Western Cape Business News

Send  Share  RSS  Twitter  06 Feb 2009

EXPORTS: Marketing Is Key To Success


Recent Western Cape Business News

TECHNICAL Systems may be the leading supplier of flat feeder chain, auger and flat wire in the world, but competition still remains very keen.

So while it expends considerable energy (and money) on international trade shows, direct customer visits and international advertising in magazines from the USA to China (targeted at the pig, poultry and dairy sectors), it is also sharp at looking at creative ways to export into difficult markets.

First and foremost for Technical Systems is accurate research on market trends, competitor information and product information and pricing. Most of this information is picked up through direct visits to customers, visits from customers and trade exhibitions.

Information is the key to global competition and Technical Systems has been very effective in each region to adapt its products, packaging and pricing to satisfy customer needs.

So for example in pricing the company identifies which countries are extremely price competitive. Pricing is done in a manner allowing developing countries such as China and Argentina lower pricing than Europe for example. In these countries labour is inexpensive and competition is fierce, whereas for Europe, prices are high and labour is expensive, but quality critical. It allows Technical Systems to sell products into developed countries where quality is critical as well as selling products and competing in countries where pricing is low.

Each country is also unique in the product mix offered by Technical Systems. In Brazil for example, all customers produce their own auger products, so Technical Systems started selling wire for auger production, thus generating profits from a country where the likelihood of achieving profits through auger are low.

In packaging Technical Systems is unique in producing both auger and feed chain and can provide extremely cost efficient shipments by placing heavy feed chain containers inside lightweight auger coils. By combining auger and chain shipments, Technical Systems has been able to outperform competitors who only manufacture auger, or who only manufacture feed chain.

Technical Systems gets really creative by studying each opposition and providing solutions based on the relative SWOT analysis of opposition companies.

A major opposition company the USA, for example, is based in the Midwest region. Technical Systems has analysed the shipping costs, duties and weight restrictions applicable for this competitor to ship to global customers and has found the following: American weight restrictions prevent shipments going over 18.5 tons due to road weight restrictions. The cost of inland freight is far higher than that of South Africa and the shipping costs from the US to the Far East for example are very high.

What’s more, the competitor does not offer to ship, but insists the customers arrange their own transport. And they pay upfront before the goods are loaded.

Technical Systems has been able to tailor pricing in a way that countries close to this competitor are able to get a better price and countries far away are able to get a higher price, but still lower than the opposition’s. Its SWOT advantage is that it can fit 25 tons in a container, and by adding more efficient shipments through combined products, its transit prices are lower and its shipments to the Far East are low.

So the company is able to be competitive and profitable, using what is offered by being based in the South African region namely its port location (central to world shipping routes), raw materials that are of good quality and being central to world time zones.

For customers in the USA technical Systems is able to compete through having stock available in the USA in a warehouse. This stock can be withdrawn and sold within a week to any customer in the USA. Similar warehousing is used by Technical Systems in China, the Netherlands and Malaysia to service customers faster and smarter.

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