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Creating a strong USP for an export product is crucial to success


Date: 12-04-2019
Subject: Creating a strong USP for an export product is crucial to success
Identifying a product is the foremost step when it comes to zeroing in on an effective export strategy. Keeping some key parameters in mind can augur well for those looking to branch out in the business and win back lucrative returns. 

Most entrepreneurs opt for a strategy where they focus on a country and after focusing on the country, they look at the kind of products that can be exported to that particular country. Then, there is another set of exporters who focus more on the product and thereafter look at the market. Both strategies have a chance to work but the primary point is that once in the field of exports, one has to keep in mind that they are replacing somebody who is already present in the market. 

Replacing someone means that positioning the USP of the product is essential. Its USP may not be confined only to the product. It may be related to the packaging, after sales service or any other area, but some kind of differentiation has to be evident enough. 

Next one should see what kind of market is being reached out to and who, in the market, is an established supplier. Questions like what kind of economic engagement those countries have vis-a-vis one’s own country need to be ascertained clearly. For example, if a good product has been identified which is supplied in the US market by Mexico as well, then Mexico has an FTA with the US which allows zero tariff on that, whereas the other product may attract 15% tariff. In such a situation whether one will be competitive vis-a-vis Mexico or not could be an issue. 

The kind of market access requirements present in that particular country also needs to be understood. They may have different requirements for the packaging, different registration processes and other formalities that have to be taken note of. All these are certain issues which one has to understand before stepping in a particular market. The primary point is in what way someone is working towards differentiating from the product which is already present in the international market. 

Entering a particular country means prior suppliers may already be present. It may not be an Indian supplier but someone else may be supplying. Logically then it should be differentiated from other suppliers. 

For example, if you are entering into the market and the target segment in women’s segment is girls in the age group of 15 to 25 years. Accordingly, one is segmenting their product as per the age and target group preferences. Some kind of new value addition has to be there - if one is joining the race, they can be successful only if they are price competitive which is difficult for new entrepreneurs as this comes from volumes. 

Most of the new entrepreneurs are attracted to the business of lifestyle products. But when looking at the field of exports, a look at the challenging fields such as Pharma can also be explored. In pharma, if one is not manufacturing and trading, they should look into what way they can offer some kind of addition to the product which can appear a challenging task at the outset. For instance, they can have a set of doctors at the back-end who can assist the patients abroad.Based on the symptoms that patients describe, the medicines can be recommended by the doctors. The point is that something new needs to come in. 

From an Indian perspective, low-end engineering sector products are seeing rapid growth because China was our competitor, but it is slowly exiting all these sectors. In the textile sector, competition is growing tremendously, but a lot of Indian entrepreneurs are entering into the field and they are still finding success. Footwear is another such sector. The trend here has been to move away from 100%  leather and to mix different kinds of synthetic material which adds to the comfort level and also brings down the price. So when you are looking into the major markets - target market, niche product, differentiation aspects need to be carefully looked into. 

From a regulatory standpoint, the processes are very simple. The only mandatory document required is IEC code and one gets it online easily. The other document needed is PAN, and that would take care of the statutory part of compliance. 

However, more needs to be done in handholding of entrepreneurs. Product identification is the biggest challenge - it is the first step before any further guidance can be given to new entrepreneurs. It definitely helps if one has family tradition or history in the field in which they choose to export. But, at the end of the day, it all depends on the individual. There are individuals who don’t have any backing, they have borrowed little sums of money and now they are hugely successful in their line of business. If one is passionate about exports then a new entrepreneur can also succeed. 

Source: economictimes.indiatimes.com