HOW TO TAKE YOUR BRAND GLOBAL!
For most brand owners, building and maintaining a local customer base is the first challenge on the journey to success. Once they have achieved this goal, some brand owners feel they’re ready to take the next step of expanding internationally.
Becoming a global company is an impressive feat, but not every business that sets out to do it accomplishes this goal. To successfully convert your business from domestic to international, you’ll need to consider a new set of factors that might not necessarily affect a domestic only business strategy.
Are you ready to go global?
Creating a strong international presence is rarely as simple as saying you ship overseas and then waiting for the interest to roll in. There are a number of things to think about when selling and marketing in another country, and these factors must be considered carefully.
Here are the steps to take, the mistakes to avoid, and the basics of exporting and importing.
Your local market sales can be great, but it’s not large enough for many brand owners. For these growth-minded business owners, the rest of the world is their desire to explore. Some of the specific advantages presented by successfully growing globally include:
- You can extend the sales life of existing products and services by finding new markets to sell them in.
- You can reduce your dependence on the markets you have developed.
- If your business is plagued by destabilizing fluctuations in your markets due to seasonal changes or demand cycles, you can even out your sales by tapping markets with different or even countercyclical fluctuations.
- You can increase your sales and lower your production costs through volume efficiencies.
- Finally, by entering the global marketplace, you’ll learn how to compete against foreign companies-and even compete with them on their own ground.
Questions to Ask Before You Start:
- The overriding reason to go global is to improve your potential for expansion and growth.
- Have I ensured that a customer base exists in the country or countries I want to enter? A product that sells well in your home country may not necessarily have the same appeal elsewhere, so it’s crucial to invest time and energy into researching potential foreign markets.
- Is your target market familiar with your product or service? If not, be prepared to invest a lot of time and money in consumer education. On the flip side, if you’re the first one to introduce a new and exciting concept, the product then becomes synonymous with your company or brand name.
- Are you prepared to find the right partner and are you prepared to support that partner?
- Are you open to market nuances, flexible in making market changes to be competitive and have patience with the process of developing a new market? The moment you’ve been waiting for has finally arrived, and you’re ready to export your product. Now what? Your first order of business is to heed the hard lessons learned by those who have gone before you. Many have failed, but that doesn’t mean you have to. Below are some of the most common exporting mistakes:
The Pitfalls of Exporting
Along with promise, going global carries an equally heavy load of peril. From chasing too many opportunities to getting hit by currency fluctuations, the game of international expansion has many threats that domestic-only business people never experience. You can grab the holy grail of growth by going global, but only if you avoid the pitfalls:
- Poor Strategy Planning. Small businesses are particularly vulnerable to this problem, but larger ones are often guilty of the same mistake. It takes far more time to extract yourself from problems created by lack of planning than it would to do it right the first time.
- Chasing All the Inquiries. Just because dozens of countries or importers show interest in your brand doesn’t mean you’re ready to market your product everywhere. Staying on strategy and patience is key. It takes discipline to respond to an inquiry from a country about which you know very little.
- Assuming if it works in your local market, it will work anywhere is not You need to tailor your sales and marketing efforts to each country, market or channel. Don’t ignore the cultural differences that shape the marketplace. The same goes for pricing, shipping, payment terms and packaging. You have to understand the trade terms in your target market to be successful.
- Assuming business will be done in English. Familiarize yourself with the local language. It is the height of ignorance to expect other people to learn your language to buy from you. Selling to customers or working with vendors who don’t speak your native language can be a significant obstacle for any brand owner.
Doing business around the world can seem a long way from doing business in your hometown. But each year countless small businesses make the trek. Like most long journeys, going global can be boiled down to a series of steps. Here are the six basic steps to going global:
- Start your campaign to grow by international expansion by preparing an international business plan to evaluate your needs and set your goals. It’s essential to assess your readiness and commitment to grow internationally before you get started.
- Conduct foreign market research and identify international markets. Your local Department of Commerce is an excellent source of information on foreign markets for goods and services.
- Evaluate and select methods of distributing your product abroad. You can choose from a variety of means for distributing your product, from opening company-owned foreign subsidiaries to working with agents, representatives, distributors and setting up joint ventures.
- Learn how to set prices, negotiate deals and navigate the legal challenges of exporting. Cultural, social, legal and economic differences make exporting a challenge for business owners who have only operated in one country.
- Tap government and private sources of financing-and figure out ways to make sure you are getting paid. Financing is always an issue, but government interest in boosting exporting and centuries of financial innovation have made getting funding and getting paid easier than ever. Consider looking into companies that offer purchase order financing and order factoring. It is a great way to free up revenue for a low cost.
- Move your goods to their international market, making sure you package and label them in accordance with regulations in the market you are selling to. The globalization of transportation systems helps here, but regulations are still different everywhere you go.
Understanding a Different Culture
One big difference between doing business domestically and internationally is culture. Less than 25 percent of business ventures abroad are successful. A lot of that is because companies/brands don’t do their homework or because they think the rest of the world should do business the way they do business. Here are some tips to avoid making costly mistakes in international business meetings:
- Build a relationship before you get down to business. That entails investing time in understanding potential partners and getting to know one another without immediately getting into business discussions.
- Don’t impose time limits. Keep an open mind to the time it takes to develop business in unfamiliar markets or channels. Be realistic to your demands.
- Do your research. Learn at least a few pointers and facts about the country; it shows you respect your potential partners’ cultural heritage. Also, get comfortable with the basic words in their language.
- Bring your own interpreter. If they provide the interpreter the interpreter is going to have the other person’s interests at heart, not yours.
- Understand body language. People think body language is universal but it’s not.
- Dress with respect and authority. This should be self-explanatory. If it’s not, seek the help of an image expert. They guarantee working capital loans for exporters and guarantees repayment of loans or make loans to foreign purchasers of goods and services. They also often offer exporters credit insurance to protect against nonpayment by foreign buyers. International business consultants can provide valuable help the first few times you are trying to evaluate a foreign distributor. If you prefer to do the job yourself, look for the following when assessing in a foreign distributor:
- Finding a Foreign Distributor As tricky as it can be to obtain financing for a global expansion program, finding foreign business partners can be even tougher. If you can find foreign distributors for your product, you will be able to simply sell them your products and let them worry about reselling them at a profit in their domestic markets. Distributors are nice because they can offer foreign customers top-notch service and are easier for you do deal with because they typically buy enough of your product to build up an inventory.
- Financing Help From the Import-Export Bank As with any growth plan, expanding internationally requires financing. And growing globally requires special capabilities when it comes to finances. One of the most popular sources of financing for businesses expanding overseas is global banks that specialize in international business.
- You can eliminate many foreign distributor prospects by deciding whether you need a stocking or non-stocking distributor. Stocking distributors are generally larger firms that will commit to purchasing an inventory of your product.
- If your product requires a salesperson knowledgeable about the product you will obviously require a distributor who can provide that type of sales force.
- The best distributor will be one with a track record selling to the companies or consumers who are target markets for your product.
- Unless you are fluent in the language of the country you are selling to, you should choose a distributor who can speak your language well.
- You will want prompt, competent responses to your requests for information or service. Make sure your phone calls, faxes and e-mails are answered in a timely, satisfactory fashion.
- Meet your prospects in person, and, as always, get and check references.
- Look to the other brands that trust or work with the distributor or agent because it will give you insights into their success level. If other big brands have hired them, it is always a great sign. If you feel you’re ready to tackle the challenges of international business, follow this advice and as local development nothing is easy, or everyone would be doing it. You need someone who has a passion for your brand, understands … the local market, has experience in the industry, and ideally has additional businesses where they can leverage shared resources.
- We Represent Over a Billion Dollars a Year in Luxury Brands across Cosmetics, Fashion Handbags, Jewelry & Beauty Accessories – Contact us to expand globally in Travel Retail or with Luxury Retailers today and lets’ celebrate together…
- Find the right partners. When you’re expanding your business, it’s critical that you don’t try to go it alone.
Why Go Global?
If you feel you’re ready to tackle the challenges of international business, follow this advice and as local development nothing is easy, or everyone would be doing it.
Find the right partners. When you’re expanding your business, it’s critical that you don’t try to go it alone.
You need someone who has a passion for your brand, understands … the local market, has experience in the industry, and ideally has additional businesses where they can leverage shared resources.
We Represent Over a Billion Dollars a Year in Luxury Brands across Cosmetics, Fashion Handbags, Jewelry & Beauty Accessories – Contact us to expand globally in Travel Retail or with Luxury Retailers today and lets’ celebrate together tomorrow…
Scott Bradley – President
Global Retail Solutions Group – One World, One Solution…