As a leading manufacturer in their category, and with representation in all major and independent supermarkets throughout Australia, the management team sought expansion overseas.
“We were trying to open markets in the USA and Canada for over 2 years without much to show for our efforts. Anything you do in the US market costs you money and we had sunk well-over A$120,000 into the project without success.” Explains the manufacturer.
“The CVEN team were referred to us and that’s where our relationship started.”
CVEN’s first task was to evaluate what the company had done in export previously and where management believed the roadblocks were. Often a fresh look at a problem is all that is required. By meeting with the management team and hearing them articulate what their expectations are, our tasks become clear:
- Identify which markets offered the best opportunities
- Confirm the competitiveness & pricing strategies
- Validate product compliance and entry requirements
- Engage with the customers
The first objective for the team was to understand where similar products were being sold and what compliance barriers the business might face. Food products the world-over are being scrutinised more stringently so this is often the number one barrier to entering a foreign market. Quite often it is a preservative used here in Australia or an official certification required by the destination market that creates the roadblock. For the CVEN team, compliance is one of the great tools we use to help shortlist markets.
With 3 key markets highlighted and the compliance requirements confirmed, focus turned to establishing the export pricing models. Commercial viability is not surprisingly high on the list of priorities and one of the biggest contributors to cost is international transportation. If you have a product that requires special transportation (chilled, bulky, non-containerised) its even more critical to understand the impacts and have strategies in place to be able to make your goods available in the target destination and at the right price.
Our review identified the retail prices of ‘like products’ overseas and presented a number of logistic scenarios to help identify not only the cost impact, but the most lucrative volumes needed for each consignment. Oh, I hear some of you say – that can be my minimum order quantity.
The scenarios clearly highlighted the business was able to ship more frequently and in smaller just-in-time volumes better satisfying the demands of the buyers. Building on this data, the team showed how a higher selling price to the distributors would achieve a retail price point in line with the existing market participants. This additional margin meant we had a budget to allocate to a retail marketing program including special price promotions, in-store tastings and other seasonal promotional activities. Products don’t sell themselves and all buyers love to hear of the support on offer.
Introductions to key retail partners then followed and with the newly created marketing materials, the products were picked up by 5 major retailers in 4 countries.
CVEN worked alongside this client for the next 2.5 years as the company’s Asian export expansion continued. With our market development coming to an end, our team’s focus was to train the existing staff in export operations and documentation so that they could take over the day to day activities.
WHO IS CVEN ?
CVEN is an export advisory with a difference. Our team are hands on and engage internationally with buyers, compliance agencies and logistic specialist on a daily basis. This means the information we provide and the pathways we use are the result of the international business we undertake, everyday.
CVEN is different – we export.