To identify new markets and potential opportunities, or eliminate unsuitable markets, researchers should first examine macroeconomic data. Macroeconomics refers to research into the overall aspects of a country’s economy, including income, national output and the interrelationship between economic sectors.

The economic characteristics of an international market are conditions that organizations cannot control. If an organization cannot contend with these characteristics, or if the characteristics mean that a product or service is unlikely to be suitable for that country, then the market can be discounted as an opportunity or the organization can investigate methods of adapting to the market.

The macroeconomic features of a potential host country can be divided into several areas for research:

1. Gross national product (GNP)

The market value of all final goods and services produced by the nationals of a country in an annual time frame. GNP is often used as a measure of the size of a country’s economy, and incorporates income derived from overseas activity.

2. Gross domestic product (GDP)

The market value of all final goods and services produced in a country or region in an annual timeframe. GDP per capita is often used as a measure of the standard of living in a country.

3. Purchasing power parity (PPP)

Compares the purchasing power of different currencies in their domestic countries and is often used as an alternative to GDP figures for measuring the standard of living in a country. PPP is calculated using the amount of domestic currency needed to purchase a similar collection of goods in different countries.

4. Household disposable income

This is the average amount a household in a country has to spend after taxes and payment of essential items, such as housing costs and utilities.

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5. Market size

The market’s total number of buyers. The larger a country’s population, the larger the potential customer base.

6. Market potential

Describes how many people or businesses in a country could realistically be expected to purchase a product or service.

7. Market resources

The presence of natural resources in a country will have an impact on international business success. The presence of resources such as oil, soil, timber and minerals increases a country’s wealth and leads to increased development of infrastructure.

It is also important for exporters to consider the geography and climate of a potential market country, because both have an impact on the transportation of goods and dictate which products or services are likely to be purchased.

For organizations considering sourcing goods from an international market or setting up a production site in a foreign county, the presence of resources needed for production processes will be essential for success.

8. Market activity

In some cases, organizations will need to investigate the major economic industries present in a specific country. For example, an organization wishing to sell building machinery might need to check whether a potential market has its industry centered on agriculture rather than industry.

9. Infrastructure

A country’s infrastructure, such as the transportation network, the distribution of cities and major centers, and the extent of the national power supply, will have an impact on the distribution of goods or services and the costs involved with distribution.

In some cases, this information will also indicate a need to adapt a product or service (because the supply of electricity is intermittent, for example), or will indicate the unsuitability of exporting to that market.

Information about a country’s infrastructure will also give an idea of how effective business communications might be (for instance, the availability of telephone, Internet and mail services) and how easy it will be to travel to the country for meetings and to monitor business activities.

10. Urbanization

The amount of urbanization in a country is a measure of that country’s demand for certain goods and services and its income levels. In general, workers in urban areas are paid higher wages than workers in rural areas.

The post Start to identify new markets by looking at these 10 statistics appeared first on Trade Ready.

Research findings are of little or no value until they can be applied to solve problems and help make decisions. International trade research is especially valuable when it is used to decide the following:

• Which markets are good international trade opportunities
• When and how to enter international markets
• Whether to adapt products, processes or services for a new market
• How to adapt marketing to new opportunities

Determining when and how to enter a market requires examining many different aspects. Perhaps the most important one is deciding on the nature of the service or product that should be offered to a promising market. In taking a product or service into a foreign market, your company has several distinct options about how to proceed:

• Your company can sell the product or service as is with no modifications or changes.
• Your company can create several modified versions of the existing product or service, each one aimed at a different market.
• Your company can create new products or services for different markets.
• Your company can incorporate all required changes into one product or service to address the global market.
• Your company can introduce modifications to the processes by which a product is designed, manufactured, sold and delivered to the marketplace.
• Your company can modify the services accompanying the product or service to better accommodate market requirements.

Which of these options your company chooses will depend on the information researchers have gathered about the target market and the market intelligence that has been developed from it.

Do you have a universal product?

Occasionally, modifications to products, services or processes might not be necessary.

Your company might be able to export the same product and use the same processes as it does for its domestic market.

This situation can occur when your company:

• deals with customers who want a product because it is the same in all worldwide markets, such as jeans;
• supplies generic components, such as tires or computer chips;
• produces a unique product that is sold based on its status or foreign appeal, such as Gucci watches
• produces a product that is sold exclusively on a commodity or price basis, such as iron ore or wheat.

In other cases, intelligence gathered by researchers will indicate that a product is unsuitable for a market and cannot be modified to make it suitable. For example, water skis are unlikely to find a mass market in desert countries and air-conditioning units are not required in Greenland.

Some product-market mismatches might be eliminated over time. For example, many Asian countries do not commonly use milk or milk products, but this could possibly change with the right product and marketing approach.

However, such an attempt would require a lot of time and investment and would have no guarantee of success. Another example would be that of a mobile phone provider that does not want to expand into a market without wireless infrastructure.

To begin applying your research take a high level perspective

Applying trade research to product design and modification involves considering the whole production and export process and comparing it to what has been learned about customers in the target market area.

Your company should think of the following factors:

• How its products and services are advertised and sold
• How they are designed and, in the case of products, manufactured
• What happens when orders are received from customers
• How products are stored and shipped
• The speed and reliability of delivery and the comprehensiveness of any after-sales service

Research and the resulting product or service modification must not be viewed as a one-off project. Applying market intelligence should be a process of improvement.

Every aspect of your venture can be evaluated and improved, even if the product or service does not require modification or cannot be modified.

Exporters will never have a perfect product or perfect process. Their products or services will always be at the mercy of competitive pressures, changing market preferences and emerging new technologies. Success depends on understanding and anticipating change through continual improvement.

Case study: Improving packaging in response to market demands

In 2007, Novartis, a Swiss agribusiness, chemical and drug company, announced that all food products made from its genetically engineered crops would be labelled to indicate the presence of genetically modified ingredients.

Genetically engineered products made by Novartis are used on many farms to increase milk production and reduce the amount of herbicides or insecticides used on corn, soybeans, cotton and potatoes. Foreign genes have also been introduced into tomatoes to prolong their shelf life.

There has been widespread opposition to genetically engineered foodstuffs for several years, but Novartis has been unable to change its product to respond to these concerns. However, Novartis decided to improve its product offering in response to numerous customer surveys that have shown that U.S. customers would prefer to know when the food they are eating comes from genetically altered crops or animals.

Use your data to see what your customers want

Products can be standardized, adapted or created for a foreign market. Regardless of which approach is chosen, there are certain common characteristics that all products should have.

They should all be:

• fit for the purpose for which they were intended;
• efficient, safe and reliable;
• devoid of features that might offend customers;
• appealing; and
• in conformance with all regulations in the target markets.

To develop a clear picture of what the target market really wants and what can realistically be provided, your company must interpret market intelligence by sorting through and weighing a variety of factors.

Customers might express interest in a wide variety of features, some of which might appear contradictory: low price, high quality, timely service, expanded functionality, rapid delivery or excellent after-sales service. Not all of these requirements will have equal weight. Their significance will depend on the product being considered.

Your company must decide how to weigh, select and trade off customer requirements to achieve an optimal mix.

It might not always be easy to define or predict what motivates customers to purchase a particular product. For example, Apple has had immense success in recent years, despite its computers and iPods being more expensive than rival brands. What has led to the popularity of its products is good design and a clever marketing strategy that emphasizes that an Apple product is more fashionable than others and that people who own an Apple Mac computer are more creative than PC owners. Younger customers feel that there is a cachet in being seen with an iPod rather than other MP3 players.

Break your market intelligence into 4 distinct categories

The market intelligence developed from international trade research can be divided into four broad categories:

• Political and legal environment
• Infrastructure
• Market description
• Product-specific market data

Each of these categories contains descriptive information about a different aspect of the target market. That information can be examined and evaluated for indications of where some modification is required to your company’s product, service or processes. It can also identify potential areas for growth, perhaps by exposing an unmet customer need.

As well as identifying where products or company business processes might have to be altered to meet customer and market needs, this intelligence can help researchers evaluate the attractiveness and viability of a market that is being considered as an international trade opportunity.

Market intelligence is essential not only for guiding business decisions about whether to engage in international trade, but also for indicating ways in which products, services and business processes must be adapted or changed in order to become successful in a market.

This intelligence can be invaluable for guiding companies towards unexploited markets in which a small and inexpensive change to their product will generate new demand. It is also helpful in identifying markets that seem to be profitable opportunities but will in effect be difficult to sell to without extensive product modification.

Market intelligence is also valuable for guiding how products and services should be promoted and advertised to different cultural markets and can help organizations avoid potential loss of reputation from cultural mistakes.

The post How to apply market intelligence to your products and processes appeared first on Trade Ready.

Market intelligence can answer several questions, including:

• In which market will our new product be most likely to succeed?
• What is the best way to enter this market?
• Do customers in this market need our product?
• Are there customer needs that are not being met by existing products or services?
• What is the market potential for this product?
• Can we establish a cost-effective overseas production plant?
• Why is our product not selling effectively?

In one example, an international medical products manufacturer had been trying without success for four years to find a partner that could help it gain entry to the U.S. market. The company commissioned an in-depth market intelligence report that developed a comprehensive picture of the U.S. medical products market.

This knowledge answered the question, “What are the critical success factors for this market?” The answer was that potential partners needed to mitigate the risks of launching new products.

Armed with this knowledge, the company demonstrated to potential partners that it was capable of mitigating the risks associated with licensing of new products in the U.S. With this new approach, the client founded a successful partnership and began generating substantial revenue.

Don’t jump to conclusions without knowing a market’s geography

Market intelligence about geographic and climatic conditions will help companies assess how easy or difficult it will be to exploit a new opportunity.

The size of a country, its distance from the company’s distribution centres and the nature of the terrain will affect distribution costs and the ease of communication.

It will also indicate the types of goods that can be traded and how goods must be packaged. For example, processed food products in countries such as Japan that have a regular rainy season, often require special packaging.

Perishable goods might not be suitable for export to a country where an inefficient distribution system might lead to delays of many weeks. Intelligence about the geography and environment of a region is also critical for decision making when a company is contemplating locating production or distribution facilities in another country, as the case study below illustrates.

It is important not to jump to conclusions when making decisions based on geographic characteristics. For example, distribution in many African countries relies on a complex system of riverboats, trains and even carts. However, this system is often very cost effective and reliable when compared to modern infrastructures.

Geographic and climatic factors can also provide important indications of the market potential for products related to weather and climate conditions, such as snowmobiles, snow blowers, ski equipment, jet skis, sunglasses, swimwear, air-conditioning units and electric fans.

One U.S. food processor built a pineapple cannery on a river delta site in Mexico. A pineapple plantation was located upstream, and the plan was to float the ripe pineapples downriver on barges. This would have been an efficient and cost-effective transportation method; however, at harvest time, the river was flowing too rapidly for barges to be used safely.

There was no other feasible method of transporting the fruit, so the company closed the plant. The equipment was sold to a Mexican competitor for a fraction of the original cost, and the competing company immediately relocated the plant.

Effective market intelligence could have helped the food processing company avoid this costly mistake.

Add demographics to your market intelligence for the full perspective

Demographic figures provide important indications about the size of a market, but how these figures are applied and interpreted will vary depending on the product or service.

For example, China, with a population of 1.3 billion, seems at first sight to be a huge potential market for many goods and has attracted the attention of many exporters. However, even after recent economic growth, income levels of most Chinese people are extremely low.

According to Chinese government figures, 10 percent of the Chinese population lives below the official poverty line of $87 a year. It is estimated that at least half the population lives on less than $2 a day. This means that, while the potential market does seem very large, many goods might be beyond the means of ordinary Chinese people to afford.

Use your information about economic characteristics

Analysis of economic characteristics can provide companies with an idea of the affluence, stability and potential for growth of a market. Less affluent markets will not be attractive options for marketing luxury goods such as consumer electronics, designer goods, jewellery and high-end automobiles.

However, some large markets such as India have very affluent sub-markets that can be targeted effectively.

How tech-savvy is your potential new market?

Market intelligence about technological indicators will help companies decide whether there is likely to be sufficient market potential for sophisticated products and services such as personal computers, electronic games, books and training programs.

For example, a company that produces online software will research the number of companies in a target market with substantial sales forces, the frequency of Internet use in industries with sales forces, the availability of computers and mobile devices and the amount of software that is currently available in the market.

Information about the level of technological education in a foreign market will also help companies decide whether to invest in the market and locate company facilities there. It is usually very expensive to support expatriate managers and employees, so the presence of a skilled indigenous workforce will be an important factor in determining whether a proposed investment will be cost effective.

What can socio-cultural characteristics tell you about how customers will respond?

Information collected about cultural values, lifestyle patterns, linguistic variation and cultural and ethnic patterns in a market is essential for helping companies decide what the market response will be to a product or service.

This information is especially important for companies considering whether to export products such as food, clothing and beverages, because the use of these products is highly dependent on cultural views. For example, in countries such as Korea, consumption of dairy products is uncommon.

Information about the range of languages spoken in a country or about the alphabets used will help a company determine whether translation will be a potential problem and whether products will require different packaging for regions in the same market. For example, Serbs and Croats speak a similar language but use two different alphabets.

Add all your market intelligence together to see the true market potential

Market potential represents the maximum amount of sales all suppliers of a particular product or service can make in a target market in a stated time with a defined level of marketing effort and under defined conditions. The market potential is determined by analyzing a variety of market factors, including socio-political aspects, market access, size and characteristics of the market and growth factors.

An idea of market potential can be determined by gathering and analyzing the following data:

• The amount of product that is consumed or purchased in the target market
• Supply figures, including domestic production figures
• Export and import figures
• Factors affecting imports
• Competing products and sales
• Market share trends
• Price trends
• Demographic trends
• Trends in purchasing power

The size and growth of product imports can be an important indicator. If import numbers are small relative to the potential market size, this might be a sign that the market is unreceptive to the product or that the market is not adequately supplied.

If imports of a product are growing more slowly than consumption in general, this would suggest that the market is not interested in the product.

If import numbers are large relative to the potential market size, this might be an indication of strong demand or of very strong competition.

Import figures rising more rapidly than domestic consumption does suggest an intense and successful marketing effort, but can also indicate the potential for weakening long-term products when the market becomes saturated.

The post Grow your business now by making the most of your market intelligence appeared first on Trade Ready.

Entering a new market requires a deep dive into the minds, lifestyles, habits and communication style of your new clients. Gathering accurate information to give you a full picture of this market will be the key to success in expanding your business into this new region.

Market intelligence can help companies determine current needs and preferences, future requirements, customer attitudes and factors that might have an impact on the market. This information can be used by decision makers to make more effective choices and develop better strategic approaches to markets.

Market intelligence is the process of researching, analyzing and applying qualitative and quantitative information about a market environment. It develops comprehensive knowledge about a market, such as how and why a market is changing over time.

Why you need to know every detail about your target market

During the past decade, oversupply, loss of market share, failing profit margins and general corporate under-performance have all exposed the inadequacy of planning based solely upon forecasts and budgets. Although beloved by accountants, such approaches could never explain how the desired results could actually be achieved.

Sound international marketing decisions cannot be made without accurate and timely data. Yet most SMEs do little or no formal market planning, nor do they conduct the market research needed to support their plan.

A company’s international marketing plan can mean the difference between success and failure, not only in the target market, but for the company as a whole. The money lost in a misdirected export-oriented venture may never be recovered from domestic activities. For this reason, the researcher that gathers the information and develops the analysis used in the marketing plan carries considerable responsibility.

There must be good communication and co-operation between the research and marketing functions. This collaboration extends through all phases of the process: initial exploration of the opportunity, identification of sources, conceptualization of the venture, data gathering and validation, analysis, planning, implementation and ongoing monitoring of progress and changes in the target market.

With this close collaboration, the researcher will have a better understanding of what information is required and will not waste time and resources gathering irrelevant material.

The firms that will survive base their success to a great extent on an early identification and analysis of changes in markets and industries in their international market environment.
– Bo Rundh, Karlstad University, Sweden

Marketing can’t operate in a bubble

Recognizing that the marketing function relates to or impacts the other business functions in a company, it follows that the preparation of a marketing plan involves input from all elements of the company. In many cases, such input should be provided on an ongoing basis in order to verify planning assumptions developed by the marketing function or to react to circumstances as they develop in the marketplace.

Product modifications must be validated with research and manufacturing. Innovative contractual terms should be submitted to the legal department. Changes in payment procedures should be checked with finance. The researcher must communicate with other divisions of the company, bringing them data that can help frame their decisions and finding out from them what additional information might be required.

In addition, the researcher can make a contribution that goes beyond any particular foreign market. For example, if research uncovers a new approach to manufacturing, this information could have a significant impact on the entire company. In this sense, researchers should know enough about the company to recognize the relevance of this kind of information when they run across it.

Find the market research approach that works for you

There are many ways to perform market research. Very large companies tend to have in-house research departments. In small companies with small budgets, this research may be conducted by senior executives, such as the head of the marketing function or even the president. There is one significant advantage to this approach—such concentration of functions ensures effective co-ordination of research, strategic planning and implementation.

The disadvantage, obviously, lies in the workload imposed on a few individuals. The danger is that the research will not be carried out as comprehensively and accurately as is needed and the company may find itself making costly mistakes that it can ill afford. For companies without in-house research capabilities, there is another alternative—hiring external specialists in market research.

Experienced market research companies, whose sole business function is to conduct market research for other companies, can be a very effective way of obtaining the required research.

These companies know the type and nature of information available through secondary sources. They know where to find the information needed and are aware of its completeness and accuracy from previous experience.

These companies can advise their clients on when direct market research in the form of surveys or focus testing may be required to obtain the level of sophistication and reliability needed to formulate a successful marketing plan.

Though such research may initially appear expensive, it can pay for itself many times over if it results in an effective marketing plan or if it helps the company avoid costly mistakes. Depending on a company’s need for ongoing research, it may be economical to contract out the market research capability on an as-needed basis instead of employing a full-time research person.

Over the longer term, however, if a company commits itself to doing business in foreign markets on an ongoing basis, it may find that it becomes cost effective to set up a dedicated research function in-house.

The post Create a winning international marketing plan by nailing your market research appeared first on Trade Ready.

What if everything you tried didn’t get you past go?

A chance meeting with a group of potential exporters led to a spirited discussion on how to best enter export markets.

It quickly became apparent that management teams were flying blind, planning for markets that no longer existed, and seemed to forget that if you want to catch the fruit, you must first get under the tree.

Further discussion determined the fundamental problem: managers were not willing or able to apply the same strategies and operating methods that had made them successful at home to export markets.

This problem begs the questions:

• What has changed and why are so few of Canada’s SMEs exporting?
• Why do they try to manage offshore markets differently than home markets?
• Where are the best opportunities for growth – i.e. where is the aforementioned tree?

Canada’s export evolution

Canada’s exporters underwent two powerful shocks, plus a pronounced transition from goods to services, that combined to radically change how Canadian SMEs need to think and operate in global markets.

The “Haves” and “Have Nots”:

Enabled by globalization, Canadian exporters had separated into two distinct camps by 1995: those with global value chains (GVCs) that saw massive offshoring to foreign affiliates and focused on services and knowledge-intensive manufacturing, and those without GVCs that were limited to exporting goods from Canada.

Export sales by foreign affiliates now account for over 50% of Canada’s exports.

They are also growing more than twice as fast as export sales directly from Canada.

Money talks – Trade walks:

The second shock occurred from 2000-2009, when the high Canadian dollar forced an estimated 20,000 manufacturing firms to shut down, with a loss of about 500,000 jobs.

Local actors stepped in, in what had been Canadian export markets, quickly dominating their sectors, and becoming sophisticated competitors.

Manufacturing clusters employing millions of workers in automotive and aerospace manufacturing, ICT, agriculture and chemical industries sprung up, forming tightly integrated supply chains, insisting on local supply and service, and effectively excluding foreign-based exporters from Canada and elsewhere.

Leaving on a jet plane? Not without a work visa:

In 1995, Canada’s (and the world’s) trade was dominated by goods, but by 2008, services accounted for about 50% of Canada’s exports.

Unfortunately, exporting services means either moving people or establishing autonomous foreign affiliates and transferring IP.

Since 2004, companies wanting to export technical and professional services from Canada have faced increasing difficulty in obtaining the necessary visas (often impossible).

They also face competition from rapidly advancing local competitors who are invariably cheaper, and are frequently offshore divisions of other Canadian firms.

The transition from widgets to services:

Manufacturing has moved away from transactional finished goods towards value added (knowledge-intensive) products.

In addition, they are offering related services and maintaining a relationship with the customer for maintenance, upgrades, etc.

Those firms that established GVCs have prospered as they developed solid customer relationships, whereas Canada-based exporters have seen a general decline.\

Exactly where is the new frontier?

Current status:

Canada holds no compelling advantage in any value-added sector. However, many Canadian products and specialized technical and professional services are competitive and in demand.

Exporters have been successful, but most had to leave Canada and set up foreign affiliates to do so.

Canada is a world leader in integrative trade, with well over $800 billion in Canadian direct investment abroad (CDIA), and we would argue that Canada’s most successful exports are corporate divisions or even entire companies, not the products they produce.

This offshoring strategy has paid off, and since 2004 foreign affiliate sales in services have grown by approximately 86%, adding over 200,000 new jobs offshore.

Future expectations:

Over 2,500 examples of Canadian foreign affiliates in Mexico alone, clearly demonstrate that exporting goods from Canada is not a path to growth.

In fact, exporting goods from Canada declined by 7% over the same period as manufacturing growth from Canadian foreign affiliates grew by 20%, and these trends are projected to accelerate.

Market intelligence is critical, but also dangerous on its own without the cross cultural context that drives each market.

Realistically, the only way to obtain unfiltered market intelligence in context is to have a credible local presence in each export market, capable of establishing and maintaining relationships, and responding to change in real time.

The post Facing the new realities we can’t ignore in SME exports appeared first on Trade Ready.

Abid Samdani, CITP|FIBP, is a Trade Commissioner Assistant with DFATD in Karachi, Pakistan.

With a passion for international trade and over ten years of practical experience, he is setting himself apart as an elite member of the global trade community.

From a free trade agreement to a presidential visit

Abid began his international trade career in February 2005, when he became a Commercial Assistant at the Consulate General of Sri Lanka in Karachi.

The opportunities in joining the international trade field are huge. It offers the chance to be a constant learner, to work in a challenging environment, travel and to make a real impact on the company or organization for which we work.

One of his initial assignments was to supplement the Sri Lankan Mission’s operation to provide relief to areas in Sri Lanka hit by the tsunami in December 2004.

His core responsibilities included promoting awareness among the Pakistani business community about the free trade agreement signed between Sri Lanka and Pakistan, a task which had a major influence on the rest of his career.

“Just after joining the Sri Lanka Consulate in February, the Pakistan – Sri Lanka FTA came into force from June 2005. I was made responsible at the office for studying and communicating its basics to local businessmen. Later, I got myself so involved in the subject that it made me adopt international trade as a career.”

He was an important member of the team which organized and recruited 27 companies from Sri Lanka for the “My Karachi Exhibition 2007,” which resulted in several memorandums of understanding (MoUs) and contracts being signed between various participating businesses.

Abid also operated the Sri Lankan visa section of the consulate for a couple of weeks, under supervision, when one of the visa officers was absent, and assisted with protocol and administration when then-Sri Lankan President Mahinda Rajapaksa visited Karachi in 2006.

“Providing ‘in-market’ support to visiting trade missions and delegates had been an integral part of my portfolio; varying from event planning/management to handling high level protocol services.  This multi-tasking has really helped me later in my career to professionally handle multiple tasks within time constraints.”

Scaling new international heights with DFATD

After over three years at the Consulate, Abid decided to join DFATD and begin his current position as a Trade Commissioner Assistant at the High Commission of Canada in Karachi.

“Working for DFATD as a Trade Commissioner Assistant was my dream, to work for one of the largest OECD economies, and with a highly globalized North American economy. It has given my career a new height of success and international exposure.”

“At the Karachi post, we deliver client-focused services to Canadian business that includes market intelligence, match making for business partners, promotion of B2B networks between Canadian clients and local contacts, and more.”

Two of Abid’s main areas of focus have been forestry and education, and he has worked to see impressive results in both areas.

One of my proudest accomplishments was assisting with the business ventures, events and marketing of Canadian forestry products to achieve an increase of approximately 20% of Canadian lumber to Pakistan.

These forestry products are then primarily used in construction and allied industries, like cabinets, floors, door framing and furniture.

In the realm of education, Abid has been working on a program called “Imagine” to create awareness for Canadian post-secondary institutions as desirable international study destinations for students, parents and consultants in Pakistan.

The program includes school presentations, participation in local education events, newspaper editorials, connecting with local education groups, and general advertising.

As a result, there has been a steady increase in the number of Pakistani students applying to, and enrolling at, Canadian universities and colleges.

Abid hopes that “the quality of a Canadian education will provide them with the tools they need to develop their full potential. The program is therefore intended to be a springboard that will help them fulfill their dreams and ambitions.”

He also has a diploma in computer science, and was able to help the entire Trade Commissioner Service by suggesting improvements to their new corporate CRM tool.

An unending thirst for knowledge

In 2010, two years after starting with DFATD, Abid began working on his Post-Graduate Diploma in Economics and Finance (PGDEF) from the University of Karachi. However, one educational program wasn’t enough for him.

“I took the FITT courses as a challenge as I was also completing my PGDEF from the University at the same time.”

Online FITT courses allowed me to study at my own pace and at my given time, and it allowed me to login from anywhere to study – which eventually resulted in completion of both study programs in the same duration.

On top of his other education, Abid is certain that studying international trade, specifically through FITT courses, has been a great asset to his career, and will continue to be going forward.

“The FITT courses gave me in-depth and current knowledge of international trade. It expanded my horizon to a new level, empowering me to research and think analytically before going ahead in international trade work, or any other field of life.”

Joining the international trade elite

Once Abid finished the courses, he was excited to apply for and receive the elite CITP®|FIBP® designation.

“I am honored to be affiliated with the most prestigious professional CITP|FIBP designation by FITT, the only credential of its kind that is industry proof of the highest level of cross-functional international trade expertise.”

Though he has only had his designation for a few months, Abid says he is already seeing benefits to his career, and is excited to see the directions it can take him in the future.

“The CITP designation will advance my career and build professional credibility in the field of global business. It will set me apart in the competitive international business industry because it’s proof that I possess the competencies global business experts have identified as being essential for a successful career in international trade.”

The post Abid Samdani, CITP|FIBP – Trade Commissioner Assistant appeared first on Trade Ready.

This analysis should be carried out in all of the company’s main functional areas: production, marketing, logistics and finance.

Each of these areas must consider its tasks in the export process, the associated resource demands upon the company, opportunity costs, and the estimated costs of performing those tasks using external suppliers.

The costs of using external suppliers may be lower or they may be higher (as can happen when using specialist skills).

Find and keep the core of your business

At this point, the analysis is only partially complete. Managers also need to consider costs and benefits in other terms. Improvements (or deterioration) in the performance of tasks need to be identified.

For example, using a foreign market research firm may offer the benefit of greater sensitivity to local market influences. Conversely, use of a trading company would result in a loss of market intelligence.

These benefits and costs are admittedly hard to quantify, but nevertheless need to be taken into account.

The strategic dimension must also enter the analysis. The firm must not lose sight of what business it is in and what tasks are considered core to that business. It may then focus on what tasks may or may not be outsourced, depending on the supply of services and the results of analysis.

For example, if a firm is a leader in the design and marketing of shoes and seeks a global presence, it may want to devote its limited resources to investing in world class designers, tools and advertising.

The logistical infrastructure to deliver product, and the manufacturing capacity required in various parts of the world, can be supplied externally.

Selecting external suppliers

In selecting suppliers, it is always a good idea to develop a short list of potential candidates. Then evaluate their services according to established performance criteria.

The supplier that provides the best added value should be selected. Value provided by the supplier can be measured by a ratio of price and quality. As price increases, quality should increase at a faster rate.

These price and quality criteria should be both qualitative and quantitative and the supplier selected for overall fit and not just for price.

Perform background checks on the company (of credit and reputation) in order to minimize company risk. Then select the supplier that represents the best value package to the firm. However appealing a supplier, the manager should ensure that core competencies remain inside the company.

Use these tips when selecting your external supplier

Some of the desirable qualities to look for in selecting external suppliers include:

• a desire to learn about the factors that affect the exporter’s business, priorities, etc.;
• efforts to improve service, with the goal of creating a seamless relationship between exporter and supplier;
• depth of knowledge in dealing with the industry (e.g. a customs broker experienced in dealing with perishable goods) and the experience to anticipate problems before they occur (e.g. an experienced market researcher would know that respondents in certain countries answer questions in the way that they think the researcher wants, which skews results);
• investment in technologies and personnel to facilitate the transmission of information, whether it be documentation, research results or market reports;
• ability to grow with the client, whether in a large target country, region or globally;
• not dealing with competing products or services: in the case of freight forwarders and logistical firms this may not be such an issue, but it most definitely would be for trading houses, distributors and agents; and
• readiness, interest and ability to feedback information on target countries; without such feedback the firm is isolated from its international business.

Supplier selection is a two-way activity and both parties have to be comfortable to make a collaborative relationship work.

What element of your business could become more efficient if you partnered with an external supplier? What criteria would be most important to you when looking for one?

The post Improve your business efficiency by selecting the right external supplier appeared first on Trade Ready.

Here are some real-life examples of why it’s so important – with a Latin American flavour:

1. Because you need evidence for your export strategy.

Your strategy will drive your actions, but your strategy needs to be based on facts.

Thorough research will give you the evidence you need to include or exclude countries from your strategy, to know where you stand compared to your competitors, and to know which are the best ways into your target market.

Take, for example, my U.K. manufacturing client in electrical engineering. They invested in researching eight Latin American countries. They knew Latin America was on their radar, but how much of a priority was it?

Determine which countries should be tackled first and which should be postponed until a later stage of your export strategy – or removed entirely.

2. Because knowledge is power.

One of the most experienced clients I’ve had, whom I have learnt a lot from, was a sales manager of a food technology company in the U.K.

He wouldn’t land in a country without knowing it well, so he subcontracted research for every new market.

Why?

He told me he needed knowledge for negotiations, both with his clients and his partners. His partners knew he meant business because he knew his stuff. He wasn’t just parachuting into Latin America, like too many foreign firms do nowadays.

He knew how large his market was, which clients the distributor should be tackling, and what growth to expect. He also knew which projects were coming up and who the industry influencers were.

When you start off in a country you don’t know, you can’t afford to be seen as lost, disengaged or uninformed. Market research gives you confidence, and power.

3. Because it shows that you care.

How many of your competitors are investing in market research? How seriously will you be taken in a new market by clients, partners, and sector experts?

A sign that you mean business, that you are serious and committed, is knowing the market well. It’s important and helpful to know everything from the simplicity of business greetings, through to the structure of the industry you are in.

You should also be up to date on the latest relevant news and the performance of the economy over the last few years.

This is particularly key in Latin America, because business is based on personal relationships, and caring about people and their countries is always appreciated.

4. Because it can save you an awful lot of time. And cash.

Once they receive my report, clients always appreciate how much work goes into market research and how many mistakes I save them from:

“Knowing what the market is like in Venezuela means we have saved ourselves £20k this year since we won’t visit to suss it out, we now know it’s not for us.”

“We never thought of Colombia before and now we’ve sold there – without the research, we would have stayed away.”

“The feedback from your industry contacts is precious, we are now revising our branding as a result.”

“So glad your research prioritized trade shows for us in the region, we would have wasted time and money attending the wrong events”

5. Because it’s the only way of convincing the Board.

Many export assistants or export managers need to put forward cases to the wider company to get budgets approved. Having a friend in Buenos Aires or fancying a trip to Cancun might not quite cut it when it comes to rationales for export expansion.

What you need is evidence. And independent, rigorous evidence should tell you how things really are.

If a market is not for you, or maybe not for you right now, it should say so, or you should be able to work it out. I often advise my clients against expanding to Latin America, so make sure the advice is truly independent and not tied to a particular country (I am based in Uruguay but I often advise clients to start off somewhere else).

Market intelligence is not a cost, it’s an investment. Successful exporters know it.

What’s your next market research investment going to be?

The post 5 compelling reasons you should invest in market research before exporting to Latin America appeared first on Trade Ready.

For entry strategies such as indirect exporting, in which entry costs are low, the level of competition is less important than when substantial financial investment is required. Companies should therefore research the competitive environment as carefully as possible when deciding on which strategy will best suit them and use this to develop a series of competitive landscape maps (CLMs).

They should also analyze the market entry strategies being used by others to determine hidden pitfalls and the methods most likely to succeed.

Create competitive landscape maps (CLM)

A CLM is a simple chart that indicates what is important to consumers in the chosen market. Companies should develop several CLMs: one that compares price and quality, one for other important product or service qualities, one for sales strategy and one for key product differences. On each chart, the company should indicate the position of each main competitor in the market. On analysis, this will indicate competitive gaps—these are the areas that a company can target to gain a competitive advantage.

For example, if a chart shows that most companies in the market provide basic bread products at low prices, a company entering the market with the same types of products will find the competition hard to compete with. The CLM will illustrate areas in which it can find a niche in the market, such as by offering specialist types of bread or by developing baked products with health benefits.

To develop competitive maps, companies need to use competitive intelligence. Competitive intelligence is developed by using publicly available sources to gain information about competitors and competition. It does not involve any underhand gathering of information. Companies will find that they can gather all the information they require from available sources if they conduct some intensive research.

Research for competitive intelligence

Companies can obtain information about a company’s strategic goals, its marketing strategies and its product and pricing strategies by commissioning a competitor analysis company to investigate the market. If a company is unwilling or unable to pay for this service, there are numerous resources a company can use to undertake its own research.

Explore company profiles

Companies can try finding information about companies in the market using directories such as Yahoo’s Business and Economy directory (dir.yahoo.com/business_and_economy). Hoover’s online is another exhaustive source of company information (www.hoovers.com). The information provided includes industry analysis and company information organized by country. Not all companies in specified regions are included, but major ones are. Company websites will often contain valuable information that can help researchers clarify product positioning and deduce strategic aims and objectives.

Browse news stories for competitive intelligence

Companies should read the news from their target market to gain an understanding of major industry initiatives. Online versions of newspapers and business journals are available for free from most countries in the world, and most of them written in English. A basic search using Google News will provide archived articles about industry and company news in a target market. Other useful sources are Business Wire (www.businesswire.com) and Reuters (www.reuters.com).

Employment advertisements are another useful source of information. The numbers of people being hired by a company and the job roles they are looking to fill will give researchers clues to future competitor activities.

Take advantage of industry activities and resources

To obtain a real understanding of the competitive environment in a foreign market, companies can attend trade shows, conferences and seminars. They can also contact their country’s embassy in the target markets and obtain information about their industry sector from the Trade Commissioners there.

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However,  raw data alone are not sufficient to develop a company’s market knowledge. The data must be analyzed to give them meaning and then put in context to generate insights about the international business environment. This process of taking raw data and analyzing them strategically is called market intelligence.

What is market intelligence?

When companies develop market intelligence, they are seeking to take raw data (such as sales figures for soft drinks in international markets) and process them to develop knowledge. This processing involves filtering the information, ensuring its validity, selecting relevant parts and deducing some meaning from them. In other words, knowledge is data that have meaning.

Intelligence involves analyzing this knowledge to add context, to determine what might happen, to decide what the best course of action should be in light of the knowledge and to plan for future actions.

Market intelligence for international markets is generated from international trade research and personal experience. It includes tacit knowledge (personal knowledge that is not easily transferred) and explicit knowledge (knowledge that is easily communicated, such as information in directories or on websites). To develop intelligence about an international market, a company must have clear strategic objectives relating to international trade. These will determine the business decisions that must be made and therefore indicate the type of market intelligence required and the data needed to develop that type of intelligence.

Types of Market Intelligence

The type of market intelligence that a company needs to make decisions depends on the company’s specific circumstances and strategic objectives and the target market. However, there are general guidelines that a company interested in international trade opportunities should use. For each global market being considered, researchers should gather four classes of information:

• The factors shaping the political, legal and business environment: This information can be used to assess general conditions in a market and the risks associated with them.
• The market infrastructure: This information can be used to evaluate the difficulties and costs that will be associated with the physical distribution of a product or service.
• The forces affecting the market: This information includes market size, consumer trends and market dynamics and can give an idea of the potential for sales and profit.
• Product-specific or service-specific data: This information can be used to evaluate the suitability of the company’s product or service and to determine whether adaptations or positioning might be required.

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