• Product

The first question that a businessman should ask upon placing goods in the market is: what is the product? According to IIC, a product is the total sum of varying assets that add value to the raw material: natural, technological, financial, and human.   

What does adding value entail? Added value is what helps a commodity differ from that of its competitors. It does not necessarily have to have a high cost to yield great profit. The key words upon considering how to add value are: creativity and customer preference.

Added value helps differentiate a commodity from that of its competitors

After identifying the product and the value that can be added, the entrepreneur must think of a strategy to adapt the product to the new geographical markets: it must identify the features that consumers and distributors demand in that market niche in order to effectively enhance and communicate the product. It can be adapted through labeling, design, wrapping and packaging or through cultural or language aspects, among others.  

• Price

The second aspect to consider is price, which can be defined as “the payment or compensation amount that a party delivers to the other as consideration for its services,” says IIC. Price impacts sales levels (because the cheaper brands sell more, although they obtain less profit per product), market share (in terms of similar products) and profitability (this is essential since once a price has been set it is difficult to change it). 

How can we determine the price of a product? According to IIC there are many factors that have to be taken into account such as production cost, the cost to access the market, marketing costs, target labor costs, taxes, buyers’ purchasing power, the image you wish to transmit regarding the product, certifications, and the cost of positioning the product in the market. Once all this data has been obtained, the businessman or woman must determine the price in accordance with the cost of production including the cost of raw material as a fixed cost and then add a profit margin.

• Place

A third aspect to take into account is how and where to distribute the product. In this regard, the businessman must consider: the businessman’s distribution network (super stores, convenience stores, and specialty stores), the distributor’s capacity to track orders and the profit margin that the distributor expects to obtain upon marketing the product.

In addition to these specific elements there are other general factors to be taken into account such as extra prices related to export procedures; if the product can be transported easily; or how the brand’s image is managed generally abroad.

• Promotion

The last aspect to evaluate is the product’s promotion: How can we position the brand? How can we generate consumer curiosity? How can we obtain consumer loyalty in the new market? How can we gain new consumers?  

SMEs have the possibility of promoting their products by attending trade fairs, “it is an essential step in many markets,” affirms IIC. Attending these events helps to obtain better information, to probe the market, identify and contact customers and execute sales or representation agreements.