Preparing Your ProductPreparing your product for export
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Selecting and preparing your product for export requires product knowledge and awareness of the unique characteristics of each target market. Market research and contact with foreign partners, buyers, and customers should give your company an idea of what products can be sold and where. Before the sale can occur, your company may need to modify a particular product to satisfy buyer tastes or legal requirements that pertain to the foreign destination.
The extent to which your company is willing to modify products sold for export markets is a key issue to be addressed by management. Some exporters believe that their domestic products can be exported without significant changes. Others seek to consciously develop products that are customized to a particular market. For example, an electrical product that runs on a particular voltage may need to be redesigned to run on a different voltage for a particular destination, or packaging to meet labeling standards or cultural preferences may be necessary.
If your company manufactures more than one product or offers many models of a single product, start by exporting the one best suited to the targeted market. Ideally, your company may choose one or two products that fit the target market without major design or engineering modifications. Doing so works best when your company:
- Deals with international customers that have the same demographic characteristics or the same specifications for manufactured goods.
- Supplies parts for U.S. goods that are exported to other countries without modifications.
- Produces a unique product that is sold on the basis of its status or international appeal.
- Produces a product that has few or no distinguishing features and that is sold almost exclusively on a commodity or price basis.
Questions to Consider:
- What foreign needs does your product satisfy?
- Should your company modify its domestic-market product for sale abroad? Should it develop a new product for the foreign market?
- What specific features such as design, color, size, packaging, brand, labels, and warranty, should be modified? How important are lingual or cultural differences?
- What adjustments or specific services are necessary to execute your sales model abroad at the pre-sales, sales, and post-sales stages? For example, does the foreign market have an environment that will affect the product such that the product’s warranty should be changed? Or perhaps include different spare parts than those you might include for the product when sold domestically?
- Are your firm’s service and repair facilities adequate?
Your company may have to modify its product to conform to geographic and climatic conditions, buyer preferences, standards of living, or government regulations. Your company may also need to modify its product to facilitate shipment or to compensate for possible differences in engineering and design standards.
Buyer preferences in a foreign market may lead you to modify your product. Local trends and customs, such as religious practices or the use of leisure time often determine whether a product is marketable. The sensory impression made by a product, such as taste or visual effect, may be a critical factor. For example Japanese consumers tend to prefer certain kinds of packaging, leading many U.S. companies to redesign cartons and packages that are destined for the Japanese market.
Market potential must be large enough to justify the direct and indirect costs involved in product adaptation. Assess the costs to be incurred and, though it may prove difficult, determine the increased revenues expected from adaptation. The decision to adapt a product is based partly on the degree of commitment to the specific foreign market. A firm with short-term goals will probably have a different perspective than a firm with long-term goals.
Foreign government product regulations are common in international trade and are expected to expand in the future. Regulations can take the form of high tariffs, or they can be non-tariff barriers, such as industrial regulations or product specifications. Governments impose these regulations in order to:
- Protect domestic industries from foreign competition.
- Protect the health and safety of their citizens.
- Force importers to comply with environmental controls.
- Ensure that importers meet local requirements for electrical or measurement systems.
- Restrict the flow of goods originating in, or having components from, certain countries.
- Protect their citizens from cultural influences by which they deem inappropriate.
When a foreign government imposes particularly onerous or discriminatory barriers, your company may be able to obtain help from the U.S. government to press for their removal. If you suspect that a foreign government regulation is a barrier to business contact the Office of the U.S. Trade Representative at https://ustr.gov/.Prepared by the International Trade Administration. With its network of 108 offices across the United States and in more than 75 countries, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Foreign Trade Regulations Packaging