An overview on how to analyze a product or service's export potential in international markets. Take an Export Readiness Assessment..... This article is part of the U.S. Commercial Service's "A Basic Guide to Exporting".
Last Published: 8/26/2016
Once you’ve determined whether or not you need an export license to sell your product and for example, you’ve learned that North Korea is not among the markets to consider, analyze your product’s or service’s export potential. There are several ways to evaluate the export potential of your products and services in international markets. The most common approach is to examine the domestic sales of your products. If your company is successful in the U.S. market, there is a good chance that it will also sell in markets abroad, at least in those markets where similar needs and conditions exist. If you are a wholesaler in the United States or if you want to be a manufacturer’s representative, you’ll have the means of assessing domestic sales. If you have a startup but haven’t sold anything yet, you’ll at least have a good sense of future prospects.

Another way to assess your company’s potential in exporting is by examining the unique or important features of your product. If those features are hard to duplicate abroad, then it’s likely that your product will be successful overseas. A unique product may have little competition so demand for it may be quite high.

However, even if your product is not unique, don’t be discouraged.
Many products and services have competitors in their targeted overseas markets.
Advantages of “Made in the USA”
• Innovative, creative, cutting edge
• Flexible and prepared to modify products  and services
• High quality, durable, safe
• Positive brand values and awareness
• Reputation for excellent after-sales service and warranty coverage
• Creative marketing materials
• Easy to reach and communicate with
• Honest, ethical business dealings

Assessing Your Company’s Export Readiness
Export-ready companies possess certain qualities that increase the likelihood that their exporting efforts will be successful. Answering these important questions about how exporting will enhance your company’s goals can help you determine your company’s export readiness:

• What does your company want to gain from exporting?
• Is exporting consistent with other company goals?
• What demands will exporting place on your company’s key resources, management and personnel, production capacity, and financing, and how will these demands be met?
• Are the expected benefits worth the costs, or would company resources be better used for developing new domestic business?
Qualities of an Export-Ready Company • Have commitment from ownership and are  prepared to fund exporting activities • Understand the added demands international  business can place on key resources • Have realistic expectations regarding return on investment from international activities • Are prepared to modify products and services  by market as well as provide training and  after-sales service • Be willing to work with government export  promotion agencies

Motivational factors include:
• Long-term expansion. Building an exporting plan takes time, so it is important to focus on expanding your business over the long term and not to look for immediate returns.
• Increased competitiveness. By selling internationally, your company can gain insights into different ways of doing business.
• Exploitation of unique technology and expertise. If your product quality or expertise is superior, you’ll have a competitive edge in the international marketplace.
• Improved return on investment. Your company should seek multiple benefits from exporting, such as expanded customer networks and exposure to new ideas and technology. • Increased capabilities. You’ll develop better products and services, acquire better leadership abilities, and collaborate better with customers and suppliers.

Organizational factors include:
• Management commitment. Total backing from management is the number one determining factor of export success.
• Funding support. Management must be willing to allocate sufficient time, enough resources, and an adequate budget for export activities.
• Personal expertise and commitment. Having staff members with international experience or having employees learn about your target market’s language and culture will help you enter the international marketplace.
• Product capabilities. Your company must possess the space and equipment needed to manufacture for the specific countries to which you are selling (each of which will have its own product standards and regulations).
• Company’s exporting goals. Whatever your goal, consider whether the expected benefits outweigh the costs.

Is your product ready to export? To determine export readiness, consider these additional factors:
  • Selling points. If your product is a success domestically, the next step is to identify why it sells or has sold so well here, keeping in mind that conditions abroad may be somewhere between slightly and significantly different (socially, culturally, economically, politically, and environmentally).
  • Modifications. You may sell your product without modifications to international markets, as long as it meets the standards and regulations set by the respective countries. Some countries have strict governmental regulations that require special testing, safety, quality, and technical conformity measures. Depending on the product and market, suppliers may need to alter colors, sizes, and packaging to accommodate local conditions and consumer preferences.
If features are hard to duplicate abroad, then it’s likely that your product will be successful overseas.
  • Product licensing. Some classifications of products require special approval from the U.S. Department of Commerce before you export and some of those products require export licenses. (See the discussion on export regulations in this chapter).
  • Required training. Products that require training to operate place a greater responsibility on your company and distributor or agent, and you must decide how to support that training.
  • After-sales service. Products that require considerable after-sales support must be handled by a distributor or agent who is well positioned to provide such a service. Providing the means to send the product back to you for repair and replacement is another option.
  • Product distinctiveness. Products that have unique features enjoy a competitive advantage and better reception in foreign markets. Such unique features include patents, superior quality, cutting-edge technology, and adaptability.

Rather than filling the occasional order from an international buyer. You could do a very nice business selling internationally via your own website or a third party e-commerce site. So-called passive or reactive exporting may be the dominant model among U.S. small and medium-sized enterprises. There is nothing wrong with this method of exporting, and it usually does not require elaborate planning or deep reflection on motives or capabilities. However, to take your business to the next level of performance, expertise, and growth, a strategic approach is needed. The first step is to create a written export plan.
Many small companies export to more countries than they have employees


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