|1. Failure to obtain qualified export counseling and to develop a master international strategy and marketing plan before starting an export business.
Define your goals, objectives and the constraints in a particular market. Also, develop a plan to accomplish objectives and counteract potential problems. Often outside assistance is helpful, since most small companies do not have a staff with considerable exporting expertise. Your local U.S. Department of Commerce or Small Business Development Center can assist with the development of your plan.
2. Insufficient commitment by top management to overcome the initial difficulties and financial requirements of exporting.
It may require more time to establish yourself in a foreign market than in the domestic one. Although the early delays and costs involved in exporting may seem difficult to justify when compared to your established domestic trade, take a long-term view of this process and utilize your international marketing efforts to overcome these early difficulties. With a solid foundation for your export business, the benefits derived should eventually outweigh your investment. (Remember: Getting started in the U.S. domestic market can also be difficult at first!)
3. Insufficient care in selecting overseas sales representatives and distributors.
The selection of a foreign distributor is crucial. Complications involved in overseas communications and transportation require international distributors to act with greater independence than their domestic counterparts. Also, since a new exporter's history, trademarks, and reputation are usually unknown in the foreign market, foreign buyers will select goods based upon the strength of your distributor's reputation. Therefore, conduct a personal evaluation of the personnel handling your account, the distributor's facilities and the management methods employed. For additional information on selecting a distributor or agent, see Chapter 2.
4. Reliance on orders from around the world rather than concentrating on one or two geographical areas and establishing a basis for profitable operations and orderly growth.
Distributors must be trained to promote your account actively; their performance should be continually monitored. A company may need to relocate a marketing executive to the distributor's geographical region. New exporters should concentrate efforts in one region or two geographical areas until there is sufficient business to warrant a company representative. Then, while this core area is expanded, the exporter can move to another geographical area.
5. Neglect of export business when the domestic market booms.
Many companies turn to exporting when business falls off in the United States. With the return of a boom in domestic business, many companies neglect their export trade or relegate it to a secondary position. Such neglect can seriously harm the business and motivation of overseas representatives, leaving exporters without recourse when domestic business falls off once more. Even if domestic business remains strong, companies may eventually realize they have lost a valuable source of profits.
6. Failure to treat international distributors and customers on an equal basis with domestic counterparts.
Many times, companies carry out institutional advertising campaigns, special discount offers, sales incentive programs, special credit term programs, warranty offers and similar options in the U.S. market. These companies fail to offer similar assistance to their international distributors. A lack of assistance can destroy the vitality of overseas marketing efforts. Also, many new to export companies fail to take into consideration gross margin requirements.
7. Assumption that a given market technique and product will be successful in all countries.
All markets differ in culture and customs of the targeted area. If a product sells well in the United States, it will not necessarily sell in all foreign markets. In addition, the methods of promoting and selling can be radically different. Countries all have different means of product distribution and selling, such as the existence of large supermarket chains versus small family owned shops. An exporter must do research to determine the best strategy for their objective.
8. Unwillingness to modify products to meet regulations or cultural preferences of other countries.
Foreign distributors cannot ignore local safety and security codes or import restrictions. If necessary modifications are not made at the factory, the distributor must do them -- usually at a greater cost and, perhaps, not at a high level of quality. The resulting smaller profit margin makes the account less attractive. For long term success, food products must be packaged according to local import regulations.
9. Failure to print service, sales and warranty messages in foreign languages.
Although your distributor's top management may speak English, it is unlikely that all sales personnel will. Without a clear understanding of sales messages or service instructions, personnel will be less effective. In turn, the customers will not understand the terms of service of a particular product and may receive false information from a salesman. For food products unfamiliar to local consumers, instructions and recipes in local languages can educate consumers.
10. Failure to consider use of an export management company.
If a company cannot afford it own export department (or has tried one unsuccessfully), it should consider the possibility of appointing an export managing company (EMC). An EMC assists in market research, promotion, sales and distribution of a company's product, therefore saving the company large amounts of time and money. See Chapter 2 for more information on this topic.
11. Failure to consider licensing or joint venture agreements.
Import restrictions, insufficient personnel, financial resources, or a narrowly limited product line cause many companies to dismiss international marketing as not feasible. Nearly any product that can be successfully marketed in the United States can be successfully marketed in any market of the world. A licensing or joint venture agreement may be the profitable answer. In general, all that is required for success is flexibility in using the proper combination of marketing techniques.
12. Failure to provide readily available servicing for the product.
Consumers and distributors are likely to purchase products, which cannot be maintained or repaired. An exporter should provide information and a contact of how to carry out the necessary procedures.