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Is your product ready to be exported?
How to tell if you product is ready for an export market, whether or not your product is export ready is a function of the buyer’s needs, your product’s ability to meet those needs, and how your product will shape up against international competition. Your product’s exportability would also be dependent on your business’s ability to export as discussed in the previous section.
In order to determine export readiness, you need information on the target market, potential competitors and the buyers themselves. Your product may also demand specific questions relating to that industry. Common factors that would affect the exportability of a product are:
Unless there is a need, you will not sell your product. Your domestic market is a good indicator of the chances of success in international markets based on the fact that you are meeting a need locally and should be able to meet the same need internationally. This, however, is not the only consideration. International markets are usually further away, meaning that you will have to add international transport costs, and will most probably have to include the cost of import duties and taxes in the final delivery price.
2. Product adaptability
A key quality of an export product is its ability to adapt its function, design, or packaging to suit an international market. Cultural differences between countries could affect the use or acceptability of a product in each country. A product name could have a totally different and possibly derogatory meaning in another language and would have to be changed for that market. The following questions test the flexibility of your product to meet the different needs and demands of selling in international markets:
3. Cost structure
The cost structure of the product will obviously impact on its competitiveness. For example, depending on the cost of materials, and whether or not those materials can be locally sourced, international transport costs and customs duties in the importing country will collectively determine the final delivery price. The following questions highlight the areas that will affect your cost structure:
4. Competitor’s product
The more you know about your competitor’s product, the better your position when determining your own chances of succeeding. Price is an important factor in determining success, but not necessarily the only way to compete. By differentiating your product against your competitor’s, such as highlighting some of the unique selling points of your product, can result in success. Questions that should be addressed with regard to your competitors are:
5. Product complexity
The greater the complexity of your product, the more important role the strength of your business will play. Products that need a high level of support or installation, need a strong agent network with trained staff to support the product. The investment in setting up a sales and support structure in the importing country could be prohibitive to you, making your product unexportable. The following questions indicate the type of considerations affected by complex products:
6. Rights to sell product internationally
If your product is being manufactured under licence, you must check to see that there are no limitations on which markets you may sell into. The country that you may wish to sell into may already be producing the same product under the same licence and the patent holder may prevent you from competing with that manufacturer in his market.
The directorate is mandated to promote South African value added goods and services abroad by broadening the export base, increasing market share in targeted high growth markets and sustaining market share in traditional markets. This objective is pursued through the review and finalisation of the National Export Strategy which is built on the following critical pillars:
Export Promotion Offerings