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Marketing local products:
Short and long distribution channels

[ Summary ]

Section II
Collectively marketing local
products via long distribution channels

 

Chapter 4
Marketing channels

 


 


4.4 Foreign markets

 

Foreign markets represent a promising outlet for a wide range of local products. Aside from an explosion in demand for certain products (e.g. in northern Europe for fresh organically grown products and virgin olive oil from the Mediterranean), there are signs of a more general openness in markets that makes them accessible to traditional production units. Moreover, in most European countries, the consumption of foreign food specialities has, for many different reasons, developed beyond a mere niche market, as evidenced by the interest shown in them by the greatest of mass market specialists - mass retailing chains. Many of these have stepped up their promotion campaigns and promotional and thematic activities (nation-wide operations, “countryside weeks”, etc.) in an increasingly sophisticated bid to improve their staging and choreography.

Initiatives to develop cross-border marketing channels present a number of distinctive features to do with geographical distance and cultural differences. This means that the initial phases of identifying potential customers and starting up the business relationship generally require heavy investment in terms of time and resources (translated into high costs). The most common type of activities in this field include participation in international shows, specialised trade fairs [1] or export missions. Furthermore, national and regional organisations specialising in exports (Food from Britain, Sopexa, Catalonian Quality Foods, etc.) provide interested firms with a wide range of highly useful services:

  • participating in shows, fairs, etc.;

  • sending a mailshot to the buyers of leading distribution groups and the most active importers;

  • holding promotion weeks and other promotional and selling activities (merchandising) at the points of sale of mass retailers;

  • collaborating with buyers in seeking products (presenting firms, organising samples, meetings, company visits, etc.).

In the case of Fastnet of Ireland, its presence at specialised shows organised in “target” countries (France, Belgium, etc.) has been its main method of sales penetration into the export market. In this firm, which invests nearly 25,000 euros in such activities each year, they follow up every participation with a report, a cost and revenue analysis and coordination of the contacts made with sales representatives. According to Fastnet, the special assistance of the B.I.M. (Irish Seafood Board) has been very effective.

However, such services do not always respond to the specific needs of business firms and, even where they are free of charge, they entail a whole series of costs that must not be underestimated. This type of participation should therefore be selected cautiously and courses of action must be carefully planned. [2] It is also possible to envisage planning and carrying out entirely independent sales-penetration operations abroad.

The “Saveurs des Pyrenées” sales penetration method of organising export missions to test out one or more specific products on the foreign market and developing sales in a specific country, provides an interesting example:

  • Phase I: completion of a preliminary study to describe the reference scenario, including drawing up a list of potential sales operators and a questionnaire to be put to them, followed by an appointment to see them. This essentially documentary and telephone- based research is generally entrusted to a trainee and coordinated by the director of the association. This phase sometimes lasts several months;

  • Phase II: an on-site mission of between 8 and 10 days by the director, consisting of a series of targeted interviews with sales operators (importers, buyers, etc.). The final report on this mission, analysing the opportunities for each product, is studied with the firms involved.

  • Phase III: if the conclusions prove positive, a sales penetration plan is then developed.

In the light of its experience, “Saveurs des Pyrenées” considers this method to be particularly effective:

  • the average quality of business contacts is better and the results are faster in terms of business ties (sometimes immediate) than the results obtained with other initiatives (shows or institutional missions);

  • the cost is reasonable. It has averaged 2,286 euros (762 euros for the preliminary phase and 1,524 euros for the on-site mission).

It is generally slower to use this method of establishing business ties in export markets, but when foreign customers have had the chance to test the credibility of their business associates, they tend to be more loyal. In this type of business relationship, the “trust” factor takes on greater importance because, for the importer, it would be more troublesome to accredit new suppliers.

It is also common for the customer (the importer) to ask to “control” the brand that he is planning to introduce into his specific market. This usually takes the form of requests for exclusivity or for the product to be sold under a special new brand.

 


[1] See section I “Marketing products
via short distribution channels”.

[2] See the dossier “Exploiting local
agricultural resources: the experience of
LEADER I”, LEADER European Observatory, 1995.



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European
Commission

Agriculture
Directorate-General