International Trade 101

Session 1: Export 101

1. Assessing your Organizational and Product Readiness for Export

2. Market Research and Assessing the Competition

3. Developing an Export Strategy and Marketing Plan – Assessing Market Characteristics

4. Promoting Products in Target Markets

5. Complying with U.S. and Foreign regulations

6. U.S. Government Agencies for Assistance to Exporters

Agenda

Assessing Your Organizational and Product Readiness

Evaluating Your Product Readiness

What has contributed to the success of your product or service domestically? Does a similar demand exist overseas?

What are the unique features of your products? Do theses features enhance the demand for

your product in certain markets or regions?

Evaluating Your Product Readiness

Other areas to think about Labeling changes, altering components or

ingredients, instructions or may need to be translated, ability to provide after sales service or support.

Organizing For Exporting

A company new to exporting generally treats its export sales the same as domestic sales. This is a mistake.

Two key advantages of separating international from domestic business are: The centralization of specialized skills

needed to deal with international markets. A focused effort on export sales.

Organizing For Exporting

Separating international from domestic business may be done at different levels in the organization.

Depending on your firm, some international sales people may specialize by product or by geographical region

Commitment from your firm’s CEO or President is critical to the success of the export initiative.

Market Research and Assessing the Competition

The Importance of Market Research

Your company may begin exporting without any market research if it receives unsolicited orders from abroad. But, you will find even more promising

markets by conducting a systematic search. Businesses that invest time in market research

increase their chances of succeeding more cost effectively.

The Importance of Market Research

Researching potential markets can help your company by: Finding where your products are most likely to

sell Identifying market segments and niches Determining both domestic and international

competitors

The Importance of Market Research

Discovering how to overcome barriers to market entry

Understanding customers’ needs and accommodating as appropriate

Identifying new trends Determining your price competitiveness

Market Research Sources

www.export.gov country and industry specific reports from the U.S. Commercial Service

www.buyusa.gov/eme Industry specialized reports and bulletins from the U.S. Commercial Service

www.strategis.ic.gc.ca U.S. and Canadian statistical trade information

www.census.gov

Fee Based Resources

Harris Selectory On-Line Database Kompass.com On-Line USA Trade Online Statistics BNA Export Reference Guide On-Line Distributor Match

Developing an Export Strategy and Marketing

Plan

Export Plan Content

An export plan should contain the following information: Executive Summary Export Policy Commitment Statement

Mission statement Objective of exporting

Background Analysis Why your company is ready to export

Export Plan Content

Market Analysis and Implementation Strategy Identify and rank markets, products, and

possible distribution channels Financial Analysis

Export budget Addenda

Facts to back up the export plan Background data Research information

Promoting Products in Target Markets

Promotion Techniques

Tapping into foreign visitors at domestic shows you may already be exhibiting at

Exhibiting at key foreign trade shows Overseas industry publications Identifying distributors by seeing who other

firms with complementary products have appointed

Promotion Techniques

Working leads and referrals from other overseas distributors

Networking through key international industry associations

Holding targeted training or informational seminars in a key market

Promoting Assistance through U.S. Commercial Services, ODOD (Int’l Trade Division), ITAC

Complying with U.S. and Foreign Regulations

Complying with U.S. Regulations

Why should you do your homework? U.S. Export Enforcement fines can be very

steep, even if mistakes are unintentional. Does your product require an export license?

U.S. Department of Commerce, Bureau of Industry and Security http://www.bis.doc.gov

U.S. Department of State, Directorate of Defense Trade Controls http://www.pmdtc.org

Plan Ahead – Be Prepared

Determine jurisdiction of your item Classify your item Identify the reasons for control Cross-reference the controls against the

Country Chart Screen all parties to the transaction Ensure no prohibited end-uses Export using appropriate ECCN and

authorization

Determine Your License Requirements

What is my item? Where is it going? ECCN and Destination

Who is involved? What are they doing with it?

End-user/End-use

What is My Item?

Check with the manufacturer Work with company engineer/someone who

knows the item Submit formal classification request to BIS

Who is Involved?“List to check”

Denied Person’s List Entity List Unverified List General Order No. 3 of Supp. No. 1 to part 736 Specially Designated Nationals List – Treasury

Department, Office of Foreign Assets Control Nonproliferation Sanctions List – State

Department Debarred Parties List – State Department

Red Flags or Indications of Unlawful Transaction

1. Customer or purchasing agent is reluctant to offer information about end-use of a product.

2. Product capabilities do not fit the buyer’s line of business; i.e., a small bakery places an order for sophisticated lasers.

3. Product ordered is incompatible with the technical level of the country to which the product is being shipped.

Red Flags or Indications of Unlawful Transaction

4. Customer has little or no business background.

5. Customer is willing to pay cash for a very expensive item when the terms of sale call for financing.

6. Customer is unfamiliar with the product’s performance characteristics, but still wants the product.

Red Flags or Indications of Unlawful Transaction…

7. Routine installation, training or maintenance services are declined by the customer.

8. Delivery dates are vague, or deliveries are planned for out-of the-way destinations.

9. A freight forwarding firm is listed as the product’s final destination.

10.The shipping route is abnormal for the product and destination.

Red Flags or Indications of Unlawful Transaction…

11.Packaging is inconsistent with the stated method of shipment or destination.

12.When questioned, the buyer is evasive about whether the purchased product is for domestic use, export or re-export.

General Prohibitions

1. Export and re-export of controlled items to listed countries

2. Re-export and export from abroad of foreign-made items incorporating more than a de minimis amount of controlled U.S. content

3. Re-export and export from abroad of the foreign produced direct product of U.S. technology and software

General Prohibitions

4. Engaging in actions prohibited by a denial order

5. Export or re-export to prohibited end-uses or end-users

6. Export or re-export to embargoed destinations

7. Support of Proliferation Activities

8. In transit shipments and items to be unladen from vessels or aircraft

General Prohibitions

9. Violation of any order, terms, and conditions

10.Proceeding with transactions with knowledge that a violation has occurred or is about to occur

Complying with Foreign Regulations & Requirements

Why should you do your homework? Each country’s requirements may be

different. They can also change without notification.

Is product registration required with their ministry? Is outside lab testing required?

Complying with Foreign Regulations & Requirements For entry, what documents are required?

Certificate of Free Sale Certificate of Origin Sanitary Certificates BSE Certificates

Some of these documents may need to be stamped by their consulate in the U.S.

Consider the market’s regulatory standards UL, CE, and CCC marks Labeling

Exporter Responsibilities

Record Retention – 5 years Anti-boycott Regulations – prohibits U.S.

persons from participating in or supporting foreign boycotts

Foreign Corrupt Practices Act (FCPA) – addresses bribery to foreign government officials

Papa Omar DiopInternational Trade & Assistance Center

Columbus State Community College

Tel: 614-287-3850 Fax: 614-287-6311

E-mail: pdiop@cscc.edu

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