Page 4: International markets
Trading overseas recognises that people all over the world have different needs. Organisations have to accept that differences in values, customs, languages and currencies will mean that many products will only suit certain countries and that global markets really only exist for the very large producers.
Catering for such differences involves greater risk. This means that in developing products for different overseas markets, businesses have to be better prepared by engaging beforehand in careful planning and research. No organisation can hope to succeed unless unfamiliar elements are effectively catered for. By understanding all of these influences, businesses can make their products more relevant for each market they enter. So, what are these differences? Imagine some of the basic problems you might encounter if you wished to export hair dryers to a country in another part of the world.
Trading overseas, therefore, involves much more than simply making goods or services available to people in other countries. It requires understanding some of the areas mentioned and many more. For example, there may be protocols to follow, such as diplomatic channels or negotiations between senior managers and directors. Another problem is that exporters often experience longer delays in receiving funds from their export trade than from home trade business. Catering for an overseas market and all of its demands will involve considerable organisation to cope with such differences. One useful way of identifying the key characteristics of overseas markets is
through a PEST analysis. PEST stands for:
- Political and legal framework of the country
- Economic systems
- Social and cultural behaviour
- Technological levels.