How Do I Market and Sell My Products in Asia?
Early in 1997, US-AEP commissioned a case study analysis of several top
U.S. environmental companies to determine best management strategies for
penetrating Asian environmental markets. Some strategic considerations apply
to all types of U.S. environmental firms; some are best suited for companies
of different size and available business development resources.
Specifically:
For All Companies
U.S. companies must have a local presence.
U.S. companies must have staying power. The minimum Asian market entry
budget should support two or three years of local effort -- whatever form
that takes. If you don�t have it, don�t go.
Face-to-face time with both overseas clients and partners is critical.
Good business development tactics dictate finding ways to get in front of
key clients as often as possible, both formally and informally.
U.S. government assistance cannot substitute for good planning, careful
product and service selection, and, most important, commitment of the
necessary resources necessary to go into Asia. U.S. government assistance
can only help U.S. firms that are doing their best to help themselves.
Infrastructure firms are seeing subsidized foreign competition,
especially in the form of up-front financing of project feasibility studies.
This type of foreign government subsidy gives foreign competitors a
significant advantage in subsequent phases of the project, that is, project
design, construction, and equipment sales.
For Larger Companies
Market entry for larger companies is best done by acquiring local firms.
Acquisitions provide an instant backlog of projects and a client base.
Focusing on growing an existing backlog is much more likely to succeed than
investing in start-up operations and beginning from scratch.
For larger companies making acquisitions, a majority control over a
smaller Asian company is better than minority control over a larger company.
More control translates into higher priority for your company�s products and
services.
For larger companies, the ability to take an equity position and help
bring project financing is no longer just a good idea but is a requirement
to compete with European and Japanese firms operating in the area. The
ability to bring access to financial resources to the acquisition greatly
enhances the U.S. firm�s position in the acquisition.
For larger environmental engineering companies, moving from design-only
to design-procure-construct is key to servicing Asian clients who demand
one-stop-shopping.
For Smaller Companies
Smaller companies with very limited international business development
resources need to specialize and focus on one country and one area of
service and/or product. Resist the temptation to be an opportunistic
generalist.
Smaller companies need to do their homework before pursuing Asian
markets. Where possible, find out who will be target customers and key
accounts before deciding on a market entry point. Start a dialogue with key
customers before entering the market.
For smaller companies, local sales representatives are the low-risk,
low-cost market entry and business development alternative. The problem with
local reps has been their simultaneous representation of competing products.
This problem has been solved in part by having proactive regional managers
focused only on following up and managing the in-country reps.
Marketing and selling U.S. environmental product and services in Asia is
an intensive but very doable process. This marketing and sales process is
different, depending on the type of product, target customer, and target
geographic area. In general, however, U.S. companies have to be patient,
have staying power, and find partners with whom a trusting relationship can
be built. The type of marketing and sales plan that is most effective will
contain the following components:
- Identifying Your Value Proposition
- Identifying Your Target Customer
- Identifying Your Geographic Markets
- Identifying Channels to the Target Customer
- Estimating Sales Cycles and Final Cost of Sales
- Developing Sales, Revenue, and Cash Flow Forecasts and Benchmarks
- Investigating and Executing Partnership Agreements, Joint Ventures,
and/or Acquisitions to Begin Initial Sales.
In some form or another, all companies going into new overseas markets go
through this process. The list of steps above will be interconnected -- the
company will initiate steps and then modify them as new information arrives
from subsequent steps. One thing that is critical, however: have your
independent market homework as complete as possible before seeking partners.
Inevitably you will end up across the table from your partner discussing
terms and if you�ve not done your homework, your bargaining position is much
weaker -- and they know that. Your estimates may be way off, but at least
your partner will have to explain why your estimates of potential sales are
too high or low and it will force a better joint understanding of the
business issues at hand.
Because partnerships are so key to the marketing and sales of
environmental products in Asia, the following section describes the
different types of partners and the advantages and disadvantages of each
type. The option of going into an Asia market, setting up your own shop,
developing your own sales staff, sourcing your own supplies, and so on is a
difficult way to go and not recommended here, especially for environmental
companies.
Also, there is not much discussion here on advertising or public
relations. Selling environmental products and services is a
business-to-business (or business-to-government) sales process that is
relationship intensive. Buying any type of environmental product or service
is heavily scrutinized because of its contribution to the cost side of any
business without any tangible upside, that is, commensurate contribution to
the revenue side. To purchase pollution control products, be it for air,
water, or solid hazardous waste pollution control, the prospective Asian
buyer must decide if the risk of being in noncompliance is worth the price
of the product or service. Specifically, the risk of noncompliance a
purchaser faces is a function of the likelihood of being in noncompliance,
his likelihood of being caught once in noncompliance, and the likely fine or
penalty once those two events have occurred plus the cost of shutdown if a
cease and desist order is enforced.
In addition, if the pollution control product also minimizes waste in a
region in which waste disposal costs are non-zero, then these avoided costs
enter positively into the benefits equation. This is not an easy equation to
always pin down, the buyers themselves may have nothing more than an
intuitive notion about such risks, costs, and benefits. However, If the
annualized price of the pollution control product is higher than the
anticipated benefit -- intuitive or not -- then the chance of a sale is very
low or the sales cycle is very long. On the other hand, if the benefit of
the product is greater than annualized pollution control costs then you may
have the buyer�s interest. But, do you have a sale? No way. It�s from this
position of value that you have to begin to find partners, develop
relationships, build customer trust, show demos, deal with regulators,
handle legal export details, and so on in order to close the sale. It is
from this position of demonstrable benefit that the game of marketing and
sales begins.
The first step in the market entry process is selecting the geographical
area, that is picking the country or countries you want to go after. In a
1997 interview with Ram Gupta, regional manager for Wheelabrator Water
Technologies in Asia, he outlined some of the key ideas in successful market
entry selection. A good marketing manager will say, "Taiwan is spending
US$700 million a year, and Korea is spending US$500 million a year in
industrial wastewater treatment." Besides Japan, these two are the largest
markets, both of which have a huge potential and are spending large sums of
money on environmental problems now.
What most environmental marketing directors say is that these are the
largest markets and, therefore, we should go in those directions. What they
forget or don�t realize is that many of the surrounding markets are large as
well, and your revenue targets are a small fraction -- in the range of 0.5
to 1 percent of the total market, even of the "smaller" Asian markets. What
difference does it make if the market is US$100 million or US$500 million if
your sales forecasts are in the low millions? Remember this is a market
entry strategy, and all you�re trying to do is to get a foothold in the
region. The result of a good market entry strategy is a regional presence."
Gupta continues, "In my fifteen years of international experience, I�ve
learned to prioritize markets, not so much on growth or magnitude, but on
the ease of doing business. Picking regional markets where you think the
business climate will allow you to conduct business in a much easier way
will pay off by allowing you to show short- and mid-range results, instead
of banging away at the larger, more difficult markets -- with maybe nothing
to show for it after a year or two or three. This is why Wheelabrator Water
is in Singapore. I ended up picking Singapore as my base of operations
because it was easier than Taiwan, Korea, China, or India, even though those
markets are ten to fifty times greater in magnitude. People say Singapore is
a small city. Ease of doing business means ease of dealings with government
agencies. Singapore was first, Malaysia was number two, Philippines was
number three, and Thailand was number four. Also, many U.S. firms don�t
realize that Singapore is the third largest refining center in the world. It
is one of the top three electronic manufacturing centers in the world, and,
for an industrial wastewater manufacturer, those characteristics match what
we want in a region. But, most important, for our products and services,
Singapore can act as a hub for subsequent entry into Malaysia, Thailand,
Philippines -- the entire Asian region. Korean, Indian, and Chinese markets
are the most difficult in terms of governmental dealings. They are not
recommended markets for first timers."
After geographical selection, the subsequent steps in the market entry
decision process is deciding on (1) target industry, (2) key clients, and
(3) specific products and goods. For example, suppose that you want to deal
with multinational customers who may already have some experience with your
products in your domestic markets? You determine the geographical markets in
which they have plants and begin to prepare your plan. Are there similar
industries in the region, preferably within service range of a local office?
Then you determine which are going to be key clients that you want to go
after. The last is deciding which specific products and services will be in
your portfolio -- selecting all of them could dilute your focus. So, you
just pick the products and services that have the highest probability of
customer and project success.
Face it. You heard that health and safety regulations were becoming more
strictly enforced in Malaysia. There have been several worker safety
problems that have hit the press related to handling hazardous waste. Your
company has a lightweight tyvek suit with tear resistant enhancement-- great
for hazardous waste-handling situations. You find out that the current
hazardous waste suits in use in Malaysia are a less expensive, lower quality
Chinese brand. You know that your suits can handle multiple day use whereas
the Chinese suits are a one-time use only. You know that your suits are
maybe 50 percent higher in cost but last four times as long, reducing
replacement costs and material disposal costs. How do you break into the
Malaysian market? How do you contact prospective customers? How do you make
your pitch? There is only one way. You need partners. You need partners that
understand the local conditions, know the customer base, can understand your
product, and relate its benefits to the targeted customer base.
Tyvek suit sales require close attention to competitive prices, periodic
time with customers and retail outlets, understanding where projects are
that require hazardous waste protection, and so on. The sales cycle is short
-- maybe a month for the first order and then even shorter for the next
order depending on the volume of usage and the performance of the product.
The product price is low, the product technology and, more important,
benefits are easily understood, the sales discussion is simple and short,
and the risk to the customer of trying the product is relatively low. If the
expensive U.S. tyvek suits don�t work, the Malaysian customers simply go
back to the Chinese suits. In this case, with this type of product,
significant intensive pre- and after-sales service is not required. The
appropriate partner is a distributor or agent, whose job is basically
account maintenance.
On the other hand, let�s suppose you�re selling industrial
reverse-osmosis water treatment equipment to semiconductor manufacturers in
Taiwan. The price of the product has jumped from a dollar a unit to hundreds
of thousands of dollars per unit as compared to the tyvek suit. These are
high-ticket sales, and high-ticket sales are a risky business. Every chip
manufacturer is a little bit different, the equipment has to be modified,
the purchase has to wait until next year�s budget cycle, six people instead
of one are in the purchase decision chain, there are local and federal
regulators involved, and there is competition from German and French
manufacturers with national subsidies to sell their reverse osmosis product.
There is also substantially more risk for the customer. If the equipment
doesn�t work and the incoming bath water for the chips has metal
contamination, it�s not just a loss from poor equipment performance, but in
producing malfunctioning chips, production downtime, lost face, and lost
good will your customer has to endure from their customers. In this product
situation, in which stakes are high for the customer, the sales process is
much more complicated, and simple account management from an agent or
distributor will not work. After sales support and service is critical; your
customer needs to feel that his or her problem is your problem and that, if
something goes wrong, you will be there to back up your product. In this
case, more in-depth partnerships such as joint ventures or acquisitions of
local engineering or equipment firms are the way to go. Given these two
examples, it is clear that different business and product types require
different partnership arrangements to sell in Asian markets.
Selling into Asian markets, each type of environmental good or service
will require some type of Asian partnership and the depth and type of the
partnership should match the level of sales and after-sales effort required.
For U.S. companies it�s then key to analyze what type of focused product and
services portfolios have the best potential in Asian markets and then decide
on the level of sales and marketing effort that is required to maintain
satisfied and repeat customers for those products. And, as a rule of thumb,
whatever customer service and sales effort is required for domestic
customers, double it for Asian customers. With that sales effort
information, the appropriate business partnership can be determined.
Types of Partnerships
Four types of partnerships are used to gain entry into new markets by
every type of business, not just environmental companies. The four
partnerships vary by degree of commitment, up-front investment, and
technology protection. All four are described below.
1. The Use of Local Agents or Distributor
Agent or distributor arrangements, by which a foreign manufacturer or
exporter appoints a local company or individual to promote and sell its
products, are common methods used by newcomers entering a country�s markets.
Agent and distributor firms can range in size from small (with fewer than
twenty-five employees, handling only a few specialized products for a
limited number of manufacturers) to large trading companies (handling a wide
variety of products and suppliers).
Most agents and distributors offer a full range of services. Marketing is
their usual responsibility; they suggest market strategies, arrange
exhibits, and undertake promotion of the product through the most effective
means. They may agree to negotiate sales transactions, assist in getting
quotations and financing, and advise on compliance with import regulations
and permit requirements. Often, they will direct the physical movement and
storage of the product. The scope of the agent�s or distributor�s
responsibilities should be spelled out precisely in the contract. It is
imperative to tailor the contract for your specific product or service, for
your company, and for the particular markets.
Advantages:
Using an established distribution channel for imports will mean that the
importer has already complied with import permit requirements and is
familiar with customs requirements. Furthermore, the representative knows
the market, culture, and language of the local target market. No laws impede
the termination of an agent or distributor contract should either party
decide to end the relationship. However, contracts typically specify that
thirty days� notice must be given to cancel the agreement.
Removes the need to create one�s own marketing and distribution
structure. Agents and distributors know local needs and customs; are often
aware of opportunities before bids are announced; know the ins and outs of
bidding; monitor and promote smaller sales; maintain spare part inventories;
provide after-sales services, and market to both wholesalers and retailers.
Disadvantages:
The representative will usually take a fee, a commission on sales, or
both. Problems can arise unless a well-planned, comprehensive contract is
signed at the start of the relationship. For example, will you expect your
representative to participate in trade shows? To which market is your
representative allowed to sell? How much marketing or sales support, such as
training and materials, will you supply? Which costs are to borne by the
representative and which by you? What will constitute unsatisfactory
performance? For the agent or distributor relationship to succeed, not only
must the duties and liabilities of both parties be clearly defined in the
beginning, but the parties must understand each other�s changing situations
and, possibly, adjust the terms of their agreement accordingly.
Five Ways to Help Your Local Agent: General Guides
- Make frequent visits to support your agents. These visits help build
the relationship, without which no amount of marketing effort can succeed.
Keep in mind that your competitors are also paying personal visits to
their agents and customers. And invite your agent to your country to
reciprocate his or her hospitality and familiarize him or her with your
country and company.
- Hold many demonstrations and exhibits of your products. For suppliers
to manufacturers, the value of sales presentations at factories cannot be
overemphasized. Factory engineers and managers are directly responsible
for the equipment and machinery to be purchased, and they have much
influence on the decision to buy. This is so highly effective -- and so
cheap-- a sales booster that it�s irresponsible for an exporter to ignore
it.
- Increase the distribution of promotional brochures and technical data
to potential buyers, libraries, and industry associations. When your agent
makes personal sales calls, your potential customers won�t be completely
in the dark.
- Improve follow-up on initial sales leads. Let your agent know you�re
backing him up with whatever it takes to pursue the lead. Make your agent
proud to be associated with you. "All of our foreign partners know that
they have the support of a large system behind them," McDonald�s spokesman
Brad Trask says, "The support system is available on request."
- Deliver on time. If you don�t, you can believe that someone else will.
Failure to deliver on time not only makes your agent lose face, thereby
undermining your relationship, it jeopardizes your sales. There is not
much you can do to make ships go faster or airlines schedule more flights,
but you can stockpile your products overseas to ensure that your agent has
a steady supply. When you have to (and it�s possible), forget the expense
and air freight the product for two-day delivery: The extra effort will go
a long way to establish and fortify your reputation.
2. Establish a Representative Office
Advantages:
This is preferred for products needing heavy after-sales service and
cultivation of close relationships with clients, which is definitely the
case for sophisticated environmental products -- some water treatment
equipment, emission controls equipment, and consulting services -- but not
necessarily for less sophisticated environmental products. Industrial
wastewater treatment equipment, which must be modified for each customer, is
a sophisticated product that is difficult to sell through an agent. Also the
life of the product is important. If the product is a high risk for the
customer, the service and commitment to that service via a branch office is
demonstrated and raises the comfort level (see Wheelabrator case study).
Disadvantages:
This approach represents a heavier commitment. A representative office
entails heavy exposure to red tape and the high cost of setting up an office
and hiring staff, is ineligible for Foreign Capital Inducement Act tax
incentives, cannot directly engage in manufacturing or financial services
activities, and still depends on local agents or distributors.
3. Negotiate a Joint Venture with a Local Company
This approach is preferred for high-tech products that must be modified
for sale in a local market, are in growing international demand, and are
protected by intellectual property laws. Typical arrangements have included
U.S. environmental companies bringing technologies to the joint venture and
an Asian partner providing the marketing expertise. Joint ventures differ in
the degree of control each of the partners have, which is typically a
function of initial equity or technology valuation contribution. Also, in
some countries the amount of foreign ownership in the joint venture can be
limited to a minority share.
Advantages:
Gives access to local markets and local distribution through a known
company. Instant credibility. Doesn�t require any setup costs and minimizes
time spent at the lower ends of the local market learning curve.
Preferred for high-tech products that must be modified for sale in the
local market, are in growing international demand, and are protected by
copyright, patent, or similar intellectual property laws. Also preferred as
a way to get access to a joint venture�s technology and/or customer base
without having to acquire that company.
Disadvantages:
Represents an even heavier commitment and entails heavy exposure to red
tape, especially in the Korean, Indian, and Chinese markets (one German firm
had to meet 376 different regulations, many of them unpublished, to get
Korean government approval of a joint venture). Allows for technology
transfer, plus potential infringement on design, patent, and technology
rights and resulting enforcement problems. The foreign partner is often
limited to less than a 50 percent share of the joint venture company
(although 100 percent is sometimes permitted). The foreign partner has no
legal status except the contractual one and so has no protection under
foreign investment law and is liable for the Asian partner�s misdeeds and
losses.
New Types of Joint Ventures: "In-filling" and Operating Partnerships
Traditionally, Asian joint venture partners have provided most market
access to local markets, and the partnership was unequal. The Asian partner
provided access to local distribution and political networks. The foreign
company contributed the products, systems, technology, manufacturing
expertise, and the majority of the cash investment and, therefore, was
expected to dominate the relationship. Today, having accumulated formidable
stocks of capital, resources, systems, and technical skills, large Asian
companies no longer need to play second fiddle in joint ventures. Not
satisfied with being merely distributors and local representatives, they are
seeking new roles in their partnerships with Western and Japanese companies.
Asia�s new style of partnerships falls into one of two basic categories:
specialized in-filling and operating partnerships. In a specialized
in-filling relationship, the Asian company already has a strong base in a
business, often focused on the standard mass production end of the market.
But, for the business to grow its profits, it needs to expand its offerings
and add more value, which requires access to specialized designs, systems,
or specific technologies that can be used to fill in the gaps in existing
capabilities. For such purposes, Asian companies seek partnerships with
smaller Western or Japanese companies that have a unique technology or a
differentiated product to offer. And, whether its partner is large or small,
Asian in-fillers will favor a licensing arrangement over a full-blown joint
venture, with the Asian company typically being the lead player.
In operating partnerships, the large Asian company�s goal is to expand
into new businesses, new geographical regions, or both. It requires a
Western partner with a full range of technologies, products, and systems and
extensive operating experience. The Asian partner will provide access to a
pan-Asian network of relationships with suppliers, buyers, and other Asian
alliance partners; experience operating with different governments and
market environments; and probably a significant investment stake. The
operating structure is likely to be an ongoing joint venture, in which the
parties are equals. Sime Darby, for example, has a strong base in
electronics and basic manufacturing and has pursued licensing agreements and
other types of in-filling partnerships with a number of Scandinavian
companies. In contrast, in oil, gas, and technical services -- areas in
which its partners need a depth of operating experience -- Sime Darby has
entered into full joint ventures with major international players. Likewise,
Thai company Charoen Pokphand and Honda have agreements in which Honda
provides in-filling capabilities for some of Charoen Pokphand�s core
manufacturing businesses. In brewing and telecommunications, however, areas
in which Charoen Pokphand is a relative newcomer and needs to access both
breadth and depth of experience and technology, it as operating partnerships
-- in these cases equity joint ventures -- with Heineken and Nynex
Corporation.
Because established Asian players are now engaging in specialized
in-filling, often through licenses or technical agreements, Western
companies are finding it more difficult to profit fully from Asia�s growing
markets. Licensing offers Western companies only a small portion of the new
wealth being generated in Asia because much of the added value -- and the
profits -- lie elsewhere in the overall supply chain. To make Asian
operations contribute significantly to their company�s bottom line, Western
managers must decide either to bundle their technology and systems with
operating experience that can add real value to an Asian partnership
(thereby allowing their company to demand a greater share of the returns) or
to go it alone as direct competitors in the Asian game. The former strategy
places increased pressure on the employees of the Western company, who must
learn to transfer their experience and knowledge to a new market. The
alternative strategy -- becoming a direct competitor -- means deciding how,
as a Western company, you can add something unique to today�s new Asian
game.
There is hope. Many emerging Asian companies have brands that are poorly
developed outside the boundaries of their home country -- a problem
exacerbated by the lack of attention being paid to marketing in some
industries. Furthermore, because many Asian markets were dominated, until
recently, by standard, mass-produced products, many indigenous companies
have limited experience in handling high levels of variety, customization,
and product differentiation. And, although some cutting-edge Asian companies
such as ACER are learning to decentralize their operations, other companies
in the region tend to be highly centralized and hierarchical -- a fact that
impedes their ability to build effective multinational organizations.
Furthermore, although those same companies have access to the most modern
technologies and can set technical standards, most companies are much more
limited in that regard.
The bottom line is that Western managers must recognize that competing in
Asia does not mean simply transferring technology, assets, and know-how into
Asia. In the future, winning shares in Asia will depend on understanding --
and then changing -- the unique dynamics of Asian industries. Western
companies will have to set new rules of competition, reach previously
excluded consumers, attack Asian control of value chain bottlenecks, offer
more product variety and customization, and leverage pan-Asian brands and
operating scale. Regardless of whether Westerners try to go it alone or form
partnerships with local companies, they will be forced to learn the rules of
the new Asian competitive game. Then they will have to decide whether to
keep or break them.
4. Acquisition of Local Company
Acquisitions represent the most committed form of partnership. This is
the method traditionally chosen by larger U.S. firms wanting more control of
the local partner and business development direction. Total, 100 percent
acquisitions are not allowed in all countries. However, because of
multilateral lenders are requiring market reforms as a condition of issuing
or rolling over debt (review current Korea concessions to IMF bailout plan),
more countries are leaning toward greater acceptance of foreign ownership.
Advantages:
Allows you to retain a competitive edge in prompt service, customer
commitment, and consulting aspects of a sale, suggests to your buyers that
you have a permanent commitment to maintaining a presence in domestic
markets, and promotes an image of stability and long-term availability. Some
countries only allow manufacturing if profits stay in the country;
acquisition is a possible vehicle, or you may be able to set up your own
distribution system. Illegal technology transfer is not as big a problem and
acquisition definitely allows for a business development focus for parent�s
products and/or services.
Disadvantages:
This approach represents a truly heavy commitment and entails heavy
exposure to red tape; the high cost of setting up the office, and hiring
work horse. Building or leasing facilities (foreigners are allowed to own
land only in limited circumstances) is not terribly popular with some Asian
governments, because it is seen as a threat to domestic firms and profits
leave the country. Lack of a local partner makes dealing with the
government, labor unions, and some industry groups problematic.
Cost and uncertainty of what is actually being bought. Due diligence on
Asian companies in some markets is difficult. You may have the necessary
political connections today, but not after next month�s elections. If
operating philosophies and corporate cultures clash too dramatically, there
can be walkouts or just low worker moral and productivity.
Technology Protection: Be Wary of the Joint Venture
Another element of partner type selection involves technology protection.
For technology that is difficult to duplicate or is well protected, you can
utilize any type of partnership as a distribution channel. However, the best
technology is often simple, which leaves the technology developer very
exposed. Horror stories about technologies lifted from plans and
remanufactured at much lower cost are fairly common. The risks of unintended
technology transfer for each of the partnership types are discussed below.
Using distributors can be risky from a technology transfer point of view.
Distributors may have little vested interest in your continued success in
Asia and could pose a threat. In a distribution arrangement, little
technical information is passed between companies keeping the risk of
unintended technology transfer low. Outright acquisitions involve a
relatively low threat because any illegal technology transfers can be met
with unemployment or frozen assets. Joint ventures pose the highest risk for
unintended technology transfer. In this case, the product is usually
complicated, requiring an exchange of detailed technological information to
be passed on to the Asian partner�s sales force so that the product can be
effectively explained to potential customers. Armed with detailed
technological information, the joint venture partner can sell off the
technology or leave the partnership and develop the product on their own.
Although laws prevent such behavior -- and crackdowns have occurred recently
on intellectual property violations in Asia -- a wise business firm will
keep its technology physically protected as well as legally protected on
paper, especially in the joint venture type partnerships. And if it can�t
protect technology physically, using a joint venture partnership should be
carefully reviewed.
Keep your initial sales costs as low as possible -- probably through
direct sales -- until you have established initial customers. For
environmental products in particular, some in-country examples of where the
product or service is being used are critical. People must talk to their own
before they will buy; the more expensive a product or service, the more time
your prospective Asian customer will take investigating the claims of the
product.
It�s likely you will need to adapt your product to local requirements,
laws, and certifications. Most of the time, these modifications will be
minimal, but, in some cases, they can be significant. Prepare yourself, and
be flexible. You must go overboard to service your orders immediately, and
you must answer your faxes immediately. Above all, your company must make a
genuine commitment to export, because otherwise your worst problems will
come from within, not from abroad. This commitment must be made
resource-wise in terms of labor and support with "go" or "no go" milestones
for pulling the plug if things go significantly worse than expected, or
investing additional resources if revenue and profit targets are met or
exceeded.
1. Exhibit at trade fairs
Preferred for product promotion. Available only if trade fair includes
your product and/or your target customer base.
Advantages:
Provides contacts with major and smaller buyers and foreign and local
industry representatives. Hands-on demonstration techniques increase product
awareness. High attendance is typical in Singapore. Other advantages:
- They foster contacts with large and small buyers.
- You can get access at a single event to foreign and local industry
contacts.
- Hands-on demonstration techniques increase product awareness.
- The social events facilitate initial relationship building.
- It�s a quick and easy way to see your competition.
- It�s a quick and easy way to interview potential partners and agents.
Disadvantages:
Market limited to attendees. Intense competition with other products
targeted for the same industry. Hectic atmosphere often prevents deep and
serious contacts.
- Your exposure is limited to the marketing of the show.
- Attendees get inundated with material and may not pick yours out of
the crowd.
- It�s a quick and easy way for your competition to see what you�re up
to.
- For small companies, expense and opportunity cost can be high.
2. Direct marketing
Preferred for consumer products but also common among industries
(including factories) that want to avoid "middlemen" costs. Key to this
method, especially for environmental firms, is targeting the appropriate
industries and contacts within each industry. Effort should be focused, with
follow-up.
Advantages:
Direct access to targeted customers at relatively low cost. Good initial
strike and tests interest. Also useful for finding product price break
points by offering different customer groups slightly different price-value
combinations.
Disadvantages:
Low impact and does not provide feedback on why the product is not
selected as actual client interaction would.
3. Advertise in industry-specific trade journals or magazines
Advertising in professional trade journals. Because most environmental
goods and services are sold business to business, with the exception of
point-of-use water treatment and indoor air treatment products, industrial
trade journals are the most effective print advertising. Depending on the
novelty of the technology, engineering research journals are also good
targets.
Advantages:
Creates brand and product name awareness in a recognized forum. Still
relatively low cost, depending on the media budget. Very effective as a
complementary marketing technique to direct mail and sales calls. Helps your
agent or distributor, who can refer to advertisement, to push the product.
Disadvantages:
By itself, will not likely generate sales. Provides little feedback from
customers. Can get expensive.
4. Make your embassy work for you
Your embassy�s commercial service has many programs designed by experts
for exporters, including seminars, workshops, market analyses, and
introduction to prospective agents and partners. US-AEP has several programs
and services including matching funding for taking U.S. environmental
technologies into Asia. |
