Steps to InternationalDevelop an Market Strategy · ¾Select your channel partners with care...

CXOCXOAdvisory Group

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

November 2009

Steps to Develop an

InternationalMarket Strategy

2000 - 2009 © CXO Advisory Group


Anyone Can Go GlobalAnyone Can Go Global

Doing it Doing it ProfitablyProfitably

Is the RealIs the RealChallengeChallenge



Common Exporter Mistake #1Common Exporter Mistake #1

Insufficient Insufficient Commitment By Commitment By

ManagementManagement




Going Global Going Global Before Domestic Before Domestic Market is Fully Market is Fully

EstablishedEstablished




Failing to DevelopFailing to DevelopA FullA Full

GoGo--ToTo--MarketMarketPlanPlan



Plan Your Entry into the ChannelPlan Your Entry into the Channel

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



Market SelectionMarket Selection

So Many ChoicesSo Many Choices




Using Wrong Using Wrong Criteria for Criteria for

Selecting Markets Selecting Markets to Enterto Enter




Trying to Enter Too Trying to Enter Too Many New Markets Many New Markets

at One Timeat One Time



Selecting Your Market: Ease of EntrySelecting Your Market: Ease of Entry

Netherlands, Nordic, Benelux, Germany, France

UK, Australia, New ZealandCanadaSimilarity to US

Business Models

1 2 3

LanguageCanada, UK, Commonwealth Countries

Nordic, the Netherlands

Germany, Spain, Eastern Europe

Employment lawsCanada, 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




Failing to Establish Failing to Establish a Budget Up Fronta Budget Up Front



Creating Effective BudgetsCreating 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 Not Localizing The ProductThe Product



Localization Localization -- MarkingMarking

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



Localization Localization –– Labeling, Labeling, Packaging & DocumentationPackaging & Documentation

Requirements vary from country to countryLanguage• May have Multi-

Lingual requirementCountry of OriginMay be layers of Labeling BEWARE: Regulations and Reality may DIFFER



Localization Localization -- StandardsStandards

US Standards are NOT universally acceptedKnow the Standards you have to MeetCE Mark – European UnionCCC – ChinaNOMS – MexicoISO




Running Afoul Running Afoul of US Export of US Export RegulationsRegulations




Selecting the Selecting the Wrong Wrong

Distribution Distribution ChannelChannel



Sales Channels Sales Channels –– The RealityThe 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.



Sales Cycle Stage

Know Your Customers Buying ProcessKnow Your Customers Buying Process

Customer’s Cycle Objective

Discover NeedIdentify Business GoalsQuantify Impact & ROI

DeliverCloseProposalQualifyProspectIdentify

Seek SolutionResearchFind VendorsGet Information

Review Vendor MaterialsDetermine Total Scope of ProjectRFQTiming & Budgeting

Agree on Solution and Project Specs.Coordinate Buying ProcessConfirm timing & BudgetSelect Vendor

Check ReferencesValidate Proposal EstimatesChoose VendorSign off ApprovalsContract signedPurchase Order

Start ImplementationAssign ResourcesStart TrainingManage ProjectPay Bills



Channel StrategyChannel Strategy

Must start with the customerHow 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 Distribution Channels -- Examples Examples

Direct salesStrategic partnersCorporate resellersMaster or local distributorsIntegratorsValue-added resellersManufacturer’s agents

BrokersFranchisesTelemarketersInternet sitese-MarketplacesRetailAgents (consultants, affiliates, etc.)



Comparison of Major ChannelsComparison of Major Channels

High

Medium

Low

Low

Medium

Low

Low

Slow

Retail

LowLowLowHighMediumHands-On Sales/Marketing Support

HighLowHighLow/MediumLowRisk

LowMediumMediumLowMediumAccess to New Partners

HighLowMediumLowLowDevelopment of In-House Expertise

HighMediumHighLowLowCost of Sales

HighMediumHighLowLowBrand Control

HighMediumHighLowMediumManagement Control

SlowMediumMediumMedium/FastSlowTime to Market

SubsidiaryJoint VentureAcquisitionDistributor/VARAgent/Rep



Channel Value Add Channel Value Add

ValueAddOf Sale

Cost per Transaction

High

Low

HighLow

InternetInternet

Tele-marketing

Tele-marketing

RetailStoresRetailStores

Dis-tributors

Dis-tributors

VAR’sVAR’s

FieldSalesFieldSales

“Low Touch Channels”

“High Touch Channels”

Direct ChannelsIndirect Channels

Direct

Sales

Channel



Direct SalesDirect Sales

DedicatedControl message to the marketCustomer contactCompany loyaltyControl the BrandPriorities (focus) or products

Expensive!!!!• Accounts receivable• Inventory• Expenses• Employment costs

Slow ramp upLimited coverageLabor laws

Pluses Minuses



Joint Venture or Strategic PartnershipJoint Venture or Strategic Partnership

Quick penetration – less riskEstablished market presenceProvides localization of productHandles all marketing, sales, distribution & supportProvides ongoing market analysisProvides ongoing competitive analysisUsually won't carry competing productTough sale – long sales cycle



Approaching a Potential Approaching a Potential Joint Venture or Strategic PartnerJoint Venture or Strategic Partner

Be Ready to Explain Key Product AdvantagesDo 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

productsHow easy it will be to work with youSupport you will give them

• Technical• Training



Key Issues Licensing AgreementKey Issues Licensing Agreement

Specs & DeliverablesAcceptanceGrant of LicenseTermsPaymentsBookkeeping RequirementsOwnershipUse of TrademarksTrainingDecision Making Authority

Marketing ObligationsList Price of ProductPerformance RequirementsWarrantiesLimitation of LiabilitiesDevelopment SupportRights to UpdatesTerminationSource Code Access



DistributorsDistributors

Sells to other channel players within designated areaTakes title to goods and is compensated by mark-up upon saleSells suppliers goods to his own customersNo authority to act on your behalfMaintains InventorySells in original packagingMay or may not provide after sales servicesMany products are taken on consignment basis



Distributor Network IssuesDistributor Network Issues

Exclusive v’s non exclusiveTerritory coveredPeriod, renewal, notice to terminatePerformance requirements (quarterly/annual)Poor performance cure periodsCross territory salesOEM sales Global account sales to multi national corporationsAppointment of additional distributors



Manufacturers Agent/Commercial Manufacturers Agent/Commercial AgentAgent

Alternative to own sales forceBoth authorized to solicit orders in designated areaReceive salary or commissionUsually bear no credit riskMaintains no inventoryRequires same support & training as internal salesforceCarries several linesReferences, References, References



Agent IssuesAgent Issues

Exclusive v’s non exclusiveTerritory coveredCommission ratePeriod, renewal, notice to terminatePerformance requirements (quarterly/annual)Poor performance cure periodsCross territory salesOEM sales Global account sales to multi national corporationsAppointment of additional agents



The International Marketing PlanThe International Marketing PlanProgram

Coverage modelValue propositionBusiness rulesSales modelPricingSales Support modelCustomer Support ModelBudget

StrategyGoalsTarget MarketProductCompetitionChannels

• Roles• Alignment

ExecutionMedia CampaignCommunicationIncentivesEducation Outsourcing



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

Marketing materialsLocalized website and URLs – CLAIM YOUR NAMEPrice listsOutline of your marketing campaign – Demand CreationProduct samples – Packaging (LOCALIZED)MDF funds and campaignsIn-store merchandisingProspect & customer correspondenceSales training for their personnelSales supportEnd user trainingEnd user support



Key Points That Can Make a DifferenceKey Points That Can Make a Difference

Select your channel partners with careDevelop a mutual agreed performance plan that is measureableHave realistic expectationsTop management commitmentFocus, Focus, FocusLong Term ViewClear understanding of end-user targets and their alignment with channel partnersDevelop comprehensive business rules for managing program processes



Key Points That Can Make a DifferenceKey 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 salesReview your channel strategy yearly

• Identifies potential destructive channel conflict• Tune channel support programs




Ignoring Your Ignoring Your International International

Markets When Markets When the US Market the US Market is Doing Well.is Doing Well.

Lost MarketOpportunity



QuestionsQuestions


Stephen DavisStephen Davis

Phone: (508) 528-7571Email: [email protected]: www.cxoadvisorygroup.comLinkedin: www.linkedin.com/in/stephendavisTwitter: twitter.com/stephendaviscxo

Interim COO/VP Sales & Marketing | Business Consultant | Sales Channel and Business Development Expert | Author & Speaker

Contact Information:

“Partnering With Clients to Drive Sustainable Profitable Growth”



The CXO Advisory GroupThe 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?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

programsMarket 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


Stephen DavisStephen DavisInterim COO/VP Sales & Marketing | Business Consultant | Sales Channel and Business Development Expert | Author & Speaker

Contact Information:

“Partnering With Clients to Drive Sustainable Profitable Growth”

Phone: (508) 528-7571Email: [email protected]: www.cxoadvisorygroup.comLinkedin: www.linkedin.com/in/stephendavisTwitter: twitter.com/stephendaviscxo

Steps to InternationalDevelop an Market Strategy · ¾Select your channel partners with care...

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