Marketing Tips for the International Marketplace
By: A. Ray Thomas | Posted: 15th April 2009
If you're like most small business owners, you've entertained visions of running a successful company that meets increasing customer demand for your product or service. Maybe you've dreamed of international expansion and impressive profits.
Unfortunately, if you're like most small business owners, you haven't pursued that dream because you think you are too small to compete.
Fortunately, you do not need to be a large top company to expand your business globally. With the numerous resources available today, that dream of expanding into the international marketplace may be easier - and closer - than you realize.
What may also surprise you is that given the available resources, only four percent of American businesses - about 230,000 companies out of almost 49 million - export their products and services around the world.
The percentage is low compared to other countries because many small-and midsize companies have valid reasons/assumptions why they don't seriously consider international trade:
• Unsure of economic/political climates and language in a foreign country
• Feel it is unnecessary to market overseas
• International transactions are too risky
The bottom line is that there are resources to help guide you through what seems to be an international marketing maze. Start with a few global marketing tips to help you determine if going global is right for you.
Tip: Utilize the Government's Worldwide Network In the United States, there are export assistance centers that can refer you to the U.S. and Foreign Commercial Service at overseas embassies.
They are typically the first point of contact you would want to make when doing business overseas. Their staffs are street smart and know the business community, trade opportunities and local language and culture.
Even better, this department offers a full range of products and services, from a background check and market research to market opportunities and assistance in meeting with the local company. Many of these services are free.
As a matter of fact, there are also state trade offices in every state that have country-specific and industry-specific information. The locations are available through the John H. Chafee Center for International Business, Bryant University.
Tip: Know the Rules of Trade Agreements There are eligibility requirements with trade agreements, and they do affect SMEs (Small and Medium Enterprises).
You will want to know what those requirements are and what they entail. The International Trade Administration in the Commerce Department maintains a database where SMEs can look up trade agreements with other countries.
And that's just for starters. There are also benefits associated with knowing the trade agreements. According to a study done by the APEC Business Advisory Council and the University of Southern California, only one in five companies in the Asia Pacific region utilized the preferential treatment eligibility among the trade agreements. This shows that many companies don't do their homework.
Tip: Get the Right Financing In order to reduce financial risk, you need to understand the benefits of having credit insurance.
It's a fact. What SMEs typically find as exporters is that they cannot get lenders to lend against foreign receivables or inventory destined for overseas markets because those items are considered ineligible collateral.
For all of these reasons, both the Overseas Private Investment Corporation and the Export-Import Bank of the United States (Ex-Im Bank) offer programs to counteract that problem. Ex-Im Bank, for example, offers a working capital guarantee program that will lend up to 90% against accounts receivable and up to 75% against inventory, including work in process and raw materials.
Tip: Develop Your Product for Competition If you want to move into a new market, there are a number of different costs that you have to consider.
You should factor in these costs when looking at getting financing for international transactions:
• Will you have to re-engineer your product to meet regulations in that country?
• How is your product priced, especially if you have a catalog?
• Does your cost to ship include cost insurance and freight?
• Do you understand the market norms and how you will be paid?
Tip: Utilize Your Logistics Provider to Comply With Export Control Requirements The U.S. government has many programs and offices that will help SMEs comply with export control requirements, which have become much more significant since 9/11. Non-compliance can lead to fines and penalties for the SME. This can be overwhelming, which is why it is recommended that you consult with your logistics service provider. It is their job to have in-depth knowledge about various requirements, which can be very helpful for you.
By uniting these global marketing tips with other sound resources, you can maximize your global business opportunities and realize your dream of competing in the international marketplace.
ZANA Network is a free resource that provides a one-stop, efficient, business-to-business online marketplace for small and medium enterprises (SME) worldwide. ZANA Network provides advertising and partnering opportunities, international trade resources to do business in 283 countries, provinces and territories, e-learning courses, business guidance, and essential services while enabling SMEs to come together in a community for mutual benefit. For more information, visit www.zananetwork.com.
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Tags: marketing tips, small business owners, market opportunities, point of contact, successful company, customer demand, american businesses, available resources, global marketing, international marketing, international marketplace, language and culture, trade opportunities, international expansion, international transactions, worldwide network