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Building Effective Distribution Channels
A “ground zero” approach for SME’s new to, or in the early stages of entering, the International Marketplace. This session will help SME’s
discover an effective method to build international distribution channels.
Presented by:
John A. DeLuca, International Sales Manager, Liberty Pumps Inc.
Claudia Salgado, U.S. Commercial Service, Mexico, Embassy of the United
States of America (Via Satellite)
Special Introduction
Timothy J. McCall
Director
Rochester U.S. Export Assistance Center
U.S. Department of Commerce
400 Andrews St., Suite 300
Rochester, NY 14604
Tel: 585-399-7065
Fax: 585-423-7570
So, Let’s define “Ground Zero”…
Let’s also define SME…
• Small and medium enterprises or small and medium-sized enterprises (SMEs, small and
medium-sized businesses, SMBs, and variations of these terms) are companies whose
personnel numbers fall below certain limits. The abbreviation "SME" is used in the European
Union and by international organizations such as the World Bank, the United Nations and
the World Trade Organization (WTO).
• SME (small-to-medium enterprise) is a convenient term for segmenting businesses and
other organizations that are somewhere between the "small office-home office" ( SOHO )
size and the larger enterprise . The European Union has defined an SME as a legally
independent company with no more than 500 employees.
• In the United States, the Small Business Administration sets small business criteria based
on industry, ownership structure, revenue and number of employees (which in some
circumstances may be as high as 1500, although the cap is typically 500).[4] Both the US
and the EU generally use the same threshold of fewer than 10 employees for small offices
(SOHO).
Was Liberty Pumps an SME at Ground Zero?
• Founded in 1965
• Family Owned
• Around $30-35M
• Just under 100 employees
• ~ 1% sales were “international”
2010
30,000 foot look at the
challenge….
Goal: International Market Penetration (International market share = 25% of US)
resulting in “Targeted Sales Amount” (25% of company turnover) by 2020
1. What do I have to sell?
2. Where can I sell it?
3. What is GTM/channel by country?
4. How do I find “Mr. Right”?
30,000 foot look at what needs
to happen….
How do I avoid Mr. “Wannabee”?
30,000 foot look at how do I do
that… before looking for Mr. Right
• Exporting Plan
– “Failure to plan is
planning for failure”
• Export Toolkit
Closer to the ground look
at it…. Part 1 – Export Policy Commitment Statement
Part 2 – Situation Analysis
1.Products
2.Operations
3.Personnel and Export Organization
4.Resources at Liberty Pumps
5.Industry Structure, Competition and Demand
Part 3 – Marketing Component
1.Identifying Target Markets
2.Evaluating and Selecting Target Markets
3.Product Selection and Pricing
4.Distribution Methods
5.Terms and Conditions
6.Internal Organization and Procedures
7.Sales Goals: Profit and Loss Forecast
Part 4 – Tactics
1.Primary Target Countries
2.Secondary Target Countries
3.Indirect Marketing Effort
Part 5 - Export Budget
Part 6 – Implementation Schedule
1. What do I have to sell?
2. Where can I sell it?
3. What is GTM/channel by
country?
4. How do I find “Mr. Right”?
Let’s drill down and take a Ground
Level look….
Export Compliance Program
Consulting with Experts
(e.g. WTCBN)
Legal
Training
Written Plan
part of ISO
Quality Manual
Compliance
Worldwide
Shipments
Ok… back to finding Mr. Right
1. Create a profile of the “ideal” agent/dealer/distributor for your
products:
• Market they Serve
• End User base
• “Product Line Card”
• Sales turnover
• Territory coverage
• Number of Sales People
• Marketing resources
• Warehousing capability
• Payment terms
• Shipping/receiving logistic
• Language skills
• Other????
Understand the Scope of the market you are trying to
penetrate… the markets are usually smaller!
• What you have in the USA • Most likely is not what you get
abroad
Ok… Let’s start looking!
Do you know
Anyone? #1- Your Network
Ok… Let’s start looking!
• Professional
Organizations
• Directories of
Manufacturers
#2- Market Research
Directories of Distributors
Target Email Blast
This approach is the result of your
market research… mining all the
resources mentioned for a list of
“Targets”
Recall:
• Professional Groups
• Directories of Manufactures
• Directories of Distributions
But how do you know which one is “Mr. Right”
“Mr. Right”
• Exactly in your market
• Recognized as a premier
dealer/distributor by potential
end users
• Profitable, Successful, and
growing
• Knows of your company and
wants to add your products to
the line card
“Mr. Wanabe”
• Kind of in your market
• Not a first tier player… goes to
trade shows and tells
potentials suppliers they “want
to be” your dealer/distributor
• Not doing well… needs you to
infuse some cash!
• Doesn’t care who you are!
Best Tool I have used
to find “Mr. Right” and
why…
The Gold Key Matching
Service (GKS)
Why the best?
• Targeted in-country market
research (in 80 countries!)
• Coordinated dealer/distributor
search for the profile I defined
• No language barriers
• “Mid Term Report” with
proposed action plan for dealer
and/or distributor visits
• Assistance with travel and
accommodations
• Assistance with translation
service
• Follow up support
Obvious advantages
• Speed
• Accuracy
• Ease of Use
• Cost
Hidden Advantages
• “Mr. Right will respond to a
solicitation from the US
Embassy… not so to your email
blast…
• “Mr. Right” knows the US
Embassy brings him only the
“Right” US Companies… he has
nothing to fear… only to decide if
the fit is “right”
Go To: Claudia in Mexico City
Make Introduction
And bring her in on Skype
Claudia to describe what typically happens from her
side while executing a Gold Key Service Program
Get your Upstate NY Trade Conference passport signed by at least 10 exhibitors for a chance to win the
following prizes, which will be raffled off and announced after the closing keynote
Exhibitors: 1 GRE/IBC/NYSERDA
2 Time Warner Cable Business Class
3 Advanced Language Translation
4 Freed Maxick CPAs, P.C.
5 Wells Fargo Bank, N.A.
6 KCI Engineering of New York, PC
7 JR Language Translation Services Inc.
8 RIT Saunders College of Business
9 Speed Global Services
10 RBS Citizens
11 FBI
12 US Small Business Administration
13 Mohawk Global Logistics
14 School of Business Administration and Economics,
The College at Brockport
15 Gallagher Benefit Services
16 U.S. Department of Commerce
17 U.S. Customs and Border Patrol
18 County of Monroe Industrial Development Agency (COMIDA)
Procurement Technical Assistance Center (PTAC)
19 Employer Support of the National Guard & Reserves (ESGR)
Exhibitor Passport Prizes:
• Advanced Language Translation, Inc.
$500 Gift Certificate towards translation services
• Hong Wah Restaurant – $10 Gift Certificate
• Mario's Via Abruzzi Restaurant – (2)
$50 Gift Certificates
• Mohawk Global Logistics
$100 Gift Card to Black & Blue Restaurant
• Richardson’s Canal House Restaurant – (2)
$25 Gift Certificates
• Speed Global Services
Dictionary of International Trade
& 50% off 2nd international shipment
• The Cheesecake Factory – $25 Gift Certificate
• The Spa at the Del Monte
50 minute Massage
• Wegmans – $100 Gift Card
• Wilmorite Inc. – $50 Mall Gift Card