| CHAPTER 3 |
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| Making Contacts |
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| By now, your company has identified its most promising markets and
devised a strategy to enter those markets. As discussed earlier, a company may sell directly to a customer or use the
assistance of an in-country representative (agents or distributors) to
eventually reach the end user.
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Department of Commerce
Trade Event Programs |
| Some products, because of their nature, are difficult to sell unless the
potential buyer has an opportunity to examine them in person. Sales letters and
brochures can be helpful, but an actual presentation of products in the export
market may prove more beneficial. One way for a company to actually present its
products to an overseas market is by participating in trade events such as trade
shows, fairs, trade missions and catalog exhibitions. |
| Attending trade fairs involves a great deal of planning. The potential
exhibitor must take into account the following logistic considerations:
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Choosing the proper fair out of the hundreds that are held every year;
Obtaining space at the fair, along with designing and constructing the
exhibit;
Shipping products to the show, along with unpacking and setup;
Providing proper hospitality such as refreshments, along with maintaining
the exhibit;
Being able to separate serious business prospects from those just browsing;
and;
Breaking down and packing the exhibit, and return shipping. |
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| Preparing Your Product for Export |
| Selecting and preparing your product for export requires not
only product knowledge but also knowledge of the unique characteristics of each market being targeted. Market research conducted
and foreign representatives contacts should give your company an idea of what products can be sold and where.
However, before the sale can occur, the company may need to modify a particular product to satisfy buyer tastes or needs in foreign markets.
If the company manufactures more than one product or offers many models of a
single product, it should start with the one best suited to the targeted market.
Ideally, the firm chooses one or two products that fit the market without major
design or engineering modifications. Doing so works best when your company:
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Deals with international customers that have the same demographic
characteristics or the same specifications for manufactured goods;
Supplies parts for your goods that are exported to foreign countries without
modifications;
Produces a unique product that is sold on the basis of its status or foreign
appeal; or produces a product that has few or no distinguishing features and
that is sold almost exclusively on a commodity or price basis.
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| Product Adaptation
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To enter a foreign market successfully, your company may have to modify its
product to conform to government regulations, geographic and climatic
conditions, buyer preferences, or standards of living. The company may also need
to modify its product to facilitate shipment or to compensate for possible
differences in engineering and design standards.
Foreign government product regulations are common in international trade and
are expected to expand in the future. These regulations can take the form of
high tariffs or nontariff barriers, such as regulations or product
specifications. Governments impose these regulations to:
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Protect domestic industries from foreign competition;
Protect the health of their citizens;
Force importers to comply with environmental controls;
Ensure that importers meet local requirements for electrical or measurement
systems;
Restrict the flow of goods originating in or having components from certain
countries; and
Protect their citizens from cultural influences deemed inappropriate. |
| Market potential must be large enough to justify the direct and indirect costs
involved in product adaptation. The firm should assess the costs to be incurred and though it may be difficult,
determine the increased revenues expected from adaptation. |
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