Product Modification

When a business begins to shift attention from the home market to export markets, it’s really important to consider the product offering and to be prepared to make modifications to make them suitable to local needs and expectations.

When I first worked in an export sales role, it was a source of some considerable friction with my employer that I kept introducing customers who wanted to buy, but wanted changes. “Why can’t you just get out there and sell what we actually have?” my boss once asked me in frustration. It’s just part of the steep learning curve that businesses need to go through when expanding internationally. The first step is to forget many of the aspects of the home business that have become second nature. Even when trading with countries that are relatively close both geographically and culturally, exporters can encounter surprising differences in practice that impact on how the product needs to be produced, packed and presented.

It won’t always be necessary to make modifications to succeed in exporting, but it’s certainly advisable for any aspiring exporter to be prepared to do so where necessary.

The need for modification can come from differences in law, standards, custom, local taste and practice, and also from the need to protect the product from the impact of the shipping process. It may also be necessary to revise products just to be competitive.

In considering the need for modifications, the business needs to consider the product in its widest sense, which is to say the review should include the packaging, labelling, supporting literature and all customer services that support the customer. Some of the likely changes will be relatively easy to anticipate, such as dimensions, weight, voltage etc. They may also be as simple as just amending the figures given on the packaging and literature to meet local needs, although in many cases the product may have to be redesigned or repackaged to meet local regulations and practice on common quantities. Language is another predictable issue. Many countries will need consumer products to carry information in the local language.

It’s best to get some local advice on the issue. If the business is working with a potential distributor or other local representative, they should be able to advise on what’s necessary. Alternatively, government or other export support agencies may be able to offer guidance. For British exporters, the Department for International Trade has replaced UK Trade and Investment and can access local sources of information.

Reasons for changes can be extremely varied and may include, but not be limited to, the following:

Local legislation

This is very wide-ranging, and can affect the way a product is made, how it performs, how it is presented and sold.

Local product, technical, safety and health standards

Local regulations may in some cases require a radical redesign of the product in order to comply.

Custom and practice

Often the most difficult to identify and understand, it’s really important to understand the practices and preferences of potential end users. Studying competitive products on the market can help to avoid mistakes, but first-hand information from target customers is most reliable.

Taste

Cultural traditions and practices give meaning to supposedly inane matters such as numbers, colours and shapes. Product names and brands may have unintended connotations in the market, and it’s vital to identify potential problems early and find a suitable solution.

Shipping requirements

Even when local conditions are understood and met, many shipments of product hit problems related to moving the goods that can lead to modifications. When moving goods over long distances by sea, road or air, the packaging that has suited the home market may prove to be inadequate because it doesn’t protect the product adequately, or because the product cannot maintain its quality over the period of transportation, which can involve among other things very wide extremes of temperature.

In many cases, a product may end up significantly different when it reaches the target market. There are of course very important aspects of cost involved in making these changes, in terms of set up costs, stocking of materials and production. An aspiring exporter needs to research the implications very carefully before making commitments. It’s possible that in some cases the market may not be considered worthwhile when the reality of the risks and potential earnings are evaluated. It’s also very likely that the implications of these market requirements may have a serious impact on costs, and the exporter must calculate these before negotiating any prices.

Fortunately for most products and markets, these implications are minimal, and as the process of globalisation continues to assimilate customer tastes and expectations, such issues are generally becoming less crucial. But the wise exporter will always consider these points carefully and ensure they understand the market they are considering before making commitments.

Written January 2017 by Tim Hiscock Assosiate at Strong & Herd LLP

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