January 2010


Marketing materials

Sales and channel tools

Customer service

Tech support

 It’s all there, and ready to go, now the question is how much ‘localization’ do you really need to do to achieve the sales? Language, culture, and buying patterns are just a few factors that can impact the effectiveness of your product support structure and materials.

Ideally, you would build adaptability up front, but typically companies are figuring out how to adapt products and services that are already successful in the home market. You may or may not need to adapt the product itself to local markets, but you will likely need some adaptation of materials, packaging, training and more – at minimum, translation of marketing and sales materials into the local language – to be successful.

Key takeaway: don’t skimp on what it takes to support your international markets.

Local laws and regulations differ, but often are much more stringent than employment laws in the U.S. especially when it comes to letting someone go, whether due to business reasons, or for cause.

You might say it’s the classic question of “control” versus “risk”. While many more companies are ‘born international’ in today’s economy, most companies still work through the lifecycle of ‘going international’. On average annually, 15% of exporters will stop exporting, while 10% of non-exporters will begin. Companies more or less advance along stages until they reach a level right for their capabilities or product (or stop), with the most critical junctures: beginning or stopping exporting.

As noted above, you need to be careful choosing any partner, whether distributor or employee. It may be tempting to hire right away, with the thought that you will have more ‘control’ than you might with a distributor relationship (for example). However, the risks can be similar, and severing the relationship can be even more costly, so be sure it’s really what you need before taking that step. There are four key factors to consider in making your decision:
• Degree of standardization in product offerings
• Marketing program beyond the product
• Location and extent of value added activities
• Competitive scenarios
Finding a balance will be critical to your success.

In market entry decisions, it’s critical to look beyond the “math equation” – sales potential may be great, but is it really the best, next opportunity? Distance can make a difference, and “distance” is more than geographic.

Pankaj Ghemewat, in his Harvard Business Review 2004 article Distance Still Matters, suggests a framework of evaluating markets that looks at “distance” through a number of lenses:

Geographic         (share a border, adequate transportation or communication systems, physical remoteness, climate differences, time zones)

Cultural                 (religion, race, social norms, language)

Administrative       (currency, trading arrangements)

Economic              (income, distribution/channel quality)

Where do you manufacture?

How do you manage customer service or working with vendors?

Does the distribution system support your product?

Will the buying criteria still be the same?

How about localization needs?

Is sharing a language more important than geographic proximity?

The answers to these questions may be different depending on your product, and where your company is in its lifecycle of international business.  Understanding what is most relevant, and acting on it, will be a key driver to your successful international expansion.