As you can imagine, many foreign markets differ greatly from the United
States. Some differences include climatic and environmental factors, social
and cultural factors, local availability of raw materials or product alternatives,
lower wage costs, varying amounts of purchasing power, the availability
of foreign exchange, and government import controls. Once you have decided
that your company is able and committed to exporting, the next step is
to develop a marketing plan.
A clearly written marketing strategy offers six immediate benefits:
- Because written plans display strengths and weaknesses more readily,
they are a great help in formulating and polishing an export strategy.
- Written plans are not easily forgotten, overlooked, or ignored by
those charged with executing them. If deviation from the original plan
occurs, it is likely to be due to a deliberate and thoughtful choice.
- Written plans are easier to communicate to others and are less likely
to be misunderstood.
- Written plans allocate responsibilities and provide for an evaluation
- Written plans are helpful when seeking financial assistance. They
indicate to lenders that you have a serious approach to the export venture.
- Written plans give management a clear understanding of what will be
required of them and thus help to ensure a commitment to exporting.
Actually, a written plan signals that the decision to export has already
This last advantage is especially noteworthy. Building an international
business takes time. It usually takes months, sometimes even several years,
before an exporting company begins to see a return on its investment of
time and money. By committing to the specifics of a written plan, top
management can make sure that the firm will finish what it begins and
that the hopes that prompted its export efforts will be fulfilled.
To successfully export your product, you should examine foreign markets
through research. The purpose is to identify marketing opportunities and
constraints abroad, as well as to identify prospective buyers and customers.
Market research encompasses all methods that a company can use to determine
which foreign markets have the best potential for its products. Results
of this research inform the firm of: the largest markets for its product,
the fastest growing markets, market trends and outlook, market conditions
and practices, and competitive firms and products.
Your firm may begin to export without conducting any market research
if it receives unsolicited orders from abroad. Although this type of selling
is valuable, the company may discover even more promising markets by conducting
a systematic search. If your firm opts to export indirectly (see Chapter
4) by using an intermediary such as an Export Management Company
(EMC) or Export Trading Company (ETC), you may wish to select markets
to enter before selecting the intermediary. Because many intermediaries
such as EMCs and ETCs have strengths in certain markets, it is valuable
to select the intermediary after deciding on markets to enter. You may
also want to do market research if you export indirectly.
A firm may research a market by using either primary or secondary data
resources. In conducting primary market research, a company collects data
directly from the foreign marketplace through interviews, surveys, and
other direct contact with representatives and potential buyers. Primary
market research has the advantage of being tailored to the company's needs
and provides answers to specific questions, but the collection of such
data is time-consuming and expensive.
When conducting secondary market research, a company collects data from
various sources, such as trade statistics for a country or a product.
Working with secondary sources is less expensive and helps the company
focus its marketing efforts. Although secondary data sources are critical
to market research, they do have limitations. The most recent statistics
for some countries may be more than two years old. Moreover, the data
may be too broad to be of much value to a company. Statistics may also
be distorted by incomplete data-gathering techniques. Finally, statistics
for services are often unavailable. Yet, even with these limitations,
secondary research is a valuable and relatively easy first step for a
company to take. It may be the only step needed if the company decides
to export indirectly, since the intermediary firm may have advanced research
Methods of Market Research
Because of the expense of primary market research, most firms rely on
secondary data sources. The three following recommendations will help
you obtain useful secondary information:
- Keep abreast of world events that influence the international marketplace,
watch for announcements of specific projects, or simply visiting likely
markets. For example, a thawing of political hostilities often leads
to the opening of economic channels between countries.
- Analyze trade and economic statistics. Trade statistics are generally
compiled by product category and by country. These statistics provide
the U.S. firm with information concerning shipments of products over
specified periods of time. Demographic and general economic statistics,
such as population size and makeup, per capita income, and production
levels by industry can be important indicators of the market potential
for a company's products.
- Obtain advice from experts. There are several ways of obtaining this
- Contact experts at the U.S. Department of Commerce and other government
- Attend seminars, workshops, and international trade shows.
- Hire an international trade and marketing consultant.
- Talk with successful exporters of similar products.
- Contact trade and industry association staff.
Gathering and evaluating secondary market research can be complex and
tedious. However, several publications are available that can help simplify
the process. The following approach to market research refers to these
publications and resources that are described later in this chapter.
A Step-by-Step Approach to Market Research
Your company may find the following approach useful. It involves screening
potential markets, assessing the targeted markets, and drawing conclusions.
A. Screen Potential Markets
- Step 1. Obtain export statistics that indicate product
exports to various countries. Published export statistics provide a
reliable indicator of where U.S. exports are currently being shipped.
The U.S. Census Bureau provides these statistics in a published format.
Trade statistics also can be obtained using the National Trade Data
- Step 2. Identify five to ten large and fast-growing
markets for the firm's product. Look at them over the past three to
five years. Has market growth been consistent year to year? Did import
growth occur even during periods of economic recession? If not, did
growth resume with economic recovery?
- Step 3. Identify some smaller but fast-emerging markets
that may provide ground-floor opportunities. If the market is just beginning
to open up, there may be fewer competitors than in established markets.
Growth rates should be substantially higher in these countries to qualify
as up-and-coming markets, given the lower starting point.
- Step 4. Target three to five of the most statistically
promising markets for further assessment. Consult with a Department
of Commerce Export Assistance Center (see http://www.doc.gov),
business associates, freight forwarders, and others to further evaluate
B. Assess Targeted Markets
- Step 1. Examine trends for company products as well
as related products, that could influence demand. Calculate overall
consumption of the product and the amount accounted for by imports.
The National Trade Data Bank (NTDB)and the National Technical Information
Service (NTIS) offer Industry Sector Analyses (ISAs), Country Commercial
Guides (CCGs), and other reports that give economic backgrounds and
market trends for each country. Demographic information (such as population
and age) can be obtained from World Population (Census) and Statistical
Yearbook (United Nations).
- Step 2. Ascertain the sources of competition, including
the extent of domestic industry production and the major foreign countries
the firm is competing against in each targeted market by using ISAs
and competitive assessments. This information is available from the
NTDB and the NTIS. Look at each competitor's U.S. market share.
- Step 3. Analyze factors affecting marketing and use
of the product in each market, such as end-user sectors, channels of
distribution, cultural idiosyncrasies, and business practices. Again,
the ISAs and Customized Market Analyses (CMAs) offered by the Department
of Commerce are useful.
- Step 4. Identify any foreign barriers (tariff or nontariff)
for the product being imported into the country (see Chapter
8 for an analysis of tariff and nontariff barriers). Identify
any U.S. barriers (such as export controls) that affect exports to the
- Step 5. Identify any U.S. or foreign government incentives
that promote exporting of your particular product or service(see Chapter
C. Draw Conclusions
After analyzing the data, the company may conclude that its marketing
resources would be applied more effectively to a few countries. In general,
if the company is new to exporting, then efforts should be directed to
fewer than ten markets. Exporting to one or two countries will allow the
company to focus its resources without jeopardizing its domestic sales
efforts. The company's internal resources should determine its level of
The next section describes the publications that have been mentioned
as well as additional sources. Because there are many research sources,
the firm may wish to seek advice from their local Export Assistance Center
(see Chapter 3 and http://www.doc.gov).
Sources of Market Research
There are many domestic, foreign, and international sources of information
concerning foreign markets. Several of these sources are given here and
others may be found in the bibliography to this publication. This information
ranges from simple trade statistics to in-depth market surveys.
Trade statistics indicate total exports or imports by country and by
product. They allow an exporter to compare the size of the market for
a product in various countries. Some statistics also reflect the U.S.
share of the total country market in order to gauge the overall competitiveness
of U.S. producers. By looking at statistics over several years, an exporter
can determine which markets are growing and those that are shrinking.
Market surveys provide a narrative description and assessment of particular
markets along with relevant statistics. The reports are often based on
original research conducted in the countries studied and may include specific
information on both buyers and competitors.
The following sources fall into two broad categories: 1) general information
resources, and 2) industry and country specific resources. Each category
is also divided into several subgroups.
One of the best sources of information is personal interviews with private
and government officials and experts. A surprisingly large number of people
in both the public and private sectors are available to assist exporters
in any aspect of international market research. Either in face-to-face
interviews or by telephone, these individuals can provide a wealth of
market research information.
In the private sector, sources of market research expertise include local
chambers of commerce, world trade centers or clubs, and trade associations.
Most state governments maintain active export promotion offices. In the
federal government, industry and commodity experts are available through
the Departments of Commerce, State and Agriculture, and the Small Business
- Business America. This monthly publication of the Department
of Commerce contains country-by-country marketing reports, incisive
economic analyses, worldwide trade leads, advance notice of planned
exhibitions of U.S. products worldwide, and success stories of export
marketing. (GPO:703-011-00000-4). Contact Superintendent of Documents,
U.S. Government Printing Office, Washington, DC 20402; telephone 202-512-1800.
- Commerce Business Daily (CBD). CBD is published daily,
Monday through Friday (except holidays), by the Department of Commerce.
It lists government procurement invitations over $25,000, contract awards,
subcontracting leads, sales of surplus property, and foreign business
opportunities, as well as certain foreign government procurements. It
is available by subscription and on-line (electronically). Contact the
U.S. Government Printing Office, Washington, DC 20402; telephone 202-512-1800.
For on-line subscriptions contact STAT-USA at 1-800-STAT-USA (1-800-782-8872).
This information center was established as a comprehensive source for
U.S. companies seeking information on federal programs and activities
that support U.S. exports, including information on overseas markets
and industry trends. The center maintains a computerized calendar of
U.S. government-sponsored domestic and overseas trade events. Telephone
1-800-USA-TRADE; e-mail: [email protected]; Internet home page: http://www.ita.doc.gov/td/tic.
- Trade Information Center. This information centerwas
established as a comprehensive source for U.S. companies seeking information
on federal programs and activities that support U.S. exports, including
information on overseas markets and industy trends. This center maintains
a computerized calendar of U.S. Government-sponsored domestic and overseas
trade events. Telephone 1-800-USA-TRADE; e-mail: [email protected];
Internet home page: http://www.ita.doc.gov.
- Economic Bulletin Board (EBB). EBB is a great resource
for business, economic, and trade information on a daily basis in a
traditional dial-up platform. You can connect to this vast collection
of information and download trade leads, market research reports, and
the Commerce Business Daily via your computer. Subscription costs are
low and vary, depending on which information you choose to access. For
more information, call 1-800-STAT-USA (800-782-8872).
- The National Trade Data Bank (NTDB). The NTDB is one
of the primary sources of export information from the federal government.
The NTDB is a must-have resource, gathering trade information from over
20 different government agencies into one place. The NTDB is a low-cost
business service run by the Department of Commerce, which provides market
research reports, Country Commercial Guides, contacts overseas, trade
statistics, policy and trade practices, legal ramifications of exporting,
an export promotion calendar, and publications (for example, A Basic
Guide to Exporting and SBA's Breaking into the Trade Game). The NTDB
is updated daily on the Internet (http://www.stat-usa.gov)
and updated monthly on CD-ROM. The CD-ROM version is avail-able to use
for at over 1,000 federal depository libraries throughout the country.
To find the library closest to you, purchase access for your desktop,
or learn more, call 1-800-STAT-USA.
- STATUSA/Internet (http://www.stat-usa.gov).
A comprehensive collection of business, economic and trade information
available on the Web. Through this address you can access the NTDB,
daily trade leads and economic news, the Commerce Business Daily and
the latest economic press releases and statistical series from the federal
government. For more information on this low cost service, call 1-800-STAT-USA
- STAT-USA/Fax. This fax on demand service providing instant
hard copy of business and economic information from the federal government.
All releases are available 24 hours a day, seven days a week. The most
popular fax documents include the daily trade leads and numerous U.S.
government economic press releases. For more information, call 1-800-STAT-USA
- TRADESTATS. A comprehensive source for U.S. export and
import data, both current and historical. Maintained by the Commerce
Department's Office of Trade and Economic Analysis, this web site contains
total and disaggregated U.S. trade statistics by country and commodity
classifications, state and metropolitan area export data, and trade
and industry statistics. Much of this data is downloadable. The Web
site address is http://www.ita.doc.gov/td/industry/otea.
- Selected SBA market research-related general resources.
The Small Business Administration publishes many helpful guides to assist
small and medium-sized companies, including: Marketing for Small Business:
An Overview, Researching Your Market, Breaking into the Trade Game,
or the videos Marketing: Winning Customers with a Workable Plan, The
Basics of Exporting. Contact the Small Business Answer Desk, 1-800-U-ASK-SBA
- UN Statistical Yearbook. Published by the United Nations
(UN), this yearbook is one of the most complete statistical reference
books available. It provides international trade information on products,
including information on importing countries useful in assessing import
competition. The yearbook contains data for 220 countries and territories
on economic and social subjects, including population, agriculture,
manufacturing, commodity, export-import trade, and many other areas.
The most current addition is from 1993; it is available in hard copy
and CD-ROM. Contact United Nations Publications, Room DC2-0853, New
York, NY 10017; telephone 212-963-8302.
- World Bank Atlas. The World Bank Atlas provides demographics,
gross domestic product, and average growth rates for every country.
The latest edition, 1997, covers data through 1996. Contact World Bank
Publications, P.O. Box 7247-8169, Philadelphia, PA 19170-8169; telephone
202-473-1155, fax 703-661-1501.
- World Factbook. Produced annually by the CIA, this publication
provides country-by-country data on demographics, economy, communications,
and defense. The data is available through a subscription to the NTDB
(to subscribe call 1-800-STAT-USA). To order a hard copy, contact the
U.S. Government Printing Office, Washington, DC 20402; telephone 202-512-1800.
- International Financial Statistics (IFS). Published
by the International Monetary Fund, IFS presents statistics on exchange
rates, money and banking, production, government finance, interest rates,
and other subjects. It is available in hard copy as a monthly subscription
or on CD-ROM. Contact the International Monetary Fund, Publication Services,
700 19th Street, N.W., Washington, DC 20431; telephone 202-623-7430.
- World Population Profile. This valuable resource is
produced by the Bureau of the Census of the U.S. Department of Commerce.
Census collects and analyzes worldwide demographic data that can help
exporters identify potential markets for their products. Information
on each country - total population, fertility, mortality, urban population,
growth rate, and life expectancy - is updated every two years. The document
also contains detailed demographic profiles of individual countries,
including analysis of labor force structure, and infant mortality. For
the latest edition, contact the U.S. Government Printing Office, Washington,
DC 20402; telephone 202-512-1800.
General Industry and Agriculture Information
Country and Area Information
- U.S. Industry and Trade Outlook '98. Successor to the
U.S. Industrial Outlook, published from 1957 to 1994, this expanded-coverage
600-page edition includes economic forecasts for 350 manufacturing and
service sectors, including telecommunications, financial services, aerospace,
and utilities. Issued by the International Trade Commission in conjunction
with the McGraw-Hill Companies. Available at bookstores ($69.95) or
through the National Technical Information Service, 5835 Port Royal
Road, Springfield, VA 22161; telephone 1-800-553-8847.
- Export Information System Data Reports (XIS). Produced
by the Small Business Administration (SBA), each data report covers
approximately 2,700 product categories. XIS helps small businesses determine
which export markets to pursue. Upon request, SBA provides a small business
with a list of the 25 largest importing markets for its product, the
ten best markets for U.S. exporters of that product, the trends in those
markets, and the major sources of foreign and UN data. This service
is available free to small businesses. Telephone the Small Business
Answer Desk at 1-800-U-ASK-SBA, or access the SBA home page at: http://www.sbaonline.sba.gov.
- U.S. Department of Agriculture: U.S. Trade Assistance and Promotion
Office (TAPO). The Trade Assistance and Promotion office of
the Foreign Agriculture Service serves as the first point of contact
for persons who need information on foreign markets for agricultural
products. The TAPO staff can provide basic export counseling and direct
you to appropriate Department of Agriculture offices to answer specific
questions on exporting. In addition, the staff can provide country and
commodity specific Foreign Market Information Reports, which focus on
best market prospects and contain contact information on distributors
and importers. Extensive information on the Foreign Agricultural Service
is also available through the Foreign Agricultural Service home page
on Internet. Contact: Trade Assistance and Promotion Office, (202) 720-7420,
fax (202) 690-4374; Internet: http://www.fas.usda.gov/.
- Trade Information Center (TIC). TIC trade specialists
can answer questions on (1) import tariffs/taxes and customs procedures;
(2) standards, intellectual property rights, government procurement,
and other commercial laws, regulations, and practices; (3) distribution
channels, business travel, and other market information; and (4) opportunities
and best prospects for U.S. companies in individual markets. In addition,
callers can access the TIC's 24-hour automated fax retrieval system
to access regional- and country-specific market information. Both services
are available by calling 1-800-USA-TRADE; e-mail: [email protected]; Internet
- Country Commercial Guides (CCG). CCGs are prepared annually
by U.S. embassies covering 115 countries. Each CCG is a planning tool
that analyzes an individual country's business and economic climate
emphasizing marketing and trade statistics, development, and other issues.
CCGs are available through the NTDB or through the NTIS. The National
Technical Information Service may be contacted at 1-800-553-NTIS or
703-487-40530 for TDD (hearing impaired).
- U.S. Department of State, Bureau of Consular Affairs Automated
Fax System. The Consular Affairs automated fax system is available
to anyone with a fax machine equipped with a telephone jack. This system
offers all of the bureau's Consular Information Sheets, Travel Warnings,
Public Announcements, Tips for Travelers brochures, and Visa Bulletins.
The telephone number is: (202) 647-3000. Callers must use the receiver
on their fax machines to dial into the automated fax service.
- Congressional Presentations of the U.S. Agency for International
Development (AID). Published by AID's Office of Small and Disadvantaged
Business Utilization, this document provides country-by-country data
on nations to which AID will provide funds in the coming year, as well
as detailed information on past funding activities in each country.
They also list projects the agency desires to fund in the upcoming year.
Since these projects require U.S. goods and services, these presentations
give U.S. exporters an early look at potential projects and therefore
are an opportunity to plan ahead. (See Chapter
7 for more details on AID's programs). They are available through
the National Technical Information Service (NTIS) by the set or as separate
volumes. Contact National Technical Information Service, 5285 Port Royal
Road, Springfield, VA 22161; telephone 1-800-553-NTIS. The information
is also available through USAID's home page @ http://www.usaid.gov.
- Organization for Economic Cooperation and Development (OECD)
Surveys. These economic development surveys cover each of the
29-member OECD countries individually. Each survey presents a detailed
analysis of recent developments in market demand, production, employment,
and prices and wages. Short-term forecasts and analyses of medium-term
problems relevant to economic policies are provided. The surveys are
shipped from France. Contact the Organization for Economic Cooperation
and Development, Publications and Information Center, 2001 L Street,
Suite 700, Washington, DC 20036; telephone 202-785-6323. The OECD home
page address is http://www.oecd.org.
- OECD Publications. The chartered mission of OECD is
to promote its member countries' policies designed to support high economic
growth, employment, and standard of living, and to contribute to sound
economic expansion in development and in trade. OECD publications focus
on a broad range of social and economic issues, concerns, and developments,
including reports on international market information country by country,
such as import data useful in assessing import competition. For information
on and prices for these publications, contact Organization of Economic
Cooperation and Development, Publications and Information Center, 2001
L Street, Suite 700, Washington, DC 20036; telephone 202- 785-6323.
Industry and Country-Specific Information Resources
U.S. Government Product and Industry Resources
- Industry Sector Analyses (ISAs). Prepared by the commercial
sections of the U.S. embassies, ISAs provide a basis for quickly evaluating
a particular commercial or industrial market in a particular country.
ISAs present market demand, market size, competitive analysis, end-user
analysis, and market access criteria, as well as industry contacts and
marketing opportunities. Available through the NTDB or the NTIS, which
may be contacted at 1-800-553-NTIS or 703-487-4053 for TDD (hearing
- International Market Insights (IMIs). IMIs are prepared
on an ad hoc basis by the economic and commercial sections of U.S. embassies
and consulates for the Commercial Service. They help to identify unique
market situations and marketing opportunities for U.S. business. Available
through the NTDB or the NTIS, which may be contacted at 1-800-553-NTIS
or 703-487-4053 for TDD (hearing impaired).
- Customized Market Analyses (CMAs). CMAs are produced
by the Commercial Service on request. CMAs provide a U.S. firm with
detailed market information on a selected single product in a selected
market. They answer basic questions about the marketability of the product,
key competitors, comparative prices, customary distribution and promotion
practices, trade barriers, and other factors. Contact your local Export
Assistance Center (see Chapter 3
and http://www.doc.gov) for more information.
- Textile and Apparel Database. Prepared by the Department
of Commerce's Office of Textiles and Apparel (OTEXA), this database
provides information on overseas markets and rules and regulations affecting
U.S. exports. The database includes specific "country profiles" which
include information on marketing and distribution, market entry requirements,
shipment and entry procedures, and trade policy. More general information,
such as how to export, potential buyers and suppliers, current trade
issues, and background on textile and apparel trade policy agreements,
is also available. The Web site is located at http://otexa.ita.doc.gov.
- Private Sector Product and Industry Resources. The U.S.
and foreign private sectors publish numerous guides and directories
that can provide invaluable help to the exporter. For specific references,
consult your local Commerce Export Assistance Center or the Trade Information