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Exporting Basics

You want to find your best markets, but youalso want a manageable number of markets. Don't spread yourself too thin or pursue markets that aren't right for you. Aim for a first cut of 5 to 10 "promising" markets; then weed these down to your top 3 to 5 "target" markets. Here are some techniques to help you narrow the search:

The "best" markets offer a combination of high comfort for your company and high potential for your products.

• High-comfort markets are those you're personally close to in some way. You may have trusted contacts there, such as relatives or friends; or you're at ease with the language and culture; or you've spent time in the country. Often, however, high comfort countries do not offer the highest potential for your products.
• High-potential markets are where you ultimately want to be. They're the large, emerging or fast-growing markets, with high receptivity to products like yours; limited local or foreign competition; and no significant market barriers.

You can find high potential markets with a little research and screening. The US Government offers extensive resources for best-market identification, including trade statisticsand in-depth product and country market research.

Here are 5 questions/answers to help identify your high potential markets:

1. Where are comparable products mostly exported? Look for the largest and fastest growing export destinations for the product over the past several years. Source: For U.S. exporters, and foreign exporters to the U.S., see USITC DataWeb for official U.S. export/import statistics by commodity and country.

2. Which countries are mostly importing comparable products? Look for countries with the largest and fastest growing imports of the product over the past several years. Sources: International Trade Centre – Aggregated Trade Statistics; Best Market Reports and Industry Subsector Analyses.

3. Where would comparable products be most competitive? Look for high market share countries with limited competition from local producers. Source: Best Market Reports and Industry Subsector Analyses.

4. Where are comparable products most welcome and easiest to sell? Look for countries with high receptivity to the product and no significant market barriers. Source; Best Market Reports andIndustry Subsector Analyses.

5. Which markets do the experts consider most promising? Look for countries recommended as "Best-Prospect" markets for comparable products. Source: Best Market Reports and Industry Subsector Analyses.

The above criteria generally apply for any product or industry. Additional criteria for specific products include:

• Economic indicators -- for products affected by economic conditions or income levels (e.g., level and growth of Gross National Product (GNP)/ Gross Domestic Product (GDP), per capita GNP/GDP,industrial/agricultural production). Source: CIA World Factbook; UN InfoNation; STAT-USA State of the Nation.
• Demographic indicators -- for products aimed at particular population groups (e.g., level and growth of population by age, sex, race, religion, profession). Source: CIA World Factbook; UN InfoNation
• Sectoral indicators -- for products aimed at particular industry sectors (e.g., number and growth of relevant manufacturers; hospitals; cars, houses, banks, utility companies). Source: CIA World Factbook; UN InfoNation
• Infrastructure indicators -- for products that use or require infrastructure support (e.g., level and growth of power, transportation, communications, and other facilities). Source: CIA World Factbook; UN InfoNation
• Financial indicators -- for products affected by fiscal and monetary developments (e.g., level and growth of consumer/wholesale/industrial prices, interest rates, foreign exchange reserves, national debt). Source: CIA World Factbook; UN InfoNation; STAT-USA State of the Nation.

Selection Criteria

Key: Columns/Criteria

• Largest export markets, latest year
• Fastest growing export markets, past 3 yrs
• Fastest growing export markets, latest year
• Largest importing countries, latest year
• Fastest growing importing countries, past 3 yrs
• Fastest growing importing countries, latest year
• Strong share of import market, latest year
• Limited competition from local producers
• High receptivity to products from your country
• No significant market barriers
• Recommended as a “best” export market

Having defined your market selection criteria, you now need to gather the data to make your assessments. The CITD Trade Information Database has most of the information needed to fill in the Export Potential Matrix, including trade statistics, trade and economic indicators, and international market research covering virtually all world markets.

• U.S. Export Statistics (columns 1-3) includes the official U.S. export/import statistics compiled by the U.S. Census Bureau. The Commodity-by-Country series shows all the destination or source countries for a specified product, by value, quantity, unit value, customs district, transport mode and year. The Country-by-Commodity series shows all products exported to or imported from a specified country. With these statistics, you can readily spot the largest and fastest growing export markets for products like yours; or identify the largest and fastest growing U.S. exports to a particular country. Individual tables can be downloaded to a spreadsheet. Once in the spreadsheet, you can do whatever calculations and sorting you wish (e.g., growth rates, rank ordering, projections, etc.). See Worksheets 1-3 for sample Commodity-by-Country U.S. export statistics.
• Foreign import statistics(columns 4-7) help "size up" markets of interest, identify the major supplier countries, and compare competitor country market shares. Each country compiles and publishes its own import statistics. The United Nations also consolidates and publishes the data, but in broader product categories and on a less current basis. Alternative sources are specific market research reports that extract and analyze the data (e.g., Best Market Reports and Industry Subsector Analyses).
• Best Market Reports (BMRs, column 11) are a fast way to pinpoint high potential markets for selected industries. BMRs are compiled only on the industries considered "best-prospects" worldwide, based on recommendations of U.S. commercial officers in each country. BMRs identify the largest/fastest growing markets for selected industries in one convenient matrix and give a brief rationale for each country's selection as a "best prospect."
• Industry Subsector Analyses (ISAs, columns 8-10) can provide more detailed assessments of market potentials for your products in particularly promising countries. ISAs are product-and country-specific market surveys written by U.S. commercial staff abroad. They discuss overall demand trends; best sales prospects within the subsector; key end-user segments; major competitors; and relevant business conditions, practices and market barriers. They also identify useful government and industry contacts, including importers and distributors. ISAs offer corroborating information for columns 8-10 in the Export Promotion Matrix (market share, product receptivity, competitive situation, and market access) and are even more telling than BMRs because of their product specificity.