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International Trade 101

International Trade 101. Session 1: Export 101. Agenda. Assessing your Organizational and Product Readiness for Export Market Research and Assessing the Competition Developing an Export Strategy and Marketing Plan – Assessing Market Characteristics Promoting Products in Target Markets

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International Trade 101

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  1. International Trade 101 Session 1: Export 101

  2. Agenda • Assessing your Organizational and Product Readiness for Export • Market Research and Assessing the Competition • Developing an Export Strategy and Marketing Plan – Assessing Market Characteristics • Promoting Products in Target Markets • Complying with U.S. and Foreign regulations • U.S. Government Agencies for Assistance to Exporters

  3. Assessing Your Organizational and Product Readiness

  4. 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?

  5. 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.

  6. 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.

  7. 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.

  8. Market Research and Assessing the Competition

  9. 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.

  10. 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

  11. 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

  12. Market Research Sources • www.export.gov country and industry specific reports from the U.S. Commercial Service • www.buyusa.gov/eme Industry specialized reports and bulletins from the U.S. Commercial Service • www.strategis.ic.gc.ca U.S. and Canadian statistical trade information • www.census.gov

  13. Fee Based Resources • Harris Selectory On-Line Database • Kompass.com On-Line • USA Trade Online Statistics • BNA Export Reference Guide On-Line • Distributor Match

  14. Developing an Export Strategy and Marketing Plan

  15. 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

  16. 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

  17. Promoting Products in Target Markets

  18. 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

  19. 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

  20. Complying with U.S. and Foreign Regulations

  21. 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 • http://www.bis.doc.gov • U.S. Department of State, Directorate of Defense Trade Controls • http://www.pmdtc.org

  22. 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

  23. 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

  24. What is My Item? • Check with the manufacturer • Work with company engineer/someone who knows the item • Submit formal classification request to BIS

  25. 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

  26. Red Flags or Indications of Unlawful Transaction • Customer or purchasing agent is reluctant to offer information about end-use of a product. • Product capabilities do not fit the buyer’s line of business; i.e., a small bakery places an order for sophisticated lasers. • Product ordered is incompatible with the technical level of the country to which the product is being shipped.

  27. Red Flags or Indications of Unlawful Transaction • Customer has little or no business background. • Customer is willing to pay cash for a very expensive item when the terms of sale call for financing. • Customer is unfamiliar with the product’s performance characteristics, but still wants the product.

  28. Red Flags or Indications of Unlawful Transaction… • Routine installation, training or maintenance services are declined by the customer. • Delivery dates are vague, or deliveries are planned for out-of the-way destinations. • A freight forwarding firm is listed as the product’s final destination. • The shipping route is abnormal for the product and destination.

  29. Red Flags or Indications of Unlawful Transaction… • Packaging is inconsistent with the stated method of shipment or destination. • When questioned, the buyer is evasive about whether the purchased product is for domestic use, export or re-export.

  30. General Prohibitions • Export and re-export of controlled items to listed countries • Re-export and export from abroad of foreign-made items incorporating more than a de minimis amount of controlled U.S. content • Re-export and export from abroad of the foreign produced direct product of U.S. technology and software

  31. General Prohibitions • Engaging in actions prohibited by a denial order • Export or re-export to prohibited end-uses or end-users • Export or re-export to embargoed destinations • Support of Proliferation Activities • In transit shipments and items to be unladen from vessels or aircraft

  32. General Prohibitions • Violation of any order, terms, and conditions • Proceeding with transactions with knowledge that a violation has occurred or is about to occur

  33. 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?

  34. 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

  35. 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

  36. Papa Omar Diop International Trade & Assistance Center Columbus State Community College Tel: 614-287-3850 Fax:614-287-6311 E-mail: pdiop@cscc.edu sbdcfreeadvice.ning.com

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