The 4Ps of marketing—product, price, place and promotion—are undoubtedly familiar to any successful Canadian company. To win globally, you’ll need to adapt your domestic 4P formula for each new market. Here’s how.
Putting opportunities in strategic perspective
There are countless benefits to diversifying the countries in which you do business. As a Certified International Trade Professional (CITP), I’ve spent my career helping companies sell into new markets. I’m a huge advocate, but I’m also a big believer in being strategic—rather than opportunistic.
Let’s say you sell high performance kayaks and get an inquiry from a prospective specialty sporting goods retailer in Germany. You reach out to me and say, “Hey, I need to be in Germany.” My advice: “Let’s do some research first. Maybe Germany’s exactly where you’ll find a solid customer base; not just this one prospect, but others as well. But maybe Japan would be better.”
Regardless of which new market you’re considering, understand that just because you’ve succeeded at home, doesn’t mean you can simply duplicate your domestic formula for an international market. For one thing, crossing borders gives rise to a whole host of considerations for which you’ll need to plan:
Trust the process
Going through the process of developing an international marketing plan is key to succeeding in a new export country. As a professor of international sales and marketing, I spend an entire semester teaching students about this analytical process. For the purpose of this primer, I’m going to try to boil everything down into a short read, so please understand that I’m just skimming the surface. The goal is to get you thinking strategically to help you leverage opportunities around the world, with the highest probability of success.
The whole point behind developing a plan is to avoid the costly mistakes of acting on erroneous assumptions. Once you’re done, you’ll have addressed your gaps, flushed out the risks and efficiently and accurately determined your potential return on investment.
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You’ll also have developed a methodology that you can duplicate with each successive market you enter. Make no mistake, you’ll have to go through the same process each time, but I promise, it gets easier with practice.
One of the most often-overlooked advantages of creating an international marketing plan is, you can literally take it to the bank. Chances are, you’re going to need financing to support your global growth. Whether that’s through debt or equity, you’ll need to sell your expansion plan to get money, and you’re not going to see a single dollar without a plan.
Figure out your landed cost…before you land
Pick up any textbook on international marketing and you’ll find entire sections dedicated to the additional operating expenses related to selling your product across borders—also known as the landed cost.
For example, selling into the United States (U.S.) looks easy on the surface: It’s so close, after all. While it might be cheaper to ship your product from your operational base in Victoria, to Seattle, Washington—compared to shipping it to Halifax—you’ll be passing through an international border.
Some of the associated costs of this border crossing are highly visible, fairly obvious and easy to calculate, including shipping and transportation, insurance, import duties, fees and taxes. Some are far less obvious, and oftentimes, invisible. For example, you'll need to provide specific documentation to clear the U.S. Customs and Border Protection, including certificate of origin if you’re claiming preferential tariff treatment. Is your product subject to standards or regulations that apply in the U.S., but not in Canada? Should you have modified the product or packaging? Don’t wait until you’re at the border and have your shipment rejected before you find out.
Which P do you start with?
To a certain extent, it doesn’t really matter where you start, since all of these elements are interrelated. Although I’ll discuss each separately, it’s critical to understand that you can’t fully determine one without the others.
Even if you’ve landed well in your new market, you’ll need to consistently monitor all of the 4Ps. Perhaps the export country has introduced new regulations that might affect your product, and consequently, your production line and price. Maybe a new competitor has entered the market at a lower price point, and you have to find ways to trim your costs. Or perhaps a new consumer trend has emerged, placing your unique offering in the coveted “must-have” position.
1. Product
It’s almost a given that you’ll have to make some modifications to your product in order to sell it into a new market—especially if you’re in the B2C (business-to-customer) space—where cultural differences, consumer preferences and market trends play significant roles.
Even if you can sell your product as is, you’ll need to adapt your labelling and packaging to meet the language and regulatory requirements in each country, as well as the aesthetic preferences of your target market. By packaging, I’m not simply referring to printing in another language, but also, potentially altering the overall graphic and packaging design concept, as well as packaging materials.
While you’ll likely want to keep your brand name consistent, your product name may have to be adapted to make sense in a particular market. I like to tell my students the story of why Chevy Nova sales were weak in Latin America: In Spanish, No va means no go. While it may be an urban legend, it’s a great reminder of how the devil is in the details.
If you’re selling food or beverages, you’ll discover different food safety standards in each market. Everything from clothes to electronics can be subject to different product and safety standards around the world. While you may have no trouble selling your goods in Canada and the U.S., you could run into a number of additional regulatory requirements for your product to pass into the European Union (EU). Keep in mind, Europe has high environmental standards, where end-of-life considerations may determine which materials you use in that market.
With respect to the certificate of origin mentioned earlier, you’ll have to consider your entire supply chain to be able to accurately complete the necessary documentation. Be sure to understand the regulations your export market has with respect to inputs from countries within your supply chain. For example, you might import a key component used in your final product from one country, only to discover that your new export market has a trade embargo with that import country. Knowing this in advance will enable you to make adjustments to your supply chain to satisfy the requirements of your export markets.
2. Place
The next consideration is how you’re going to place your product in a new export market. Are you going to sell direct to your customers? Or are you going to use channel partners such as a value-added reseller, wholesaler, retailer, agent or distributor? If it’s the latter, understand that each of those channel partners will require a different compensation model.
Ultimately, you’ll discover that certain channels work better in some markets than in others. In fact, some countries have laws requiring exporters to use a local agent in order to sell into their market—in other words, you have little choice in how you land in the market.
Regardless of where you do business abroad, you’ll need to calculate how you’re going to get your product to your channel partners and how much that will cost. If you’re selling goods, this is where Incoterms come in: A set of internationally recognized rules that define the responsibilities of sellers and buyers in an export transaction. It’s a whole subject onto itself and you can learn more about it in this webinar.
There are also on-demand courses available because it’s somewhat complicated.
Suffice it to say, these rules are critical and have far-reaching consequences. They may be represented by three simple letters—FOB (free on board) or DPU (delivered at place unloaded), for example)—but using the wrong Incoterm can cost a lot of time and money.
For products better suited for online marketplaces, Amazon might be the runaway leader in North America and Europe. But if you’re looking at a high-growth Indo-Pacific market, like Indonesia, Amazon is ranked lower. It would be far better placed on shopee.co.id or tokopedia.com, so find out what the highest ranked online marketplace is in each new country where you export, and understand their fee structures.
3. Promotion
When I mention promotion to customers, the first thing they think of is marketing. But here’s a bit of myth busting: Promotion isn’t the same as marketing. In fact, promotion is simply one element in the complex alchemy that’s marketing.
At its core, promotion refers to how you’re going to get the attention of customers for your product in a new market. If you’re selling a consumer good—let’s stick with the high-end kayak example—you’ll need to promote it through different social media channels. You’ll want to develop a brand ambassador program to enlist key influencers in a specific market and you’ll likely look at sponsoring specific sports figures and events to—forgive me—make a splash.
Selling through social media channels—or social selling—is like marketplaces: The most popular ones can vary by country and product type. To get noticed by elite kayakers in Germany, you’ll need to use Facebook. In Japan, Facebook is used primarily for business networking, so YouTube or Instagram would be better.
You’ll also have to develop content to feed into the various channels and promotional programs. First, you’ll need an essential product description that encapsulates and differentiates your offering. You’ll also need to develop blog content that tells your story in a way that’s truly compelling. Of course, all of this will depend on what motivates your new target consumer.
All this to say, no, you can’t simply take the promotional materials you developed for Canada, or the U.S., and translate them into German or Japanese. Just imagine how much would get lost in translation. Instead, you’ll need to do a cultural reset—that typically involves working with in-market experts—to tap into the mindset and desires of your new consumer group.
4. Price
There are many variables that determine how you’ll price your product for a new market. Having already gone through the other Ps, you now have a basic understanding of what you’ll need to add to your list.
In no particular order, here’s a few variables to consider:
- Placement costs
- Product modifications
- Packaging/labelling modifications
- Customs broker/freight forwarder fees
- Shipping and freight costs
- Customs, duties and taxes
- Free trade agreements (i.e., tariff reductions/elimination)
- Warehousing (if applicable)
- Competition/competitive advantage (i.e., price sensitivity)
- Foreign exchange conversion
If you’re selling a product in an international market, be sure your quoted price clearly indicates the Incoterm to be used, as well as the currency in which payment should be made. The best way to ensure a successful sale is to clarify all variables. Never assume your customer will remember your last conversation when they agreed to this or that. Time has a habit of erasing details from our memories—that’s why we have contracts or invoices with specified terms.
Get help with your international marketing plan
You wouldn’t think of running your business without the expertise provided by lawyers or accountants, so make sure you have expert help as you consider your next new market. If you already have an international marketing firm in place, great. If not, consider engaging a CITP-accredited consultant to help you navigate the various elements touched on here.
The EDC x FITT FITTskills Lite Learning Series also provides a free guide to adapting products and services for international markets.
Finally, I recommend using the free resources provided by Trade Team Canada, including EDC and the Trade Commissioner Service. With all these specialists in your corner, there’s no corner of the globe that you shouldn’t consider as you plan your global growth.
