Building Effective Distribution Channels

A “ground zero” approach for SME’s new to, or in the early stages of entering, the International Marketplace. This session will help SME’s

discover an effective method to build international distribution channels.

Presented by:

John A. DeLuca, International Sales Manager, Liberty Pumps Inc.

Claudia Salgado, U.S. Commercial Service, Mexico, Embassy of the United

States of America (Via Satellite)

Special Introduction

Timothy J. McCall

Director

Rochester U.S. Export Assistance Center

U.S. Department of Commerce

400 Andrews St., Suite 300

Rochester, NY 14604

Tel: 585-399-7065

Fax: 585-423-7570

timothy.mccall@trade.gov

So, Let’s define “Ground Zero”…

Let’s also define SME…

• Small and medium enterprises or small and medium-sized enterprises (SMEs, small and

medium-sized businesses, SMBs, and variations of these terms) are companies whose

personnel numbers fall below certain limits. The abbreviation "SME" is used in the European

Union and by international organizations such as the World Bank, the United Nations and

the World Trade Organization (WTO).

• SME (small-to-medium enterprise) is a convenient term for segmenting businesses and

other organizations that are somewhere between the "small office-home office" ( SOHO )

size and the larger enterprise . The European Union has defined an SME as a legally

independent company with no more than 500 employees.

• In the United States, the Small Business Administration sets small business criteria based

on industry, ownership structure, revenue and number of employees (which in some

circumstances may be as high as 1500, although the cap is typically 500).[4] Both the US

and the EU generally use the same threshold of fewer than 10 employees for small offices

(SOHO).

Was Liberty Pumps an SME at Ground Zero?

• Founded in 1965

• Family Owned

• Around $30-35M

• Just under 100 employees

• ~ 1% sales were “international”

2010

30,000 foot look at the

challenge….

Goal: International Market Penetration (International market share = 25% of US)

resulting in “Targeted Sales Amount” (25% of company turnover) by 2020

1. What do I have to sell?

2. Where can I sell it?

3. What is GTM/channel by country?

4. How do I find “Mr. Right”?

30,000 foot look at what needs

to happen….

How do I avoid Mr. “Wannabee”?

30,000 foot look at how do I do

that… before looking for Mr. Right

• Exporting Plan

– “Failure to plan is

planning for failure”

• Export Toolkit

Closer to the ground look

at it…. Part 1 – Export Policy Commitment Statement

Part 2 – Situation Analysis

1.Products

2.Operations

3.Personnel and Export Organization

4.Resources at Liberty Pumps

5.Industry Structure, Competition and Demand

Part 3 – Marketing Component

1.Identifying Target Markets

2.Evaluating and Selecting Target Markets

3.Product Selection and Pricing

4.Distribution Methods

5.Terms and Conditions

6.Internal Organization and Procedures

7.Sales Goals: Profit and Loss Forecast

Part 4 – Tactics

1.Primary Target Countries

2.Secondary Target Countries

3.Indirect Marketing Effort

Part 5 - Export Budget

Part 6 – Implementation Schedule

1. What do I have to sell?

2. Where can I sell it?

3. What is GTM/channel by

country?

4. How do I find “Mr. Right”?

Let’s drill down and take a Ground

Level look….

Export Compliance Program

Consulting with Experts

(e.g. WTCBN)

Legal

Training

Written Plan

part of ISO

Quality Manual

Compliance

Worldwide

Shipments

Ok… back to finding Mr. Right

1. Create a profile of the “ideal” agent/dealer/distributor for your

products:

• Market they Serve

• End User base

• “Product Line Card”

• Sales turnover

• Territory coverage

• Number of Sales People

• Marketing resources

• Warehousing capability

• Payment terms

• Shipping/receiving logistic

• Language skills

• Other????

Understand the Scope of the market you are trying to

penetrate… the markets are usually smaller!

• What you have in the USA • Most likely is not what you get

abroad

Ok… Let’s start looking!

Do you know

Anyone? #1- Your Network

Ok… Let’s start looking!

• Professional

Organizations

• Directories of

Manufacturers

#2- Market Research

Directories of Distributors

Target Email Blast

This approach is the result of your

market research… mining all the

resources mentioned for a list of

“Targets”

Recall:

• Professional Groups

• Directories of Manufactures

• Directories of Distributions

But how do you know which one is “Mr. Right”

“Mr. Right”

• Exactly in your market

• Recognized as a premier

dealer/distributor by potential

end users

• Profitable, Successful, and

growing

• Knows of your company and

wants to add your products to

the line card

“Mr. Wanabe”

• Kind of in your market

• Not a first tier player… goes to

trade shows and tells

potentials suppliers they “want

to be” your dealer/distributor

• Not doing well… needs you to

infuse some cash!

• Doesn’t care who you are!

Best Tool I have used

to find “Mr. Right” and

why…

The Gold Key Matching

Service (GKS)

Why the best?

• Targeted in-country market

research (in 80 countries!)

• Coordinated dealer/distributor

search for the profile I defined

• No language barriers

• “Mid Term Report” with

proposed action plan for dealer

and/or distributor visits

• Assistance with travel and

accommodations

• Assistance with translation

service

• Follow up support

Obvious advantages

• Speed

• Accuracy

• Ease of Use

• Cost

Hidden Advantages

• “Mr. Right will respond to a

solicitation from the US

Embassy… not so to your email

blast…

• “Mr. Right” knows the US

Embassy brings him only the

“Right” US Companies… he has

nothing to fear… only to decide if

the fit is “right”

Go To: Claudia in Mexico City

Make Introduction

And bring her in on Skype

Claudia to describe what typically happens from her

side while executing a Gold Key Service Program

Get your Upstate NY Trade Conference passport signed by at least 10 exhibitors for a chance to win the

following prizes, which will be raffled off and announced after the closing keynote

Exhibitors: 1 GRE/IBC/NYSERDA

2 Time Warner Cable Business Class

3 Advanced Language Translation

4 Freed Maxick CPAs, P.C.

5 Wells Fargo Bank, N.A.

6 KCI Engineering of New York, PC

7 JR Language Translation Services Inc.

8 RIT Saunders College of Business

9 Speed Global Services

10 RBS Citizens

11 FBI

12 US Small Business Administration

13 Mohawk Global Logistics

14 School of Business Administration and Economics,

The College at Brockport

15 Gallagher Benefit Services

16 U.S. Department of Commerce

17 U.S. Customs and Border Patrol

18 County of Monroe Industrial Development Agency (COMIDA)

Procurement Technical Assistance Center (PTAC)

19 Employer Support of the National Guard & Reserves (ESGR)

Exhibitor Passport Prizes:

• Advanced Language Translation, Inc.

$500 Gift Certificate towards translation services

• Hong Wah Restaurant – $10 Gift Certificate

• Mario's Via Abruzzi Restaurant – (2)

$50 Gift Certificates

• Mohawk Global Logistics

$100 Gift Card to Black & Blue Restaurant

• Richardson’s Canal House Restaurant – (2)

$25 Gift Certificates

• Speed Global Services

Dictionary of International Trade

& 50% off 2nd international shipment

• The Cheesecake Factory – $25 Gift Certificate

• The Spa at the Del Monte

50 minute Massage

• Wegmans – $100 Gift Card

• Wilmorite Inc. – $50 Mall Gift Card