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CBI EXPORT GUIDELINES
4 Export marketing tools
Having a strong set of export marketing tools is paramount. The different
distribution
opportunities available highlighted earlier suggests that, as a manufacturer,
you are not always required to conduct sales. Sales are typically the
responsibility of the exporter and distributor. Understanding what tools are
available to help you make important choices is important.
Export product
Because of cost management, buyers prefer to deal with as few suppliers as
possible. As a consequence, a supplier should offer a complete range of
products. You can either produce the complete line yourself, or you could team
up with another manufacturer to complement your range. In general, it is often
better to offer a limited number of product groups, but with a complete range
within the groups.
More information is available in CBI’s Exporter Planner (chapter 4.2. and 4.4),
CBI’s EMP Builder (chapter 4.1, 7.4 and 7.5) and CBI’s ‘Your guide to market
research’ (chapter 3.2).
Packaging and design
The packaging design should take the following into account:
• Proper storage and transport
• Standard packing sizes
• Documentation/labelling
• Environmentally friendly materials
Every sterile medical product used in or on patients should be packed with a
document that contains instructions for use, description of the medical
application, risks and warnings. The design of packaging needs more attention
for consumer (self-care) products compared to wholesale products, as it is part
of the ‘look’ and image of the product.
Costing and pricing
There are different pricing strategies, varying from charging high prices to
affluent customers to accepting rock bottom prices in order to penetrate the
target market. Pricing strategy forms an integral part of the overall marketing
strategy, and the following aspects should be taken into consideration to
contribute to the overall success of the export strategy. Exporters from DC are
best advised to adopt a price-following and not a price-setting strategy.
Especially when supplying to other European manufacturers, buyers usually
dictate the price at which they are willing to buy. Only when supplying unique
products is following a price-setting strategy advised.
When setting prices with importers or distributors, often a quote is requested
which,
thereafter, serves as the basis for further negotiations. A good relationship,
proven reliability and transparency in the past will help with getting a good
price. Proper exchange of information is essential in setting a price. An
importer or distributor will normally have a mark up of 70% over his net
purchasing price. The price differences between FOB and C.I.F. are negligible.
Once you have identified a suitable business partner, i.e. an importer or
distributor in an EU country, you have to formalise your cooperation in a
written contract. The nature of the contract depends somewhat on the product you
are supplying. For commodity products, the procedure is similar to other
markets.
For more information please refer to CBI’s Export Planner (chapter 4.5), CBI’s
EMP Builder (chapter 7.6), and CBI’s ‘Your guide to market research’ (chapter
3.1.4.).
Promotion
There are various ways to promote your product:
• Trade fairs - attending conferences and trade fairs are an important
promotional tool. At a trade fair or conference you can identify and contact
potential importers, distributors and producers. It is also a good way to find
out what is going on in the market place.
• Newsletter - an interesting way to distribute this information could be via a
quarterly (electronic) newsletter or press releases. They could cover
experiences with your products anywhere in the world, letters from users, and
descriptions of other developments. In addition, more general medical
developments could be included to arouse the interest of potential readers.
Hospitals and distributors value this type of information. An example of such a
press release can be found on the website of Ultravision (http://www.ultravision.co.uk)
• Advertisement - advertising in medical journals and magazines is another
useful marketing tool, although the role of the internet and digital
magazines/newsletters is gradually becoming one of the main communication
channels for marketing. Medical Device Technology Magazine (http://www.devicelink.com/mdt/about.html)
is an example of such a magazine and serves the European medical device and in
vitro diagnostics manufacturing industry.
• Product samples - free distribution of product samples may prove to be a very
costly strategy if only few orders are generated. But in some cases, it is
crucial to offer potential customers the opportunity to learn about and/or
experience using your products. Sending a limited number of samples is
sufficient for a technical analysis by the customer.
Once an agreement with a distributor is established he will take on most of the
promotional activities. However there are two promotional tools for medical
devices and disposables that still have to be provided by the manufacturer:
• Sales brochures - the sales brochure or catalogue merely gives a detailed
overview of all the products that you are able to supply, stating the minimum
requirements, production capacity and packaging method. The brochure must enable
potential customers to make a brief appraisal of the complete product range and
production capacity; it must include minimum order quantity and the possibility
for additional orders. These brochures must always be kept up-to-date. Ideally,
they are accessible through your internet homepage, but could also be made
available on CD/DVD-rom or in print (e.g. to offer at trade fairs). For more
information on printing of medical brochures visit the website of DDA Medical
(http://www.zeroonezero.com/medical/medical-manufacturers/medical-print-design-MDM.html).
• Clinical trails - studies that contain a precise overview of the targeted
medical problem, the category of patients used in the clinical trial, the
treatment applied and products used. This form of promotion can be effective
when selling high tech medical devices and more sophisticated medical
disposables.
5 Finances
Obviously, you want to know whether export is profitable. In fact, that comes
down to a simple calculation: turnover minus costs should equal profit target.
Try to calculate the effect your marketing activities will have on revenues and
profitability. Make up an export sales forecast, covering a period from 1 to 3
years.
More information
• CBI’s Export Planner (chapter 6.4);
• EMP builder (chapter 10).
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