Tutorial Week 11

Exercise I - Analysing Company Information

PLEASURE BOATS’ EXPORT SUCCESS: FLAT PACK LIKE FURNITURE

We export over 1000 boats to 22 countries, but Austrade were particularly helpful in our landing our first orders from Russia", said Quintrex Export Manager, Ms Trevlynn Petzke. Australia's largest builder of aluminium boats, Quintrex, is now shipping trailerable 'tinnies' by the container load to Russia. Quintrex’s aluminium boats are built to last a lifetime. Established in 1945, Quintrex is Australia’s largest aluminium boat manufacturer producing over seventy models, ranging in size between 2.45m – 6.7m. This leading brand has over 45% of the aluminium boat market in Australia and produces in excess of 12,000 boats a year. The company is based at Coomera, on Queensland’s Gold Coast, and has over 300 employees.

A multi-award winner Quintrex recently won two prestigious 2007 Australian Marine Industry Federation awards in the categories “Day Boat of the Year” and “Fishing Trailerable Boat of the Year (Aluminium Under 6m)” for the 580 Freedom Cruiser and 580 Coast Runner respectively, in May, 2007. Quintrex’s innovative 580 Freedom Cruiser began the winning streak in early May, being awarded Modern Boating magazine’s “Aluminium Boat of the Year” in Sydney. Quintrex Export Manager Trevlynn Petzke, said that the company had not sold into Russia before last year. "Austrade's Moscow-based Business Development Manager, Sergey Kask, alerted us that a customer in Russia might be interested in our range," Mrs Petzke said.

"It took about eight months before we made our first sale, because we did not have a dealer in place in Russia. Austrade was vitally important here; they helped us through the process – and have continued to help us." Quintrex now has the Admiral Group as its Russian distributor of aluminium boats up to 7m. Trevlynn Petzke said that exporting to Russia was much easier than the company had originally thought. "The quality of the goods has to be there, though." She said that the aluminium 'tinnie' used to be thought of as a boat with a 'rough ride'. "No longer. With new advances in building techniques and the development of the 'Millennium Hull', the strength of these boats has improved immeasurably and the relatively light weight of the aluminium is such a bonus when you are towing." Quintrex trademarks in hull construction include a flared bow and a hull with v-strake pressing, ribs welded to the keel, and chine extensions. "Our light-weight hulls are equivalent to a fibre-glass hull," said Mrs Petzke. Most of Quintrex's Open Boats feature level flotation as standard. The bench seats are fitted with foam flotation to ensure the boat remains level and upright in calm conditions should it become swamped, and the solid keel is a single piece extrusion. Mrs Petzke said that Quintrex's website has proved to be an important selling tool internationally in their export to 22 countries. Importantly efficient distribution and logistics have also played a role. Quintrex's aluminium kit boats shipped flat and packed up to 40 per container for local assembly in market, are currently sold to the UK, Canada, and Tahiti.

Source: http://www.austrade.gov.au/default.aspx?ArticleID=7164

This is an exercise to train you in identifying and classifying useful information from an article (a useful skill when doing your export readiness analysis). Read the above case and try to categorise the key information into the following groups: a) export readiness characteristics b) product features c) distribution d) promotion

Exercise II - Overseas Market Selection

Many companies begin international business through reactive exporting. However, for on-going overseas sales, a business should take a more proactive approach by selecting the best market that may generate sales growth over time. To select the ideal target market, a business should first develop broad market selection criteria and then fully research the specific conditions in each potential market. Market selection research, which may take up to 70% of export preparation time, is important as proper research will avoid any waste of money, time and effort spent doing business in inappropriate markets.

Source: Austrade (2009) Creating International Business: Resources for Higher Education Business Courses, http://www.austrade.gov.au/default.aspx?ArticleID=5814

Consider the following questions and discuss them with your class...

1. From an exporter's perspective, what do you think are the most essential characteristics that make a foreign market attractive?

2. What do you think are the potential problems that may make a foreign market difficult or risky to enter?

3. When researching a target market, what are the key criteria that should be considered? Why?