Market Entry – how companies enter overseas markets

Market Entry – how companies enter overseas markets

2020-08-10T15:44:31+00:00By |News|

The link between Agriculture and Agritech

The people who buy, invest in and use agritech technologies (mobile phones, GPS steering, pen side diagnostics etc) are involved in agriculture and AgriTech is the tools they use.

The implication is that to enter a market we need to identify the potential users for agri-tech in as much detail as we can.

The more this information (the identification of buyers, key decision makers, etc.) is in place the better.  It enables the development of relationships prior to any visit and assists in making the visit very productive for Agritech companies.

 

Is it a service or a physical item that we are selling?

The internationalisation approach of UK companies in marketing and selling their products will differ significantly depending on whether they are selling a service or a physical product.

Service

If is a Service that a UK company is providing – such as Remote Sensing or Drone mapping the identification of the businesses is potentially all that is necessary.  Farmers can adopt such technologies relatively easily and they can switch providers relatively easily, and often they are not tied in for a significant length of time.

Physical products (Hardware, software, equipment and machinery & animals)

For physical items, it is important that overseas businesses involved in farming can be identified at the earliest stage of planning, construction , re-development or expansion, etc.  Information at a very early stage of planning, before the facilities are constructed, is useful.  Once facilities are constructed and the provider  of equipment chosen, the window of opportunity has passed, potentially for a significant time.  (E.g. if a milking parlour is installed it is not going to be replaced for 10 to 15 years. If a software accounts package is purchased and embedded in a business it is not easy to replace, as there is considerable inertia to change, new training is required, etc.)

Sources of early information

Planning

Where planning, permitting, authorisation or permission is required knowledge of this is very useful to companies.  Some agritech companies actively track planning applications. If this information is available within markets this provides a valuable insight for UK companies.

Finance

Farming businesses (or other intermediaries such as corporate farming companies) that are starting or expanding are likely to be obtaining finance from banks and other institutions.  Within country, if it is possible to establish good relationships with lenders to farming companies this is valuable information.

Advisors / influencers

Property / farm management companies, Land Agents and investors are also often integral in farm investment decision making, e.g. members of the CLA and RICS in the UK.  There are companies that have a wide influence in sales of products and services to farmers and who are a route to market, e.g. PGG Wrightson in New Zealand.

Who are the Decision Makers?

Knowledge of the market is to identify and then segment who are the likely buyers / partners / facilitators / decision makers, facilitators of agri-tech?  This may be Governments, institutional investors, producers or corporate farming companies.  They may be within the focus country or overseas (i.e. UK / German / Dutch companies that farm overseas).

Land Tenure

Knowledge of land tenure in the country concerned is vitally important.  For example, in the Ukraine individuals have not owned land for generations, so it is an unknown, unusual concept.

There is enormous variation between countries in land tenure (who owns or controls land) and who are the decision makers.  Farmers are not necessarily the owners of the land; it could be the State, or other landowners.

 

 

Check list of market information

Basic Country / regional information

Land tenure – (at a national regional scale) who owns, controls, makes decisions

Numbers & distribution of farm size (Who are the top 10?)

Location of categories of farm (where are the top 10?)

Area of crops, number of livestock

Detailed information

Planning? How is planning undertaken.  Who do we need to know?

Banks? Which banks have an agricultural division?  Who are the agricultural managers?

Other lenders? There are many institutional, corporate  and private investors.  Who are they?

Who owns / controls the land and business?  Who are the decision makers (name, email and telephone)?