In search of a qualified customer abroad
One of the challenges for those who want to export is to find a qualified buyer.
The insertion of a company and its products into the international market is however not a simple task. There are a number of steps to be accomplished, that comprehend an in-depth study of the opportunity.
Considering for example an industrial product, well established in its domestic market, whose producer has already faced the different aspects of finding a buyer, setting prices, form and terms of payment, who understands the logistics specificities of the country the business is made and has clear definition of the lay time or time between order placed and delivery to the final customer.
Search of a qualified customer to export
Depending on the country, there may be regional cultural considerations, however selling in a domestic market does not raise aspects as communicating in a foreign language, consumer habits and competition in the target international market. That is to access only a few items at this moment.
The process of developing an international market is not an easy one. Therefore it is prudent to take it step by step starting with an in depth knowledge about the differentials the product to be sold has, the limitations the producing company has to export and where to find the needed help to conduct the process.
It is important to remember that developing and international market consumes time and money. So, it shall be assessed as a long term strategy.
A great number of countries have government initiatives to promote a culture of exports, specially directed to small businesses. It’s easy to understand the reasons for it. International businesses tend to be more competitive, being it quality, price or convenience wise. Some countries are more and others are less exposed to international competition. It’s a matter of economy openness. The top beneficiary of an open economy is its population, who take advantage of a greater variety of products and consumer experiences.
So, if at this point there is an understanding of the exporters’ competencies and the product’s competitive advantages a next step could be to map the potential target markets and study them in depth. The communication with the chosen target market is a fundamental aspect. Many markets are able to deal with languages broadly used or yet used in several countries or still rely on intermediaries to get the message across and understand relevant cultural aspects to do business with the chosen market.
Eventually the markets easier to communicate with and understand are those located closer to the supplier. If that is the case, be aware of the market size and its logistics to get there. Understand logistics limitations and possible order size to be negotiated shall be studied right upfront as could turn the sale unfeasible, be it due to cost and time to get to that market.
For the market study it is indicated to identify the size of the target market, its domestic production and imports, added to statistics and information about demand obtained at Chambers of Commerce and other government institutions, for the product to be sold. What that market annual growth potential is, price levels practiced, if there are treaties and agreements granting commercial preferences and reduced import taxes, or other barriers of entry, tax and non-tax related.