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Product Globalization

Product Globalization. Robert E. Chalfant March 16, 2010. Welcome!. Are You Ready to Export? Where do You Start? What’s Important?. The Obvious. Market Size Trade Data, Estimates, Local Knowledge Localization Size, Color, Flavor, Uses Competitive Position. Political Risk. Regulations

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Product Globalization

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  1. Product Globalization Robert E. Chalfant March 16, 2010

  2. Welcome! • Are You Ready to Export? • Where do You Start? • What’s Important?

  3. The Obvious • Market Size • Trade Data, Estimates, Local Knowledge • Localization • Size, Color, Flavor, Uses • Competitive Position

  4. Political Risk • Regulations • Export Licenses, Certs, Inspections, Tariffs, Non-Tariff Barriers • Intellectual Property • Court System • Bribery • Anti-Boycott Laws, Economic Sanctions, Industry Groups

  5. Exchange Rate • Uncertainty Of The Future Exchange Rates • Quote Prices And Require Payment In U.S. Dollars • Purchase Foreign Currency At A Fixed Price In Dollars • Bank's Fee Should Be Included In The Price Quotation

  6. Choices and Approaches to Exporting • Sell to Domestic Buyers Who Then Export the Product • Sell to Domestic Buyers Who Represent Foreign End Users or Customers • Export Indirectly Through Intermediaries • Export Directly

  7. Shipping Details • Freight Forwarders and Freight Brokers • Harmonized Tariff System • Export Documentation Requirements • Incoterms: http://en.wikipedia.org/wiki/Incoterms • Defines Who Pays for Transport & Insurance, From and To Which Location • EXW; FCA; FAS; FOB; CFR; CIF; CPT; CIP; DAF; DES; DEQ; DDU; DDP

  8. Graphic of Incoterms Courtesy of Wikipediahttp://en.wikipedia.org/wiki/File:Incoterms_Robert_Wielgorski_EN.PNG

  9. How Do You Get Paid? • Cash In Advance • Documentary Letter Of Credit • Collateralized Letter Of Credit – US EX-IM Bank • Documentary Collection Or Draft - Paid Like a Check When Documentation is Presented • Open Account • Other Payment Mechanisms, Such As Consignment Sales, Countertrade (barter)

  10. Product Support • Marketing • Translation Of Product Brochures • Participation In Trade Shows • Customer Informational Seminars • Sales • Sales Negotiations • Pre-contractual Equipment Inspections At Factory • Installation Training • Training In The United States For A Local Sales Agent Or Distributor • Continuous Market Research And Sales Planning • Repair and Maintenance • Equivalent Service Quality • Frequent Travel By A Technician Or • Establishment Of An Equipment Service And Maintenance Center

  11. The Checklist • Is Your Product Successful in the US? • Are Goals and Strategy Defined in an Explicit Plan? • Do You Have Sufficient Production Capacity for the Foreign Market? • Can You Support the Marketing of Products in the Foreign Markets? • Do You Have a Local (in the foreign country) Agent? • Find & Translate Import Regs, Safety Certs. • Suggest Product and Package Mods, Cultural Prefs • Find Attorneys, Consultants, • Due Diligence on Customers

  12. The Checklist • Do You Have the Resources (people, time, money) and Commitment to Continuously Develop the Foreign Market? • Do You Have or Can You Create an Pre- and Post-Sale Support System Equivalent to the Domestic Market? • Do You Know How to Modify the Product, its Package, its Ingredients? • To Meet Import Regulations • To Satisfy Cultural Preferences • Do You Know How to Ship Your Products? • Do You Know How or Can You Acquire Expertise in Export Payment Mechanisms Such As Letters of Credit?

  13. The Usual Justifications • I have all kind of products to offer... • My product price is very competitive. • That looks like a good foreign lead. Let's respond to it! • Let's export our product to a bunch of foreign markets. • I want to export my products but can’t make any changes to it. • I know my product works well at home; I am certain it will fly overseas. • We appointed an exclusive agent, yet didn't get any sales. • When our domestic sales slide, we should work hard at getting foreign sales.

  14. Resources • Export.gov • http://www.export.gov/salesandmarketing/eg_main_018205.asp • U.S. Commercial Service • http://www.trade.gov/cs/ • Harmonized Code • http://www.foreign-trade.com/reference/hscode.htm • Questionnaire on Export Readiness • http://hq-intranet04.ita.doc.gov/bid/export_questionnaire.asp and • http://www.neotec.org/site.cfm/ITAC/Export-Readiness-Questionnaire.cfm • Sample Outline for an Export Plan • http://www.export.gov/exportbasics/eg_main_017456.asp • Management Issues • http://www.export.gov/exportbasics/eg_main_017455.asp • Conducting International Business Online • http://www.export.gov/exportbasics/eg_main_017449.asp • Northeast Ohio Trade and Economic Consortium (International Trade Assistance Center) • http://www.neotec.org/site.cfm/ITAC.cfm • How To Develop an Export Business Plan (an interesting and simple example) • http://www.zeromillion.com/business/international/exporting-business-plan.html • Stories About Exporting • http://www.exportlawblog.com/archives/1134 • What Not to Do • http://www.dfait-maeci.gc.ca/canadexport/articles/385627.aspx

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