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Pilot Practices in Regions "Gaziantep Weaved Carpet Production Sector Target Market: USA” . INTERNATIONAL COMPETITIVENESS AND COOPERATION CONFERENCE JUNE 4-5, 2013 ANKARA. Pilot Project: Target Market USA. I) Aims of the Pilot Project II) Approach towards the Pilot Project
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Pilot Practices in Regions "Gaziantep WeavedCarpetProductionSectorTarget Market: USA” INTERNATIONAL COMPETITIVENESS AND COOPERATION CONFERENCE JUNE 4-5, 2013 ANKARA
Pilot Project: Target Market USA I) Aims of the Pilot Project II) Approachtowardsthe Pilot Project III) TrainingandGuidanceOutcome of the Pilot Project forExportSupervisors of Gaziantep CarpetFirms IV) Market AnalysisOutcomes of the Pilot Project V) PotentialClientAnalysisOutcomes of the Pilot Project VI) AdvertisementActivities of the Gaziantep CarpetClusterto USA Market Outcomes of the Pilot Project USA
Aims of the Pilot Project Gaziantep MachineWeavedCarpetProductionSector, is the leadingproducer of the 75% of the massproduction in Turkeyand the production is exportationoriented. 90 % of theexportation of Turkishweavedcarpets is carriedoutby Gaziantep carpetproducersandmost of theexportation is madetoSaudiArabiaandIraq, countrieswithinconsistencies in marketing. Gaziantep CarpetCluster, needs to diversifyitscurrent market and be morepresent in consistentmarketssuch as the USA and EU.
Aims of the Pilot Project Tocarryout a market researchfor USA target market. Trainingsconcerning market researchandforeignadvertisementbyincludingrecentgraduates as well as foreigntradespecialistswithin the firms to pilot actionplans. Attemps of interviewswithprospectivebuyersandattendance in a fair or a mutualactivity in USA to be decided as a result of Pilot actionplans.
Pilot Project Team • CoordinatorSeniorSpecialist: Dr. Binhan OĞUZ BERKSOY • SeniorSpecialist: Bilal EKMEKÇİ • Gaziantep Cluster – info Spot Coordinator : Serap GÜLTEKİN • TeamLeader: Michael B. Dan
Pilot Project: Target Market USA II) Approachtowardsthe Pilot Project III) TrainingandGuidanceOutcome of the Pilot Project for ExportSupervisors of Gaziantep CarpetFirms IV) Market AnalysisOutcomes of the Pilot Project V) PotentialClientAnalysisOutcomes of the Pilot Project VI) AdvertisementActivities of the Gaziantep CarpetClusterto USA Market Outcomes of the Pilot Project
«How to Make the Pilot Project Efficient for Both the Participantsand the Cluster in General?» Whichsegmentwithin USA market would be moreprofitableandsustainableforthefirms? AretheFirmsReadyfor USA? Whichalternativeactivitiesofferedwould be mostefficient in enhancingtheexportation of thefirms Arethefairschosenappropriateforthefirms? • Wouldtheyacttogether? Whichfieldwould be appropriateforactingtogether?
ThroughIntroductionMeetingsandFirmvisits, opinions on the USA market wereobtained • It is clearthatthefirmsindividuallyneedsupport in marketing andadvertisementwithin USA andmajority of thefirmslookforindividualsupportratherthanacting as a cluster. • As indicatedunder the assumptionsconcerning the project, the participantswerelargefirms in exportation in Gaziantep to USA ratherthanfirmswith a goal or potential of exportation to USA. Howtobringaddedvaluetothefirms?
Consideringwhatthefirmssaid: “WeWouldLiketoExporttothe USA! BUT!” Belgium has 250, Gaziantep has 900 weavinglooms!!! Thecustomerfinds us! Weshiptotheclientbyaddingeverythingwiththetagandtheprice! 10 out of 100 carpets in USA market arefrom Gaziantep!!! It is a lot of burden! Therearen’t 5 firms in total, whichwouldcomplywiththesecriteriawithin Gaziantep! China is not a competitor, theirproductslackqualityandareexpensive!!! Wewereabletomeetalltheconditions but wegaveup!
Whatdidwe set as prioritiesafterfirmvisits? Whatactionsdidwetake? • Weassessedthesituation of Gaziantep Clusterandthesituation of thecompetitorswithin USA market • Wemade a SWOT analysis of the Gaziantep Clustercomparedtothe USA market • Wearestrongwithin a market affectedby the economiccrisis but we do havecompetitors: Belgium is stillwithin a profitablesegment, China “mightbecomestrongerandbecome a competitor» • Theshare of ourexporters is increasingwithinthe market but ourprofit is low • Ourfirmsarewithinpricecompetitionespeciallywitheachother • Samefirmsgotosameclientsandapply a “firmfollowuppftheclientpolicy” • An importantreason of thelack of trust in mutualaction is thatthedifferentiationstrategy is not adoptedbythefirms
Pilot Project: Target Market USA III) TrainingandGuidanceOutcome of the Pilot Project forExportSupervisors of Gaziantep CarpetFirms IV) Market AnalysisOutcomes of the Pilot Project V) PotentialClientAnalysisOutcomes of the Pilot Project VI) AdvertisementActivities of the Gaziantep CarpetClusterto USA Market Outcomes of the Pilot Project
TrainingandGuidanceOutcome of the Pilot Project forExportSupervisors of Gaziantep CarpetFirms TrainingswerecarriedoutfortheExportationSupervisors of the Pilot Project in Gaziantep CarpetFirmsandGuidelineswereprepared. 2 differenttrainingsweregiventogroups of 10 concerning Market AnalysisMethodsandExportationDeterminationMethodsand a handbook of 10 pageswasprepared. This handbookand the detailedreportwaspreparedby the SAEA to be distributed to allWeavedCarpetExporterswhetherincluded or not within the analysiswhichwillserve the purpose of increasingexportation to USA
IV) Market AnalysisOutcomes of the Pilot Project A) Qualities of USA Carpet Market B) Competition in USA Carpet Market C) PotentialProvidedbythe USA Market fortheParticipantFirms of the Pilot Project: DeterminingtheExportationPotential of theFirmsthroughClusterApproach D) ConditionsconcerningRegulationwithinthe USA Market forparticipantfirms of the Pilot Project V) PotentialClientAnalysisOutcomes of the Pilot Project VI) AdvertisementActivities of the Gaziantep CarpetClusterto USA Market Outcomes of the Pilot Project
Transfer toActive Marketing EXPORTATION IDENTIFICATION Exportation market research/ identification / accreditation Characteristics of usa STATE OF THE CARPET MARKET USA CARPET EXPORTATION USA CARPET SALES/DISTRIBUTION CHANNELS
Characteristics of the USA Market In 2012 there is a greatnumber of purchasehigherthanpriortothegreatfall in 2009 Startingfrom 2006, twomostprominentpartners of the USA, CanadaandMexicoare no longerimportant Chinapredominantlysettled in USA exportation WITHIN 10 YEARS
Reflections of the ImprovedEconomicRelationshipsbetween USA andTurkey on Carpet Market BUT! Turkey USA StrategicPartnership!
TargetActivities in USA Market forExportationfromTurkey 11% of theExportationfromTurkeyto Georgia is madeup of exportation of carpet. Exportation of thesector is 2,3% of the total exportationto New York.
Competition in USA CarpetSector • Competitionbetween the players in USA CarpetSector is developingwithin a negativeenvironment. • With the effect of crisisnumber of firmsoperatingwithin the sectordiminishedby 24%. • Despitecrisiscarpetexportation in USA increasedby% 6,24 andcompetitionbetweencountrieshavebeenignited.
ExportationEvaluation: ValueChainMethod • Valuechainevaluatesthestructure of thefirmswithin 4 mainfieldsthroughtheefficiencies of thesectoractivities: • Access toRawmaterials • Production- ProductDevelopment • Marketing andSales • Services • …
KeySuccessFactors: ProductionandProductDevelopment • Thereareabout 800-100o weavinglooms in Gaziantep CarpetCluster. • Theleastnumber of loomsincluded in theanalysis is 3 andthemostgoesupto 50. 2 firmshave a muchbiggercapacitythantheaverage; • Whenthenumber of employeesforeachloom is considered it is anticipatedtohave a numbercloseto 18; a researchmade in 2011 for 137 firmsshowsthatthisnumber is 14,29. It is hard tobuild a onemutualstrategy.
C) PotentialOfferedbythe USA Market ByParticipantFirms of the Pilot Project : ExportationPotentialIdentificationwill be carriedoutwith a ClusterApproach Qualitycertificatesare not in priority…
KeySuccessFactors : Marketing andSales • Mostimportant market forthefirmsincluded in theevaluation is MiddleEasternregionwhichincludesIraqandSaudiArabia but 41% alsomakessales in USA market. • Researchcompleted in 2011 done for 137 firmsindicatesthat EU countriesfollowMiddleEasternandArabiccountries.
KeySuccessFactors: Marketing andSales • Firmsaremostlyexportationbasedandthere is an domestic market-foreignl market balance. • Expandingthebrand market share in domestic market makesup a strongbaseforexportation • Mostvulnerableparts of thesectorforexportation is exportingthesameproduct, tosamemarkets… • Firmsconcentrate on thesamekind of products.
RegulationConstraints in USA Market fortheFirms in Pilot Project TariffObstacles Because the productsimportedby USA areproductsthatareneededandthat do not bother the domesticproducer, there is a dutytaxexemption or lowrates of dutyareapplied. Obstacles not RelatedtoTariff Whether the productsareappropriate for the environmentandhumanhealth, or issuessuch as employingchildworkerswhichmaycreateobstacles not related to the tariffaredeterminedbycommercial/scientificassociations, technicalorganisations, profesionalunions, scientificsocieties, Federal Governmentand institutions such as NationalInstitute of Justice.
Aims of the Pilot Project USA I) Aims of the Pilot Project II) Approachtothe Pilot Project III) TrainingandGuidanceOutcome of the Pilot Project forExportSupervisors of Gaziantep CarpetFirms IV) Market AnalysisOutcomes of the Pilot Project V) PotentialClientAnalysisOutcomes of the Pilot Project VI) AdvertisementActivities of the Gaziantep CarpetClusterto USA Market Outcomes of the Pilot Project
PotentialClientAnalysisOutcomes of the Pilot Project ExportationDoes Not OnlyMeanThat The ProductleavesTurkeyandentersanothercountry; exportation is to sell the product to the buyers in targetcompany in the mostprofitableandeffectiveway. Market Researchwascarriedout. CompetitorResearchwascarriedout. The idea is to sell the weavedcarpetsexportedfrom Gaziantep to the buyers in the USA in the mostprofitableandeffectiveway.
PotentialClientAnalysisOutcomes of the Pilot Project • AdvertisementconcerningtheExporter/ Wholesaler profile in USA Market wassuggested. “Additionally, establishing a logisticbase in USA wasdeemed as adventegeousforcompetitionand an enterpreunership plan thatthewholeclusterwouldbenefitwassuggested. • Instead of exportation the Agencieswere recommended to open a Liaison Office of ourfirms in USA.
Aims of the Pilot Project USA I) Aims of the Pilot Project II) Approachtothe Pilot Project III) TrainingandGuidanceOutcome of the Pilot Project forExportSupervisors of Gaziantep CarpetFirms IV) Market AnalysisOutcomes of the Pilot Project V) PotentialClientAnalysisOutcomes of the Pilot Project VI) AdvertisementActivities of the Gaziantep CarpetClusterto USA Market Outcomes of the Pilot Project
Problems in Applyingthe Pilot Project • Contrary to Europe, fairs in the USA showthat the wholesalersparticipate, thereforeparticipants do not wish to exhibittheirproducts in fairs • Aditionnally, as forthewholesalers/exporterswhoarethedirectbuyers of thefirm, exhibitingforthemdoes not seemreasonable. • . • Withinthiscontext, it is requiredthatactivitiesotherthanfairparticipationthatwould be heardandthatwouldincreasetheexportation of thecluster as a wholeshall be plannedandrightpartnersandrightactionplansshall be chosen. • .