BASICS OF STARTING THE EXPORT PROCESS

Qn 1 : I AM INTERESTED IN EXPORT BUSINESS. HOW DO I GO ABOUT IT? WHERE CAN I GET HELP? WHAT DOCUMENTATION DO I NEED?

1. Register a company through a law firm.
2. Register for VAT with the URA (Uganda Revenue Authority)
3. Acquire an export certificate from the MTTI (Ministry of Tourism Trade and Industry)
4. Register with UEPB at 30,000/= per year.
5. Select a product or service of your choice based on what you have confirmed has foreign market demand.
6. Undertake some basic internal desk/primary research
7. Write a business plan.
8. For relevant DOCUMENTATION, CLICK HERE.

(At UEPB – We Guide, Counsel and Facilitate Exporters within their areas of interest. Donot hesitate to contact us!!)

TEN TIPS TO EXPORT SUCCESS

Qn 2: What is the general mix, that i can apply to my company in order to succeed in the International market?

Here are some important recommendations that should be kept in mind so as to achieve successful marketing.

1. Obtain appropriate Export advice and Develop an Export marketing plan before going for any export business. The plan should clearly define goals, objectives , and the problems encountered.
2. Management should have a real commitment to overcome the initial difficulties and financial requirements of exporting. It must be ready to accept the early delays and costs involced in exporting. These may seem difficult to justify in comparison with established domestic sales, but the exporter should take a long-range view of this process and carefully monitor international marketing efforts
3. Take sufficient care in selecting overseas distributors. The complications involved in overseas communications and transportation require suitable international distributors to act more independently than their domestic counterparts
4. Establish a basis for profitable operations and orderly growth. Although no overseas inquiry should be ignored, the exporter that acts mainly in response to unsolicited trade leads is trusting success to the element of chance.
5. Devote continuing attention to export business. Too many enterprises turn to exporting when local business drops off. However, when domestic business starts to boom again, they neglect their export trade or relegate it to a secondary position.
6. Treat international distributors on an equal basis with domestic counterparts. Companies often carry out advertising campaigns, special doscount offers, sales incentive programs, special credit programs, warranty offers, and so on, in the home market, but fail to make similar offers to their international distributors.
7. Do not assume that proven marketing techniques in one market will automatically be successful in all countries. What is good for Uganda may not be suitable for Germany, and what works in Japan may fail flat in Saudi Arabia. Each market has to be treated separately to ensure maximum success
8. Be willing to modify products to meet regulations or cultural preferences of other countries. Local safety and security regulations, as well as import restrictions cannot be igonored by foreign distributors.
9. Print any documents, advertising material, packages etc. in locally understood languages, Although a distributor may speak English, it is unlikely that all sales and service personel have this capability. Furthermore, think of who is going to purchase your product.
10. Provide readily available servicing for the product. A product without the necessary service/backup support can aquire a bad reputation very quicly and therefore damage long term export prospects in that market(s).

PREPARING FOR BUSINESS NEGOTIATIONS

Qn 3 : I have experienced difficulty negotiating with my International partners. How can i avoid the common pitfalls?

Hereunder are some key factors that companies should consider when planning for successful business negotiations

Know your position

• Have a clear understanding of what you are planning to achieve
• O bjectives should be clearly defined, prioritised and realistic
• Knowing your own negotiating position implies an understanding of your company’s strengths and weaknesses

Know the other sides position

• Knowing what you company wants from the forthcoming negotiation is understanding what the other party hopes to obtain
• Various sources of information can be explored to get details on the other party
• Knowing the other sides strengths and weaknesses, including its objectives and priorities, is an important element of your preparations

Know your competition

• It is important to know who your competion will be in a specific transaction
• Research in the competition is essential to identify the relative strengths and weakneses of such third parties
• Unless you plan ahead for such situations in advance and develop ways to overcome them, you might find it difficult to achieve the desired outcome in your negotiations

Know your negotiating limits

• You should know at which point a sale becomes unprofitable, based on a detailed costing of the product and other associated expenses
• It is important that your initial offer be realistic, credible and reasonable, so as to encourage the other party to respond
• When setting your opening offer, you should take into consideration the cultural background, market conditions, and busieness practices in the other party’s environment,

Develop strategies and tactics

• Strategies should be prepared on the basis of your company’s aim taking into consideration your knowledge of the other firms goals and position
• Whenever you make offers, you should be in a position to justify them with valid and sound arguments
• The long term implication of your actions should be taken into consideration when designing strategies and corresponding tactics

IN SUMMARY FIND A PRE-NEGOTIATION CHECK LIST

• What are the objectives of the negotiations?
• What are the main issues to be included in the aganda?
• What are the main strengths?
• What are the main weakneses?
• Who has the strongest bargaining power?
• What concessions may be made, and how?
• What are the maximum and minimum limits of consessions?
• What items are negotiable?
• What items are not negotiable?
• What are the expected offers requiring counter-proposals?
• What will be the strategy and tactics?
• What will be the opening offer?

Observing such a systematic approach before entering into International business negitations can be of great benefit for companies to achieve export objectives.

INTERNATIONAL MARKETING

Qn 4 : How do i successfully market my products/services to my international clientele? what is the marketing mix for International Trade?

There are some fundamental and vitally important questions which companies seeking to expand internationally must address if they are to be successful. Here are just a few of them

Assesing the foreign market

• What opportunities (if any) exist in a foreign market for the firms products and services?
• What are the major political, economic, social, technological and legal feature of doing business in the target markets?
• What are the firms competitive strengths and weaknesses in reference to such factors as product quality, packaging, distribution, advertising, prices, experience, technology, capital and human resources?
• Are there any trade barriers in the target market?
• What specific requirements – for example, import licenses or exchange controls – have to be met in order to sell your product or service?
• How difficult are foreign government regulations for the firm seeking to export to a particular market?
• Are there adequate transportation and storage or warehouse facilties in the foreign market?
• Does the foreign market offer efficient channels of distribution for the firms product?
• What are the most cost-effective advertising and promotional vehicles in the target markets?
• How effectively can distributors, agents or other intermediaries perform specific marketing functions

SOME KEY EXPORT MARKETING QUESTIONS

Product

• Which products (within product range) should the firm offer abroad?
• What specific feature – design, colour, size, packaging, brand, warranty and so on – should the product have?
• What needs does the product satisfy within the target market abroad?
• Should it develop new products for the foreign market?
• How competitive is the product abroad?
• What patents or trademarks does the firm have that can benefit it abroad?
• How much legal protection does the firm have concerning patents, trademarks and so on?
• What should be the firms product orientation in the foreign market?
• Are the firms products socially responsible?
• Do the firms products convey a good corporate image?

Price

• At what price should the firm sell its product in the foreign market
• Does the export price reflect the product quality
• Is the price competitive
• What types of discounts – trade, cash, quantity – and allowances – advertising, trade-off, etc. – should the firm offer its foreign customers
• What pricing options are available if costs increase or decrease

Distribution

• Which channels of distribution should the firm use to market its products abroad
• Should the exporter seek to go direct or should an intermediary be used within the target markets
• What types of agents, brokers, wholesalers, dealers, distributors, retailers and so on should the firm use
• What is the cost of distribution by channel
• What are the costs of physical distribution
• What types of incentives and assistance should the firm provide its intermediaries to achieve its export sales target
• Which channels of distribution are used by the firms competitors, and how effective are these channels

Promotion

• How should the firm promote its products in the foreign market
• Should it advertise
• Should it participate in international trade fairs and exhibitions
• What advertising media are available to promote in the foreign market
• How effective are these
• What are the legal requirements
• Is there a need for personal selling to promote the product abroad
• How does the firms sales force (or that of its agent or distributor) compare with its competitors
• What criteria should the firm use to evaluate the performance of its agents or distributors

Of course there are many more relevant questions, however, these are just a few of the numerous export marketing issues which companies should seek to address. Naturally, not all questions can be readily or completely answered, however knowing that such questions should be asked is a step in the right direction. After all forewarned is forearmed.

UEPB will be happy to help you seek answers to some of these questions. Interested companies are encouraged to contact UEPB for more information on how this may be done. We look forward to hearing from you

IMPLEMENTING A QUALITY SYSTEM

Qn 4 : I am often told about quality standards. How do i certify my products? what are the certifications available out there? where do i fall?

The quality of a business is an essential part of any manufacturer’s and exporter’s competitive edge. The importance of an effective quality system is therefore a foundation for a better performance, particularly when it comes to export. A quality system aims to integrate all elements that influence the quality of the product or service provided by a company. Manufacturers and exporters must deliver consistent quality to their local and export customers if they are to compete successfully in an ever increasing global competitive environment. These days, many foreign companies and export buyers expect that the companies they deal with should have internationally recognised quality certification such as ISO 9000 series.

Some definitions

• Quality management – is deciding what quality means to a business and seeing what it is put into practice
• Quality of a product/service deficiencies and improve processes
• Quality assuarance is the system one uses to give confidence that will satisfy those requirements

What does one expect from a quality system?

• Deliver what your local and export customers order, consistently and on time
• Spot the product/service deficiencies and improve processes
• Improve your competitive in local and international markets

How can a business satisfy local and foreign customers’ requirements

• Step 1 – identify and clarify what these customer requirements are
• Step 2 – provide the product/service to the standard specified
• Step 3 – monitor so as to make sure you meet the agreed requirements

Which standard best suits your company?

• If you are a manufacturer or exporter of custom designed products or services, then ISO 9001 is probably the most appropriate, since the key factor is the existence of a major element of ‘design’ in what you produce
• If you are a manufacturer of the provider of a relatively simple standard product or service with little or no ‘design’ input, then ISO 9002 is probably the most appropriate choice
• If you are a small manufacturer or exporter producing simple products or services, where customers can check quality by final inspection, then ISO 9003 could be the most suitable option.

Such a quality management system can help to:

• Examine you business and improve your systems, methods and procedures, often leading to significant cost savings thereby enhancing international competitiveness
• Involve and motivate all your staff to raise performance, promote further improvements and do things right first time. These are all important factors for export success
• Define key roles, responsibilities and authority in your company
• Assure that local and export orders are delivered consistently and on time
• Highlight product/services deficiencies and develop design/process improvements
• Make sure that any quality failures and customer complaints are recorded and investigated so that prompt action is taken to prevent recurrence
• Give a clear signal to new and existing customers, particularly those abroad, that you are taking positive steps to improve your quality
• Work towards a documented system for recording and satisfying the quality training needs of new and existing staff
• Work more effectively with your suppliers and selecting those who can deliver the quality you specify on time
• Provide a way to increase confidence and reduce risk if you issue warranties or certificates of conformity, particularly to export customers
• Provide a sound platform for growth and international expansion

Setting up an ISO 9000 system you need:

• A quality policy – a short note, which must be understood and followed by everyone, about the company’s attitude to quality and how it affects the customer
• A quality manual – a general description of the quality system available and which satisfies the standard and your own quality requirements
• Procedures and work instructions – simple descriptions of the key jobs you and your staff have to do
• To record and deal with all quality failures and customer complaints- setting up a procedure to deal with them and doing what you can to prevent them happening again
• To nominate someone to take responsibility for the quality system – a person usually known as the quality manager
• To understand and carry out regular management reviews and internal audits of the system

Is ISO 9000 suitable only for larger companies?

The answer is NO since ISO 9000 certification is especially recommended for the smaller manufacturer, service provide and exporter whose success in export markets depends critically on its consistence, dependability and reliability.