To succeed in global business, companies need to simplify their approach to export operations while unifying their international sales and marketing efforts. This was a presentation as part of a panel where we disccused: strategy considerations before your first actions; how to approach the daunting task of positioning your business for international sales, marketing and distribution; how brand positioning and direct communications can have a multiplier effect on your success; and how to integrate cultural, language and marketing considerations so they are synergistic with your business strategy and execution plans.

1. Steps to
Develop an
International
Strategy
Stephen N. Davis
“Partnering With Clients to Drive
Sustainable Profitable Growth”

2. Anyone Can Go Global
Doing it
Profitably
Is the Real
Challenge
2000 - 2009 © CXO Advisory Group

3. Common Exporter Mistake #1
Insufficient
Commitment By
Management
2000 - 2009 © CXO Advisory Group

4. Common Exporter Mistake #2
Going Global
Before Domestic
Market is Fully
Established
2000 - 2009 © CXO Advisory Group

5. Common Exporter Mistake #3
Failing to Develop
A Full
Go-To-Market
Plan
2000 - 2009 © CXO Advisory Group

6. Plan Your Entry into the Channel
“If you don’t know
where you’re going
you’ll probably
wind up
somewhere else”
2000 - 2009 © CXO Advisory Group

7. Market Selection
So Many Choices
2000 - 2009 © CXO Advisory Group

8. Common Exporter Mistake #4
Using Wrong
Criteria for
Selecting Markets
to Enter
2000 - 2009 © CXO Advisory Group

9. Common Exporter Mistake #5
Trying to Enter Too
Many New Markets
at One Time
2000 - 2009 © CXO Advisory Group

10. Selecting Your Market: Ease of Entry
1 2 3
Canada, UK,
Nordic, the Germany, Spain,
Language Commonwealth
Netherlands Eastern Europe
Countries
Netherlands, Nordic,
Similarity to US UK, Australia, New
Canada Benelux, Germany,
Business Models Zealand
France
Canada, UK,
France, Germany,
Employment laws Australia, New Nordic, Netherlands
Italy
Zealand
Canada, UK,
Market Size Italy, Spain, Nordic Eastern Europe
Germany, France
Canada, UK,
Least Amount of Nordic, France, Belgium, Italy, Greece, E.
Corruption Netherlands, Spain Europe
Germany
2000 - 2009 © CXO Advisory Group

11. Common Exporter Mistake #6
Failing to Establish
a Budget Up Front
2000 - 2009 © CXO Advisory Group

12. Creating Effective Budgets
 A program without a budget is a wish
• Cancelled at any point
• Not credible to reseller
• Cannot be strategic or justified to management
• Costs cannot be measured or controlled
 Must estimate costs of program design, implementation
and management
• Coverage, sales model, support model, value proposition
• Calculate as both cost of sales and return on investment
2000 - 2009 © CXO Advisory Group

13. Common Exporter Mistake #7
Not Localizing
The Product
2000 - 2009 © CXO Advisory Group

14. Localization - Marking
 Requirements vary from
country to country
 Made in USA has
different meanings
around the world
2000 - 2009 © CXO Advisory Group

15. Localization – Labeling,
Packaging & Documentation
 Requirements vary from
country to country
 Language
• May have Multi-
Lingual requirement
 Country of Origin
 May be layers of
Labeling
 BEWARE: Regulations
and Reality may DIFFER
2000 - 2009 © CXO Advisory Group

16. Localization - Standards
 US Standards are NOT
universally accepted
 Know the Standards you
have to Meet
 CE Mark – European
Union
 CCC – China
 NOMS – Mexico
 ISO
2000 - 2009 © CXO Advisory Group

17. Common Exporter Mistake #8
Running Afoul
of US Export
Regulations
2000 - 2009 © CXO Advisory Group

18. Common Exporter Mistake #9
Selecting the
Wrong
Distribution
Channel
2000 - 2009 © CXO Advisory Group

19. Sales Channels – The Reality
“A product with better distribution will
always win over a product with poor
distribution or customer access”
It’s not fair. It’s not right.
But, it’s reality.
2000 - 2009 © CXO Advisory Group

20. Know Your Customers Buying Process
Sales Cycle Identify Prospect Qualify Proposal Close Deliver
Stage
Discover Need Seek Solution Review Vendor Agree on Check Start
Materials Solution and References Implementation
Identify Research
Project Specs. Validate Assign
Business Goals Determine Total
Find Vendors Resources
Scope of Project Coordinate Proposal
Customer’s Quantify Impact Get Information Estimates
Buying Process Start Training
& ROI RFQ
Cycle Choose Vendor
Confirm timing & Manage Project
Objective Timing &
Budget Sign off
Budgeting Pay Bills
Select Vendor Approvals
Contract signed
Purchase Order
2000 - 2009 © CXO Advisory Group

21. Channel Strategy
 Must start with the customer
 How many channel partners do I need?
 What channel partners should I have?
• Build a channel partner profile
• Link to end-user targets
• Fit with existing channels
• What role do they play?
• Influence
• Sales
• Support
• Technical
 How do I choose them?
 How do I measure them?
 How do I generate business for them?
 Do the financial requirements make sense for our company?
2000 - 2009 © CXO Advisory Group

22. Distribution Channels - Examples
 Direct sales  Brokers
 Strategic partners  Franchises
 Corporate resellers  Telemarketers
 Master or local  Internet sites
distributors  e-Marketplaces
 Integrators  Retail
 Value-added resellers  Agents (consultants,
 Manufacturer’s agents affiliates, etc.)
2000 - 2009 © CXO Advisory Group

23. Comparison of Major Channels
Retail Agent/Rep Distributor/VAR Acquisition Joint Venture Subsidiary
Time to Market Slow Slow Medium/Fast Medium Medium Slow
Management Control Low Medium Low High Medium High
Brand Control Low Low Low High Medium High
Cost of Sales Medium Low Low High Medium High
Development of In-
Low Low Low Medium Low High
House Expertise
Access to New Partners Low Medium Low Medium Medium Low
Risk Medium Low Low/Medium High Low High
Hands-On
High Medium High Low Low Low
Sales/Marketing Support
2000 - 2009 © CXO Advisory Group

24. Channel Value Add
High
“High Touch
Channels” Field
Sales
Value VAR’s
Add Dis-
“Low Touch
Of Sale tributors
Channels” Retail
Stores
Tele-
marketing
Internet
Low
Low High
Cost per Transaction
2000 - 2009 © CXO Advisory Group

25. Direct Sales
Pluses Minuses
 Dedicated  Expensive!!!!
 Control message to the • Accounts receivable
market • Inventory
 Customer contact
• Expenses
 Company loyalty
• Employment costs
 Control the Brand
 Slow ramp up
 Priorities (focus) or
 Limited coverage
products
 Labor laws
2000 - 2009 © CXO Advisory Group

26. Joint Venture or Strategic Partnership
 Quick penetration – less risk
 Established market presence
 Provides localization of product
 Handles all marketing, sales, distribution &
support
 Provides ongoing market analysis
 Provides ongoing competitive analysis
 Usually won't carry competing product
 Tough sale – long sales cycle
2000 - 2009 © CXO Advisory Group

27. Approaching a Potential
Joint Venture or Strategic Partner
 Be Ready to Explain Key Product Advantages
 Do Your Homework
• Why should they be interested?
• Fills competitive hole
• Enhances existing product line
• Prevents having to compete against you
• You could develop market in your home country for their
products
 How easy it will be to work with you
 Support you will give them
• Technical
• Training
2000 - 2009 © CXO Advisory Group

28. Key Issues Licensing Agreement
 Specs & Deliverables  Marketing Obligations
 Acceptance  List Price of Product
 Grant of License  Performance Requirements
 Terms  Warranties
 Payments  Limitation of Liabilities
 Bookkeeping Requirements  Development Support
 Ownership  Rights to Updates
 Use of Trademarks  Termination
 Training  Source Code Access
 Decision Making Authority
2000 - 2009 © CXO Advisory Group

29. Distributors
 Sells to other channel players within designated
area
 Takes title to goods and is compensated by mark-up
upon sale
 Sells suppliers goods to his own customers
 No authority to act on your behalf
 Maintains Inventory
 Sells in original packaging
 May or may not provide after sales services
 Many products are taken on consignment basis
2000 - 2009 © CXO Advisory Group

30. Distributor Network Issues
 Exclusive v’s non exclusive
 Territory covered
 Period, renewal, notice to terminate
 Performance requirements (quarterly/annual)
 Poor performance cure periods
 Cross territory sales
 OEM sales
 Global account sales to multi national corporations
 Appointment of additional distributors
2000 - 2009 © CXO Advisory Group

31. Manufacturers Agent/Commercial
Agent
 Alternative to own sales force
 Both authorized to solicit orders in designated area
 Receive salary or commission
 Usually bear no credit risk
 Maintains no inventory
 Requires same support & training as internal salesforce
 Carries several lines
 References, References, References
2000 - 2009 © CXO Advisory Group

32. Agent Issues
 Exclusive v’s non exclusive
 Territory covered
 Commission rate
 Period, renewal, notice to terminate
 Performance requirements (quarterly/annual)
 Poor performance cure periods
 Cross territory sales
 OEM sales
 Global account sales to multi national corporations
 Appointment of additional agents
2000 - 2009 © CXO Advisory Group

33. The International Marketing Plan
Strategy Program Execution
 Goals  Coverage model  Media Campaign
 Target  Value proposition  Communication
Market  Business rules  Incentives
 Product  Sales model  Education
 Competition  Pricing  Outsourcing
 Channels  Sales Support
• Roles model
• Alignment  Customer Support
Model
 Budget
2000 - 2009 © CXO Advisory Group

34. Is Your Buyer Package up to Snuff?
 Marketing materials
 Localized website and URLs – CLAIM YOUR NAME
 Price lists
 Outline of your marketing campaign – Demand Creation
 Product samples – Packaging (LOCALIZED)
 MDF funds and campaigns
 In-store merchandising
 Prospect & customer correspondence
 Sales training for their personnel
 Sales support
 End user training
 End user support
2000 - 2009 © CXO Advisory Group

35. Overseas Distribution Maturity Curve
Fully-owned
operating subsidiary
in the territory
Commercial partnership
with export distributor
in the territory
Export distributor
supported by
dedicated staff
based in the territory
Export distributor
Simple Export supported by
Distributor dedicated headquarters-
based staff
2000 - 2009 © CXO Advisory Group

36. Key Points That Can Make a Difference
 Select your channel partners with care
 Develop a mutual agreed performance plan that is
measureable
 Have realistic expectations
 Top management commitment
 Focus, Focus, Focus
 Long Term View
 Clear understanding of end-user targets and their
alignment with channel partners
 Develop comprehensive business rules for
managing program processes
2000 - 2009 © CXO Advisory Group

37. Key Points That Can Make a Difference
 Take inventory of your partners
• Does the 80/20 rule apply?
• Build profiles based on successful partners
• Align internal resources based on contribution
 Invest in your partners
• Marketing
• Training
• Support
• Web
 Use the Internet to enhance partner sales
 Review your channel strategy yearly
• Identifies potential destructive channel conflict
• Tune channel support programs
2000 - 2009 © CXO Advisory Group

38. Common Exporter Mistake #10
Ignoring Your
International
Lost Market Markets When
Opportunity the US Market
is Doing Well.
2000 - 2009 © CXO Advisory Group

39. Questions
2000 - 2009 © CXO Advisory Group

40. Contact Information:
Stephen Davis
Interim COO/VP Sales & Marketing |
Business Consultant | Sales Channel and
Business Development Expert | Author &
Speaker
“Partnering With Clients to Drive
Sustainable Profitable Growth”
Phone: (508) 528-7571
Email: sdavis@cxoadvisorygroup.com
Website: www.cxoadvisorygroup.com
Linkedin: www.linkedin.com/in/stephendavis
Twitter: twitter.com/stephendaviscxo

41. Driving Profitable Growth
We help companies optimize business
development and marketing; accelerate
sales; and seize the most attractive
growth opportunities.
2000 - 2009 © CXO Advisory Group

42. The CXO Advisory Group
 CXO Advisory Group is a strategic operations advisory
and management firm comprised of proven C-level
executives with both breadth and depth of experience.
 CXO Advisory Group Team members have achieved
success in positions ranging from: President/CEO to
COO, and VPs of Sales, Marketing, Corporate
Development and Human Resources.
 Has proven success in business development and in
building US sales and distribution channels
2000 - 2009 © CXO Advisory Group

43. How Can CXO Help You?
Business Strategy Services
• Audit business practices and organization
• Evaluate product and pricing strategies
• Evaluate effectiveness of sales channel
• Assess effectiveness of existing sales and marketing
programs
Market Entry Program
• Analyze competitive landscape
• Market launch strategy and plan
• Channel strategy and programs
• Establish sales channels
• Generate sales and manage relationships
• Identify and develop strategic partnerships
2000 - 2009 © CXO Advisory Group

44. How Can CXO Help You?
Sales Channel Management
• Review and revise sales channel strategies
• Channel partner identification, prospecting and recruitment
• Eliminate channel conflict
• Channel contract development and negotiation
Interim Management Resources
• Interim CEO, COO, CMO, CSO
• Interim VP of Sales and Marketing
• Consultant on staff
• Launch team coaches
2000 - 2009 © CXO Advisory Group

45. How Can CXO Help You?
Venture Advisory Services
• Fine tune operations, business strategy and market entry
• Assist with due diligence
• Strategic business assessment of portfolio companies
2000 - 2009 © CXO Advisory Group

46. Driving Profitable Growth
2000 - 2011 © CXO Advisory Group

47. Contact Information:
Stephen Davis
Interim COO/VP Sales & Marketing |
Business Consultant | Sales Channel and
Business Development Expert | Author &
Speaker
“Partnering With Clients to Drive
Sustainable Profitable Growth”
Phone: (508) 528-7571
Email: sdavis@cxoadvisorygroup.com
Website: www.cxoadvisorygroup.com
Linkedin: www.linkedin.com/in/stephendavis
Twitter: twitter.com/stephendaviscxo