MARKET ENTRY |
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Datamatrix – Market Entry
Suite 506 MARKET ENTRY Selling and Promotion Overseas Entering New Markets Promoting New Markets Visiting Overseas Markets Sources of Help and Support 506.01 SELLING AND PROMOTION OVERSEAS Selling into overseas markets can be a great way of expanding your business. Many products and services that succeed domestically 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. Research possible markets 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 or 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. For example, 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. 506.02 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 – starting to export takes time and money
- Think how you'll cope with local differences – for example, understanding local needs and customs
- For instance, will you sell directly or use an agent? Decide how you'll reach your customers
- 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.
- Work out whether you need to change your business to prepare it for exporting.
Consider joining your local export club. Other sources of help and advice include your local Chamber of Commerce and your trade association. Find trade associations for your industry on the Trade Association Forum website: http://www.taforum.org/searhgroup.pl?n=500 Selling in new markets You'll have to decide how to sell your products or services to your customers in new overseas markets. Depending on your product, you may be able to sell directly into your new market. For example, you might be able to sell over the Internet, by mail order or by exhibiting at local trade shows. However, many businesses will 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 products on your behalf – this gives you more control over sales (however, you may also have some legal responsibility for what the agent does)
- 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 (but if your venture is successful it can be difficult to expand a local office).
- 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.
The choice you make can have important legal and financial consequences. Discuss the options with your adviser and decide whether you want the freedom to graduate from one option to another at a later date. 506.03 PROMOTING 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 it or do you have a local partner who will communicate on your behalf.
- Will customers' expectations be the same as in your country?
- Will your business image be the same? For example, foreign customers might see your imported product as exotic or less trustworthy.
- Is your type of product sold through different channels compared within your country? Will this alter your marketing?
- Do you need to change the way you behave? For example, business people in France are often more formal than those in the UK .
- Are market trends the same? The “latest thing” in one country might already be old news elsewhere – or it might be too new to take off yet.
- 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? For example, many countries require products to be labelled in the local language or to meet local technical requirements.
506.04 VISITING OVERSEAS MARKETS You'll probably need to visit the country you plan to sell into. 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 your embassy. A potential drawback with overseas visits is the cost. But there are several schemes to help you. - In the United Kingdom – the UK Trade & Investment can subsidise a visit through their support programme. Your Passport to Export Success. For further information, contact the International Trade Team at your local Business Link.
- Your local chamber of commerce may organise trade missions. These are often subsidised by government schemes.
It can be a good idea to build your visit around a trade exhibition. This let you meet several contacts at the same time and to see your competition. There is a lot of help available to new exporters attending an overseas trade exhibition. - See the database list in this section to find all the events they support by country and sector – listed under trade shows.
- The Chambers of Commerce organises overseas Partanariat events where you can meet representatives from overseas companies in your business sector.
- You can find out more about support for new exporters from the UK Trade & Investment website.
506.05 SOURCES OF HELP AND SUPPORT Your National Chamber of Commerce offers support for market research, training, trade missions and other services. U.S. Government Agencies and Programs Bilateral Trade Affairs The State Department's Office of Bilateral Trade Affairs (BTA) works to promote open markets between the United States and its trading partners. Increased international opportunities for U.S. trade and investment are essential to sustaining U.S. economic growth, creating jobs, and increasing economic wealth for all citizens. The Office of Bilateral Trade Affairs ensures that the overall foreign policy goals of the U.S. Government are factored into the development of U.S. trade policy. The Office of Bilateral Trade Affairs, together with the other offices within the Trade Policy and Policy and Programs division, represents the Department of State on delegations to negotiations with regional economic groupings including the Asia-Pacific Economic Cooperation (APEC), the European Union, and the North American Free Trade Agreement (NAFTA). It also represents the Department in ongoing trade negotiations including those aimed at establishing the Free Trade Area of the Americas (FTAA)( and bilateral free trade agreements, including those now ongoing with Central America , Morocco , Australia , and the Southern African Customs Union. BTA also represents the department in interagency discussion of U.S. steel policy. The Office of Bilateral Trade Affairs is divided into two regional divisions: Asia, Near East and Africa (ANA) and Europe and the Western Hemisphere (EWH). (from state.gov) managed by the Bureau of Public Affairs, U.S. Department of State. The U.S. Export-Import Bank (Ex-Im Bank) The U.S. Export-Import Bank is the official export credit agency of the United States Government headquartered in Washington , D.C. It's an independent federal agency established by an Act of Congress in 1934 to support the financing of US exports into markets where such financing is not available on reasonable terms. There are six regional offices throughout the United States : Chicago , Houston , Los Angeles , Miami , New York and San Francisco . Ex-Im Bank programs can be divided into three categories: - Loans (direct loans from the US government)
- Guarantees (to private sector lenders); or
- Insurance (which is similar to a guarantee when the holder of the policy takes a documentary risk). Usually, only short-term insurance is available.
http://www.exim.gov/country/cntlimit.html Here you will find details as to the time periods of loans; decisive factors that bind Ex-Im Bank in the course of new project evaluation; and terms. In the United Kingdom : In the United Kingdom : The British Chambers of Commerce offers support via their website: http://www.britishchambers.org.uk/exportzone/emrs UK Trade & Investment website: In the United Kingdom : The UK Trade & Investment offers extensive help with market research, including: - Free access to an information centre with market reports, directories and including free access to fee-based Internet services
- Free market reports on different countries and industries
- An online database of sales leads from UK embassies and other sources
- A database of useful websites for exporters
- A fee-based tailored market information serviced – you may qualify for a grant
- Assistance with assessing the best market for you
To get in touch with UK Trade & Investment talk first to the International Trade Team and seek advice from your local chamber of commerce and your trade association: http://www.uktradeinvest.gov.uk/ukti/preparing_to_trade You can find downloadable market reports from the UK Trade & Investment website: http://www.uktradeinvest.gov.uk/ukti/ukti/support_to_succeed You can get more details for export clubs from the UK Trade & Investment website. This will give you a chance to discuss ideas with other exporters and hear from experts. UK Trade and Investment events database: http://www.uktradeinvest.gov.uk/ukti/market_entry Technical help for exporters in the UK is available from the British Standards Institution (BSI). You can find out about the technical support provided by the British Standards Institution of the BSI website. Export seminars on the Institute of Export website: http://www.export.org.uk/education/qualifications/courses/ http://wktilocaloffice.thedriveris.com/ http://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfpb=true http://www.britishchambers.org.uk/exportzone/emrs/ AUSTRALIA http://www.sa.gov.au/ http://www.nla.gov.au/oz/gov/ http://www.gov.info.au/ CANADA http://www.canada.gc.ca/depts/major/depind.e.html IRELAND http://www.irlgov.ie/ NEW ZEALAND http://www.govt.nz/ http://www.ecommerce.govt.nz/ UNITED STATES http://www.firstgov.gov/ http://www.export.gov/ UNITED KINGDOM http://www.dti.gov.uk/ (regulations and law) http://www.businesslink.gov.uk/ http://www.sbs.gov.uk/ (small business service) Read overseas market reports on the UK Trade & Investment website: http://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/overviewcountries?_nfpb=true Find a list of embassies at the Foreign and Commonwealth Office website: http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Ecelerate/ShowPage&c=Page&cid=1007029395231 Select an event to meet prospective overseas buyers at the UK Trade & Investment website http://www.uktradeinvest.gov.uk/ukti/market_entry Access details on how to simplify international trade at the SITPRO website: http://www.sitpro.org.uk/trade/faqs.html Contact your nearest Euro Info Centre from the National Euro Centre Info Network website: http://www.euro-info.org.uk/index_new.htm Search for advice and information for exporters on the British Chambers of Commerce website: http://www.britishchambers.org.uk/exportzone Find out about export services provided by BSI at the BSI consultancy website: http://www.bsi-global.com/Export/index.xalter View country information on non-EU countries including information on trade barriers on the EU Market Access Database website: http://mkaccdb.elu.int/cgi-bin/stb/mkstb.pl?action=search Check if the need an export license on the DTI website (for UK only) http://www.dti.gov.uk/export.control/publications/briefguide.htm (for UK only) Find out about importing from the Customs and Excise website: http://www.hmce.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_InfoGuides&columns=1&id=INTRODUCTION_TO_IMPORT ( UK only) Find out about the UK export credits agency on the Export Credits Guarantee Department website: http://www.ecgd.gov.uk |