Global business expansion considerations

Expanding your business to the global stage has certain key considerations. This is the view of Mr. Justin Letschert the CEO of Union-Swiss. Letschert was the speaker that the University of Stellenbosch Business School (USB) business breakfast gathering held on 27 June.

The first thing businesses must realize is that expansion to global markets can not be exclusively done by just starting a new export division. The experts, who established and managed the business and brands on the local market, must be involved in the executing of the strategies for entering global markets.

South African brands may have brand equity on the local market, but on the global stage is just another product. This implies that entering a new market is launching this new product form scratch.

Government regulation and duties, capital expenditure (cost) and the lack of established networks are some of the main difficulties in entering new global markets.

Letschert indicated that a simple calculation can determine the most viable international markets. By adding a country’s GDP/ Capita ranking and the population rankings the possible best export markets can be identified. This figure gives a more accurate indication of potential markets. The top 10 countries on this list are USA, Japan, Germany, UK, France, Italy, Canada, Spain, South Korea, Russia.

The cost of the media in the specific country as well as the duties and regulations must be taken in consideration when evaluation potential new international markets. Language and counterfeit problems must also be taken into consideration when evaluating proposed new markets.

Letschert emphasized the importance of effective distributors in foreign countries. These distributors must be able to communicate and deliver what they are hired for.

Letschert further added that to succeed in the global business area you must out-think the opposition. The geographical and other practical drawbacks imply that you cannot out-do the opposition, you must out-think them.

You must conduct your business in a more professional manner than the first world standards. The reason for this is because the foreign market participants have preconceived negative ideas about (South) African businesses. You must give them no reason to believe or confirm their preconceived ideas.

Letschert concluded by quoting Mr. Koos Bekker form Naspers. Bekker once said that it is difficult for first world countries to do business in China. South Africa is not from the first world which gives us a business advantage. South African tenacity is your biggest advantage when we compete and enter new global markets.

Marketers must take holistic view at the brand experience

Differentiation is becoming harder every year with products and services commoditizing, consumers zapping away the ads, and an economic downturn reducing marketing budgets by an average 3%.

Smart marketers respond by taking a holistic view at the total brand experience. Apple, for instance, took the portable music market by storm by offering an exclusive service -- iTunes -- in combination with its MP3 player. Verizon improved its Web site with interaction optimization tools and raised its conversion rates by 36%. What are other marketers doing to differentiate their customer experience?

Take a business-driven approach.

Where is the money in improving the experience? Recent research from Forrester shows that good customer experience correlates highly to loyalty -- especially when it comes to consumers' plans for making additional purchases. Marketers in any industry can justify their customer experience investments with the savings they generate in client acquisition and the additional revenues from upselling and cross-selling.

Develop online communities.

As ever more consumers become active in social networks like Facebook, marketers have started to develop branded communities to engage with clients and non-clients. A successful community is not a fortunate accident but the result of careful strategic planning, an orchestrated launch involving the firm's brand advocates, and ongoing interaction with the community members by a dedicated social media team.

Turn employees into brand advocates.

Bad service is the No. 1 reason why consumers switch brands. To motivate and empower frontline staff to live and breathe the brand values, marketers develop employee brand advocacy programs improving their knowledge, attitudes, and behaviors. Restaurant chain Garden Fresh, for instance, has empowered its staff to make any on-the-spot decision to improve client satisfaction. As a result, the number of loyal clients has been increasing by almost 50% each year since the program launched.

Inflation and economic uncertainty are hitting the European wine markets

Inflation and economic uncertainty is hitting consumer markets across Europe, with retailers telling wine companies that value is more important to shoppers than ever.

But Chris Losh points out that even during the good times, the wine sector has been too price-led, and with consumers now tightening their belts it will be that much harder for wine companies to push through necessary price increases.

How quickly the consumer trend has shifted from saving the planet to saving the pennies! Whereas the era-defining phrase for ‘06 and ‘07 was ‘carbon footprint’, for the last six months economists can perm any two from ‘credit crunch’, ‘housing crash’, ‘oil price’ and ‘energy crisis’ and still have metaphorical change left over for ‘inflationary pressure’.

Wine marketers must take note of these changes in the market. Brand strategies must focus on value and sustainability as well as brand leveraging strategies