4 Ways Understanding Data Can Inform Your Export Strategy
Created on June 23, 2014
This post originally appeared on the Tradeology, the ITA Blog
Kenneth R. Mouradian is the Director of the International Trade Administration’s Orlando U.S. Export Assistance Center.
Numbers can be misleading, especially when they’re used as a proxy for quality thought in decision making.
Now, let’s be clear, here. When I say that numbers can be misleading, I’m assuming that you’re looking at an X and a Y axis with data points and no text except that which is necessary to label the graph. Alternatively, you’re looking at 10 numbers: five years and five corresponding dollar amounts or volumes. That’s where a lot of U.S. exporters begin their market research; and, if that’s where their research ends, that’s a problem.
Potential exporters need to look behind the data points on the graph by asking some important questions:
What happened before the trend?
What happened after the trend?
What caused the trend?
Can you compete (i.e., price, quality, terms of sale, features, post-sales support)?
Here’s a hypothetical: Imagine for a moment that you sell building products and the data indicate a 5-year growth trend in Timbuktoo for exactly what you sell. Assume, too, that the data are two years out of date and that you don’t follow soccer. Little did you know that Timbuktoo hosted the World Cup two years ago and that, if you had more recent data, you’d see a drop in demand for building products once the stadium, exercise buildings, dormitories, and tourism infrastructure had been completed.
I should also mention that all the best relationships were probably formed well before construction started. Should you spend much time exploring the Timbuktoo market? Based on what little we know about your company and Timbuktoo from this example, there’s nothing exceptional about Timbuktoo but you wouldn’t know that from statistics alone.
So, what’s a company with limited resources supposed to do to identify potential export markets? Here are a few ideas:
Use reports to improve understanding. General reports and information about export opportunities can be found at the Market Research Library.
Consult “people in the know” to challenge assumptions. ITA offers business counseling and can provide the inside scoop for companies looking to export. U.S. and foreign trade shows are also a great resource for businesses who want to learn more about the exporting opportunities available to them. The District Export Council can also be a source of information and counsel to those who need.
Visit the Market. The U.S. Department of Commerce, World Trade Centers, state and local Economic Development Organizations, and chambers of commerce organize trade missions and can facilitate your visit to the market to make contacts for future deals. Contact your local U.S. Export Assistance Center to get more information.
In addition to your local U.S. Export Assistance Center, more info about government-wide services and resources for exporting are available at www.export.gov.