Presentation on theme: "International Trade 101 Session 1: Export 101. 1.Assessing your Organizational and Product Readiness for Export 2.Market Research and Assessing the Competition."— Presentation transcript:
International Trade 101 Session 1: Export 101
1.Assessing your Organizational and Product Readiness for Export 2.Market Research and Assessing the Competition 3.Developing an Export Strategy and Marketing Plan – Assessing Market Characteristics 4.Promoting Products in Target Markets 5.Complying with U.S. and Foreign regulations 6.U.S. Government Agencies for Assistance to Exporters Agenda
Assessing Your Organizational and Product Readiness
Evaluating Your Product Readiness What has contributed to the success of your product or service domestically? Does a similar demand exist overseas? What are the unique features of your products? Do theses features enhance the demand for your product in certain markets or regions?
Evaluating Your Product Readiness Other areas to think about Labeling changes, altering components or ingredients, instructions or may need to be translated, ability to provide after sales service or support.
Organizing For Exporting A company new to exporting generally treats its export sales the same as domestic sales. This is a mistake. Two key advantages of separating international from domestic business are: The centralization of specialized skills needed to deal with international markets. A focused effort on export sales.
Organizing For Exporting Separating international from domestic business may be done at different levels in the organization. Depending on your firm, some international sales people may specialize by product or by geographical region Commitment from your firm’s CEO or President is critical to the success of the export initiative.
Market Research and Assessing the Competition
The Importance of Market Research Your company may begin exporting without any market research if it receives unsolicited orders from abroad. But, you will find even more promising markets by conducting a systematic search. Businesses that invest time in market research increase their chances of succeeding more cost effectively.
The Importance of Market Research Researching potential markets can help your company by: Finding where your products are most likely to sell Identifying market segments and niches Determining both domestic and international competitors
The Importance of Market Research Discovering how to overcome barriers to market entry Understanding customers’ needs and accommodating as appropriate Identifying new trends Determining your price competitiveness
Market Research Sources country and industry specific reports from the U.S. Commercial Service Industry specialized reports and bulletins from the U.S. Commercial Service U.S. and Canadian statistical trade information
Fee Based Resources Harris Selectory On-Line Database Kompass.com On-Line USA Trade Online Statistics BNA Export Reference Guide On-Line Distributor Match
Developing an Export Strategy and Marketing Plan
Export Plan Content An export plan should contain the following information: Executive Summary Export Policy Commitment Statement Mission statement Objective of exporting Background Analysis Why your company is ready to export
Export Plan Content Market Analysis and Implementation Strategy Identify and rank markets, products, and possible distribution channels Financial Analysis Export budget Addenda Facts to back up the export plan Background data Research information
Promoting Products in Target Markets
Promotion Techniques Tapping into foreign visitors at domestic shows you may already be exhibiting at Exhibiting at key foreign trade shows Overseas industry publications Identifying distributors by seeing who other firms with complementary products have appointed
Promotion Techniques Working leads and referrals from other overseas distributors Networking through key international industry associations Holding targeted training or informational seminars in a key market Promoting Assistance through U.S. Commercial Services, ODOD (Int’l Trade Division), ITAC
Complying with U.S. and Foreign Regulations
Complying with U.S. Regulations Why should you do your homework? U.S. Export Enforcement fines can be very steep, even if mistakes are unintentional. Does your product require an export license? U.S. Department of Commerce, Bureau of Industry and Security U.S. Department of State, Directorate of Defense Trade Controls
Plan Ahead – Be Prepared Determine jurisdiction of your item Classify your item Identify the reasons for control Cross-reference the controls against the Country Chart Screen all parties to the transaction Ensure no prohibited end-uses Export using appropriate ECCN and authorization
Determine Your License Requirements What is my item? Where is it going? ECCN and Destination Who is involved? What are they doing with it? End-user/End-use
What is My Item? Check with the manufacturer Work with company engineer/someone who knows the item Submit formal classification request to BIS
Who is Involved? “List to check” Denied Person’s List Entity List Unverified List General Order No. 3 of Supp. No. 1 to part 736 Specially Designated Nationals List – Treasury Department, Office of Foreign Assets Control Nonproliferation Sanctions List – State Department Debarred Parties List – State Department
Red Flags or Indications of Unlawful Transaction 1.Customer or purchasing agent is reluctant to offer information about end-use of a product. 2.Product capabilities do not fit the buyer’s line of business; i.e., a small bakery places an order for sophisticated lasers. 3.Product ordered is incompatible with the technical level of the country to which the product is being shipped.
Red Flags or Indications of Unlawful Transaction 4.Customer has little or no business background. 5.Customer is willing to pay cash for a very expensive item when the terms of sale call for financing. 6.Customer is unfamiliar with the product’s performance characteristics, but still wants the product.
Red Flags or Indications of Unlawful Transaction… 7.Routine installation, training or maintenance services are declined by the customer. 8.Delivery dates are vague, or deliveries are planned for out-of the-way destinations. 9.A freight forwarding firm is listed as the product’s final destination. 10.The shipping route is abnormal for the product and destination.
Red Flags or Indications of Unlawful Transaction… 11.Packaging is inconsistent with the stated method of shipment or destination. 12.When questioned, the buyer is evasive about whether the purchased product is for domestic use, export or re-export.
General Prohibitions 1.Export and re-export of controlled items to listed countries 2.Re-export and export from abroad of foreign- made items incorporating more than a de minimis amount of controlled U.S. content 3.Re-export and export from abroad of the foreign produced direct product of U.S. technology and software
General Prohibitions 4.Engaging in actions prohibited by a denial order 5.Export or re-export to prohibited end-uses or end-users 6.Export or re-export to embargoed destinations 7.Support of Proliferation Activities 8.In transit shipments and items to be unladen from vessels or aircraft
General Prohibitions 9.Violation of any order, terms, and conditions 10.Proceeding with transactions with knowledge that a violation has occurred or is about to occur
Complying with Foreign Regulations & Requirements Why should you do your homework? Each country’s requirements may be different. They can also change without notification. Is product registration required with their ministry? Is outside lab testing required?
Complying with Foreign Regulations & Requirements For entry, what documents are required? Certificate of Free Sale Certificate of Origin Sanitary Certificates BSE Certificates Some of these documents may need to be stamped by their consulate in the U.S. Consider the market’s regulatory standards UL, CE, and CCC marks Labeling
Exporter Responsibilities Record Retention – 5 years Anti-boycott Regulations – prohibits U.S. persons from participating in or supporting foreign boycotts Foreign Corrupt Practices Act (FCPA) – addresses bribery to foreign government officials
Papa Omar Diop International Trade & Assistance Center Columbus State Community College Tel: Fax: