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Notwithstanding all the benefits of exporting,
it remains a complicated process that is fraught with risks.
It is not a question of simply becoming an exporter from
one day to the next. There are many steps involved in becoming
an exporter and each of these steps may have several sub
components to it. The 20 steps to exporting are highlighted
below:
A: Understanding and preparing
for exports
- Considering
exporting? - If you are considering exporting, you
should get yourself up to speed by understanding why
you want to export, what the difference is between domestic
marketing and export marketing, what the various environments
are that you will encounter in international trade and
the trade barriers you may face in the international
marketplace.
- Current
business viability - If you are not managing to survive
in your current business, then don't consider exporting.
- Export readiness - Besides for having an existing base
(i.e. a viable business) to build on, there are several
other factors that contribute to your readiness to export.
- Set a broad export mission statement and initial research
budget for your firm - If you're ready to export, then
you need to set a broad statement indicating that intention
to export (which you may revise later), and you will
also identify a small budget that will allow you to do
the research and preparation necessary to plan and implement
an export strategy.
- Confirm management's commitment to exports - probably
one of the main reasons why firms fail with their export
endeavours is because management only pay lip service
to the firms' export efforts. This is not enough! Get
management to commit on paper to the firm's exports efforts
and have them approve the budget you submitted for your
export research (see step 4).
B: Researching and segmenting export
markets
- Undertaking an initial export SWOT analysis of the firm - as it is important to understand what the export capabilities
of the firm are, as this knowledge is used as an input
to the export marketing research process (see the next
step), it is necessary at this point in the export process
to undertake an export SWOT analysis. But as you do not
yet have the foreign market information at your disposal,
this SWOT analysis will need to be reviewed again later
in the export process as an introduction to the export
plan.
- Selecting and researching potential countries/markets
abroad - It is a fact; you cannot export to all the countries
in the world. Indeed, even established companies can only
concentrate on two or three countries at most (and usually
only those that are close to each other either geographically,
culturally or in terms of language or some other factor).
Smaller companies will barely be able to cope with one
additional country (over and above the domestic market).
The question is which country? At this point in the export
process your firm must evaluate the many potential countries
open to you and narrow the list down to no more than three
to five countries with the greatest potential to look at
more closely (a shortlist of countries). Once you established
a shortlist of countries, the next step is to do some desk
research and in-market research to identify the most suitable
country (or perhaps two countries) from your shortlist.
In the case of large countries such as the US, Germany,
the UK, etc., you may also want to segment the country
into more accessible segments (such as males under 30,
or households with an income of $50 000 or more per annum)
that you can focus your marketing efforts on. The purpose
of this research will be to understand the foreign environment
you intend to enter and to identify potential foreign customers
and their needs so that you can plan an export marketing
strategy that will meet your potential customers' needs.
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C: Compiling an export plan
- Preparing your export plan - This
is one of the most important steps in the export process
and will incorporate a situational analysis (export SWOT),
your export objectives and an export marketing strategy.
D: Implementing the export plan
- Obtain financing/resources for your exports - You
will almost certainly need to finance your export efforts
in some way and you will have to give thought to how much
you need and where you will find the money. You may also
need to find the staff and facilities necessary to support
your export activities (which, in turn, will cost money).
- Managing your export risk - When you negotiate and
eventually sign an export contract, you need to be aware
that you are committing your firm to certain responsibilities
(such as delivering on time and according to a certain
standard) and that you are making certain assumptions about
your business partner (that they will pay, for example).
These responsibilities and assumptions represent a serious
risk for your firm and you need to be aware of what these
risks are and you need to take steps to manage these risks
as best possible.
- Promoting the firm and its products abroad - This involves
letting the world know about your firm and what it offers
and there are many promotional channels that you could
use (such as advertising in trade magazines, e-mail marketing
or participating in a trade fair). The channel you use
will depend on what your promotional strategy is that you
outlined in your export plan.
- Negotiating and quoting in export markets - You need
to approach your customers, convince them to buy from you,
negotiate a deal and price that that find acceptable, and
present them with a quote (usually in the form of a proforma
invoice).
- Revising your export costings and price - Following
your negotiations, you will in all probability have to
consider lowering your price or other sales terms. This
may require you to revisit your costing exercise and pricing
strategy.
- Obtaining the export order - This is all about closing
that sale and signing the contract!
- Producing the goods - With the export order in hand,
you now have to get down to producing the goods that you
have promised to deliver. This will mean securing raw materials
and components from your suppliers, and producing, packaging
and labelling the goods for export.
E: Export transportation and logistics
- Handling the export logistics - You have to get the product from your factory to your
customer and you will need one or other form of transportation
to do this.
F: Export documentation and
payments
- Handling export documentation and export payments - A lot of paper work will accompany each consignment.
You need to ensure that your export documentation is in
order so that you can effect export payment for your goods.
- Providing follow-up support - Customers will want to
be ensured that you will help them if something goes wrong
with your product. To this end, you will need to consider
what warranties and guarantees you will offer your customer,
as well as what support you will provide them.
- Getting paid - An important part of the export process.
G: Export management
- Reviewing the export process - To ensure a successful export department,
you will want to review and improve your export process.
- Export management - The process
does not end here. It needs to start all over again with
your next customer.
This is the focus of export management and involves the
way you organise your export department.
Select the topic from the list above
that you are interested in. Under each topic, you will
find a number of other issues that will help deal with
your exports.
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