Marketing your products and services
Market entry
It is recommended to establish a business contact with someone who is familiar with the Danish textile and clothing industry and the trends in this sector. Danish importers and agents also want committed suppliers.
If an Australian exporter is entering the European market for the first time, Denmark could be a good test market as it is relatively small. This can give an indication of how successful the products will be in Europe without an investment that is too large.
The entry barriers to the Danish textile and clothing industry are low and an Australian exporter of garments should not expect competition from producers of garments in Denmark. Competition instead, is to be found among the other garment manufacturers in the exporting countries. Since the capacity and number of producers are relatively larger than the limited amount of garments required by Danish importers, the competition among producers is very intensive, especially on a price/quality dimension. Furthermore, Danish importers are keen to establish long-term relationships with suppliers to ensure precise deliveries and uniform quality of the products.
In order to meet the short–term delivery requirements you need to establish a presence in Denmark. This can be done in a number of ways:
- A joint venture with a Danish company.
- A joint venture with another Australian company with a synergistic product range in order to share distribution costs and compliment each other’s product ranges.
- Establishment of a sales and fulfilment office in Denmark or another European country for fast delivery.
- Appointment of a Danish distribution partner and representative.
The Euro Info Centre under the Danish Chamber of Commerce has a service for identifying business partners in Denmark.
Visiting and/or exhibiting at fashion fairs or trade events in Denmark is also another market entry worth looking into. They provide a good location in which to meet business partners and potential customers.
The Danish textiles and clothing industry is highly dominated by well-established domestic fashion brand names such as Vero Moda, Claire, Cottonfield, InWear, Martinique, Red/Green. A large marketing and advertising budget is required to create brand awareness for a new Australian brand, as loyalty to the existing brands is high.
Danish consumers have a great perception of Australia and Australian products. Australian exporters can benefit from that by emphasising the high quality of Australian products in the marketing message.
There are several ways to market products in the Danish textiles and clothing industry:
- Going large-scale: heavy advertising is required explaining why Australian products are different and more beneficial to the Danish consumer than the traditional brands in the Danish clothing stores. Only large Australian exporters would be able to have this impact.
- As a niche-product: for smaller Australian exporters it is advisable to establish a niche market in Denmark, marketing the Australian clothing and apparel as different and unique.
Depending on which market objectives you might have, it is of vital importance that the importer bringing the Australian products to the Danish market can match these objectives. Before entering the market extensive research should be done on:
- What kind of value the retailer will have from listing the Australian product
- If the products fit in with the current product range
- Who the target buyers should be Pricing and margins
Distribution channels
Many Danish manufacturers rely almost entirely on suppliers from abroad or have set up their own production facilities outside of Denmark. Manufacturers are generally not interested in other types of ready-made garments than their own design. Being able to deliver garments in accordance with the design specifications given by the manufacturer is of paramount importance to the supplier.
The Danish wholesalers import ready-made garments as well as garments manufactured according to given design specifications. Wholesalers will typically carry international brands as well as their own branded and unbranded garments.
Due to their knowledge of local markets and wide network of contacts, Danish and international agents are sometimes used when Danish manufacturers, wholesalers and retailers source from foreign countries. Generally, the biggest Danish manufacturers, wholesalers and retailers set up their own purchasing offices around the world or they buy directly from foreign suppliers.
The smaller Danish buyers often make use of an agent. Most agents do not carry their own stock, but purchase solely on the request of their customers. Furthermore, most agents work on a three to seven per cent commission, based on FOB prices. Depending on the line of business, retailers import ready-made garments as well as garments based on own design specifications.
The price structure of garments naturally varies depending on the type of garment, the type of retail outlet, and whether they are imported by a retail company or by an agent or wholesaler. High fashion garments or heavily advertised brands carry higher mark-ups.
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