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Our modules on Incoterms®, Trade Finance, Export Administration, Customs and International Law have equipped countless African exporters with the necessary knowledge to succeed. However, we have also identified essential areas that could significantly impact the success of exports from the region—one of which is international marketing for African exporters.
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Traditional methods of marketing for exports have had to adapt or die in the face of global pandemics and unforeseen geopolitical tensions. In the face of these disruptions, international marketing personnel have had to look at innovative ways of entering international markets, reaching foreign customers, and effectively engaging in international trade. While we would love to say that 2023 looks more predictable than the chaos of the last few years, the new year will undoubtedly come with challenges that require tremendous versatility, particularly for African exporters.
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Adapting your product, increasing production capacity to meet international demand and marketing for exports may require financial resources you do not have on hand. While a few companies have sufficient cash reserves to fund their international expansion, most exporters require some form of trade finance.
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Running any business will inevitably involve correctly managing the business's finances and ensuring that you always have a sustainable amount of cash on hand. Without liquidity, your company will almost certainly end up bankrupt, i.e., in liquidation. While problems with cash flow can plague any business, the risk of experiencing cash flow issues amplifies when engaging in international trade.
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A country's level of economic development will give you insights into the economic environment of your intended foreign market. When international marketing personnel assess the economic environment of a particular foreign market, they are essentially trying to estimate demand by establishing the distribution of income, the employment levels and the general economic outlook of the foreign market in question.
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Business books and MBA lectures are filled with examples of disastrous international marketing efforts that could have been avoided by simply considering the cultural sensitivities of a particular foreign market. The wrong colour, phrase, or circumstance could create a situation where your international marketing campaign develops a negative perception of your product and brand.
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Conducting international marketing research, adapting your product for the export market, increasing production capacity and ultimately, marketing for exports may require more capital than you and your business has on hand. It is also common practice when conducting international business that you must agree to lengthy credit terms to conclude an international sales negotiation. For example, to win a particular deal, you may be required to consider extending credit terms of 30, 90 or even 180 days to your buyer.
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A common misconception about Africa is that local businesses cannot compete in international trade. However, this perception is the furthest thing from the truth. There are countless examples of African companies that have been highly successful in international trade and continue to expand into new markets. The real question we should be asking is why more African businesses are not engaging in international trade.
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Growing your business globally to break into international trade is difficult and often requires a lot of blood, sweat, tears and money! However, the reward of persevering through the difficulties of selling your products in foreign markets could be life-changing for you, your business and your community. While exporting has challenges, exporters often make life more difficult for themselves by making avoidable mistakes.
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Expanding your business internationally could be the key to achieving enormous growth, profit and sustainability. For example, exporting from South Africa could allow you to mitigate the risks of strained demand locally. Furthermore, while the depreciation of the South African rand has negatively impacted the international purchasing power of South Africans, it could positively impact the price competitiveness of South African exporters in foreign markets through a favourable foreign exchange rate for foreign buyers.
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