Plastics production is a specific kind of business. You therefore would need a specific strategy to enter or expand your presence in foreign markets.
In 2022, plastics and rubbers were the 6th most traded commodity in the world with a total trade volume of $1.09 trillion. Trade in plastics and rubbers accounts for 4.6% of total global trade. In 2022, the major exporters of plastics and rubbers were China ($189 billion), the United States ($110 billion), Germany ($104 billion), South Korea ($53 billion), and Japan ($40.6 billion). In 2022, the major importers of plastics and rubber were the United States ($132 billion), China ($90.7 billion), Germany ($75.6 billion), France ($40.2 billion), and Mexico ($38.1 billion).
The global plastics market size was valued at $624.84 billion in 2023 and is projected to reach $943.76 billion by 2033. The major reasons for the growth of this market are increasing production in the automotive, packaging, manufacturing, and construction industries.
Strategy to reach out to foreign markets
The cultural aspects of each global region dictate its own particularities. For example, in some parts of Europe, price is a major factor, while in others strict deadlines, prompt support and feedback prevail over competitive pricing. In Asia, product visibility is fundamental, while in parts of the Americas, purchasing and distribution managers have high demands for homologation of products coming from Europe.
In general, however, the steps in forming an export strategy remain the same:
Step 1: Researching the potential market
Market research is often neglected, either because business managers consider it too complex or because they consider it irrelevant to their projects.
However, it provides a detailed understanding of how the target market works. Having done such a study, it becomes easier to understand the perspectives of strategic presence in a particular market. For example, Germany is the largest European producer of plastic products, so in order to successfully enter the German market with your products, you need to offer something truly unique, yet of high quality and competitive pricing.
With Kompass solutions for international trade onboard, you are able to get answers to the following questions:
Market
- What is the target market (its size and evolution)?
- What are the products/services in the niche?
- Who are the key players?
Demand
- How is demand developed and segmented?
- What is consumer behavior?
Supply
- How is the supply evolving?
- Who are the main competitors?
Environment
- What external factors could affect your project (regulations, lobbying, etc.)?
- What is the economic and political situation in your target country?
Step 2: Export Marketing Plan
With your market research report completed and your export objectives clearly defined, you can now move on to preparing an export marketing plan that describes exactly how you will meet the needs of your overseas buyers.
Your export marketing plan should allow you to address the following questions:
- How can you standardize or adapt your product to meet the expectations of your buyers?
- What export pricing policy should you adopt?
- How can you inform potential buyers about your product and encourage them to buy it?
- How can you deliver your product to the buyers?
Step 3: Distribution Channels
The choice of distribution channel for your export products depends on your objectives and international strategy.
In a nutshell it sounds like this:
- Direct distribution. You launch your own direct sales network by opening a representative office, hiring qualified staff and renting warehouse space. This will give you complete control over costs and time, as well as brand image.
- Indirect distribution. You engage an agent company that acts on behalf of the exporter. The advantages of this channel include better knowledge of the market and local culture on the part of the agent, experience in dealing with administrative, banking and customs authorities. Or you may work with the local importers or distributors who act on their own behalf and for their own account. They buy your products to resell them to their customers in the local market.
For example, to enter the plastic market in Australia, which imports up to 70% of plastic products, it is best to find a local distributor, as doing business on the green continent is quite specific, and the fact that many Australian distributors also cover New Zealand is a definite plus for choosing an indirect distribution channel.
In the case of entering Brazil, which imports US$9.74 billion worth of plastic products per year, you should opt for a direct distribution channel, as Brazilian business culture highly depends on building strong personal relationships, so you will need to open an office or joint venture for successful expansion.
Step 4: Finding partners and customers
So, your company is at a low start, the choice of markets has been made, the appropriate sales channel has been identified. Now it is time to find the right partners/customers with whom to realize your export plans.
There are various ways of contacting potential partners/customers.
These include:
- Online visibility. That is, export-oriented company website, multi-lingual digital presentation of the exporter on reputable B2B websites and online catalogs, quality content in virtual showcases. Here is an example of priority visibility with Booster International option on Kompass.com: https://www.kompass.com/en/c/chemco-plastic-industries-private-limited/in862006/. Our global B2B marketplace is used to be visited monthly by over 190,000 B2B users, including potential buyers looking for plastics products and suppliers worldwide.
- Online prospecting, allowing for market segmentation and target audience targeting. Attention should be paid primarily to those countries that are major global importers of plastic products (USA, China, Germany, France, Mexico). Our global database lists more than 270,000 companies engaged in the plastics industry.
- Direct email campaigns by marketing lists of potential partners.
- Participation in exhibitions and trade fairs.
- Participation in B2B meetings and networking.
Stage 5: Marketing Policy
As a rule, before accessing any foreign market, the exporter should take into account the life cycle of the product in the new target market, which goes through the following stages:
- Launch: It is important to critically evaluate the situation: success is not guaranteed and there is a risk of failure. Exporting requires more time, resources and investment.
- Growth: Competitors have similar products on the market and need to be squeezed. The main objective of marketing is to develop the brand awareness. Market share expands and profits increase.
- Maturity: The product is already on the market, sales grow more slowly and eventually stabilize. Therefore, it is high time to optimize marketing.
- Decline: The market is slowing down. Changes need to be made to the product, adapting it to new consumer demands (needs, tastes, trends, technology, etc.).
Given that the duration of each stage varies greatly from product to product, and in order to guarantee the conditions for a successful international market expansion, the exporter must choose one of two methods to market his product internationally: either standardize it or adapt it to the target market.
Also, pay attention to whether your plastic products are on a country’s list of banned plastic products.
Final thoughts
The plastics industry has experienced tremendous growth since the beginning of the 21st century, and this growth is projected to continue in 2023 and 2024.
Advances in technology and improved cost management should enable plastic manufacturers to capitalize on these opportunities for business expansion, offering high-quality products at competitive prices. Take advantage of our comprehensive digital solutions for exporters to make accessing new markets as painless and efficient as possible.
Comentarios
No Comments