- Adapting your product to meet government regulations, country conditions, or preferences - Modifying product labeling and packaging - Planning for installation of your product overseas
Market research can give you a good idea of what products you can sell overseas and where. You may have to modify your product to some extent before you can sell it. How much modification you are willing to do in order to export your products is a key decision you’ll face. You may believe you can export your domestic products without significant modification. Alternatively, you might consciously develop products that will be acceptable in all markets. You may at the least have to redesign electrical products to handle voltage differences in different countries. You also may have to redesign packaging to meet different labeling standards or cultural preferences. Doing research to make sure you’re pursuing the right strategy will be crucial.
- Answering these questions will help get you on the right track: - What foreign needs does your product satisfy? - What products should your company offer abroad? - Should your company modify its domestic market product for sale abroad? - Should it develop a new product for the foreign market? - What specific features, such as design, color, size, packaging, brand, and warranty should your product have? - How important are languages or cultural differences? - What specific services, warranties and spare parts are necessary abroad at the presale and postsale stages? - Are your company’s service and repair facilities adequate?
If possible, you should start by exporting products that are best suited to the target market without requiring major design or engineering modifications. This will work best if your company:
- Deals with international customers that have the same demographic characteristics or the same specifications for manufactured goods. - Supplies parts for U.S. goods that are exported to other countries without modifications. - Produces a unique product that is sold on the basis of its status or international appeal. - Produces a product that has few or no distinguishing features, and that is sold almost exclusively on a commodity or price basis.
Reasons You Might Have to Modify Your Products
In many cases, however, your company will have to modify its products to a greater or lesser extent, in order to conform to government regulations, deal with geographic and climatic conditions, satisfy buyer preferences, or fit standards of living. Thus it’s necessary to make sure the market potential is large enough to justify the direct and indirect costs involved in product adaptation.
Governments impose regulations for a variety of reasons:
- To protect domestic industries from foreign competition - To protect the health and safety of their citizens - To force importers to comply with environmental controls. - To ensure that importers meet local requirements for electrical or measurement systems - To restrict the flow of goods originating in or having components from certain countries - To protect their citizens from cultural influences deemed inappropriate
Detailed information about regulations imposed by foreign countries, help in dealing with those that may be particularly onerous or discriminatory, and assistance in making sure you receive the full benefits of international trade agreements is available from several government sources.
Modification of your product(s) may be necessary for technical reasons, such as to facilitate shipment or compensate for differences in engineering and design standards. Electrical standards can vary wildly between, and sometimes within, different international markets, and many kinds of equipment must be engineered in the metric system for integration with other pieces of equipment or for compliance with the standards of a given country.
Buying, labeling, and packaging issues may also require attention. Many have to do with buyer preferences and tastes. Others may involve corporate or product image, while yet others will have to do with issues like language, content labeling, and measurement systems. Similarly, installation procedures may raise issues involving technicians and methods for training them, or concerning instructions, manuals, and documentation. Warranties and guarantees may also require attention, since expectations and rights will vary by country. In general, you should plan to keep your standards in these areas as high as or higher than in the United States.
This chapter’s Success Story is Avazzia, a manufacturer of medical pain management devices that found its initial overseas success in India. Its exports currently account for 20 percent of overall sales, a figure that could grow to 50 percent in two years.
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