As you can imagine, many foreign markets differ greatly from the United States. Some differences include climatic and environmental factors, social and cultural factors, local availability of raw materials or product alternatives, lower wage costs, varying amounts of purchasing power, the availability of foreign exchange, and government import controls. Once you have decided that your company is able and committed to exporting, the next step is to develop a marketing plan.
A clearly written marketing strategy offers six immediate benefits:
- Because written plans display strengths and weaknesses more readily, they are a great help in formulating and polishing an export strategy.
- Written plans are not easily forgotten, overlooked, or ignored by those charged with executing them. If deviation from the original plan occurs, it is likely to be due to a deliberate and thoughtful choice.
- Written plans are easier to communicate to others and are less likely to be misunderstood.
- Written plans allocate responsibilities and provide for an evaluation of results.
- Written plans are helpful when seeking financial assistance. They indicate to lenders that you have a serious approach to the export venture.
- Written plans give management a clear understanding of what will be required of them and thus help to ensure a commitment to exporting. Actually, a written plan signals that the decision to export has already been made.
This last advantage is especially noteworthy. Building an international business takes time. It usually takes months, sometimes even several years, before an exporting company begins to see a return on its investment of time and money. By committing to the specifics of a written plan, top management can make sure that the firm will finish what it begins and that the hopes that prompted its export efforts will be fulfilled.
Market Research
To successfully export your product, you should examine foreign markets
through research. The purpose is to identify marketing opportunities and
constraints abroad, as well as to identify prospective buyers and customers.
Market research encompasses all methods that a company can use to determine which foreign markets have the best potential for its products. Results of this research inform the firm of: the largest markets for its product, the fastest growing markets, market trends and outlook, market conditions and practices, and competitive firms and products.
Your firm may begin to export without conducting any market research if it receives unsolicited orders from abroad. Although this type of selling is valuable, the company may discover even more promising markets by conducting a systematic search. If your firm opts to export indirectly (see Methods/Channels) by using an intermediary such as an Export Management Company (EMC) or Export Trading Company (ETC), you may wish to select markets to enter before selecting the intermediary. Because many intermediaries such as EMCs and ETCs have strengths in certain markets, it is valuable to select the intermediary after deciding on markets to enter. You may also want to do market research if you export indirectly.
A firm may research a market by using either primary or secondary data resources. In conducting primary market research, a company collects data directly from the foreign marketplace through interviews, surveys, and other direct contact with representatives and potential buyers. Primary market research has the advantage of being tailored to the company's needs and provides answers to specific questions, but the collection of such data is time-consuming and expensive.
When conducting secondary market research, a company collects data from various sources, such as trade statistics for a country or a product. Working with secondary sources is less expensive and helps the company focus its marketing efforts. Although secondary data sources are critical to market research, they do have limitations. The most recent statistics for some countries may be more than two years old. Moreover, the data may be too broad to be of much value to a company. Statistics may also be distorted by incomplete data-gathering techniques. Finally, statistics for services are often unavailable. Yet, even with these limitations, secondary research is a valuable and relatively easy first step for a company to take. It may be the only step needed if the company decides to export indirectly, since the intermediary firm may have advanced research capabilities.
Methods of Market Research
A Step-by-Step Approach to Market Research
Sources of Market Research
Because there are many research sources, the firm may wish to seek advice from their local Export Assistance Center (see Export Advice and www.doc.gov).
More about Exporting:
Introduction
Developing an Export Plan
Developing a Market Plan
Export Advice
Methods/Channels
Making Contacts
Technology Licensing /Joint Ventures
Preparing Your Product for Export
Service Exports
International Legal Considerations
Shipping Your Product
Pricing, Quotations, and Terms
Methods of Payment
Financing Export Transactions
Selling Overseas
After-sales Service
