Posts Tagged ‘international business’

Today, businesses all over the world allocate resources to markets in the hopes of achieving growth. The current economic climate has been definitely producing challenges all over the world, especially in North America and Europe. However, there are other emerging markets in the Middle East and Asia.

Though it may look like things are slowing down, there is still a variety of countries that are excellent market choices for exporting US products. We’ve examined these markets by looking at the population and economic statistics while considering the dynamics of the global food and consumer industries. These dynamics include things like eating and drinking habits, modern retail trade and development, and cost of entry. Here are our top ten, not in any order:

1 – Vietnam

2 – Egypt

3 – Israel

4 – Peru

5 – Malaysia

6 – Saudi Arabia

7 – Colombia

8 – India

9 – China

10 - Brazil

Vietnam
Over the past couple of years, Vietnam has experienced consistent growth rates (of about 5-7%) and it helps that the country receives significant investment from multinationals. The unemployment rate is low; however, the income of the population shows us that it is still an emerging market. However, brands from the United States are quite well received. With a low cost of entry and a growing market, Vietnam has quite a bit of potential.

Egypt
With more than 80 million people living in Egypt, it is an obvious choice for US exports. In fact, it is the largest country in the Arab world. Although it is a historically poor country, it has been growing stably for the last few years and the population’s hunger for international brands has come with that growth.

Israel
Though the smallest country in this list, it has the highest income per capita. Most of the population is familiar with many US brands and has the money to buy them. There are many distribution options here.

Peru
Peru has a young population and is blessed with abundant natural resources making it a logical location for US exported products. Because of the country’s growth, higher demand for more products has quickly ensued and Peru has recently signed new trade deals with both Canada and the US.

Malaysia
Malaysia has experienced low inflation and unemployment levels over the last decades and is one of the highest per capita incomes in all of South Asia. Growth is stimulated by its diversified population and economy which means it is a great candidate for US exported products.

Saudi Arabia
As you probably already know, Saudi Arabia has more than 20% of the world’s oil reserves, but that doesn’t mean it isn’t a good country for exporting from the US. It is in fact one of the top markets for US products, especially consumer and food goods.

Colombia
Though much stigma is attached to Colombia, it is a promising market. Increased stability and a major port on the Caribbean Sea make this country a contender for US exporting.

India
One of the largest populations in the world, India is an emerging market for US exports. The cost of entry is relatively low and the market is growing. Now is the time to get into India.

China
China’s economy has a growth rate of just over 8% and though we import plenty of products from the nation, it is still a contender for US exported products. Though the food industry has experienced some setbacks in exporting to China, other sectors like personal care and household products have flourished.

Brazil
Right now, Brazil’s economy is booming and so is its population. They claim to have found massive oil reserves and it looks like Brazil may be a contender for greatness pretty soon. Exporting to Brazil will mean taking a look at its fragmented market and being able to cover its needs.

Many small businesses have discovered that exporting to countries overseas is a lucrative business opportunity. However, when they sit down and develop their operating plan they are faced with the dilemma of what type of exporting to engage in. Franchising is a very popular business venture both on the domestic front and internationally. However, it is more difficult to franchise a business internationally than it is domestically. There are some key differences between the two that every business owner needs to be aware of, especially if they are trying to get their small business exporting division off the ground.

Franchising has long been a business that has proven to be effective and profitable on both sides of the fence. Domestic franchising is considerably easier, however, because all of the resources needed for it are within a reasonable distance of one another. International franchising, on the other hand, requires a great more patience, expertise, and resources, especially when dealing with a foreign culture that may or may not have the additional problem of a language barrier.

Does this mean small businesses should skip franchising as a way to break into the exporting market? No. It does mean that small business owners will need to be more on the ball when it comes to making sound financial business decisions.

There are three main issues each international franchiser needs to be aware of. Let’s take a look at them:

Issue #1: The risk involved

• There is risk involved in any business venture, but when it comes to international franchising they tend to be greater. Most small business owners suddenly find themselves working outside their comfort zone in dealing with product issues as well as staff. They are required to deal with markets that are unfamiliar to them both culturally and professionally and they must be prepared to deal with the unknowns of the business. Franchisers are required on the international level to deal with partners that are from the country they are setting up in which requires a great deal of research in order to find ones that are reliable. While using a partner with international experience is a plus, international franchising is still filled with risks.

Issue #2: The culture

• Research is imperative in any exporting operation, especially when you are not familiar with the culture you want to set your franchise in. Exporters need to educate themselves on the culture their franchise will be in, and it is a good idea to seek out indigenous partners and advisors who can aid them in understanding the myriad issues they will face during the first few years of business overseas.

Issue #3: Adapting to the international environ

• Not every franchise will work in the original format. For example, if the franchise is a fast food chain in India, there will need to be adaptations made to the menu. This is where many international franchisers run into problems. The franchise has to be adaptable otherwise it is not going to succeed in the international environ. International franchise owners must be prepared to adapt.

If you’re a small business owner you may have considered looking into exporting your goods and services overseas. Exporting is a billion dollar business – when it is done properly. As a small business you will have to rely on the help of a professional exporter to help you get your business up and running. Setting this up is a daunting prospect to say the least, but it can be done and you can turn a nice profit from an exporting business.

The biggest problem with turning your company into an exporter is understanding where to start. It is a very detailed business that requires patience and a lot of hard work to get off the ground. When you have a successful exporting business in place, you could earn a profit of 10% for every transaction that you make. While the process is considerably more complicated and detailed than what we present here, this quick guide will give you an idea of what you need to do to get started.

• In order to be successful in exporting you need to make contacts with manufacturers and distributors overseas that want to trade with you. The best way to do this is to make a list of everyone you know outside of your home country and asking them to aid you in finding partner companies. If you do not know anyone overseas, contact the foreign embassy of the country you want to export to and ask to speak with whoever is in charge of their global trade initiative.

• Once you have made your initial contact start researching the country you want to export to. You need to identify the market niche you are interested in exporting to and research the popular trends that are sweeping the country. This will give you a good look at the viability of the market you are interested in. Make sure you also research aspects of exporting that include any restrictions that are in place, tariffs that may need to be paid and any trade barriers you will have to overcome.

• After you have prepared all of your research and targeted the market you want to import to you can start contacting the list of people you made who could be interested in working with you to build your exporting business. Take your time talking to these people and get to know them well so that you are confident they are the right fit for your business and will make a viable selling partner. At this point you can put into place deals that are agreeable to both of you that include prices charged, the amount of goods to be delivered, distribution to the customers, letters of credits and shipping agreements.

• With an agreement in hand you will need to find a competent exporter to partner with in order to get your goods delivered to your overseas partner overseeing the selling and distribution of your exporting division. Research is key here and most exporters will be able to explain the intricacies of the business to you in order to develop a good working relationship that ensures your products are delivered on time.

Even though the world economy has been shaken up over the last few years it is still growing and offering small businesses an opportunity to make a profit. In order to cash in on that profit, these companies have to be willing to take on the intricate process of shipping their products overseas. You need to put into place an export strategy that will work for your business. We recognize that every business is different and our Small Business Exporting Basics DVD can help you understand what you need to do in order to be successful.

Before we can help you export your products and services overseas you need to consider the following when it comes to overseas sales.

• How are your domestic sales doing?

You need to take a look at what is going on at home before you try to sell products overseas. If your sales are lagging at home, there is something wrong. Are you offering your customers the wrong product? Do you have too many competitors? Is your marketing plan lacking? Your customers are your best source of information. If what you are offering is not selling at home, it is not going to do well overseas.

• Is your product or service exportable?

In today’s internet driven society you can export a service just as easy as you can export a product. However, your product has to fill a niche that is not found overseas. You have to offer something that is exportable and can be packaged in a way that is appealing to the audience overseas. You also need to make sure that your produce does not violate any type of international or cultural prohibition and taboo.

• Do you have any foreign partnership leads willing to distribute your product?

Most small businesses are not in a position to set up an international office in the country you want to export to. Instead you need to find an export marketing and sales companies that are interested in partnering with you to either purchase your product outright and resell it or establish distribution on your behalf for an agreed upon cut of the profits plus a nominal upfront retainer. Most small businesses partner up with export marketing and sales company which also helps them gain valuable insight on how the market works and any regulations they need to be aware of.

• Are you conversant in the legal issues that surround exporting your product or service?

Many small businesses forget to research this part and it causes them problems in the long run. You need to understand all of the legal aspects of exporting your product or service on both sides of the coin. You need to know the laws governing exporting from your home country and the laws governing importing into the target country. It is a good idea to employ an export lawyer who can help you ensure that you are in compliance with the law.

Exporting is a very lucrative business and it is easier to get started than you think. Take a look at our Small Business Export Basics DVD which is designed to help the beginner and experienced exporter alike. We think you’ll find the information on it valuable to the success of your small business.

In the last fifteen years, organizational structure has undergone a shift from the individual climb up the corporate ladder to an increasing emphasis on work teams and groups. The shift to work teams is largely due to factors such as globalization, downsizing and the need for technological efficiency. As companies expand and tasks become more complex, more and more specialists are needed within organizations. These specialists must learn to work together so that colleagues have an understanding of the role and responsibility of those whose skill sets differ from their own. In addition, the convergence of products, services and technology from around the world has forced companies to work in a cross functional environment for which the best organizational design is often working in teams.

There are other reasons for the emergence of work teams as well. Stiff competition, particularly in technology-driven fields, requires teamwork with a concerted effort to keep the company as a whole on the cutting edge. Because technology-driven tasks have become far too complex for one person to handle alone, many organizations create work teams to accomplish collective goals. In addition, organizations are all but eliminating middle management as a result of downsizing efforts. Shifting authority down to members of a work team allows management to capitalize on a positive synergy that results in significant increases in productivity. When teams operate in such a way that the whole is greater than the sum of its parts, productivity invariably increases.

A well-functioning team can bring out the best in its members because problem solving skills and creativity increase with mutual support that builds morale. The characteristics that make a team effective include complementary skill sets, a sense of accountability among the team as a whole, and a synergistic approach to problem solving. Most importantly, the team must have a desire to work together to implement solutions. A team that functions efficiently learns to benefit from the diversity of skills among its members, and the result is much more than can be accomplished by each member of that team working alone. It follows that the single most important factor in determining whether a team will work well and be productive is a sense of teamwork. This foundation should be in place before the team’s tasks are even defined. With a sense of teamwork and the right mix of skills, teams will have the basis for functioning autonomously and the commitment to accomplish their goals.

Work teams are usually self-managed, which is very different from the traditional management approach of holding individuals responsible for the whole group. Though they function collaboratively, most teams have a member who can function in a leadership role. When teams develop, natural leaders should be allowed to emerge. Team leaders have a role that is very different from traditional managers. The leader may facilitate group activities, such as brainstorming sessions in which no idea is a bad idea. With a free expression of ideas in an environment that encourages people to think actively, team members are more likely to proactively seek solutions in a way that allows every member of the team to participate according to his or her strengths and level of skill. When every member of the team is engaged, the group as a whole is productive.

While at best work teams operate to increase productivity, there are many challenges that can affect their efficiency and lead frustrated human resource managers to abandon the effort entirely. For example, members of a team can suffer from “groupthink,” the belief that every member already knows what the others will propose as solutions. When this happens, teams can become paralyzed by inaction. Issues related to globalization create what are perhaps the most daunting challenges to teams. As national borders become transparent and economies intertwine, there is an increased risk of choosing solutions that isolate or marginalize some team members because the solutions are based on preconceived notions that do not apply across international borders.

Other problems faced by struggling work teams are due to interpersonal clashes in personality or work style. For example, employees who feel they should not have to make decisions may balk at the idea of working in self-directed teams. Virtual teams have a special challenge as a result of their dependence on communications technology to do their jobs and the fact that technology may be their only vehicle for establishing trust and working relationships.

While many managers and executives view teams as the most effective design for involving all employees in the success of a company, they may not be skilled in the group dynamics needed to run teams effectively. This, along with the fact that many people are initially more comfortable working alone, may cause executives to be skeptical about the value of work teams and hesitant to take the necessary steps to create them. With some basic planning and preparation, however, most organizations can implement a system of work teams that thrive.

Human resources managers can do a variety of things to support team efforts. To begin with, management should communicate clear expectations for a team’s performance, as well as a rationale for why the team was created. Messages to various departments should be tailored to individual needs for information with the awareness that everyone has different perceptions about what goes on in an organization. Multiple channels should be used to convey messages as well. Letters, phone calls, meetings and memos are all ways to communicate with team members. All communication should involve empathy with others, and managers should be aware that face-to-face communication is sometimes more valuable and effective than less personal methods. For a message to be conveyed most effectively, words and actions should always match. Relevant feedback and active listening are other strategies that skilled communicators use as well.

In addition to communication efforts, sufficient resources (people, time and money) must be allocated to a team and its tasks. Performance evaluations and reward systems that reflect team contributions are also part of the effective leadership that motivates teams. An organization’s human resources policy and its practice are important forces in shaping the behavior and attitudes of employees. Policies should address the selection process, training and development, performance evaluation, and, when applicable, union management.

Another way for human resource managers to support teams is by offering workshops and training sessions to improve the communication skills needed to function effectively as a unit. Competent employees do not stay competent indefinitely. Skills sets deteriorate and can become obsolete, so ongoing training in everything from literacy and interpersonal skills to problem solving and technical skills is critical.

Finally, managers can bring in external facilitators and mediators to help resolve conflicts when necessary. Unresolved or excessive conflict can hinder the effectiveness of a group or organization, resulting in reduced productivity and lowered morale. A skilled, impartial third party is an invaluable resource, particularly when conflicts become personal. Consultants can improve relationships between parties in conflict and help to facilitate resolution to interpersonal problems.

Licensing is a method of leveraging an organization’s process, trademark, patent, or other intellectual property for a fee or royalty. The licensed property can then be associated with a product or used in conjunction with a service or other effort produced by the licensee. The arrangement benefits both parties. The licensee gains a familiar association with a product or a tested method of doing things, and the licensor gains additional revenue and, in the case of trademarks or brand names, exposure for the trademark or brand being licensed. In the latter case, for example, a company that does not have a recognizable brand can obtain a license from a known brand to enter into a market that would otherwise be too expensive to cater to. In this way, the licensee capitalizes on an image that is already known and respected.

Companies grant licenses for several reasons. Though licensing does generate income for the licensor, licensing is often not an end in itself. Rather, licensing allows the owner of a property to gain entrance into new markets that would otherwise remain untapped due to lack of marketing expertise or ways to distribute their existing products in a new market. In some cases, licensing can also expand a company’s customer base by offering goods to those who cannot afford its main line products.

The growing trend toward globalization of businesses is a significant factor in the licensing arena as well. About one third of the revenue from licensed products that originate in the U.S. comes from international territories. In addition, international licensors are increasingly entering the U.S. market, a situation that was extremely rare a decade ago. Licensing properties overseas has significant advantages to companies that want to introduce products to international markets without investing in expansion or exporting activities. Of course, before licensing in other countries, several factors must be considered. A licensing campaign that is effective in one country may not work as well in another for a variety of reasons. Differences in laws with respect to intellectual property, taxes, antitrust issues and customs may have a significant effect on overseas licensing contracts. Knowledge of the economy in the foreign market is essential when planning an international licensing effort, as are language and cultural issues.

When a licensed brand or trademark is already known, licensees often have little additional marketing to do because they are able to capitalize on attracting an existing customer base. However, in some cases, licensees are required to contribute to marketing efforts, often by investing a percentage of sales for marketing efforts. Such an agreement can benefit both sides. Since both the licensor and licensee have in interest in sales of the product, the best marketing strategy is often the result of the combined efforts of both. This is especially true when art and design are central to the development of the licensed product.

Companies entering into a licensing agreement to increase brand awareness and recognition in new markets must select licensees carefully. This is important to ensure that pitfalls that could damage the licensor’s reputation are avoided. One of the more common mistakes licensors make in this regard is inadequate monitoring of the product. If a licensed product is of inferior quality or is sold in discount stores, for example, the reputation of the brand can be jeopardized. To ensure consistency in quality, licensors develop a style guide that must be used by licensees in designing the final product. Licensors will want to examine the quality of the licensee’s product to ensure that the guidelines are set forth in the style guide are followed. In addition, the licensee’s capacity to produce the volume of sales necessary to maintain the relationship is an important consideration. The licensee’s experience, breadth and depth of distribution channels, the size of its sales force, and its total marketing capabilities are all issues here. The licensee’s willingness to guarantee a certain amount in royalty payments is another prime consideration for licensors.

Before a property can be licensed, it must be cleared and protected legally by the owner. The way a property is protected depends on the kind of property it is. Trademarks, copyrights and patents are examples of how a property can be legally protected for licensing. Trademarks are applied to words and phrases, brand names, characters, symbols and designs that identify a company’s goods and distinguish it from another. Trademarks are registered with the Patent and Trademark Office (PTO) of the United States Department of Commerce. In contrast to trademarks, copyrights exist automatically with the creation of original material and are owned by the author of the material. Graphics, music and written work are automatically copyrighted material. The symbol © indicates a copyright, but the use of the symbol is optional since the copyright always rests with the author automatically unless the work is considered “work for hire.” Patents can be filed for designs, technologies and other inventions that provide a unique way of accomplishing something. Regardless of its reputation, a licensable patent can provide revenue from companies that can use the patented method or design to improve their own products or services.

In terms of finances, most licensing agreements involve royalty payments to the licensor by the licensee. Typically, an amount of sales of the licensed product, a minimum guarantee and an advance are included in the contract. Graduated royalties and royalties that are tied to performance benchmarks may also be negotiated. Royalties are typically between 5 and 14% but can range from 1-20%. The rate depends, of course, on the popularity and demand of the property to be licensed. In competitive sectors, where there are many similar properties available for licensing, royalty rates are lower than for unique properties with well-established markets. Royalty rates are typically applied to the manufacturer’s selling price, not the retail price.

The guarantee included in most royalty agreements is a minimum amount that the licensee must pay the licensor even if sales are not great enough to generate that amount in straight royalties. Including a guarantee minimizes the risk to the licensor and also encourages the licensee to be proactive in generating sales. Often the guarantee or a percentage of it is required in an advance upfront. In certain cases, the advance may be waived or lowered, for example, when the licensor wants the licensee to initially invest funds in marketing or developing the product.

The business of licensing can pose many challenges. For many licensors, retaining a licensing agent is the most cost effective and efficient way to manage licensing ventures. Especially for those new to licensing, agents offer expertise and contacts that can prove invaluable to the licensor. This may be particularly important when licensing is done internationally. Agents handle the business of licensing, from selecting licensees and contract negotiations to creating stylebooks and collecting fees. Most agents work by charging a percentage of royalty income, while others are hired on retainers and collect fees upfront. Commissions paid to agents can range from as low as 15% to as much as 55%, but generally fall in the 35 to 40% range. Retainers may range from $3,000 to $20,000 for a basic agreement, with fees for consulting or additional duties added to that amount.

While agents assist licensors with business matters, manufacturers often turn to licensing consultants to guide them through the process of obtaining the license to a property. Consultants can represent manufacturers who do not have in-house staff with experience in licensing. Consultants advise manufacturers in evaluating whether a property is appropriate for the manufacturer, and they can help develop licensing strategies as well. Though terms vary widely, most consultants, like agents, either work on commission or charge a retainer.

Here are 5 helpful ideas on finding customers, appointing agents, and delivering your products to export markets:

Tip No 1 – Small can be good.

• It is the dream of most exporters to move into a new market and work with the biggest players in that market in a specific industry. But the big players usually have a multitude of brands, are aggressive in negotiating price and demand support incentives that eat further into your profits. Now if you can get on board with a mega company, and negotiate a profitable price structure – GREAT! But a small company can often be hungrier for brands, and can offer focus that is fantastic. I appointed a small company to distribute some electronic products in Norway. It was almost a start-up company but the owner and his team were well funded and needed a break to grow. The first six months were tough, but after that, this small company exceeded all our expectations. So, when looking for a partner in an export market – don’t dismiss the little guys.

Tip No 2 – Beware of local costs.

• Getting your goods into a market can be a minefield. Electronic approvals, Food and Drug approvals, multi lingual owners’ manuals, costs of landing and warehousing goods and bribes to get your goods to your customer can all be major headaches, if you are not aware of the problems that you may encounter. One customer in Brazil advised me that he had to pay US$4,000 per container in bribes to land the goods. If he did not pay, all goods would be put in a holding pattern, including new shipments. This can go on for months or even years. Electrical approvals vary from country to country, and now even China is insisting on electrical approvals that are costly and time consuming. Get all the local knowledge you need before you do a deal.

Tip No 3 – Go there!

• Many companies often want to use the trade shows, phone, email, fax and letters to negotiate business in distant markets, but there is no substitute for getting on a plane and going to see your prospects in world markets. The travel is expensive and time consuming, but a visit to your new customer can be invaluable in understanding their business and seeing the wider opportunities in that market. You have the most experience with your product or service. Take the time to be with your customer, shake his or her hand and build a partnership that has depth, while seeing and hearing things for yourself.

Tip No 4 – Close the deal.

• Closing the deal in export is not just about getting the opening orders. It is about setting agreed targets, taking firm forward orders, agreeing on marketing and advertising that your customer will undertake, agreeing on warranty and service responsibilities and so much more. It is vital that you have a legal agreement between yourself and your export customer so that all issues are clear from day one. If things are not up to your expectations, you have a document to refer back to so you can ensure your product or service is represented in the best possible light, KGI can help you in this area with a sample agreement. A tight agreement also gives you the opportunity to move on if you wish to appoint a different distributor. In Europe, in countries like Belgium & France as an example, it can be difficult and VERY expensive to terminate a relationship unless you have a rock solid agreement that gives you detailed exit clauses.

Tip No 5 – Export packing.

• Don’t be cheap on the way your goods are packed and shipped to the customer. If you ship in full containers, there is less chance of damage, but we have seen containers where goods have been seriously damaged because the container was packed badly. If you use smaller sea freight shipments or air freight shipments – in excess of 20 different people can handle the goods between your manufacturing plant and the end user. And these freight industry people seem to like to THROW things! Pack it well – inner and outer cartons – shrink wrap on pallets and if necessary make sure all fumigation laws have been satisfied for the country where you will ship to.

If you have the right product or service, you might want to consider exporting, or in fact make a serious attempt to export. Exporting can be both a challenging task and a rewarding opportunity. If carried out with foresightedness, exporting can really be an activity worth following that’d deliberately yield you increased profits, and greater market share.

8-Impactive Ways of Exporting to Success

Here are the ways that can help you achieve success in exporting:

• Define your goals and objectives, and focus on them. Make a deliberate commitment that would otherwise give you confidence to compete internationally, and transcend national borders. Keep in mind that exporting is an activity that takes time and energy, and if you have no long term and short term goals, you are bound to fail. Ideally speaking, your long term goals would be the ones which you wish to achieve a year from now, or most probably in future. On the other hand, your short term goals would be the ones which you wish to fulfill in 5 to 10 days or within the period of one month. You as an exporter need to carefully identify your priorities.

• Do a SWOT Analysis. The acronym SWOT expands to Strengths, Weakness, Opportunities and Threats, which are helpful in determining the strong and the weak points in your export strategy. Moreover, as a successful exporter, doing meticulous SWOT analysis is also instrumental when indicating the future opportunities or threats perceptible in the markets chosen, and what strategy should be formulated in dicey market conditions.

• Develop an Export Plan. A well researched and a detailed export plan is the secret to exporting success. A structured export plan would be your guiding light, when you make the move towards exploring foreign markets. An export plan would ideally help you to act effectively, rather than reacting to the international market challenges and risks. A well structured export plan would comprise: Company’s Description, the target market and its industry; analysis of the target market and its industry; Individual Business Objectives of your company; financial requirements and forecasts; SWOT Analysis of the competitive market and in contrast to your own etc. A workable export strategy planned by you would also help you in aligning support from financial institutions, freight forwarders, consultants, and various other strategic partners. Furthermore, in order to achieve success as a legitimate exporter, you need to think along the lines of customer profiling, sales and distribution channels; financial requirements and forecasts; and many other potential factors.

• Conduct Market Research. This would help you in taking a firm stand while you make an export marketing decision based entirely on the socio-economic, political and cultural factors. Moreover, market research saves you time, money and energy. It provides you with a holistic view about the export market you want to penetrate. There are two types of market research, such as, Secondary market research and Primary market research. Secondary market research would help you collect information from various published resources such as books, newspapers, market reports, studies, periodicals; and the Internet. Secondary market research is a cost effective and readily available means to refine your export information requirements. Primary market research on the other hand aims to make a direct link with the industry experts, customers, and other potential sources of information. Primary market research involves one-to-one interviews and consultations. An exporter should make an attempt to reach primary market, after he has become familiar with the potential markets.

• How to enter the foreign market? Now that you have done plenty of market research and developed a workable marketing strategy, it is important to see how and what market strategies would work potentially well for your target market. There are basically three go-to-market strategies. These include Direct Exporting, Indirect Exporting and Exporting through strategic partnerships. Under the direct exporting method, there’s direct marketing and selling to the client. In the Indirect exporting method, an agreement is done with an agent, distributor or a trading house for the purpose of selling the products in the target market. The third go-to-market strategy, it may be feasible to forge strategic partnerships with other companies or individuals that would harmonize your export business.

• How to get your product or service exported to the foreign market? Exporting is a dynamic activity, and every market where you intend to export, have different market regulations, which cover health, safety, security, customs and duties, packaging and labeling. It is also important that you establish an affable relationship with the freight forwarding company and a customs broker. This would help overcome the hurdles in compliance and shipping documentation.

• How to arrange the finances in exporting? Business returns are only evident if you invest your time and money. Moreover, it is also important to see that you have financial stability and secure cash flow. Therefore, as a professional exporter you should develop your financial plan so as to address the imminent cost requirements involved in exporting. The plan should also address to the immediate as well as long term budgetary needs.

• Search financing options for your Exporting Success. A good exporter is the one who materializes a workable financial plan so as to take care of the hidden costs involved in exporting. The plan would include at least a two- to three-year cash budget that would cover overhead expenses, as well as the capital budget. A capital budget is the one that helps the exporter to rightly assess the cost-benefits of the export objectives, and is also considered as an effective operating plan to make precise assessment of the expenditures involved therein.

Exporting is as professional as any other business activity. Therefore, you need to plan out things well in advance. With export professionals working round the clock at Khanstellation Group, Inc. you have the right export team and strategy working in place. Our exporting solutions also help the exporter save you money, and increase returns on investment.

Marketing managers and PR specialists do not always talk the same language. Marketing managers are much more bottom line oriented, whereas PR practitioners see their job as preparing and disseminating communications. But these differences are disappearing.

Many companies are turning to marketing public relations companies (MPR) to directly support corporate or product promotion and image making. Thus, MPR, like financial PR and community PR, serves a special constituency, namely the marketing department.

The old name for MPR was publicity, which was seen as the task of securing editorial space-as opposed to paid space-in print and broadcast media to promote or “hype” a product, service, idea, place, person, or organization. But MPR goes beyond simple publicity and plays an important role in the following tasks:

• Assisting in the launch of new products: The amazing commercial success of toys such as Teenage Mutant Ninja Turtles, Mighty Morphin’ Power Rangers, and Beanie Babies owes a great deal to clever publicity.

• Assisting in repositioning a mature product: New York City had extremely bad press in the 70’s until the “I Love New York” campaign began.

• Building interest in a product category: Companies and trade associations have used MPR to rebuild interest in declining commodities such as eggs, milk, beef, and potatoes and to expand consumption of such products as tea, pork, and orange juice.

• Influencing specific target groups: McDonald’s sponsors special neighborhood events in Latino and African American communities to build goodwill.

• Defending products that have encountered public problems: Johnson & Johnson’s masterly use of MPR was a major factor in saving Tylenol from extinction following two incidents in which poison-tainted Tylenol capsules were found.

• Building the corporate image in a way that reflects favorably on its products: Iacocca’s speeches and his autobiography created a whole new winning image for the Chrysler Corporation.

As the power of mass advertising weakens, marketing managers are turning more to MPR consultants and firms. In a survey of 286 U.S. marketing managers, 3/4ths reported that their companies used MPR. They found it particularly effective in building awareness and brand knowledge, for both new and established products.

At KGI, our international MPR activities can contribute to the following objectives:

• Build awareness: MPR can place targeted stories in foreign media to bring attention to a product, service, person, organization, or idea.

• Build credibility: MPR can add credibility by communicating the message in an editorial context.

• Stimulate the sales force: MPR can help boost sales force and channel enthusiasm. Stories about a new product before it is launched will help the sales force sell.

• Hold down promotion costs: MPR costs less than direct mail and media advertising. The smaller the company’s promotion budget, the stronger the case for using
  PR to gain share of mind.

When developing a plan for international markets, executives and managers must decide how involved the firm will be. We’ll describe six basic kinds of involvement: exporting, licensing, contract manufacturing, management contracting, joint venturing, and wholly owned subsidiaries.

• Exporting Often Comes First

Some companies get into international marketing just by exporting – selling some of what the firm produces to foreign markets. Some first start exporting to get rid of surplus output. For others, exporting comes from a real effort to look for new opportunities. Some firms try exporting without doing much planning. They don’t change the product – or even the service or instruction manuals! As a result, some early efforts are not very satisfying – to buyers or sellers.

• Licensing is an easy way

Licensing is a relatively easy way to enter foreign markets. Licensing means selling the right to use some process, trademark, patent, or other right for a fee and royalty. The licensee takes most of the risk because it must invest some capital to use the right. Further, the licensee usually does most of the planning for the markets it is licensed to serve. If good partners are qualified and developed, this can be an effective way to enter a market.

• Contract Manufacturing takes care of the production problem

Contract manufacturing means turning over production to others while retaining the marketing process. Sears used this approach when it opened stores in Latin America and Spain. This approach doesn’t make it any easier to plan the marketing program but it may make it a lot easier to implement. For example, this approach can be especially desirable where labor relations are difficult or where there are problems obtaining supplies or government cooperation. Growing nationalistic feelings may make this approach more attractive in the future.

• Management Contracting sells know-how

Management contracting means the seller provides only management skills – others own the production and distribution facilities. Some mines and oil refineries are operated this way – and Hilton operates hotels all over the world for local owners. This is a relatively low-risk approach to international marketing. The company makes no commitment to fixed facilities – which can be taken over or damaged in riots or wars. If conditions get too bad, key management people can fly off on the next plan – and leave the nationals to manage the operation.

• Joint Venturing is more involved

Joint venturing means a domestic firm entering into a partnership with a foreign firm. As with any partnership, there can be dishonest disagreements over objectives – for example, how much profit is desired and how fast it should be paid out – as well as operating policies. Where a close working relationship can be developed – perhaps based on one firm’s technical and marketing know-how and the foreign partner’s knowledge of the market and political connections – this approach can be very attractive to both parties.

• Wholly owned subsidiaries give more control

When a firm thinks a foreign market looks really promising, it may want to take the final step. A wholly owned subsidiary is a separate firm – owned by a parent company. This gives the firm complete control of the marketing plan and operations, and also helps a foreign branch work more easily with the rest of the company. If a firm has too much capacity in a country with low production costs, for example, it can move some production there from other plans and then export to countries with higher production costs.

• Specialists can help develop the plan

Exporting does require knowledge about the foreign market. But executives and managers who don’t have enough knowledge to plan the details of a program can often get expert help from specialists like Khanstellation Group, Inc.

Exporting doesn’t have to involve permanent relationships. Channel relationships take time to build and shouldn’t be treated lightly – sales reps’ contacts in foreign countries are investments and require time to nurture.