Wednesday, May 25, 2022

Alberto Romo-Chavez Alro Export

Blog by Alberto Romo-Chávez Jr. about Global Trade

Alro Exports is a Mexican company of Consultants in Global Markets with more than 30 years’ experience, in the development and adaptation of different products for exports.

"Export it's an action, not a category"  ARC

Alro is hired by a local food company to export one of its Products. Initial commitment is to ensure that the Product is competitive before the client spends large amounts of cash.  

How we determine the competitiveness and probable adjustments if any to export it. We focus in our potential market in our case the closest and more attractive USA. A visit is scheduled to analyze competition and probably channels.

Determining its competitiveness

We have our own formula and is based as follows: sale price (included cost for adjustments), plus handling, freight, duties, fees and commissions if any, the sum is multiplied by a factor depending on its category. Final result, the Product is very competitive in price besides there are no similar products with same characteristics found on store shelves.

PHASES

1. In the US, a Marketing professional is hired to create brand name and container shape, an Editor for label design, romantic story and Product characteristics.

2. A questionnaire is structure with the final results and a food tasting is organized. We hired 30 people from the same profile as the potential channels. Three options are tasted, two are chosen, four brand Names are presented, two are selected in case one of them is not available, the label design and text is finalize and container shape is decided.  

3. Selected name, label and container shape are registered in EU. Later, registration will be made before the FDA. Insurance will be acquired since the Product is for human consumption.

4. The local Product is packed in a plastic container and its capacity is not auspicious for the market. Decisions to use glass for longer shelve life and freshness. We found a Mold company to manufacture the new glass container; a factory is located for its production. Note. This container model and new name will allow the company to approach upper level Mexican clients.

5. Packing a master box with 12 pieces and inners boxes of 4 units. There are chains with different store sizes and these two can be used in either case. The other packing is 12 units per master box, with protective cells.

6. Sale prices are determined, from origin (FOB), or port of entry (CIF), or if it is delivered directly to stores (Drop Ship) in this case, inventories must be kept in the US. This would turn us into wholesalers thus, obtaining an additional channel Independent Store (Mom's & Pop's). A policy is established to receive payments. Will negotiate with several banks to get best and better conditions, including Factoring.


MARKET NOTE

Being a new product, initial orders will be small; the factory will take advantage of surpluses and, if necessary, will eliminate delinquent and difficult customers. The idea is to grow with future customers. It will be not necessary to train the factory personnel in export, since a "Check-List" will be elaborated for the different scenarios.

7. How to achieve the consumer to select our Product from similar, without huge advertising campaigns? Years of experience has taught us; competitive price, attractive packaging, eye-catching name, romantic story on hanging tag and, emphasizing the fact that the Product is made in country of origin is the trigger. In the USA there are all types of regions and customers for their consumption.

“International Trade is not a set of rules, laws or free trade agreements, is a number of details”   ARC

MARKET NOTE

Currently there are hundreds of exportable products that manufacturers ignore, others that with minor adaptations can become exportable. Also if, manufacturers eliminated additional costs when selling locally, thousands of exportable products would be available!

Examples of some goods adapted for export:

  • Camping Stove.
  • Tableware design, adapted to Parson Table.
  • Changing packaging, with additional use.
"ALL PRODUCTS ARE EXPORTABLE"
"Wanting to acquire experience only with theory, is like wanting to satisfy hanger just by reading the menu" Anonymous.

Alberto Romo Chávez D.

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www.alroexport.com

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