International Market Development
Every organization wants to grow and ensure revenue continuity. This can be achieved through developing existing markets or product development. However, although more complex, market development often offers greater opportunities. This means expanding the scope to global growth opportunities. A critical part of Sales Strategy Development in this regard is the assessment of the economy and country segmentation. Do these differ sufficiently in the new market from the existing one? In other words, are we spreading the chances of growth?
Revenue Continuity and Growth through International Market Development
Exporting to countries not linked to the business cycle ensures diversification. Sometimes with a different direction of the economic spiral. So not the ‘easy’ export to countries similar to the Netherlands, but often to greater challenges. Such as the emerging so-called "Next Eleven" country, Mexico. Or perhaps somewhat similar, but then to areas close to those economically different countries, like Australia, which benefits from the Asian "BRIC" economies of India and China.
The reason to export is no longer the easier comparability, but specifically the cyclical deviation. Various case studies show that the most obvious country does not always offer the most added value.
Example of an Analysis
In 2009, the Sales Improvement Group advised an ambitious industrial organization. Their high-quality products were in demand in the Dutch home market, but the market was not growing fast. The company believed they knew Germany and its people (comparable sales market) and had plans for market development there.
However, the Sales Improvement analysis revealed that, to achieve their ambitions, Germany did not offer sufficient potential. It had the same cyclical expectations and expected population growth as the Netherlands.
Following our advice, they spread their highly profitable wings to Canada and Mexico that same year. They continued their success in Australia and by 2013 were also active in emerging Latin American countries.
Questions to Ask Yourself Beforehand
- Which countries are not directly linked in terms of business cycles?
- In which countries is growth occurring?
- Where does my product add value?
- Is my product suitable for that specific country?
Getting Started with Export
Where the market differs from the home market, choosing local dealers or distributors is the obvious choice, aside from the internet. This way, you benefit from their knowledge and network. Determining dealer segmentation policy is the next step. Turn the dealer network into an extension of your own sales organization. A clear set of requirements makes the distributor dealer-worthy.
It's also important how you select which type of dealer. Do they only sell your product? And how? And do you want to segment? If so, choose an initial classification of dealers by size, product range, and service level. Doing this after a few years is extremely complex. Also, pay ample attention to after-sales: are end customers served locally in case of complaints or repairs?
Such topics are addressed in a clear Sales Strategy. You develop your market internationally by focusing on growth through cyclical diversification.
By: Paul Schmidt
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