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5 Questions To Ask Before Modifying Your Products For Export MarketsMost companies realize that there are many international markets where they can export their products and services. But to maximize sales in another market, there are different requirements and expectations from customers. The question is:
How much should you change your product for export markets?
Company A's CEO feels that their product should only be sold in markets where no changes to the product are needed to sell it. As you would expect, Company A has almost no international sales.
Company B's CEO from the same industry is trying to maximize revenue and market share by creating different, localized versions of products for each market. In-country managers and/or distributors set the product specifications. As you might expect, revenues are high, but expenses to produce and manage so many product variations are even higher. Company B is losing money in most of their markets.
These two scenarios set the extremes in localization. In truth, the optimal amount of localization is normally in between these tactics. Here are five questions to help you decide which product alterations to make and which ones to skip:
1. What is the market opportunity?
Let's say you sell products to manufacturing firms. There's been an increase in demand for your offering in Central America. This coincides with manufacturing's continual rise in that region over the past few decades. How large is the market potential? If you're not sure, you can ask a government agency like the U.S. Commercial Service for the data. International industry associations are another great source of this type of information. So long as there are potential customers willing to pay a price that leaves your company profitable, then there is a market opportunity worth considering.
2. What are the market's legal requirements?
As most export managers know, the minimum set of product changes needed include any local or national regulations. This may include input material requirements, labeling and certifications with local/regional/national compliance boards. It is so important to understand the local requirements before ever selling products into a new market in order to avoid unnecessary expense, loss of brand value, and key relationships.
3. Are the local requirements and preferences things that can and should be added to the core product?
Sometimes localization is a simple change like adding a short translation on the company's standard product packaging. If the product is available in several colors, then adding the product in a color heavily preferred by a large new market may be beneficial. But many times the expense of changing the product outweighs the additional sales the product would garner.
4. What are the localization expenses?
Oftentimes companies consider the increased fixed and variable costs related to producing a unit of the localized product. Here are other factors to consider:
Cost of designing changes.
Time and expenses to receive required approval from any foreign regulators.
Cost of changing to multiple production batches.
Translation/localization costs for any copy.
Checks to see if the product variations affect any legal implications such as intellectual property.
Management time to oversee localized production variations.
Quality assurance for changes including checking any translations.
5. How does localization fit in with your company's overall strategy and corporate culture?
Any shifts in the amount of product localization needs to fit well with both your company's strategy and culture. If the strategy focuses around growing market share and revenue ahead of plans to have the company acquired, then well-planned localization can help to grow market share with increased demand in international markets.
But if your company culture is one that resists change and embraces continuity of product design, then localization may be met with some resistance from within the company ranks.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| PSMF081408A51 bearing | 8 | 14 | 8 |
| PSMF081212A51 bearing | 8 | 12 | 12 |