Export Market Research

INTERNATIONAL MARKETING

Section 2 –D

Export Market Research

          Market Research is considered as a crucial part of marketing and selling. Export Market Researches are designed for companies that require specialized information concerning a particular product or industry in a specific market.

          Market research abroad is different from the market done locally. Culture is a very important factor to consider before entering and placing a product in a diverse market.

Elements of Export Market Research Report

1.       The Market Potential

a.       County’s trade restrictions – one of the reasons for restricting exports is to protect the environment. There are products listed as endangered species or affected by environmental concerns.

The most common documentary requirement in almost all trading nations is the Certificate of Origin which certifies that the raw materials used in making the product are obtained from that country.

b.      Market Access – Tariffs and quotas are just one of the concerns exporters should consider. Apart from that, you have to be familiar with other necessary requirements the target market country may ask for.

The country’s political climate or situation should also be considered.

c.       Market Size, Patterns and Growth – part of the market research is to study the market as a whole. The essential data can be taken from annual trade statistics published by every country.

When you are interested in a particular country, visit its local embassy.

The Internet is a very good source of data on market size, patterns and growth.

d.      Competition – competition is part and parcel of any business venture even if you have already created your niche in the market.

Exporting to other countries would definitely be competitive. There always be other competitors or you may be the competitor in the particular industry of the country that you want to export to.

e.      Price Structure – price is the only area in global marketing mix where policy can be changed quickly without large direct cost implications; however, it is important that management realizes that constant fine-tuning of prices in overseas market should be avoided and that many problems are not best addressed by pricing actions.

  

Estimating Market Potential

YOUR COUNTRY’S TRADE REGULATIONS	COUNTRY RESTRICTIONS
Market Access	Currency and Tax Regulations Licensing and Other Documentary Requirements Tariffs and Quotas ( applying to your country and the other country) Currency Restrictions Distribution Channels Health and Safety Regulations Political Factors Affecting Access
Market Size, Patterns and Growth	Imports (Volume, Value, Sources, Trends) Consumption (Volume, Growth, Trends, Geographic Patterns, Market Segmentation) Factors Affecting Demand (Economic, Climate and Geographic, Social and Cultural
Competition	Domestic Production, Volume and Growth Structure Market (Market Share, Plant Locations, Capacity Plans) Strength (Size and Special Advantage) Reasons for Success Gaps in Product Lines Trademarks and Patents
Price Structure	Prices to End-Users Trade Mark-Ups Transport Costs

2.       Product Requirements

a.       Product - the product itself determines whether it is going to be accepted or not by your target market. In creating an acceptable product for the global market, it is important to examine the “total” product offer.

b.      Packing for Shipment – packing is one of the necessary element I exporting. Mostly, packing is done through sea and air freight. But there are other distribution systems by which you can transport goods such as rail or road especially in Europe. Packed goods can be placed in containers or crates. Other products require more protective packing, and processed foods normally have shelf life date to contend with.

c.       Industrial Package Pack – this refers to the package handling once the products reach the country of destination. How will the products be stored? How will they be unpacked from a master carton? Are there any reuse or return requirements?

d.      Consumer Pack – potential customers are first attracted to the product’s packaging. At times, products are usually bought because of their presentation or packaging.  Packaging varies among countries. Caution and care should be observed in designing packs that might be considered offensive by a particular foreign country.

          In  export marketing, there are also practices that are standard among countries. These are transport, sales and distribution channels, pricing strategy factors, services expected by buyers, and advertising and sales promotions.

 A checklist of the different aspects in export product research.

Product	Color – technical specification Taste – reasons for use Design and styling conditions for use Materials – performance characteristics
Packing for Shipment	Handling methods – storage conditions Marketing requirements
Consumer Pack	Protective Requirements (Storage and Handling Methods, In-Store Conditions) Information Requirements (Labeling Regulations, Language, Consumer, Knowledge of the Product) Merchandising Requirements (Display Conditions, Size and Shape Requirements) Reactions to Trade Names, Colors and Symbols Usage (Dispensing Requirements, Home Storage Conditions, Reuse or Disposal Requirements) Legal Requirements (Labeling, Weights and Measures, Materials)

Dos and Don’ts of Designing Packs Worldwide

Color
France, Holland, Sweden	Green is associated with cosmetics.
France	Red is masculine. To the rest of the world, blue is masculine
Sweden	Swedes do not like packaging that shows gold or blue. Combination of white and blue, the colors of the national flag, is best avoided.
Ireland	Green and orange should be used with care
Switzerland	Yellow means cosmetics. Blue means textiles.
China	White is the color or mourning, and white-robed figures in illustrations are counterproductive. Red is happy, profitable color. Blue and white mean money.
Other Design Elements
France	Avoid illustrations showing liquor being poured.
Spain	Bikini-clad girls should not be used in illustrations.
Germany	The use of superlatives is forbidden. “Mist” is the word for dung, the word “gift” means poison.
Designing Packs Worldwide
Sweden	Consumers do not like giant packs. The brand name must be pronounceable in Swedish.
Switzerland	The oval is an omen of death.
Turkey	A green triangle signifies a free sample.
Europe generally	Designs resembling the “swastika” (Nazi sign or logo) are generally disliked.

Source: London Chamber of Commerce and Industry, 1991

3.       Marketing Practices

a.       Transport – whatever transport mode is used, you must be aware of the shipment cost. You must research the how many hours/days it would take before the goods arrive at the country of destination.

Shipping by air is done for fashionable accessories and perishable goods. packing requirements should also be strictly followed for a secured voyage of your goods.

b.      Sales and Distribution Channels – you have to find the best distribution channels that will link the producers to their final customers. New channels that identify opportunities to cut costs or develop the efficiency of reaching a particular market segment are emerging. These include Internet ordering, cable TV shopping, telephone ordering and catalogue retailing.

c.       Pricing Strategy Factors – here, you have to consider your direct or indirect competitors. Are you pricing your product too high? Do your competitors have product attributes which are not present in your product?

d.      Services Expected by Buyers – after-sales service can be in the form extended warranties, guaranteed response service agreements, installation support, support for product use and maintenance, spare parts, field service and repair. Customer loyalty is easier to preserve if there is strong after-sales service.

e.      Advertising and Sales Promotions – advertising is an important part of the communication mix especially for consumer goods which have countless small-volume customers who can be reached through mass media.

There are times when exporters do not have a say in the promotion of the product to the end customer. However, the exporter can extend his services beyond the selling the product to the importer. He should foresee how the target market will respond to the product with the aid of advertisement or sales promotion. An example is to print the labels or instructions using the other country’s language or own symbols

Some useful tips in advertising in Asia:

-          Trying to solicit an immediate response from a potential customer is contrary to traditional buying habits. Instead, the advertiser should plan carefully the offer and refrain from hard-sell approaches.

-          Asians are more conservative than Westerns, and they consider human relationships important. When family life is used as a theme, the advertisement becomes appealing.

-          Asian are collective. Testimonial especially from revered personalities can lead to attractive advertisements.

Marketing Practices

Transport	Freight Rates – Speed and Frequency Reliability – Risks Packing Requirements
Sales and Distribution Channels	Normal Channels for the Product Alternative Channels Advantages, Disadvantages and Feasibility of Using Normal or Alternative Channels Delivery Time Requirements Mark-Ups and Discounts of Each Level Major Distributors
Pricing Strategy	Practical Limits – Likely Reactions of Competitors Supply of Competing Products Prices of Competing Products – Product Advantages
Services Expected by Buyers	Technical Advice – Replacement of Defective Merchandise Guarantees Repairs and Maintenance – Spare Parts
Advertising and Sales Promotion	Media and Techniques Mainly Used Timing and Geographic Concentration Sales Messages Emphasized in Advertisement