Experience shows there are seven areas of
importance in determining if a firm is ready to tackle the export market.
Companies, which do not take a careful and objective view of the export
readiness of their organization and product or service, are unlikely to succeed
in the export market. A diagnostic checklist for each of the seven areas appears
below:
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Developing an Export Marketing Plan
Market planning is a key ingredient in initial success
in the export market. Formulating an export strategy based on good information
and proper assessment of both the company and the marketplace increases the
chances that the best market options will be chosen. The market plan outline
given below can be used by the new export firm as a guide to preparing their
first export plan:
I Introduction: Why should this company export?
The introduction should provide the basic rationale
for why the company should export. The reasons should be profit oriented and fit
with the company’s overall business plan.
II Situation and Background Analysis
The situation and background analysis should describe
the company, its internal resources, and the structure of their industry.
Sections should include descriptions of the following areas:
III Marketing Component
The company must identify how it will select and
service target markets. Specific sales and profit targets should also be set.
The marketing component section should include:
-
Identifying, evaluating and selecting target markets
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Product selection and pricing
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Distribution
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Terms and conditions of sales
-
Internal export procedures
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Sales goals
IV Action Steps
The company must identify its primary and secondary
target markets and describe how the market will be approached and developed.
V Export Budget
The company must prepare a budget for their export
drive. The information should also identify specifically from where the money
will come. The export budget should include:
VI Implementation Schedule
Along with the procedures and budgetary requirements
of exporting, the company will need to develop firm time lines for its export
drive. Time lines will be needed for the following areas:
-
Marketing
-
Production/service
-
Management reviews
VII Feedback and Evaluation Mechanisms
The company must discuss how it will develop feedback
on the export drive and how it will be evaluated.
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Getting Paid
As firms come closer to their first export sale, the
issue of payment options becomes critical. All the work put into preparing and
executing an export plan can be wasted if customers do not pay on time or at
all.
The majority of exporters use one of four methods of
payment. The following table describes the important aspects of each:
|
Method of Payment |
When Seller is Paid |
Risks to Seller |
Risks to Buyer |
|
Payment in Advance |
Before goods are shipped / services delivered |
No payment risks |
Non-performance by seller |
|
Letter of Credit |
Normally on shipment of goods or delivery of
services |
Inability to produce correct documentation to
obtain payment from bank |
Goods or services not as called for in commercial
contract |
|
Bank Collections |
Upon payment of the buyer to the collecting bank |
Failure of buyer to pay colleting bank and need to
dispose of goods already shipped |
Goods not as ordered |
|
Open Account |
Upon payment by buyer |
Failure of buyer to pay for goods or services
already delivered |
No Risks |
Shipments to the U.S. and Western Europe most commonly
use open account terms, whereas more secure payment terms are common in other
parts of the world. Firms should take advantage of the international services
provided by Jordanian banks, Jordan Loan or Export Credit Guarantee Corporation,
Arab Trade Financing Programs, and other programs.
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Trade Shows and the New Exporting Company
Trade shows are often an excellent tool to assist the
newly exporting company break into new markets. There are literally tens of
thousands of shows each year of which perhaps about 200 are of international
significance to Jordanian exporters.
Given the cost in time and money of attending shows in
other countries, it is important for firms to carefully evaluate their
participation. Important questions to ask include:
-
Why does the company want to attend the show?
-
Who has attended the show in the past?
-
What do previous exhibitors and attendees think of
the show?
-
What is the show’s or the show manager’s reputation?
-
What does the show manager do to help attendees and
exhibitors?
Many firms question whether they should simply attend
a show or actually exhibit at a show. Exhibiting at a show sends the signal
that you are ready to export. This coupled with the high cost of exhibiting
should play into your decision to exhibit. First time trade show attendees are
advised to simply walk the show.
Viewing the exhibition booths should be done in a
professional manner. Walking the show allows companies to evaluate the
competition, see new technology, and meet potential customers and agents. The
five key guidelines for getting the most out of a show are:
-
Decide why you are attending the show.
-
Select the right show to attend.
-
Set objectives before attending the show.
-
Cover the show floor efficiently; don’t just wander.
-
Get the most out of each exhibit; don’t be distracted by giveaways and
products you are not interested in.
The steps under the “Export Readiness to the U.S.
Market” guide will provide your organization with the most applicable references
and the best-practice models to prepare your company for the U.S. market and to
embark on a “Reference Portfolio” that is relevant to your business needs and
interests in the U.S. Market.
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Obtaining Current Information on Trade Leads,
Marketing Analyses and US Laws and Regulations
The United States Government has created a resourceful electronic toolkit called
TradeNet's Export Advisor. This tool kit provides links to hundreds of pages of trade-related information including trade forms, points of contact for each government organization that supports trade, trade finance information, searchable international business opportunities, access to numerous databases, trade leads, and much more. Jordanian companies can use this resource to obtain information on the United States market.
The TradeNet’s Export Advisor can be used one of three ways:
Quick Links
The TradeNet's Export Advisor provides users with “Quick Link”, a quick and
useful process for exporters to obtain information quickly. The “Quick Link”
section on the home page of the Export Advisor has a pull down menu, which list
several categories. Click on the appropriate category of which is interest and
obtain a list of useful links.
The main page of the Export Advisor also provides customers with quick access to the following sections: export contacts, export finance, export library, tutorials, and trade leads.
Develop Your Own Customized Database
The
TradeNet’s
Export Advisor provides people with the option of creating their own
personalized version of the Export Advisor. After entering a username, password,
and contact information, the user selects information that he or she would like
to continually access. Once the user selects the categories, the personalized
page is created. The user can continually add additional Export Advisor sites to
his or her personalized page. The information on the personalized page is
updated with each use. If the user decides not to enter any categories or links
on his or her personalized page, the Export Advisor will automatically place the
most popular links from their site in the page.
Use the
Database Already Designed for Jordanian Exporters
Using the
TradeNet Export Advisor, a mini-portal was developed specifically to provide
Jordanian businesspeople useful information for exporting their products. This
mini-portal provides links to current information on trade, finance, business
opportunities, industry information, government information and much more.
The
mini-portal is divided into nineteen selected categories. Each of these
categories provide the user with links to specific, up-to-date information:
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Industrial Classification Codes for Exporters
United States Government News
Sources
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State International Trade Information
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Online Tutorials
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Non-Agricultural Markets
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Programs
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Individual Websites
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Government Sources of Trade Leads
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Non-Agricultural Data
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Private sources of Trade Leads
-
Access-Trade
AlertLine
receive targetted trade leads by email
-
Access-Trade
PowerBroadcaster
post your trade offers & demands to a large international audience
-
Anew
Technology Corp.
-
Asia-Pacific
International Business Directory
(free)
-
Center
for Global Trade Development Trade Leads
(free)
-
ClearFreight's
Trade Leads on the Net
-
FITA's
Trade Leads
(Federation of International Trade Associations)
-
Global
Information Network's Custom ETO Trade Lead Matching
(a customized trading list which can be emailed to you daily)
-
IMEX
Exchange Trade Leads
(many links to trade lead sources)
-
IMEX
Trade Lead Bulletin Board
(post, read, and search for trade leads)
-
Interdata's
Export Leads Newspaper
($95/year)
-
International
Bid Opportunities
(multi-lateral development banks, United Aid initiatives)
-
International
Technology and Trade Network (ITTN)
(limited to the Middle East and Northern Africa)
-
International
Trade Data Network (ITDN)
The ITDN is a non-profit, Internet tool that provides timely data and
business opportunities from around the world.
-
Regent
Commerce Network of China
(free, limited to China)
-
Tenders
Electronic Daily Alert Service
(the European Public Procurements Information Service)
-
Tradecompass
Trade Broker
(The Trade Broker is a web robot which automatically visits the top 30 sites
for trade leads and business opportunities on a daily or weekly basis. Over
10,000 leads per week are indexed and placed in the Trade Broker's
database.)
-
Tradecompass
Trade Leads
-
UNTPDC
Electronic Trading Opportunity System
from the United Nations, mailing list and newsgroups of offers to buy &
sell products and services
-
World
Trade Center Association
(Directory for all World Trade Centers, leads, trade information. Find a
regional World Trade Center.)
-
Assist
International Trade Leads
trade leads selected by Peter Robinson, Assist International
-
Turkey
trade leads
market opportunities in Turkey
-
Angola
trade leads
business opportunities in Angola
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There are thousands of trade leads sources in this section, which
are classified according to country and industry. Some of these sources require
membership and some require fees.
Global Trade Leads
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This section provides information about other international
sources of trade leads.
Shipping
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Country or Regional Information
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Trade Directories
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Laws and Regulations
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Laws and Regulations (International)
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Market and Development and Maintenance
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Local Export Contacts
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Industrial Classification Codes for exporters
-
State International Trade Information
-
Programs
-
Non-Agricultural Data
-
Shipping
-
Laws & Regulations
-
U.S. Govt News Sources
-
Online Tutorials
-
Individual Websites
-
Private sources of Trade Leads (some require membership and
some are fee-based)
-
Country or Regional Information
-
Laws & Regulations (International)
-
New Urls to be Edited
-
Non-Agricultural Markets
-
Government sources of Trade Leads
-
Global Trade Leads
-
Trade Directories
-
Market Development & Maintenance
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Groups and Discussions
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Classifying your product under the Harmonized Tariff
Schedule of the United States
The United States uses the
Harmonized Tariff System (HTS), which is a 10-digit United States adaptation
of the Harmonized System Codes. In order to obtain the correct harmonized code
for your product under the United States system, the following steps are taken:
-
Link to the
Harmonized Tariff System (HTS) on the Internet or obtain a hard copy of
the HTS.
-
Locate the chapter in the table of contents, which
applies to your product. Then you look for the 4-digit heading that most
closely describes your goods.
-
Once in the correct chapter, look for the 6-digit
international subheading that most closely covers your product.
-
Once you have located the correct 6-digit line for
your product, look under the 6-digit category to determine the 8-digit US rate
line for the most specific category.
-
Once you have determined the 8-digit rate line, look
under the 8-digit rate line for the 9th and 10th digit that covers your
product.
There are some situations in which goods can be
described several ways. Customs established a
binding ruling program whereby importers can request a written ruling as to
the proper United States HTS classification and applicable rates of duty.
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Determine Your Product’s Tariff Reduction under the
FTA
In order to obtain your product’s current tariff rate
and its reduction in tariff in the upcoming years, you must first determine your
product’s
Harmonized Tariff Schedule (HTS) category number. Once you have determined
the category number, you may enter this number in the United States
International Trade Commissions’ database. This database is specifically
designed to provide you with the U.S. Tariff Reductions under the U.S. - Jordan
Free Trade Agreement -- by Product from 2001 until 2010. This database will show
when your product will be tariff free.
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United States Customs Information
In order to export to the United States, the Jordanian
exporter must be familiar with the United States Customs and its regulations.
The United States Customs’ website includes an importing/exporting section which
provides valuable step-by-step information on importing to the United States.
The United States Customs has developed a
publication, which assists importers through the steps of importing to the
United States. This pamphlet is to be used as a general reference for import
requirements and includes the following information:
Other valuable information on the U.S. Customs website
includes:
-
Marking the Country of Origin
. This document includes information on the
following: purpose of marking, country of origin, forms of marking, marking
items and much more.
-
U.S. Customs Service Ports of Entry. Companies exporting to the U.S. can
obtain individual Customs port information.
-
Information on the
Binding Ruling Program. Importers to the U.S. can submit a request a
written ruling on a described transaction, a definitive interpretation of
applicable law, classification or other appropriate information.
-
Implementation of the FTA: a
memorandum sent to U.S. Customs field offices which explains the FTA’s
rules of origin, the importer’s requirements under the FTA and how to handle
items which qualify for preferential treatment as well as the documents which
accompany the items.
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