware and Tableware Trade Exhibition, Paris, France M&O Paris is one of the biggest and best trade fairs for consumer goods listed above in the world. There are different halls with separate shows; clearly arranged into product areas: o Home Textile o Ethnical Chic from Developing Countries o Contemporary design o Country Style o Kids and many more It is very difcult to get space high competition waiting list. Well developed application with stand and product concept has to be delivered Location at the fair is very important some halls are more related to retail business others are more volume business some higher segments, some lower segments; some design oriented, others mass market Participation is mostly not successful at rst appearance. At least 3 participations are needed. Design oriented stands. Stand design and decoration is very important. Its all about lifestyle-concepts. Very much recommended for exporters. Group exhibition recommended for the higher segment. Must be very stylish including stand design

Tendence Internationale Frankfurter Herbstmesse, Germany Tendence Frankfurt used to be a very successful trade fair. Tendence was named Decorative Life for the last years and combined with Collectione in July Number of visitors declined dramatically Organizer decided to go back in 2010 to the old concept and time: August consumer goods fair for a large-scale retailer or distributor. Product areas: Table, Kitchen & House ware; Location at the fair is very important some halls are more related to retail business others are more volume business some higher segments, some lower segments; some design oriented others mass market Design oriented stands. Stand design and decoration is very important. Its all about lifestyle-concepts.

Heimtextil International Trade Fair for Home and Contract Textiles, Germany The worlds biggest trade fair for home and contract textiles, annually 4 days in January Product groups: deco & style; sit & feel; furniture fabrics; sun & shadow; oor & more; wall & dcor; sleep & dream; kitchen; bathroom, atelier & design; service & technology Product groups: deco & style; sit & feel; furniture fabrics; sun & shadow; oor & more; wall & dcor; sleep & dream; kitchen; bathroom, atelier & design; service & technology There are separate shows; clearly arranged into product areas: Location at the fair is very important some halls are more related to retail business others are more volume business some higher segments, some lower segments; some design oriented others mass market Participation is mostly not successful at rst appearance. At least 3 participations are needed. Since a decade Heimtextil is not anymore an order fair. Intensive follow-up is needed.

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Very high competition from Asia: Chinese exhibitors 2009: 417 India: 390 Pakistan 202 Design oriented stands. Stand design and decoration is very important. Its about lifestyle-concepts. Very much recommended for exporters

Domotex Hanover The World of Flooring, Germany Domotex - World Trade Fair for Carpets and Floor Coverings The worlds leading trade show for oor coverings Buyer: importer/wholesaler/bigger retailer from all over the world For over many years now, hand-made carpets and rugs is the leading product group, with the main concentration in booths and most popular among the visitors.. Very high competition from Asia: Chinese exhibitors 2009: 147 India: 290 Very much recommended for exporters

Import Shop Berlin, Germany Import Shop since 1962 in Berlin Focus on Germany retailer and direct sales Very popular for manufacturers from Africa for successful direct sales Focused on ethnic handicraft Recommended for smaller Mono artisans to sell directly

International Handwerkmesse Munich, Germany The Leading Trade Fair for the Craft Trades and Medium-Sized Enterprises since 1947 Focus on Germany retailer and direct sales Very popular for manufacturers for successful direct sales Recommended for smaller SMEs artisans to sell directly and nd smaller retailer in the region of South Germany

CPD Internationale Fachmesse fr Womenswear und Accessoires, Dsseldorf, Germany CPD is one of the biggest and best trade fairs for fashion and personal accessories in Europe Many famous brands exhibit in separate showrooms in the town of Dusseldorf The importance of the fair ground is not any more as it used to be. Decrease of nearly 50% of visitors from 2007 to 2009 Recommended for exporter of personal accessories

BioFach + Vivaness Nuremberg Organic Trade Fair / Trade Fair for Natural Personal Care and Wellness, Germany One of the major trends of the past years is certainly the growing importance of the ecological, social and economic added value of products, such as sustainability, fairness and social responsibility Biofach is the biggest trade fair in Europe related to this topic Visitors can also obtain information and exchange views about all our special topics at specic forums as part of the congress The non-food segments of textiles, natural products, detergents and cleaning agents are combined in a separate hall in 2010, likewise Vivaness. It is becoming increasingly apparent that the customers see exhibitions in a less sales-orientated way than in earlier years. Exhibitions are places for the sector to meet for cultivating customer relations and networks. They promote sales on the one hand, but also the positioning of corporate and product brands. The sector attracts a level of media attention through the exhibition especially in the case of a world-leading event that a single company could never achieve

I.L.M. International Leather Goods Fair Offenbach , Germany Offenbach is the leading trade fair for leather products For retailers and importers 5,634 visitors at the last I.L.M Winter Styles 2010 outperformed the target of last year by about 9%.

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Ethical Fashion Show Paris, France Messe Frankfurts French subsidiary has taken over the Ethical Fashion Show in Paris. The Ethical Fashion Show is a trade fair for ethical fashion, now featuring more than a hundred brands. Messe Frankfurt has added a new segment to its portfolio of events. With the event, which focuses exclusively on ecological, socially responsible and environmentally friendly garment production, the fair and exhibition company is opening up a new growth market and also gives customers the chance to enter the garmentmanufacturing business. Thus, Messe Frankfurt now covers the entire value chain in the textile-fair sector all over the world. http://www.ethicalfashionshow.com/efs2/homepage.html

European Fair Trade Fair Lyon The rst edition of Fair Trade in Europe (which took place in Lyon-Villeurbanne on February 1st, 2nd and 3rd, 2008) gathered 175 exhibitors coming from 20 different countries. In the wake of this success, EquiSol and its European and national partners have decided to try the experience again. Visitors: o European professionals from different sectors: textile, food, out house catering, cosmetics..., o Collective purchasers and works councils, o European local authorities o Professionals from Fair Trade education and lobbying o Activity creators More intensive research on this fair is needed because the trade fair is very young

Museum Expressions Paris - Trade Fair, France The Heritage & Tourist Gift Show The leading trade show for cultural and tourist gifts The importance of the tourist sector, currently considered as one of the most important world industries, is generating remarkable economic growth. The number of visits to cultural and tourist sites is beating all records. This increased level of visits is having very positive effects on the cultural gifts trade. To answer the increasing demand for cultural gifts, by their international buyers, 200 manufacturers, craftsmen, creators and editors from many sectors offer a range of items, both varied and original. Reproductions and creations, customized in various ways, offer homage to the heritage of our past while at the same time relating both to the present and the future. The fair gives access to a unique market place for cultural gifts! Who should exhibit: Museum Expressions is targeted at all the professionals that are manufacturing, distributing and selling retail products to the heritage and tourist industry.

Formland Trade Fair for Scandinavian Design, Table Top, Giftware, Handicraft & applied Art, Herning, Denmark Well established trade fair for the whole Scandinavian Market Stand design and decoration is very important. Its all about lifestyle-concepts. Very much recommended for exporters when entering the Scandinavian Market. Group exhibition recommended for the higher segment.

Home Decor Interior Design and Home Furnishings Fair, Poznan, Poland Good trade fair for targeting East Europe, especially Poland Relatively many visitors for 150 exhibitors good opportunities Very much recommended for exporters. Group exhibition recommended. Research needed before participation

Other trade fairs in Europe: especially for selected outstanding products Best research can be done by www.auma.de Italy (Florence) International Handicraft Fair: Home furnishing, textile and metal articles, costume jewellery,ceramics, leather and fur articles. Annually 10 days at end April/beginning May (http://www.renze-expo.it).

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Pitti Casa Household linen exhibition, annually at September. Industry focus: Bed, bath, kitchen and table linen (http:// www.pittimmagine.it). UK (London): - Top Drawer annually 2 days in September. Industry focus: Home supplies, arts, crafts, stationery, giftware, furniture, fashion accessories. The trade fair is strategically positioned in the buying calendar to enable buyers to see and purchase inspirational gift ideas for Christmas, as well as innovative new product to take them into the New Year (http://www.topdrawer.co.uk/td/Autumn2006).

Spain (Valencia) Textilhogar international fair for home textiles and decoration, annually in January. Product groups: carpets, blankets, table linen, curtains, bathroom textiles (http://www.feriavalencia.com).

AFRICAN TRADE SHOW SIAO International Handicraft Fair Ougadougou, Burkina Faso Institutionalized in 1988, is a manifestation SIAO strongly requested by African states. Held every two years, the show is an ideal setting for African artisans who sell their products on domestic and international markets. SIAO is positioned as a showcase of African crafts essential. All means are implemented to facilitate trade relations between artisans and buyers. Visitors: International buyers, Museum professionals, Institutional, Press etc www.siao.bf

TRADE SHOWS AND FAIRS - USA New York International Gift Fair www.nyigf.com San Francisco International Gift Fair www.sgf.com Atlanta International Gift and Home Furnishings Market www.americasmart.com High Point Furniture and Home Furnishing Show www.highpointmarket.org

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Annex IV: Template Customer Survey


CUSTOMER SURVEY: TEMPLATE In order to continue to meet the needs of our existing and new customers we are compiling information about our market and the buying needs of our clients. Please help us help you, by taking a few moments to complete the following questionnaire. Thanking you in advance! Name of your Company: Please underline or * all relevant responses QUESTIONS ABOUT YOUR ORGANISATION: 1. Please indicate which sales channels are used by your company Internet/mail order/retail/wholesale/agents/other - please specify: 2. Please indicate which gift and home ware products you are currently buying: glassware/wood/metalware/textiles/basketry/ceramics/leather/other 3. If possible please indicate which of the above product groups are experiencing most sales growth in your business: QUESTIONS ABOUT YOUR MARKET: 4. Please indicate which market segment/s your business is mainly targeting Low/low-mid/high-mid/high/niche please describe: Contact Person:

5. Please indicate all relevant information about your end consumers Sex: mostly women/mostly men/mixed/dont know Age: under 25/25-35/35-45/45-55/55-65/0ver 65/dont know Occupation: Managerial/Professional/Clerical/Skilled manual/semi-skilled/Pensioners Motives: trend conscious/slightly inuenced by trend/not at all trend conscious/mixed/dont know Motives: always ethically conscious/sometimes ethically conscious/never ethically conscious/mixed/ dont know QUESTIONS ABOUT YOUR PURCHASING DECISIONS: 6. Please indicate how your company normally purchases goods from overseas suppliers Imports directly from supplier/via a European based wholesaler/via an overseas agent/via in-country purchasing ofce/other please specify: 7. From which countries are you currently sourcing most of your products? 8. Please indicate how your company prefers to source new products from suppliers Purchasing ofces/Internet/trade fairs/catalogues/visits from suppliers/cds/visits to suppliers/other please specify 9. Please indicate what background product or company information you expect to receive from new suppliers:

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QUESTIONS ABOUT YOUR SAMPLING AND ORDERING PROCESS: 10. Please indicate in which months you do your product selection/ordering For Autumn/Winter For Spring/Summer 11. Please indicate in which months you start your sampling For Autumn/Winter For Spring/Summer 12. Please indicate the normal lead time required On bulk orders On repeat orders 13. Do you require pre-production and production samples? Pre-production yes/no Production yes/no 14. Do you have a seal system of nal sample/pre-production/production sample? yes/no 15. How frequently do you require order updates? Weekly/15 days/monthly/prior to dispatch only/other please specify 16. Please provide details of your normal payment terms: 17. Please advise if legislation applies in your country to any of the product groups mentioned above: 18. Do you have specic packaging and labelling requirements?

THANK YOU FOR YOUR TIME AND COOPERATION

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Annex V: Observations of key buyers and sourcing agents


1. Please give us a short introduction of your company.

Companies in the interviews included buyers from Europe; USA and Asia. Most of these are sourcing/ buying ofce or representative ofce for importers or retailers in USA and Europe European Leading company In Premium Gifts And Promotional Items. years of experience in the gift and Home Deco business 20- 100 employees in Europe and Between 100 - 1000 customers 100 - 6 000 products designed per year Some order up to 30 million pieces per year They would have dedicated in-house designers They would have experienced sales people across the European market Highly dedicated and specialised buyers and merchandisers They are in compliance with European regulations Inline and nal inspections by a third party company Laboratory tests conducted by internationally known labs (Intertek, SGS, BV) Head ofce certied ISO 9000 or ISO 14001

2. Types/ segment of business:


Which sector you are working in (Furniture, home decor, textiles, Promotional items) Which market segment of customer you are buying/ sourcing for? volume business, super-hyper markets, department stores, retail chains, specialised shops, mail order How many containers you are buying a year? from 5 to 400 Containers Finding/sourcing suppliers: How do you nd/source your suppliers? e-platforms like Alibaba.com, global sources, Google, direct sourcing, supplier recommendation,, Canton fair, international trade fairs USA, Paris, Frankfurt What is the most effective way for you to source suppliers? See above How many manufacturer /companies in Vietnam you work with: between one and ten Is Vietnam in your organization high-middle-or low priority? 40% high, 60% middle 0% low What is your most important sourcing country? Vietnam, Thailand, China, Indonesia

3.

4. What criteria you consider when choosing suppliers Importance level: 1 is the most important 7 less important

Criteria DE

Companies FR USA FR world World Wide 1 2 6 3 4 5 7 Hong Kong World 3 5 1 2 4 6 7 1 2 7 3 4 5 6 1 3 7 2 6 5 4 USA EU

Price Capacity Design Delivery time Social compliance Communication Small order acceptance

4 5 1 2 6 3 7

1 5 6 2 7 3 4

2 5 6 3 1 4 7

5 6 7 2 3 4 1

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5. What are weaknesses of Vietnamese supplier?


Non-compliance with European regulation less material combination poor design long production lead time cursorily prepare offer presentation slow feedback poor marketing and management What are their strong points? Please give an example Higher quality product good communication, good customs service in-time delivery small order acceptance good price for some elds as handicrafts, outdoor furniture, ceramics wares for dcor

6.

7. Do you expect from Vietnamese suppliers new designs or is it sufcient that they can work on buyers requirements and buyers designs?

Most of buyers look for new and innovative designs from suppliers. Suppliers should be aware of buyer requirements, market trends

8. What should be done to help Vietnamese producers to promote their products and expanding business? Why?

Their product must be with great designs, good quality, safety. US market requires a lot of safety and regulatory requirements so you have to have in mind that your quality must be End-to-End quality They should invest to pass the audit factory so that they can work with many big buyers around the world Prove they can pass all the test requirements, and are ready for work in Europe Show large assortment during a Fair Send company presentation with photo of running production regularly to the buyer Should be present on B2B platforms like alibaba.com Should participate in trade fairs

9. If you could give advice to Vietnamese suppliers, what would you recommend?

Producers must know their target clients (high middle or low) in order to concentrate and develop their products that meets their needs Should join and visit interesting fairs of home dcor in Vietnam and support other producers to join international trade fairs. Good process control, high productivity, good quality, Competitive price and on-time shipping Should invest in product development and observe competitors world wide Should bring new designs every 3 or 6 months Pay attention to what buyers are looking for, what is market trend (design, shape, colour). Create added value like Design (Product development), Packing Solution (display pallet & cute case), Shipping (not only FOB ), Payment term (exible, extend payment term & can charge for interest) Connect with other vendors to supplier the full program, e.g. ceramic dinnerware vendor connect to glassware vendor to offer full house ware program to customers Be exible, good English communication Invest to pass factory audit, be ready to pass test requirements Improve the management Be willing to make samples Be aware of the trading process with European retailers, aware of trends and designs

Annex VI: Comparison of voluntary standards

Requirements selected voluntary standards Fair Trade International

BSCI

FSC
Ethical Trading

Social

85

Conditions of work Safety at work (ILO 184) Safe work environment No forced labor (ILO 29&105) Child labor prohibited (ILO 182) Condition of employment Minimum age (ILO 138) Equal remuneration (ILO 100) Workers empowerment Freedom of association (ILO 87) Collective Bargaining (ILO 98) No discrimination at work (ILO 111

Its Time to Go Global

Social/human rights Gender issues Womens rights at work Work/labor rights Conditions of work Safety at work (ILO 184) Training on safety issues Safe work environment Safety equipments and emergency kits Safe handling chemicals Healthy work conditions Access to safe drinking water Access to sanitary facilities at work Access to medical assistance/ insurance Training requirements on site No forced labor (ILO 29&105) No use of physical violence Child labor prohibited (ILO 182) Condition of employment Contract labour policies and practices Transparency of employment practices Written contracts Seasonal - partial labour issues addressed Leave days clearly specified Timely payment of wages Minimum wage requirements Living wages to cover basic human services/savings Minimum age (ILO 138) Maximum number of working hours

Social/human rights Cultural/religion rights (ILO 169) Indigenous rights Minority rights Active support of community services Community consultation on impact of business Work/labor rights Conditions of work Safety at work (ILO 184) Training on safety issues Safe work environment Safe handling chemicals Training requirements on site No forced labor (ILO 29&105) Child labor prohibited (ILO 182) Condition of employment Minimum wage requirements Minimum age (ILO 138) Equal remuneration (ILO 100) Local hiring and purchasing promoted Workers empowerment Freedom of association (ILO 87) Collective Bargaining (ILO 98) No discrimination at work (ILO 111)

Social/human rights Housing and sanitary facilities i n place Cultural/religion rights (ILO 169) Work/labor rights Conditions of work Safety at work (ILO 184) Training on safety issues Safe work environment Healthy work conditions Access to safe drinking water Access to sanitary facilities at work No forced labor (ILO 29&105) No use of physical violence Child labor prohibited (ILO 182) Condition of employment Contract labour policies and practices Written contracts Leave days clearly specified Pensions and s ocial security benefits Minimum wage requirements Living w ages t o cover basic human services/savings Minimum age (ILO 138) Equal remuneration (ILO 100) Maximum number of working hours set Workers empowerment Freedom of association (ILO 87) Collective Bargaining (ILO 98)

Requirements selected voluntary standards Fair Trade International

BSCI

FSC

Ethical Trading

86 Export Marketing Guidelines

set Workers empowerment Freedom of association (ILO 87) Collective Bargaining (ILO 98) No discrimination at work (ILO 111) Joint committees Financial sustainability Price premium Written contracts between buyers and sellers Advance payments including prefinancing Administration and management Timely payment criteria from buyer Corporate Social Responsibility policy Internal Control System management Criteria for quality management Quality management best practices Product quality specifications Explanation o f Standards Maps i nterpretation o f compliance policies i n the Fairtrade standard system: Immediate Requirement: F airtrade s tandards provide for minimum and progress requirements. A ll minimum r equirements are considered as immediate requirement i n the database. The related compliance assessment is c onsidered Pass / Fail Long-term requirement: Fairtrade progress requirements a re c onsidered as long-term when a t imeline is g iven f or c ompliance, w hich can be extended over 3 years. C ompliance assessment c an b e Pass / Fail, Threshold or Scoring system. Recommendation: Fairtrade Progress requirements are c onsidered a s recommendations when no timeline is explicitily mentioned to comply with the requirement and/or f ull compliance is not required.

Requirements selected voluntary standards Fair Trade International

BSCI

FSC

Ethical Trading

Compliance a ssessment can be Pass / Fail, Threshold or Scoring system. Source:

Environment

87 Its Time to Go Global

Soil Soil conservation/erosion Soil quality Plant and animal productivity Soil related nutrients and fertility Forest Protection of forests against logging and/or burning Chemicals List of prohibited chemicals Synthetic inputs Pesticides/herbicides Equipment and training on chemical use Storage/disposal/waste Management of chemicals Weed control Biodiversity Genetically Modified Organisms (GMOs) Prohibition Management system Risk prevention Conversion of primary land use Animals Waste Waste management - collection, treatment, disposal Recycle waste which cannot be prevented Pollution management Composting Disposal of waste Water Disposal of grey waters and run off Carbon

Soil Soil conservation/erosion Soil quality Soil related nutrients and fertility Forest Reforestation of depleted forests and woodlands Protection of forests against logging and/or burning Conservation of ecosystems health Conversion of forests to other uses Chemicals List of prohibited chemicals Integrated Pest/Crop Management (IPM/ICM) systems Synthetic inputs Fertilizers Pesticides/herbicides Natural inputs Fertilizers Pesticides/herbicides Equipment and training on chemical use Storage/disposal/waste Management of chemicals Weed control Biodiversity Habitat and/or eco-system Wildlife Flora density/diversity Set aside land Ecological niches Genetically Modified Organisms (GMOs) Prohibition Management system

Requirements selected voluntary standards Fair Trade International

BSCI

FSC
Ethical Trading

Risk prevention Conversion of primary land use

88

Green-house gases emissions measured Sequestration: soil/tree/other Other Harvesting/post-harvesting practices Settlement - infrastructure and buildings Financial sustainability Price premium Written contracts between buyers and sellers Advance payments including prefinancing Administration and management Timely payment criteria from buyer Corporate Social Responsibility policy Internal Control System management Criteria for quality management Quality management best practices Product quality specifications Administration and management Internal Control System management

Economic

Export Marketing Guidelines

Source: ITC Standards overview

While efforts have been made to verify the information contained in this document, the International Trade Centre cannot accept responsibility for any errors that it may contain. The views expressed in this report can in no way be taken to reect the ofcial opinion of the MDG Achievement Fund, the Viet Nam Trade Promotion Agency VIETRADE, the Viet Nam handicraft exporters association VIETCRAFT, and the International Trade Centre. The usual disclaimers regarding responsibilities apply to this report.