PEST Analysis

PEST is the analysis of macro environments for you to understand your target market and it is the first step to exporting.

Political Factors

• Helps you to understand the political situation in terms of stability, policy, tax and system adopted by a particular country; 
• There may be government restriction to export or import of goods and services to the respective country; 
• The foreign government position on marketing ethics has to be considered; 
• The foreign government policy on the economy has to be ascertained 
• Knowledge on the foreign government's involvement in trading agreements such as AFTA, NAFTA, EU and others is essentials; 
• United Nations (UN) and Office of Foreign Asset Committee (OFAC) sanctions have to be considered before dealing with individuals, corporations and countries.

Economic Factors

• TheeconomicstabilityinparticulartheGrossDomesticProduct (GDP) per capita is an important indicator;
• A volatile interest rate in a particular country can be of concern;
• The purchasing power will determine the cost to the customer and therefore will influence the price;
• The level of inflation is crucial especially when the buying country is dependent on raw material and labour intensive.

Socio-Cultural Factors

• The social and cultural influences factors have to be considered;
• Attitudes and perception of customers to foreign products and services;
• Impact on the language barriers on dissemination of products;
• Types of society (knowledge-based, technology savvy etc.) and its age group composition (teens, young adults and seniorcitizens); 
• Level of acceptability by the society; 
• Awareness on Corporate Social Responsibility (CSR); 
• Understanding of local culture and religious perspectives is anadvantage.

Technology Factors

• Standard of technology and its application will determine acceptability of products and services offered to the foreign customers;
• Compare the competitive and comparative advantages of the technological environment of target country against own capacity and capability.

Identification of Target Export Market

Based on the scenario below, it is imperative that you ascertain where you are. Three important elements in the scenario are resources (please refer to topic Are You Ready?), product potential and knowledge (refer to PEST).

Scenario A

• Limited resources and no product potential 
• No knowledge and understanding on PEST 
• Company is better off to concentrate on local market andemphasise more in strengthening / enhancing resources and product potential.

Scenario B

• Limited resources and no product potential 
• Have knowledge and idea on PEST 
• Company has to emphasise more in strengthening / enhancingresources and product potential.

Scenario C

• Has resources and product potential 
• No knowledge and understanding on PEST 
• Company has to learn PEST and prepare Export Marketing Plan.

Scenario D

• Has resources and product potential 
• Has knowledge and understanding on PEST 
• Company is ready to export and implement the Export Marketing Plan.

Market Research

To export your products successfully, research on foreign markets should be conducted. The main aims are to identify marketing opportunities and constraints abroad, as well as to identify prospective buyers and customers. Research may be conducted by using either primary or secondary data.

Market Research Information

Market Research involves finding out information such as:

• Market Size and Growth 
• Import Duties 
• Rules and Regulations
• Distribution Channel 
• Competition / Competitor’s Performance 
• Demographic Characteristics 
• Local Production.

Key Elements

• Market Characteristics 
• Consumer Perceptions 
• New Product Development 
• Distribution / Retailing and Market Structure 
• Product and Pricing 
• Packaging and Labelling 
• Advertising and Promotion.

Vital Information

Exporters normally require information on:

• Importers / Buyers / Distributors / Agents / Manufacturers 
• Market Reports 
• Country Reports 
• Tax and Tariffs.

Sources of Information

MATRADE: Your Link to World Markets

• MATRADE Business Library - country reports, market reports, trade statistics, directories, online databases and trade magazines
• Trade Commissioners' offices overseas  
• Trade Advisors - Regional / Products / Services Desk officers 
• Export Leads, MATRADE Online News and Trade Martmagazine (members only) 
• MATRADE Portal.

Other Sources

• Foreign Embassies 
• Other Government Agencies 
• Trade Promotion Organisations (TPOs) 
• Chambers of Commerce / Trade and Industry Associations 
• Private consulting / research firms 
• Internet (Website / Search Engine etc.) 
• Newspapers and Business Magazines.

Export Marketing Plan

Why do you need Export Marketing Plan?

• Determines the availability of resources 
• Determines the objectives and business direction pertaining toexport 
• Provides clear and focus guide on how to enter export markets 
• Minimises risk as company will be able to calculate any possible financial risks involved 
• Prioritises and segments export markets according to their ease of entry.

SWOT Analysis

Marketing Mix 4Ps and 4Cs

Competitors’ Comparative Analysis

• Analysis on competitors’ strategies and activities both local and foreign in the target markets.

Know your Market’s Needs

• Technology Packaging Labelling 
• Branding strategies that suits their requirement 
• Establishing linkages and networking with industry players.

Positioning Your Products and Services?

• Understanding the viability of your products / services in target export market
• Positioning your products in relation to your competitors 
• Prepare market contingency plans to meet targeted exportmarket demands, if needed 
• Segmentation of price according to competitor’s price, localdemands and perception 
• Identifying suitable promotion tools in accordance with marketneeds.

Who Can Help?

The following contacts can assist you to optimise your efforts in achieving the desired goals and strategies:

• Ministries / Agencies 
• Trade Promotion Organisations (TPOs) 
• Trade related organisations.

Info : For details, please refer to Appendix 1

Networking

Importance of Networking

• Effective for information gathering
• Brings together business executives with similar interest 
• Opportunity to interact and ask industry players on their exportstrategies and target markets.

Organisers of Networking Sessions

• Chambers of Commerce / Trade and Industry Associations 
• Business Chambers 
• Government Agencies 
• Foreign embassies and consulates
• Bilateral business councils 
• Associations, Societies and Clubs.

Entry Point for Networking

• Become a member of Associations, Chambers, Societies, Clubs, Organisations and others
• Get invited as a guest of the member 
• Request / apply online for invitation 
• Register name in the mailing list of the respective entity.

Pointers for Networking

• Make necessary preparation to gain maximum advantage 
• Check with the organisers on who will be attending 
• Identify who will be able to provide assistance and advice andmeet up with them 
• Ask specific questions that you need to know 
• State clearly who you are and your company’s interests to starta useful discussion 
• Keep relevant business cards and notes in your databaseincluding where you met them as well as points of common interest 
• Send e-mails to the people you met and those whom you would like to maintain contact and establish relationship.

Winning Formula in Networking

• Focus on certain value-added services which can be differentiated from competitors
• Target practices which are easily “exportable” in the region (i.e. where there is a demand due to developments such as Islamic financing and privatisation)
• Adopt empathising approach with Asian values / cultures in dealing with sensitive / political issues and
• Branding.