Market-Oriented Three Winning Export Strategies

Three major changes have brought opportunities and challenges to Chinese exporters:

*China has joined the WTO. This intensifies competition in domestic and international markets, but also provides Chinese suppliers with greater opportunities to enter the international market and emerge in the global market.

*More emphasis on market efficiency. Success now depends on the customer. Companies that offer superior value will succeed, and those that don't will be eliminated.

*Technology is increasingly used. More and more companies are using technology to find customers, provide services, and sell products, which are expensive. Having said that, if used properly, technical means can greatly improve the work efficiency of exporters.

At the same time, through my visits to China over the past 5 years, I have noticed that Chinese exporters are changing from an "old concept" to a "new concept", although some companies are slower to do so.

*Old notion - Requirements are guaranteed; focus is internal, product centric.

*New Concept - Exporters have to seek or create demand for their products and services; the focus is external and customer-centric.

The transition from old to new is about developing market-oriented thinking, as well as new strategic and analytical skills. This means:

* Enables everyone in the company to focus on meeting customer needs and delivering superior value to customers.

*Be proactive and make key strategic decisions, don't wait all the time. Decision making depends on:

o Which customers are targeted?

oWhich markets will you focus on?

oWhat products are offered?

o What to do and what not to do?

oHow can I differentiate myself?

oHow can I best communicate with customers?

*Strategies are based on "data" not "feel". These data include: customers, distribution channels, markets, competitors and the efficiency of using additional promotional tools.

I have seen many Chinese exporters not moving fast in this transition and struggling. The truth is that many of the winners of the export competition are the companies that have moved the fastest in changing mindsets. They adopted the following strategies.

Be Different

In China and the rest of the world, the first strategy for successful exporters is to develop a clear differentiation strategy. Mediocre exporters produce the same products as their competitors and compete at lower prices. But the reality is that there are always people ready to offer lower prices, and such companies can be found everywhere in China, Indonesia, India or Thailand.

Differentiation strategies are based on "scarcity" and fulfillment of needs:

*Scarcity - A company has a certain resource or is able to do it that a competitor does not or cannot do.

*Meeting Needs - The company is able to provide customers with products and services that provide value to them.

This requires exporters to recognize where their true competitive advantage lies. The problem is, companies often find that they don't have anything unique. Often, it is these companies that are fighting price wars and worrying about not making money.

At the same time, this requires exporters to have a deep understanding of their customers. I see a lot of ads in trade magazines that describe it with words like "high quality," "excellent service," or "good price." Of course, these customers need it, and all suppliers say so, and they should also provide these real content. But that doesn't make them different.

Exporters should gain a better understanding of their customers. What are their specific needs? How can it help them in the business - reduce costs for customers, help them attract more customers, etc.? Only after in-depth understanding of the customer, the exporter can understand what kind of income is the most valuable to the customer.

Then you need to combine the company's competitive advantage with the customer's needs to find the true Unique Selling Point (USP). Of course, this does not mean that you can provide all services to all customers, but need to make a clear strategic choice: what kind of customers to serve? What products and services are offered? You need to focus on your strengths.

It is important to note that successful exporters with unique selling points are not just for their products. Maybe they make similar products to their competitors, but it may be the packaging, sourcing, logistics, design capabilities and sales process that make them stand out. For manufacturing companies, perhaps they should regard themselves as service companies rather than just manufacturing products, because it is in the service field that the greatest value can be created for customers.

Correct positioning on the value chain

The links involved in the value chain include: design, manufacturing, distribution, branding and retailing, etc. It is impossible for a company's business to include all links in the value chain. Exporters need to know where their strengths lie and focus on making the most of them.

Take branding as an example. Many exporters don't understand why they can only sell a product for $5, while foreign companies can sell for $100 simply by putting their trademark on the same product. Why can't Chinese manufacturers stick their own brands and sell for the same price?

Such questions show that many Chinese exporters do not understand brands and do not understand brand promotion. I think one of the reasons is that a lot of people see a brand as just a name. In fact, the cost of establishing and maintaining a brand is extremely expensive, and its connotation is definitely not just a name. A great brand means delivering benefits to customers.

Let's take a look at a luxury brand - Chanel. It took the company years and millions of dollars to create brand awareness, brand meaning and brand associations in the minds of customers. And to maintain these, millions of dollars are spent every year. There are not many Chinese exporters willing to spend these costs. Likewise, a successful international brand requires the company to have a deep and comprehensive understanding of customers in different international markets (to make the brand more meaningful to them and more relevant to them). To do this requires great skill and numerous resources.

Chinese exporters should consider these issues thoroughly and be realistic about them. There is no doubt that more and more Chinese brands are successfully entering the international market, such as Lenovo. But that's not to say that all manufacturers have to imitate blindly, and some companies may have to wait. Mitsubishi is a good example. Mitsubishi Motors has a low market share in the United States, but it makes engines for automakers with better-known brands, so Mitsubishi's share of the engine market is solid. It focuses on that part of the business that it does best.

Building Partnerships

Successful exporters, both in China and abroad, seek to build long-term partnerships with their customers, rather than "one-shot deals". They form partnerships with overseas clients to provide them with better and more efficient services. A business like Walmart is a good example where partnership is an essential requirement for their collaboration. The longer and closer this partnership is, the more both parties benefit from cost-effective and personalized service. The more exporters can understand their customers' needs, the more customers rely on them. It is much more profitable to provide more services to a small number of customers than to provide a small number of services to many customers.

There are some markets that exporters cannot access by themselves. Partnerships can solve this problem, and they can also use partners to understand and study these markets.

Two major challenges in implementation

During the export marketing management course, as well as in conversations with Chinese exporters, some implementation barriers were mentioned, among which there were two major challenges:

1. Human resources - This refers to the ability to find, attract, train and retain good people who have the skills and minds required for "new ideas" or who can learn these skills and develop such minds. This is a relatively difficult problem in current China. I have some suggestions for this:

*Look for those who have studied in foreign trade colleges or business schools. There are more and more such teaching institutions in China.

*Create an "employer brand". That is, treat future employees as customers and develop your own unique selling point to attract them. In many cases, attracting high-quality talent and retaining them is harder than attracting and retaining clients. So, the same marketing policy needs to be adopted.

2. Technology—Technology is expensive and the output is uncertain. With so many companies selling technology products, it can be hard to decide which product is right for you. My suggestion is, don't think about technical issues or specific technical products, start with the key problems and opportunities you face, and find solutions. For example, a key issue facing Chinese exporters is how to manage a large number of inquiries and how to keep track of customers? There are some CRM solutions that might help, but there are so many on the market that you should know which one you need. Ask them to demonstrate the exact value of the solution provided.

Christopher W. Styles holds a Ph.D. from the London Business School. He is currently a Senior Lecturer at the School of Marketing, University of New South Wales, Sydney, Australia, focusing on the international and export marketing aspects of SMEs. Styles was previously an export marketing manager at Procter & Gamble. His work in international and export marketing has been featured in many prestigious journals including the Journal of Business Research, International Journal of Marketing, International Journal of Marketing Research and International Marketing Review. In addition, he co-authored 'The Silk Road Towards International Marketing' and authored the report 'First Steps to Export Success' for Austrade and the UK's Office for International Trade. He is the lecturer of the "Export Marketing Management" course jointly organized by Global Sources and China Europe International Business School.