Detailed Export Marketing Plan for Austchilli Company Analysis

This report provides a detailed export marketing plan for Austchilli, focusing on the company's readiness to export avocado products. It begins with an internal analysis of Austchilli, examining financial statements, management commitment, available resources, and knowledge of export procedures. The report then analyzes the industry, identifying trade-offs and benefits associated with international market expansion, and evaluates the export potential of Austchilli's products through a SWOT analysis. The study identifies priority markets using economic modeling, resource analysis, and assessment of trading blocs. It also discusses the Ricardian model, market segmentation, and market targeting, and provides a determination matrix to assess market attractiveness based on price sensitivity, competition, market size, and growth potential. The report aims to guide Austchilli in making informed decisions about entering and succeeding in foreign markets.

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EXPORT MARKETING PLAN
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Export Marketing Plan
Assessment of Austchilli’s Readiness for Export
Different factors should be put into consideration when deciding if Austchilli Company is ready
to export its products. First, there is need to carry out an internal analysis of the business to
determine if there is growth feasibility. First, the financial statements of the company should be
analyzed. These include the balance sheet, income statements, and the cash flow statements
(Pittel, 2002). These statements should be within 3 to 5 years. They show the profits or losses
that Austchilli has been making and the expenses that were incurred. They also show the cash
that is coming into the company as compared to that which is going out. If the company is ready
to export, the cash inflow ought to be higher than the cash outflows. For the balance sheets and
the income statements, there should be a record of profits. Moreover, if the company is publicly
traded, the equity from shareholders could be used to finance the export activities.
Second, there is a need to analyze the company’s management by looking at their level of
commitment and how well they have implemented different strategic plans in the past. This
knowledge can be gained by talking to the Managing Director because this is the highest
authority in the firm’s management. It is also important to speak to the entire management team.
This will aid in providing an enlightenment on the firm’s culture to see if they are ready to
export. For example, Austchilli is a medium enterprise with 50 to 200 employees. The company
is privately owned where the managing director has close control and is in charge of critical
decision making. The culture of Austchilli includes learning, values, communication, and
leadership which are some of the characteristics of organization’s that are innovative
(Šimanskienė, Paužuolienė, and Paužuolis, 2015). The company can seek assistance from other
exporters who are not its competitors inorder to venture into exporting.

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.
Another factor that should be considered in the internal analysis is the presence of resources that
will be used to enter the new markets. To export products, Austichilli will need to have funds for
distribution, product adaptation, marketing among others. Therefore, if the company lacks the
necessary resources, it cannot be able to thrive in foreign markets and is therefore not ready to
export its products.
Further, it is necessary for Austchilli to evaluate if the company has knowledge and skills on
entry procedures and documentation needed to venture into foreign markets and the different
export risks that are involved. This is because ignorance on this matter may cause the company
to make losses due to fines or to fraudsters. If it is determined that the Austchilli has in-depth
knowledge of these procedures, this is an indication that it may be ready to enter new markets
(Henisz, 2000).
After the internal analysis of the company has been carried out, there is a need to analyze the
entire industry. There is a need to find out to what extent the industry is involved in the global
market. By conducting this analysis, one can understand the significant aspects of the industry
that can be used in their own exporting decisions and processes. Moreover, the company can
gain insights on how to conduct their exportation processes by receiving advice from other
businesses providing substitutes in the same industry (Arnold, 2001).
Additionally, there is a need to determine the trade-offs and benefits associated with the
expansion of the market internationally (McDonald, n.d.). This is important in the determination
of what outweighs the other. Entrance into the export market will lead to reduced dependence on
domestic markets. Trade-offs may include the need for additional financing to hire more staff or

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the plowing back of short-term profits to ensure that there will be profits in the long run
(Terpstra, Foley, and Sarathy, 2012). Once it is identified that the benefits outweigh the trade-
offs the company can consider other factors.
Next, it is vital to determine whether the avocado products from Austchilli have export potential.
This may require a SWOT Analysis of the products to find out what the competitive edge of the
products would be in the foreign markets. If the products are not performing well domestically,
they should not be introduced into external markets because there is a high probability of failure.
However, if the analysis showed that the company is financially weak, has no competitive edge,
has poor management, or lacks knowledge on international markets, the company can carry out
different activities to strengthen its position. These include; setting up meetings with successful
exporters to know how they managed to succeed, carry out training activities for their employees
on exportation matters, or join export clubs.
Priority Markets for Austchilli
It is significant for Austchilli to carry out a robust analysis of existing markets to identify which
markets have the highest growth opportunities and will bring the highest return on capital
invested. The insights that are made from carrying out the business domestically can come in
handy when choosing the best export markets. Austchilli Company should, therefore, focus its
efforts and resources on finding the most favorable foreign markets before initiating the export
process.
To identify the priority markets for Austchilli company, there are some steps that can be
followed to ensure the results are as accurate as possible. First, economic modeling is essential to
be able to identify the markets that had the highest potential for growth and that could provide

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this company with competitive advantages (Manfredi, 2003). Next, an analysis of potential
resources that are needed regarding capital sources, availability of technology, and talent for the
workforce should be conducted. Further, an analysis of key trading blocs in the region that would
enable Austchilli to reduce costs by saving on taxes should also be conducted. Finally, it is
valuable to observe the significant role players in the industry identify how they have been able
to remain profitable over the years.
Activities such as liberalization of trade, extensive changes in technology, and presence of
extreme competition are factors that are extremely vital in consideration of priority export
markets. It is vital for the company to evaluate if it can be able to have a comparative advantage
or absolute advantage over other competitors (Arthur, 2004). It is more important to have an
absolute advantage than a comparative advantage because being able to produce high-quality
products is much better than producing low-quality products at low prices. However, the
company should strive to enter into markets where they can be able to provide both advantages at
different levels in a bid to reach as many customers as possible.
One model that was used in the analysis of foreign markets is the Ricardian model. In the context
of international trade this model asserts that there is a comparative advantage difference based on
differences in technology in different countries (Soo, 2017). This model assumes that apart from
technological differences, all other actors are the same in the home country and the country to
which products are being exported.
This model is based on the labor theory of value. This model unlike a majority of other models in
international trade says that international trading activities are beneficial for all the countries
involved. It states that even nations that use poor technological infrastructure will benefit from
global trade (Arthur, 2004). The labor theory has three significant implications. These are; units

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of labor are homogenous in the country, labor is mobile within the country, but immobile
internationally, and labor is the one primary factor of production (Horwitz, n.d.).
The Ricardian model created a basis for my analysis of entry into international markets, but
different factors were refuted such as the implication that labor is immobile internationally. This
is because the senior authority will be situated in the company’s home country but will oversee
all trading activities in the foreign markets (Horwitz, n.d.). By this model, there is a need to look
even at the available labor when choosing target markets. The target market should also have the
proper technology to be used in trading activities. This will aid in saving time and costs.
Economies of scale are brought about by business expansion. To maximize profit margins, it is
vital to identify countries in which the costs of production are much lower than those in the
domestic country. Additionally, countries which have higher prices for the same products are
attractive to venture into. By so doing, the company will be able to increase sales volumes and
consequently reap higher profits.
Historic links that exist with other countries should also be put into consideration. These include
trade blocs and existing free trade areas. These factors should be put into an account to ensure
that the company can maximize its revenues and reduce taxes.
This process of market prioritization involves market segmentation as well as market targeting.
Market targeting refers to the process in which specific market segments are selected based on a
segmentation exercise. The segments are evaluated by an agreed criteria. The major constraint
involved in this process is the presence of limited resources (Mulderij, 2016). The process of
prioritization involves the selection of a given segment depending comparison of the chosen
segments and through this process, resources are allocated to the chosen segment. Market

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targeting, segmentation, and prioritization are the foundations on which the marketing strategy is
based and are very important in the process of developing routes to market.
Criteria for market attractiveness
Price sensitivity
Conventionally, people believe that a market segment that does not price sensitive is good
because it can enable the company to maintain its profit margins. However, if a company has a
high market share and it employs economies of scale, it is likely to increase its profit levels. It is
therefore very important for Austchilli to take this factor into consideration when choosing its
priority markets.
Competition levels
The existing competition levels in a given market segment determine whether it is favorable. If
the competition is made up of a few weak competitors, market entry into this segment of pressed
avocado products would be favorable. However, factors that show unattractive markets in
regards to competition are; the presence of many players in the market with similar products,
very many channels providing the products, ease of price comparison, and the willingness among
customers to change from one product to another (Henisz, 2000). Moreover, it is vital to look at
how likely it is that new competitors may join the market.
Size
It has been conventional wisdom that large market segments are more attractive than small
segments. However, these segments may be highly contested by other companies, and therefore
they may be unfavorable for the long haul. Austchilli would be better fitted to join a niche

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market where it could easily gain a large market share for its pressed avocado products and make
a greater revenue.
Growth
Segments that have high growth potential are more likely to be considered attractive. However,
due to this, they may also attract many competitors.
Stability
A market may become either attractive or unattractive due to its rate of change. Segments that
are stable are also more predictable as opposed to those that are unattractive. However, they
leave few opportunities for growth and product differentiation. Conversely, those that are
unstable have the upper hand in that they can offer new opportunities on a continuous basis. In
turn, this makes them more open to competitors.
Determination Matrix
Market attractiveness Weighting
Price sensitivity 35%
Growth 25%
Competition intensity 20%
Market size 20%
Total 100%
Figure 1
Statistics show that in the year 2016, Mexico produced over one million tons of avocado. Of this
total, eight hundred and sixty thousand was shipped to the United States. And the rest of other
markets. However, the prices were not so favorable because the United States was saturated by

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avocado products from other places (Mulderij, 2016). This, therefore, shows that the United
States may be a large market, but it faces price fluctuations due to the presence of many
competitors.
China has also been seen to have a very high demand for avocado products. Chile, which exports
avocado products to China reported that their exports had grown twice this year as compared to
those achieved last year even though China is not their main market. Their main market is
Europe which highly values avocado products. As a result, the prices received for the products
are high (Horwitz, n.d.). However, given the present competition, the market has not increased
enough to make huge profits.
Spain is a gateway through which avocado products enter into Europe. It is a hub for importing
and re-exporting avocados. The Spanish domestic market has a high demand for avocado
products. This makes it very much more favorable than the united states because the avocado
products are sold to the local markets, and they are also re-exported to the rest of Europe.
However, Netherlands has a more prominent market than Spain and it also re-exports to other
destinations such as France and Germany (Mulderij, 2016). This, therefore, makes it a higher
priority than Spain.
Therefore, regarding market size, the most favorable markets are; The United States,
Netherlands, France, United Kingdom, Germany, Spain, Canada, China respectively.
Figure 2 below shows the total sales per country in a million Euros in 2016 and figure 3 shows
some avocado products imported in thousand tonnes.

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Source: UN and Eurostat. Figure 2
Source: market access database Figure 3
Based on the above data, a matrix can be created as follows;
Segments Price Growth Competition Market Total

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sensitivity
(35%) (25%)
intensity
(20%)
size
(20%) (100%)
USA 13 7 7 8 =13+7-
7+8= 21
Netherland
s
12 6 2 6 =12+6-
2+6=22
France 3 3 3 2 =3+3-
3+6=9
United
Kingdom
4 3 3 1 =4+3-
3+1=5
Germany 1 2 1 1 =1+2-
1+1=3
Spain 1 2 1 1 =1+2-
1+1=3
China 1 2 3 1 =1+2-
3+1=1
Figure 4
The table shows that the most favorable market is Netherlands followed by the United States,
then France. The calculation involves a subtraction of the competition factor because this will
affect the company negatively. This means that the first market that Austchilli should enter is
Netherlands. In case of expansions in the future, the second market to export into is the United
States of America.
After identifying these markets, the next step is to call importers of pressed avocado products
from these countries to be able to identify the costs that will be incurred in the process of