An insider’s guide to developing foreign markets

When we first considered exporting manufacturing equipment as a business strategy we already had some demand for our cherry grading equipment. Early on, one Italian customer purchased three of our machines to sort and grade cherries. It was from this one customer – who happened to have a very high profile in the industry – that we were then able to build relationships with European and Turkish customers. This taught us that it is vital when considering export markets to gain key contacts that will help push your brand and product.

After our initial market entry, we began receiving more interest from Italy and around the same time were approached by an Italian agent to represent us. This allowed us to develop a more concerted push into other export markets.

After establishing a number of overseas clients, we looked at an online presence. Our first website in 1998 focused on GP Graders being an exporter, despite at the time having little presence in markets outside Australia. Nevertheless, the web site allowed us to appear bigger and more widely spread than we were at the time.

From the beginning we developed a multilingual website and brochures. We produced VHS videos with voiceovers in foreign languages and posted them to enquiries we received through the website. This strategy worked, particularly in Italy where we sold about 13 complete lines over the next six or seven years.

From Italy we spread to Turkey where we sold our first machine directly to a customer, before accepting an approach by an agent. From here we sold more than 30 complete lines over the next eight years. We had a similar experience in Greece and Chile.

One of the reasons for our success is because we have a product that is attractive to overseas markets. Cherries are a sought after commodity and in Asia are seen as a luxury item. It is why Australian cherry exporters have a strong market share, despite certain quarantine hurdles placed on them by foreign governments.

As we entered the US and Canada, we did discover flaws in our formula and found that with growth often comes the need for direct intervention in markets, rather than simply relying on distributors. My advice is to play a very active role in all markets you participate in, because it may be cheaper to go direct. More importantly, it gives you control of your brand. If you have built strong relationships, there should be no problem approaching customers directly.

Agency relationships work well in small and more fractured markets but less well in larger more clustered markets. Ideally exporters should have direct ownership over the entire process from product development, to marketing, sales and installation or deployment. But this can be impractical where a company only makes occasional or smaller sales. We have direct control in Chile and the US, but are comfortable for now with agents elsewhere. We do continually reevaluate this strategy as we are in an expansion mode.

We now have machinery in 18 countries and, with the development of our product mix, we are looking to grow from this base. We target niche markets, introducing a technology and process that is revolutionary to existing methods. Early adopters provide us a reference site from which we grow within these niche industries and geographies and we seek to gain penetration and established our brand before the competition arrives. We have an exciting future ahead of us and we see endless opportunities in obscure and exotic products and places.

Stuart Payne is GP Graders’ managing director

Published on The Sydney Morning Herald