The government is looking to marketing to encourage more small- and medium-sized businesses to export goods as the UK’s impending exit from the EU raises new challenges.
According to a new report by the Chartered Institute of Marketing (CIM) and PwC, 70% of SMEs already exporting expect their exports to increase over the next three years, while just 4% are forecasting a decline. Yet of those firms that don’t export, just one in seven will consider doing so and 59% are “very unlikely” to consider it in the next three years.
And the Office for Budget Responsibility expects export growth to “flatten off” between 2020 and 2022 post-Brexit. Last year, UK exports rose by 11% to £617bn, but that is well behind the £1trn by 2020 target set six years ago.
The Department for International Trade (DIT) is working with the CIM to try to address some of the challenges. The plan is to use campaigns such as ‘Great’ and ‘Exporting is Great’ to show more businesses the merits of exporting and the key role marketers can play.
However, there are challenges that brands and marketers need to address. According to the survey, while three-quarters of marketers believe their organisation has the skills to sell goods and services in new markets, just a third have an export strategy.
The government sees marketing as key to shifting this perception. CIM CEO Chris Daly says marketers, because they are customer champions, are in the right position to ensure when companies enter new markets they do so on the right platform.
He cites the example of the Cambridge Satchel Company, which was initially one woman making bags in her kitchen but now gets a fifth of its orders from China through a focus on British standards and quality.
There are also brands such as Marmite that have seen success by repositioning. In India, for example, Marmite is pitched as a cooking ingredient not a spread.
“Marketers can do this because they are leaders in innovation, entrepreneurship; they are the people looking forward on a changing landscape,” Daly explains. “There is no other skillset within business really targeted at doing that.”
Holding them back are issues over skills. More than a third (35%) of in-house marketing teams admit to experiencing difficulties hiring people with the right skills, with that figure rising to 67% in marketing agencies.
That makes finding people with the right skillset a bigger challenge than barriers such as tariffs and political uncertainty. Four in 10 businesses say they have found it hard to find people with the know-how to adapt a UK-based strategy to different markets or cultures, while 33% admit they lack the confidence to approach new markets and 30% don’t have the contacts to do so.
Uncertainty caused by Brexit and off-putting tariffs are challenges experienced by just 25% and 13% of marketers, respectively. And this was the case at both small and bigger businesses; those with a turnover of more than £25m believe they are more likely to report difficulties adapting strategies.
Of the one in seven businesses that say they have no intention of starting to export, 11% have been put off by a lack of in-house experience or knowledge (behind just the 13% that don’t think they offer a suitable product or service). Some 10% are put off by a lack of knowledge of overseas markets.
While the US, Germany and France are the three most important exporting markets, the fastest growth in demand is coming from outside the EU, with the USA first on 27% followed by China on 20% and the UAE on 14%. Yet these are also the countries that organisations find particularly challenging to address.
The report suggests marketers looking to help businesses export will need good communication and relationship building skills, but also flexibility, business planning skills, appreciation of other cultures and the ability to adapt business strategy to different markets.
“The need for greater cultural awareness is a critical factor,” says the report. “UK businesses need to work harder at understanding and appreciating the cultural nuances of their export markets, especially in the Far East, Russia and Middle East. The successful marketer of the future will need a ‘global mindset’ and have a strong cultural appreciation of their target markets.”