Selling pasta abroad: the role of export marketing3 March 2015
Italian pasta manufaturers are facing a saturated domestic market and, as a result, most are experiencing the need to initiate or develop new business opportunities outside of Italy. In this process, export managers play a crucial role.
by Marino Rossi
All players in the pasta market are fully aware of certain fundamental data regarding the size and dynamics of the complex Italian situation.
As a result, it is a well-known fact that, although Italy remains (by a long shot) the country with the highest per capita annual consumption of pasta, it is also true that, for years, this global figure has been slowly and continuously diminishing.
The reasons for this decrease have been discussed a number of times on other occasions and in different venues.
They range from the role of diet and changes in lifestyles (with an increasingly lower caloric requirement typical of advanced countries), to health-related problems (celiac disease, allergies, etc.) and new gastronomic trends (ethnic, fusion, etc.) which are the result of globalization and immigration. And, of course, changes in the importance of meals (with the midday meal becoming increasingly less central).
For these and other reasons the Italian pasta market must be seen for what it has actually become: a “saturated” market in quantitative global terms where action can certainly be taken to diversify and more specifically refine the product mix by interpreting and anticipating new needs and trends through the use of all tools marketing offers.
But expecting significant trends in the amounts sold would seem to be a dangerous illusion.
In fact, many Italian pasta manufacturers are aware of this and for some time they have been equipping themselves to operate efficiently and profitably in foreign markets.
It should be noted briefly that while an approximate and amateurish approach to sales on the Italian market can prove unsuccessful and problematic (although sometimes partially camouflaged and compensated for by a certain dose of intuition and a bit of knowledge of the Italian market or segments of it), operating on foreign markets without proper marketing organization or expertise can lead to disastrous failure.
Selling in foreign countries means knowing how to act on all fronts. First of all, knowing the specific characteristics of each market, its needs (both expressed and latent), trends and fashions, buyer preferences and cultures, the competition and sales channels, etc. In short, what is required is mastering all variables that could have an influence on commercial success.
But this is not enough. There are also legal requirements which, although relatively minor within the European Union, become increasingly relevant as the “exotic” nature of the markets increases.
And, of course, the language barrier does not make things easier for companies.
The result? If an average Italian pasta manufacturer wants to expand and/or combat a potential fall in the domestic market, it is forced to look to foreign markets, but it can only do so by adopting means and methods that are completely professional and congruent with the challenge to be faced.
Naturally, this is because setting up and creating an effective export marketing strategy requires human resources that are fully-dedicated and adequate to the task, and the first step is identifying these resources.
The right people to be involved in these activities may already be present in a company, perhaps under-utilized or involved in projects still in the development phase and, therefore, available for being re-directed to export in the short-term.
But it is more likely—especially in smaller companies—that the firm must look to the outside and therefore undertake a specific personnel search.
The first priority is to identify the person who will run this export activity—the export manager—the absolutely key position for competing abroad.
The task of the export manager is to handle the development of corporate sales (from the standpoint of sales strategy) in the foreign countries in which the company has a presence through its own sales network, or where it intends creating one.
It is a job which is highly demanding and time-consuming.
Many small- and medium-sized companies have not yet realized that the export manager embodies that “something extra” required for taking on markets.
Other companies, in order to avoid paying the high salary required for someone in this position, prefer hiring recent graduates who, because they have little or no experience, are in fact worth no more and no less than what they receive.
But does it make sense and is it effective (only to keep costs down) to enter a new country with a person who not only does not have the required experience on the international market, but could actually cause serious damage to the image of the company itself?
In fact, reliable export managers must have leadership qualities and be highly diplomatic with both customers and those they deal with inside and outside the company (such as suppliers), because they must know how to handle complex situations and potential conflicts among the various company departments.
A good export manager must also necessarily possess the flexibility required to face various situations and with a range of business approaches, as well as always being open to learn something new. The amount of information required and the rapidity with which markets evolve mean export managers must remain constantly up-to-date.
Another essential quality is creativity because sometimes it is not enough to simply sell—new business opportunities must also be explored in non-conventional ways.
As can be intuited, the profession of export manager is one that is broadly-based and goes beyond merely a question of foreign sales.
It is a role that must answer the need of backing up sales-related entry strategies into foreign markets with initiatives for greater consolidation of the on-site presence, while also operating in a number of different countries with a “global” approach aimed at forming strategic and operational ties among the various initiatives created in the different markets.
Companies must be able to count on resources capable of adapting to markets undergoing significant change and which can react rapidly to consumer requests.
Obviously, excellent knowledge of English is indispensable, but this must be backed up by knowledge of at least one other language.
To conclude, export managers must be able to work independently and be able to analyze the situations in which they operate. This means not just knowing how to sell, but also being able to guide the company and marketing organization in the right direction while grasping the signals from the market and analyzing them correctly which can provide a jump-start on the competition.
Let’s take a closer look at the tasks of export managers.
They must coordinate the company’s international activities, in particular entry or consolidation of its products in new markets.
Export managers are responsible for choosing new potential foreign markets and developing the most efficient strategies for entering them and consolidating corporate presence in the countries selected.
They also define the lines of action on the basis of the export strategies set by top management, identify and select the main business opportunities, and plan and coordinate the promotional campaign on the international market. [hidepost]
They plan and organize the product distribution network within the foreign country and draw up and maintain business and official agreements with local partners (businessmen, sales offices, foreign players in that sector, insurance and shipping companies, banks, etc.).
They interpret the evolution in the global market, act as the liaison with the organizations and players on the international scene, with a marked ability to adapt to the different cultural contexts in which they come into contact.
The range of expertise required is, therefore, extremely broad. Export managers must have a good cultural foundation, must know the main telematic and computer technologies, marketing strategies, transaction and negotiating techniques, insurance formulas, banking and contract procedures and shipping-related issues.
The limited resources small- and medium-sized Italian pasta manufacturers have at their disposal do not allow them to have the highly-structured and complex organization of a foreign sales office of a major company. For this reason, they must entrust themselves to a professional who encompasses in a single individual all the skills needed to run and manage the internationalization process.
However, because finding a high-level professional is not easy, and the costs involved are not insignificant, it could be a good idea to use an approach that has recently been gaining in popularity: outsourcing export marketing as a temporary management solution. In essence, it means “renting” an expert in this sector from a dedicated service company.
These managers act within the company to perform the specific task entrusted to them, following all the phases in the process up to the creation, management and coordination of a sales network that guarantees the company proper market coverage.
If backed up by in-house personnel, once they have completed their job, they can leave the company having transferred their expertise and experience so that the work can continue without them.
Whichever approach is selected, pasta export marketing is an aspect that cannot be ignored. [/hidepost]
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