Developing Your International Market Strategy

International Strategy
Stephen N. Davis
Partnering With Clients to Drive Sustainable Profitable Growth
Steps to Develop an
Anyone Can Go Global
Doing it Profitably Is the Real Challenge

2000 - 2009 CXO Advisory Group
Common Exporter Mistake #1
Insufficient Commitment By Management
Going Global Before Domestic Market is Fully Established

Failing to Develop A Full Go-To-Market Plan

Plan Your Entry into the Channel

If you dont know where youre going youll probably wind up somewhere else
Market Selection
So Many Choices
Using Wrong Criteria for Selecting Markets to Enter

Trying to Enter Too Many New Markets at One Time
Selecting Your Market: Ease of Entry

1
Language
2
Nordic, the Netherlands UK, Australia, New Zealand
3
Germany, Spain, Eastern Europe Netherlands, Nordic, Benelux, Germany, France France, Germany, Italy Eastern Europe
Canada, UK, Commonwealth Countries

Canada Canada, UK, Australia, New Zealand Canada, UK, Germany, France Canada, UK, Nordic, Netherlands, Germany
Similarity to US Business Models
Employment laws
Nordic, Netherlands
Market Size
Italy, Spain, Nordic
Least Amount of Corruption
France, Belgium, Spain
Italy, Greece, E. Europe
Failing to Establish a Budget Up Front
Creating Effective Budgets
A program without a budget is a wish
Cancelled at any point Not credible to reseller Cannot be strategic or justified to management Costs cannot be measured or controlled
Must estimate costs of program design, implementation and management
Coverage, sales model, support model, value proposition Calculate as both cost of sales and return on investment
Not Localizing The Product
Localization - Marking
Requirements vary from country to country Made in USA has different meanings around the world
Localization Labeling, Packaging & Documentation

Requirements vary from country to country Language May have MultiLingual requirement Country of Origin May be layers of Labeling BEWARE: Regulations and Reality may DIFFER
Localization - Standards

US Standards are NOT universally accepted Know the Standards you have to Meet CE Mark European Union CCC China NOMS Mexico ISO
Running Afoul of US Export Regulations
Selecting the Wrong Distribution Channel

Sales Channels The Reality

A product with better distribution will always win over a product with poor distribution or customer access Its not fair. Its not right.
But, its reality.
Know Your Customers Buying Process

Sales Cycle Stage
Identify Prospect Qualify Proposal Close Deliver
Discover Need Identify Business Goals Customers Cycle Objective Quantify Impact & ROI
Seek Solution Research Find Vendors Get Information
Review Vendor Materials Determine Total Scope of Project RFQ Timing & Budgeting
Agree on Solution and Project Specs. Coordinate Buying Process Confirm timing & Budget Select Vendor
Check References Validate Proposal Estimates Choose Vendor Sign off Approvals Contract signed Purchase Order
Start Implementation Assign Resources Start Training Manage Project Pay Bills
Channel Strategy

Must start with the customer How many channel partners do I need? What channel partners should I have?

Build a channel partner profile Link to end-user targets Fit with existing channels What role do they play? Influence Sales Support Technical
How do I choose them? How do I measure them? How do I generate business for them? Do the financial requirements make sense for our company?
Distribution Channels - Examples

Direct sales Strategic partners Corporate resellers Master or local distributors Integrators Value-added resellers Manufacturers agents
Brokers Franchises Telemarketers Internet sites e-Marketplaces Retail Agents (consultants, affiliates, etc.)
Comparison of Major Channels

Retail Time to Market Slow Agent/Rep Slow Distributor/VAR Medium/Fast Acquisition Medium Joint Venture Medium Subsidiary Slow
Management Control Brand Control Cost of Sales Development of InHouse Expertise Access to New Partners
Low Low Medium
Medium Low Low
Low Low Low
High High High
Medium Medium Medium
High High High
Low
Low
Low
Medium
Low
High
Low
Medium
Low
Medium
Medium
Low
Risk Hands-On Sales/Marketing Support
Medium
Low
Low/Medium
High
Low
High
High
Medium
High
Low
Low
Low
Channel Value Add

High High Touch Channels
VARs
Field Sales
Value Add Of Sale
Low Touch Channels

Telemarketing
Distributors Retail Stores
Low
Internet
Low
High
Cost per Transaction
Direct Sales
Pluses
Dedicated Control message to the market Customer contact Company loyalty Control the Brand Priorities (focus) or products
Minuses Expensive!!!! Accounts receivable Inventory Expenses Employment costs Slow ramp up Limited coverage Labor laws
Joint Venture or Strategic Partnership

Quick penetration less risk Established market presence Provides localization of product Handles all marketing, sales, distribution & support Provides ongoing market analysis Provides ongoing competitive analysis Usually won't carry competing product Tough sale long sales cycle
Approaching a Potential Joint Venture or Strategic Partner

Be Ready to Explain Key Product Advantages Do Your Homework
Why should they be interested? Fills competitive hole Enhances existing product line Prevents having to compete against you You could develop market in your home country for their products
How easy it will be to work with you Support you will give them
Technical Training
Key Issues Licensing Agreement

Specs & Deliverables Acceptance Grant of License Terms Payments Bookkeeping Requirements Ownership Use of Trademarks Training Decision Making Authority
Marketing Obligations List Price of Product Performance Requirements Warranties Limitation of Liabilities Development Support Rights to Updates Termination Source Code Access
Distributors

Sells to other channel players within designated area Takes title to goods and is compensated by mark-up upon sale Sells suppliers goods to his own customers No authority to act on your behalf Maintains Inventory Sells in original packaging May or may not provide after sales services Many products are taken on consignment basis
Distributor Network Issues

Exclusive vs non exclusive Territory covered Period, renewal, notice to terminate Performance requirements (quarterly/annual) Poor performance cure periods Cross territory sales OEM sales Global account sales to multi national corporations Appointment of additional distributors
Manufacturers Agent/Commercial Agent

Alternative to own sales force Both authorized to solicit orders in designated area Receive salary or commission Usually bear no credit risk Maintains no inventory Requires same support & training as internal salesforce Carries several lines References, References, References
Agent Issues
Exclusive vs non exclusive Territory covered Commission rate Period, renewal, notice to terminate Performance requirements (quarterly/annual) Poor performance cure periods Cross territory sales OEM sales Global account sales to multi national corporations Appointment of additional agents
The International Marketing Plan

Strategy

Program

Execution

Goals Target Market Product Competition Channels
Roles Alignment
Coverage model Value proposition Business rules Sales model Pricing Sales Support model Customer Support Model Budget
Media Campaign Communication Incentives Education Outsourcing
Is Your Buyer Package up to Snuff?

Marketing materials Localized website and URLs CLAIM YOUR NAME Price lists Outline of your marketing campaign Demand Creation Product samples Packaging (LOCALIZED) MDF funds and campaigns In-store merchandising Prospect & customer correspondence Sales training for their personnel Sales support End user training End user support
Overseas Distribution Maturity Curve

Fully-owned operating subsidiary in the territory Commercial partnership with export distributor in the territory Export distributor supported by dedicated staff based in the territory Export distributor supported by Simple Export dedicated headquartersDistributor based staff
Key Points That Can Make a Difference

Select your channel partners with care Develop a mutual agreed performance plan that is measureable Have realistic expectations Top management commitment Focus, Focus, Focus Long Term View Clear understanding of end-user targets and their alignment with channel partners Develop comprehensive business rules for managing program processes
Key Points That Can Make a Difference
Take inventory of your partners
Does the 80/20 rule apply? Build profiles based on successful partners Align internal resources based on contribution
Invest in your partners
Marketing Training Support Web

Use the Internet to enhance partner sales Review your channel strategy yearly
Identifies potential destructive channel conflict Tune channel support programs

Lost Market Opportunity
Ignoring Your International Markets When the US Market is Doing Well.
Questions
Contact Information:
Stephen Davis
Interim COO/VP Sales & Marketing | Business Consultant | Sales Channel and Business Development Expert | Author & Speaker Partnering With Clients to Drive Sustainable Profitable Growth Phone: Email: Website: Linkedin: Twitter: (508) 528-7571 sdavis@cxoadvisorygroup.com www.cxoadvisorygroup.com www.linkedin.com/in/stephendavis twitter.com/stephendaviscxo
Driving Profitable Growth
We help companies optimize business development and marketing; accelerate sales; and seize the most attractive growth opportunities.
The CXO Advisory Group
CXO Advisory Group is a strategic operations advisory and management firm comprised of proven C-level executives with both breadth and depth of experience. CXO Advisory Group Team members have achieved success in positions ranging from: President/CEO to COO, and VPs of Sales, Marketing, Corporate Development and Human Resources. Has proven success in business development and in building US sales and distribution channels
How Can CXO Help You?

Business Strategy Services
Audit business practices and organization Evaluate product and pricing strategies Evaluate effectiveness of sales channel Assess effectiveness of existing sales and marketing programs
Market Entry Program

Analyze competitive landscape Market launch strategy and plan Channel strategy and programs Establish sales channels Generate sales and manage relationships Identify and develop strategic partnerships

Sales Channel Management
Review and revise sales channel strategies Channel partner identification, prospecting and recruitment Eliminate channel conflict Channel contract development and negotiation
Interim Management Resources
Interim CEO, COO, CMO, CSO Interim VP of Sales and Marketing Consultant on staff Launch team coaches

Venture Advisory Services
Fine tune operations, business strategy and market entry Assist with due diligence Strategic business assessment of portfolio companies
Driving Profitable Growth
Contact Information:
Stephen Davis
Interim COO/VP Sales & Marketing | Business Consultant | Sales Channel and Business Development Expert | Author & Speaker Partnering With Clients to Drive Sustainable Profitable Growth Phone: Email: Website: Linkedin: Twitter: (508) 528-7571 sdavis@cxoadvisorygroup.com www.cxoadvisorygroup.com www.linkedin.com/in/stephendavis twitter.com/stephendaviscxo

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International Strategy

Anyone Can Go Global

Doing it Profitably Is the Real Challenge

Common Exporter Mistake #1

Insufficient Commitment By Management

2000 - 2009 CXO Advisory Group

Common Exporter Mistake #2

Going Global Before Domestic Market is Fully Established

Common Exporter Mistake #3

Failing to Develop A Full Go-To-Market Plan

Plan Your Entry into the Channel

2000 - 2009 CXO Advisory Group

2000 - 2009 CXO Advisory Group

Common Exporter Mistake #4

Using Wrong Criteria for Selecting Markets to Enter

Common Exporter Mistake #5

Trying to Enter Too Many New Markets at One Time

2000 - 2009 CXO Advisory Group

Selecting Your Market: Ease of Entry

Canada, UK, Commonwealth Countries

Similarity to US Business Models

Italy, Spain, Nordic

Least Amount of Corruption

France, Belgium, Spain

Italy, Greece, E. Europe

2000 - 2009 CXO Advisory Group

Common Exporter Mistake #6

Failing to Establish a Budget Up Front

2000 - 2009 CXO Advisory Group

Creating Effective Budgets

A program without a budget is a wish

Must estimate costs of program design, implementation and management

2000 - 2009 CXO Advisory Group

Common Exporter Mistake #7

Not Localizing The Product

2000 - 2009 CXO Advisory Group

2000 - 2009 CXO Advisory Group

Localization Labeling, Packaging & Documentation

2000 - 2009 CXO Advisory Group

2000 - 2009 CXO Advisory Group

Common Exporter Mistake #8

Running Afoul of US Export Regulations

2000 - 2009 CXO Advisory Group

Common Exporter Mistake #9

Selecting the Wrong Distribution Channel

Sales Channels The Reality

But, its reality.

2000 - 2009 CXO Advisory Group

Know Your Customers Buying Process

Seek Solution Research Find Vendors Get Information

2000 - 2009 CXO Advisory Group

2000 - 2009 CXO Advisory Group

Distribution Channels - Examples

2000 - 2009 CXO Advisory Group

Comparison of Major Channels

Low Low Medium

Medium Low Low

Low Low Low

High High High

Medium Medium Medium

High High High

Risk Hands-On Sales/Marketing Support

2000 - 2009 CXO Advisory Group

Channel Value Add