International trade
Jul 7 2005 By the Evening Gazette
Selling into overseas markets can be a great way of expanding your business.
Many products and services that are successful in the UK can succeed abroad as well.
But exporting isn't often a quick or easy option, you need to invest time and money to get it right.
Careful research is essential to find out where the opportunities are. You also have to work out how to attract new customers and deal with new competitors.
You'll have to tailor what you do to local rules and requirements and you'll probably need to visit the country you plan to export to.
Researching the market
Understanding your new market is essential before you commit yourself to exporting. Your research should answer the following questions:
Who are your potential customers?
What are their preferences?
Who are your competitors and what do they offer to customers?
What's the best way to market and sell your products and services?
What costs will you face?
Are there regulations you'll have to comply with?
Are there any political or other risks?
Think about the changes you might have to make to move into an overseas market, e.g. you might need to change your product to suit local tastes or to comply with local regulations.
You may have to change labels and packaging and translate your literature. Changes like this will impose costs on you, make sure you take them into account before deciding to export.
First steps to entering new markets
When your research is finished and you've identified an export opportunity, there is still a lot of preparation to be done.
Consider whether you have the resources and commitment you'll need, as starting to export takes time and money.
Think how you'll cope with local differences, e.g. understanding local needs and customs.
Consider how you will reach your customers, e.g. will you sell directly or use an agent?
Think about how you'll handle delivery and payment.
Plan visits to the market, this will broaden your research and help you build contacts and make sales.
Selling in New Markets
You'll have to decide how to sell your products and services to your customers in new overseas markets.
Depending on your product, you may be able to sell directly into your new market, e.g. you may be able to sell over the internet, by mail order or by exhibiting at local trade shows.
However many businesses benefit from establishing a more solid presence in new markets, either directly or through a local partner:
You can sell to a distributor who then sells your products locally.
You can use a sales agent who sells product on your behalf, this gives you more control over sales.
You can enter into a joint venture with a local business, this gives you a share of the management and profits of the joint venture.
You can open a local office staffed by one or more of your employees, this is a relatively cost-effective way of opening in a foreign market.
You can set up a local company, this will involve considerable administrative work, but it makes it easier for your new operation to expand and limits your liability if things go wrong.
Marketing and sales promotion in new markets
Every market is different, the way you market and promote your product must reflect the different preferences of your new customers and any differences in the way the market works.
Are there any language barriers? If the local language isn't English is there someone in your business who can speak the language or do you have a local partner who will communicate on your behalf?
Will customers' expectations be the same as in the UK? Some products in the UK are very different from their European equivalents.
Will your business image be the same? Foreign customers, for example, might see your imported product as less trustworthy or exotic.
Is your type of product sold through different channels compared with the UK? Will this alter your marketing?
Do you need to change the way you behave? People in France, for example, are more formal than those in the UK.
Are market trends the same? The latest product or service in the UK may be old news somewhere else.
How does the competition differ? If local companies have strong customer relationships, you may find it difficult to break into the market.
Will you need to adapt your product to conform to local regulations? Many countries require products to be labelled in the local language or to meet technical requirements.
The Next Steps
You may need to visit the country you plan to sell into, as this helps you make contacts, build relationships with potential customers and partners and get a better feel for how the market operates.
It's also an opportunity to discuss your plans with staff at the UK Embassy.
