Food Export Marketing: 3 Market-Entry Challenges and Solutions

Food Export Marketing: 3 Market-Entry Challenges and Solutions

1. Marketing :

which countries, which segments, how to manage and implement marketing efforts, how to enter with intermediaries or directly, and with what information?

2. Sourcing of the products:

whether to obtain products, make, or buy?

3. Investment and control :

 joint venture, global partner, acquisition? 

In this article, we are going to answer these three questions and make your challenge easier. 

First; we will talk about “marketing” 

Which countries and segments can you choose while entering your target markets?

To all exporting companies worldwide if you are thinking about exploring new markets and reaching new destinations with your unique food and restaurant supplies (food stuffings) you have to think about the Middle East market for the following advantages

• Flexible options (Market Scan and Rep Finder can be purchased separately).
• A low-risk way to ascertain the market’s climate (favorably or unfavorably).
• Acquire valuable data regarding import regulations and restrictions to successfully enter the desired market.
• Discover competition and sales potential within a variety of retail and distribution facilities.
• One-on-one meetings with pre-qualified and interested buyers.
• In-market assistance (introductions, translation (if necessary), and follow-up assistance).
• Cost-effectiveness.
• Specific insights to drive export sales.
• Market-specific/product-specific results – customized for you.

How to manage and implement marketing efforts?!

It only happens by building a strong strategy to enter the right food market

About starting this step, you should consider the following factors:-

First of all, is time, اas time is a very crucial factor. Building an intelligent system and creating an image through promotion takes time, effort, and money. Therefore, you have to make it as fast as possible as the market doesn’t wait for anyone and if you didn’t make it today another competitor will take your place. “Brand names do not appear overnight”

Second, transaction costs are also a critical factor in building up a market entry strategy. We can summarize these costs in international trade barriers; cost of search and bargaining, physical distance between countries, logistics cost, and risk limit with the help of trade partners.

The third and last factor is the enforcement of contracts as it may be costly and you have to be aware of the legal integration between countries. 

Learn more about the importance of marketing strategies

Strategies that you have to study well before entering a new foreign food market in the Middle East:-

1- Innovation strategy; an innovation strategy is a plan to grow market share or profits through innovative products and services. You have to study the unmet needs in the food market you are willing to enter and then start to create an innovative product or service that will settle this need or make it easier

2- Adoption strategy; adopt the product according to the food market requirements while keeping its original luster. Adaptation is also important for companies that want to introduce new products but do not have the funds or resources to develop completely new items.

3- Availability and security strategy; overcome transport risks by countering perceived risks

4- Low price strategy; (penetration strategy) which means offering a relatively low price to stimulate demand and gain market share.

5- Total adaptation and conformity strategy; where the foreign producer takes a holistic approach to doing everything the customer might need in terms of product, handling, development, and delivery.

How to enter an intermediary or directly? 

Indirect exporting is often an easier food market entry strategy to implement than direct exporting, especially for small and medium-sized businesses.

Indirect exporting is the other trading food market entry strategy an organization may choose and requires fewer dedicated resources than direct exporting. In indirect exporting, organizations sell to an intermediary in their own country. This intermediary then sells the goods to the international market and takes on the responsibility of organizing paperwork, permits, shipping, and marketing. By using an intermediary, the organization avoids various types of risk, including currency risk. There are several intermediaries that may be used in indirect exporting, each has its advantages and disadvantages. Therefore, you have to read more about trading houses and confirming houses.

Sourcing the food market

Here there are many points you have to take into consideration before exploring new food markets for exporting foods and restaurant tools; 

• You must study the market well before starting with a view to knowing the foodstuffs that are not available there in abundance and available in your country in large quantities and cheap prices and high quality.
• You have to choose the products that will achieve maximum profits if they are exported to another country but also take into account that these products are not subject to damage quickly.
• When selecting partners, they should have previous experience in the areas of (purchasing, exporting, customs clearance, marketing, and international selling). so; that everyone can fulfill their mission to the fullest.

• Partnership contracts must be written and documented so that there is no opportunity for either side to deceive the other parties.
• The group whose mission has ended does not mean that it will go and wait for the rest of the groups to return to it with profit. Rather, the workflow must be monitored permanently and continuously to find out how things are going. Rather, other groups should be assisted if necessary.
• It is preferable for the implementer of this project to have experience in the field of importing and exporting foodstuffs through food markets so that he is familiar with all matters and is easy for him to lead the groups.

Investment and control:  joint venture, global partner, acquisition? 

Here we recommend looking at three directions regarding the investment parties and promoters:-

1.  Seek out potential investors;
2.  Organize visits to home country by potential investors;
3.  Organize events to promote the home country to investors.

Investment in the food market

1. joint venture: in a joint venture agreement each of the participants is responsible for profits, losses, and costs associated with it. However, the venture is its own entity, separate from the participants’ other business interests.
2. In a global strategic partnership, two or more firms from different countries work as a team. They pool their resources or skills to provide better products or services. Furthermore, they reach a broader audience through collaboration. Firms engage in global strategic partnerships because they believe the partnership will lead to synergy, which means increased economic benefits.
3. An acquisition is when one company purchases most or all of another company’s shares to gain control of that company. Purchasing more than 50% of a target firm’s stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s shareholders. Acquisitions, which are very common in business, may occur with the target company’s approval, or in spite of its disapproval. With approval, there is often a no-shop clause during the process.

“Therefore, you must choose the best among these three agreements to start investing in one of the Middle East countries. Moreover, make your choice according to your capabilities and business power. Also, select the agreement that allows you to maintain your own control.”

For food export marketing support, visit VadeCom’s food export marketing service or contact our team.