Assessing Export Potential

Determine Your Product’s Potential
There are a number of ways to gauge the overseas market potential of your products and services.

These are:

  1. Some markets will differ from your domestic market and some products will have limited potential. These differences may be the customs or culture of the country, as well as climate or other environmental factors. It may hinge on the availability of raw materials or the lower purchasing power of people overseas. If your product is successful in your domestic market, then if a full investigation was carried out to determine why it sells so well, that may provide information to assist in the design of the overseas marketing approach.

  2. Another way to assess your potential is by finding out how unique your product is, compared with others sold overseas. If your products have features which are hard to duplicate then it is likely you will experience overseas success. Any product with unique qualities will have little competition and potentially high demand.

    If your product is not new or unique, market research may be required to assess the true potential. Examine international trade statistics and obtain a preliminary indication of overseas demand as a gauge of how it would fare in overseas countries.

  3. Your product may still have export potential, even if you have a low or declining domestic market. You may have the type of product, which because of the size of the overseas market, could be successful. You may be in a country with a small population, where even if you had the dominant share of the market, the number of units sold would be still too low for your business to achieve profitability.

    You may find that a sizable export markets exists for your products but you had lost market share because of technically advanced competition. Less developed countries may not need the state of technology your competition has so potentially you may have good markets in those countries. The fact that your products may be more affordable because of lower costs due to reduced sophistication may be a factor in the larger market.

What to Look At Before Exporting
Before you begin to export overseas, carefully consider these areas:

  1. Ready. Make sure you are ready to export.
  2. Your market. Make sure there is an overseas market and that the potential size is sufficient for you to get involved in exports.
  3. Your product. Complete the necessary research to determine if your product will be suitable and in demand overseas.

Is Your Business Ready to Export?
Basic questions you need to ask when determining whether your business is ready to export include:

  • What exactly does your business expect to gain from exporting?
  • Is exporting consistent with achieving the goals set out in your business plan?
  • Is the expected revenue from exports worth the costs required?
  • Could the resources of your business be better used for developing the domestic market, rather than risking it with a less guaranteed export market?
  • Will exporting place unnecessary pressure on your company’s resources, such as, staff, production capability, finance and management?