Negotiate With Americans (2011)

Business negotiation
with Americans

Goals
Structuring the negotiation : different success keys to
negotiate with Americans

Preparing the negotiation: to understand better the culture
and the expectations of American buyers

Negotiation’s strategy :to adapt your marketing strategy
to increase your success

Understanding the entry barriers to the U.S. market

© Consultation Contacts Monde 2007

Module 1: Structuring the negociation : different
success keys to negociate with Americans

Entering Your Chosen U.S. Market

3 strategies:
Direct selling
Indirect selling (selling
through intermediaries)
Selling through strategic
alliances


Diversification Methods
Direct selling Direct sales
Agents
Indirect selling Distributors
Brokers
Trading House
Partnerships Co-Enterprise/Co-Marketing
Agreement with other manufacturers
Licensing
Technology Transfer


1. Direct selling
Direct exportation from a distance
Direct sales
Representative (paid manager)

Establish a U.S. presence
Opening a U.S. branch of your company
Establishing a separate U.S. subsidiary, such as
a corporation


Direct selling
Allow you to operate a Business implication
retail outlet in the heart of Important financial
your U.S. market resources (high fixed cost)
Protect your company’s Risk exclusively assumed
assets by the export department
Be seen as more International expertise
«American» Need more time before
Autonomy in the getting sales
administration
Better knowledge of the
market
Permanent network
All the benefits


2. Indirect selling

Trading houses
Representative (agent)
Importers
Distributors
Brokers
Sociétés de gestion export
Bureau d’achat


Indirect selling
Getting an immediate Less control
presence in the United Greater distance from
State market without
setting up your own your customer base
sales operation Control on commercial
Limited risk politics: very low /
Low implication null
(human and financial Paying commissions:
resources) short term vision
Screen between the
market, the clients
and the exporter


3. Selling through strategic alliances
Formal or informal

Licensing
Franchising
Cross-licensing
Co-marketing
Co-production
Joint venture


Cooperation / partnership
Sharing risk, cost and Business implication
investment Partial control on
Sharing resources, know-how, commercial politics
contacts Risk to loose the know-
Sharing export activities how
(custom clearance) Understanding difficulties
Resolving problem related to (culture, language)
professional accreditation, Time required to
movement of personnel across administrate the
the border and U.S. tax and partnership
legal status Difficulty to select partners
Combining the technical and
financial strengths of the two
business
Better knowledge of market
specificities
Access to public invitation to
tender
Access to technology © Consultation Contacts Monde 2007

Expectations of your agent

Exportable goods
Export knowledge
Fair agreement / partnership


Questions & answers on videos
How frightening?
How different?
How do you get started?
What is the role of partnership?
Is the partnership a threat?

Module 2: Preparing the negotiation: to understand better
the culture and the expectations of American buyers

Personnel control on the environment and
responsibilities
Positive and natural perception on
changes
Time = $$$
Egalitarianism and equity
Individualism and independence
Smartness et initiative


The culture of the American buyer
Competition
Vision oriented on the future
Vision and action work-oriented
Lack of formalities
Honesty, open-minded, rightness (Enron !)

Practical and efficient nature
Materialism


Reminder on negotiation
from : Executive Planet.com

Make up their minds quickly and decisively.
Information must be straightforward and to the
point.
Money is a key priority and an issue that will be
used to win most arguments. Status, protocol,
and national honour play a smaller role.
American businesspeople are opportunistic and
willing to take chances. Opportunism and risk
taking often result in Americans going for the
biggest possible slice of the business, 100% if
possible.


Dislike periods of silence during negotiations and
in conversations, in general. May continue to
speak simply to avoid silence.
Persistence is another characteristic you will
frequently encounter in American
businesspeople; there is a prevailing belief that
there is always a solution. Moreover, they will
explore all options when negotiations are at an
impasse.
When they agree to a deal, they rarely change
their minds.
Future oriented. Innovation often takes
precedence over tradition.


Thinking tends to be analytical, concepts are
abstracted quickly, and the "universal" rule is
preferred.
There are established rules for almost everything.
Experts are relied upon at all levels.
Lawyers everywhere ! The most litigious society
in the world.
Negotiating = problem-solving through "give and
take" based on respective strengths. Often
emphasize their financial strength and/or position
of power.


In negotiations, points are made by the
accumulation of objective facts. This evidence is
sometimes biased by faith in the ideologies of
democracy, capitalism, and consumerism. The
subjective feelings of the participants are not as
much of a factor. Therefore, they will not spend
much time seeking consensus.
Try to extract an oral agreement at the first
meeting. Sometimes bring final contracts to first
meetings. In large firms, contracts under
$10,000 can often be approved by one middle
manager in a single meeting.
Limited knowledge of other cultures. May assume
that their way is the "correct" or only way.


Strategy to diversify your marketing
strategy: 2 websites to keep in mind
Manufacturers’ Agent National Association
(MANA): 22 000 professional sellers, by line of
business. Since 55 years. www.manaonline.org
(Americans like to have a direct access to your
products!)

For public sector: www.dfait-maeci.gc.ca :
SALE2USGOV


Why working with an American
representative (MANA) ?
Predictable Sales Costs That Go Up And Down With Sales
Lower Sales Costs
Increased Sales
Immediate Access To The Market
Free consulting services
Cost of Training And Turnover In Sales Personnel Is
Eliminated
Highly Experienced, More Aggressive Sales Force
Sales Forecasting Is Equal Or Superior To A Direct Sales
Force
Broader Sales Context For Your Product
Provides Marketing Flexibility At Less Cost
Creates A Systems Approach To Selling
Every Call Is A Relationship Call For Your Company
Multi-faceted, Multi-skilled Sales Team
Better Market Intelligence
Vested Partner In Manufacturer’s Success


Selling to the public sector
It takes 3 to 5 years to close a selling with
the U.S. Army
It takes 3 to 4 years to close a selling with
a government department

Examples of procedures:
Federal Acquisition Regulation
Central Contractor Registry
Tax Identification Number
Help of DFAIT representative


Module 4: Entry barrier on the U.S. market
The legal and logistical side of exporting to the U.S.
Labelling et packaging
Insurrance
Custom’s law
Quotas
Transport
Payment methods
Intellectual Property


Patent: United States Patent and Trademark
Office
Trademark
Norms, certificates, probate
American Standards Institute
Food and Drug Administration (FDA)
Travel’s status (Entry’s fee & visas)

Post 9/11 context


To conclude…

Sources of information
www.international.gc.ca

Advices

Thank you !

Subscribe to the CCM
newsletter:
www.contactsmonde.com


Negotiate With Americans (2011)

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