U.S. Small Business Administration

The next step in the research process is to thoroughly investigate the marketing environment.  If you plan to export merchandise, you need to find out how products are distributed; the types and availability of transportation; freight costs; packaging and storage facilities; and the availability of media and personnel for advertising, sales promotion, publicity and personal selling.  Once you have this information, you can decide how to market and distribute your product.

Don't forget to check on tariffs, quotas and non-tariff barriers and possible government imposed trade restrictions.  You should also be familiar with a country's legal system and regulatory framework including contract law, trademark law, patent law, taxation, and corporate and general commercial law; its currency restrictions; and restrictions on foreign investment and operations.

And while you are researching the market potential of various foreign countries, you should also evaluate your company's potential for expanding into those markets.  This evaluation should include analyses of your potential product or service, your domestic opportunities versus your prospective foreign ones and your operation's abilities to handle problems that arise in managing an international business.

Experts recommend that in evaluating your product's compatibility with a particular foreign market, you should consider:

• The country's product standards, such as quality, safety and technical;
• Your product's technical specifications and codes ensure compatibility with locally manufactured products;
• Product life cycle--understanding where your product fits in that cycle; a product that has reached maturation level in the United States may find new life in a foreign market;
• Price--the cost of doing business internationally may cause you to raise your price in order to realize a profit (this is true of either product or service exporting); and
• Alternative uses--foreign needs may be quite different than domestic and may require you to modify your product.

Before you jump head first into overseas markets, you need to fully investigate the product's potential uses in the country and assess such factors as competing and compatible lines of products, brand loyalties, customs, packaging and marketing techniques, all of which influence customer preferences.

Once you have looked closely at prospective markets, it is time to take a good look at your internal operations.  To achieve success in the international marketplace, experts say, you must be willing to commit yourself to overseas sales for at least three to five years and ideally for the long run.  Just like American customers, foreign customers expect consistent and continuous products and service.  And the products and services you provide your international customers should be of comparable quality to those you offer your domestic customers.

Another internal consideration is staffing.  In the past, American companies preferred sending their own employees overseas to handle operations.  That practice is changing as owners of American businesses increasingly realize the important contribution local nationals can make.  They know the culture, traditions and nuances of their market and may also have advantageous business connections.

* Excerpted or reprinted with permission from Small Business Success, Volume 1, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration.