ExporTT Limited Development of Sustainable Exports to the European Union under the EPA

1. ExporTT LimitedDevelopment of Sustainable Exports to the European Union under the EPA MARKET ENTRY STRATEGY MAY16,2013 WORKSHOP PRESENTATION A-Z Information Ltd

2. Outline of the Presentation • Introductory Remarks • Reflections on the Exploratory Trade Mission • Market Entry • Market segmentation • The Export Product • Packaging • The identity of your company and your export product • Export costing and pricing • Channels of distribution • Promoting your exports

3. 1. Introduction To date Companies would have taken several steps along the path towards developing their export plans. These essentially would include an analysis of the following: • Management: goals, resources, tools • Export Auditing • Selecting your target market • Estimating market potential • Identifying the competition

4. Introduction The experiences gained from the Exploratory Trade Mission would have been decisive in determining whether further efforts should be made to develop exports to the FCORs. • Having completed the necessary analyses, the next phase of export preparation is to design a ‘market entry strategy’. • Basically, this task means that you will design a method of how to sell your products or services.

5. 2. Reflections on the Exploratory Mission The specific objectives were as follows; • To promote product(s)/service(s) to trade; • To assess/test the market for demand, acceptance and competitiveness; • To meet with buyers and obtain buyer reaction; • To identify possible Agents/Distributors for my products; • To obtain trade information on the market; • To get a general understanding of the economic situation and outlook in each market

6. Evaluation of the objectives and outcomes of the mission

7. Evaluation of the objectives and outcomes of the mission

8. Evaluation of the objectives and outcomes of the mission

9. Main conclusions from the mission • There are good market prospects for all products presented in each territory of the FCOR. • A few of the companies have confirmed orders for products and are following up with same. • The market size is relatively small and is dominated by a few large Buyers.

10. Main conclusions from the mission cont’d • The prospective buyers are invariably interested in multiple products lines being offered by the Trinidad and Tobago exporters. • This means that the approach to the market has to be well coordinated. • This situation presents a good opportunity for exporters to work together in sending consolidated shipments to the FCORS.

11. Main conclusions from the mission cont’d. • With respect to consolidated shipments however exporters must be aware of the implications for the Quay tax for which one variable is the composition of the shipment. • Some of the potential buyers/distributors have multiple outlets in all three countries hence the possibility for increasing the overall volume of trade is good.

12. Main conclusions from the mission cont’d. • A thorough assessment of each of the markets visited is required. • Reason: it was difficult to assess competitiveness in a situation where information to assess the market was not forthcoming from potential buyers

13. Main conclusions from the mission Contd. • The indications however, are that Trinidad and Tobago will be able to compete in the market given its competitiveness in terms of cost of production and transportation costs to the market. • A good example is the case with office and household furniture where shipping rates from Trinidad are much lower than from France which is the main competitor.

14. Main conclusions from the mission Contd. • There are indications that the markets may be quite good for raw materials as companies are willing to purchase items from sources other than Europe. • In such a case, more attention needs to be paid to ensure that TT products are of the required EU standards.

15. Main conclusions from the mission, contd. • The follow-up from both sides has been aggressive. • Indications are that, based on the positive interest shown, there will be extensive follow-up activities to consolidate and finalize business transactions in the shortest possible time. • Based on the development thus far, it is expected that a sizable export business would have been started prior to the upcoming market penetration mission.

16. Main conclusions from the mission, contd. • Both in terms of future trade missions and the need for follow-up support to penetrate the markets, there will be the need for interpreters or bi-lingual managers to service the three territories.

17. Summary of Tasks completed to date: The International Market Evaluation Process

18. Reflections

19. NextSuggestions for improving future trade missions

20. Suggestions for improving future trade missions, contd. • Advance discussion with participants as regards to expectations and objectives of mission. • Meeting must be confirmed at least 2 weeks in advance prior to visit, this will allow for participants to be more prepared

21. Suggestions for improving future trade missions, contd. • Accommodation must be confirmed 2 weeks in advance and submitted to participants. • If possible, provide a detailed company profile of the prospective buyers and the distribution structure.

22. Suggestions for improving future trade missions, contd. • The Consultants/ExportTT representatives should meet with all participants at their companies and review with them what their business is about. • Let the participants and senior members present such information so that all parties are on par with what the objectives are, or should be so that the right business are sourced and contacted;

23. Suggestions for improving future trade missions, contd. • For the reception or cocktail, more could be done to showcase the Trinidadian culture • Market data on specific products carried by each participants

24. Suggestions for improving future trade missions, contd. • Look at visiting some of the potential customers on an individual basis, as most times key people are too busy to meet at short notice

25. Suggestions for improving future trade missions, contd. • Send a prospective list to participants three weeks in advance before the mission, so meetings can be pre-arranged to save time and face

26. Suggestions for improving future trade missions, contd. • Better accommodation

27. Suggestions for improving future trade missions, contd. • One on one consultation with exporters to identify suitable prospects. Meetings should be arranged locally and feedback on prospects given well in advance so that necessary arrangements could be made to ensure the meetings are kept. • More direct meetings on site. • Work earlier to arrange meetings to obtain the required quality.

28. Reflections

29. MARKET ENTRY STRATEGY

30. MARKET ENTRY STRATEGY • Developing the market entry strategy requires a synthesis of the analyses done regarding: • the firms capacity, • product attributes, • export audit and competitor analysis , • market selection, • market analysis and • trends.

31. MARKET ENTRY STRATEGY • The process leads to the design of the “marketing mix” which comprises the ‘toolbox’ or the instruments and methods for export marketing. • This stage involves determining your market (segments), choosing the most suitable distribution channels, and selecting the right trade partners.

32. MARKET ENTRY STRATEGY Several discreet steps are involved: 1. Market segmentation (Establishing what part or segment of the market you will aim at) 2. The Export Product (How to ‘match’ your product with the market’s needs)

33. 3.1 Market Segmentation

34. Market Segmentation • A ‘market’ defined as a group of people (potential buyers), sharing a common need for a certain kind of product or service, • It is usually too wide a focus from which to expect successful entry. • When identifying your customer(s), you should try to ‘zoom-in’ on your target group.

35. Market Segmentation, cont’d. • Splitting-up the group into smaller groups or sub groups/sub-divisions which share the need for a particular product- Such a sub-divided group is called a market segment.

36. Market Segmentation, cont’d. • Segments, in turn, can be sub-divided in even smaller parts, called ‘niches’ • Strive for a balance between competitiveness and profitability hence identify relevant market segments and niches i.e. fit for your product

37. Market Segmentation, contd. Variables used for segmentation are: • Geographic variables (e.g. region, country, urban or rural, climate zone); • Demographic variables (e.g. age, gender, family size, income level, education level, nationality, religion); • Psychographic variables (e.g. lifestyle, personality); • Behavioural variables (e.g. benefit sought, product usage, brand loyalty, readiness to buy, decision-making unit); • Functional variables (e.g. industrial use, consumer use).

39. Market Segmentation, contd. Variables used for segmentation are: • Geographic variables (e.g. region, country, urban or rural, climate zone);

40. Market Segmentation, contd. • Demographic variables (e.g. age, gender, family size, income level, education level, nationality, religion);

41. Market Segmentation, contd. • Psychographic variables (e.g. lifestyle, personality);

42. Market Segmentation, contd. • Behavioural variables (e.g. benefit sought, product usage, brand loyalty, readiness to buy, decision-making unit);

43. Market Segmentation, contd. • Functional variables (e.g. industrial use, consumer use, Car2go).

44. Market Segmentation, contd. Once you have identified a segment by using one or more of the above variables, check whether this cluster meets all of the following requirements: The segment should be • entirely homogeneous in itself; • heterogeneous vis-à-vis other segments; • clearly identifiable and measurable; • stable over time; • accessible and actionable; • small enough to be controllable and large enough to be profitable

45. Market Segmentation, cont’d. • In which outlet(s) is your target segment buying your type of product? • Who supplies these outlets? • Which distributor provides the best complementarities and synergy? • Is it safe to assume you can develop your market with this distributor?

46. Reflections On Market Segmentation

47. Next MARKET ENTRY STRATEGYThe Export Product

48. 2. The Export Product (How to ‘match’ your product with the market’s needs) How do we get trade statistics? INSEE?

50. Global Market Entry Methods Given that you chose the segment of the Market to enter, how do you get the product into the Market?