Export Manager: A Practical Guide to Develop Foreign Markets

By Luca Gatto and Marco San Filippo

In the complexity of the current economic context, exports represent the only path that allows Italian SMEs to grow and thrive in the medium to long term. However, the international markets in which they operate are increasingly complex and competitive, and unlike local markets, they are complicated by the presence of barriers and peculiarities related to sales and after-sales management. In this scenario, the Export Manager is a crucial figure in enabling companies to initiate, develop, and man-age the export of goods and services, and more generally, to activate the internationalization process. In this perspective, the book represents a true guidebook for a profession on the rise. From company assessment to market analysis, from defining the entry strategy into target countries to designing the business model, from risk assessment to business plan drafting and implementation to KPI monitoring.

• Language: English
• Publisher: EGEA Spa - Bocconi University Press
• Release date: Jul 1, 2024
• ISBN: 9791281627017

Book preview

Introduction

The context in which Italian SMEs operate is increasingly complex. The geopolitical scenario and the Covid-19 pandemic have made the competitive arena harder, characterized by a hyper-competitive environment that pushes companies to more expensive but higher value positionings.

Today, exports are the only path that will enable Italian SMEs to survive and grow. However, foreign markets are even more complicated than the local market due to the risks associated with developing the relationship with the customer, managing the transaction, handling delivery and managing the after-sales process. In this context, the Export Manager appears to be an increasingly central figure, helping the company to start, develop, consolidate and manage the export of its goods and – more generally – guiding the company along the internationalization process.

The Export Manager is a professional figure that takes years to train, which is why SMEs often rely on Temporary Export Managers (TEMs) while medium-large companies convert their own commercial resources, training them on transversal issues.

In terms of education, however, there are few books in Italy on export management and they can be grouped into two categories: i) methodology (or theoretical) books; ii) practical books written by Export Managers. The former are mostly manuals that touch on the themes concerning export management on a transversal level but are quite dated. The latter, instead, are books written by professionals with a long track record and are focused on practical experiences, on the method developed and applied over the years. In both categories aspects related to digital transformation are covered in a non-integrated way. Furthermore, at a regulatory level, the Export Manager is part of the new professions and therefore for a long time was not officially recognized, nor were its qualifications and skills clearly defined; lastly, it lacked legal safeguards. The Italian legislator has, however, recognized the importance of these professions and with law no. 4/2013 (Provisions concerning unorganized professions) it postponed (article 9.1) the regulation of unorganized professions by professional associations which, together with UNI – the Italian Standardization Body – can establish compliance rules for professionals in their respective sectors. Certification bodies may, pursuant to article 9.2, issue the certificate of compliance with the UNI technical standard.

Over the last few years UNI has worked together with AICE/IMIT, CNA Nazionale, Confartigianato, Confcommercio Professioni, Federmanager, RINA, RubiconEX, SACE, UNIEXPORTMANAGER and Weevo S.r.l. for the definition of the professional figure of Export/Import (EXIM) Manager. In July 2021 UNI published standard 11823¹ which provides three different levels of classification for this professional figure – Junior, Advanced and Senior – corresponding, respectively, to levels 5-6-7 EQF (European Qualifications Framework) / NQF (National Qualifications Framework). This rule is therefore aimed at a wide audience of EXIM Managers and as such can be applied to professionals with different degrees of experience. The standard defines the complete list of twelve tasks and related specific activities that fall within the remit of the EXIM Manager.

It is therefore precisely in light of the limitations of existing publications – as well as the regulatory and structural changes in export management driven by digitization – that we thought it was useful to write a book to support the Export Manager’s activity. The book does not seek to be a manual, much less a compendium of practical experiences; it aims to describe all the activities that Export Managers must develop in their work, in line with the requirements of the UNI standard.

On the one hand, we will illustrate the necessary methodologies and knowledge; on the other we’ll relate transversal practical experiences that will demonstrate how methodologies and knowledge are applied in various sectors and geographies. To make these case studies even more concrete we carried out interviews with entrepreneurs and managers of leading companies: the reader will be able to access the videos through the QR Codes placed next to the boxes dedicated to the respective stories. The book is a project that brings together, on the one hand, the toolbox that Export Managers carry with them, explaining which tools to use and how to use them in the day-to-day; on the other hand, it relates the concrete experiences of the Temporary Export Managers of Co.Mark S.p.A., the leading Temporary Export Management company in Italy.

The former part was edited by Luca Gatto; the latter part – on the concrete experiences of the Temporary Export Managers of Co.Mark S.p.A. – was edited by Marco Sanfilippo. Lastly, it should be noted that the Italian Bureau of Certification verified the alignment of the topics covered in the book with the provisions of the UNI 11823:2021 standard which defines the requirements relating to the professional activity of the expert manager of import and export processes. In light of this, the volume can be considered a valid tool for training the professional figures of Juniors, Advanced and Senior Export Managers.

1The Export Manager in the Company

1.1 Export Managers and their role in the company

The Export Manager (hereinafter EM) is a professional figure that has developed over the past 20 years and was born out of companies’ need to manage growth on international markets in a more structured way. In the past, especially in the case of SMEs, sales opportunities abroad were managed personally by entrepreneurs who developed relationships of trust – mostly medium- to long-term – with their customers and managed the relationships, as well as the sales process, in a rather informal way, providing guidelines to their production, logistics and administrative departments when needed.

The competitive environment has changed and this approach has been superseded as a result of: 1) the need to manage multiple – often non-recurring – relationships; and 2) the emergence of associated risks.

The EM’s primary objective is to support their company’s international expansion efforts. Export Managers respond to the following needs: i) transforming local companies, in particular SMEs, into international companies; ii) enable exporting firms to expand on international markets.

In consideration of this role, the EM starts by setting export objectives for the company – objectives shared with the owners and/or the top management, whose task is to then translate them into practice by minimizing risks and aligning company policies (as well as the organization) towards the needs of target markets.

There are two types of EM: ‘Hunters’ and ‘Farmers’. The ‘Hunters’ are charged with breaking into the market of interest or contributing in a decisive way to its expansion. They identify new customers among the target market’s distributors, importers and direct clients, analyze studies and monitor the local market. The ‘Farmers’, on the other hand, manage the customer portfolio with the goal of increasing market penetration. In order to keep a lid on costs, a Farmer can also increase the penetration of a market by developing new customers. Often, companies that already export rely exclusively on ‘Hunters’. This approach may be fine in the short term, but exporters risk losing opportunities because they don’t capitalize on the impact that the EM’s activity can generate on all markets where the company exports.

The EM typically operates within the commercial department of the company, which however can also use external EMs, more properly called Temporary Export Managers (hereinafter TEM), for the development of ad hoc markets. An export manager’s responsibilities vary depending on the size of the company (as measured, for example, in terms of turnover) and its level of internationalization. In most cases, the EM’s responsibilities are a function of the company’s size, as in the following cases:

micro company (turnover less than 2 million euros): this is a private, unstructured, owner-managed company, which often seeks opportunities in individual markets. The EM is always an external figure, i.e. a TEM, who supports the owner of the company;

small company (turnover between 2 and 10 million euros): this is a company which may already have some function managers and which usually has customers abroad, even of an ongoing nature. In this case also the EM is an external figure, therefore a TEM, but already collaborates with departments and works with indirect foreign commercial networks (for example, distributors or agents);

medium company (turnover between 10 and 50 million euros): this is a company that is structured by functions but still with limited teams. The EM is internal, with some experience, and deals with strategic markets where the company has a presence, while for developing markets a TEM is relied upon. The EM reports to the sales/commercial director;

medium-large company (turnover between 50 and 250 million euros): this type of company has a developed foreign sales network in strategic markets. The EM is internal, with experience, covers a specific geographical area (generally there are several EMs) and reports to a foreign sales manager who, in turn, reports to the commercial director;

large company (turnover exceeding 250 million euros): this is a very structured company, often part of a group, with functional/structured departments, including the international one, that respond to the CEO. The international structure is divided into geographical areas; the EM – even a junior – is responsible for specific markets and responds to an experienced Export Manager, who is in turn responsible for specific geographical areas and answers to the director of the international area.

The Export Manager’s role is constantly evolving, a result also of the digital transformation that has received a further boost from the pandemic, which has led to substantial changes in the approach, development and management of markets and customers, especially in companies that produce consumer goods and services as well as in companies that produce intermediate and capital goods.

The EM is a unique figure in the company, who works in dynamic equilibrium somewhere between ‘corporate-man’– who promotes the products and the company to the customer as well as to the sales network – and ‘customer-man’, who must facilitate all the alterations necessary to adapt the products – and in certain measures the company – to the needs of the customer and the market to which the products are addressed.

Coming now to the definition of the EM, this is a multidisciplinary professional figure which, as explained above, was given official recognition only in July 2021 by the Italian Standardization Body (UNI) via the UNI 11823:2021 standard for Unregulated professional activities – Expert Export/Import and Internationalization process manager (EXIM Manager).

The EM brings together a combination of knowledge (hard skills) and capabilities (soft skills). The EM will use both types of skills to perform a variety of functions to be realized in the field.

1.2 Knowledge (hard skills)

The EM must have a deep understanding of the company in which he works; he must know it in depth, starting from the product, and: i) know about logistics (inbound and outbound) and production (production cycle), guaranteeing the stock of the products; ii) be extremely knowledgeable in marketing and related techniques and have excellent multicultural commercial skills; iii) know about customs practices, legal and finance/accounting issues (starting from Export Business Plan, to which Chapter 7 is entirely dedicated; iv) organize the internal/external commercial network; v) be a technologist in terms of knowledge of the company’s IT systems and digital technologies; vi) be knowledgeable of the company’s competitive advantage.

Most likely the EM is the figure who needs to know the company best after the entrepreneur. When an EM develops a market, acquires a new customer or increases sales to an existing one he must understand how decisions impact the company and therefore must be able to communicate with all company departments. For simplicity we can refer to the Value Chain model, especially in terms of primary activities. Going in process order:

inbound logistics: warehouse stock management allows for production planning, which is useful because in case of order breaking execution could be delayed. For this it is important to know the order value and also how relevant orders may require specific supplies with impacts on production as well as on warehouse management in general. Lastly, the orders could include customizations that require the use of new suppliers who, in turn, require a certain amount of time for research, accreditation, development, etc. If this is the case, it is preferable to proceed, at least initially, with limited orders in terms of volumes, to mitigate costs and risks – unless we are talking about goods that are ‘born’ customized, as in the case, for example, of luxury boats;

operations: In a broad sense, this refers to everything concerning production. The EM must be familiar with the necessary production process to realize the product (to a lesser extent in the case of services). This allows him – already in the development stage of the commercial opportunity – to identify the critical issues for any customizations or order sizes relative to which the company could encounter execution difficulties. Such mastery of the issues gives the customer and commercial network the impression that the EM is deeply knowledgeable, increasing his credibility. Often companies outsource a portion of the production process, especially the non-core part. Knowing how these external processes fit into the business processes and how they can impact the management of orders represents strategic information that enables acquiring and managing orders in the best manner (for example, in the production of ovens for domestic use glass is purchased externally). This aspect, with different modes, can also be applied to services, where it could be necessary to resort to third-party suppliers of technologies that must then be integrated with those of the company; it often happens that the time required for technological integration is a critical success factor in developing new customers;

outbound logistics: This refers to the warehousing processes for finished goods, transport to the customs of the country of destination and the storage, distribution and delivery of goods to the customer/distributor as well as the tracking systems. Considering the breadth of possible delivery destinations for the goods, the complexity of this process is clear. Outbound logistics is so strategic in the export of goods that in some sectors it can represent a potential lever of competitive advantage and, in general, impact on customer satisfaction. Complete control over the process, the knowledge of the dynamics involved and the use of reliable and specialized partners represent critical factors;

marketing: together with sales this is the core activity of the EM. The English meaning of the word from which it derives – namely to market – means enter and make suitable for the market and fully renders the breadth of the work included under this denomination. The EM starts from in-depth knowledge of the product in a broad sense (features, benefits, cost, advertising and supporting communication materials) and must: i) identify the markets with the highest potential; ii) evaluate the positioning of the competition (Italian and foreign); iii) understand if and how to adapt the products (and determine whether it is worth it in terms of cost and revenues); iv) identify the appropriate sales channels; and v) determine the most appropriate entry strategies, first of all by setting up the Export Business Plan and then individual marketing plans for each target market. Monitoring the plans – and adopting corrective measures, if necessary – completes a process which aims to sustainably grow the company abroad. The use of some tools (for example, the Business Model Canvas and Porter’s Five Forces) will support the EM in his day-to-day activities;

sales: together with marketing, this is the other core activity of the EM. The ‘place’ represents the marketing lever, the one that requires the most time and attention, also because the success of internationalization is specifically linked to the results of this action. The EM must be dedicated to the development of clients and the supporting commercial network (both internal and external) by continuously monitoring sales data and forecasts. The development of relationships not only serves to increase sales but also to collect feedback from customers and networks, which is fundamental for improving products and service levels. The sales process requires a careful planning phase (sales forecast) and related monitoring. Lastly, an increasingly important role – in some sectors now predominant – is played by the digital transformation, within which marketplaces are now the masters;

services: after-sales is an important lever in investment goods and, in part, in instrumental goods. Not only do services, in general, build customer loyalty; in many cases they are becoming the main source – at times the only source – of revenues in businesses that employ the pay-per-use concept, in which you pay only for the use of the asset but not for its ownership. The EM can use this leverage to build customer loyalty and to increase penetration with other ancillary products through cross selling.

Knowledge of the company’s value chain and its related products is, however, not sufficient; it must be complemented by transversal knowledge, which is mainly of the following types:

macroeconomic and geopolitical: the EM keeps informed on macroeconomic trends of the most important countries and has good knowledge of geopolitics. This know-how is certainly facilitated by the tools made available by research offices that deal with monitoring of the countries, as well as by the development of forecasting models like those produced by SACE²;

legal: the launch of a product/service requires studying the legislative and regulatory framework of the target market to ensure compliance and avoid – as much as possible – the risk of taking illegal actions that can impact on the delivery of goods and in general on customer satisfaction. At the same time the EM must have knowledge of international contracts to develop and manage, as best as possible, customer relations and local commercial networks;

financial: the EM must have in-depth understanding of corporate finance issues, as he must draw up the medium-term Export Business Plan, which indicates the financial resources necessary for the implementation of the plan, itself an indispensable document that must be included in the general business plan of the company as well as in the annual budget forecasts;

technological and digital: even though it may appear obvious, the EM must be familiar with the use of technological devices (PCs, smartphones, etc.), related tools (email, spreadsheets, presentation tools), cloud platforms and web-based applications – even more so after the pandemic. This knowledge is not only necessary; it has also become a means to develop a lasting competitive advantage along the value chain (from monitoring of warehouse stock up to delivery and management of customer feedback);

customs: it is important that you know the most relevant aspects of the customs procedures in order to set up the process correctly.

The level of mastery of primary activities and transversal knowledge required of the EM is different if we are talking about a) services, b) consumer goods or c) capital goods (for example machinery and plants). In the case of a) and b) knowledge will move more towards the downstream part of the value chain.

The EM must know where the company’s competitive advantage lies – that is, its strengths – and how that advantage is developed along the value chain. This knowledge can be more complex in the case of the existence of several production sites, especially if located in several countries, and in the case of process parts outsourced to external suppliers, whether they are in Italy or abroad.

At the same time the EM must know the weaknesses of the company and how these can affect the development of new markets.

Ultimately, such knowledge is useless if it is not supported by adequate linguistic skills: it goes without saying, but the EM must first of all have an excellent command of written and spoken English, which, however, must be supplemented by a second – and, even better – a third language.

1.3 Capabilities (soft skills)

The EM must combine the knowledge described above with adequate skills which enable him to: i) work constructively with colleagues and the various corporate functions; ii) dialog and collaborate with the commercial network, partners and customers; iii) develop and manage the relationship between company and customer.

These capabilities can be divided into those that refer to the ego, or to the way in which the EM approaches life, and those related to the development of the relationship with third parties. In addition to these, there are the skills that allow one to work effectively with digital tools.

Capabilities that pertain to the ‘ego’:

–curiosity and inventiveness : in general, the EM is passionate about the new and the different, loves to travel, even for long periods, and does it to discover cultures and languages, even before understanding if there is space and opportunity for business. By nature, he possesses an open mind and a strong international background. These features enable him to grasp useful signals to identify new markets and the most efficient way to approach them. Associated with the ability to innovate is that of knowing how to think ‘out of the box’: the EM must therefore be able to think strategically and laterally. Enthusiasm is the other aspect connected to this point;

–resilience and stress management : in a multicultural, hypercompetitive context that is in constant change it is necessary to develop the ability to adapt and have a high tolerance to – and capacity to manage – stress in order to face any crisis and any situation. This ability can also become a lever that makes a difference on the field;

–emotional intelligence : this is a crucial skill, which helps to understand and master emotions so that they do not interfere with job performance and relationship dynamics. Also included in this capacity is empathy (which concerns others): being able to identify with, respect and understand the interlocutor, in order to behave accordingly, are the first steps to establishing a successful dialog, whether it is with a new colleague or customer. This ability is transversal and helps also on a relationship level.

Skills related to the relationship:

–communication : the EM must engage with various counterparties to sell products/services, starting with customers and business partners as well as logistics companies and institutional representatives. Clarity in both directions and avoiding misunderstandings is important, both in verbal and non-verbal communication;

–negotiation and cultural mediation : these are two sides of the same coin for an EM who has to relate, for the most part, with people from other cultures who express themselves in different languages. Under this point you can also consider feedback management, of particular importance primarily towards customers, but also towards the sales/commercial network as well as towards the company. The EM is a cultural mediator that operates in the interest of the company with a view to development/consolidation of the relationship with the customer, and in the interest of the customer, so that the company’s offer is best able to meet the client’s needs;

–management of the sales network : the EM must develop a trustworthy and constructive relationship with the internal sales network and (in particular) external sales network (distributors, importers, agents). The EM must know how to motivate and animate the network/s, training it/them on the products and on the company and delegating responsibilities and managing properly any conflicts that may emerge, especially those between the two networks themselves as well as also those between the networks and the company itself;

–digital mindset : last but not least, ‘digital mindset’ is a decisive ability, in some businesses even fundamental. It encapsulates a set of both relationship and behavioral skills, tightly linked to an effective use of the new digital tools. It starts with a predisposition to move effectively in the digital space, which in turn is the result of other soft skills together with knowledge and experiences gained. Considering the abundance of information on the Internet, the EM must also know how to select that which is most useful and then identify the best means to communicate with counterparties (for example, LinkedIn). On the web it is also a good idea and useful to build a brand that helps the EM position himself in a distinctive way, leading to his becoming an influencer and enabling him to build a ‘brand-persona’. To all of this must be added digital collaboration, which received a decisive push from the pandemic: working productively using digital platforms (Zoom, Teams, Skype for business, etc.) has now become the practice and, eventually, will replace some stages of the relationship process. Indeed, online relationships will require the EM to practice his ability to communicate clearly and effectively even in digital environments.

1.4 Main tasks

Knowledge (hard skills), i.e. the skills developed over the years, and soft skills must be deployed for the tasks that the EM must perform. The UNI 11823 standard precisely regulates these tasks, which vary according to experience. The EM can be:

junior (generally a recent graduate or someone with little experience);

advanced (3/5 years of experience);

senior (8/10 years of experience).

Guiding the way, however, are the types of tasks assigned, which revolve around four stages:

internal and competitive context assessment;

definition of strategy and operational plan;

implementation of the operational plan;

monitoring, assessment and follow up.

Going in order of experience, and therefore in terms of task complexity, the UNI standard proposes the following categorization.

Junior EM:

–internal and competitive context assessment: the Junior EM must know the company, in particular its processes, and – in an in-depth manner – the competitive context, that is: i) the competition, ii) the entry barriers, iii) product positioning, iv) sales channels (both offline and online), v) the potential market. Lastly, he must know how to carry out the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis;

–definition of the strategy and the operational plan: the Junior EM must offer support in defining objectives and know how to collect information necessary to identify the best entry method for target markets;

–implementation of the operational plan: the Junior EM is charged with implementing the operational plan, in particular with the development of the markets, i.e. of customers and the internal and external commercial networks. On the customer side, the Junior EM must also consolidate the relationship through assistance and loyalty programs;

–monitoring, assessment and follow-up: the Junior EM must carry out the reporting, sales forecasting and monitoring of the competition in the markets in which the company operates, with particular attention to: i) competition, ii) entry barriers and iii) commercial channels. Lastly, he must continually monitor technologies – including digital ones – that can impact the company’s business.

Advanced EM: in addition to the responsibilities assigned