Marketing your products and services
Market entry
Suppliers of clothing and textiles in the UK have a variety of possible channels:
- Retailers
- Mail order sellers and e-tailers
- UK manufacturers
- Direct sales to consumers – this needs massive logistical support from the supplier
In order to succeed with any of these channels, you will need a presence in the UK. Category management is common, and buyers reduce sales costs by limiting the number of suppliers.
Market entry strategies include:
- Appointing a distribution partner to handle importing and customer liaison
- Managing the customer base from Australia and find a fulfilment company to warehouse and ship to the customers
- Setting up an office in the UK
- Sending one of your staff to the UK as a representative
- Sharing distribution with another Australian company – preferably with a synergistic product range
- Manufacturing your products in the UK under contract or license
- Undertaking a joint venture with a UK company
The most effective is probably appointing a distribution partner. A UK company will understand how to best present your products, comment on changes to your packaging and will understand how to place the product in the market. These skills take time to acquire and demand long-term exposure to the UK.
UK-based companies expect to have long-term relationships with their suppliers, working together to achieve sales targets, therefore Australian exporters should consider the UK as a long-term strategic destination.
Smaller distribution partners often specialise in a particular product sector and may service customers on a regional basis or may supply only certain types of retailer. An Australian exporter may require more than one UK distribution partner in order to access the entire market.
It should be noted that the number of experienced distributors is limited, and it is important to check for conflicts of interest. You may need to work with a smaller or less experienced company as a long-term project and build sales gradually.
Most UK distributors will be working on a 20–30 per cent margin, and the retailer will be looking for significantly more. As a general rule, multiply the landed price by 250 per cent to get to the retail price. The level of margin will depend on the unit value of the product, projected sales volumes and the product category.
Competitors may advertise heavily in magazine and newspaper weekend supplements. For example, costs per page in The Daily Telegraph magazine are between $54,000–$76,000 plus. There are other less expensive media options, but costs are still higher than in Australia. You will be expected to contribute towards promotional expenses and other costs.
Think carefully about your target consumer before presenting your products to a UK buyer. Don’t assume that your British consumer will have the same characteristics or habits as your Australian consumers.
Research the market and your potential competitors thoroughly before making contact with customers and take advice from your UK distributor. You will need to tailor your presentation to each retailer in order to be successful. Visit as many stores as possible to build up a picture of the retailer’s consumer base and consider how your product fits their needs and aspirations.
When presenting your product to a UK retailer, either direct or via your UK distributor, you will need to consider the following:
- What is the value to the retailer of listing your product?
- How does your product fit in the current product offering?
- Who are the target buyers?
- What is the projected level of sales?
- What will the retail price be?
- What margins are expected by the retailer and distributor?
- How you are going to promote the product?
- Are you willing to alter the product to suit the retailer?
- Is an exclusivity deal appropriate?
Are you are ready to provide product samples or swatches? UK companies prefer to have brochures and product samples, rather than relying on websites for information. Use of the Internet is widespread, but a brochure or sample in the buyer’s hand tends to make a faster impact. Brochures don’t need to be expensive, but they should:
- Accurately project the values of your company
- Include technical information
- Give full details of all products in the range
- Mention the benefits of the product to the customer – perhaps include an Australian case study
Pricing information should be provided separately. It should also be in UK pounds where possible, or at least in Australian dollars with reference to a current exchange rate.
Most major retailers in the UK have incorporated the Internet into their business strategy. Most have websites with a brochure format for products. Some have added an interactive sales facility for consumers, but business-to-business sales are not well developed.
If you offer your products for sale to the UK and Europe over the Internet, you will need to comply with British and European laws.
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