Steps to Develop an


Not credible to reseller. • Cannot be strategic or ... Value-added resellers. ➢ Manufacturer's .... COO, and VPs of Sales, Marketing, Corporate. Development and ...

CXO Advisory Group

Steps to Develop an

International Market Strategy Stephen N. Davis “Partnering With Clients to Drive Sustainable Profitable Growth”

November 2009

Anyone Can Go Global

Doing it Profitably Is the Real Challenge CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #1

Insufficient Commitment By Management CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #2

Going Global Before Domestic Market is Fully Established CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #3

Failing to Develop A Full Go-To-Market Plan CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Plan Your Entry into the Channel

“If you don’t know where you’re going you’ll probably wind up somewhere else”

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Market Selection

So Many Choices

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #4

Using Wrong Criteria for Selecting Markets to Enter CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #5

Trying to Enter Too Many New Markets at One Time CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Selecting Your Market: Ease of Entry 1

2

3

Canada, UK, Commonwealth Countries

Nordic, the Netherlands

Germany, Spain, Eastern Europe

Similarity to US Business Models

Canada

UK, Australia, New Zealand

Netherlands, Nordic, Benelux, Germany, France

Employment laws

Canada, UK, Australia, New Zealand

Nordic, Netherlands

France, Germany, Italy

Market Size

Canada, UK, Germany, France

Italy, Spain, Nordic

Eastern Europe

Least Amount of Corruption

Canada, UK, Nordic, Netherlands, Germany

France, Belgium, Spain

Italy, Greece, E. Europe

Language

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #6

Failing to Establish a Budget Up Front

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Creating Effective Budgets ¾

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 •

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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 •

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #7

Not Localizing The Product CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Localization - Marking

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Requirements vary from country to country Made in USA has different meanings around the world

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Localization – Labeling, Packaging & Documentation ¾ ¾

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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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Localization - Standards ¾ ¾ ¾ ¾ ¾ ¾

US Standards are NOT universally accepted Know the Standards you have to Meet CE Mark – European Union CCC – China NOMS – Mexico ISO

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #8

Running Afoul of US Export Regulations CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #9

Selecting the Wrong Distribution Channel CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Sales Channels – The Reality “A product with better distribution will always win over a product with poor distribution or customer access”

It’s not fair. It’s not right. But, it’s reality.

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Know Your Customers Buying Process Sales Cycle Stage

Customer’s Cycle Objective

Identify

Prospect

Discover Need

Seek Solution

Identify Business Goals

Research

Quantify Impact & ROI

Get Information

Find Vendors

Qualify

Review Vendor Materials Determine Total Scope of Project

Proposal

Agree on Solution and Project Specs.

RFQ

Coordinate Buying Process

Timing & Budgeting

Confirm timing & Budget Select Vendor

Close

Deliver

Check References

Start Implementation

Validate Proposal Estimates

Assign Resources

Choose Vendor

Manage Project

Sign off Approvals

Pay Bills

Start Training

Contract signed Purchase Order

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Channel Strategy ¾ ¾ ¾

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

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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?

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Distribution Channels - Examples ¾ ¾ ¾ ¾ ¾ ¾ ¾

Direct sales Strategic partners Corporate resellers Master or local distributors Integrators Value-added resellers Manufacturer’s agents

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Brokers Franchises Telemarketers Internet sites e-Marketplaces Retail Agents (consultants, affiliates, etc.)

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Comparison of Major Channels Retail

Agent/Rep

Distributor/VAR

Acquisition

Joint Venture

Subsidiary

Time to Market

Slow

Slow

Medium/Fast

Medium

Medium

Slow

Management Control

Low

Medium

Low

High

Medium

High

Brand Control

Low

Low

Low

High

Medium

High

Cost of Sales

Medium

Low

Low

High

Medium

High

Development of InHouse Expertise

Low

Low

Low

Medium

Low

High

Access to New Partners

Low

Medium

Low

Medium

Medium

Low

Risk

Medium

Low

Low/Medium

High

Low

High

Hands-On Sales/Marketing Support

High

Medium

High

Low

Low

Low

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Channel Value Add High “High Touch Channels”

Value Add Of Sale

Low

Field Field Sales Sales

VAR’s VAR’s DisDistributors tributors

“Low Touch Channels”

Internet Internet

TeleTelemarketing marketing c Dire

Retail Retail Stores Stores

els n n Cha t c e r Indi

ct Di r e s e Sal nnel Ch a

ls nne a h tC

Low

High

Cost per Transaction

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Direct Sales Pluses ¾ ¾ ¾ ¾ ¾ ¾

Dedicated Control message to the market Customer contact Company loyalty Control the Brand Priorities (focus) or products

Minuses ¾

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Expensive!!!! • Accounts receivable • Inventory • Expenses • Employment costs Slow ramp up Limited coverage Labor laws

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Joint Venture or Strategic Partnership ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Approaching a Potential Joint Venture or Strategic Partner ¾ ¾

Be Ready to Explain Key Product Advantages Do Your Homework •

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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 •

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Key Issues Licensing Agreement ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

Specs & Deliverables Acceptance Grant of License Terms Payments Bookkeeping Requirements Ownership Use of Trademarks Training Decision Making Authority

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Marketing Obligations List Price of Product Performance Requirements Warranties Limitation of Liabilities Development Support Rights to Updates Termination Source Code Access

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Distributors ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Distributor Network Issues Exclusive v’s non exclusive ¾ Territory covered ¾ Period, renewal, notice to terminate ¾ Performance requirements (quarterly/annual) ¾ Poor performance cure periods ¾ Cross territory sales ¾ OEM sales ¾ Global account sales to multi national corporations ¾ Appointment of additional distributors ¾

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Manufacturers Agent/Commercial Agent ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Agent Issues Exclusive v’s non exclusive ¾ Territory covered ¾ Commission rate ¾ Period, renewal, notice to terminate ¾ Performance requirements (quarterly/annual) ¾ Poor performance cure periods ¾ Cross territory sales ¾ OEM sales ¾ Global account sales to multi national corporations ¾ Appointment of additional agents ¾

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

The International Marketing Plan Strategy

Program

Execution

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¾

¾

¾ ¾ ¾ ¾

Goals Target Market Product Competition Channels • •

Roles Alignment

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Coverage model Value proposition Business rules Sales model Pricing Sales Support model Customer Support Model Budget

¾ ¾ ¾ ¾

Media Campaign Communication Incentives Education Outsourcing

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Is Your Buyer Package up to Snuff? ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Key Points That Can Make a Difference ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Key Points That Can Make a Difference ¾

Take inventory of your partners Does the 80/20 rule apply? • Build profiles based on successful partners • Align internal resources based on contribution •

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Invest in your partners Marketing • Training • Support • Web •

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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Common Exporter Mistake #10

Lost Market Opportunity

Ignoring Your International Markets When the US Market is Doing Well. CXO Advisory Group

2000 - 2009 © CXO Advisory Group

Questions

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

CXO Advisory Group

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 [email protected] www.cxoadvisorygroup.com www.linkedin.com/in/stephendavis twitter.com/stephendaviscxo

The CXO Advisory Group ¾

CXO Advisory Group is a strategic operations advisory and management firm comprised of proven C-level executives with both breadth and depth of experience.

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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.

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Has proven success in business development and in building US sales and distribution channels

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

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

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

How Can CXO Help You? 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 •

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

How Can CXO Help You? Venture Advisory Services Fine tune operations, business strategy and market entry • Assist with due diligence • Strategic business assessment of portfolio companies •

CXO Advisory Group

2000 - 2009 © CXO Advisory Group

CXO Advisory Group

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 [email protected] www.cxoadvisorygroup.com www.linkedin.com/in/stephendavis twitter.com/stephendaviscxo

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