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Analysis of Products for Export

"only if the answers to these questions are satisfactory, should the would-be exporter proceed"

The exporter should ask himself a number of questions about the nature of his product and determine how exportable it is.

The types of questions that should be asked are:

1. What are the features of our product that make it compare favorably with competitive products? # In other words, why do your local customers like them?

2. How is the product used?
# Meaning that: Would it have the same use abroad?

3. What size, colors, design, etc., are preferred by the users? # Would foreign buyers have the same attitude?

 


Site Contents for:
How to Conduct
Export Research?

Page 1/3 How to conduct Export Research?

<<This Page 2/3 Analysis of product price and Analysis of export product "...only if the answers to these questions are satisfactory, should the would-be exporter proceed..."

Page 3/3 Export Distribution Research "An Important question 'export research' can answer is - how to distribute your product in the foreign market?"

 

 

 
 
4. What modifications, if any, would be necessary?
# That is to make the product more acceptable to foreign buyers?

5. Has the product been thoroughly tested and tried in the home market? # Can you be sure of consistence high product quality?

6. What are the branding, packaging, and labeling requirements to sell the product abroad? # How would the present branding, packaging and labeling be changed for exporting?

7. What are the technical specifications of the product? # Would they be acceptable in the target country?

8. What after-sales service, if any, would be required? # How should it be provided?

9. Would the product meet foreign health and safety
standard requirements?
# How do you meets foreign required standard?

10. What if the technology is changing fast?
# How can you maintain product superiority?

11. How do we keep ahead of the competition?

12. Can you produce the quantities of product that may be required?

13. Will you be able to maintain continuity of supply?
 

 

 
 

 

 

 

 
 

Analysis of Export Pricing

Another research that would-be exporter should undertake is the export price for the product.

Most foreign buyers prefer to be quoted an all-inclusive price, in their local currency or in US dollars, delivered to their warehouse, nearest port, airport, or city.

In other words, it is not enough for the would-be exporter to calculate an export FOB or FOR to his own local port of shipment.

He must calculate the price right through to the foreign country, an export price that is CIF, FOB or FOR called Incoterms known as Special International Trade Terms

The guiding principle in calculating an export price is to make sure that all possible costs are included using a Costing Sheet to ensure that no items have been overlooked.

The first item is the production cost. Here a decision must be made whether it includes both variable or direct and fixed costs-(overhead costs).

Some exporters, to help keep their export prices competitive, include little or no overhead cost, only the variable or direct cost of production. The cost of administrative overhead is absorbed in the price set for local sales.

The risk exists with this practice for your goods being sold abroad at less than the home country price is - there may be the imposition of an anti-dumping duty on your product.

In addition to all the various production, transportation, customs, marketing, marine insurance, exporter's profit margin and other costs that must be included in the final landed price.

Different foreign markets, if the exporter is considering different foreign markets, he would have to prepare different price quotations -- see How to do Costing for Export?

If the foreign market is very large, as with The EEC and CE Marking requirements he may need to have different prices for each region, taking into account varying transportation costs.

Some flexibility is important, the exporter may need to offer some discount to the foreign buyer for large orders or if the buyer is willing to pay cash or a higher price to take account into account for bank interest incurred when an importer agrees to pay a given sum of money at a stipulated date know as a time draft.

Once the exporter has calculated the final selling price for his product How to do Costing for Export?, he must compare this with the price charged by his competitors products.

Decision ahead of time by the exporter on the amount of credit, if any, to be given to the foreign buyers and how payment is to be made Get Paid for Exporting for example;

Sight draft drawn against an irrevocable letter of credit.

 

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