MARKET INFORMATION |
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Datamatrix – Market Information
Suite 504 MARKET INFORMATION Market Information Information Sources Research Procedures and Documentation Logistics and Transportation Financial Considerations Selling Direct or Using Importers Related Websites 504.01 MARKET INFORMATION Market Information on sectors and countries Your business strategy may include exporting your product or service to a target market or sector. You will need to know how your target market works and the opportunities in each target sector. See Datamatrix Country Profiles within this site. Deciding on the target market A target market for exporting your product or service is one that has opportunities for new exporters and needs what your business can offer. Market Opportunities Don't enter a market without research. Your export activities may be less successful if the market is oversupplied with similar products or services. You can read overseas market reports on the UK Trade & Investment website. You may hear about opportunities from competitors, other sources with local knowledge, or perhaps an embassy. Embassies generate new inward investment opportunities and maintain existing investments. Find a list of embassies at your countries Foreign office website. You can also check trade or business journals – use the business information service in the library. Which countries need your product or service? - Consider your product or service, alternatives and related sectors.
- Analyse what your customers prefer and any trends
- Put this information in the context of your target market, its size, culture, economy and political situation.
You may wish to view opportunities identified by people with in-depth market or sector knowledge. Register for membership with Datamatrix to have access to a continuing list of these opportunities. You can also select an event to meet prospective overseas buyers at Trade Shows. Implications of exporting to your target market Several factors will affect the way that you do business in your target market: - Market size and segmentation
- Infrastructure
- Communications
- Transportation
- Language
- Culture
- Availability of skilled workers
Local legislation or regulations may affect you, importers, agents or distributors. Take into account trading practices and trade barriers – anything that could stop or hinder you exporting. The government may restrict exports or require a licence to export to your target market due to sanctions or embargoes. Check for export restrictions. Check that you can visit the Export Control Organisation section of the DTI website or call the DTI Export Control Organisation Helpline to check whether restrictions are likely to apply. As well as applying to specific types of products, restrictions also apply to certain destinations – in particular those to which trade sanctions and arms embargoes apply. Again, you should seek advice. In the United Kingdom the following licences are available: - Standard Individual Export Licence – this allows export of a quantity of specified goods to a specified importer as set out in the licence.
- Open Individual Export Licence – this is specific to an individual exporter and allows multiple shipments of specified goods to specified destinations.
- Open General Export Licence – this allows the export of specific goods by an exporter.
You can submit a completed Standard Individual Export Licence online by using the Export Licensing via the Internet System (ELVIS). This service will ensure that the application is fully validated. It will allow you to electronically attach all your relevant documentation, cutting down on the time it takes to get your application into the system. Enrol in the Export Licensing via the Internet System with Sign-up Manager. If your business has a digital certificate, and wishes to use it to enrol in ELVIS, please use the services on the Government Gateway website. http://www.dti.gov.uk/export.control Foreign and Commonwealth website: http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate/Showpage&c=Page&cid=1007029391422 504.02 INFORMATION SOURCES For businesses thinking about exporting, there is plenty of information from business libraries, information centres, public and private sector websites, magazines and trade associations. The government publishes information for doing business with other countries. But, all the work and coordination has been done for you in Datamatrix Country Profiles: http://www.datamatrix-uk.com/country profiles.htm Euro Info Centres are also information providers, linked to the European Commission and business networks. For local access to a range of specialist information and advisory services to help companies develop their business in Europe , contact your nearest Euro Info Centre through the National Euro Centre Info Network website: http://www.euro-info.org.uk/index_new.htm The British Chambers of Commerce: http://www.britishchambers.org.uk/chamber_network/chamberlist The British Standard Institute (BSI) information on international trade. Find out about export services provided by BSI at the BSI consultancy website: http://www.bsi-global.com/Export/index.xalter The British Library holds a comprehensive stock of business information. Access the business information service on the British Library website: http://www.bl.uk/collections/business/business.html 504.03 RESEARCH Researching market and sector You can do your own market research using published information or you could commission research that will match your needs, or perhaps both. Doing your own research You can use published country profiles and reports on your target market that are written by people with knowledge of the country. You may also wish to refer to press cuttings and to talk to others who either export to that market or sell from within. You may find it helpful to research the following information: - The demand for your product or service or the reasons why there currently is no demand
- The alternative (competitor) products or services sold
- The limitations on sales because of cultural, religious or social factors or other local restrictions
- The adaptations required to your product or service
- What influences the price that customers are willing to pay
- Potential outlets and distribution networks
- The economic climate
- The availability of services including translation, professional advice and documentation experts
- The availability and quality of transport and communications
- Potential use of local staff for sales and distribution
- The cultural differences
Commissioning research It is possible to omission research on your market using the OMIS service via the UK Trade & Investment website: http://www.uktradeinvest.gov.uk/ukti/market_sector_research Try to be as specific as possible in your commission request so as to minimise the risk of expensive mistakes. 504.04 PROCEDURES AND DOCUMENTATION Each importing country will have its own rules and requirements for bringing in a product or service so it is worth finding these out. The rules relate to: - Customs tariffs
- Documentation requirements
- Licensing
- Shipping terms
- Methods of payment
Each country has trade agreements with various countries and for certain products and services you may need an export licence. You must check this with the government's of each target country. To export products or services you will typically need: - A commercial invoice or bill for the goods from the seller to the buyer
- A certificate of origin identifying where the goods come from
- A bill of packing itemising the material in each package
- A bill of lading which is a contract between the owner of the goods and the carrier
- An air-way bill to handle air freight shipments
- A customs declaration describing the goods, their value and whether or not they are commercial items
- Insurance for loss of a damage to the cargo during transit
Plants, foodstuffs, animals and hazardous products require additional paperwork. 504.05 LOGISTICS AND TRANSPORTATION It is worth considering the logistics and transportation of your product or service early on to highlight potential pitfalls. This can be done as part of your market research. You may find it useful to consider the following issues: - How you will finance the export of your product or service
- The nature of your product or service, packaging requirements, temperature requirements and how it can best be physically moved.
- The air, sea, road and rail facilities in your target market
- The best route, bearing in mind any legal, cost, speed and customer constraints
- Any Freight forwarders to your market who have experience of your product or service.
- The distribution channels in your market
- The customs requirements in your market
- How you will be paid for your product or service
Once you have considered these points, you can then decide: - Whether to transport your goods by air, sea, road or rail
- Whether to carry out transportation in-house or pay a specialist, such as a courier, haulier, freight forwarder or logistics provider to deal with some or all of your transport requirements
It could be helpful to talk to businesses who already export to your intended market. And for more information, see our guide on shipping and handling logistics and paperwork within this Aid to Trade sector, on the 9 th Floor. 506.06 FINANCIAL CONSIDERATIONS There are financial implications for exporting in relation to sourcing your product or service, insuring it, delivering it to your market and being paid for it. Bank account Your local bank can advise you on setting up a business bank account in a foreign country. You can then use this to make local payments for freight, insurance and packaging and to receive money owed to you. If you are to be paid in a currency other than your normal currency, your bank can advise you of ways to protect, or hedge, the value of your money. A foreign exchange contract fixes the exchange rate for transactions. Credit control and insurance Cashflow problems are one of the largest reasons why so many businesses fail, and most cashflow problems are caused by businesses not chasing up debts in time. There is a lot of legislation to stop companies paying late but there are still times where companies and individuals will withhold payments for long periods of time, affecting your bank balance. Date your invoices and ensure that they contain the terms of payment. Keep in contact with your customers and put a system in place that checks they have received the invoice and reminds your business to contact them, say, a week before the end of your payment terms. It can be useful to get the customer to check your address and payment details. If you do not receive your payment on time, contact them again on the due date. You will want to insure your goods to arrive safely – you can take out insurance for your chosen method of transportation. 504.07 SELLING DIRECT OR USING IMPORTERS There are many considerations when deciding to export. We have set out below the main factors to consider and then the advantages and disadvantages of the various options. Direct selling - Consider whether you need a local office to deal with distribution and local administration.
- Work out how to promote your business
- Think about what type of after-sales support you will offer
- Ensure you have adequate time, money and understanding of the market to go it alone.
The following table gives you the advantages and disadvantages of selling directly: Advantages Disadvantages _________________________________________________________________ You maintain control over your Possible lack of knowledge of the local product and Marketing market
You take all of the risk Language and cultural barriers
Lack of business contacts_________________________________________________________________ Using importers If you are thinking of using an importer there are some practical choices and decisions to be made. For example, you need to find one preferably with experience in selling your type of product or service, then you need to decide between licensing your product to a third party – allowing them to manufacture, distribute or sell your product or perhaps setting up a joint venture. The following table gives you the advantages and disadvantages of using an importer: Advantages Disadvantages __________________________________________________________ Rapid entry into the Market Your partner may become your competitor
Preparing a licensing agreement may be costly and time consuming. _________________________________________________________________The following table gives you the advantages and disadvantages of a joint venture: Advantages Disadvantages __________________________________________________________ You maintain control over foreign It requires more investment than licensing Operations
Your partner has extensive The potential cultural and language knowledge of the target market differences between you and your partner
Your partner's business contacts It requires more training and management may ease your entry into the market _________________________________________________________________
504.08 RELATED WEBSITES Websites you might find useful: 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 |