Chatting about Export Marketing
An exchange with Luigi Bidoia on a Ulysses Magazine post gives me the impetus to write these lines.
The post asked why French wine was sold at a premium price in the world compared to Italian wine: reasons of better quality, better marketing, or greater value added by the country of origin?
My opinion is that the main reason is marketing.
Marketing is Value Added
Barring silly parochialism, the quality of Italian wine now competes on par with French wines. France’s greater appeal certainly has incidence because they started much earlier than we did, because they are better at “national marketing,” and because they are naturally inclined to “pull it off.” :).
Italian entrepreneurs are outstanding in making the highest quality products, but still little oriented toward investing in adding value to the product through marketing. In fact, they have champagne, we have prosecco.
For goodness sake, I don’t want to say that they are the same product (this is not a post about enology) and it is fine to occupy even low-end markets with high volumes, however, I don’t think it is a coincidence that we often, in different sectors, face competition only on price.
With several exceptions, the natural inclination of the Italian entrepreneur is toward the product, for which he has unparalleled passion and skills, but he is colder toward promoting the product, almost as if the product, once made, had no need to be sold but sold itself.
Do a simple test: ask an entrepreneur to invest 100K in a plant and he will evaluate it carefully; propose a similar investment in marketing and see the face he makes.
Louis: “Stephen you find me in complete agreement. I would add that it also detects a different ability to manage risk. People often invest in machinery to reduce costs, the risk management of which is relatively controlled; investment in marketing, on the other hand, is always aimed at increasing revenues, with associated multiplication of risks: have I identified the needs well? Is the communication adequate? Is the price judged in line with the quality? How many potential customers are there? Etc. etc. “
Point centered. Much less risky to talk about cost reduction (for goodness sake welcome them at every level, penny saved, penny earned) but it is only business investment, which is random by definition, that brings development. This is where entrepreneurial “attributes” are needed!
Recovering the spirit of the 1960s
The neglected attitude toward marketing finds explanation–in my opinion–in the historical contingency in which Italian business was born and developed. From the postwar period to the 1980s, all you had to do was have products (well made fin for goodness sake but, let’s face it, that also benefited from costs that were competitive with the rest of the Western world) and the sale came of itself: buyers sought you out, at most you went to a trade show. Debts were made (promissory notes on fearless promissory notes) to buy machinery and sheds, no investment was made in sales, at most commissions were paid to agents (salesmen were considered a necessary evil, almost parasites who took a “bribe” on the product).
The entry of China’s and Asia’s huge production capacity into the market, increased trade interchange and international relations, and the Internet and online sales are the factors changing the pre-existing balance.
Globalization changes the world; the ball passes to the buyer.
So here it is no longer enough to know how to MAKE a good product, that is the minimum, you also have to know how to tell the story behind it, identify exactly the needs it is going to satisfy, go out into the world to find the customer and give them a very high level of pre and post-sale attention. Italian entrepreneurs (not all but still too many) are having a hard time getting used to a world in which FIRST you find the market and AFTER you produce; too many companies still live in a time when they could thrive without a marketing and sales network (how many there are today without a real sales network!).
In my experience, many (too many) companies, especially p.m.i.’s of course, have not yet metabolized (going to extremes) that today it is possible to develop a company that sells products worldwide WITHOUT owning a production plant, but you go nowhere without a marketing idea and a sales network.