Fear Factor Asia

Trade AreaMarketing Group

Harry Falber203.557.4150 (office)203.858.0279 (mobile)[email protected]@gmail.com

Fear Factor – AsiaWhat you don’t know,

you don’t knowand why you should not fear going

to market in Asia (or other emerging markets for that matter)



What is so mysterious about doing business in Asia?

Nothing

And

Everything



A brief idea of what you will need as a foundation to go to market.

What type of learnings are necessary And what type of market intelligence is

necessary so when you invest in going to Asia, you will know that there is a lot you don’t know…

and you can begin to do something about that – from the get-go.

What can you hope to gain from a few short minutes together?



The first thing?

We all think

CHINA

We all should think…



We should all think…..SingaporeThailandKoreaMalaysiaVietnam (safest country)Philippines (90% literacy – English primary language)Japan (in spite of aging market– want the best of the bestIndia (world’s largest middle class)IndonesiaAustraliaNew Zealand China (Taiwan, Hong Kong) – great quality in goods…….and others.



What is the point of thinking Pan-Asia vs. China?Simple. Virtually all the countries are

emerging as opportunities to conduct business in – either selling or buying.

And many of them have an economic backbone of “middle class” consumers that are aspiration oriented



This is what Carrefour has said(the biggest retailer in Asia)“We are expecting a great deal from this area.

We have been doing business in Asia since 1989, and we are very familiar with local customs and trends. We believe the rapid changes in consumer patterns in the countries where we do business are promising.

Asia is the continent with the greatest potential for long-term growth for the Group”



This is what Wharton’s Professor Zang said (marketing focused on retail, pricing advertising,etc.)

“The country is moving very fast. Never in my dreams could I imagine that a country this big with this many people could move so fast. It’s astonishing to me, and probably to most people in the world”



But while it all may sound rosy, you need to understand the dynamics going on

• Northern Asia: Politically expected to remain stable, and economic growth will be positive.– Korea: Middle class expected to grow, purchasing power of young,

married adults will grow and convenience/fashion items will be attractive

– China (PRC): Economic trends with eye on world-class political and financial clout married to “old way” networks (PRC estimated to have min 40% of total world textile business), and Olympic hosting will help drive purchasing power and interest in convenience food. But many foreign investors say China is already the most competitive market in the world, and it's likely to get tougher

– Japan: Emerging from 17 year old recession, older married couples having first child, and dual incomes will help grow home product categories, but it is an aging market




•Southern Asia: Politically expected to remain unstable for ‘10. warnings signs are prevalent.

–Philippines: 90mm population but 68% below poverty, political instability/terrorism/military build up, one of most dangerous places for journalists in world –Thailand/Malaysia: business environment predicated on unknowns that may effect shipping and manufacturing business - impacting on purchases of premium products but on the positive side, becoming a center for best of breed medical procedures




•Sub-continent–India continues to have high trade barriers for entry.–You definitely need a “guide” to navigate the waters of entry -- both financial and political–It is the largest middle class in the world, but there are few big stores for distribution of products and you need to rely heavily on strong distributors



That not withstanding – each of you should examine the great potential of Asia

•40%+ of all wooden furniture is now coming out of China to US•With China’s “almost fully executed” commitments to the WTO including most WFOEs (wholly foreign-owned enterprise), all the other Southeast Asian countries will grow by the “spill over” effect from China not keeping pace with the needs and production goals of manufacturers as global economincs improve.



The real question today is how do you go to market and where do you start.



To start, you can pay men and women like me from the to do all the work, or begin the education on your own



Export.gov is the place to start

• What is Export.gov?Export.gov is the portal to all export-related assistance and market information offered by the federal government. Whether you're looking for trade leads, free export counseling, or help with the export process, Export.gov is your first step in growing your international sales. Export.gov Newsletter

• Register to receive monthly updates on feature articles, trade events and new market reports.



And you can go visit (hands on learning is the best learning – gives you all sorts of competitive intelligence)



Nor is it expensive to go



There is a wealth of information here



There is a wealth of information you can link to



And other sites that are just as comprehensive as the “dot gov” site.



But you need to take the first step• Export Phobia

Fear comes naturally to anyone new to exporting. Fear of the unknown, or lack of information, is one of the reasons that many businesses that are doing well nationally are reluctant to engage in exporting.

• Fear of the unknown encourages deeper thinking. By thinking and careful planning, the risk of failure in exporting can be reduced. Never allow fear to impede exporting. Exporting is vital to the growth and prosperity of the company and the country.

• The process of exporting is not like a walk in the park. Neither is the process like mastering Beethoven's piano sonatas and concertos. Exporting is never easy but it can be learned and can be done well. The process of exporting is challenging! (from Export911)



And steel yourself for a rollercoaster experience• Export Mindset

The business ground is a battleground. Exporting, like any other business, involves risks. It is necessary to prepare for the challenges and the consequences. Engaging in exporting is akin to engaging in a war. It is a war of price, quality, delivery and service. It is a battle for the business orders. It is a fight for the company's survival---profits and growth. In practice, rough strategies are often used by some exporters in order to win contracts.



It won’t be easy

Overnight export success will not happen. Short-term export profits rarely occur. Exporting requires long-term commitment from management and employees. Dedicating long hours to the business is necessary, especially for the fledgling exporter.



Remember, it’s a rollercoaster ride not a trip in a Mercedes

• New exporters will usually encounter lots of unanticipated problems.

• Problems cannot be solved by panicking. • There is always a solution to a problem. • Learning from experience is indispensable.



And that’s where a plan comes in

• Here is the way I would go about the first 90 days after biting the bullet and saying I want to jump into business in Asia



I. Gain Understanding of Country Sales and Distribution Practices

Detail Current Sales & Distribution Practices from Strategy Development/Account Specific Plan Implementation to Management Controls among competitors, if any

Document Sales Planning practices related to sales volume, goal setting and attainment to key business drivers (Distribution, Shelving, Merchandising, & Pricing)

Evaluate Criteria being used to capture key learnings influencing past business performance and support future planning.

100 day action plan



Develop Competitive Knowledge Base

Gain Marketplace Insights to Trade and Supply Chain Practices, and Retail Conditions

Evaluate Wholesaler and Distribution Networks

Develop Criteria for Wholesale and Distribution Partners



About that “Distributor”Ask how they will:

• Do Sales Planning from Volume Goal Setting to Budget Establishment

• Work with you on Account Planning with respect to Distribution, Shelving, Merchandising, and Pricing

• Agree to Trade Terms and Conditions of Sale

• What they will do on their own for Instore Promotional Activity (Push Girls, Slotting fees, Extra Display, etc.)

• What are the Key Account handling systems, practices, and competencies

• Run your Sales Management Team

• Manage in country logistics

• Distribution by Trade Type

• Distribution by Account

• Controls, Controls, Controls and Reporting



Sales Development Action Plan

Develop Competitive Knowledge Base

Gain insights into who is doing what

Marketplace Success

Retail Clout

Trade Relationships

Wholesale/Distribution Network Sales

Go-To-Market Strategy

Sales Force Profile/Size



Sales Development Action Plan (continued)

Perform Comprehensive Marketplace Assessment

Trade Assessment

Conduct Trade Interviews in HQ of Global and Key Local retailers to probe and gain insights into:

Development Strategies

Management Styles

Economics

Supplier expectations and supplier best practice

Wholesaler-Distributor AssessmentInterview principals and sales managers of Prospective Wholesalers

Probe current capabilities, and development potential

Develop criteria for the selection of suitable wholesaler partners by region/city



Sales Development Action Plan (continued)

Formulate a Best Effort Sales Plan

Work closely with in-country team to develop comprehensive Sales Plan

Develop Sales Planning Process

Develop ‘Go-To-Market’ Strategy

Identify Trade Terms and Conditions

Margin Strategy

Price Lists

Discount and Rebate Plan

Provide Criteria for Distribution / Wholesaler Selections

Key Requirements

Decision Selection Template



Thank you… and welcome to the world of doing business

in (Pick a country, almost any country that’s an “emerging market”) .

You’ll love it.

Fear Factor Asia

Documents

Transcript of Fear Factor Asia