Case Study: No Silk Route to the States

Silk Cocoon was established in 2003 to manufacture high quality silk nightwear and bedding. After four years of steady growth during which it was nominated for a Contour International Lingerie Award, the company was keen to begin exploring export opportunities and turned to UK Trade & Investment for support.
 
Silk Cocoon completed Passport to Export, which is designed to help novice exporters take their first steps into overseas marketing. International Trade Adviser, Sharla Newport, recommended the Export Marketing Research Scheme which is a UK Trade & Investment scheme run by the British Chambers of Commerce. The scheme provides professional support and grant funding for eligible companies wishing to research a potential export market. Silk Cocoon's CEO, Dr Ying Groves, explains:
 
"We were visited by an Export Marketing Research Adviser, Clive Hogan, who talked to us about what we were hoping to achieve. He used something called a Market Selection Tool to help us select some of the most promising export markets. The US emerged as a strong contender, which fitted in with our own ideas. We had already received a number of enquiries from lingerie shops in the US and felt that it would be worth investigating the market's true potential."
 
With the help of the Export Marketing Research Scheme, Silk Cocoon organised a seven day research visit to New York. Clive put the company in contact with the British Consulate in New York which was able to advise on a wide range of topics, including general market information, regulations, import duties, labeling and so on.

Dr Groves comments: 
 
"We didn't know the market at all before we began our research and we learned a lot in a very short space of time. We visited every known lingerie shop and department store in New York. Seeing the market first hand and the face-to-face interviews were particularly informative. We discovered that European brands are generally perceived as being of good quality. There is a lot of franchising in the larger department stores but, to our surprise, much of this is poor quality polyester lingerie. One of the key factors to emerge from our interviews was that brand and image are crucial - people simply won't buy from you if they don't know the brand."
 
In order to raise its profile to a sufficiently high level, Silk Cocoon discovered that it would need to attend both of the two major lingerie shows in the US. It would also need to have a reliable representative in the market. The company learned that the sheer size of the US means that marketing in Los Angeles is very different to marketing in New York and that it would have to tackle each territory as a distinct market in its own right. Based on this information and also the subsequent market slowdown, Silk Cocoon made the decision not to go ahead with trying to export to the United States. Dr Ying concludes:
 
"This research was a very valuable exercise for us. It gave us a clear picture of the US market and convinced us that the time is not right for us to enter this marketplace just now. We realised that we would have to spend a lot of money building our brand profile in the US and that the returns were likely to be reasonably modest. On this basis, we have decided not to proceed and we are grateful that the research has prevented us from investing any more money in pursuing a market that is not really suitable for us.
 
Without the support of the Export Marketing Research Scheme, it is unlikely that we would have done this research visit, so it has proved a very useful initiative, even though it will not result in export sales to the US. We are now turning our attention to Switzerland, which was another of the countries identified by the Market Selection Tool as having good export potential for us. We will definitely be approaching the Scheme for support again."