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Exporting Basics

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CHAPTER 1. Is Exporting for me?
  Export Prerequisites
  Management Commitment

Motivated management is the primary key to export success -- "Where there's a will, there's a way." If the will exists, ways can be found to make a product more salable; overcome or adjust to tight budgets; or to better market a product. Reluctant or indifferent management won't make that happen.

Exporting takes time and perseverance to pay off. To be more than an occasional or incidental exporter, management must be willing to commit and see it through. Has your management reached this point?

  • Do you foresee exports contributing to sound, specific company goals?
  • Do you want foreign sales to be a more significant facet of your business?
  • Are you willing to wait the 2-4 times longer it may take to develop new export business, compared with domestic selling?

If you're not sure, you might try low-risk, go-slow approaches to test the waters and build more confidence in your export potential. These are discussed under Costs of Exporting.

Competitive Product

Products won't sell anywhere if they can't compete. To compete, your product must match or exceed the appeal of others -- in meeting needs, in quality, in price, etc. Are you export-competitive? You may well be without realizing it. For example, if your product has sold reasonably well in the domestic market, chances are it will also sell abroad. Why? By succeeding in the competitive domestic market, you've already proven your product can compete not only against other domestic products, but also against imported products. This is essentially the same competition you'll meet when you export. The overseas playing field will be different. You may need to adapt your product and pricing somewhat to compete in specific markets. You may have to absorb added marketing and shipping costs to remain price competitive. You may have to offer credit and wait longer for payment to match competitors. You may need to alter your product to comply with local standards and tastes. Are you prepared to do what it takes to compete? If not, you won't succeed as an exporter.

Adequate Resources

As with any business, you'll need experienced staff,a premises and equipment. It's possible to start with as little as a home-based office, and a computer, phone and fax. If you're already established, you'll need to research and develop potential markets abroad. As export orders come in, you'll need enough inventory on hand to fill them, or the ability to produce or acquire more product as needed. If your customers want delayed payment terms, you'll have to pay for financing. You can minimize these costs and still export, but you can't eliminate them entirely. Do you have or can you get the necessary resources? If not, consider the go-slow, low-budget approachdiscussed under Costs of Exporting.

Sound Marketing Methodology

How you enter and develop a foreign market is important. Marketing and distribution practices vary by country and are often dictated by law, custom, or necessity. Some countries may require or prefer certain marketing or distribution methods, such as direct sales or use of local agents; others may control or prohibit them. Some countries have excellent mass media and high receptivity to advertising, trade shows, mail order, etc. Others shun these approaches or do not have the modern communication technologies to support them. Are you prepared to adapt your marketing methods? If not, you'll need to limit yourself to markets more like your own.

 
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