It is worth to hold the price
One way or another, but many enterprises from time to time deal with a difficult dilemma — to export with minimal or zero profitability, earning bonus points for the brand, or to orient flow of commodities to other, more profitable markets. To be more exact, the matter is the balance of these two constituents.
Last year Belarusian OJSC “Glass factory “Neman” shipped nearly 70 percents of manufactured production to foreign markets. Export geography embraces not only CIS countries, but also Baltic countries (with a perspective of entrance to Scandinavian countries), almost the whole European Union, the USA and Canada… “There were no situations, when we had to leave the market because of its hopelessness, — says the deputy director on foreign economic activity of the enterprise Sergey Tishkov. — While assimilating a new market, we study the environment and build the price policy in such a way as to be competitive. Sometimes we have to work with minimal profitability, but we are not in minus”.
It is obvious, that a commercial organization by definition should first of all think about profit. Many of them make a decision even in prejudice of image tasks. “If we will sell the products for export with negative profitability because of prestige, we won’t be able to solve assigned tasks, — says Viktor Kashansky, the deputy general director of OJSC “Rechitsky textile”. — And our founders and shareholders, a collective of the enterprise are interested in obtainment of maximum profit”. Thus, for example, the partners from Germany want to buy the towel at the enterprise of his consumer for 5 Euro, which costs 7 Euro for a Belarusian citizen at the domestic market. We can’t agree for such “prices of prestige”, — explains Viktor Kashansky. That is why we chose our own tactics in association — to implement the strictest requirements of the customer to quality, but not to lower the price. A peculiar “trump card” of OJSC “Rechitsky textile” is a growing demand for the production at the main market outlets in Belarus and Russia.
Image with meaning
However, without creation of a corresponding image of the production at western markets it is hardly possible to find a lodgement. If to be stably occupied with the advancement of a trade mark to the markets with a high level of competition, it is necessary to invest big funds. Forms of image marketing are rather diverse — from participation in international and regional exhibitions to opening of trading houses and representative offices… These could be different business-presentations of not only separate companies, but of groups of participants, formed by field, regional or other features.
Each manufacturer, being governed with his own strategy, chooses the most acceptable instruments in each case. For example, Neman glaziers supply all their articles in individual colored package, on which there are not only requisites, but also rather complete information on the activity of the enterprise. Apart from that, you can find a logotype on each article, a year of establishment of the enterprise (1883) and an inscription “hand made”. “We support the image of our mark and refuse from the offers of foreign partners to manufacture the products under their logotypes”, — says Sergey Tishkov from OJSC “Glass factory “Neman”.
The most economical variant of the production advancement to foreign markets is considered the work of “our” consumers, living abroad. For example, during last months CJSC “Pinskdrev” shipped several containers of furniture to the African continent, to Guinea. The Customer was the company “Russian aluminium”, which builds houses for its employers, working in this country. Soon to the address of the Belarusian manufacturer the request from Togo came: probably, there were rumors about our supply to Africa, made a conclusion the specialists of the department of foreign economic relations.
Viktor Kashansky from OJSC “Rechitsky textile” admits, that the partners often become emigrants from Belarus. And the general director of CJSC JV “Milavitsa” Dmitry Dichkovsky told many times, that the company allocates serious investments for assimilation of markets of CIS countries and doesn’t yet plan active expansion to the West (by results of the last year 86 percents of sales fell on Russia and Belarus). At the same time there is also supply to the countries of the Western Europe, without efforts of the enterprise. Dmitry Dichkovsky is apt to explain such an interest by energy of the immigrants from Belarus and other CIS countries, where the trademark “Milavitsa” is known well enough.
Dividends not always ring and rustle…
Experience of many companies, including Russian ones, shows that at the western markets on the initial stage of their assimilation you shouldn’t count on high profit. However, apart form financial advantage, such a work in conditions of the cruelest competition gives additional advantages to the company: this is a good school of life for the employers, a possibility of professionalism elevation.
Apart from that, many Belarusian enterprises (and the national economy on the whole) simply can’t survive without export supply. That is why even at minimum profitability external markets provide realization of the manufactured production. The company “Baltika” considers extremely important to assimilate new territories beyond the country, as the Russian beer market is practically completely divided.
Some markets, even not very profitable, attract our manufacturers with their discipline and reliability. For example, Germans, which are thrifty by nature, can chaffer the best prices in view of high competition among suppliers. Few people can compare with them by accuracy of calculation… And finick of foreign manufacturers on separate Belarusian enterprises has been shifted to the category of positive factors — as a serious impetus to the improvement in the quality of production. Besides, the work on the “alien” market can significantly increase the loyalty of the “own” audience: in compliance with research, our consumers like to find habitual products and goods abroad.
Reputation will not draw down the pocket
Many manufacturers like to tell about export supply and its wide geography. However, sometimes production is exported not only because of financial advantage, but also for improvement of marketing positions of the enterprise