It ain’t gonna be easy
I have trouble understanding why Americans think that selling to a foreign country is easy. Many times they feel they can go to Asia, open a briefcase and start selling. This myth exists on the buying side of the equation as well. The streets are littered with entrepreneurs who feel they can just go get their product made in China even though they know nothing about China and may not understand production techniques and country/cultural variables either. If it was easy to buy and sell overseas, everyone would do it. American firms fail 82% in global business dealings.
It ain’t gonna be cheap
Everything about doing business overseas costs money. Sales, marketing, product enhancements, travel and a team of knowledgable executives all cost money. There are many government agencies that offer their services for free (or near free). But those agencies (even if they don’t collect a dime from you) don’t negotiate, educate, stimulate demand, collect your receivables and deliver product for you. All of those services (plus the ones you will have to add) have a price tag…and it usually isn’t a mysterious commission. When firms are under funded and look to expand globally, they probably ain’t gonna succeed.
Click on this little chart for quick myths and facts about Global Business
BUSINESS ISSUES OVERSEAS
Market Research: Identifying and Locating Buyers/Competitors/Market Forces
Are connections necessary in this market, and if so, is your firm connected in the market? Can you purchase these connections?
What is the size of the potential market, and is there an expressed market need?
What language does the market speak? Are there several languages or dialects? Do you have people who can communicate with them?
What are some of the available sources of information on potential buyers, written and personal, public and private? How does one assess the reliability of the information and the source?
Is the market organized, can you find information? Where are the written sources located and how can they be obtained?
How difficult is it to obtain non-sensitive “inside” information about a company?
How might an organization which is a potential buyer be structured? What is the typical hierarchy and where is the power likely to lie?
Where in the organization will the decision be made to buy or not to buy your product or service?
If the decision will be made by a single person, what is the probable title and what responsibilities would that person have?
If the decision is likely to be made by a group or committee, describe it. Is one function (i.e. Engineering, Finance, etc.) likely to wield the real power?
What are the relevant issues regarding protocol when approaching a potential customer?
What is the best Mode of Entry into this market, and are you comfortable with it? (e.g. licensing, co-production, co-branding, direct export).
￼Is there an image of business, in general, that is expected? Is there an image of the particular industry that is expected?
What characteristics do potential customers look for in a vendor? What characterizes a tarnished business image–one that would not make it through the front door?
What is the attitude in general toward the USA and American products and services?
What is the attitude toward advertising? Is it an acceptable means of company and brand promotion?
In some countries marketers marshal an array of advertising media and techniques to secure public awareness of their companies and products. Are those same devices accepted in the country under consideration? Are there any distinctive differences in that regard?
Is there a point at which the amount of advertising becomes offensive, or so ostentatious that it is self-defeating?
Are there any cultural taboos regarding which media are used or, particularly, about message content, including choice of words, colors, and graphics?
Are there advertising/promotional media that are considered essential for the participant’s particular industry? (For example, if a European publisher is not represented at the Frankfurt Book Fair it loses prestige, reputation and, presumably, orders).
Can you re-purpose any existing advertising?
Do you need local advertising, websites, business cards, or addresses?
Networking and Contacts
Are introductions essential?
Are there ways to meet key people in non-business settings that are more effective or acceptable than other means?
What are expected networking methods? What are accepted means of developing acquaintances and friendships among potential customers?
What is the attitude toward mixing business with pleasure? What is the usual behavior in this regard?
Is business entertaining by vendors desirable, expected or resisted? Is there a point before which a vendor should not extend such an invitation in order to avoid risking a negative impression?
If business entertaining is acceptable, where is entertaining expected to be done?
(At home, in restaurants, at the theater, at sporting events, or elsewhere)?
Is club membership important in meeting key business people? How easy is it to obtain such memberships? Is being an expatriate an advantage or disadvantage in obtaining club membership?
How involved does your family need to be?
Are there any cultural taboos regarding your gender?
Does this market require local sales talent?
In face-to-face meetings, are there any cultural conventions that the American sales person should observe?
Is the sales person held to a different ethical standard than is the population in general?
What are the possible negative consequences if conventions or standards are overlooked?
What traits or qualities are considered admirable for a sales person to display? What behavior is considered to be offensive?
Sales people in any culture must be assertive to a degree. At what point does assertiveness become interpreted as aggressiveness in this culture?
Are there specific selling techniques in this industry that are particularly effective in this culture?
How important is call preparation? How would a typical business person react to a sales representative who spent significant time during a face-to-face meeting asking basic questions about the company’s products, markets, etc.?
Is it necessary to work with administrative assistants? If so, what are some acceptable ways of winning over the administrative assistant or secretary who can block the sales representative’s access to a key decision maker?
How widespread is the use of American English in commerce?
How serious is a lack of fluency in the customer’s language or dialect? Is there any significant benefit to speaking the customer’s tongue?
American business conversation is liberally sprinkled with sports metaphors. What metaphors are commonly used in the culture under consideration?
The Purchase Decision
Is this an individual or collective decision?
Is the time taken to close a sale proportional to the value, size and complexity of the sale? Are negotiations conducted expeditiously or is the tempo slower, with the negotiations more formal and choreographed than in the U.S.?
What behavior might be interpreted as “American impatience,” and what would the reaction be?
What might be telltale verbal or nonverbal signs of indifference or hostility?
What are the key criteria leading to the first repeat orders? What priority might be assigned to?
o reputation of the vendor
o perceived quality of the product/service
o dependability of the vendor, e.g. timely delivery o kickbacks, bribes
o personal qualities of the company representative: – personality- trustworthiness, responsiveness to requests, complaints -other
o customer intimacy
Are there any unique aspects of the country’s commercial code (Napoleonic Code vs. English Common Law, for example) which will affect the Document of Sale?
Are contracts used?
What are the standard provisions in sales contracts?
Other than consistent timely delivery of quality products or services, what are acceptable means of maintaining good customer relations?
Gifts? Personal or with business logo? When?
How do you balance gift exchanges with your personal and company ethics?
Entertainment? What kind? Favors asked by the client? Extended time spent together?
What kind of relationship does your customer expect to develop with you? How is this relationship built and maintained?
What does the customer most value in this relationship?
What are the limits of the relationship?
How frequent is on-going customer/vendor contact for the purpose of maintaining the relationship?
How much information of a proprietary nature does your customer expect and want?
Can you get money in and out of the market?
Do you need to sell directly or through intermediaries?
Is the government a barrier or an aide to your progress?
Can you travel to the market easily?
Are the amenities necessary for you to conduct business available? Are offsets or investments required?
Are there quotas on your product?
Is your product being sold into a protected industry?
Are their prohibitive tariffs?
How will you handle disputes? Is this a pay-in-advance country? If not, are the players creditworthy?
Do you need a local partner?
Will in-country production be demanded? Are licenses easy or difficult to obtain?
Is Ecommerce practical in this market?
Are negotiations structured or loose?
How long do negotiations take in this market?
Can your firm invest enough resources to negotiate properly?
Are negotiations firm, or do they continue throughout the life of the relationship?
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