‘Not enough SMEs treat international export correctly’ believes Ray Jones, head of business consulting at RTC North, a business support organisation. Once your product or service has succeeded in your home country, the next route of progression usually considered is exporting your services internationally. It’s a big step which requires a lot of commitment, financially and time, and something you should be sure your business is ready for before committing to. We’ve compiled a list of how to know whether your business is export ready.
1. You know your product is suitable for the foreign market
Your product is well received in the domestic market, but this doesn’t necessarily mean the international market will go for it. It’s likely your product will have to be adapted before exportation, to make it relevant to the specific market. Your product must possess characteristics that make it acceptable for the specific market-these may be features like size, shape, design, performance and even colour. For example, knowing red is a popular colour in Chinese speaking areas, whilst light blue is synonymous with death and mourning, even these minor details can affect sales.
Different industries fare differently in foreign markets, for example, in contrast to other industries, grocery retail is still dominated by local players in most countries. Food is one of the main areas in which it’s difficult to penetrate foreign markets as tastes can differ so widely. Differences may occur in such aspects as distribution channels and pricing as well as advertising in languages that are relevant to particular cultures.
Ensure your product is cost competitive and that you are iISO certified and approved. International competition means competitors’ products measuring up against one another, resulting in a constant striving to improve functionality, design and efficiency in order to keep existing or to win new market share. For more international marketing tips, download our free e-book.
2. You’ve had visits to your website from abroad/enquiries from abroad
If your tracking data shows evidence of visitors from abroad, this could be a sign of a potential customer base in a foreign country. If there is a particular country you’re receiving visits from this may be worth researching further. Another sign of overseas interest are enquiries from abroad, have you had any phonecalls or e-mails from abroad requesting your product or services?
If these apply then it would imply the interest is there and you should do some further research into a specific or multiple foreign markets.
3. You have the capacity to fulfil the needs of foreign export
Your company has the capacity to fulfil the linguistic, financial and delivery needs associated with export. Meaning:
– You have the linguistic capacity to provide your customers with support in their own language if necessary. 20% of UK exporting companies lost business as a results of language or cultural differences and 72% of customers abroad would rather buy products that provide information in their own language. 36% of internet users do not search in English, so to attract a foreign language market your website and other advertising mediums needs to be accurate in the target language. Also take into consideration time differences if applicable. Difficulties in communicating with customers could be damaging to your brand.
– You have the financial capacity for international export. Your budget would have to cover all the relevant costs involved with delivery services, additional staff, overheads, re-branding or alteration of product and market research. Would what you gain from exporting overseas be sufficient enough to justify the time, effort and financial sacrifice?
– You have the financial capacity to deliver internationally if applicable, you have researched prices such as freight or shipping prices and have a good knowledge of the logistics involved. Systems of distribution vary widely. You should know your product can withstand different environments it will encounter through export. Find out more about export pricing here.
4. Your company is able to cope with the extra demands associated with export
The demands of export are high, particularly at the beginning. 50 employees may be sufficient for the domestic market, but consider the amount of customers you could gain from this international market, would your staff body be able to deal with all these new customers? If not, do you have the capacity to hire new staff, and other associated necessities i.e. office space/computers?
Consider things such as whether your product needs after sale service or technical support, do you have staff who deal with these services? And as mentioned above, do you have the capacity to provide after sale support in the target language?
5. You understand your target market
You understand that not every country wants the same thing, and that localization is the difference between success and failure. Even if the product is the same, your marketing strategy may need to be altered for many reasons ranging from law to cultural preferences, understanding what your foreign customers want in terms of branding is key.
Consumers’ media habits vary widely. If you don’t have this knowledge already, do you have the means to gain knowledge on the local market, contacts abroad or the ability to organise focus groups? If you fail to do so you may miss a vital piece of information that could make a big difference. Previous examples of things which could have been simply avoided through having feedback from local clients are things such as brand names and slogans gone wrong.
When KFC launched in China, its slogan “Finger-Lickin’ Good” translated into Chinese as “We’ll Eat Your Fingers Off”. With the right research simple errors such as these can be avoided. There are also a number of things you need to be aware of such as local laws and licencing. Ray Jones, head of a business support organisation says “you have to set it up as a separate business model rather than simply take a punt at getting some business from a different part of the world,» he says. «It is vital to build and invest in something that will be sustainable in the future.»
6. It’s worth doing
The final thing you should be sure of is that what you will gain from expanding overseas will be worth it. Often companies go through a lot of stress in order to expand overseas and sometimes the price doesn’t pay. Would it be worth exhausting all domestic potential first?
You must be prepared for a slow beginning, and for your staff must be willing to commit the extra work in order for export to be a success. See here for more details of UK Trade & Investment’s (UKTI) services and help available for UK companies looking to or already exporting.
Over to you. Is there anything else you would add to the list?
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