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Contents
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333
Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
Chapter 1
Introduction:
Export Marketing Strategy
Upon completing this chapter, you should be able to
• u
nderstand the importance of exporting to your firm’s business
performance;
• understand the determinants of export performance, especially
the importance of export marketing strategy;
• follow an export marketing strategy framework to develop
suitable marketing strategies for your export venture in a
foreign market.
Importance of Exporting
In a globalized market, exporting plays an important role in a firm’s
growth and profitability. With trade barriers coming down, advances
in telecommunication, transportation, and data processing technolo-
gies, and increasing global travel, exporting is no longer the privilege of
large multinational corporations. In fact, a large number of small and
medium-size firms have become active and dynamic exporters in the
global market in the last few decades (Katsikeas, Bell, & Morgan, 1998).
Increasingly, exporting is becoming a very important strategic initiative
in the growth of many small and medium-size firms. For many firms,
exporting is a vital part of their business operations. Without success in
exporting, many firms may not survive in the saturated domestic market.
Internal Characteristics
Firm
Characteristics
Product
Characteristics
Export Marketing
Export
External Characteristics Performance
Marketing
*Strategic
Strategy
*Financial
Industry
Characteristics
Foreign Market
Characteristics
Strengths
• A strongly differentiated product
• Distinctive competencies in the industry
• Strong brand name and reputation
• An attractive customer base
• Superior intellectual capital and international experience
• Innovative marketing capabilities
• Quality management
• Technological and financial resources
• Cross-cultural competencies
• Strong alliances with foreign partners
Weaknesses
• Lack of distinctive competencies
• Higher costs or weak differentiation
• Weak brand and customer base
• Weak distribution network
• Lack of intellectual capital and international experience
• Limited financial resources
• Lack of cross-culturally competent personnel
• Lack of strategic vision
Opportunities
• Rising demand, especially from the export market
• Existence of underserved market segments in the export market
• Opportunity to utilize existing skills and resources in the export
market
• Falling trade barriers and attractive foreign markets
• Opportunity to increase scale from foreign operations
• Possibility of exploiting a relationship with foreign business
partner or government officials
Threats
• Intense competition in the foreign market
• Slowing market growth
• Growing bargaining power of foreign businesses or governments
• Shift in customer demand
• Costly new government regulations
• Likely entry by formidable competitors into the foreign market
• Technology changes fast in the industry
After a careful SWOT analysis, the firm should seek to adapt its mar-
keting strategies in such a way as to capitalize on its strengths, overcome
its weaknesses, exploit opportunities, and avoid threats. In other words, a
firm should align its strengths with market opportunities when adapting
its marketing strategies to the export market. Once a close fit is achieved
between its export marketing strategy and its internal and external environ-
ments, its export performance will be improved (Cavusgil & Zou, 1994).