Digital marketing strategy for entering foreign markets

Globalization is not a brand-new issue, it continues over 50 years. Nevertheless, each new decade globalization creates new opportunities for business. A relatively new issue in international business is that global business became available for small and medium size enterprises. It is based on:

- Internet and digital communication tools, such as messengers, skype, WhatsApp, Zoom, DingTalk

- Digital marketing

- Online sales spots: Alibaba, Amazon, Taobao, JD

- Efficient and fast logistics and delivery

What is really new in 21st century is that now even a small business is able to export goods and services and develop business globally. Automation of logistics makes export goods more available for consumers. Personal presence in a foreign country is not obligatory for doing business anymore. Transport costs are much lower or not significant in case of export of services. Online shopping reduces costs of entering new foreign markets. Regular shopping requires physical presence in the country whereas online shopping is based on digital advertising, web platforms and delivery by post.

Another large field of globalization is the globalization of service businesses.

Before Internet era global export business typically was represented by delivery of material goods, such as different goods from China, German and Japanese cars and machines, export of rude materials such as oil and timber and so on. Nowadays there is one more significant and fast growing part in export business: global services. Spread of Internet, Social Media and digital marketing has contributed to the global development of these industries most of all.

These are such businesses as:

Digital marketing and e-commerce tools provide you with numerous opportunities of expanding your business globally. The fundamentals of modern global marketing are:

- Digital marketing tools and E-commerce

- Modern technologies of logistics and delivery

- Modern communication tools

- Selling web-portals, such as Aliexpress, Amazon, Taobao, JD

Another significant change is that an offline presence in a targeted country is less required for international business than before. A combination of digital marketing tools, electronic communication with real offline meetings and negotiations helps to replace costly subsidiaries or offices in other countries.

1. Global strategies for different types of businesses: From export marketing standpoint, two types of business are different: marketing and delivery of physical goods and marketing of services. To make more clear, which marketing tools and strategies can be used, let me give first general block schemes of export relations in both cases.

2. Can Sales & Marketing be delegated to partners abroad? At the stage of international business planning many business leaders ask a question: should we rely on partners abroad or on yourself only? Definitely you should work with partners, such as wholesalers, agents, resellers etc. The only thing I want to warn you: don't expect that your partners will be very active in promoting your products / services and attracting new customers.

Partners have advantages and disadvantages.

The key advantage is low price of penetrating into new market. The partner already has necessary infrastructure, such as office, staff, legal permissions etc. Disadvantage is low motivation or abilities of promoting your goods / services.

Conclusion is that partners are useful, just don't expect too much. Sales & marketing is key business function, so it can't be delegated easily to another person or company. It's a core value of your business.

So, you can delegate separate duties to the partners, but keep sales & marketing activities under your own control. No need to say, that you don't know this new market yet, so both your service and customers can be stolen if you delegate too much. On the other hand, the partners (retailers, wholesalers, resellers etc.) will be more interested in working with you, if you provide them with a strong marketing support.

Why the own marketing support is needed

- Own marketing allows to collect all the information about the market, understand new trends, be in the direct touch with customers

- Marketing support will be appreciated by wholesalers, it will add value and make difference between VIGEX and other manufacturers

- Own marketing allows to change partners easily. If one partner (wholesaler) is not really good, we can replace it with another quickly

- Later you can replace local partners with your own subsidiary (business center);

- Internet-marketing is not too expensive. In fact, it is cheaper to pay for the remote marketing support, than to pay for regular personal visits to the customers (tickets, hotels, etc.)

The main reason why the own marketing support is needed is that otherwise you can never be sure, that the wholesaler is really promoting your production.

The wholesaler can accept the partnership, but not really attempt to promote the products. Usually the wholesalers have a number of suppliers of the same production.

You need to create additional reasons for the wholesalers and partners to promote your production. With own marketing you can see the real demand. If the sales are going slowly, you know: is it up to demand (end-customers) or up to partner, who doesn't really promote your production.

Combining the own digital marketing with partners abroad:

3. Adjust your product line to foreign markets. Try to attract all types of customers! Product line should be adjusted: it's a very key to the whole export enterprise. There are two main reasons why product line should be adjusted:

1. Because your foreign target market might be very different from your local market. Different means not only the taste and color preferences, or cultural differences, what is wide discussed on the web. It also means different channels of distribution, different types of advertising, different market niches and competition.

To understand this better, a diligent market research is required, we discuss it below.

2. Because your international strategy should be tightly adjusted to digital marketing. For some companies it is not a problem, if they already have strong digital marketing in their domestic market. But many small or medium companies, especially in B2B, have more traditional relations with customers. For example, individual relations, telesales, participation in tenders, revolver sales to the existing customers.

All these barely works for export marketing (there are some exemption, we also discuss it later). Digital marketing and sales tools are typically the key to your success in exports.

For all companies, starting with sales to new foreign markets, it will be better to separate export sales & marketing division from your local business. This export/international venture will have its own patterns of development, that might be sometimes very different from those in your domestic market. Be more open, listen to your new foreign customers and partners, adjust your product / service to their requirements. Don't bring too many of your old traditions or local habits to a new market!

How product / service line should be adjusted to Digital marketing strategy?

The answer is quite the same for different types of businesses: Develop front-end products / services (if you don't have it yet). It means, make cheap, available and attractive products. These products will serve as trial version of your more expensive products / services. If this is not possible for you, consider free of very cheap DEMOs of your products and services.

4. Big or small customers. Why small customers are important: Low-price front-end products create cumulative effect for marketing and save your budget:

From the point of marketing it is much more cost-effective to attract small customers and big customers at the same time. Internet-marketing works in that way: you get 95 per cent leads of small customers and 5 per cent leads of big customers.

But, small customers are useful as well, because:

1. Many companies in the targeted country become acquainted with your product or service; (small customers can give advice to bigger customers);

2. Small customers sometimes can be big in fact. Their small purchase could be a trial one.

3. In internet-marketing you can not get just big leads, so if you want to get big customers, you pay for big and small anyway. 10 per cent of Large Customers might bring you 70 per cent of profit. But 90 per cent of small orders might cover your marketing expenses and secure from losses.

5. Importance of the market niche: Participation in the global cooperation implies high level of specialization. Usually, you should be more specialized in the global market then in your domestic market. The competition in the domestic market is usually limited, but in the global market you compete with the best companies from all over the world. The size of the global market is also much bigger, so this efforts will be rewarded.

The best strategy for beginners is B2B cooperation with foreign companies. B2B export marketing is usually cheaper compared to B2C, especially for physical goods.

The only exception is sales of services, that will be executed online, such as Education, advertising, media, remote IT services and outsourcing etc.

These types of services can be sold directly to the final customers without extraordinary expenses.

For other types of businesses B2B is a better way. Some of the developed countries don't have many well-known brands. For instance, Netherland has $ 700 billion of the export yearly, but can you call at least one famous brand of this country?

Chinese export is mostly based on Original Equipment manufacturers, i.e. companies producing goods for their partners (brand-holders) in other countries. Participation in B2B cooperation is less risky, less costly and help you find your new specialization in the foreign market.

In order to specify your market niche, you should:

- Conduct research of competition in the market of destination;

- Conduct the research of customers' needs and preferences;

- Specialize in your strongest advantages;

- Try to find B2B partners;

Key types of demands for import in the foreign markets are:

- The country has a lack in natural resources (oil, metals, agricultural resources);

- Your price for goods or services is much lower;

- The country has a lack in your specialization;

- Your product is not typical, brand-new.

The proper analysis of competition and price levels in the foreign market will let you understand if you are able to sustain this price level (and offer a lower price) or not.

(The author is business trainer and researcher in the field of global marketing, economics and social media. He owns kashkin.com.cn)