Selling more to Bermuda and Bahamas
versus Brazil? More business in Hong
Kong than China? Join the club. The
long road to BRIC success is filled with
dangerous curves and uncertain junc-
tions. “Low hanging fruit” opportunities
in these countries have long disappeared
replaced by a scrum of category
combatants from all corners of the world
wrestling for market share in what could
be small categories for a long time to
come. There are no miracle solutions! Our
ten tips apply to large emerging markets
such as China and Mexico as well as
companies having troubles penetrating
Germany, Japan, Italy or the USA.
1. Apply Fundamental Lessons Learned
from your Home Market
Think about the factors that drove your
success in your home market: Unique
product, Consumer Research, Local
Production, Competitive Pricing,
Marketing Budget, Strong sales team, etc.
The same fundamentals apply to entering
large new markets. I always challenge the
senior management of my clients with the
following Business Case Study: What
would you do if competing Global Brand
“A” from another continent tried to enter
your home market? The response is filled
with aggressive plans to defend the home
turf. My next question is “Don’t you think
that the local competition will react the
same way when you plan to enter their
2. Stop Treating Large Countries
as Export Markets
Shipping small quantities of product
thousands of miles and visiting twice
a year will not win in a large market like
Germany, the USA, Mexico, or China.
Large markets need to be treated
strategically, with a separate business
strategy and resource commitment versus
a small export market. In some cases, it is
better to exit a large market if you can not
commit versus potentially harming the
brand image with lackluster shipments
through a subpar effort.
3. Conduct Market Research
Extensive category research is required
in strategic markets. Is your category
developed or evolving? For developed
categories, what unique characteristics
does your brand deliver and how much
do you plan to invest to source share from
existing brands? In new categories, what
does the consumer say about your brand?
Is the taste profile
appreciated, even if it
foreign versus the local
cuisine. Syndicated data
is available which will
help you gauge the “size
of the prize.”
4. Pursue Local Manufacturing
Export programs to large
businesses. The incremental
overseas freight costs and
duty structures normally
translate to retail prices far higher
than competition produced in country.
Building a factory represents a long term
commitment. Contract packing could
provide a less costly, interim option.
5. Prepare Your Board for
a Long Term Investment
Creating a meaningful new business in a
large country is not a 1-2 year event. More
realistic is a 5-10 year plan depending on
existing acceptance of your category.
Brands and habits and practices take
years to create except in the case of true
innovation. A significant investment in
marketing is mandatory, even in the case
of a true category innovation.
6. Buy a Local Competitor
The quickest way to gain a presence in a
large market is to acquire a local competitor.
Conduct a category review and see which
competitor would be the best “fit” for your
company from a product portfolio and
cultural standpoint. Price is always a
consideration, as you do not want to
overpay for future growth in an emerging
market or pay too much for market share
in a mature market.
7. Don’t Tackle Many Large Countries At Once
Companies multi task. Morning meeting on
Mexico and we’ll attack Russia after lunch.
A better idea is to pick one major country
and plan to focus the teams resources on
winning in that country for the next 1-2
years. This includes deployment of human
resources as well as investment dollars. Get
it right and management will be pleased to
fund a broader expansion. Spread yourself
too thin and you may fail everywhere.
8. Invest in an Expatriate
Companies need a soldier from your head
office on the ground in the country of focus.
This facilitates the transfer of best practices
and company culture to the new country.
The expatriate knows who to call at the
home office to get things done. He can
report the true status of initiatives and has
a long term dedication to the company. Best
bet is to partner the company soldier with
an experienced local player who knows
the local market, culture, customers etc.
Language barriers can present a challenge,
but the benefits far outweigh the issues.
9. Scorecard against In Store Fundamentals
Your sales team must be equipped and
measured against the fundamentals of
securing strong in-store presence at
leading retailers. Too many times, a
team’s progress is judged solely upon
shipment numbers. Another scenario
reflects positive reports regarding chain
headquarter authorizations, but no follow
up execution at store level. Our business
succeeds with a team focused with
winning the battle store by store.
10. Consider a Local Partner
Plans may be fast tracked through a local
partner. Partnerships can take many
forms including a joint venture, licensee,
services contract, or distributor type
relationship. Extensive due diligence is
required as unsuccessful partnerships can
be difficult to exit. Export Solutions has a
thorough nine step process we deploy on
our many partner identification projects.
Lessons learned including alignment
from your partners senior management
to the retail merchandiser, as often the
partners commitment gets diluted
through the supply chain. It’s advisable
to have your own representative “in
house” at the partner to look out for your
company interests. Partner results are
directly proportional to your investment
as even the best sales teams require the
right financial resources to allow them
to obtain optimal performance.
Ten Tips – Fixing the Problem: Small Shipments to Big Countries