Guide: Spotlight on international marketing

On this page

• The art of marketing
• Unique selling proposition
• International marketing considerations
• Product localization
• Find the right price
• Place: Distribution strategy
• Promotion: Getting the word out
• Be ready to export

In an ever evolving technological world where businesses continue to improve their efficiency and new competitors can be established overnight, global competition is fierce, making it imperative to sell yourself effectively to both potential customers and investors.

The following Spotlight will illuminate key considerations and best practices for marketing your company internationally as well as to investors and venture capitalists. Whether it involves fine tuning your unique selling proposition (USP) or adapting elements of your marketing mix, this short guide can help your company prepare to market itself efficiently when faced with global opportunities.

"Treat all markets differently. There are cultural differences out there that you need to respect."

The art of marketing

Advances in information and communications technology (ICT) over the last couple of decades have resulted in the ability to easily send messages digitally to every corner of the world. With that being said, there is now an abundance of promotional content and it has never been more important to ensure that your message is conveyed concisely, is received by its intended audience and is easily heard above the noise in cyberspace.

The Canadian Trade Commissioner Service (TCS) is pleased to present the following Spotlight on International Marketing, which brings together intelligence and resources for companies seeking advice on how to become more competitive internationally and market/sell their product or service in new foreign markets.

Marketing is a subject that requires nuance in order to elicit the desired response. This Spotlight focusses on how to build a unique selling proposition (USP) and tailor aspects of your marketing mix, the pillars of any marketing strategy, for entering markets with different cultural, social, political or economic environments than your own.

It is important to note that before creating your marketing plan you should first conduct market research to confirm that there is demand for your product and that there are no significant barriers to trade that would prevent you from exporting to the selected country. For more information on choosing a market and developing an export marketing plan consult the TCS which contains special sections dedicated to 'Setting out: identifying your target market' and 'Reaching the customer: developing your export marketing strategy'.

Unique selling proposition

If you are entering a new market then your brand awareness is probably not going to be at the same high- a level you may have established within Canada. In order to have a successful entry in the market, your USP should be developed so that customers are not only informed of the value that your product or service provides them, but also how it is different from and/or superior to that of your competitors.

Before your USP can be crafted, there are a couple tasks to accomplish first:

• Segmentation: Identify your target customers by creating buyer personas for the segments you believe will most likely purchase your product or service. Your entire marketing plan will be based on the chosen segments. The geographic, demographic and psychological factors that you use to determine your target customers will affect pricing, communication and distribution decisions. Canada Business Network offers more information on segmentation and Developing a marketing plan. Business Development Canada (BDC) has a template to be used when constructing your own marketing plan.
• Market scan: Research and develop a profile for each of the most important competitors you will be up against in the target market. This will help you determine your competitive advantage and position which benefits differentiate your business from competitors. Export Development Canada (EDC) offers more information on how Research will set you apart from the competition including how to create a competition grid to summarize a market's competitive landscape.

The basis for creating an effective USP are the following four (4) steps, combined they answer your prospective customers and/or investors most important question "Why should I choose you over your competitors?":

1. Tell the customer what you're offering: Summarize your unique position succinctly in terms of what your product or service can do for them.
2. Differentiate yourself from competitors: Focus on exclusive differences you offer as opposed to varying degrees of improvement of a benefit that other firms already offer.
3. Identify the value you provide: Avoid listing the features of your product or service, communicate what value the customer will receive, and what problem(s) you are solving for them.
4. Prove your claim: Add legitimacy to your declarations and boost sales with testimonials, case studies, performance comparison data, and demonstrations or trials.

A USP is a versatile tool that will be a focal point of your marketing strategy and encompass any salient selling points of your product/service. It can also be used when presenting to potential investors and venture capitalists, especially when time is short. BDC provides tips for constructing the elevator pitch. For more information and examples of USPs see EDC's white paper on Creating a Unique Selling Proposition for Your Global Market.

International marketing Considerations

International trade is more complicated than selling domestically. There are an additional 9 Ps that will affect your export marketing plan and must be taken into account along with your marketing mix elements, resulting in the 13 Ps of international marketing. Ask yourself these questions as you create your export marketing plan for maximum results:

1. Payment: How complex are international transactions?
2. Personnel: Does your staff have the necessary skills?
3. Planning: Have you planned your business, market, account and sales calls?
4. Paperwork: Have you completed all the required documentation?
5. Practices: Have you consider differences in cultural and business practices?
6. Partnerships: Have you selected a partner to create a stronger market presence?
7. Policies: What are your current and planned policies?
8. Positioning: How will you be perceived in the market?
9. Protection: Have you assessed the risks and taken steps to protect your company and its intellectual property?

Product localization

The product or service that you sell domestically may have to go through some changes before it's sold abroad. After performing a market scan and creating your USP there may be features that you wish to add, remove, or alter in order to differentiate from rival offerings. This may also have to be done in order to respond to market specific differences in practices such as culture, tradition, standards and regulations or economic development.

In the localization of your product, a major cultural difference that must be addressed is language. All of the packaging and any instructions included with your offering must be translated into the local language of your target market. If you are providing a service, or offer customer service as part of your product then your personnel need to be able to interact with customers in their local language as well. Hiring employees from the region you're exporting to may be the best way to accomplish this. It's important to provide new employees with proper training and instill in them your organizational culture and values as they are representing your company and are an extension of your brand.

Remember that the product benefits and features you offer must satisfy consumer needs. A company can effectively tailor a product to a specific market to successfully acquire market share abroad. They can offer smaller package sizes of their various product lines in specific countries so that consumers can still enjoy their goods but at more affordable prices.

Finding the right price

Establishing the right price is imperative to success in any market; it's commonly a factor in a customer's buying decision process. Price contributes to the expectations for a product or service and affects how consumers evaluate their purchase which can determine whether or not they become a repeat customer. Pricing is a strategic decision that encompasses multiple considerations, the first being your business objectives for the selected market. The pricing strategy that you choose will vary depending on your short and long-term goals. Marketing and pricing objectives may have to be adjusted for certain markets due to cultural or economic differences.

A universal objective regardless of your goals is to make a profit; the selected strategy will simply determine how you go about making it. In order to make a pricing decision that will result in your desired profit margin it is important to have a comprehensive understanding of all your costs - fixed and variable - involved in producing, transporting, marketing and financing the exportation of your good or service. EDC offers financing and credit insurance solutions, which can be a source of competitive advantage by allowing you to offer customers more attractive credit terms than your competitors.

Your price should not be chosen without first consulting market and competitor research. Market demand for your product can affect the price you are able to charge. A useful metric to use when determining consumer's ability to pay is per capita income, especially in developing nations. Your competitor's prices cannot be ignored either. These are the companies you will be compared to, making it all-important that your price reflects the value that you offer relative to your rivals. BDC is a resource for more information on pricing policies, pricing decisions, and pricing strategies.

• Penetration pricing: Entering with a low price in order to quickly attract customers and gain market share. This can be a very effective short-term strategy but keep in mind that once consumers are accustomed to a low price point it may be difficult to change expectations and raise it later on. If your product is one that instills loyalty or you can create switching costs this will help neutralize the effects of a price increase.
• Price skimming: Starting with a premium price to maximize profit from high-end consumers and early adopters in the market that have the means and desire to have the latest and greatest products; then lowering the price to lure a larger portion of consumers seeking more value for their purchases.
• Flexible pricing: Adjusting prices for different types of customers. This can include different pricing between or within markets. Offering different models of your product with varying levels of features allows you to tier prices and broaden the range of customers you're targeting. For services this is used to capitalize on different customer needs and maximize revenue. For example, in the airline industry there are different price buckets: first-class, economy, coach.
• Competitive pricing: Setting a price based on what the competition charges, this strategy is commonly used when multiple companies are selling the same product with little distinguishing one from the other. If you're deploying this strategy try to find subtle differentiators to highlight, such as better customer service or a longer warranty, that will increase your value at this price point or allow you to charge slightly more and avoid being in a price war.
• Full cost-based pricing: Covering both the fixed and variable costs of the export sale. With this method once the total cost of your export has been identified you can simply add your desired profit margin to the total cost and that will give you the price you should charge.
• Marginal cost: Covering only the variable costs of production and exporting, while you pay overhead and other fixed costs out of domestic sales. If manageable this method goes well with a penetration strategy as it helps cover the additional costs associated with selling internationally and allows more of the price point in that market to be considered profit.

Place: Distribution strategy

This portion of the marketing mix is devoted to finding 'the right place' for your product or service also commonly referred to as distribution. It includes not just where your good is sold but also the process of how it gets to the customer. One of the primary business considerations is distribution channel length, which is determined by how many intermediaries the product or service has to go through, if any at all, before it gets to the end user.

The appropriate channel length will vary depending on your product and the industry sector it falls under as well as how accessible markets are in terms of infrastructure and available partners. Keep in mind that the longer the distribution channel, the smaller profit margins will be since every intermediary, agent, distributor or reseller needs to take their cut. This also results in a higher price charged to consumers (See Figure 1). With this being said, channel members can add value and increase sales volume with the ability to reach a much larger number of customers more effectively.

It is imperative to make your product or service available where your target audience is going to be looking. You must understand the behaviour of the buyer personas that you have decided to target. If your target audience prefers to shop in physical locations then it would make sense to sell through a retailer or invest in your own store front. However, if your prospective customers are buying online then you will need to make your offerings available via the internet. For more information on how to effectively sell online see the TCS Spotlight on E-commerce.

Whether it's your channel members or your customers, you must also understand how international payments will be processed through a functional system. Through what mediums do they prefer to transact? This may vary depending on whether you sell to businesses or consumers.

Promotion: Getting the word out

Your promotional strategy is vital to the success of your exporting operation. If your target audience doesn't know what you're offering, or worse, doesn't even know that you exist, then they are never going to be converted into new customers.

When crafting your promotional messages, you should make sure that your USP is clearly articulated in a way that resonates with your target audience and reinforces your desired positioning, how you would like to be perceived in the market. Just as with your USP and the other aspects of your export marketing strategy, promotional strategies and your choice of communication channels may have to be adapted from one market to the next due to differences in practices. This is especially true for promotional messages due to the different themes, tones and perceptions that they lend themselves to.

Consistent with choosing where to sell your product, you must ensure that the mediums you use to send your messages are suited to where your target audience's attention will be. Here is a list of communication tools and considerations for their use:

• Advertising: Select the media that will gain the most exposure in your target audience. Television? Radio? Print? Online advertisements?
• Social media: Which online platforms does your demographic use? Are there local social media platforms relevant to the market? (Ex. WeChat in China or XING in Germany)
• Trade shows: Promote your business to international players and conduct primary research on your competitors and the market.
• Direct mail: With effective research and traction in your target market, a direct mail campaign can produce impactful results.
• Media: Have a media kit that profiles your company, new products/services, customer testimonials and any publications about your company.
• Personal visits: In many cultures personal contact is considered the most accepted means of promotion and building business relationships.

Be ready to export

The Step-by-Step Guide to Exporting will help you to:

• Sell to more customers. Target online buyers.
• Enter more markets. Leverage the benefits of free trade.
• Save time and avoid costly risks. Learn the legal aspects of trade.

Access these additional resources:

• Canadian Trade Commissioner Service (TCS)
  • Archived: Five Steps to Taking on your International Competition (Webinar)
  • Assess your market potential
• Canada Business Network
  • Marketing and Sales
  • Marketing Basics
• Export Development Canada (EDC)
  • Competitive Advantage: Defining Your USP for New Markets
  • How Do You Create and Use a Powerful USP?
• Business Development Canada (BDC)
  • Free eBook: Online marketing
  • Free eBook: Social media