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    Look Before You Leap

     

     
     
    © International Trade Centre, International Trade Forum - Issue 1/2001 

    From the generic version of Trade Secrets, hints on exporting pitfalls and what questions to consider before developing your export operations.

    Q. What are the most common mistakes made by exporters? 

    • Developing an international strategy and marketing plan without qualified export counselling advice.

    • Not securing commitment from top management to overcome the initial difficulties and financial requirements of exporting.

    • Selecting overseas sales representatives or distributors too hastily.

    • Seeking orders from around the world rather than concentrating on one or two geographical areas.

    • Neglecting export markets when the domestic market booms.

    • Treating international distributors and customers differently than domestic counterparts.

    • Assuming that a particular market technique and product will automatically be successful in all countries.

    • Not modifying products in order to meet regulations or cultural preferences of foreign countries.

    • Neglecting to translate service, sales and warranty documentation into the relevant language.

    • Overlooking possibilities to use an export management company when a firm cannot afford its own export department.

    • Missing opportunities to enter into licencing or joint venture agreements when the firm is reluctant to enter into foreign markets on its own, due to import restrictions, insufficient resources or a limited product line.

    • Providing insufficient after-sales service for the product.

    Q. What questions should be answered before making the decision to export? 

    Exporting involves considerable financial, managerial, and production resources. An objective analysis is necessary before making the decision to export, based on the following questions: 

    Analysis of domestic performance 

    • Why is the firm successful in the domestic market?

    • What is the current domestic market share of the product?

    Firm's commitment and desire to export 

    • What are the firm's exporting objectives?

    • Where is the exporting department in the firm's hierarchy?

    • Which members of the firm's personnel will be involved in the export process?

    • Is there a need to recruit additional personnel?

    • What international experience does the firm (or any of its employees) have?

    • How involved in the export process is the firm willing to be?

    • How much risk is the firm willing to take?

    Competitive analysis 

    • What makes the firm's products or services competitive in a foreign market?

    • What makes the products or services unique?

    • What are the overall competitive advantages (such as technological advancements, patents, skills)?

    Finding out about foreign markets 

    • What market segments are being targeted?

    • What level of stock needs to be maintained to sell abroad?

    • How are the firm's competitors performing in international markets?

    • Will the product be restricted due to tariffs, quotas or other non-tariff barriers?

    • Does the product conflict with the culture, traditions or beliefs of customers abroad?

    • Will patent/trademark protection abroad be essential for the product?

    • What product labelling requirements must be met?

    • What sort of environmental or other regulations need to be adhered to?

    Marketing the product 

    • How will the product or service be advertised?

    • What companies, agents, or distributors have purchased similar products?

    • Who will represent the firm when selling abroad?

    • Will an agent or distributor be appointed to handle export markets?

    • What territory should the agent or distributor cover?

    • What non-competitive lines are acceptable for the agent or distributor to carry?

    • Can a potential buyer see a functioning model or product sample?

    • Is there a trade fair where the product or service can be presented?

    • Will the product or service be sold under the same name in the target foreign market?

    Pricing and commercial terms 

    • How will the price be calculated?

    • What are the service terms?

    • What are the payment and credit terms?

    • What are the warranty and guarantee terms?

    • What are the discount terms?



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