Trade Training Workshop

for DPTP Staff and Private Sector in

LAO PEOPLE DEMOCRATIC REPUBLIC

INTERNATIONAL
MARKET ENTRY STRATEGY

Presented by
Rahim Jabbar

July 2011
 International Market Entry Strategy
Points of Discussion

An Overview of Export
Export: Extension to the Global Market

Options to Enter the Global Market

– Indirect export

– Direct Export
International Market Entry Strategy

Points of Discussion
Channel Routes between Local Producers and
International/Global Market
–General routes
–Entry Options
Formulation of Marketing Strategy to
Support Market Entry Strategy
–Positioning in the Target Segment
–Product & Packaging
–Identity/Branding
–Price
–Promotion
–Distribution Channel
–Trade Partner
SUMMARY
AN OVERVIEW
OF EXPORT

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 Exporting is about Making Laotian Products
Accepted & Bought →Used

CONSUMERS
see it as Export
Value Destination
SMEs’ potential Features → When THEIR : Country/
products for Advantages→ • Goals are Market :
export s in LAO Benefits (FAB) achieved
What the
PDR • Needs are
CONSUMERS do
fulfilled
really NEED &
$ Export WANT
•Wants/desires
Business are satisfied
Transactions $

Requires Market Entry Strategy 5

 Market Entry Strategy → Combining
Product and Target Export Market
What are the
What are its opportunities &
How can
strengths? Product X challenges in the
weaknesses? be made international market
successful in
+ + +/ - - - the global * * */ ! ! !
market?
PRODUCT X PRODUCT X
In the domestic Entry strategy In the Target Export
market Market

*Changes
*Alternatives What should be the
What are the competitive
*Allocation of resources competitive
advantages of Product X
in the domestic market? *Well planned program advantages of Product
*Step-by-step X in the global market?
*Flexible
*Adaptive
Copyright Rahim Jabbar/2010 6
OPTIONS FOR MARKET
ENTRY STRATEGY

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 International Market Entry Strategy
SIMPLIFIED ENTRY STRUCTURE

Agent
Trader Distribution
(Outlets)

Trader
Exporter Customer
Importing
Wholesalers

Country or
Tariff
Border 8
Source: CBI, Export Planner, 2004
 International Market Entry Strategy (cont’d)
LABYRINTH OF
Manufacturer
INROADS
Export Cluster
Organization Buyer
Country or
Tariff
Border

Agent
Importer
E-commerce
Buyer
Retailer Joint venture

Trade partner
CUSTOMER
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Source: CBI, Export Planner, 2004
International Market Entry Strategy (cont’d)
THE AGENT
An independent person or company who merely intermediates
(bringing exporter/seller and importer/buyer together).
His/her services are paid (usually by the exporter) in the form
of a commission, which is a percentage of the (CIF) value of
the goods imported.

THE IMPORTER
An independent company, specialized in importing a certain
range of goods from abroad.
An importer buys directly from the exporter and thus becomes
the rightful owner of (or 'takes title' to) the goods.
In turn, he will try to sell the goods to wholesalers or, in the
case of professional goods, to customers.
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International Market Entry Strategy (cont’d)
THE IMPORTING WHOLESALER
An importing wholesaler is a company that not only imports
but also operates facilities to forward the goods into the
distribution channels by means of promotional support.

THE BROKER
A broker is an independent person or company who,
somewhat like an the agent, brings together buyer and
seller and gets paid by the party who hired him.
The broker holds neither title, nor stock.
Occasionally, he can provide consultancy services, based
on his sector knowledge.

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International Market Entry Strategy (cont’d)

THE TRADING HOUSE

A trading house is an independent company that
specializes in trading certain range(s) of goods.
A trading house or company buys and sells on its own
account and at its own risk.
It decides on its own export assortment.
Trading houses usually have a strong commercial acumen
and professionalism.
Sometimes their after-sales performance, which is
necessary for most technical and professional products, is
weak.
A trading company can be located in the Company’s own
country or in the target country.
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 Options for International Market Entry Strategy

Three Options of the Strategies

Production
Indirect Direct In the Country of
Export Export Destination

•Export Trader •Buyers in COD •Assembling

•Trading House •Agents in COD •Contract manufacturing
•Roving International •Trading House •Licensing agreement
Private Trader •Distributors in COD •Franchising
•Representative in COD •Joint-venture company
•Sister company in COD •Strategic alliance
•Local/domestic
production in COD
STAGE WISE 13
 FORMULATION OF
MARKETING STRATEGY TO
SUPPORT
ENTRY STRATEGY

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 The Choices To Be Made

The best positioning among the most

potential target segment
The correct product with suitable
packaging
The most convincing identity, with a
strong uniqueness
The best price level
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 The Choices To Be Made
(Continued)

The most effective promotional

activities
Selecting the right distribution channel
for the product
Selecting the most suitable Trade
Partner to handle the product

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 Combining Product → Target Segment:
→Positioning the Product in the Segment
•Value/Price Ratio > Competitors
•Better quality at the same price or lower price
at the same quality level.
•The product has got competitive advantage in terms of
*Physical attributes
NICHE •Process attributes
MARKET •Benefits attributes
*Unique product attribute contributes to the Unique
Selling Point of your offer.

QUALITY OK WITH COMPETITORS AND TARGETED TO

SEGMENTED
SPECIFIC SEGMENT WITH SOME DIFERENTIATION

CAN FULFILL CONSUMER NEEDS IN TERMS OF

MASS •Technical performance
MARKET •Level of quality
•Price advantage

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Product Features, Attributes & Benefits
(FAB) That Ensure Competitiveness
Should comply with market access
requirements of comprehensively
regulated target markets.
Adjusted to target segment’s needs and
requirements in the target market.
A set of features that conveys benefits
which are more attractive with unique
value compared to competitors in the
target market → Unique Selling
Proposition (USP).
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 The Most Suitable Type Of
Packaging For The Product
Packaging → the eternal communicator for
the product.
The look should be attractive to the
sophisticated eyes of the consumers in COD.
It should signify all the best and unique
features of the product as per the cultural
views of the people in COD.
Should comply with all regulations on
packaging applied in COD.
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Marketing Mix For Unbranded Product

PRODUCT PRICE

MARKETING
MIX

PROMOTION DISTRIBUTION

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 Marketing Mix For Branded Product

NAME
& LOGO PACKAGING
IDENTIFER PRESENTER
& LINK
BUYERS/
CONSUMERS/
PRODUCT/ CUSTOMERS
SERVICE IN THE
BASIS TARGET
COD
MARKET
CORE PRICE
MESSAGE
STORY PROXY OF
TELLER VALUE

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Copyright: Rahim Jabbar, 2011
 The Best Price
Relationships: Cost → quality → value →
price range.
Price → represents value.
A better price/value ratio helps
competitiveness.
Major strategic considerations:
Target segment
Product positioning
In selling through an intermediary, consider
your place in the buyer’s (or trade partner in
the COD) portfolio of suppliers.
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The Most Effective Promotional Activities

Adjusted to target segment characteristics

Business-to-Business or
Business-to-Consumers
Key messages should be in line with the
product concept.
Use of most effective media
Optimum reach and frequency for different
stage of position in EDC market.

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 The Right Distribution Channel

Adjusted to distribution structure for the

product in the selected target COD market.
Can be indirect, or through direct route i.e.
through specialized retail stores.
Logistic effectiveness is the main decision
criteria.
For SME’s exporters from developing
countries, choice depends on selecting the
right trading partner.
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The Most Suitable Trade Partner

SMEs from developing countries can

only choose among: buyers, agent or
distributors in the target COD
market.

Representatives & sister companies are

beyond SME’s capability
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Exporter Needs To Nurture Long-
term Relationship With Buyer

It takes considerable amount of time,

energy and money to establish a
position in the complex in the
developed market as a COD.
→Exporter should find a trading
partner that would likely be having
long-term perspective and nurture
mutually advantageous relationship
with the buyer.
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SUMMARY

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Major Points On Market Entry Strategy

Options available for SMEs (Small & Medium

Enterprises) to enter the international
market can be a) direct and b) indirect
export.
Direct export can be conducted through:
a) Export trader; b) Trading house
Indirect export might involve:
a) agent; b) broker; c) buyer; d) importer;
f) trading house; e) distributors, etc.

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Major Points On Market Entry Strategy

International Market Entry Strategy should

be supported by Export Marketing
Strategy as follows:
Market Segment & Positioning Strategy
Product & Packaging Strategy
Identity/Branding Strategy
Pricing Strategy
Distribution Strategy
Promotional Strategy
Trade Partner Strategy
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