Product Analysis And Selection

My post today is on product analysis and selection,and I hope you will benefit from this information,in relation to your company's readiness to export.
Product analysis and selection is a very important area in the export business,especially for new entrants.It involves the consideration of various factors that come to play in the success of international business.Product selection has come to be identified as the most difficult aspect of the export business as against legal or even financial input with the various technical requirements.
Reason for the above difficulty can be explained by the fact that there is no single rule in the analysis and selection of products.In Nigeria we have several product manufacturers and commodities that each has its peculiar rules.The problem,therefore,is not only that of analyzing and selecting,but identifying and selecting the right product for your identified market.

The right product
What constitutes a right product differs from one entrepreneur to another.A product is considered right if it gets the exporter started as quickly as possible and has a good chance of paying the export returns.However,the exporters are advised by experts to get other products that can pay back rather than remaining at the planning stage,waiting for the perfect product that may not come.Don't forget that what appears to be right product for now may not be part of your business in the next few years.These first export products are used to develop the ideas and ways of doing business in international market.Experience,changing requirements and your business growth will certainly differ considerably as subsequent products are exported to the international market.
Bearing in mind that export business is opportunistic in nature,there is need to do proper analysis to determine the right products,and the plans must not be too rigid.It is not enough to decide on your general direction and let the details work themselves out with time,without the advice of a consultant.
The major objective of conducting a product analysis is to crystallize the financial and other resources that would be needed to bring a product idea to commercial reality.It further provides the basis for the metamorphosis of product ideas into detailed written proposals,which form the core for management decision-making process.
In analysing a product,care should be taken so that ideas,which don't seem good,are dismissed outright because of a lack of vision,while a poor product idea or information is passed through the screening stage.Nevertheless,a proper screening or analysis is not a guarantee for good product performance in the market place as there are several factors that determine this.Product analysis is done in two stages.

Objectives and Resources
This stage relates the product idea to the company objectives,financial resources and capabilities.The questions here are:Is the product idea compatible with the company's objectives in terms of profitability,return on investment,maintenance of corporate image,etc?It requires determining as accurately as possible the sales and profit volumes,product life span,risk,level of investment and recovering time.This stage also considers the company's available financial resources needed for commercializing an idea.Even though this exercise may be guesswork at this stage,a disciplined analysis of ideas at this stage can avoid wasteful commitment of resources.
Usually,ideas should have ratings to be considered worthwhile for investment.But this is not to say that those,which did not meet all the conditions,should be swept under the carpet.They should rather be kept in view as things change.Or better still,a remedy is found for those loopholes.For instance,if a product idea is compatible with the profitability and return on investment of the company but lacks th technical and professional resources for commercializing rather than discard the idea,the company should investigate how the available technical and professional resources can be improved,say,by in-house training schemes or by sending personnel on courses.

Competitive Strong Point
This second stage analysis of the product is from the standpoint of its potentials in enabling the company take maximum advantage of its competition.It starts by reviewing your company's competitive strengths and weaknesses,which are routinely carried out annually or whenever there is an activity that will significantly affect the company performance.Such spheres of performance factors as company personality and good will,marketing,personnel,research and development,finance production,etc are considered,though there is no hard and fast rule about what constitute the factors to be considered.
The company should carry out this review vis-a-vis those of its competitors to enable it determine which area its competitors has strong points and weak points,to take advantage.This information cannot be traded for anything.
From the two stages of product analysis and selection,one can conclude that passing the product through the first stage provides you with a disciplined but generalised estimates of the process and desirability of making and marketing the envisaged product.While the second stage suggests the ideas that pass the first test to a more vigorous competition-conscious screening.However,the firm can do the first stage,which requires only a sound business sense and a general knowledge of company activities,but the second stage will require the assistance of specialists or a consultant.
You can see from the foregoing that the processes of determining the right is not an easy task.On a cautious note,you are advised to check your preferences,through your export consultant,before commiting yourself to the product.In addition,you are warned of the get-rich-quick schemes that ensnare the business terrain.Do not jump at mouth-watering offers,or you will burn your fingers.

Your company
Here,strength,weakness,opportunities and threat (SWOT) analysis has to be done to determine the company's ability to go into export business.Its financial strength to accommodate risks,skilled personnel,who will withstand any difficulty that may arise from the business transactions,and to what extent can they cope with disappointment.The SWOT analysis is imperative,considering the ruthless nature of international market.You cannot make amend to documents or business proposals,like you do in the domestic market.The means of transport to be adopted for export,should take into consideration financial capability,product and delivery terms,etc.Your company's ability to guarantee quality of product is not negotiable in international trade.The issue at stake is that of credibility and ability to deliver as a responsible and responsive company,when required.With these obvious complexities,a skilled person has to be in charge of a company's export desk,in other to maximise profit and growth.

Cheers to your success.