September 2009

Ownership, operating, and funds transfer risks are key areas to pay attention to when assessing the political situation in a new target market. You already know that knowledge and appreciation of a country’s history, language and culture is critical – review the political background to round out the picture before making a long-term investment. Monitor political developments, and factors outside of government control such as strikes, and create country-specific approaches to your business model, including contingency plans.

Be careful to consider laws or regulations that may impact marketing your products, such as

  • Entry of goods
  • Antidumping/below-cost sales of products
  • Licensing
  • Health and safety standards
  • Advertising
  • Membership requirements (e.g. chamber, trade union)
  • Nationalistic buyers or suppliers
  • Currency and remittance restrictions
  • Value-added and export performance requirements

There’s a lot to consider, but the good news is there are many resources available to tap both in the U.S. and in the target market.

Business language, greetings, titles, business cards, conversational topics, negotiation, introductions, business meals, public behavior … need I go on? All these and more need to be handled within the culture where you are doing business. Tips and guidelines are available for many cultures.

But what about colors, pricing standards, truth in advertising, humor, product naming, packaging? Culture drives attitudes and behaviors in business partners and would-be customers, and new market entrants need to be ready to adjust – to “localize” where it’s important.

Look at how people buy and sell: trying to export channels strategies that work in one country may feel more like a square peg in a round hole:

Japan has many layers of small players
Brazil has many small shops
Argentina mall was like being in the US

Cultural differences can trip you up if you don’t pay attention – little things mean more, so do your homework and pay attention to detail right from the beginning! Bonus: you’ll have more fun and build stronger relationships!