Guide to Entrepreneurship

Global Shea Association Entrepreneurship and Export Trainee Guide 1

ENTREPENEURSHIP 101 AND EXPORT 101 TRAINEE GUIDE PRESENTED BY 2020 DEVELOPMENT COMPANY LLC

CONTENTS INTRODUCTION After completing this course, the participants will be able to:

• Analyze current business practices • List the skills necessary to be a successful entrepreneur and export manager • Identify solutions to business strains caused by entering the export business • Identify corporate strengths and competitive advantages • Identify the niche for their product in the local and global market • Define risk and determine their acceptable level of risk acceptance • Debate the qualities of various customer relationships • Develop a company and product profile document • List the benefits of using Incoterms • Understand payment term options and terminology • Understand basic price strategies • Understand basic tradeshow strategy and ways to achieve success through

tradeshows How to use this guide This Trainee Guide has been provided to you to fulfill two purposes. First, you will use the Guide during training to take notes, complete exercises, and follow along with the trainer. Second, after training is completed, this Guide will serve as a reference for you to use when applying the principles taught in this course.

Global Shea Association Entrepreneurship and Export Trainee Guide

Because of this dual purpose, it is very important that you write in your Trainee Guide when you take notes or complete an exercise. Some of the graphics have been adapted for the PowerPoint presentation so the figures in your book may not perfectly match the presentation. You might want to take notes on the graphics to remind you of key points. This is your reference document, and you will want to be able to recall your thoughts and ideas when you return to the job. Special instructions: During this course, you will be exposed to a variety of skills and behaviors related to export management. This introductory course should be used as a starting point to understanding the operations of international trade. When you have questions that are beyond the scope of this course, or you need clarification, please seek out assistance from the organization or individual who can best answer your questions. The author of this course can be reached at [email protected] to help clarify questions you may have. He will attempt to answer you as quickly as possible. MODULE #1 – ENTREPRENEURSHIP 101 WORKSHOP Lesson 1 –What is an Entrepreneur and what skills do they possess? Objective: After discussing the keys to successful entrepreneurship, the participants will evaluate their individual and company’s internal strengths and weaknesses affecting their ability to succeed in business and specifically in the export business. The participant must identify adjustments needed to succeed as an exporter. Enabling Objectives: Prior to completing the lesson objective, you will be able to: • Identify the principles entrepreneurship • Assess your skills using tools provided • Understand the 10 keys to success • Determine “what business” they should be in MODULE #2 – EXPORT 101 Lesson 2 –Export 101 Objective: After discussing the keys to successful exporting, the participants will evaluate their company’s internal strengths and weaknesses affecting their ability to export. The participant must identify adjustments needed to succeed as an exporter. Enabling Objectives: Prior to completing the lesson objective, you will be able to:

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• Identify the principles of international trade • Assess your personnel • Select the “right” products for export • Analyze your products to identify the niche for their export efforts • Analyze your risk and determine their acceptance level • Understand various trade relationship options for the export market

End of Course Assignments MARKETS document Complete the attached MARKETS document Appendix 1 of this Handbook is the 2020DC MARKETS document which is a review of your company this document provides you and the supporting agencies with a clear picture of your organization, its strengths, challenges and opportunities. It also provides a blueprint for action to enter the export markets. Complete a company and product profile for your company Utilize the skills taught in this course coupled with the MARKETS document to produce a company and product profile that can be utilized to market your company and its products. MODULE #1 – ENTREPRENEURSHIP 101 WORKSHOP Discussion #1: What is an Entrepreneur?

A person who organizes, operates, and assumes the risk for a business venture. Naturally a risk taker and visionary Entrepreneurs play a key role in any economy. These are the people who have the skills and initiative necessary to take good new ideas to market and make the right decisions to make the idea profitable. The reward for the risks taken is the potential economic profits the entrepreneur could earn. (Investopedia.com) An Entrepreneur is the individual most likely to survivor in a developing economy.


Discussion #2: Examples and discussion on local Entrepreneurs In the space below please provide notes on local entrepreneurs from your own experience and the discussion of the group. Discussion #3: limitations and hurdles for local entrepreneurs to overcome In the space below place your notes from the discussion of the local environment for entrepreneur success. Discussion # 4: Key words used to define Entrepreneur In the space below write your own list and the group list of key words that describe an entrepreneur: What characteristics does an entrepreneur possess?

1. Examine needs, wants, and problems to determine what they can do to can improve the way these needs and wants are met and problems overcome.

2. Narrows the possible opportunities to the one offering the greatest potential for returns for their efforts and investment taking into consideration their resources and skills.

3. Timing is critical to the execution of the idea and meeting the needs of a changing market. First to market has the highest risk but also with success the highest returns.

4. Research the opportunity and how the needs, wants and problems are being met currently and what is on the horizon.


5. Enlist sources of advice and assistance including the support of your family and employees. Also looks to government programs or other forms of assistance to capitalize on available support programs.

6. Plan the ventures and consider various scenarios of success and problems.

7. Rates and understands the risks and the probability of possible rewards. Know what

could go wrong before it happens and takes action to minimize the impact of problems.

8. Evaluate the various scenarios of possible risk and possible rewards and develop a strategy to act or not to act based upon adequate knowledge of the options.

9. Never hang on to an idea beyond its usefulness. Be flexible to market conditions and improvements in knowledge.

10. Employ the adequate resources for the venture to succeed.

11. Understand their business and the commitment it will take in order to achieve success.

12. Reaches their goals and continually adjust them to achieve higher plateaus and levels of success as they define it.

Survival Mode In many economies individuals are forced to become “Entrepreneurs” due to lack of employment outside of their own efforts. Everyone who owns a store, sells something on the streets or provides a service to others is in their own way an entrepreneur. When in “Survival Mode” most individuals become entrepreneurs out of necessity. They depend upon their own skills to survive; they take calculated risks and naturally gravitate to what they can do to survive. To survive in business people need tools to survive. The balance of this course will provide some of these tools. Identify the principles of Marketing and Success Here are the top 10 most important things you should know to be successful in marketing: 1. Communication is key – You must respond to a customer’s inquiry immediately.

Even if you don’t know the answer to their question, or you don’t think they will like the answer, you need to respond in a timely manner. It is better to communicate too much


than not enough. Tell the customer more than you think they need to know. The customer should select the information they want, rather than wish they had more.

2. Honesty is essential – Like every situation in life, honesty is a key to success. For

instance, if you are going to be late on a shipment, or deliver an inferior quality product in comparison with your last shipment, tell your customer honestly. Give them all of the details and let them make the decisions. It is best you alert your customer about bad news rather than wait for them to find out later when the shipment arrives.

3. A consistent quality is key – Your product and product grade/description must be

consistent. If you are manufacturing a product, each unit should be identical to the last, each shipment identical to the last. If you are selling an agricultural product or other raw material, your description should be constant. If you grade a product, every time you ship that product under that grade it should be identical in characteristics to the last time you shipped that product under that grade. If there are no official standards, develop your own, provide them to your customer, and grade your product consistently.

4. Risk assessment – Know your ability to accept risk and stay within your bounds.

Understand how much risk you are willing to accept and no matter how much you want the sale, do not go beyond your ability to absorb a loss. Know how to protect yourself from excess risk.

5. Know your Markets – Become a student of your markets. Know the customers, the

customs, the culture, the duties, and the competition. Know what the customer does with your product, how it is used, how it is sold, and why it is bought.

6. Details, Details, Details – Pay attention to the details. Without attention to detail your

business will ultimately fail. You must keep track of the details! 7. Product Advantages – Be ready to answer the question “why should I buy your

product?” The customer has dozens, or even hundreds, of alternatives to buying your product. Be prepared to explain why a customer should buy your product rather than any other.

8. Customer relationships – Consider your customers as your partners. They really are

your most valuable allies. They must make a profit to continue working with your products. Help them make a profit by providing them what they want, when they want it. By doing this, your customer will continue to work with you even when times are difficult.

9. Networking – Network at all levels of the trade cycle. Build relationships on a business

and personal level with customers, suppliers, bankers, forwarders, freight companies, and


everyone in between. You never know, someone you may consider of no importance today may end up as your most important ally tomorrow.

10. Excellent product visibility – If the customer doesn’t know you have the product or

doesn’t see the quality first hand, they will not buy your product. Therefore, be prepared to send out samples...lots of samples. This is a major expense for which you need to plan. Unseen products remain unsold.

C - Communications H - Honesty A - A consistent quality R - Risk M - Markets D- Details A - Advantages N - Network C - Customer relations E - Excellent visibility Exercise 1.1 – Analyze Current Business Practices Directions: Consider numbers 1-10 above and assess your current business practices to determine if you are ready to do business internationally. Rank your performance in each area on a scale of 1-10 (one is best). For the bottom four finishers, identify how your business could improve performance in those areas. Table 1.1 – Current Business Practices Rank Current Practices Identify Areas For Improvement 1. Communications 2. Honesty 3. Consistent Quality 4. Product Visibility 5. Market Knowledge 6. Product Knowledge 7. Risk Assessment 8. Customer Relationships 9. Networking 10. Attention to Detail

Exercise – Internal Strengths and Weaknesses


Directions: Now that you have reviewed your organization’s personnel and resources it is time to put them into a “T” chart to graphically illustrate these competencies. To do this, take a piece of paper and draw a big “T” starting at the top of the page. On one side of the “T” write “Strengths” and on the other side write “Weaknesses”. Next begin to list issues, items, and people by writing them into the appropriate column. Table 1.2c shows an example of a “T” chart.

Table 1.2c – “T” Chart Strengths Weaknesses

Products – consistent quality, strong demand Domestic market – profitable sales Individual with key skills International travel experience Good relationship with government agencies Desire and willingness to learn

Experience Domestic market – shared resources Grading needs to be established Time away from office Need to strengthen staff Need to improve relationship with bank Need to improve product visibility

Take your completed “T” chart back to work and review it with the appropriate individuals in your organization. Organize discussions with them about how you can build upon your strengths and down play your weaknesses. For each weakness, write a statement about how you will keep the weakness from hindering your success as an exporter. Post the “T” chart some place where you will see it regularly, like on your bathroom mirror, by your copy machine, or by your door. You want to remind yourself and other appropriate individuals to review it on a regular basis. By understanding these weaknesses you will be forced to address them and find solutions to them. This will help to ensure your business succeeds. This is an important exercise which may seem like an extra effort. However, if you do it before you begin to export; it will help you avoid surprises once you are in the middle of your export program. If you consider your organization’s weaknesses you are in a better position to build your export business than if you simply concentrate on your strengths. Use the chart below as a starting place for your own “T” chart for yourself, your organization and your products.


What business am I in? Objective: Through the thought process of this section the student will understand the importance of reviewing their business from a different perspective. Often time’s businesses get tied up with the concept of what they do rather than what they can do more profitably. Companies must learn to produce what they can sell rather than sell what they produce. Consider production option If you are a painter, are you better served by producing one picture which takes a year to produce, or by producing cheaper pictures every day? Where do you maximize your profits? An artist can paint a landscape which sells for $30,000; however, it takes him 52 weeks to produce. He has an opportunity to paint houses, and though painting houses does not take advantage of his greatest talents, it would net $1000 per week, or $52,000 per year! Under this scenario, he is financially better off painting houses than painting landscapes. However, if he could sell his landscapes for $60,000 each, or produce them in half the time, he would be better off painting landscapes. Consider opportunity cost. Opportunity cost is defined as the most favorable forgone alternative. To analyze opportunity cost, you need to look at what you are producing and compare it to some other product you could produce with the same resources. Which is more profitable?


For example, your company currently uses its resources to produce faucets generating a 3% yearly return. However, these same resources can produce doorknobs generating an 8% return. The 8 % forgone profit would be your opportunity costs or alternative costs. In order to provide you with the greatest returns on your resources you need to know what other opportunities for returns exist. Financial returns are not the only “returns” to be considered in either the marginal cost or opportunity cost analysis. You should also consider non-cash benefits and costs associated with a decision. For example, if the artist were able to paint the landscape from his home studio and spend time with his family, he might choose to make less money than he would painting houses away from his family. This will depend upon what “value” he places on spending time with his family or other non-cash benefits or costs. Only individuals can determine non-cash values for themselves, therefore, this analysis needs to be done internally rather than someone on the outside telling you how to run your business and your life. Where are your Competitive Advantages? Objective: Given factors to consider when choosing an export product, the participants will rate their product and market knowledge to determine areas for improvement. Determine which product your company has a core competency producing Now that you understand your business’s strengths, weaknesses, and ability to accept risk, you can take a closer look at your products and determine what market niche you want to capture as your primary market. It is important to identify and pursue a niche because no company has the resources to pursue an untargeted market. To know what market to go after you must first identify which of your products is going to have the greatest potential for success. Identify your products. This starts with an internal review of the products you could export. This review would include an analysis of your production to ensure that you have a sufficient surplus of product available for export. One of the most discouraging things for a sales-focused organization is to have more sales than product available to sell. Therefore, if you are going to develop a market you want to make sure that you have a reasonable ability to supply that market with product. It is always best if the product has both a domestic and international market, as situations change and you want to keep your avenues open by having a product with multiple opportunities to sell. You will want to strike a balance between your domestic and international sales. Will you have sufficient capacity, personnel, raw materials, and capital to handle a larger volume? You may wish to consider that the highest profit products are those with a limited supply and high demand. Therefore, selling a product which is difficult to produce yet has a


significant demand can be more profitable than selling a product which is easy to produce with even a strong demand. Figure X.X shows an example of this. Consider your marketing abilities. Determine if your organization is going to have the greatest advantage by marketing a lot of a product with high supply and high demand or a little volume with limited supply and limited demand, but with a higher profit margin. Companies have succeeded with both scenarios, and you must determine which is best for your organization. Determine if there is international demand for your product Now that you have completed an internal review of your organization you are ready to look beyond your company and country to determine if there is an export market for the product which you are most capable of producing and marketing profitably. Determining if there is international demand for your product will require research into the marketplace. The more time you spend researching the more you will learn about the market. Research should not only be conducted before you begin exporting, but rather on a regular basis. There are a number of e-newsletters and trading centers for which you can register and receive regular updates. You should find an industry association in your target markets and join or simply get their membership list. These members will be some of your target customers. What you are looking to learn by conducting research and interviews is what the market demands and what is currently being supplied. Spend some time learning what your competitors are doing, however, do not make this your obsession. Do what you do best and your competitors will end up worrying about what you are doing, not the other way around! Determine if you can be competitive in the export market There are three basic assets applied to the production of any product – land, labor, and capital. (Land can be defined as any material input or raw material.) In which of these areas do you have a comparative advantage? Are your raw materials cheaper than your competitors? Is your labor rate lower or more productive than your competitors? Do you have access to capital? What is the cost of your funds versus your competitors? “Cost of funds” includes the opportunity costs of using your own funds from your domestic or other operations.


MODULE #2 – EXPORT 101 Discuss your current business practices Assess your personnel In smaller organizations individuals need to wear many hats. One employee is expected to perform a variety of duties and responsibilities. However, even if you are your only employee, knowing the skills necessary to succeed in the export market will help you identify where you need to strengthen your business or seek outside assistance. Later in the course we will discuss where and how you can strengthen your company’s personnel through the use of local and international agencies including local NGOs (Non-Governmental Organizations). Profile of a Successful Export Manager Directions: In small groups of three to five people, list questions you should ask yourself when selecting an export manager. What characteristics would you look for? What kind of person should s/he be? What kind of experience should s/he have? Table 1.2a – Profile of a Successful Export Manager 1. Does this person have international work experience? 2. Do they have sufficient product knowledge? 3. 4. 5. 6. 7.

Identify adverse business effects of entering the export market The export business is going to require significant time and resources to build. You must fully consider the effects of entering the export business and how it impacts your other business activities. What Could Go Wrong? Directions: Consider everything involved in entering the export business. What resources would be strained? What relationships would become vital? In small groups, you will have five minutes to list every factor that might affect your success as an exporter. Record your answers in Table 1.2b. Then each group will share their answers with the class and receive one point for each unique answer that no other group considered.


Get Ready to Export! Select your product Learn the basics of market research for selection of the “right” product for market. What Should You Export? Given factors to consider when choosing an export product, the participants will rate their product and market knowledge to determine areas for improvement. Exercise – Rate Your Readiness! Table 4.1 – Rate Your Readiness If you wish to increase your production to serve the export market, will you have: You have interviewed: Sufficient capacity? Banks Personnel? Steamship lines Raw materials? Airlines Capital? Embassies and consulates Considering the export market, your product: Government agencies Is properly packaged You have competitive: Has consistently acceptable quality Cost of funds Can be competitively priced Labor prices You have done market research by: Raw materials cost Reviewing export statistics Reviewing import statistics Using the internet Visiting foreign markets Visiting tradeshows in your target market Identify a niche for your product Niche - A position particularly well suited to the person/product who occupies it; “Ethiopian white honey found a good niche in the premium honey market of Asia" In the space below brainstorm about ideas to provide your product a special niche in the market: Why in the world would the buyer buy from you over everyone else? What factors determine if a buyer purchases a product at the importer level? What about the distributor level?


What determines if an end consumer purchases your product? Risk analysis Accept risks associated with export business start-up Before you enter any business activity you should understand the risks associated with that activity and your limits on accepting this risk. Exporting need not be expensive. It is possible to operate an export business on a limited budget. We will learn ways to do this during the Export 102 section of this course. It is important to set clear, attainable, measurable, and executable objectives before diving into the business. A key to success is making sure that you establish a realistic budget to achieve your exporting objectives, and continually monitor and adjust the budget and goals to reflect current events and developments. How will you finance your export business? First, build a budget for your export promotion activities. Figure out how much you can afford to invest and your expected timeline for cost recovery. In many situations the export markets are similar to the search for El Dorado, the legendary City of Gold. In order to search for El Dorado you need to have income, or available resources, to pay for the search. In most companies it is domestic profits that are used to build the export business. You either need domestic profits to cover the investment in the export business, or you need a reserve of cash from which you can draw upon as you “invest” in the export business. Therefore, before you begin pursuing the export business, spend time determining how much money you can draw off of your domestic business or where the additional capital is going to come from. Do not wait until you have committed other resources to the export business before you determine where the funds are going to come from. What is the worst-case scenario? You must consider the worst possible scenario when assessing your risk. This is the way that the banks look at your business. If you can think like a bank, without emotional ties to the business, and limit your risk, you will succeed in having a long term business. Figure X illustrates that there are risks and costs associated with every venture. Even if the cost is just your time, it is a cost to your business because of your distracted focus and efforts. The Importance of Customer Relationships After establishing a customer relationship, the participants will list the benefits of using Incoterms in customer agreements.


Choose a customer relationship There are several manners in which you can deal with your customer. It is important that you and your customer understand the relationship at the very beginning so that you don’t get yourself into a bind later. Open Market Customer – This is a customer with whom you work on a non-exclusive basis. In this situation you would sell to this customer and any other customer in the market with whom you are able to meet agreeable terms of a sale. This is often the best way to handle sales of commodities, where price is the primary factor in making the sale. Under this scenario you and your customer have the right to buy from, and sell to, whomever you want at any time. The disadvantage is that there are few loyalties with this type of relationship. If your competitor has a lower price then you next time, they will get the sale. Market Development Customer – This is a customer with whom you are working to develop a specific market. Unlike the Open Market Customer, you are in a more long-term relationship with this customer. Market development relationships are, by definition, long-term, mutually beneficial, and cooperative. Together with this customer you will work to achieve mutual success; however you have not given up all other customers or opportunities to work with them. This type of relationship could progress to an exclusive relationship over time. Market or Product Exclusive Relationship – This is a customer who will be your “exclusive” representative for their market. A Market or Product Exclusive Relationship (MPER) gives the customer limited rights to market your products. These limitations can be geographic, niche, brand, or time oriented. Often times this agreement begins as no more than a handshake or e-mail communication and understanding. As it moves to more formal terms it is best to have an attorney familiar with both markets and laws to draft a relationship agreement. It is helpful when entering this form of relationship that you clearly state to your customer what your intentions are and that they understand what you are trying to accomplish. This can be done in a letter and need not involve an attorney. By giving a customer a MPER right to a specific geographic area you are free to work in other areas where other customers may be better positioned. By limiting the MPER representative to a niche you are allowing them to market to their specific target niche and therefore take advantage of their core competencies. For example, if you are offering fresh fish to a market you may find that one importer does an excellent business with restaurants, while another sells to grocery stores, while yet another sells to processors. With an MPER you play to the customer’s strengths. An MPER is one of


the best ways of keeping your avenues open, while benefiting from the advantages of an exclusive relationship. Exclusive Agent – This is a customer that you have given all rights to market your product or brand in a specific market. It differs from an MPER, in that it is a legally binding agreement which should include performance clauses for both you and your customer. It may be limited by the factors listed in Figure X.X. This is the most restrictive type of relationship for both you and your customer, however, if it is the right relationship it can be the most rewarding. In an exclusive agent agreement you truly need to consider your customer as your partner. An exclusive agent is going to be more willing to invest resources into promoting your brand, and by so doing, will promote both parties’ future. They will invest in promoting the brand and/or your company, knowing that in so doing they are promoting their future as well. One way to work with an exclusive agreement, while keeping your doors open for other opportunities, is to give your customer “exclusive rights” to one brand. Then, if you find another customer in the market, you can simply develop another brand. It is important that both customers understand each other’s rights and objectives. If you have two agents in the same market they must each know their role, rights and responsibilities. “As long as you buy everything I produce, you have an exclusive.” This is a simple philosophy which works well for many agricultural and natural products. If your target sales in give a market are 20 units a month, and a customer is willing and able to purchase that amount on the condition that they have an exclusive, then you have nothing to lose by providing them with exclusive rights. If a customer can achieve your goals and expectations in a market, there is no need to look for another customer. Care must be taken to make sure that both sides fully understand what is expected from them in exchange for this agreement. An exclusive agreement should not be entered into without the consultation of an attorney in the country where the product is to be marketed. It is recommended that you not utilize the same attorney as your customer, to get an outside opinion on the rights, responsibilities, and enforcement of the agreement. Customers almost always prefer to work as Excusive Agents. The agreements should always include a performance clause which allows you to move on if things do not reach your objectives. Lay the foundation for a long-lasting customer relationship The internal review is done, the product is defined, and the research into the markets is complete. Now we can work on identifying and securing a customer. There are several layers and potential methods for working with a customer. In all of the methods the 8th rule of international trade, maintaining customer relationships, is pivotal. Consider your customers as your partner. Your customer is your partner even if it is just for


a single transaction; you must treat them as a partner. In a good partnership, like in a good marriage, both parties benefit from the relationship. The father of modern capitalism and economics, Adam Smith, presented the concept that a seller sells the product because he can get more value for his goods than it is worth to him, while a buyer purchases the product because its value to him is greater than he is paying for it. In this manner both parties win! This rule holds as true today as it did in 1775 when it was made popular by Adam Smith in Wealth of a Nation. If you treat your customer as your partner, and create win-win transactions, then they will end up your friends. And as much as you can influence each other’s success, the friendship and business will grow together. In order for this relationship to work it must be a two-way street. Your customer must also treat you as a partner. This is best achieved through developing trust and a full understanding of each other’s’ business. International trade is like a card game with you and your customer playing on the same team. To make the best hand between you, both of you must lay your cards on the table in full view of each other in order to build the best hand. You can take the first step towards building a successful business relationship by putting your cards on the table. Develop a company and product profile document Unseen is unsold! If the customer doesn’t know what you have for sale they can’t buy it. Therefore you need to promote your product and the development of a company and product profile. Utilize the MARKETS document in the appendix of this document as a starting point for gathering the information necessary to produce a company and product profile document. Standardize the documents for each product so that the customers can clearly compare the different products, grades or packages. It is important that the customer have confidence in the company producing the product the fact sheet helps them gain this confidence. It is important to provide an outline of the company’s technical abilities and resources. It is important to provide background information on the company owners. The product specification sheet should contain a minimum of the following: Contact Information Common and Scientific Names Ingredients Packaging Specifications Special Certifications Shipping conditions


International Chamber of Commerce Terms (INCOTERMS) Define international commercial terminology In international trade it is important that you “speak the same language as your customer”. This does not require that you speak their native tongue, but rather that you utilize the same terminology for the sale and know its correct definition. To avoid errors in execution you need to make sure that you fully understand the international terms you are using and use them correctly. Mistakes can be very costly. Intercom 2010 are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities. They also clarify when the transfer of merchandise ownership occurs. Incoterms are incorporated into sales agreements or other methods of sales transactions. Listed below are some of the most important Incoterms. If you run into a term which you do not understand, please take the time to contact your bank, an NGO, or others who would be able to explain the definitions of Incoterms. Risk of utilizing the wrong terminology can cost you your business, therefore, be sure to fully understand the Incoterms before you use them.

• EXW - Ex Works -- Title and risk pass to buyer including payment of all transportation and insurance cost from the seller's door. Used for any mode of transportation.

• FCA - Free Carrier -- Title and risk pass to buyer including transportation and

insurance cost when the seller delivers goods cleared for export to the carrier. Seller is obligated to load the goods on the Buyer's collecting vehicle; it is the Buyer's obligation to receive the Seller's arriving vehicle unloaded.

• FAS - Free Alongside Ship --Title and risk pass to buyer including payment of all

transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

• FOB - Free On Board -- Risk passes to buyer including payment of all transportation

and insurance cost once delivered on board the ship by the seller. Used for sea or inland waterway transportation.


• CFR - Cost and Freight -- Title, risk and insurance cost pass to buyer when delivered on board the ship by seller who pays the transportation cost to the destination port. Used for sea or inland waterway transportation.

• CIF - Cost, Insurance, and Freight -- Title and risk pass to buyer when delivered on

board the ship by seller who pays transportation and insurance cost to destination port. Used for sea or inland waterway transportation.

• DDU - Delivered Duty Unpaid -- Title, risk and responsibility of import clearance pass to buyer when seller delivers goods to named destination point. Used for any mode of transportation. Buyer is obligated for import clearance.

• DDP - Delivered Duty Paid -- Title and risk pass to buyer when seller delivers goods

to named destination point cleared for import. Used for any mode of transportation. After establishing a customer relationship, the participants will list the benefits of using Incoterms in customer agreements. Benefits of “Speaking the Same Language” List the benefits of using Incoterms. Table 5.2 – Benefits of Incoterms 1. 2. 3. 4. 5.



Target your customer base In marketing, you can use several different methods to “target” a customer. Broad Marketing is like a fisherman throwing out a net in the barren sea and hoping to catch a fish or two. It can work, however it is often very expensive and time consuming. To market using this strategy you would advertise to the public by placing ads in magazines and trade journals before you have a distributor or customer. This method is often used by large companies. However, this strategy is typically more effective for building brand recognition than for attracting key customers. Target Marketing combines knowledge collected through market research and interviews to efficiently steer your business into the most profitable market. The more specific you are in targeting your customer the more economical your marketing efforts are going to be in terms of time and resources. This method assumes that you have made the right conclusions based on thorough market research. You will already have a “target” customer in mind, if you have taken the necessary steps prior to target marketing:

a) reviewing your business b) reviewing your products c) researching the markets d) understanding the rules of international trade

Before you begin target marketing, you should know the answers to the following questions:

• Who are the end users? • Where are the end users getting my product? • Who are the distributors? • Who is supplying the distributors with product? In other words, who are my

competitors? The more you know about the market, the better you will be at serving your customers’ needs.


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Wednesday, March 06, 2013

Market Access Research Keys for Export Trade Support

This document is designed to provide 2020DC and our affiliates with the information necessary for our clients to succeed in expanding their business with specific focus on assisting in marketing efforts. The more complete this information is the easier it is for us to help you develop customers and achieve your sales objectives. This information will be utilized to 1) help us identify your needs and design a program to help you meet your sales objectives and 2) develop a profile for your company for presentation to potential customers, partners and others critical to your business. This some of this information will be utilized for presentations outside of 2020DC and therefore if you want to keep this information confidential beyond our relationship please indicate accordingly as instructed below. 2020DC TRACKING INFORMATION

Interviewer’s name: Phone number: e-mail:

Interview date: Consultant: Jorge Machado


Product(s) to be marketed:

Where are the products currently marketed? General Company Information

Company receiving assistance: Year established: Legal structure of company: Corporation LLC Government entity

NGO Sole Proprietor Partnership Other

Primary Shareholders: Shareholder background:

Website: Webmaster:

Company Work Force abbreviation Area or Department Number of People Allocated

According to Functions

PD Product Development PM Product Management S Sales

Mkt Marketing Fin Financial Plan Planning Acc Accounting PE Production Engineering

Prod Production Sup Supply


Marketing department contacts

Marketing personnel contact: Email address: Phone: Export contact: Phone e-mail address

Marketing Materials Does the company have a brochure? If yes attach a copy. Is it available digitally?

Brief history of company:

Please describe the company’s general strengths and capacity, especially related to exporting:

Please describe the company’s general weaknesses especially related to exporting:

Export experience history:

List export customers and concentration:


Has the company had an export agent or customer in the past? Yes No If yes, please describe experience, countries of activity and current status:

Percentage of the business expected to be export in the next 12 months:

Has the company attended the following export courses: Export 101 Export 102 Export 103 Tradeshow 101 Other, courses describe: Tag line or mission statement for the company: Company and product certifications:

HACCP FSC MSC ISO 14001 SA8000 FairTrade ISO 9000 Other If “Other”, please specify: What market segment does your company fulfill with greater efficiency? Wholesalers, distributors, small Does the company market via its own shops, franchises, catalogues, internet, famous brands and etc.

Company Information – Financial Who is the company’s bank: Primary contact at bank: Banker contact information e-mail

phone: Does the company have immediate financial needs which could impact their marketing opportunities and ability to grow sales?

Does the company have one or more brands? If yes, please list them. If not do you have plans to develop one or more brands


What forms of payment are acceptable for their export sales?

Letter of credit Documents against payment Open terms Wire transfer

Partial or full payment in advance

Does the company have export sales financing available?

Does the company have a complete Business Plan?

Does the company have a one, five and ten years goals and plans? If yes please describe them

Company related product information Product(s) to be marketed: Does the company have a product specification document? (Attach copy)…is it available digitally?

Is company prepared to distribute product samples? Yes No If “no” please explain when they will: Do target customers exist: Yes No If “yes” please detail: What countries does the processor believe are target markets? Why? Is company prepared to visit target markets in the next 12 months? Yes No If “no” please explain why: Is company prepared to participate in a tradeshow in the next 12 months? Yes No Please describe company strengths and capacity regarding this particular product (i.e. access to raw materials, machinery and technology, patents/trademarks, brand names, etc):


Please describe the production process for this product: (attach chart – digitally if possible) What percentage of plant or production line capacity is the company running? Please describe the company’s limitations and challenges regarding the production/marketing of this particular product: Does the company have methods to analyze its products costs in relation to its productions levels? More products less costs?

Does the companies prepares a technical form describing all data/costs to produce a product

Please list all your machinery and equipment:

Modeling and cutting how are they done?


Requested Services Information

Has a scope of work been prepared for this market development effort? Please attach if so. Please indicate tasks to be addressed and level of effort expected. Assist in product development Assist in package design and development Assist in securing raw materials Source equipment Perform market research Prepare company profile sheet Prepare product specification sheet Visit the plant and review objectives and production Assistance in finding, suggesting and performing training Partnerships and cooperation with technical schools Participate in tradeshow Market the product Bring buyers to production facilities Bring sellers to buyers Represent manufacturer in markets Find investors for business Strategy of the project and Commitments of the Client Strategy of intervention of the project with the client: Commitments of the project and their relation to the priority problems (Rank the three principal commitments) a) b) c) Commitments of the Client in relation to the action of the Project a) b) c)


Timetable of sales and investments (minimum for 1 year) Concept Most

Recent Trimester (indicate months)

Projected Sales and Investment (S/.) Trimester 1 Trimester 2 Trimester 3 Trimester 4 Total

Sales Investment ________________________ _________________________ Signature of Project facilitator Signature of Client Name Name Title Title Date Date

Guide to Entrepreneurship

Business

inland waterway

export trainee

identify adjustments

companys internal

buyer including

export trade

seller delivers

open market