How important is marketing in international trade?

Due to the basic attributes of OEM, there is little marketing for China's manufacturing exports.

When I first joined Galanz, David, the general manager of foreign trade, said in a meeting: "Although we are called the 'Overseas Marketing Department', I think it should be more appropriately called the 'Overseas Marketing Department', because selling products to customers is our daily job."

When I first heard the word "promotion", I felt that it was so low-class and had nothing in common with the high-end international trade in my mind. However, many years later, I finally realized that the word "sales" is the essence of China's foreign trade. So much so that today, ten years later, the situation has not changed in the slightest, except that when catching a customer, the words used have changed from "cheap, cheap good" to "We are one of the leading factory of ×× in China".

Does OEM really not need marketing?

As for marketing? People seem to be caught in a whirlpool of thinking: What's the point of marketing if they are all OEMs? When a customer comes, he will quote a target price and we will do it if it’s suitable.

I will assume for the moment that this kind of thinking is correct, then there should be something different between private brands and OEM brands, right?

Unfortunately, however, the vast majority of Chinese factories do not know how to operate their own brands. The positioning is not clear, the direction is not clear, and the pricing is unreasonable. In my opinion, it is just an OEM with its own brand. The so-called market strategies were simply thought up on the spur of the moment. The closed-door creation of strategies like "surrounded by Japanese and Korean giants and stepped on local brands" is truly appalling.

Let’s talk about OEM again. Even if we only do OEM orders, does that mean we don’t need marketing? If it is really not needed, then we should not blame the customer for offering a low price right away and then telling you "If you can do it, take it. If you can't, then goodbye." Because in the minds of customers, there is no difference between your product and that of your competitors. B-side customers are pursuing profits. When products are highly homogenized (at least in the minds of customers), they will naturally choose the one with the lowest price.

Let’s take an example.

Two power strips that look almost identical, one costs 48 yuan and the other costs 49 yuan. If there is no other information at this time, most people will choose the 48 yuan one - except for those who believe that "you get what you pay for" and that the higher price is always for a reason.

If someone were to break the two products apart and tell you: the 49 yuan product has a 10% thicker wire, 30% greater output, and 50% greater safety performance, although the cost is indeed 1 yuan more expensive, the value overflow is definitely more than 1 yuan, and you can raise the price by 10 yuan without any problem. At this time, which one would you choose?

When you tell one customer all this fragmented information, it is called sales promotion; but when you organize this information into a detailed comparison PPT and send it to 1,000 customers, it becomes marketing.

What is Marketing?

Putting aside the various definitions from Baidu and textbooks, I personally believe that at least in the field of international trade, marketing is a series of actions implemented for the target customer group to increase their awareness and recognition of us after fully grasping the target market information and clarifying the company, brand and product positioning, thereby improving sales conversion rates.

There are three main difficulties here.

1. Due to the regional characteristics of international trade, it is difficult to fully grasp the target market information

There are huge cultural differences between different regions! So-called hot spot marketing is popular in China now, for example, "duang", "we", "Shenzhou Special Car", "Uniqlo", we can understand them; however, we know almost nothing about hot spots abroad and cannot get started. When we say “it’s of no use” everyone will laugh, but what if you say this to foreigners? Then it really does not make any difference. Based on this, when we visit the market and investigate e-commerce websites such as Amazon, we are able to obtain some data that is helpful for sales, such as what colors the locals like, what configurations they often use, and what price levels are generally based on. However, these data are just superficial. If you want to really put your efforts into practice, the only way is "localized marketing."

For example, setting up subsidiaries overseas like Galanz did. Regardless of whether it is a joint venture or a wholly-owned enterprise, the most important thing is to have local employees responsible for marketing and to carry out targeted traditional marketing such as newspapers, television, offline marketing, and online marketing in the local area. However, this approach is unrealistic for most small and medium-sized enterprises, so we have to settle for the next best option: finding an agent.

The agency system is almost the most cost-effective way in the process of globalization, without a doubt. However, most small and medium-sized enterprises are confused about how to find the information and what to do after finding it. I have contacted several Chinese top 500 manufacturing companies, and they all have a strong desire to find agents to promote their own brands. However, in terms of methods, there are generally three inherent ideas:

(1) Develop own-brand agents based on existing OEM customers.

(2) Private brands cannot be sold cheaper than OEM brands.

(3) The so-called agent is to give gifts with the logo, and at the end of the year, a few points will be returned as advertising fees based on sales.

However, when we stand in the customer's perspective, we can easily find that the first two ideas are actually contradictory:

(1) The client’s own brand is selling well, so why should they introduce a Chinese brand?

(2) It is not impossible to introduce a new brand if it can bring greater benefits or a higher brand effect. However, in theory it is impossible for multiple brands to have the same positioning, either lower-end or higher-end. So why would a Chinese brand that is generally considered to be “cheap”, made in China and has no reputation in the local market want to go high-end? Why do you want to sell it at a higher price?

My personal opinion is:

(1) Don’t just focus on the same product; try to promote it on the same channel. If we are not worried about customers who make the same product being unfamiliar with the operating market, why don’t we look for products in the same category? For example, if we sell LED light sources, then is it not possible for us to talk to customers who originally sold LED power supplies about their intention to cooperate as agents for LED light sources?

(2) Profit is one of the biggest driving forces behind business behavior. As a Chinese brand with no brand value in the local area, the immediate interests can be appropriately abandoned. Think about the now "high-end" LG. When it was expanding globally, it quickly gained a foothold through "strategic losses" and then got to where it is today.

As for the third way of thinking, it is even more of an OEM mindset of "I don't care once it leaves the factory". In this case, what is the difference between a brand agent and a distributor who sells their own brand? The reason why we are looking for an agent is because we are attracted by their localized resources. What we need to do at this time is to combine the advantages of both parties (manufacturing + marketing + sales) and jointly develop an effective marketing plan. More importantly, with an agent who understands the market, shouldn’t we learn from his experience?

2. Improving awareness ≠ recognition

Many times we can only increase awareness but not recognition.

What increases awareness is exposure.

What increases recognition is consumer surplus.

In the era of seller's market, recognition is far more important than recognition, just like Alibaba many years ago, as long as I stood out and shouted, I would definitely have a meal; and in the era of buyer's market, the importance of recognition has gradually overshadowed recognition. For example, when everyone on the street is shouting that they are the first leading, the first leading is no longer valuable, and you need to say something else.

I have always believed that a qualified copy must make three things clear:

(1) What am I?

(2) How am I different from others?

(3) What benefits can I bring to you?

However, even among China's top 500 manufacturing companies, in most cases they can only state the first point. For example, they spent a huge amount of money to buy the Canton Fair publicity column, but they only knew how to put up a poster with a ship on the sea and blue sky, white clouds as the background, and then covered it with all the pictures of their products. This situation only increases exposure. But as a well-known Fortune 500 company, is it enough to just increase exposure? In this regard, I think we should learn from the poster of Xiaomi weight scale. I don’t know whether the product is good or not, but the copywriting is really good:

(1) I am a weighing scale.

(2) What makes me different from others is precision.

(3) The benefit I can bring is that I can even detect the amount of weight you gain from drinking a glass of water.

3. There are too few real marketers in the foreign trade circle

The difficulty in finding marketing talent can perhaps be considered a historical legacy.

To this day, when we talk about "doing foreign trade", the first impression that comes to our mind is "foreign trade sales", but never "foreign trade marketing". Most companies do not have a marketing department dedicated to international trade. Even if they do, they are just doing things like contacting people to participate in exhibitions, contacting people to make catalogs, contacting people to make posters with blue sky and white clouds, contacting people to make small umbrellas and small ballpoint pens with logos as gifts, etc. What else and what is the value?

This is true for large companies, not to mention small companies. Without the concept of marketing in mind, naturally no one would specifically study it. Therefore, many companies want sales staff to take on marketing positions first. However, people in this position:

(1) You must understand the market and must travel abroad with sales to investigate the market and visit customers.

(2) You must understand the product and know how to position it and refine its selling points.

(3) You must understand marketing and know how to convey the product’s selling points to customers.

(4) You must understand the brand and know how to gradually increase the brand’s influence on customers.

(5) You must understand analysis and know how to find information that is beneficial to the company from pre-sales data and post-sales feedback.

See, do you think salespeople can do marketing? Especially since marketing is not a job that can bring immediate benefits, it is difficult for sales staff, whose income mainly depends on commissions, to be motivated to do this.

The third outlet for international trade: full-network marketing

When it comes to marketing in international trade, we cannot avoid online marketing. Whole-network marketing is the third outlet for international trade. However, full-network marketing is not as simple as just building a website, advertising on Google, and posting on Facebook. Moreover, full-network marketing is only a part of marketing, and we need to look at this issue from a holistic perspective.

It so happens that the company has just taken on a new steam mop project. Let me take this opportunity to explain from the beginning what is needed for full-network marketing as a small and medium-sized foreign trade enterprise.

1. Market research

Learn about well-known, ordinary and cheap similar products, collect market, product, price and other information of each brand, and even purchase and research competitors' products.

2. Refine product selling points

List all the selling points we think we have, then compare them with the selling points claimed by similar products on the market, sort out the marketing points that we have but they don’t, or that they have but we have better, and clarify the product positioning.

Based on the research results of the above two points, we established our product positioning, for example, the product expert positioning of "the performance is the same as that of big brands but cheaper, the price is more expensive than small brands but the performance is better".

3. Clarify your advertising positioning

I have a new advertising concept since this year, which is to use C-side methods to operate B-side marketing, based on the following concept:

(1) The B-end customer is a businessman, but he is also essentially an individual. The C-end approach helps stimulate him as a natural person, thereby attracting him to look at the commercial attributes of my product.

(2) Now is the era when people born in the 1980s and 1990s make decisions. Compared with the older generation of businessmen, they are more emotional.

(3) The C-end approach is helpful in helping B-end customers to provide marketing coverage to their downstream customers.

(4) There are too many people saying the same thing. I need something different.

Determining the advertising positioning can make your promotion more three-dimensional and easy to associate, but there are two points to note:

(1) If a certain attribute is common in the industry and not unique to you, try to avoid it. This is why we do not use "sterilization and disinfection" as advertising positioning.

(2) The product’s selling points need to be able to revolve around advertising positioning.

4. Establishment of product catalog

Abandon the previous method of making catalogs that are made up of a bunch of data and nonsense, and require simplicity and directness.

5. Establishment of the first poster

Let me make three things clear:

(1) I am a steam mop.

(2) What makes me different from a mop is that I can sterilize and disinfect. What makes me different from other steam mops is that my temperature is higher.

(3) The benefit I can bring is that under the powerful sterilization and disinfection, children can play on the floor more happily.

6. Push of the first poster

Through blogs, email push, social media, etc.

7. Receive inquiries

Next comes the salesperson’s job.

8. A new round of marketing work

In addition to static posters, marketing work also includes dynamic videos. In addition to free channels, there are also paid channels such as Google Adwords. In addition to Alibaba, there are also our own websites.

So, the above is the most basic part of our daily work in online marketing.

The most important point is to "create content".

The most original goal is to "harvest inquiries".

The most important concept is "enhancing value".

In the past when foreign trade was easy, marketing had no necessity and no soil for growth. FOB or EXW, payment and goods are settled, how simple. However, at this stage, when product homogeneity is becoming more and more serious, costs are getting higher and higher, prices are getting lower and lower, and manufacturing advantages are becoming less and less, marketing is absolutely indispensable to help traditional manufacturing companies make breakthroughs in export business.

Author: Danniu

Source: The Art and Principles of Foreign Trade Experts