METCO conference discusses practical export issues for practical people
"Practical Issues for Practical People" was the title of a conference held last week by METCO on export marketing. The theme perfectly reflected the issues which were discussed, as the conference tackled export marketing from a down-to-earth approach. Franco Aloisio reports
METCO's first ever national conference was very much a success. It managed to raise issues relating to export marketing and dealt with them in a very practical manner.
These issues were not discussed from a purely theoretical perspective, neither from the political standpoint.
There was a conscious effort to avoid speeches with "rosy" words, but rather the emphasis was on effective presentations on how to boost one's marketing efforts vis-à-vis exportation.
The experiences of local entrepreneurs who have managed to successfully export was presented in a way that could be understood by the conference participants.
The foreign speakers who addressed the conference were all well versed in this subject and highlighted the benefits and risks of launching an export marketing
strategy.
The basic message which emerged from the conference was that any local company can make it when it comes to exporting products.
The biggest hurdle for Maltese small and medium enterprises will be how to devise an effective market research strategy, by combining the efforts of the private sector and the government export agency (METCO).
As METCO chairman Anthony Diacono said in the opening of the conference, the need for more marketing skills in the export industry is being felt strongly.
He stressed on the need for networking in export marketing and for a general growth of competitivity in this area in view of the emergence of the "global village".
The following are summaries of the speeches made during METCO's conference:
Frank Xerri de Caro, BOV General Manager (Operations)
Mr Xerri de Caro said Malta's capacity to generate wealth and raise living standards depends on the ability to sustain the growth of inter-
national trade.
"There is no shadow of doubt; we have to compete to succeed. We have to earn our living out in the global market and it is up to us, entrepreneurs, to take this decisive step. We can't expect any body to do it for us.
"Government can play a significant role in this process but it is inevitably partial. It can create an export-supportive environment by adopting policies which, for example, lower operating costs, stimulate competitiveness, encourage investment and promote the Made in Malta brand."
Mr Xerri de Caro said BOV believes in closer interdependence between the banking sector and exporters. Mr Xerri de Caro said the banks need to encourage the finance of business and devise ways of financing business without losing sight of the continuing need for commercial prudence. He urged exporters to collaborate and bear part of the risk by investing more capital in their ventures.
Amir Hayek, Director General of the Israel Export Institute and economic advisor to the Ministry of Industry and Trade
Mr Hayek delved on the Israeli experience with regards to exports incentives and marketing plans. He said that the major problem encountered by Israeli companies is the lack of resources for market research studies and consultancy.
Mr Hayek said that the Israeli government is helping companies to carry out these studies by providing 50 per cent of the required funds. If the company succeeds in attracting orders, it will have to pay back the 50 per cent to the government.
If, on the other hand, the company fails to attract foreign export business, it will owe nothing to the government.
He said the main problems encountered by small businesses while trying to start international sales is the lack of knowledge of international marketing and commerce, lack of sources of finance needed for marketing efforts, constant pressure of work and lack of time to prepare the infrastructure for export and international marketing.
Joe Caruana Curran, FOI
President
Mr Caruana Curran started off by examining the international scenario, and how the Maltese entrepreneur can position himself within this scenario.
He said the "new economy" is driving productivity up even in the service industry and it is driving the stock markets to record highs. The new economy is strong because it is based on a business system that makes sense, which drives out inefficiency, forces intelligent business process re-engineering and gives customers more of what they want.
The FOI president said that local entrepreneurs have to carefully consider their situation and overcome the disadvantages and the missing edge they have in certain respects. He added that one of main challenges for exporters is competitiveness, especially in Europe.
Both IPSE and METCO have a role to play in assisting entrepreneurs to overcome their difficulties and penetrate foreign markets. Moreover, strategic alliances in the local market and abroad are also necessary. He urged the government to reduce the size of the public sector and lower taxation.
Chris Noonan, international management consultant
Mr Noonan's speech was based on the practical issues of prioritising markets and selecting agents and distributors. He urged local companies to think global and act local. He explained the various options of international marketing strategies, and the advantages and disadvantages of the various approaches to marketing.
Mr Noonan said the first step in export marketing is desk research, which establishes the pattern of trade of the company's products and to develop a focused export strategy to worthwhile export markets.
All factors have to be assessed in this phase of marketing. He went on to discuss the distribution systems of products in foreign markets and focused on alternative distribution chains and routes.
John Magro, President of Gozo Chamber of Commerce
Mr Magro gave his own experience of how his company had started exporting abroad. He said that his career in industry started 20 years ago when he took over the running of his family business all by himself. The main business activity was food manufacturing. He explained how the situation was very tough and demoralising. However, through enthusiasm and a lot of hard work and luck, he managed to turn the business around.
"We set out a target to put on the local market at least one new product per year. Over the years we accumulated a portfolio of some 80 different products."
The strategy changed when in the late 1980s there was a change of government which brought an abrupt end to the import substitution policy.
This was a shock to Mr Magro and his business. He said that the company considered starting importing food products. This required heavy restructuring from a locally oriented business into an international business with the world as the market place.
"We now have no choice: either export or expire," Mr Magro said.
The services of METCO were used by Mr Magro's company and the company joined a trade mission to Saudi Arabia and United Arab Emirates, where the first contacts were established. Mr Magro's products had to be reformulated to suit the needs of the particular market situation of these countries, and the first order came in after 10 months of research and product development.
Alan M. Dukes, Former Irish opposition leader and consultant
Mr Dukes focused his speech on Ireland's export success especially after EU membership.
"Our experience was hugely more positive in agriculture than we had expected. I firmly believe that economic integration works to the benefit of all countries, even in the agricultural sector," Mr Dukes said.
"There are losses and gains in different sectors, but the net result is that everyone benefits from EU membership. That was the case for Ireland, and it will be the case also for Malta. Ireland has gained from the EU for the simple access to European markets."
Mr Dukes said that his country underwent massive economic changes, whereby state monopolies were removed. He said that today the Irish telecommunications sector employs more people than it used to do when telecoms were state-owned.
"For Ireland, joining the EEC in 1973 was the first major adventure in economic integration in modern times, and it paid off handsomely."
He concluded by saying that his country will continue benefiting from the future expansion of the EU, and exploit the opportunities presented by economic integration.
Michael Bonello, founder of Electronic Systems Design Ltd
Mr Bonello discussed the importance of information technology in export marketing. He recounted his experience in setting up a company from nothing. ESDL produces controller based energy saving units.
He said that in order to market a product well, one must plan well in advance and produce credible financial projections. The latter are particularly important especially when the finances are lacking. The marketing effort will drain the little financial resources available without achieving any result, he said. Finances are required for promotional material, travel, expenses and the time involved in actually implementing the marketing plan.
| 
