In 2010 SMEs were contributing 19 percent to the country’s exports and was targeted to contribute 25 percent in 2015 under the SME Masterplan 2012-2020. However, over the last eight years, SMEs’ export contribution has dropped while its’ contribution to the GDP has been increasing at a low rate.
BIZSPHERE has been consulting many SMEs and found that most of them have high quality products which are on par if not better than other countries. However, they have been focusing too much on improving and increasing productivity, trying to be competitive in pricing, that most of them neglected the importance of branding and marketing globally.
I can confidently say that eight out of 10 SMEs do not have a business plan, not to mention an export marketing plan. Here are some tips on what SMEs can do to increase its export potential.
EXPORT MARKETING PLAN
SMEs are strongly urged to develop a business plan in which export marketing plan should be a key section. Some of the best practices that SMEs should adopt include:
Identify your focus markets – Go to the ground and conduct market visit personally. Get a feel of the market condition without overly relying on your foreign partners or buyers.
- Market most relevant products over best products – The best products that you have may not be the product that the market needs or wants.
- Be clear on foreign partnership – We have to know the capabilities and commitment of our foreign partners. Not every foreign buyer is a good distributor. As a start, you might want to review whether you should appoint a foreign buyer as importer, wholesaler, retailer or distributor. Products, brands, locations, and duration of the partnership need to be considered when appointing partners. The last thing you want is to be tied up with non performing partner and unable to appoint an alternative.
- Consider logistics costs, trade marketing and branding support, trademark registration, and whether to focus on traditional or modern trade. Most important is the target sale and profit of your export. Many SMEs have higher sales volume with minimum profit.
SQUEEZE THE MOST OUT FROM MATRADE
MATRADE offers much more valuable assistance than just financial aid.
- MATRADE Library / Business Information Centre – There are tones of market information in the library on diverse products and services. Most information are updated and insightful. Integrated Centre for Export – A dedicated team is ready to provide you assistance with regards to the whole value chain of export. They can connect you with the Customs, Jakim, MITI, certification bodies, logistics and etc. It is a one stop centre that you must connect with.
- Exporters Training Programme – Equip your team with export skills and knowledge. Most programmes are affordable below RM100 and some even lower than your cup of Black Sugar Bubble Tea.
- Global Trade Offices – There are approximately 45 MATRADE trade offices around the world. They are there to give SME exporters local insights and connect you to the right people. SME Exporters can use the trade offices for business meetings (more credible in the eyes of your potential buyers as you are indirectly endorsed by the government of Malaysia) ; seek market information including some due diligence on your potential foreign partners; arrange business meetings with potential buyers based on the criteria set by you; place your marketing materials there as that is where potential buyers go to if they are looking for Malaysian products.
- Incentive programmes – Market Development Grant, Service Export Fund, Women, Young and Bumiputra Export Development, and eTRade are some of the available incentives programmes to name a few. Leverage on these benefits.
PRESENTING THE BEST OF YOU
Foreign buyers don’t just look at the marketability of your products, they also look into the consistency in your quality, capacity, and capability. They prefer to work with a reputable exporter who can give them the best deals and commitment to grow the market together. You will need to continuously present the best of you.
It’s the most common export strategy, yet most have not done it right. Very often, SMEs do not have a comprehensive trade fair plan. Preparation is needed before, during and after the trade fairs. Up-to-date and impressive marketing materials relevant to the market and their language, inviting high prospects to visit and to have discussion, booth design and arrangements are key tasks prior to exhibition. Having trained team members who can present products and company during trade fairs and follow up with leads right after the fairs.
- Marketing Materials & Presentation – It is timely for exporters to elevate their printed marketing materials to soft copies and in video formats. A Marketing / corporate video will allow foreign buyers to have better view of your company’s system, infrastructure, processes, quality management, R&D, certification, customer testimonials all within few minutes.
Export is not just about selling a container of goods overseas. It is more about how to develop the export market and grow them together with your foreign partners. Partner relationship management is crucial, therefore treat your buyer as partner not as customer.
By Keng Teck Yap, Managing Consultant of Bizsphere Brand & Marketing Group
Written for Business Today, Issue Sept 2019