Export Readiness for the U.S. Market

This Trade Tool Kit Summary includes information which may be useful to companies in assessing export readiness and preparing their business to enter the export market.

Businesses should draw on their own resources to obtain information for production of their own tool kit, manual, or reference portfolio.

The Ten Commandments of Exporting

Successful exporting involves some fundamental rules, which companies should not ignore. These ten rules are:

1. Develop a thorough export-marketing plan and make it an integral part of the overall business plan.
2. Commit dedicated resources to the export drive.
3. Choose your export partners (e.g. agents, customs brokers) with care.
4. Never give your export customers second-class treatment. Ensure that they receive the same high quality of service as offered to your domestic customers.
5. Focus on specific markets and opportunities; don't take the shotgun approach.
6. Consider the export market to be equally important to your domestic market.
7. Modify products and services to meet the needs of the offshore market.
8. Be aware of the differences between Morocco and its culture and language and those of your target market.
9. Use export specialists, such as the banks and freight forwarders. Don't try to do everything yourself.
10. Look for new ways to do things; don't assume the methods tried and true in Morocco will work overseas.

Top

Assessing Export Potential

Experience shows there are seven areas of importance in determining if a firm is ready to tackle the export market. Companies which do not take a careful and objective view of the export readiness of their organization and product or service are unlikely to succeed in the export market. A diagnostic checklist for each of the seven areas appears below:

Management Commitment

• Does senior management understand the benefits and costs to exporting?
• Has senior management developed clear goals and objectives for the export drive?
• Is senior management willing to devote a significant amount of time to the export market?
• Has senior management clearly identified individuals in the company who will be responsible for export marketing; i.e. an export marketing manager?
• Is management prepared to allocate sufficient funding to support the export drive?
• Is management prepared to wait for the benefits of export marketing to be realized?

The Domestic Track Record

• Does the firm have a proven, market-tested product or service?
• Can the firm point to reputable domestic customers that will vouch for the quality of their product or service?
• Is the cash flow produced by domestic operations sufficient to support the company's export operations for the time required to make them profitable?
• Is the organization's domestic operation well enough established to continue to thrive while management time is directed to the export market?

Market Planning

• Does the firm have a written export market plan?
• Was the export market plan developed with input from all relevant staff members?
• Does the market plan include specific, quantifiable objectives?
• Has provision been made in the plan for contingencies and feedback?
• Have specific markets been selected?

The Finance Equation

• Is the firm's present financial position sound?
• Does the firm have a financial plan covering export market development costs?
• Are sufficient funds available for exporting?
• Can the firm develop an export-costing sheet?
• Is the firm able to wait for payment?
• Does the firm have a source of patient capital, i.e. financing that does not require short-term returns?

The Right Product /Service

• Does the firm have a proprietary product or service?
• Does the firm have a unique production process?
• Does the firm's product have special features that are perceived as valuable?
• Does the product have special packaging or presentation features?
• Can the firm offer better delivery than competitors?
• Does the firm have an advantage in after-sales servicing?
• Does the firm offer attractive financing?

Gearing Up Production

• Does the firm have an established and efficient production for domestic markets?
• Does the firm have initial excess capacity to serve export markets?
• Is the company able to handle a sudden rise in demand?
• Does the firm have a reliable supply system?
• Can the company handle the logistics of getting product to export markets?
• Does the firm have plans to handle longer-term increased production levels?

Management Knowledge of Export Marketing

• Does the firm have export experience in the management team?
• Is the firm experienced in the technical aspects of exporting?
• Have company staff participated in or visited international trade fairs?
• Are members of the staff familiar with foreign cultures and business practices?
• Does the company have contacts in the export community?
• Does the firm know where to get people with the right export skills?

Top

Developing an Export Marketing Plan

Market planning is a key ingredient in initial success in the export market. Formulating an export strategy based on good information and proper assessment of both the company and the marketplace increases the chances that the best market options will be chosen. The market plan outline given below can be used by the new export firm as a guide to preparing their first export plan:

I Introduction: Why should this company export?

The introduction should provide the basic rationale for why the company should export. The reasons should be profit oriented and fit with the company's overall business plan.

II Situation and Background Analysis

The situation and background analysis should describe the company, its internal resources, and the structure of their industry. Sections should include descriptions of the following areas:

• Product or service
• Current operations
• Proposed export organization
• Industry structure

III Marketing Component

The company must identify how it will select and service target markets. Specific sales and profit targets should also be set. The marketing component section should include:

• Identifying, evaluating and selecting target markets
• Product selection and pricing
• Distribution
• Terms and conditions of sales
• Internal export procedures
• Sales goals

IV Action Steps

The company must identify its primary and secondary target markets and describe how the market will be approached and developed.

V Export Budget

The company must prepare a budget for their export drive. The information should also identify specifically from where the money will come. The export budget should include:

• Marketing budget
• Product or service development budget
• Manufacturing budget

VI Implementation Schedule

Along with the procedures and budgetary requirements of exporting, the company will need to develop firm time lines for its export drive. Time lines will be needed for the following areas:

• Marketing
• Production/service
• Management reviews

VII Feedback and Evaluation Mechanisms

The company must discuss how it will develop feedback on the export drive and how it will be evaluated.

Top

Getting Paid

As firms come closer to their first export sale, the issue of payment options becomes critical. All the work put into preparing and executing an export plan can be wasted if customers do not pay on time or at all.

The majority of exporters use one of four methods of payment. The following table describes the important aspects of each:

Shipments to the U.S. and Western Europe most commonly use open account terms, whereas more secure payment terms are common in other parts of the world. Firms should take advantage of the international services provided by Moroccan banks and other programs.

Top

Trade Shows and the New Exporting Company

Trade shows are often an excellent tool to assist the newly exporting company break into new markets. There are literally tens of thousands of shows each year of which perhaps about 200 are of international significance to Moroccan exporters.

Given the cost in time and money of attending shows in other countries, it is important for firms to carefully evaluate their participation. Important questions to ask include:

• Why does the company want to attend the show?
• Who has attended the show in the past?
• What do previous exhibitors and attendees think of the show?
• What is the show's or the show manager's reputation?
• What does the show manager do to help attendees and exhibitors?

Many firms question whether they should simply attend a show or actually exhibit at a show. Exhibiting at a show sends the signal that you are ready to export. This coupled with the high cost of exhibiting should play into your decision to exhibit. First time trade show attendees are advised to simply walk the show.

Viewing the exhibition booths should be done in a professional manner. Walking the show allows companies to evaluate the competition, see new technology, and meet potential customers and agents. The five key guidelines for getting the most out of a show are:

1. Decide why you are attending the show.
2. Select the right show to attend.
3. Set objectives before attending the show.
4. Cover the show floor efficiently; don't just wander.
5. Get the most out of each exhibit; don't be distracted by giveaways and products you are not interested in.

The steps under the “Export Readiness to the U.S. Market” guide will provide your organization with the most applicable references and the best-practice models to prepare your company for the U.S. market and to embark on a “Reference Portfolio” that is relevant to your business needs and interests in the U.S. Market.

Top

Obtaining Current Information on Trade Leads, Marketing Analyses and US Laws and Regulations

The United States Government has created a resourceful electronic toolkit called Export.gov. This tool kit provides links to hundreds of pages of trade-related information including trade forms, points of contact for each government organization that supports trade, trade finance information, searchable international business opportunities, access to numerous databases, trade leads, and much more. Moroccan companies can use this resource to obtain information on the United States market.

Classifying your product under the Harmonized Tariff Schedule of the United States

The United States uses the Harmonized Tariff System (HTS), which is a 10-digit United States adaptation of the Harmonized System Codes. In order to obtain the correct harmonized code for your product under the United States system, the following steps are taken:

• Link to the Harmonized Tariff System (HTS) on the Internet or obtain a hard copy of the HTS.
• Locate the chapter in the table of contents, which applies to your product. Then you look for the 4-digit heading that most closely describes your goods.
• Once in the correct chapter, look for the 6-digit international subheading that most closely covers your product.
• Once you have located the correct 6-digit line for your product, look under the 6-digit category to determine the 8-digit US rate line for the most specific category.
• Once you have determined the 8-digit rate line, look under the 8-digit rate line for the 9th and 10th digit that covers your product.

There are some situations in which goods can be described several ways. Customs established a binding ruling program whereby importers can request a written ruling as to the proper United States HTS classification and applicable rates of duty. 

Top

United States Customs Information

In order to export to the United States, the Moroccan exporter must be familiar with the United States Customs service and its regulations. The United States Customs' website includes an importing/exporting section which provides valuable step-by-step information on importing to the United States.

The United States Customs has developed a publication, which assists importers through the steps of importing to the United States. This pamphlet is to be used as a general reference for import requirements and includes the following information:

• Import Requirements
• Arrival of Goods
• Formal vs. Informal Entry
• Formal Entry of Goods
• Other Types of Entry
• Classification
• Determining Admissibility/Customs Examination of Goods
• Protest
• Mail Shipments
• Restricted Merchandise
• Foreign Assets Control
• Publications

Other valuable information on the U.S. Customs website includes:

• Marking the Country of Origin . This document includes information on the following: purpose of marking, country of origin, forms of marking, marking items and much more.
• U.S. Customs Service Ports of Entry. Companies exporting to the U.S. can obtain individual Customs port information.
• Information on the Binding Ruling Program. Importers to the U.S. can submit a request a written ruling on a described transaction, a definitive interpretation of applicable law, classification or other appropriate information.

Top

This exporter tool kit was adapted from the Jordan-U.S. FTA web site: our sincere thanks go to JABA (AmCham Jordan).