Export Management Plan Chapter 7 PDF

**CHAPTER 7: OVERCOMING CHALLENGES TO BUILD THE BEST EXPORT PLAN** **THE Ps of INTERNATIONAL TRADE** 1. **Product: What is your product or service, and how must it be adapted to the market? International mQarkets often require modifications to products to meet local tastes, legal requirem...

**CHAPTER 7: OVERCOMING CHALLENGES TO BUILD THE BEST EXPORT PLAN** **THE Ps of INTERNATIONAL TRADE** 1. **Product: What is your product or service, and how must it be adapted to the market? International mQarkets often require modifications to products to meet local tastes, legal requirements, or cultural preferences.** 2. **Price: What pricing strategy will you use? Pricing must consider factors like local economic conditions, competition, and cost of entry. A product priced too high in a developing market might fail, while the same price might be acceptable in a more affluent market.** 3. **Promotion: How will you make your customers aware of your product or service? Promotional strategies must be tailored to local media consumption habits and cultural norms.** 4. **Place: How and where will you deliver or distribute your product or service? Distribution channels can vary widely between countries. In some regions, e-commerce might dominate, while in others, traditional retail might still be king.** **INCOTERMS** **Incoterms® = "*A set of 11 individual rules issued by the International Chamber of Commerce (ICC) which define the responsibilities of sellers and buyers for the sale of goods in international transactions."* ([ITA, 2024](https://www.trade.gov/know-your-incoterms))** **The Incoterm® specifies when risks and costs are passed from the seller to the buyer. But not all guidelines apply in every situation. Some cover any kind of travel** - - **Responsibility: Seller makes goods available for pickup at their location.** - **Risk/Cost Transfer: Buyer assumes all risks and costs from the pickup point.** - - **Responsibility: Seller delivers goods to a named carrier location.** - **Risk/Cost Transfer: Transfers to the buyer once goods are handed over to the carrier.** - - **Responsibility: Seller pays for transport to a named destination.** - - - - - - - - - - - - **Responsibility: Seller delivers goods onto the vessel at the port.** - **Risk/Cost Transfer: Transfers to the buyer once goods are on board.** - - **Responsibility: Seller pays for transport to the destination port.** - **Risk/Cost Transfer: Transfers to the buyer once goods are on board at the origin port.** - - **Responsibility: Similar to CFR, but seller also pays for insurance.** - - - - - - - **CRITICAL PRODUCT, PRICING & COMMUNICATION CHALLENGES\ ** ------------------------- ------------------------------------------------------ **Challenge** **Description** **Product Adaptation** **Tailoring products to local markets.** **Export Licensing** **Securing necessary licenses.** **Market Selection** **Choosing target countries.** **Customer Profiles** **Understanding local customers and channels.** **Market Challenges** **Addressing competition and cultural differences.** **Pricing Strategy** **Setting competitive and cost-effective prices.** **Operational Steps** **Planning and timing each action.** **Resource Allocation** **Assigning personnel and resources.** **Cost and Evaluation** **Calculating costs and measuring success.** ------------------------- ------------------------------------------------------ **Product Adaptation Challenges** 1. **Which products are selected for export development, and what modifications, if any, must be made to adapt them for overseas markets?** 2. **Is an export license needed?** **Market Selection and Customer Insights** 3. 4. **Market-specific Challenges** 5. **What special challenges pertain to each market (e.g., competition, cultural differences, import and export controls), and what strategy will be used to address them?** **Pricing Strategy Complexities** 6. **How will your product's export sales price be determined?** **Operational Planning and Execution** 7. **What specific operational steps must be taken and when?** 8. **What will be the time frame for implementing each element of the plan?** **Resource Allocation** 9. **What personnel and company resources will be dedicated to exporting?** **Cost and Evaluation** 10. **What will be the cost in time and money for each element?** 11. **How will results be evaluated and used to modify the plan?** **PRICING STRATEGIES** 1. **Static Pricing: Charging the same price to all customers.** - - 2. **Flexible Pricing: Adjusting prices for different customer segments.** - - 3. - - 4\. **Marginal Cost Pricing: Covering only variable costs of production and exporting, while fixed costs are covered by domestic sales.** - - 5\. **Penetration Pricing: Keeping your price low to attract customers, discourage competitors, and gain quick market share.** - - 6\. **Price Skimming: Pricing the product high to maximize profit among high-end consumers while there is little competition.** - - **CALCULATING COSTS** **Once you've chosen a pricing strategy, you need to calculate your costs thoroughly:** - **Direct Costs: Include manufacturing, shipping, insurance, tariffs, and local distribution costs.** - **Indirect Costs: Factor in marketing, administrative expenses, and after-sales support.** - **Market Adjustments: Consider local economic conditions, purchasing power, and competitive landscape to fine-tune your price.** **DEVELOPING AN EXPORT PLAN** **Why Do You Need an Export Plan?** **Your export plan serves two main purposes:** 1. 2. - **Content** - - **Typically only a few pages long due to limited initial data.** - **The goal is to start small and build complexity over time.** - **Market Research** - - **Marketing and Sales** - - **Export Operations** - - **Export Budget and Pricing** - - **Management and Monitoring** - **KEY TAKEAWAYS** - **Smart Pricing: Set competitive and realistic prices. Consider local economic conditions and competition to hit the sweet spot.** - **Effective Promotion: Develop promotional strategies that resonate with local audiences. Understand your market\'s media habits and cultural norms.** - **Choose the Right Channels: Select distribution channels that best fit the market. E-commerce or traditional retail? Make the right call.** - **Stay Compliant: Ensure your product complies with local regulations and certifications. Avoid any legal hiccups.** - **Understand Your Customer: Get to know your local customers and their buying behaviors. Build a connection and trust.** - **Plan for Logistics:** - **Organize your logistics, warehousing, and transportation. Smooth operations lead to satisfied customers.** - **Use Local Insights: Leverage local expertise and partnerships. They can provide valuable insights and support.** - **Monitor and Adapt: Continuously monitor your market and adapt your strategy as needed. Just try to flexible and responsive to changes.**