Tuesday, June 18, 2013

Guam: A Land of Export Opportunities for Cash Flow

By Jerry Crawford
Business Consultant
(Guam SBDC)

Take a walk through the popular tourist shops on Guam such as Duty Free Shops, JP Superstore, ABC Stores, and others. You will find locally produced products being sold every day in quantities to support a profitable business. Here are some of the product categories you will find:
·         varieties of cookies and candies made with local ingredients such as coconut and mango;
·         lotions, oils, and soaps made from local plants;
·         Flavors of the island specialty jams.
Look at the global picture to see how big your own export business can become.

Are You The Next Guam Opportunity?

The tourism market continues to provide a steady flow of buyers of locally produced products. Plus, there is a new category of products called “Hand Carry Exports” which give business owners opportunities to expand their distribution and sales with products that can be sold at Guam Duty Free Shops and the airport as carry-on, then taken to the destination country, and declared as a purchase made overseas.
Hawaii has succeeded with pineapple, sugarcane, coffee, etc. Guam can do it with coconut products, native plant lotions and oils, flavor of the island jams, etc. What will be next? Eco-friendly toys? Agro-tours of your production plantation? Hand-crafted Guam beer or liquor? Reef shoes from recycled products? An inspired clothing line? Come up with a product and let this Export Resource Guide steer you to becoming a profitable exporter.

Food Exports

Today, the opportunities to export consumer-oriented and value-added food products are great. In fact, there has probably never been a better time for companies to begin exporting local products as people around the world become curious about other cultures through Internet interaction and world travel. The process of selling food is unique compared to other consumer products.


Asia Can Be in Your Company’s Future

There are many countries to choose from when it comes to exporting. There are many important decisions for an exporter to make when choosing a country destination. One consideration is what is commonly called “barriers to entry”. Each country erects different walls to climb over for you to import your product or service into their country. Remember “export here means import there.”

To research the country of your choice go to Export.Gov at http://export.gov/mrktresearch/index.asp   Access the U.S. Commercial Service Market Research Library containing more than 100,000 industry and country-specific market reports, authored by U.S. Commercial specialists working in overseas posts. Commercial Guides give you a better understanding of the opportunities and obstacles you need to consider. All these Guides are available free of charge from your pre-paid tax dollars. They are very complete, filled with facts and links to an abundance of valuable information.   
The online Research Library includes the most up to date information on:
·   Country Commercial Guides (read latest “Doing Business In” guides)
·   Industry Overviews*
·   Market Updates*
·   Multilateral Development Bank Reports*
·   Best Markets*
·   Industry/Regional Reports*

It is useful for you to look through the Basic Guide to Exporting found at http://export.gov/exportbasics/  to see what to expect before exporting.

Packaging your product the first time on Guam for Asian distribution in the future.
 Red Flag
Guam products are often packaged for a Guam consumer. Guam companies will invest large sums of money in packaging only to find the Japanese and other Asian tourists on Guam reluctant to buy the product. For example, in some cases the reason a Guam product does not sell is packaging mistakes that do not attract an Asian buyer. You must start out with your Asian consumer in mind when you begin packaging for the local Guam market. Do not invest in large amounts of packaging until you know the Asian consumer likes it and will purchase your product.

The first time an export plan is developed, it should be kept simple. It need be only a few pages long, since important market data and planning elements may not yet be available. The initial planning effort gradually generates more information and insight. As you learn more about exporting and your company's competitive position, the export plan will become more detailed and complete.

As you can imagine, many foreign markets differ greatly from the United States. Once you have decided that your company is able and committed to exporting, the next step is to develop a marketing plan.

A clearly written marketing strategy offers six immediate benefits:

1.      Written plans display strengths and weaknesses and they help in formulating and polishing an export strategy.
2.      Those charged with executing the written plan cannot easily forget or ignore necessary steps.
3.      Written plans are easier to communicate to others and are less likely to be misunderstood.
4.      Written plans allocate responsibilities and provide for an evaluation of results.
5.      Written plans are helpful when seeking financial assistance. It indicates to lenders that you have a serious approach to the export venture.
6.      Written plans give management a clear understanding of what will be required of them and thus help to ensure a commitment to exporting.

The purposes of the export plan are:

1.      To assemble facts, constraints, and goals.
2.      To create an action statement that takes all of these into account. The action statement includes specific objectives, sets forth time schedules for implementation, and marks milestones so that degrees of success can be measured.

Questions to consider:

1.      Which products will you select for export development?
2.      What modifications, if any, are necessary to adapt for overseas markets?
3.      Which country will you target for sales development?
4.      In each country:
a.       What is the basic customer profile?
b.      What marketing and distribution channels will you use to reach customers?
5.      What special challenges pertain to each market (competition, cultural differences, import controls, etc.)?
6.      What strategy will you use to address them?