Many are the anecdotes and accounts in the literature of export errors and disasters. These are not confined to British firms. A Frenchman trying to sell to the NHS once told the author that it takes an Englishman to sell to an Englishman. Discussions with other salesmen of various nationalities in various industries together with the author's export sales experience made it clear that a widespread general problem existed. Few were satisfied with the hit and miss nature of much export effort.
Because the problem is so general, a general solution may exist. All effective sales personnel possess a 'feel' for their market. The core of the problem is the lack of a proper formal articulation of what is meant by the 'feel', and the absence of methods for the structured study, especially from outside, of the factors that make a particular market function the way it does.
The approach outlined in this article is offered as a contribution towards resolving the problem and lightening the load of export sales personnel. Its purpose is to ensure that visits to and contacts with the target market have the maximum chances of success, with the minimum risk of error. Certainly what isproposed here costs time and money, but these costs are small with those incurred through making mistakes.
To be useful, any proposed solution must contain a recipe for action, yet not be tied to any particular country or industry. It must incorporate means for comparing results with expectations. The loop is then closed by reviewing and refining the actions required in light of the comparison.
The first requirement is to frame an intellectual model of markets in a form relevant to export sales. Such a model need have no connection whatever to the traditional models of economists. Experience and reflection brought the author to centre on three apparently naïve questions:
Why is a particular market like it is? Why do export markets require different handling from the home market? What exactly do salespeople mean when they talk about the 'feel' of a market?
Six main factors shape markets:
For each country and each product, the mix is different. For instance, the Political factor has an outstanding influence in defence related products. Financial, legal, and accountancy services must adapt themselves to the local Legal framework. For street furniture, such as road signs, one must understand how the branch of local Administration responsible for roads functions. By contrast, the Industrial factor is predominant for standard industrial components, but where there is a safety aspect to the product, both Legal and Administrative factors can be relevant. Social considerations such as family structures, customs and lifestyle greatly influence consumer purchases. The general Educationallevel of the population relates closely to the state of development of the society, which is reflected in the demand for sophisticated products. In addition, experience with products used during the Educationalprocess, especially at tertiary level, can influence later buying patterns.Local Environmental concerns can also affect the acceptability of given product.
For convenience this complex of factors can be referred to as the PLAISE. The nature and interaction of the components of the PLAISE shape and define the market.
The essential difference between an export market and a home market can now be formally defined. An export market is one where the local PLAISE differs from the PLAISE in which the exporter is based. A 'feel' for a market means that the weight and nature of the various aspects of its PLAISE are known and understood.
Having defined a model and tested it for appropriateness, there remains the practical problem of how to make use of it. A company working uniquely in the home market is like a goldfish in a pond. Through trial and error the goldfish knows all the nooks and crannies of its pond, but lacks means to map out other ponds systematically.
Before the PLAISE of an export market can be investigated, the PLAISE of the home market must be systematically described. Only then can the study of the target market be planned and executed. If what is important for the home market PLAISE is not recognised, how can the corresponding factors for the export PLAISE be identified for study?
Often the home market PLAISE is known only informally, relying on the memory of senior executives. Rarely is it formally documented. For instance, how many manufacturing firms could produce a detailed breakdown their Industrial environment in terms of market positioning, strengths and weaknesses with respect to their competitors?
When approaching an end-user in an export market, how can you make a strong presentation unless you can describe the position of your products with respect to those of suppliers already established in that market? And if you do not know how to characterise your home market, how can you hope to do it for a market that, by definition, you know far less well?
The prior study of the local PLAISE is just as important if you intend to use a distributor to reach the end user. To a supplier, a distributor offers knowledge of the local PLAISE at a level of detail that it would be impracticable for a small business to acquire for itself. But before entering into any agreement with a prospective distributor, you must satisfy yourself that he does possess the requisite knowledge. This can only be established by asking questions during the negotiations based on knowledge gained from prior study. In addition, if the distributor is any good, he will ask you to explain the features, advantages and benefits of your product with respect to the competition, exactly like the end-user cited above.
One way solving the problem of how to describe a PLAISE from within is to use the technique of rôle reversal. In the pressure to sell and to export, it is commonly forgotten that selling and exporting invoke inseparable, complementary activities. Someone's sale is always another's purchase, and for every export there is a corresponding import. One subtle weakness of many exporters is that they have little or no knowledge of the problems that confront importers.
The first rôle reversal is to imagine that you have been retained by a foreign supplier of similar products who wishes to set up in the British market.
in order to set up as quickly as possible.
It is important to define peculiarities that may be second nature to you but could trip up a newcomer. If such special considerations hold the British market, then it is likely to be true elsewhere. At the very least, they must be checked out. Let us suppose that you make a product that contains a small pressure reservoir. Would there be any insurance considerations? Would any approvals be required for the pressure vessel? How would you go about sorting these matters out?
The second rôle reversal is to imagine that you are a professional buyer needing to buy your products, but with no prior knowledge of either the market or the existence of your business. How would you find out what is available? The answers will show how and where to look for relevant information about your market from the point of view of that crucial person, the customer.
The PLAISE of the target country is built up by taking each point as established for the British market, and then studying the sources for points of similarity and difference. An initial study of a PLAISE must be backed up by a visit, because one thing that desk study can never do is to impart those vital but intangible factors that make up the local atmosphere. The results of the visit can then be used to update the description of the target PLAISE. The requirement for a closed loop is thus fulfilled.
Furthermore, the process has to be repeated at regular intervals. All societies evolve, their priorities change over time, and not all in the same direction. Once the skills are mastered, it takes little effort to keep knowledge of a PLAISE up to date.
Having established what information you need, the question of sources arises. All sources must be challenged as to their authority. As a rule, the most authoritative sources are those produced within the target country and industry. Second comes those sources produced within the target country. It is for this reason that the local technical and consumer press is so valuable. By itself, it will provide most of that information, but even if not, it will give leads to more suitable sources such as government departments or trade associations.
All sources produced outside the target country should be treated with great circumspection. Their main use is to provide leads to more authoritative sources. These considerations apply not only to written material, but also to oral information. Oral information can often be very partial and out of date. Always try to cross-check anything gained from one source against another. Perfect accuracy is unobtainable, but it is surprising how much structured study reveals.
The methods outlined in this article have their limits. They were developed for and are best suited for comparing countries with a similar cultural background and state of economic development, e.g. developed Western countries. However, the principles can be adapted for other cultural areas such as the South East Asian and Islamic.
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