Will my product work abroad?

Strategic advice

Advances in technology make it much easier for small and mid-sized companies to explore global markets. Developments like broad-based internet availability, simple language translation algorithms, and the ubiquity of smartphones and computers offer businesses fast and affordable ways to transfer information, goods, and money. Information exchange with foreign buyers provides access to export markets that were once out of reach.

Why export?

Companies looking for diversification of cash flow and expansion should look into high growth foreign markets. Developed markets in the Americas, Europe, and Asia continue to offer opportunities. With a recently developed and vibrant middle class, emerging markets like Africa, India, and East Asia may hold additional promise.

Demographics show most consumers in emerging markets are younger on average, which means they’ll have more life events to look forward to like marrying, having children, buying homes, and starting businesses. This represents a substantial opportunity for companies to gain a foothold in these markets and enjoy the benefits of continued growth and development.

3 factors to consider before getting involved in exports

  1. Will there be demand abroad for your product or service?

    Demand for consumer or business-to-business products may differ by country and market. Study the economic conditions of each foreign market and focus your attention on those that represent the highest growth potential for your business.

    Understand market demand – How many of your contacts—calls, emails, social media likes—have come from potential customers or investors in global markets? Where are your competitors selling overseas? Is there an apparent need for your product or service? Can your company meet that demand? Answering questions like these can give you an idea of your product’s marketability abroad.

    Assess market potential – What conditions create demand for your product or service? Which regions or countries have similar buying patterns? Market entry and selling costs increase exponentially when you need to create demand.

    Determine market attractiveness – Identify duties, tariffs, and market restrictions. Target countries with significant import growth rates, like Ethiopia, Egypt, India, Vietnam, and the Philippines.1 These emerging markets offer a less structured and more dynamic competitive environment.

  2. How will your product or service translate to a foreign market?

    Research your targeted market thoroughly. Your product might be a top seller in the U.S. but that doesn’t mean it’ll be an international bestseller. Ask yourself: What are the market’s buying behaviors? – Just because a market demonstrates increasing discretionary income doesn’t mean that money will be spent freely. Are consumers in your targeted market accustomed to making choices about which products to buy? Or will they be overwhelmed by too many options?

    Is your product or service right for that market? – You wouldn’t try to sell heavy construction equipment in a country where developing infrastructure makes it impossible to navigate, right? Selling consumer goods internationally can have similar constraints. While Americans might choose to super-size, some consumers in foreign markets view larger sizes—or quantities bundled together—as wasteful.

    Does your product or service fit into the country’s culture? – Some product translations—from name and usage guidelines to advertising slogans—can create issues in certain markets if not addressed. Take for example the Chevrolet Nova’s introduction to Spanish-speaking countries. In Spanish, “nova” means “doesn’t go.”

    Colors and numbers may also hold a different significance in other cultures. While in the U.S. red is associated with danger, in China red represents good luck. In some Asian countries, the number four is considered unlucky because it’s pronounced like the word for “death.”

  3. How will your product or service be used?

    Analyze how your competitor’s products are used abroad while considering the unique characteristics of each foreign market. Does your product or service need to be modified to meet government regulations? What about its buyer preferences or cultural practices? Or how about its geographic or climate conditions? If the market potential is large enough, costs associated with product adaption can be justified.

    Some products might require small adjustments to be made ready for international markets. Your manufacturers may need to use metric measurements for components and equipment. Some power and electrical standards require different cycles, voltages, or phases than products designed for U.S. customers.

    In many emerging markets, consumers don’t allocate much spending for personal use, but they do spend a lot on gifts. Be sure to consider important life events and occasion-based buying patterns when determining your product’s appeal overseas.

Move forward with confidence.

Take these factors into consideration to ensure your global marketing efforts are profitable. Work alongside qualified partners with years of experience in foreign trade that can help you simplify the complexities of international markets.

Ready to explore exports?

Want to take your company to the next level? Talk to your Truist relationship manager about expanding your business to reach global markets.