How to make a cost-efficient entry in an overseas market and boost your chances of success.
A key challenge some small or medium-sized businesses face is having a very broad range of products or solutions available in their portfolio. Consequently, they need to decide which products they’re going to take to the targeted overseas market before launching their exporting activities.
Marketing a large product range can be quite difficult as it requires more resources in order to develop the relevant user manuals and to promote a wide product range. Large multinationals are able to achieve this objective because they use their brand profile to promote themselves, and clients often base their purchasing decision on a brand name. When you are a small business and a newcomer to an export market, nobody knows your brand. As a result, you usually need to convince your overseas customers to buy your product based on the associated ‘value-add’ which you have to be able to explain and position against your competitors.
Some examples to illustrate my point about the advantages of a narrow product range for a small business include:
- translating five user manuals rather than twenty into multiple languages is much faster and cheaper.
- focusing on one or two products in a magazine advertisement will have more impact than trying to communicate about many different products
- training your distributors’ sales representatives is an easier task for a narrow range of products rather than training them on twenty products where they are then expected to remember each and every product ‘value-add’.
In other words, try to make your life as easy as possible! Providing a clear focus for everyone engaged in your team is always the best option. And this focus can always be adjusted if you find that your product collection should be different (either narrower or broader) down the track. The situation will also change as your export sales grow.
What is also very important to understand, is that choosing the wrong product can waste your time, resources and effort. This is a critical decision for your business to succeed in an overseas market in the shortest possible time.
A few guidelines for selecting your initial product range for export – how do you select the initial product range for your business to succeed in an overseas market?
First of all, while you conduct your competitive analysis, you will observe which of your product(s) are likely to have the best sales outcomes in the targeted export market. Likewise, do a quick reality check on market prices so you are aware which products are competitive price-wise.
Maturity is another important factor, I always found it took us much longer to obtain results in Europe for a client, that wanted us to launch a new product range. They had little credential with the new products, and it took us longer to get the sales in Europe for them. Therefore, products or solutions, that are already widely used and adopted is definitively a good way to start overseas.
The other important selection criteria is compliance with the targeted overseas market specifications. You will have to select those products that are either certified for the given country or that have the best chances of achieving certification. To assess this, you should engage the services of a certification consultant to guide you through the process. Remember that product certification is a long and costly exercise so there are a lot of advantages in having a narrow range of products. For SME business owners, time and money are always important considerations in the exporting journey.
These factors form the selection criteria for determining which products you should be focusing your exporting efforts on. The next critical phase is to then test it in the market, then you can refine your approach in your export market. Good luck!