Export marketing plan for Sri Lanka's apparel Industry for EU market

A.H.H. SAHEED - Chartered Marketer

INTERNATIONAL BUSINESS: The EU is the world's largest market and a prime location for international business. It is no longer seen as a fragmented and divided continent but more as a single growing market.

The international borders between member states have ceased to exist and the EU's trade policy regime is now valid to 27 member states, including Bulgaria and Romania.

EU market is large consisting of 480 million people.

Market Access

In the EU market, there are numerous market access requirements which have a major impact on the ability to exports. Legislative and non-legislative requirements are given below.

Legislative Requirements

The EU legislative requirements are based on.

* Consumer Health and Safety

There is much legislation in this area to protect consumers. Consumer health and safety is also related to product liability and environmental concerns.

* Environmental

Legislation has been developed to reduce the negative environmental impact of products such as pollutants waste management, packaging and packaging waste.

1. Case EU Legislation: Safety of children's clothing

There is no EU legislation on children's hood cords yet, but a European standard, NEN-EN 14682, has been recently developed to lay down specific requirements....

2. EU Legislation: Azo dyes in textile and leather articles

Azo dyes are often used in the colouring process of several textile and leather products. Relatively recently it has been recognized that some azo colouring...

3. EU Legislation: Cadmium in several products

Cadmium compounds are carcinogenic agents, which are applied in several ways in a large variety of products. EU Directive 91/338/EC (amending Directive...

4. EU Legislation: Flame retardants in textiles

In the EU, there is legislation prohibiting the presents of certain flame retardants in textile products that come into contact with skin. This document....

5. EU Legislation: Liability for defective products

The product Liability Directive (85/374/EEC) states that the importer is liable for the products he puts on the market. The importer, however, can in general....

6. EU Legislation: Nickel in piercings, ornaments and clothing accessories

Nickel is a metal that is sometimes used in metals ornaments (such as armlets, bracelets and earrings) and in clothing accessories (such as zippers and...

7. EU Legislation: Packaging and packaging waste

In 1994, the European Union adopted Directive 94/62/EC concerning packaging and packaging waste. This Directive establishes an overall legislative structure...

8. Eu Legislation: PentaBDE and octaBDE in products

The EU has laid down requirements in directive 2003/11/EC on the marketing and use of pentaBDE and octaBDE. This amendment of directive 76/769/EEC also...

9. EU Legislation: Perfluorooctane sulfonates

Perfluorooctanne sulfonates (PFOS) are anions that are commercially available in the form of salts, derivatives and polymers. Recent studies have shown...

10. EU Legislation: persistent organic pollutants (POPS)

EU Legislation concerning persistent organic pollutants (POPS) is determined by a regulation and therefore automatically applicable and harmonized in all...

11. EU Legislation: Product safety

Directive 2001/95/EC lays down general safety principles for products. The purpose is to ensure that manufacturers can put only safe products on the market...

12. EU Legislation: Textile labelling

The European Commission has harmonized legislation regarding the names, composition and labelling of textile products (garments and clothing) in order...

13. EU Legislation: Wood packaging materials

The EU has set new phytosanitary measures for all wooden packaging material that is used with the import of goods in to the EU from third countries.

14. Case EU Legislation: Product safety legislation

According to the General Product Safety Directive (GPSD) producers and distributors of products intended for consumers have a general duty to place only...

Non-Legislative Requirements

You also have to be aware of non-legislative requirements, or voluntary standards, that your trading partners in the EU might request. EU buyers often demand additional requirements to comply with EU legislation.

Alongside quality standards, consumer health and safety, environmental and social requirements are of growing importance in international trade. These are often request by European buyers through instruments such as labels, codes of conduct and management systems.

* Social

This relates to working conditions and healthy and safety of employees. The ILO is the body dealing with standards.

* Quality

Quality standards vary considerably between sectors. In some, customer requirements such as after service are more important than technical specification.

Manufacturers may have their own standards, but when trading with the EU, it is preferable to use EU or international standards.

Examples of this are ISO standards and CEN standards in Europe. Other requirements could be an ISO 9000 management system on quality.

SWOT ANALYSIS

Now that there is an idea of EU trends the next step is to identity the opportunities and translate them to action.

Sri Lanka with its strengths such as reputation as supplier of quality apparel relatively skilled and trainable workforce credibility for superior labour compliance, availability of low cost labour, government, business and market friendly policies, reputed customer base, unlimited quota-free access to EU market etc. and opportunities such as growing EU market increase in EU imports, increase in member countries, EU-GSP plus, restriction of imports on certain Chinese garment categories (until 2008) etc. will provide good opportunities to further increase its exports larger markets In 2006 our exports to these countries are - UK (US$ 684 mn.), Italy (US$ 172 mn.), Germany (US$ 110 mn.), Belgium (US$ 56 mn.), France (US$ 52 Mn.), Netherlands (US$ 42 mn.).

In the meantime Sri Lanka will also have to translate its weaknesses such as inadequate focus on upstream linkage, design and product development lack of direct marketing link with major buyers, non availability of own brand, financial constraints etc. however it is noted, some of those weaknesses are already being attended - Such as design program in fashion design and product development by University of Moratuwa.

Apparel Marketing Training Programme conducted by CIM-UK, International Image building with “Garment without guilt” brand image campaign, Thulhiriya Textile Complex Industrial Zone etc.

In EU market, one of the major threat is intense competition especially from Asian suppliers like China, India, Bangladesh, Indonesia, Vietnam - (The “150th member of WTO”) and EU proximity countries Turkey and Romania, Bulgaria (became member states of EU - in January 2007) who are already among top ten suppliers to EU market.

The new member states in addition to being an opportunity, some of them are threats also. The other threats are-fall in prices, demand of high quality, non tariff barriers, anti-dumping duties etc.

Market entry strategy

a) In above scenario it’s wiser to Sri Lanka to concentrate not only major importing countries such as UK, Italy, Germany, France, Belgium, Spain etc. but also explore possibilities of new member states considering population, GDP per capita and clothing consumption per head etc. of countries such as Portugal, Czech-republic, Hungary, Poland etc. and Austria, Sweden, Denmark etc.

b) Since it will be difficult to compete with countries similar to China on price-wise it will be prudent to took into product differentiation (Michael Porter’s Theory) Example: by product quality, innovative good design service etc.

c) the other options are to position our product and concentrate more on other channels of distribution rather than mostly on mass market where China is dominating. In today’s trend for middle aged women between 25-45 are shopping online and via catalog. In store services for those who shop in stores, it is important to focus on demonstrating functional benefits such as garment versatility texture and durability.

d) In order to find new distribution partners it is useful to participate in exhibition, Trade fairs, through Business contacts, Business delegations, business support organization, government assistance embassies etc. This will also be helpful to understand the market conditions, meeting buyers etc.

e) Create promotional activities through brochures, media advertisements, sales meeting, seminars, business contacts, participating in trade fairs/exhibitions etc.

f) Finally all above is i.e. product, price, distribution, promotion should focus on a particular market segment or two. Example: Income-wise (High, Medium, Low) or Age-wise (Higher age, Medium, Teens, Young Children or Babies) etc. Market that you intend to target -

Example: Japanese Auto Industry found that there was a gap in small economy cars in USA, and started exporting first small size cars and then added mid price and higher price cars and Today they export all types of automobiles.

(The writer is a Chartered Marketer with over 25 years experience in textile and apparel sector. He regularly conducts market studies and contributes articles related to textile and apparels to National and International magazines - e mail: [email protected])