How to develop an exportable product? What should I do to adapt my product (which already has a good positioning in my country) so that it can serve the foreign market?
The necessary adaptations of the product are some of the main doubts of those who are starting their trajectory in the export world.
In this text we will comment on the three main aspects that must be considered to export a product.
What is an exportable product?
An exportable product is one that the company has identified as meeting the needs and preferences of consumers in the foreign markets to which it will be exported.
This product can be one of its current line or a new item developed, which must be aligned to the price levels practiced in the target market. Also to be observed are issues related mainly to:
tariff and non-tariff issues;
knowing your competitors.
The 3 steps to develop an exportable product
The truth on the subject is that there are several steps to developing an exportable product, which will depend on both the product and your company.
However, to get a start on this path, we have listed three steps that we consider to be the most important for all exporters.
Identify target market
To identify the target market, it is essential to research possible consumers in these countries, starting with market research: a study whose objective is to verify the prospects for sales abroad in order to obtain the best results.
This research is an almost mandatory investment for a company that intends to go international, because it can result in the saving of values and the obtaining of essential information for the insertion in the target market.
It is important that the person responsible for the product (or the team) travel abroad so that they can explore potential markets and directly contact and meet importers and consumers.
It is recommended to maximize participation in trade fairs (including in Brazil). Apex Brazil (Brazilian Agency for the Promotion of Exports and Investments) always publicizes and promotes this type of action, so keep an eye out for it.
There is also the Invest & Export Brazil, website, an instrument of the Trade Promotion System of the Ministry of External Relations that aims to bring the supply of an exportable Brazilian product closer to world demand, as well as to develop trade promotion and investment work to leverage Brazilian exports.
It is possible to accelerate the identification of possible barriers and requirements of the possible target markets by participating in sectorial programs, such as the BHD of the Brazilian Association of Medical Devices Industry (ABIMO), as well as by hiring specialized professionals, such as SC Vitola.
Another important aspect is to evaluate that the identification of a target market is independent of population size and per capita income, since it is more linked to the culture, consumption habits, and legislation of each country.
An example of this is that in Brazil there is legislation that prohibits the sterilization of medical devices with a certain technology that, however, is allowed in 20 other countries. Therefore, these other countries can be potential target markets.
Adapt to the requirements of the target market
After identifying the target market and the exportable product it is necessary to study the adaptation of the product itself and the day by day of the company that will be necessary, once it will start to focus on this foreign market.
The adjustments may be to meet technical requirements of the market, related to logistics, adding value and competitive advantages, as well as to understand and adapt the communication strategy that should be adopted, based not only on competitors, but on culture and customs.
Still with regard to the demands of the target market, we can highlight the following:
They can be of various aspects: from sanitary and phytosanitary barriers, investments, to environmental and labor legislation.
An important requirement can also be related to the technology used in the exportable product to access the target market, such as an investment in a specific machine, equipment or software.
This issue is very important because it will usually require investments by the exporter. An example of this technical requirement can be seen now in the pandemic with the Pfizer vaccine, for which initially the FDA (Food and Drug Administration) recommended that it be stored in ultra-cold temperatures (between minus 80 and 60 degrees Celsius). This made it difficult to transport and store, since pharmaceutical freezers did not have all this capacity.
Fortunately, the American health agency reviewed the situation and gave a favorable opinion on the transport and storage at temperatures more accessible to the logistical and storage capacities that had existed up to that time. This made it possible for the world to safely access the vaccine without further delay or expense of purchasing specific freezers.
We can mention as bureaucratic requirements the non-tariff barriers, which would be related to:
specific customs procedures
antidumping, safeguard and countervailing measures
issuance of documents related to sanitary and phytosanitary measures.
These barriers can occur due to the lack of transparency of norms and regulations, as well as the difficulty in dealing with local entities.
Language requirements (commercial and technical material)
It is very important to provide manuals and technical drawings right after the first contacts with foreigners begin, because this will be the first step for communication and disclosure of the exportable product.
In addition, being up to date with the language of the target market and with all the marketing and advertising strategy is essential to start well the negotiation.
Create Price List
Before having a price list, it is essential to have absolute control and understanding of how to calculate the export price of the product.
You have to pay attention that to determine the price of an exported item, compared to its local selling price, it should be done the elimination of all components that are added to the selling price in the domestic market and that will not occur in the export.
Here we are talking mainly about eliminating all the taxes, because they will not occur, as a rule, in the export.
Should be added the costs inherent only to the export process (often depending on the INCOTERM - International Terms of Trade), such as
port expenses at the origin
The production costs will also be a determining factor, since some costs to meet the requirements of the destination country may be inserted in the exported items.
Creating a price list is important to negotiate with security, to have control of discount margins and minimum and maximum prices. Furthermore, this price list should have the longest possible duration within the production and sales cycle of the product.
We understand that before developing an exportable product, it is necessary to carry out market research, adaptations, and investments in your product, besides having consistent departments, such as engineering and quality, so that the adaptations are well done.
SC Vitola has broad and solid experience in this theme, count on us to connect your product to the international market.