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About the Author



Anthony Moss has worked for large corporations, medium sized businesses and established and managed an overseas start-up as an expat.

His extensive business experience now spans some 25 years; including managing businesses on three continents; Europe, US and Australia and having senior management, CEO and director positions in manufacturing, distribution, transport and professional service businesses.

With a particular passion for developing international trade, Anthony now uses the depth and breadth of his commercial experience along with the knowledge from his tertiary studies to assist clients to focus on growing their business. In his consulting experience, Anthony has worked with the owners, boards and senior management teams of businesses in many industries seeking to unlock the value in their business. Acting as a member (often the chair) of the client's advisory board, Anthony assists businesses to define strategy, evaluate management team skills and assess their ability to implement strategy. Together, Anthony and the other members of the Incite Team are able to provide all facets of management expertise to deliver strategic objectives. Anthony is focused on business growth and assisting clients to achieve their desired growth targets, especially in overseas markets; sharing his valuable international trade contacts and travelling frequently on behalf of clients. Anthony works actively to build the Incite network of clients locally, nationally and internationally and shares his knowledge as a speaker at conferences and seminars.

Anthony looks at the elements that would affect the export strategy in general and then provides an insight into what could be the opportunities and key considerations before undertaking business with India.

Contact Anthony at anthonym@incitemg.com.au.

1. So why should Indian companies seek to export to Australia?

Compared to the Indian subcontinent Australia maybe physically substantial but with a population of only 22.5 million it is a considerably smaller market. As it is a developed ‘western’ society, the per capita purchasing power is in the developed nation category, Indian companies have the opportunity to ‘test’ their export ‘capacity’ for penetrating ‘western’ markets in a relatively small market.

In addition to having the features of a developed nation –high literacy, relatively high disposable income and acceptance of the rule of law. Australia also has the following features that Indian exporters need to be mindful of:

  • It is a continental economy with different regions dependent upon different local economic drivers.
  • There is the tyranny of distance with very significant distances between major urban centres –which means distribution costs are relatively high compared to more densely populated markets.
  • Australia is an import dependent economy –where the bulk of exports are commodity related and the bulk of imports are consumer goods.
  • Australia is physically close to the major Asian economies and hence your products must be able to compete against those from other Asian supplied products.
  • Although now a multi-cultural society infused with Indigenous, European, Middle Eastern and Asian cultures there is an underlying ‘straightforwardness’ about the Aussie culture. Whilst a generalisation , the sense of the need to ‘tell it how it is’ also pervades marketing and selling approaches.

Notwithstanding these challenges, in addition to the intrinsic value of generating a profitable return from your entry into this market, Australia can be an excellent opportunity to test the acceptability of your products or services into other international markets as, while challenges of penetrating any market are similar Australia is closer, the market size is smaller and hence the ‘exposure’ is quarantined. Australia is also a very competitive market and hence ‘testing’ your product in this market will provide invaluable information to assisting you to modify your export approach to penetrate other larger international markets.

2. Are you Export Ready?

Developing overseas markets is not for the faint hearted –penetrating new markets with different languages, cultures and currencies requires time, skills, concerted effort and cash (working capital). The first step is to evaluate your ‘readiness for export.’ To address this question you must answer the questions:

  • Do we have or can get access to appropriate skills?
  • Do we have the capacity now (product or service delivery) to service export markets? Is that capacity scalable, what are the limitations?
  • Will developing export markets draw resources –skills, money, capacity?
  • Typically export markets involve a longer payment cycle and a reduced margin; plus volumes can be significant. Can your business fund this additional working capital or can it source the appropriate funds?
  • Have you researched target markets in depth and been able to identify how the value proposition of your product or service differs from local and other international competition?

If you cannot answer all these questions seek independent advice to assist you to secure the information you need and if necessary to assist you to become “Export Ready.”

3. Developing your Export Strategy and setting objectives is key.

Once you are confident you are Export Ready it is time to develop your plan. Your Export Plan must start with the clarification of your strategy. To develop your export strategy you must be able to answer the following questions.

1. Why do you wish to export?
2. What benefits will your business derive from penetrating export markets?
3. How will those benefits impact your domestic business?

Answering these three key questions will ensure that your strategy is clear and this will therefore be an important framework within which to manage the development of your export business. In addition to answering the three questions above your strategy should also identify:

  • The markets you will target.
  • The product-service areas that you will compete in.
  • How your product/service will be ‘delivered’ e.g. shipped from domestic operations, manufactured offshore, licensed, franchised, delivered online.
  • Your picture of export success.

Confirming your strategy will require analysis and evaluation based upon your desired objectives and the resources at your disposal. It is advisable to seek assistance to either assist you to develop or, to review the strategy you develop.
Once the strategy has been developed it is important to complete your Export Plan.

4. Export Marketing –Its about planning and securing help

Export Marketing activity requires the same consistent approach as in your domestic marketing activity namely

  • Being clear about your ideal target customer.
  • Being clear about your value proposition i.e. what you are offering the market.
  • Understanding how your product or service differs from local competition.
  • Being clear about your marketing message.
  • Ensuring your message is delivered in a manner that will be understood by your target audience.
  • Finally ensuring that there is alignment between your marketing message and the customer experience in all aspects of the supply chain.

In addition your export marketing activity has to cut through the nuances of:

  • Language –translation
  • Culture –the way in which a particular market does business
  • An extended supply chain –your marketing message is probably delivered by numerous channels e.g. local distributor to local retailer

Accurate Information:

Obtaining objective information is key in all business activity –no less in export. It is essential that your assumptions about your target market, the value propositions about your products and services and the points of difference between your company and local and international competitors are validated.

In export markets that validation process should include the following:

  • Internet / Desk based research
    • Market characteristics
    • Size
    • Demographics
    • Competition-domestic or international
    • Distribution structures
    • Pricing
    • Promotional activity
    • Product-service features and benefits
    • Cultural nuances
    • Regulatory environment

This research can often be sourced either directly from the market via the internet and or via State and National Export Development agencies and via commercial Export Development consultants.

Depending on budgets, information can also be commissioned in the local market.

Existing Exporters

A good source of information will be to analyse your domestic market competitors that have already penetrated a particular market.

Join an Export Networking group or forum that includes businesses already exporting to your target markets. Learn their approach, their successes and failures and particularly the cultural nuances they have found.

In-Market Visits

Finally the desk research you find should be further validated by ‘in-market visits.’ Successful exporters will confirm that it normally takes several ‘in-market’ visits to truly understand the nuance of a target market and to establish the appropriate distribution methodology and relationships.

Two good methods of visiting a previously unknown market are:

  1. To visit a trade show in your industry. This is an ideal way to see all the major players in an industry and to experience the local culture with other international visitors. Time can be spent either side of the trade show ‘experiencing’ the market.
  2. Trade Missions: Many State and Federal government export agencies organise ‘missions’ to target countries. This is an ideal ‘safe’ way to gather first hand experience of your target market.

It is advisable to visit a market several times if possible –before confirming your market penetration and marketing strategy.

5. Know your customer:

Your research would have enabled you to identify key customer drivers, regardless of whether your ultimate customer is a business or an individual consumer such as:

  • Demographics, location, size, income
  • Spending patterns
  • Seasonality
  • Use of complementary products
  • Buyer motivation (may be cultural e.g. desire for status may drive purchases)
  • Channels to market-how the end user typically secures access to your type of products or services

You now have the tools to develop the picture of your ‘ideal customer.’ Your marketing message – channel strategy, pricing and so on all need to be focused on reaching these customers and motivating them to buy. That’s not to say you won’t opportunistically accept other business that comes your way but the sustainability of your export marketing will depend upon focused effort on your target customer.

You need to build an explicit profile of that customer describing their characteristics as outlined above.

Depending upon your Market Entry Strategy you may require your agent, distributor or licensee to ultimately ‘communicate’ with the end-user–being crystal clear about the nature of the target customer will ensure a focused sales and marketing effort.


6. Be clear about your value proposition/marketing message

Being clear about what distinguishes your products and services from local and other international suppliers is essential to ensure the development of a sustainable export market.

The following simple methodology can be used to crystalise the point of difference of your company and its products:


7. How to approach the Australian market.

Section 3 above outlines the approach we recommend all SME’s follow when seeking to build export markets –but what are the nuances that Indian companies need to overcome when approaching the Australian market for the first time?

The best way to express this is by a case study – Incite’s client Jasmine Hall (see www.jasminehall.com.au and www.secretriver.com) has created a significant business in Australia importing Indian sourced textiles. The MD of Jasmine Hall, Mike Hall lived in India for many years and worked as a financial journalist in Mumbai before establishing his business in Australia.

  • Mike has now built excellent relationships with his suppliers in India but in his words “it has been a journey.”
  • The key themes that Mike and others have experienced when dealing with SME exporters.
    • Don’t sell price first. Whilst price is always a factor, leading with price defines your product as only valuable if
    • it is cheap –in reality many Indian supplied products can be sourced from other Asian countries more cheaply.
    • First impressions count: When ‘selling’ in Australia, impressions count. The quality of support materials –catalogues /websites used to present products and services must be appropriately pitched at the target market.
    • Understand design sensibility. Quality and the perception of quality are essential features to be successful in the Australian market.
    • Brand: Managing your brand perceptions in the Australian market is essential for long term success – that means understanding the value of your brand – ensuring you have the right local partner to support and develop your brand perceptions.
    • Value proposition: You must be able to clearly articulate how your product or service can provide a solution.
      Presentations are important: Quality – well thought through and executed presentations addressing not the supplier’s capability but the buyer’s needs are essential. For Australian buyers it is often less about the production capability and much more about the ability to provide a solution that counts.
    • Make doing business easy: It is important your Australian partners perceive that you are ‘easy to do business with.’ This means meeting agreed delivery deadlines, producing products as specified, promising only what you know you can do and being prepared to be open about what you can’t.

Your approach to exporting to Australia –should be thorough, determined and well resourced.


Reference material about Australia

The following websites will provide free detailed information about segmented market opportunities in Australia in addition to the regulatory environment governing imports to Australia.

http://www.dfat.gov.au/facts/exporting_to_aust.html

http://australia.gov.au/topics/business-and-industry/trade-import-and-export/import

http://australia.gov.au/topics/economy-money-and-tax/importing-goods-to-australia

http://www.austrade.gov.au/Invest/default.aspx

http://reviews.ebay.com.au/The-A-Z-of-Importing-into-Australia-Duty-GST-Customs_W0QQugidZ10000000015634691

http://www.aibc.org.au/

http://www.indoaustchamber.com/