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A Look at International Marketing: Getting Started
by Dennis R. Chrisbaum
U.S. Small Business Administration
U.S. Department of Commerce
As you begin exploring international business opportunities,
consider attending export-training sessions in your
community. These will connect you to the international
business network in your local community. The U.S.
Department of Commerce, U.S. Small Business Administration,
state international trade offices, World Trade Centers,
Small Business Development Centers, and local community
colleges typically sponsor such programs. In addition,
there are a number of Web sites that can help you
get started.
For instance, A Basic Guide to Exporting,
published by the U.S. Department of Commerce, can
be downloaded from www.unzco.com/basicguide/index.html.
Other information on the mechanics of exporting
is available through the U.S. Commerce Department’s
international trade portal at www.export.gov.
If you go to the “Export Basics Webcast”
on this site, you will be able to sign up for four
hours of free on-line training. Other sites offering
good basic information are www.tradeport.org,
www.globalspeak.com,
and the Commerce Department's Trade Information
Center at www.export.gov/tic.
One of the first things you will need before you
export is a Schedule B number for your product,
which will be put on your Shipper's Export Declaration.
The Trade Information Center can help you research
that number, or you can contact the U.S. Census
Bureau (www.census.gov/foreign-trade/schedules/b)
to locate the number. You also will be able to find
your product's Harmonized System number there. This
is used worldwide to classify products and determine
local duty rates. With this number, you can then
research the duty rates that your buyers will pay
when importing your products. Depending on the duty,
your products might or might not be competitive
in a particular market. Also refer to "Classifying
Your Product for Export" in the January 2003
issue of Export America for a guide to
locating your product under the Harmonized System.
Although
international business is different from domestic
business in some regards, certain business
principles will not change.
—Dennis
R. Chrisbaum U.S. Small Business Administration
When you are familiar with some of the basics of
exporting, you will want to begin doing market research
on potential markets. The Internet has changed they
way we do research; there is so much available on-line
now. One of the best sites to begin your market
research is www.export.gov,
which provides market research by industry sector
and country. You also will find a Country Commercial
Guide for every major market, updated annually
by U.S. embassy staffs worldwide, on how to do business
in a given country and the best prospects for U.S.
exports. And you will find a list of trade events
and services that could help you identify buyers
or representatives for your products abroad.
If you are involved in producing agricultural or
food items, visit the Web site of the Foreign Agricultural
Service, U.S. Department of Agriculture, which has
an excellent international business plan on it.
Go to www.fas.usda.gov,
and under "Exporter Assistance," you will
find an option to create your own export plan. In
addition, you will find market research reports
and trade leads at this site. Two other helpful
resources for country information are www.countrywatch.com
and The World Factbook, which can be found
at www.cia.gov.
The Four "P's" of Marketing
Although international business is different from
domestic business in some regards, certain business
principles will not change. You still need to do
proper market research, and you still need to address
the four "P's" of marketing, which define
marketing in any environment:
Product (and product modification):
One of the first laws of marketing is to ask what
the customer wants. Americans frequently make
the mistake of thinking if it sells here, it should
sell abroad. Sometimes products have to be modified.
In Japan, cars have steering wheels on the right
side, so it does not make sense to try to sell
them our standard models with steering wheels
on the left. Another important difference is that
outside of the United States, most of the world
is on the metric system. So your products will
need to be produced to metric standards. In much
of Europe, ISO-9000 certification often is required
before buyers will talk to you, and electrical
standards vary around the world. Even in Canada,
labeling must be in French and English, so packaging
frequently will need to be adjusted as well.
Placement (distribution): Distribution
channels are determined by industry and tradition
and can vary greatly among markets. This is something
you will have to research. What is the normal
channel of distribution for your product in the
targeted country? It might be quite different
from the U.S. standard. Sometimes you can go around
normal channels, but it should be a well-calculated
risk. Will you try to sell directly to the end-user,
or should you sign up an agent or distributor?
Does your product require after-sales service?
This is a critical question that may well dictate
the distribution channel that you will need. Your
local U.S. Export Assistance Center can help you
locate qualified agents, distributors, or partners
abroad. A list of their services is at www.export.gov.
Also consider getting trade leads through the
SBA's Trade Mission On-line program (www.sba.gov/oit)
or the Commerce Department's BuyUSA program (www.buyusa.com).
Promotion: How will you promote
your product in a particular country? Will you
sell directly to potential buyers, or create buyer
demand through advertising? Investigate how promotion
is typically done for your product in the targeted
country. For instance, if you have an industrial
product and Germany is your target market, but
you decide not to participate in the annual industrial
trade shows, you are definitely making a mistake.
The Germans have been doing trade shows for at
least 1,000 years. Your participation, or lack
of participation, will indicate the extent to
which you are serious about the market. This is
not necessarily the case in other countries. Contact
your Export Assistance Center about programs for
advice in this area.
Pricing: It is almost impossible
to determine your pricing without primary research
(having someone in the country evaluate your competition
and the demand elasticity for your product). However,
you should be able to get a sense of whether you
want to go into a market with a premium pricing,
or a low pricing/high volume, strategy. How do
you want buyers to view your product, related
to its price and quality, compared to that of
your competition? Also, remember that your buyer
will need to absorb transportation costs and import
duties. So, to keep your product competitive,
you might need to back out your domestic marketing
and overhead expenses, in order to arrive at acceptable
pricing in a given market.
Market research is really at the heart of any international
expansion plan, so make sure you devote adequate
time to this effort. Unfortunately, if the market
research is wrong, it is unlikely that your international
sales efforts will succeed. Good luck as your begin
what is sure to be an exciting adventure in global
marketing.
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