Originally Published August 2007
Once you’ve successfully launched a product in a particular market, you inevitably start looking for growth by launching it in another. Soon, your product is available nationally. But what if you want to keep going and sell your wares in other countries? What if the networks and channels of distribution you rely on domestically don’t exist “over there”? What if cultural differences and conventions pose vexing challenges? How will you make it happen?
The simple answer is that you’ll need someone who has experience navigating the unpredictable and sometimes intimidating terrain of foreign markets. One such person is Bill O’Leary. Following early stints in the worlds of investment banking and management consulting, Bill began his marketing career in the international arena when, while living in Hong Kong, he served as a marketing analyst for Reuters, supporting product managers throughout the Asia Pacific region.
Finding the international aspect of business engaging and exciting, Bill decided to pursue a career in marketing and international business. Over the next decade, while working for Best Foods, Unilever, and iRobot, he introduced consumer products into more than 20 countries, including Japan, Nigeria, Egypt, France, Russia, and Australia.
Based on his wide-ranging experience, Bill has the following insights to share with those thinking of expanding their brand’s global footprint:
1. It’s all about relationships.
Since most companies embarking on global expansion do not have the resources that would allow them to build an organization from scratch in another country, or the patience that would allow them to wait for an eventual return on this investment, they need to start by marketing their products through an in-country distributor. This means identifying, fostering, and managing a relationship with a local company that specializes in selling to your distribution channel/category and has a track record of building brands. Because your success will stand and fall based on these relationships, it’s critical that you pick the right partners, which means, as Bill says, “You have to learn as much as you can about their markets; go meet them face-to-face to get a sense of their credibility and how you would work together; ask a lot of questions (of them as well as those that do business with them) and then make a call on whom to go with.”
While establishing a solid relationship can take time and pose interesting challenges, it can be done more easily if you start with the proper attitude. “In business relationships, across all countries and cultures,” Bill explains, “there is no substitute for a genuine interest in the other culture and following the universal ‘golden rule’ in dealing with people. This, combined with the shared goal of making money, is the key to overcoming potential cross-cultural complexities.”
2. You need a “decider.”
U.S.-based marketing organizations tend to focus on the large domestic market and can be fairly hierarchical, with a strict division of labor: the pricing people do pricing; the packaging people do packaging; etc. Marketers who are responsible for international expansion rely heavily on the expertise of their local partners, as opposed to corporate resources, for consumer insights and operational guidance and, ultimately, have to make a lot of decisions on their own.
According to Bill, “It’s really more of a general manager-type role compared to brand management domestically. Depending on the size of the opportunity, you are making most of the decisions, ranging from which product you will introduce to revenue and profit goals to how it will be priced and packaged. The job thus tends to be more hands-on and entrepreneurial.” One upside to this, from an organizational standpoint, is that the level of accountability demanded by international work promotes a “this is my business” attitude among the marketers who do it.
3. You need to be a quick study.
Along with the responsibility for making decisions comes the added challenge that you are often working with limited information about the market you are entering. “Often, syndicated data does not exist or is beyond the budget,” Bill says, “so you become good at figuring out the key data points needed to make decisions, being resourceful in getting this information, and then connecting the dots. You have to be a professional question asker and a good listener.”
“For example, Poland was a very attractive market based on its size and emerging economy, but it was a blank canvas for my group. By immersing ourselves in the market and local consumer behavior, we soon saw that Mazola was the Unilever brand that had the best potential there. Cooking oil was a product people were using already, unlike peanut butter, for instance, so we didn’t need to explain how to use it or ask them to change existing behaviors. Since people instantly knew what it was when they saw it on the shelf, and it had the added appeal of being from the U.S., our introduction of the product in that market turned out to be a big success.”
4. Things CAN go wrong.
International business is fraught with peril. As the business model and partners are new and the landscape is still relatively unfamiliar, things can sometimes go awry.
“Over the years,” Bill recounts, “I have seen a lot of different problems arise. Hellmann’s distributor in New Zealand unexpectedly went bankrupt due to overly aggressive promotion; the European distributor of iRobot’s Roomba lacked the local roots and relationships needed to be effective; Skippy Peanut Butter failed to stick in Germany because the specialty distributor saw it as a small business for them and didn’t allocate enough resources to the effort; and I even ran into scam artists who posed as legitimate distributors in Russia and India in order to get favorable export pricing, then turned around and resold the goods in the high-priced U.S. wholesale market.”
5. You CAN avoid the pitfalls.
“The key,” Bill says, “is to learn from mistakes and be pragmatic.”
Here’s how you do that:
- Establish a playbook: For each market there should be a written, collaborative strategy and targets for the year, updated periodically, that all have agreed to. This focuses communication and better enables you to manage the market “from a distance.”
- Deal with experts: As much experience as you may have, you will never be local. Seek out and be willing to pay for expertise, especially when it comes to local distributors—You need their clout, connections, and reputation with the trade– and big decisions—The cost of a one-off consultant is small compared to potential losses from a bad decision.
- Trust, but verify: Schedule regular in-person meetings, store checks, and warehouse visits. Also, occasionally do market checks on your own, without your partner.
- Contracts: Get it in writing. As with most things, it is a good idea to get maximum protection up front, even though that initial phase is when you can least imagine that you will need it.