Insights to Accelerate International Expansion

Export Handbook

Our Mission:Help ManufacturersSpend time Selling to Distributors versus Searching for Distributors

Export is not easy. Demandingretailers, overworked distributors,and limited funds for marketinginvestment create a toughenvironment for internationaldevelopment. Export Solutions goalis to make life a little easier for exportmanagers.

This Export Handbook features themost popular articles published inour Export Express newsletter. Morethan 350,000 industry professionalshave visited our web site to read ourstrategies and suggestions forbuilding brands in overseas markets.Inspiration for this Export Handbookcan be credited to the export managerof a world famous brand. He statedIt is important that Export Solutionshas compiled all the strategies andtechniques that we know about export,but sometimes forget. Your articles

help refresh my memory plus providenew ideas. The industrys futuregrowth will be determined by ourability to expand beyond our homemarkets. Export Solutions can help!

Gregs Ten Tips1. Good news travels fast and badnews travels slowly

2. If you want to know whats reallygoing on, spend a day visitingstores

3. Pick up the phone and call a friendor business partner versus email

4. Be positive. Think, why not?

5. Results are directly proportionate toyour investment:Marketing, People, Focus, Time

6. A distributor (or Broker) respectswhat the Brand owner inspects

7. Shipment numbers rarely lie

8. Put it in writing

9. If two people agree on the princi-ple of a deal, you can usually workout the financial terms

10. There is more in common withindustry practices across the globethan differences. Brand ownerseverywhere desire more shelf pres-ence and retailers demand morediscounts. Recognize the differ-ences, but focus on the universalrequirement for superior products,marketed at a fair price.

In This Issue

AboutExport SolutionsExport Solutions is a leader in exportdevelopment and distributor identificationservices for the food, beverage,confectionery and consumer goodsindustries. Weve worked as consultants onmore than 300 export projects in 93countries and 5 continents. Our salesoriented approach focuses on practicalsolutions to get your product on the shelf insupermarkets around the world. For moreinformation visit www.exportsolutions.comExport Solutions has helpedmore than 1,700export managers Spend time selling todistributors vs. searching for distributors.

Page 2Country Segmentation One Size Does Not Fit All

Page 6Fifteen Tips:

Achieve Preferred Supplier Status

Page 9Ten Tips Common Export Mistakes

Page 10MyWay:

Finding and Selecting the Right Distributor

Page 1110 Questions for Every Distributor Interview

Page 17International Expansion

Shoestring Budget

Page 21Ten Tips

Winning the Battle for Retail Shelf Space

Export Handbook 200 Tips for ExportManagers

Segmentation FactorsSegmentation analytics will vary by company. Absolutepopulation is just one factor warranting consideration. Othercriteria include size of the category, proximity to your producingplant, as well as per capita spending power. For example, mostUSA based exporters sell far more to Puerto Rico, an island with4 million people, than they do to China or Brazil. As a result,some USA brand owners place a strategic focus on the CaribbeanBasin countries adjacent to the USA and process only occasionalopportunistic shipments to complex countries such as China.

Mix of CountriesMost companies can dedicate focus on a strategic launch intoonly one or two strategic countries at a time. Its appropriate tocreate a growth plan aimed at a mix of Strategic, Priority, andOpportunistic countries.

Market Share ExpectationsYour export road map should also be adjusted based upon yourmarket share expectations for a select market. Generally, there arethree scenarios for a brand to pursue.

Leader: Brand investment and innovation to become #1 in thecategory.

Player: Brand plans to compete effectively, obtaining a marketshare of 5% -20%.

Participant: Niche. Brand objective is incremental shipmentswith little/no investment.

Lessons LearnedCalibrate expectations to investments in brand support andmanagement oversight. Everyone wants to be a category leaderor player. To achieve this lofty status, you need to conduct localmarket research, innovate, maintain competitive pricing, investin marketing, and align with a strong sales team just as you do inyour home market. Projects fail as certain brands want categoryleadership but invest only to niche levels.

Strategic segmentation of export opportunities is Job One for export managers. Export Solutions divides countries into three groups:Strategic, Priority, and Opportunistic. This approach filters countries by size of the prize and investments required to win. The basicrationale is that a company should allocate different resources to develop a large country like Brazil, compared to a medium sizecountry like Belgium versus the Bahamas or Bermuda. Too frequently, we see companies handcuff all markets to one export program,with common strategy, pricing, and invest models for all countries.

Country Segmentation One Size Does Not Fit All

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Country Segmentation

Country Profile Investment Required Business Model Examples

Strategic(Focus)

Large Country(pop. 50mm +)High GDPHigh Category BDIGlobal RetailersHigh Complexity

Significant Investmentin Brand support.Market Research

Management Visibility

Local Office orDistributor orJoint Venture

JapanUSAMexicoChinaGermany

Priority(Manage)

Mid size Country(pop. 10 mm+)High GDPHigh Category BDIMid Complexity

Moderate investment inbrand support.

Managed by ExportManager

Distributor

ArgentinaAustraliaCanadaTaiwan/KoreaSouth AfricaBeneluxSaudi Arabia

Opportunistic(Profit)

ProfitableOpportunities.Low GDP CountriesLow Complexity

Minimal/no investmentin brand support

Distributor orDirect to Retailer

CaribbeanCentral AmericaMiddle EastAfrica

3Strong consumer goods distributors aredeluged with representation inquiriesfrom around the world. The emails areusually supplemented by a productcatalog and promise to mail a price list!In a best case scenario, this type ofapproach may lead to a request for moreinformation from a good distributor.More likely, the distributor will skip yourinquiry and move on to the next opportu-nity in his mailbox. Listed below areExport Solutions tips for breakingthrough the clutter and providing theright information to generate excitementand interest from the distributor commu-nity.

1.What is your Brand USP(Unique Selling Proposition)?USP defines your competitive edgeversus all other brands battling for thesame shelf space. The USP can revolvearound quality, value, assortment, orpackaging. However, you need tovalidate your claims. For example, astatement such as tastes better thancompetitors A& B should be supportedby market research of consumers or blindtests of a sufficient panel group that backsyour quality claim. Similarly, a retail pricereview can demonstrate a better valueposition. Your USP must also pass thelitmus test: Is your USP relevant to thepurchaser and consumer? For example,you might offer the only coffee withorange and lemon flavors, but is anyonereally looking for this product?

2.Have you done your homework onmymarket?The food/consumer goods industry isrelatively transparent. Typically, brandowners simply need to visit the leadingsupermarket chains to obtain a snap-shotof local category assortment, pricingand merchandising practices. The assort-ment and shelf space allocation willprovide clues regarding consumerpreferences from a taste/usage stand-point and potential gaps in the market.Syndicated data providers such asNielsen and Euromonitor supply reams ofdata tracking category sales and trends.New brand representation offers to dis-tributors that demonstrate a degree ofunderstanding of local category marketconditions will always receive anappreciative response.

3.What will the brand owner invest?The most important consideration afterthe USP definition! A distributor believesthat he needs the right financial spendlevels to aid him in achieving the resultsthat he is capable of. The correct spendlevel usually reflects an appropriate mixof trade development funds (listingfees/shelf space/flier participation) andconsumer awareness activities(sampling/pr etc.) The brand owner mustacknowledge that there are fixed fees toenter virtually every market. Somedistributors are willing to split these fees.Its usually not enough to case ratespending unless you have a very strongproposition. Bottom line: If you areunwilling to invest in your brandwhyshould the distributor invest his time andresources building your brand?

4.Where has your brand been successful?Your track record at building brandscounts! Share your record proudly, partic-ularly if the target country or retailer arewell known or reside in an adjacentcountry. On the other hand, a Made inthe USA success story may not beimpactful if you dont intend to duplicatethe conditions that brought you successsuch as local production and measurablemarketing investments.

5.How tough is the job to launch your brand?Are you attempting to enter a competitivecategory dominated by heavy spendingmulti-nationals? Or are you aiming at anattractive niche? What are the brandowners expectations in terms of productavailability and sales volume?

6.Can the distributor makemoney with yourbrand?Distributors seek to obtain a fair profit fortheir activities to support your brand.Profit must be measured in dollarscontributed versus percent of sales.Distributors rarely make money duringyear one of an introduction as theyallocate a disproportionate share of theirresources to launch a brand. On the otherhand, new brands in current categoriesfor the distributor can bring new profitswith minimal incremental effort. Globallyrecognized brands bring prestige to adistributors portfolio and may serve as amagnet to attract other brands. Brandowners must present a convincing case tothe distributor on the incremental profitsthat your company can deliver to thedistributors bottom line.

BrandOwners:What Every DistributorWants to Know

Ten Tips Increased Distributor Focus on Your Brands1. Quarterly MBOMeeting with DistributorSenior Management

One of the most effective tools forincreased focus is to create a regularprocess for Distributor senior manage-ment engagement in your business. TheManagement By Objective (MBO) system(or similar approaches) allows you tomeet quarterly on a pre-planned scheduleto review past quarter performance onkey initiatives and firm up plans andcommitment for the new quarter.Discussions should focus on key businessmetrics and account specific results.Meetings can be held via teleconference ifyou can not visit personally 4 times peryear.

2. International Distributor NetworkConference

This can include all your global distribu-tors or those from a specificcontinent/region. Program can be 1-2days in length and can include CorporateBusiness Review, New Product Roll-Out,and requirement that each distributorgive a presentation on a success storyfrom their home market. Meeting locationcan tie in with a major trade fair such asSIAL or FMI to reduce expenses.Alternatively, the meeting can also be in aresort location to serve as an incentive.Export Solutions is available as a confer-ence meeting speaker to discuss a varietyof distributor optimization strategies andretail trends.

3. Sales ContestsSales contests bring energy, excitement,and focus to your brands. Sales contestsshould be about six weeks in durationand offer the opportunity for everyoneto win. Prizes can range from cash incen-tives to trips to merchandise for the win-ners. Sync contest objectives andmeasures to your key initiatives for yourpeak season or a new product launch.

4. Key Account Business ReviewsIt is appropriate to conduct key accountbusiness reviews with each of the distrib-utors top 3-5 accounts once per year.Meetings should include senior levelmanagement of the retailer. This strategyrequires distributor analysis of theaccounts business and opportunities formutual growth. This also provides youwith an avenue to develop a personalrelationship with local customers.

5. Retail AuditRetail execution is critical to the successof any brand initiative. An important ele-ment in a new product launch or prepara-tion for your peak selling season is thepre-scheduled Retail Audit across amarket. The Manufacturer would bring 2or 3 people from their company andmatch them with distributor personnelfor a day in the field checking retail con-ditions. In one day, the 2-3 teams can see30-50 stores in the market to judge themarkets readiness and progress.Distributor personnel are competitive andwill work hard to make the market lookgood for the Retail Audit.

6. Plant VisitInvite your distributors for a plant visitand/or a trip to your corporate headquar-ters. Distributor can be introduced tomembers of your senior managementteam. Distributors should be encouragedto bring a large customer as well. Thistype of trip can serve as a bondingexperience and create a renewed sense ofcommitment to your business .

7. Bonus PaymentIncentive pay for performance usuallyworks well with sales teams. Sync bonuswith your key objectives. Reward per-formance on achievement of retail distri-bution, profitability, as well as salesvolume objectives. Volume based objec-tives alone may encourage questionableshipments that could be diverted.

8. Distributor Sales Meeting ParticipationMost distributors schedule monthly orquarterly meetings for their entire salesteam. This is a primary format for the dis-tributor to communicate direction andpriorities. Most distributors allow theirmanufacturers to make a presentation ona new item or key sales drive.Supplement your meeting presentationwith a small gift for all meeting partici-pants such as a pen, key chain, or calcula-tor with your company logo.

9. CEO Market VisitDistributors appreciate a visit from yourCEO or other member of your seniormanagement team (CFO, VP Internationaletc.). This gives them the opportunity todemonstrate their results and share theirinput on the markets development. It ismagical to watch certain market issuesget solved immediately prior to asenior management visit !

10.Share Best PracticesCreate a process for sharing best prac-tices and success stories within yourglobal distributor network. These can becommunicated via a monthly newsletteror email. Distributors are proud to sharetheir achievements or innovative newstrategies that they are using to buildtheir business. Manufacturers may electto reward distributors with the best suc-cess story each month with a freedinner or other incentive.

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Selling more to Bermuda and Bahamasversus Brazil? More business in HongKong than China? Join the club. The longroad to BRIC success is filled withdangerous curves and uncertain junc-tions. Low hanging fruit opportunitiesin these countries have long disappearedreplaced by a scrum of categorycombatants from all corners of the worldwrestling for market share in what couldbe small categories for a long time tocome. There are no miracle solutions! Ourten tips apply to large emerging marketssuch as China and Mexico as well ascompanies having troubles penetratingGermany, Japan, Italy or the USA.

1.Apply Fundamental Lessons Learnedfrom your HomeMarketThink about the factors that drove yoursuccess in your home market: Uniqueproduct, Consumer Research, LocalProduction, Competitive Pricing,Marketing Budget, Strong sales team etc.The same fundamentals apply to enteringlarge new markets. I always challenge thesenior management of my clients with thefollowing Business Case Study: Whatwould you do if competing Global BrandA from another continent tried to enteryour home market? The response is filledwith aggressive plans to defend the hometurf. My next question is Dont you thinkthat the local competition will react thesame way when you plan to enter theirhome market?

2.Stop Treating Large Countriesas Export MarketsShipping small quantities of productthousands of miles and visiting twice ayear will not win in a large market likeGermany, the USA, Mexico, or China.Large markets need to be treatedstrategically, with a separate businessstrategy and resource commitment versusa small export market. In some cases, it isbetter to exit a large market if you can notcommit versus potentially harming thebrand image with lackluster shipmentsthrough a subpar effort.

3.Conduct Market ResearchExtensive category research is required instrategic markets. Is your categorydeveloped or evolving? For developedcategories, what unique characteristicsdoes your brand deliver and how muchdo you plan to invest to source share fromexisting brands? In new categories, whatdoes the consumer say about your brand?

Is the taste profileappreciated, even if itforeign versus the localcuisine. Syndicated data isavailable which will helpyou gauge the size of theprize.

4.Pursue Local ManufacturingExport programs to largecountries infrequentlygenerate substantialbusinesses. The incrementaloverseas freight costs andduty structures normallytranslate to retail prices far higher thancompetition produced in country.Building a factory represents a long termcommitment. Contract packing couldprovide a less costly, interim option.

5.Prepare Your Board for aLong Term InvestmentCreating a meaningful new business in alarge country is not a 1-2 year event. Morerealistic is a 5-10 year plan depending onexisting acceptance of your category.Brands and habits and practices takeyears to create except in the case of trueinnovation. A significant investment inmarketing is mandatory, even in the caseof a true category innovation.

6.Buy a Local CompetitorThe quickest way to gain a presence in alarge market is to acquire a local competitor.Conduct a category review and see whichcompetitor would be the best fit for yourcompany from a product portfolio andcultural standpoint. Price is always aconsideration, as you do not want tooverpay for future growth in an emergingmarket or pay too much for market share ina mature market.

7.Dont TackleMany Large Countries At OnceCompanies multi task. Morningmeeting onMexico andwell attack Russia after lunch.Abetter idea is to pick one major countryand plan to focus the teams resources onwinning in that country for the next 1-2years. This includes deployment of humanresources as well as investment dollars. Getit right andmanagement will be pleased tofund a broader expansion. Spread yourselftoo thin and youmay fail everywhere.

8.Invest in an ExpatriateCompanies need a soldier from your headoffice on the ground in the country of focus.This facilitates the transfer of best practices

and company culture to the new country.The expatriate knows who to call at thehome office to get things done. He canreport the true status of initiatives and has along term dedication to the company. Bestbet is to partner the company soldier withan experienced local player who knows thelocal market, culture, customers etc.Language barriers can present a challenge,but the benefits far outweigh the issues.

9.Scorecard against In Store FundamentalsYour sales team must be equipped andmeasured against the fundamentals ofsecuring strong in-store presence atleading retailers. Too many times, ateams progress is judged solely uponshipment numbers. Another scenarioreflects positive reports regarding chainheadquarter authorizations, but no followup execution at store level. Our businesssucceeds with a team focused withwinning the battle store by store.

10.Consider a Local PartnerPlans may be fast tracked through a localpartner. Partnerships can take manyforms including a joint venture, licensee,services contract, or distributor typerelationship. Extensive due diligence isrequired as unsuccessful partnerships canbe difficult to exit. Export Solutions has athorough nine step process we deploy onour many partner identification projects.Lessons learned including alignmentfrom your partners senior management tothe retail merchandiser, as often thepartners commitment gets dilutedthrough the supply chain. Its advisable tohave your own representative in houseat the partner to look out for yourcompany interests. Partner results aredirectly proportional to your investmentas even the best sales teams require theright financial resources to allow them toobtain optimal performance.

Fixing the Problem: Small Shipments to Big Countries Ten Tips

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6Fifteen Tips: Achieve Preferred Supplier StatusAnatural goal is to achieve PreferredSupplier Status with retailers and yourdistributors. Satisfied trading partnersgenerate superior results. Vendor of theYear does not mean Spender of theYear. Listed below are 15 tips to beviewed as a Preferred Supplier with yourdistributors and retail customers.

1. Invest in Brand SupportMarketing activities drive incrementalsales and cultivate the health of yourbrand and category. Supplier investmentsin consumer awareness and retailer devel-opment activities help everyone achievetheir sales objectives.

2. Innovate, Innovate, InnovateThe CPG/FMCG industry is fast paced,with frequent new product introductions.Companies which invest in research todeliver new product ideas out-performand lead the category.

3. Keep the Supply Chain FilledShort shipments cause a chain reaction ofproblems throughout the supply chain.Seek to attain a 98% case fill rate or better.

4. Distributors Need to MakeMoney Too!Retailers, Manufacturers, and Distributorsseek to achieve a reasonable profit.Distributors ( Importers/Brokers) areoften squeezed as middlemen.Distributor Margin reductions translate tocutbacks in sales personnel, customerservice, investments in technology, andultimately impact results for your brand.A financially healthy distributor is a pro-ductive partner.

5. Focus on Priorities versus MinutiaeAll partners are guilty of getting absorbedin the details of the business. Maintainattention on the key elements which drivebusiness success. Minimize non-essen-tial reports.

6. Serve as Category ExpertIts a challenge for Retailer buyers anddistributors to master all the categories.Preferred suppliers provide fresh andunbiased insights into category trends,product development, and analysis of cat-egory data.

7. Visit the Market, But not Too OftenDistributors and Retailers welcome yourperiodic visits. Insights on market devel-opment and problem solving face toface are invaluable. On the other, you

need to provide dis-tributors the time andfreedom to build thebusiness without dis-traction of prepara-tion and managementof frequent suppliermarket visits.

8. Calibrate TimeCommitment toCompensationA first step is to eval-uate what your brandrepresents to a dis-tributor ( or retailer)in terms of annualrevenue/profit contri-bution. Reflect on theactivities requested toservice your businessin relation to yourcontribution.

9. Keep YourCommitmentsPreferred suppliersare viewed as trustedpartners. Reliablesuppliers secure morethan their fair share ofretailer and distribu-tor focus. Last minute cutbacks in market-ing support are sometimes necessary, butdamage your credibility.

10. Respond to Local IdeasDistributors and Retailers know theirmarkets. Give them the support theyrequest on a new promotion idea or salescampaign. Let them build ownership ofan idea and the ultimate results. Goodideas will build credibility and sales.

11. Pay Bill-backs on a Timely BasisMany distributors are small businesseswith tight cash flow. It is always positiveto be viewed as a Prompt Payer of legit-imate invoices.

12. Support Distributor with CorporateHeadquartersMany companies enjoy long term rela-tionships with their distributor network.The Distributor depends on you to serveas their advocate with senior manage-ment of your company. Fight for theirideas and defend their business perform-ance, where appropriate. Remember thatall organizations experience a mix ofgood years and bad years.

13. Share Best PracticesIndustry participants are all students ofthe game and are generally open tolearning about strategies from other mar-kets/retailers. On the other hand, wemust recognize that all markets havesubtle differences and not all approachesare transferable.

14. Provide Proper Lead Time to AchieveDesired ResultsThe consumer goods industry is relativelyorganized with established protocols andtimelines. Exceptions can be made in caseof product recall or breakthrough innova-tion. Everything functions better whentimelines are adhered to.

15. Recognize AchievementTake the time to say Thanks or Welldone. This acknowledgement may be inthe form of a personal note, phone call, orpublic recognition.

7Need AHand?

Contact Greg Seminara at gseminara@exportsolutions.comto discuss your international development project.

We can help!

Some recent projects for Export Solutions: Global distributor search across 26 countries supporting sale of 1 billion dollar Food brand

USA entry strategies and importer/broker search for 70 million dollar European Ethnic Food Brand

India/Australia entry strategy and distributor search for 700 million dollar Beverage company

Mexico distributor search for Global Health & Personal Care company

Export Development and Distributor Management workshop for 5 billion dollar European Food company

Japan partner identification for 2 billion dollar personal care company

Latin America development project for 70 million dollar Juice company

European Strategy and distributor assessment for 250 million dollar Natural Foods company

Middle East distributor search for Global Healthcare company

Export Solutions performs distributor search in 93 countries. Our consulting division helps companies of allsizes with global strategy and expansion projects. Looking for an impactful Distributor management workshopfor your team or meeting speaker for your annual meeting?

8Exporters love the thrill of creating plansto conquer new markets. The reality isthat our annual sales quota is dependenton driving new sales from our existingmarkets and distributors. This appears asa challenge in a low growth country ormature category, particularly if you arenot blessed with baskets of money toinvest in brand support activities. Listedbelow are our ten tips for sourcing newsales from existing markets.

1.Fill inWhite Spaces on your Listing MapMost manufacturers focus their energyon the total sales number for a country.The one template I recommend for eachmarket is a Listing Map. This grid lists top10 customers in the first column and yourbrand SKU assortment in a horizontalrow. Where are the distribution voids?Which new listings will generate the mostcases? What resources are needed to fillthe white spaces? What is the plan?

2.10% ChallengeTrade spending may be a wise investmentif it drives profitable, incremental sales.This is a good time of year to challengedistributors with the question: Whattype of spend levels would be necessaryto secure a 10% increase in shipments(consumption) in the next 90 days?.Of course, in emerging markets youmay want to challenge the distributor fora 20-40% increase or higher.

3.Retail Sales ContestCompetitive sales representatives lovecontests. Everyone enjoys winning a prizeor supplementing their income. Brandowners should consider a sales contestthat is tied to Pay for Performance.Measure incremental pallet displays forvolume brands or most creative displayfor smaller brands. Sync your competitionwith your peak seasonality or a newproduct launch. Awards such as iPads orweekend trips are motivational. Structurethe contest to maximize winners. Create atheme and have fun.

4.Senior Management VisitSchedule a visit for your companypresident or other senior executive to visitan underperforming market. Arrange forthe visit 2-3 months in advance. Youwould be surprised at the serious marketissues that are resolved prior to yourbosses arrival. The executives visit isboosted by new ideas and a commitmentfor future performance.

5.Evaluate Your Pricing ModelPricing drives volume. Most pricingmodels were designed at the beginning ofa relationship and rarely revisited exceptfor the periodic price increase. Conduct aretail pricing survey. What is your pricegap versus your competition? Whatwould happen if you adopted an everyday low price approach? If you took aprice decline of 10%, would theincremental volume compensate for theprice reduction?

6.Co-Promotion:Leverage Distributors PortfolioMany of the most successful distributorsrun quarterly or annual promotionalevents featuring all their brands. Normally,there is a charity tie-in or special themeoverlay. The beauty is that each of thedistributors brands pays only their shareof the event. These Co-Promotion eventsturn out to be a big win for the distributorand each of their brands.

7.Annual Customer Business ReviewIts appropriate for a formal review of yourbusiness at eachmajor customer. This couldbe a data intensive review at a key customerin a developedmarket or a two pager inan emergingmarket. The process is the key.Focusing each sales representative toanalyze their business results and identifytheir largest opportunities adds visibility toyour priorities.

8.Spend Time at RetailMost market visits program the exportmanager from hotel to office tocustomer followed by dinner.Periodically, well squeeze in a storevisit or two before a customer call orflight departure. Why not dedicate aday at retail with the retail managerduring a market visit? Youll get a goodpulse of market conditions andcommunicate your brand insightsdirectly with the retail sales manager.Brands that are obsessed with in storeperformance win incremental retailsales team focus.

9. Offer a Bonus Pack or On-Pack PromotionMost brands source 90% of their salesfrom the shelf. Generate some excite-ment everyday with a bonus pack orother special pack promotion. Manydistributors can manually apply smallgifts or premiums at their ownwarehouses.

10. Distributor ChangeOrganizational change is a last resort.However, if a distributor continues todeliver uninspiring performance, youmay be forced to look at marketalternatives. How is the distributor salesgrowth versus overall category andmarket growth? A new distributortypically brings a boost of energy and arenewed sense of commitment to a brand.

Ten Tips: Sourcing New Sales fromOldMarkets

9Export represents a dynamic growthopportunity for most companies.However, most companies makemistakes, particularly in the early cyclesof their export development. Listedbelow are some common mistakes:

1.No Category ResearchSome companies assume that theircategory development is consistenteverywhere. They fail to conduct basicresearch on competitive dynamics andpricing. This research can be as simple asa day of store checks in your targetmarket. I remember having an argumentwith a leading producer of brandedIndian Food about export opportunitiesto Latin America. He refused to believethat the market for Indian food was sosmall, because he had not conductedresearch or visited the market. Do yourhomework!

2. Limited Investment inMarketing & Trade SpendingFew brands are so innovative andexciting that they will sell withoutinvestments in consumer awarenessactivities and trade incentives. Yet, manyexporters believe that they can offer anet price and a distributor will create asignificant business, without support.There is a cost of doing business in everymarket. Ultimately, your results will bedirectly proportional to your marketinginvestment.

3. Another Me-Too ProductInnovation sweeps the world at a rapidpace. Manufacturers fail when they donot create a unique selling proposition(USP) for their brand. Why is yourproduct different versus current options?Is the differentiation meaningful? Abetter price (value) or heavy marketinginvestment can also differentiate yourbrand. I recently visited Europes largestfood trade show. I saw a lonelyexhibitor from the USAwith littleinterest in his commodity food products.Why would a European retailer ordistributor want to import a product thatcan be sourced locally at a better price?

4. Pricing is Too HighOn many export projects, the price to theconsumer can be twice the price fromyour home market, by the time that youadd in logistics costs, duties, distributormargins, and taxes. Yet, much of exportgrowth is sourced from emerging

markets, wherespending power islow. So, the result ishigh priced productbeing marketed topeople with limitedfunds. In many cases,the consumer will paya premium (10-30%)for a quality,imported product.However, once yourproduct is priced 50%or higher than thelocal competition, youare just appealing thetop 10% of the population in most cases.

5. Product not Labeled in the Local LanguageEnglish is a global language, butobviously your brand will obtain a betterreception if it is labeled in the locallanguage. Many countries have lawsrequiring labels or at least nutritionalinformation in the local language.Another similar issue is that some brandnames do not translate on a global basis.What does your brand name mean in thelocal language? Does it sound similar tosomething else which has no correlationto your brand?

6. Insufficient Due Diligence during theDistributor/Partner Selection ProcessI am amazed at the number ofrelationships based upon only a shortmeeting at a trade show. I love tradeshows and believe they are a great placeto meet prospective distributors.However, you must conduct duediligence on your prospective partner intheir home country, before beginningyour relationship. This includesinterviewing the distributor as well asother candidates at their local offices.Visit the stores to see their performancefor their current brands. Conductreference checks and run financial checkswith Dun & Bradstreet or similar creditcheck agencies.

7. Diverting NewCustomer Pick Up at your PlantExport managers are flooded withrequests by distributors/buyers wishingto purchase well known brands. Many ofthese inquiries are legitimate, but asignificant percentage are from diverters.Ive written a separate article on thissubject, so Ill only share a fewcomments here. If your export price is

less than your standard price, displayextreme caution in dealing with newdistributors/buyers.

Complete the required Due Diligencereferred to in point 6, including a visitto the distributors warehouse. Do notallow pick up at your plant or at a localport by a new distributor, if your priceis lower than your standard price. Shipto the distributor product labeled in hisnative language and be cautious aboutpromises to sticker the product at theport.

8.No Focus on the ShelfToo many exporter/distributordiscussions concentrate only oncontainer shipments and orders. Acritical element is the need to focus onactivities to generate consump-tion.Some export projects fail, because theexporter does not dig deep to trackprogress against fundamentals ofacceptance at major retailers, assortment,pricing, shelving, and merchandising atstore level.

9. Exporter Fails to Visit the MarketThe internet has facilitated globalcommunication. However, there is noreplacement for a periodic, face to face,market visit to discuss issues andmeasure progress. Out of sightout ofmind.

10.Unrealistic ExpectationsExporters are optimistic by nature.Launch plans project volumes basedupon category size and the famousstatement If we secure only a 10%market share You know the rest of thestory. Reality is that the 10% marketshare is possible, if you focus onavoiding the mistakes discussed inpoints 1-9 above. Good luck!

Ten Tips Common ExportMistakes

Hiring the right local partner is thethird most important step inoptimizing your sales. This followscreating a product with a uniqueconsumer value proposition andwillingness to invest in branddevelopment activities. Listed beloware some practical tips on selecting theright company to represent your brand.

Identify a Pool of Preliminary CandidatesCreate a large group of potentialcandidates. This could include distri-butors, importers, brokers, or localproducers of related products. Highlightcompanies that are specialists in themarket sector that you are aiming at.Export Solutions streamlines thisprocess with our online directory ofmore than 5,300 distributors, importersand brokers for 93 countries.

Establish Partner Selection CriteriaWhat are the key attributes of yourideal candidate? Productspecialization? Service portfolio?Existing results for current brands?Choosing a Large, Best in Classpartner versus a Small, Hungrycompany willing to pioneer a newbrand is an important preference.

Determine Candidates PreliminaryInterest LevelSend a brief summary of your productproposition and company credentials tothe 5-10 most promising candidates. Afollow-up phone call to your topcandidates is an appropriate personalconnection. Distributors expressing aninterest should complete a briefcompany overview recapping theircorporate capabilities: Sales, Logistics,Marketing, etc.

Schedule a Meeting in the Candidates OfficeNormally, we recommend interviewingat least three candidates depending onthe size and scope of a project.Schedule the meeting 3-5 weeks inadvance. Provide a specific agenda atleast 2 weeks in advance, includingpre-work such as category marketanalysis. Meet the distributors teamthat would work on your business, aswell as senior management.A distributors office provides clueson company culture, scale, andcapabilities.

Prepare Interview Questions andAssessment Grid in AdvanceCreate a list of key questions to ask eachcandidate. Topics could include localcategory dynamics, cost of entry, andDistributor success stories. Create astandard grid to evaluate and compareall candidates on a common platform.See page 11 for ten sample questions forevery distributor interview.

Conduct an Independent Evaluation ofCandidates Performance for Existing BrandsVisit target outlets for your product toobserve category conditions. At thesame time, evaluate each candidatesperformance for his existing clients. Dohis current brands maintain a strongpresence in the market? Or are hisbrands hard to find? Conduct thesevisits to leading retailers independently,as an accompanied visit may lead youto select stores which may not berepresentative of marketplace reality.

Reference Checks Represent anImportant Next StepRequest references of 5 of the distributorstop 10 clients. Call at least three referencesand request insights into performanceand capabilities. Acknowledge that theseare likely to be positive references, butthey always provide significant value.Run a Dun & Bradstreet or other type ofcredit report on leading candidates.Export Solutions is often hired to conductindependent, confidential, referencechecks.

Invite Top Choice to yourCorporate HeadquartersThe visit should include meetings withsenior management, factory tour, launchplanning, and mutual commitment. Thetrip serves as an important bonding andrelationship building experience betweenyour company and your new partner.

MyWay: Finding and Selecting the Right Distributor

www.exportsolutions.com/exportTips.aspx

80 Free ArticlesExport StrategyDistributorManagement

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10 Questions for Every Distributor Interview1.Company HistoryHow long have you been in business? Who are the owners?How many direct, payrolled employees do you have?Approximate annual sales volume?

2.Company Brand PortfolioWhat are your top 10 companies/brands represented?For which channels do you represent each brand?How long have you represented each brand?Can you provide senior level references at each brand owner?

3.Key Account BuyersWho is the buyer for our category at the largest retailers inyour market? What other brands do you sell to our buyer?How frequently do you visit each major customer?

4.New Product Launch Success StoryProvide a recent example of a new brand launch success story.Key retailer acceptance? Cost of entry? How long did it take?Key elements of the success strategy?

5.Creative SellingProvide an example where you took an assignedmarketing/brand support budget and created a successfullocal program. How do you measure success?

6.Retail ServicingHow many full time employees do you have visiting retailstores? Are they located countrywide or just in the capital city?How do you measure a good store in terms of brand presenceversus a bad store? Describe your retail reporting system.

7.PeopleWho would be our point of first contact? Would our contact alsosell our brands to major accounts? What other brands is ourcontact responsible for? How do we insure that we get our fairshare of attention from your sales force?

8.Business Planning ModelWhat would your action plan be if we made an agreement tostart with your company? First steps? 90 Day Plan? Reporting?

9.Cost to ServeHow do you model your distributor margin? Range of margin forour brands? Are you open to promotional spending split (50/50)?

10.Enthusiasm for our CompanyWhy is our brand a good match for your company?Why are you the best partner in the market for our brand?What commitment are you willing to make?

Talk to an Expert International Strategy Road Map Fix ProblemMarkets Entry Plans Find Distributors in 93 Countries ExportWorkshops Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 to discuss your business development project.www.exportsolutions.com

Online Distributor Database

Contacts for 5,300 distributors in93 countries are moments away at

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Who created the distributor lists?Our proprietary lists were compiled byconsumer products professionals with 29years working with distributors,importers, and brokers in Europe, LatinAmerica, Middle East, Asia and theUSA/Canada. The Distributor lists weredesigned to provide the fundamentalinformation that International ExportManagers would need to quickly identifyand screen distributor candidates.

How do you obtain the distributorcontact information?Our lists are compiled from more than300 Distributor search projects in 93countries. Hundred's of global brandshave shared their international distributorlists with us. A point of difference is thatdistributors can not self register or pay tobe in our database. We screen each entryindividually to make sure that they are aqualified distributor.

What product categories are handled bythe distributors?Distributors include specialists forbranded food products, health and beautycare products, non-food brands, confec-tionery/biscuits, beverage,natural/organic foods, gourmet products,specialty food, and general merchandise.Many distributors can handle any prod-uct that is normally sold through super-markets, Foodservice/Catering, orPharmacy channels.

How Frequently are the Lists Updated?Export Solutions distributor lists areupdated every day! Approximately 150New distributors are added each month.Distributor company names and web sitesrarely change. The distributors key con-tact for new product inquiries and theiremail addresses may change as a result ofjob moves or organizational shifts. Weemploy three separate mechanisms tokeep up to date with changes.

What added value is available throughan annual database subscription?Subscribers enjoy unlimited access to theentire database for one year. This includesall new distributors and countries that areadded and any updates in contact infor-mation. Subscribers enjoy time savingOne Click Access to distributor websites and email addresses. Purchasers ofindividual Country lists receive the mostcurrent list as of date of purchase, with noaccess to our frequent updates.

How many distributors are listed percountry?Most countries list an average of 52unique distributors. Many of the largercountry lists feature 80 distributors ormore. We claim to list ADistributor forevery Exporter.

How do distributors qualify forinclusion in the database?The carefully researched lists contain dis-tributors, importers, and brokers who arethe leading local companies at supplyingsupermarkets and other trade channels.Many companies represent easily recog-nized global brands. We are open toincluding most reputable distributors thatoffer sales, merchandising, and/or distri-bution services for third party brands.

How do I determine if the Distributorsare reliable?Export Solutions strongly recommendsthat each company using our lists con-duct extensive due diligence on poten-tial distributor candidates. This includesreference checks with existing clientsand Dun & Bradstreet financial analysis.We are available to help qualify distribu-tors through our strategic services divi-sion.

Do the lists only include large,powerful distributors?The lists provide a mix of large, mediumsize, and small distributors, importers,and brokers. The larger distributors tendto prefer partnership with establishedglobal brands while the smaller distribu-tors tend to be more entrepreneurial andopen to pioneering new brands andsmaller companies.

What are Export Solutions Futureplans?In 2012, we plan to offer category andcontinent specific lists such asConfectionery Distributors, Beauty Caredistributors, Natural Food Distributorsas well as Total Europe, Total Asia etc.Our goal for 2012 is to offer coverage of6,000 distributors in 93 countries.

How can I purchase a subscription orcountry distributor list?Customers can purchase our distributorlists online any time. Register withExport Solutions. Subscribe or selectyour countries of interest. Enter yourcredit card details. Then, return to theExport Solutions web site to immedi-ately print your distributor lists. Theentire process takes 2 minutes to com-plete.gseminara@exportsolutions.com

Take a PeekFree Distributor Database DemoLook Before You SubscribeContact Greg Seminara

Distributor Database Frequently AskedQuestions

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Suppliers review their distributor contractsfor two reasons: At the start of a new dis-tributor relationship or when the currentdistributor has resigned or failed. Mostexporters simply revise their standard dis-tributor contract with a new name andmake a few minor adjustments whenentering a new partnership. ExportSolutions frequently reviews distributorcontracts as part of our distributor identifi-cation process. The current financial crisishas created recent opportunities to analyzenumerous distributor contracts. We do notpretend to be lawyers but our broad con-clusion is that most current distributorcontracts were written to reflect businesspractices of the 1990s versus the businessreality of 2012. Listed below are points forconsideration as you seek to refresh orrenew your distributor contracts.

Contract vs. Letter of UnderstandingABasic question: Do you really need acontract with all distributors in all coun-tries? Formal contracts make sense whenthe manufacturer plans a strategic launch,supported by investments in trade andconsumer activities. A contract is manda-tory in transferring an established busi-ness from a direct organization to a thirdparty or from one distributor to another.A Letter of Understanding may suffice incases dealing with an opportunistic saleor testing a new product concept. TheLetter of Understanding simply outlinesthe roles and responsibilities of each part-ner, expected outcome and plan of action,and ability for each party to exit the rela-tionship without much complexity. Insome situations, a manufacturer may electto operate without a contract or otherlegally binding document. This may func-tion in some countries, but in certain mar-kets such as Puerto Rico (Law 75) arelationship with responsibilities is cre-ated with or without a formal writtenagreement.

Financial: Payment Terms, Currency & PricingOur financial world has changed. We nolonger compete in a world of 30 day pay-ment terms, stable currency and prices,and easy credit. At least half of the severedistributor issues today relate to financialbreakdowns versus traditional brandunderperformance problems. Adequatetreatment of this topic requires hours ofdiscussion. What are the lessons learned?How do we incorporate learning fromtodays financial situation to obtain moreprotection in other countries where youconduct business?

Information Technology RequirementsMost industry participants would beutterly and completely lost without ourcomputers. Yet most contracts do notspecify any Information Technologyrequirements for our distributors. Newcontracts often specify that a distributormust handle designated EDI transactionsets, Electronic Funds Transfer, andonline portal to share shipment andfinancial information. Data security andback-up requirements also warrant inclu-sion.

Global Retailer ImpactRetailers such as Carrefour, Walmart,and Metro maintain a presence in manyadjacent countries. Their cross bordersourcing activities create challenges fordistributors, as retailers buying practicesmay interfere with protected territories.New contracts should address the role ofGlobal Retailers and responsibilities foreach partner to maintain the integrity ofthe territory.

Modern Supply ChainHistorical distributor contracts requiredminimum inventory levels of 8-12 weekssupply or more based upon long supplychains and challenging routes to market.Dominant supermarket chains todaykeep about three weeks in the pipeline.One weeks business on order, oneweeks business in the warehouse, andone weeks business in-store. Leadingedge retailers share point of sale datathat can sync with supply chain solu-

tions such as SAP. The right inventorylevel is the minimum amount for a dis-tributor to maintain 98% service level orbetter.

Termination ClausesMost distributor contacts are rarelyrevisited until the possibility (or proba-bility) of termination becomes likely.Long term contracts lasting 5 years, withone year notification periods do notmake business sense for the distributoror supplier. More realistic is a three yearcontract, with escape clauses for eitherthe manufacturer or distributor to resignif minimum sales levels are not attained.Termination notification periods of 6months to one year can be harmful for abrand. A better option is a 3 month noti-fication period, with succession plansformalized at point of notification. TheUSA broker community has functionedwith 30 day standard, renewable, con-tracts for at least 30 years.

Next StepsRespectfully, most suppliers and distrib-utors desire to avoid frequent contactwith their lawyers. The financial realitiesof the last 12 months revealed that manydistributors and manufacturers are notadequately protected. A review of exist-ing contract templates to measure rele-vance for todays business practices iswarranted. Export Solutions advocates abalanced approach favoring commercialsensibilities.

Distributor Contracts: Review and Refresh

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Changing distributors is a messy business, filled with hurt feelings,business disruption, and legal implications. The good news is thatwhen you have transitioned to a new distributor, you will benefitfrom the enthusiasm and commitment of a highly motivated newpartner. Recapped below are Export Solutions Ten Tips formanaging the process of changing distributors.

1.Secure Agreement on DistributorChange from your SeniorManagementIn many cases, a terminated distributor will reach out to yourcompany president or owner to appeal your decision. It makessense to brief your management on the situation and your rationalefor the change. If they are not aligned with your point of view,better to learn in advance of creating a disturbance with adistributor termination notice that could be retracted.

2.LongTermDistributor vs.Short TermDistributor?Your approach at handling the process will vary based upon thelength of time of your partnership. Dissolving Long termrelationships( 5 years or more) requires careful handling,documentation of situation, and consideration of marketplacerepercussions. Ending short term partnerships is usually lesscomplex, as it is normally clear that mutual objectives are not beingmet.

3.Probation PeriodPutting a distributor on probation sends a warning signal thattermination is possible. Normally, probation periods last 3-6months and include specific objectives to achieve during the targetperiod. This approach gives the distributor a second chance tomeet expected standards. Termination following a probation periodreduces the risk of a distributor complaining that he didnt knowthat your company was that unhappy with his performance.

4.CheckYour ContractDistributor contracts outline termination process and procedures.The contract will guide required steps to make a distributor change.Contract terms are negotiable, particularly when a distributorrelationship is ending by mutual consent. In certain cases, theremay not be a contract which naturally provides a brand ownergreater flexibility. On the other hand, you still must consider locallaws and business practices which may be in place, even without acontract.

5.Review Local LawsMany countries have well defined laws regarding termination ofdistributors, brokers or agents. These laws often dictate acompensation formula for payments due to the distributor. Thelegal rationale relates to the concept that the distributor invested hisown resources to build awareness and good will for your brandin his country and must be compensated for this investment.Puerto Ricos Law 75 applies even when there is no contract signedand only one direct shipment to a local Puerto Rico distributor oragent.

6.Document Inventory in the Supply ChainThis includes current inventory, orders en route, and pendingorders. One of the biggest issues in any distributor change revolvesaround inventory management. Angry terminated distributors may

attempt to forward buy or fill the market with discounted goods.Or they may refuse to transfer inventory to the new distributor. Ihave also seen cases where the old distributor attempts to transferdamaged or outdated inventory to the new distributor.

7.Conduct NewDistributor Identification ActivitiesThese should be in process or completed prior to termination of theunder-performing distributor. This will allow you to minimize thetime between termination notification and transition to a newdistributor. It is likely that your current distributor may learn thatyou are interviewing the market to understand alternatives. Thisis all part of the probation process and may further stimulate thedistributor to ramp up his performance levels.

8.Minimize Notification Periods Contract Buy Out?Contracts may specify a 3 month to one year notification period fora terminated distributor. ABrand owner should not want aterminated partner representing his business any longer than theyhave to. The risk to the brand is too high. I prefer 1-2 monthtransition period, even if a brand owner is required to buy outthe last fewmonths of a contract. It is better for everyone to moveon for a fresh start as quickly as possible.

9.Trade Notification StrategyIt is likely that some customers will be upset with a decision tomake a distributor change. The good news is that they will getover it. On the other hand, it is important to identify potentialsensitive accounts and for the brand owner and the new accounthandler to have a prepared response for an unhappy customer.

10.Fast Start Program SixMonthsYour new distributor will be highly motivated to get off to a faststart to make a strong initial impression. We need to balance thisdesire to run fast to sell with the critical steps of focusing on thefundamentals: Sufficient inventory throughout the supply chain,update new vendor information in customers order managementsystem, education of the sales force on product benefits etc. Crawl,Walk, Run. Normally, the process takes six months to successfullycomplete a transition to a new distributor.

FutureDistributor change used to represent a challenging proposition dueto the lack of information on alternate distributor candidates.Export Solutions database tracks over 5,300 distributors in 93countries. This translates to an average of around 52 differentdistributors for each market. This has eased the process ofidentifying alternate candidates when distributor change is beingconsidered or required. Visit www.exportsolutions.com/distributorDirectory.aspx for more information.

Ten Tips Changing Distributors:The RightWay

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Everyone knows their own salary.But have you given much thought tothe compensation structure for yourdistributor partners? Distributorcompensation is often a murky issue,buried in a calculation created years agofocused on a combination of distributormargin plus other income for servicesrendered. Brand leaders periodicallyreview their distributor compensationstructure and compare it to therequirements to service their business in2012. Listed below are Export SolutionsTen Tips for analyzing your distributorcompensation model.

1.Convert Distributor Marginto Gross Dollars EarnedMargin percentages are important, butanother critical measure is absoluteincome derived from representing yourbrand. This simple calculation of grossmargin multiplied by invoiced salesprovides a baseline number. If applicable,manufacturers should add bonuses orsubtract retailer rebates.This is the firststep to understanding your truedistributor compensation.

2.Shared Service ModelTypical distributor services may includeimportation, warehousing, delivery,selling, merchandising, invoicing, andcollections. In some cases distributorsreinvest a portion of their margin in tradediscounts or in store marketing activities.Another major distributor expense ispeople, including senior managementand a brand management team. Incomefrom your brand margin buys yourcompany a share of total distributorresources.

3.Value Equation:Distributor vs. Local SubsidiaryAn important exercise is to evaluate theservices received from the distributorrelative to what they would cost if youneeded to create your own independentsubsidiary in a country. Your analysisshould include subsidiary allocations forbuildings, information technology,telecommunications, travel, andentertainment. Normally, the resultdemonstrates that the distributor model isan efficient outsourcing alternative. Thekey is to balance your many companyobjectives versus the requirement tofunction in a shared servicesenvironment where you are buyingonly part of the distributors time.

4.Pay For PerformanceMost food and consumergoods industry executivesoperate in a compensationstructure which includes abonus incentive for achievingand exceeding assigned goals.Some brand owners haveextended this approach todistributors so that the entireteam is aligned on a commonplan. All distributor bonusschemes should reward casesmoved into consumptionversus warehouse inventory.

5.Price Increases meanDistributor Pay RaiseMany suppliers were fortunateenough to execute priceincreases. In a margin drivenstructure, this often translatesto a pay raise for thedistributor, with littleincremental effort other thanimplementing the priceincrease. On the other hand,a price decline means areduction in distributorcompensation and thedistributor needs to executehis own salary reduction!

6.Contracts and Margins from the 1990sMany distributor contracts and margincalculations date back to the 1990s ormany years earlier. These agreements arerarely revised or reviewed based upon therealities of competing in todaysmarketplace. When was the last time thatyou reviewed your Distributor contract,margin, and service requirements? Does itstill make sense?

7. I dont knowmy distributors marginThis happens more frequently than youmight imagine. In many arrangements,the distributor buys your brand at a deadnet price and applies their own internalmethodology for margin development.Some distributors are protective of thispractice with a rationale thatmanufacturers should not pry as longas shipments maintain a positivetrajectory.

8.Best in Class Distributor CompensationLeading Distributors offer an open bookapproach based upon a cost to servemodel. Financially astute distributorsprovide new suppliers a detailed

template identifying key services andmanufacturers requirements to operatethe business. Smart manufacturers willbenchmark their distributor marginversus similar brands in the market.Key inputs include complexity of yourproduct line, logistics inputs (temperaturerequirements, case weight) and size ofyour business.

9.Total Compensation:More than Gross MarginExamine every line item in your marketprice calculation to understand totaldistributor revenue sourced from yourbrand. Distributors may increase theirincome through promotional funds,added margin for logistics services, orperiodic bill-backs.

10.Distributors have Profit Targets Too!Distributors are in business to makemoney too! It is quite reasonable to expectthat the distributor should realize a netprofit of 3-5 percent. Everyone hopes togrow their salary base and receivebonuses for excellent performance.Winning long term relationships existwhen both parties profit from businesssuccess.

Ten Tips Distributor Compensation Analysis

Stretching thin marketing budgets is a jobrequirement for most Export Managers.

Listed below are Ten Tips for brandbuilding on a Shoestring Budget.

1.Tap into Government Export ProgramsMany countries sponsor strong tradeorganizations that can aid your exportdevelopment program. Exports translateto jobs and most countries have wellestablished programs to facilitate the saleof locally produced products. For exam-ple, the USA Foreign Agricultural Servicewill co-fund marketing investments forsmall-mid size USA food producersthrough their MAP programs. GermanSweets and GEFA, UBI France, ICE(Italy), ICEX (Spain), Austrade(Australia), and AG Canada serve asvaluable resources for local exporters.These organizations often sponsor localFood Events at leading supermarkets ininternational countries. For example,Austrade sponsored GDay USA to show-case Australian food producers to USAconsumers. These events are highly publi-cized and normally feature a relativelymodest participation fee.

2. Leverage Relationships withGlobal RetailersWal*Mart, Carrefour, Tesco & WholeFoods all maintain programs to ease theexport process for their current suppliers.This usually involves direct consolidatedshipments with other local producers,labeling assistance, and placement in aspecial section in the international aisle oftheir stores i.e. USA Foods, France Foods,UK Foods etc. The immediate benefit isthe streamlined route to market withoutpayment of upfront local marketing fees.This allows you to Test the Marketprior to a traditional market entry with alocal distributor and heavy marketingsupport.

3. Joint Venture with Local ManufacturerAnother idea is to locate a local player inyour category in a country targeted forexpansion. You may be able to offer apotential partner innovation intaste/flavor or packaging to complementhis local expertise. A joint venture or Co-Branding agreement can produce rev-enues without significant start-up funds.

4.Build Marketing Costs intoDistributor MarginMany manufacturers build an accrual

fund into theirdistributormargin calcula-tion. Normallythe fundinglevel is around10 % of sales,but can rangefrom 5 -20 %depending onthe category.This creates afund for thelocal distributorto manage. Theaccrual fund iscreated on apay as you gobasis, with fundlevels propor-tionate to ship-ments. In thisscenario, the manufacturer usually pro-vides a small fixed sum to create a launchbudget prior to initial shipments

5.Free Goods May Fund Trade MarketingFree goods may be used to offset the costof trade marketing programs, particularlyfor established brands. This can be inform of a 1 free with 10 purchase or simi-lar type of promotional events. The bene-fit is that your budget can be stretched asyour cost of goods produced is less thanthe wholesale cost.

6.Private LabelRetailers source quality products for theirprivate label at the lowest possible price.This eliminates the need for marketinginvestments. However, private label isdifficult if freight expenses are too high.

7.Foodservice ChannelFoodservice/Catering offers a lowinvestment route to market versus thesupermarket channel. Foodservice usu-ally requires less traditional brand mar-keting support. Foodservice operatorslook for tailored solutions with rebatesbased upon purchase levels. A smallbudget for SPIFs ( SPIF- special incentivefund) can generate purchases from inde-pendent restaurants.

8.Specialty RetailersEach country has specialty retailers thatserve as alternate channels for yourbrands. This could include diverse cus-tomers such as Cost Plus World Market,Trader Joes, Big Lots or Dollar Tree in the

USA. These retailers maintain differentapproaches not dependent on heavy man-ufacturer spending.

Their strategy is to offer different brands (or sizes) versus traditional supermarketsor mass merchandisers.

9.Co-promotion with other BrandsRetailers generate excitement throughTheme events around a group of compli-mentary items or common cause. Thiscould involve participating in Barbecueevent with other Barbecue related prod-ucts :

Charcoal, Meat, Picnic Supplies, Drinks,Pickles etc. Another example is a retailerpromotion celebrating their anniversaryor support of their favorite Charity (Juvenile Diabetes etc.). In many countries,leading distributors sponsor an annualevent for all the brands they represent.Dont forget the country specific promo-tions (GDay USA) mentioned earlier. Ineach case, manufacturers pay for a por-tion of the event as costs are spread outamong all brand participants.

10.In & OutPacks/Gift BasketsThese special packs can generate incre-mental business without investment inlisting fees or shelf space. Examples couldinclude modular displays, trail size ship-pers, or bonus packs with free product orgift. Gift Baskets are very popular duringthe Christmas Holidays. This is a goodvehicle for Fine Foods brands to gainexposure with gourmet consumers.

International Expansion Shoestring Budget

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Export managers are overwhelmed withphone calls and emails from companiesdesiring to sell their brands. Some proposalsare worth evaluating, as we all seekincremental sales in new countries.Other requests originate from diverters ortime wasters who do not have sufficientcapabilities or financing to commercializeyour brand. Export Solutions has completedseveral projects with brands looking tostreamline the process of filteringinternational representation requests.Listed below are our ten tips for efficientlyidentifying serious inquiries from potentialpartners.

1. List Current Distributors on yourWeb SiteThis practice provides potential customersand consumers a local contact for yourbrand. It also discourages non productivecalls from other distributors from thatcountry from contacting you. Distributorrepresentation information is in the public domain, so webpublication does not breach any confidentiality issues.

2.Export Partner Philosophy StatementCreate a standard letter explaining your criteria for selecting newpartners. Suggested text should include comments like Brand Xis available in 12 countries and is a leader in the Y segment. Weare looking for established local distributors in certain countriesto participate in the next chapter of our growth. Candidatesshould maintain a successful track record pioneering otherinternational brands and offer a complete portfolio ofimportation, supply chain, key account sales, and in storecoverage services.

3.Distributor Candidate Data SheetAone page template captures core information from thecandidate. This template can also be web based and appear on thecontact section of your web site. Key inputs include years inbusiness, company size, web site, number of employees, andcurrent brands represented. Reference contacts are critical.A sample Export Distributor Data Sheet can be located at thebottom of the Export Tips section of the Export Solutions web site.

4.First Response: Send Philosophy Statement & Distributor Data SheetSend your philosophy statement and distributor data sheet as aninitial response to all unsolicited phone and email inquiries.Instruct the candidate to review the philosophy statement andcomplete the data sheet if they feel that there is a match withtheir capabilities and your companys export strategy. Informthem that someone from your export department will contactthem once the data sheet has been 100% completed. A keylearning is that unqualified or suspicious candidates will notcomplete a data sheet.

5.PostDistributorWantedListThe export page on your web site should list countries where youare searching for a partner. This listing will encourage inquiriesfrom target countries and help you fill in the white space inyour export coverage map.

6.Reference Check Promising CandidatesMy first step is to visit a distributors web site. The second stopis to review references supplied from other brands on his datasheet. References listing contacts of export managers for otherleading brands is always a positive indication. A credit checkmakes sense, particularly in emerging markets.

7.Watchout #1- Candidate Has NoWeb SiteThis indicates that the distributor or entrepreneur is small oris possibly making claims that are erroneous or misleading.Candidates who refuse to provide references from other brandsrepresented also should be avoided.

8.Watchout #2- All About Low PricesWarning bells go off from inquiries from companies urgentlyfocused on obtaining your export price list. I get suspicious ofinternational distributors volunteering to pick up product at yourfactory or those who prefer English language labeled producteven when their native language is different.

9.Due Diligence QuestionsWhat would the distributor launch plan look like if you agreedto sell to him?

What are the local category dynamics?

What does the price calculation look like?

Can the candidate share a success story for another brand fromyour country?

10. Invite Serious Candidates to Your HeadquartersThe preferred option is to visit a distributor in his home marketto see his operation. This is not always possible, particularly forsmall or remote countries. A visit by a pre-screened candidatesignals interest and initiative on their part.

Export Solutions database covers 5,300 distributors in 93countries. This serves as a quick reference tool to check thevalidity and credentials of a potential distributor candidate.

Ten Tips: Translating Export Inquiries into Incremental Sales

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Savvy exporters deploy modern webbased tactics to identify newdistributors and connect with globalconsumers. Most companies maintaina basic web site featuring aninternational section, but few sitesare designed to promote export sales.Listed below are Export SolutionsTen Tips to unleash the power ofWeb 2.0 to drive new business in 2012.

1. Language Translation Softwareincreases your ReachPopular software from Babel Fish orGoogle can be installed on your site totranslate your International page tomultiple languages. These toolsprovide instant translations withoutformal redesign of the web page.

2. Code your site for TrackingAnalyticsAvailable reports measure visitors bycity/country, time spent per page, andkey search phrases driving webtraffic. Search Engine Optimization(SEO) raises your ranking withGoogle and Yahoo.

3. List Current Distributor ContactsThis makes it easier for potential customers and consumers tolocate your brand in their home country. The distributor listingon your web page also reduces distributor inquiries fromcountries where you already have a partner.

4. Distributor Wanted PostingsDefine countries where you are searching for a partner. YourDistributor Wanted section should sync with your CompaniesDistributor Selection Criteria. A sample statement could outlinebasic requirements such as Beverage Company A seeks partnerswith significant beverage category expertise and demonstratedsuccess marketing other international beverage brands.Distributor can-didates must be highly motivated withcountrywide coverage across all trade channels.

5. Automate Process to Capture Distributor CandidateCredentialsCreate an online template to summarize a new distributorcandidates basic information: Com-pany size, current brandsrepresented, references, web site etc. Alternatively, you candevelop a process to auto-matically email a similar template tointerested candidates. Create an email box called newdistributors@yourcompanyname.com.

6. Establish an Intranet Portal for Existing DistributorsThis password protected gateway serves as an entry point to adata warehouse of information. The Intranet could includeproduct catalog, brand images, syndicated data, presentations,and a chat function to share ideas.

7. List local retailers stocking your productBasic approaches include a simple drop down menu statingnow available at with names and/or logos of leadingcustomers. Advanced applications include ability for consumersto search for retail stockists by postal code.

8. Product Request FormAn online product request form captures names and contacts ofconsumers interested in your brand. This information can beused to prioritize export expansion areas measured by level ofinquiries. Upon entry into a new country, the product requestdata facilitates targeted marketing or to demon-strate to aretailer a level of existing consumer interest.

9. Publish an International NewsletterThis newsletter may share new product information, successstories, recipes, contests, or any other method to createengagement with distributors, retailers, and consumers. Toolssuch as Constant Contact make creation and delivery of onlinenewsletters simple and cost effective.

10. Photos add a personal touchPictures of the Export department teammembers add life to theinternational web page, particularly for small-mid size exporters.Other web pages include photos of the Distributor of the Year orsenior manager visits to international markets.

Web 2.0 Your New Export Sales Partner

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Many of the most successful businessdeals are clinched long after 9:00 pm.Barriers come down once your buyeror distributor escapes the handcuffs ofan office environment. High impactschedules filled with meetings, emails,and deadlines leave us too little time tocultivate relationships. Technology, travel,and industry globalization have createdseismic shifts in our business practices.One fundamental that hasnt changed isthat relationships count and customersprefer do business with people they like.Export Solutions shares a few ideas tobuild relationships to build your businesswith key buyers and distributors.

Factory TourAwell executed visit to your productionfacility represents a perfect opportunity todemonstrate your category leadershipand commitment to quality. Couple thefactory tour with a meeting with yourResearch and Development team toimpress the buyer (or distributor) withyour plans for the future. Finish the daywith a dinner with your companypresident or other senior executive. Thiswill provide an excellent opportunity foryou to serve as a host and createlasting impressions of your brandbeyond numbers on a price list.

Share a Business BookAn inexpensive way to enhance yourconnectivity is to mail your buyers anddistributors a recent business book.Include a short personal note sayingI recently read this book and thoughtthat you might enjoy it. Another idea isto provide a gift of a coffee table stylebook of photos from your city. Inscribethe book with a personal note and evenan invitation such as, I hope you canvisit our city and company headquartersone day. You would be surprised abouthow many of these books wind updisplayed in the companys waiting room.

Speaking InvitationDistributor executives and senior levelbuyers can share broad perspectives onindustry observations sourced from avariety of suppliers. Most would beflattered by an invitation to speak at yourcompanies annual sales meeting or localindustry conference. Suggested topics arethe retailers own success story, trendsand innovation or another area where thedistributor or retailer has demonstrated a

unique capability. Organizing and hostingthe speaker normally requires significantinteraction on speaking topic and logistics,supplying further personalized contactopportunities.

Online NetworkingLinkedin counts more than 75 millionparticipants and Facebook has more than500 million users. These tools facilitateconnectivity. I have been thrilled withinvitations to connect via Linkedin withpeers from my early career days. Now Ican keep up with their progress andrekindle important relationships.

Road TripAdmit it. When you go on vacation, youalways check the local supermarkets.We are all students of the industry andenjoy visiting international retailers toview new formats and category trends.Why not invite a buyer to visit aninternational market with you? You couldbring the buyer or prospective newdistributor to visit a country where yourbrand looks impressive at retail. The sameapproach applies to an invitation to visitan international trade show to seeinnovation in a different country.

Handwritten NotesEmail, texts, and twitter have replacedthe art of a handwritten note. One of mymentors is now the CEO of a mid-sizedcompany. He ordered casual note cardsto send out quick personal notes. Everyweek, he invests the time to send out

multiple notes to the many people hemeets. This ranges from a buyer at aregional retailer to a sales representativewho sold a nice display. These notes comefrom the heart and often mean a greatdeal to the recipient. No surprise that thismentor is one of the best liked and mostrespected people in the industry.

Recognition PlaquesEveryone likes to receive an award.Distributors proudly display theseplaques in their office lobbies as astatement to their achievements.Buyers can be presented plaques forreaching 100,000 dollars of purchases or100 million units of purchasesyou canalways find a reason to celebrate! Theplaques normally cost $100 or less butcan deliver significant intangible benefits.

Old ReliablesGolf still represents a great five hourbonding experience unless you are alousy hacker like me. Dinner at a firstclass restaurant with your distributorand their spouse may be a treat. Birthdaycards may be old fashioned but send animportant message. Buy lunch for theretailers or distributors administrativestaff. Youll get the reputation as a personwho appreciates the team behind thescenes.

You will be pleasantly surprised todiscover that your buyers anddistributors like to have fun as much asyou do!

Build Relationships to Build Business

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Retail stores serve as showcases for our products. This isthe point of sale where inventory is translated to a consumerpurchase. However, many manufacturers spend the bulk oftheir energy against securing the headquarter listings, chasingshipments, while store conditions flounder at the middle ofthe priority list.

Increased focus on in-store conditions is critical because itdelivers benefits every single day. Listed below are ExportSolutions tips for winning the battle at the retail shelf.

1.Define and Publicize Your Shelf ObjectivesThe first step is to insure that each member of your sales teamis crystal clear on your brands in-store objectives. Create ashelf conditions standards book, including photos that can bedistributed or shared online. Ill always remember a store visitin Cordoba, Argentina when I was a manager for Clorox. Thedistributor representative proudly brought me to his best store.The store was not bad, but below objective because our brandonly owned 50% of shelf space versus our 65% market share.When I mentioned my disappointment, the representativeaccurately claimed that no one had ever shared this shelfobjective with him before.

2.Create an Objective Mechanism to Evaluate Every StoreHow did your brand look in the last store visited? Was it anA,B,C, D, E, or an F? Why? Establishment of a grading systemallows you to provide an objective report card for each store.Normally, a system of awarding points for share of shelf space,retail availability, and off-shelf merchandising is simple toexecute.

3.Focus on Basics: Distribution,Availability, Shelf Space,Shelf Position, and Off-Shelf MerchandisingAll authorized brand sizes should be tagged and in stock. Brandshould maintain share of category space equivalent to or greaterthan market share and placed next to the targeted competitor.Incremental points should be awarded for off-shelf displays orsecondary locations. Fair pricing is also important, but normallytightly controlled by central buying.

4.Establish a Baseline for Store ConditionsIntroducing new store conditions tracking metrics can be ashock to your retail sales team, as existing conditions are likelyfar below minimum acceptable standards. The idea is to create abaseline of performance and measure monthly or quarterlyprogress towards objective.

5.A MarketWide Retail Audit Creates an Accurate BenchmarkThis requires the participation of 2-4 people (depending onmarket size) from your company matched by an equivalentnumber of people from your distributor/retail sales team.Each two person team is committed to spend a full day at retailand is assigned a certain city or section of town. Teams canusually visit 10-15 stores per day giving you a broad spectrumof results across the market. Each store should be measured bythe same criteria. Ideally, the entire group should meet at theend of the day to share observations and next steps. Audits canbe tied into a major sales drive such as a new item rollout, peakseasonality etc. A good distributor will work hard to fix problemsin advance of a previously scheduled market wide retail audit.

6.Sponsor a Retail Sales ContestThis retail contest can be tied to the launch of new retail salesobjectives or a grading system. Structure the contest formaximum number of winners. Reward most improved froma pre-contest baseline. Contest should be one-two months induration to optimize excitement and focus. Get creative with atheme such as ARoom with a View with first prize being anovernight stay at a 5 star hotel room with a view for the salesrepresentatives stores have the best view for your brand.

7.Retailers Schematic/Planogram Serves as the Official RecordRequest that each distributor forward the planogram for eachof the 2-4 largest retailers for each market. Reward key accountsales people for implementing changes in the official planogram.

8.Provide at Least One Shelf Objective for Every MonthAmonthly objective for your brand or company forces the retailteam to look at your brand on every store visit. The objectivecan be oriented against moving your brand to an eye level shelf,improved shelf space allocation for a particular size/flavor, oragainst reduced out of stocks. Track the objective with a questionthat can be answered by yes/no or a numeric response. Thiswill allow you to participate with software on handheld retailreporting devices.

9.Focus Against AccountsWith ProblemsWith Retail ExecutionMy experience tells me that some retailers are better at maintain-ing attractive category showcases and in stock conditions. Otherhigh volume hypermarkets are plagued by frequent wiped outcategories. Certain accounts prevent representatives fromtouching the shelf due to union policy. Persistent out of stocksmay reflect insufficient shelf space, low warehouse inventory, orproblems with automatic replenishment systems.

10.Visit Stores on Every Trip to the MarketSchedule time to work with the retail sales manager. Yourattention to store conditions will linger after your plane departs.Retail is detail and the distributor respects what the brandowner inspects are well known comments on retail. Send asignal that you are focused on your retail showcase and watchyour brand presence improve!

Ten Tips Winning the Battle for Retail Shelf Space

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International brands find anatural audience overseas withhomesick expatriates missingtheir favorite Oreo cookies,PG Tips tea or Kuchenmeistercakes. Ethnic favorites mustmove beyond their basebusiness as a niche American,Italian, or German productinto the mainstream to achieveambitious growth targets.Adoption as a local brandrewards the manufacturerwith dramatically higher sales.My Irish wife swore thatAmerican icons such as Heinzand Kelloggs were Britishbrands because their labelsstated by appointment to HerMajesty the Queen. It wasprobably the one time in ourmarriage when I was actuallyright. Listed below are my TenTips for Making a GlobalBrand a local hero.

1.Manufacture in CountryPride is generated when abrand is produced locally. Thefactory employs people fromthe neighborhood and spendsmoney in the community. Itmay be costly to open adedicated plant, but co-packing is usually an option.This approach may alsogenerate cost savings throughthe elimination of duties andoverseas freight.

2. Label in Local LanguageFrequently a manufacturercuts corners by placing asticker on a package or otherminor fine tuning to complywith labeling laws. Producingyour brand with local labelingsends a powerful message tothe trade and consumer aboutyour interest in their business.Warning! Display care withtranslations to avoidembarrassing mistakes.Google Nova Spanish if youneed an example.

3.Promote RecipesUsing Your BrandA food scientist or marketresearch company couldstudy local food preferences

and your product portfolio.Are there options toincorporate your brand intotraditional recipes? Nutella isfinally gaining importanttraction in the USA as abreakfast spread, after yearsof niche status.

4.Create an Anniversary EventMany brands have beenavailable in foreign markets for10, 20, 30 years or more. Whynot design an anniversaryevent commemorating 25years in the ______ Market.Elements could include specialpackages, consumer contest,public relations, charitabledonations, and a celebratorydinner for your retailcustomers.

5.Sponsor a Sports TeamFans everywhere love theirteams. Alignment andsupport of a local sports teamyields dividends. A startingplace may be sponsorship ofyouth leagues versus budgetbusting football deals.

6. Core Brand Market Specific Line ExtensionConsider adapting your coreproduct line to meet localflavor preferences. Pringlesbuilt exceptional sales andexcitement by launchinginnovative new flavors suchas Jalapeno, Curry, GrilledShrimp, Ketchup, and Pizza.

7. Sponsor a Charity EventThere are many worthyorganizations looking forfinancial support for theirprograms. Normally, thereare chances to gain visibilityfor your brand withsponsorship of an event. Picka group that contains ameaningful link to yourproduct or target consumer.Many supermarket chainshave a favorite charityproviding a route tocollaborate with a tradingpartner for a worthwhilecause.

8.Co-Promotion orCo-Branding with Local LeaderPartner with a traditionallocal brand that has a longhistory in the market. Forexample, an internationalcereal brand could align witha local milk producer.Similarly, an international jamor marmalade brand mightconsider a joint event with aleading bread company. Co-branding is also a possibility,but reflects a long termcommitment. For example,Post cereals markets a versionof their famous Raisin Brancereal which includesauthentic Sun-Maid raisins.

9.Billboards and RadioViewed as Local MediaAdvertising or publicrelations agencies are expertsat creating campaigns to buildbrand equity. Billboards andradio offer local execution andadaptation possibilities.

10.Brainstormwithyour DistributorDistributors are localmarketing experts with arich understanding ofmarket and consumerdynamics in their country.Schedule an off sitemeeting in a peacefullocation to brainstorm ideasfor raising your brandsprofile with local consumers.This approach securesdistributor participation andownership of the program.

The evolution of aninternational brand fromniche curiosity to localfavorite requires time,energy, and investment.However, each activity willbring a step change in termsof local brand acceptanceand sales. What ca