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As
the world continues to shrink, John Q. Globalexec will need to speak
three, maybe four. Languages; have a degree from an internationally
recognized graduate business school; possess cutting-edge negotiation
and management skills; be an expert in the cultural, legal, and
political backgrounds of at least a score of countries; be informed,
well-read, and more than willing to travel anywhere in the world
at a moment's notice; personify all that's best in both sales and
marketing functions; be able to rise to any occasion, smile at the
right time, bow at the right time, pick the right wine with dinner;
and so on.
An
exaggerated scenario? Of course, but actually a lot closer to reality
than many business managers foresee or understand.
Anyone
with a week's worth of experience in the field knows that international
business is complicated, and any executive with international responsibilities
is an engineer at the throttle of an operations train that is hauling
more and more business as time goes by.
That
means to be successful in the long-term, international executives
must possess a diverse array of skill sets, numerous talents, and
have access to varied resources to be even marginally competitive
in the world arena.
Most
of the world works on a relationship basis first. This requires
persistence and patience. While sales in the US often develop from
no more than a "cold call" or a single visit, this simply doesn't
happen when you do business overseas.
The process of developing international
relationships, over a period of several months or even years, may
be needed to consummate the big deal. This success is directly related
to the commitment invested by the company through the individual
a long-term commitment of time, effort, money, and soul-in making
its international efforts a success.
Another
key element in this success is the development of direct relationships
with quality service providers and information sources-bankers,
attorneys, freight forwarders, consultants, accountants, trade associations
government agencies-that are absolutely crucial in supporting any
global business campaign.
In
a more hands-on sense, the terms of sale often determine the extent
of the normal and sometimes not so normal-costs associated with
an international business deal. For example, an FOB-Free-On-Board-plant
sale goes a long way in minimizing both cost and liability. This
compares favorably as an option to a Cost-Insurance-Freight, or
CIF sale, where the seller bears most of the transactions burdens
through the port of entry.
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LESSONS
TO REMEMBER
Some creative marketing strategies that can
keep a neophyte executive-and his company-aware and on the cutting
edge:
- Become
educated on the advantages of using Free Trade Zones (FTZs)
to position products in local markets. FTZs are worth their
weight in gold in eliminating-or deferring-duties, reducing
delivery time, allowing for packaging and other product
modifications, and positioning goods for transshipment.
- Offer
credit terms and selling on an open account, even at a higher
price, can be invaluable tools when marketing a product
Backed by account receivable insurance, open accounts can
reduce over-all exposure and offer entry and increased sales
in many cash-strapped markets-in Asia, for example.
- Product
seminars, focused sales campaigns, and creative trade show/mission
exposure can be invaluable by enhancing a local or regional
identity for the product or service. This is borne out of
a varied litany of strategies and plans tailored to the
nuances of the culture, the economy, and the politics of
the target market.
- Lastly,
develop and constantly hone the skills necessary to successfully
compete in an increasingly globalized marketplace.
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"
The world is ready
for
your
product. Are you ready
for the World? "
Irrespective
of the terms of sale, it's important to determine the expenses incurred
by the foreign buyer-your customer-to get your product to market.
Inland freight, warehousing, distribution, import licensing, customs
clearance, and value-added taxes (if applicable) are just a few
of the costs that the importer will need to factor into the "landed
cost" to determine a competitive price for the ultimate end user.
One
proven lesson is that anything that can be done should be done to
reduce any of those costs without sacrificing efficiency and capability.
Accurate pricing can make the product competitive when stacked against
goods source from either the host country, another global competitor,
or the US
Boil
it down, though, and you'll see that any potential customer will
decide to buy any product or service from you before deciding to
buy from your company.
Thomas Cook is
managing director of American River International and owner of FSI
Global Logistics in Melville, New York. |
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