A weak pound means cheaper exports and more expensive imports. This provides an opportunity for everyone around the world to take advantage of this short term. However, unless you can build a strategy to support a price rise and manage your foreign exchange exposure, it will be exactly that a short-term fix. We’re going to look at how we can change a short-term fix into a new longer-term strategy. At Export-Angels.com we know that these strategies need careful thought, and an exit strategy to allow for a managed long-term growth. Each company is different but here are some basic concepts to start considering.
International Pricing Strategy
Over the years exporters have been faced with some incredibly hard pricing decisions in terms of foreign exchange and interest rates. They have been facing supply chain issues that only happen generationally with the pandemic bringing the closure of ports but also the container shortages, and displacements have been followed by an economic downturn. Developing an international price is an art form at best and needs regular updating of using robust market data. The data once sourced needs to be revisited regularly to ensure it becomes part of the market intelligence specific to your business this is the real help you need to make pricing and market decisions. (Talk to us if you’re not certain what data you need to collect.) Your international price will also affect your marketing and potential sales channels costs and growth. The foreign exchange rates may offer you an opportunity for a short-term gain, but it is exactly that, short-term unless you have a plan for what happens when the exchange rate changes again.
Gaining New International Customers
If your business finds it can use the weak pound to attract new users, they may have been reluctant to try at the current price but might be tempted to convert to your product with a lower price. This might be the opportunity you need to understand how price sensitive your product is. Which in turn will allow you to keep customers. Ensuring you do not loose contact with them is vital to monitoring the demand this price change has created. It takes a long time to gain new customers around the world, so make sure you use these new opportunities wisely. It needs to be part of a strategy, it is not a ‘quick buck’ situation unless you really cannot make it into anything more lasting.
Market Intelligence = Intelligent Decisions
At Export-Angels.com we are set up to help businesses understand the difference it makes to use Intelligent Exporting when thinking internationally. Not just your managerial intelligence but also the market information that you gather that is part of de-risking international trade decisions. For example, with the weak pound you can go to all those customers, and markets, that couldn’t afford your products and set up trials or pilots. This provides a short-term fix but also, if managed well, could be the start of a good relationship. We can show you how to offer a slightly parred down version of your product which will look at how you can develop a range of products. Think of some of the brands that supermarkets use and then think how that would translate into your sector. You will be surprised to find that it does work well.
Short-Term Gains Can Develop into Long Term Markets
Without the use of market and business Intelligence many companies are going to struggle. The business environment has changed over the last few years, margins are smaller and tighter. It looks as though the old ‘status quo’ will not be returning. Now is the time to look at long-term solutions, processes, and strategies to navigate your way through world markets and find what little growth is available, or simply to stay in business.