“Rethinking Your Global Distribution”
Opening New Exporting Opportunities for Small Businesses
By Krista Yla
Globalization of your business is one the key issues in surviving and excelling in the current global economy. Even if you sometimes feel that today’s requirement of mastering the global market is very challenging for a small business, remember that advanced technology, marketing methods and new service concepts are providing new opportunities and creative avenues to globalize your business.
To plan (or further develop) your export business start by rethinking the distribution! Below is an agenda for your strategic planning session.
1. Define your target markets. Who can use your products or services? Define your geographical markets (countries / continents), vertical markets (industries / type of businesses / socio-economic groups). Who are the decision-makers and who are the end-users? (Don’t be shy, if the market is the whole world, make it part of your export strategy).
2. Decide your entry strategy. Do you want to take an “international approach?” For example, Coca-Cola sells the same products through the same distribution channels with similar marketing message worldwide. Or do you want to take a “multinational approach” and work together with overseas partners and adjust your product / service and operations to each market requirements?
Do you want to have a virtual presence and establish your sales location in
cyberspace? Do you want to approach the world through a vertical marketing
strategy, such as “all aerospace companies worldwide?” Or you can choose a nuclear
strategy and centralize your operations in your backyard, and allocate time for travel
and overseas sales calls.
3. Decide your distribution strategy. Think carefully and creatively. Decide what would be the simplest, most cost-effective and profitable way to distribute your product/service. Do you need a local distributor or representative? Do you want to form a strategic alliance with overseas company with a complementary portfolio? Can your technology, know-how or concept be packaged, protected and transferred? In that case, should you franchise or license your intellectual property / intelligence?
Maybe your product is a component you can sell to domestic OEMs (original equipment manufacturers) and let them take care of the exporting for you. Or maybe your product and service can be bundled with a complementary product/ service and you can join forces with your bundling partner to co-market the product internationally. What would the Internet’s role be in your international distribution — a marketing, sales, technical support tool only or your e-commerce distribution and customer service center? Maybe you need a person-to-person transaction in order to sell your product — have you thought about multilevel marketing as an exporting vehicle?
Or maybe you should market the product through infomercials and TV shopping channels, and let your overseas partner to take care of stock, shipping and handling procedures? You can mail a product / service catalog, display your catalog on the internet, or advertise in the overseas publications and the international couriers can deliver your product to the your overseas customer in 48 to 72 hours, right from your backyard. You also can use a combination of distribution strategies.
No matter what your entry strategy is, it is highly recommended that you join forces with an overseas partner. Their local knowledge, contacts and market experience saves you thousands of dollars and keeps your finger on the pulse of the international market.
Once you know what your distribution strategy is, you are able define a job description and qualifications criteria for your overseas partner. Only after those key decisions, you are able to complete your export marketing plan with product / service definition, pricing and marketing communications strategies. Utilize government agencies, trade organizations, chambers of commerce, universities, the Internet and private consultants, to provide you with necessary market intelligence and prospective partner contacts.
There are plenty of ways to make your globalization a reality. Just choose the way you want to do it!
Krista Yla is the president-elect of NAWBO-LA and one of the owners of Techxport, Inc. in Santa Monica, an international sales distribution management and marketing company.
