Marketing Globally: The Pre-launch Checklist

By Scott Goddin, Portland US Export Assistance Center

A key component of a successful international strategy is an internal evaluation of a firm’s commitment and capabilities to support the significant efforts required. A great marketing staff cannot succeed without engineers who can tweak code to foreign requirements; finance and accounting personnel who understand foreign payments, currency and tax issues; a legal staff knowledgeable about intellectual property issues and contracts; and management committed to growing the firm through sales in international markets.

Why go international
The question may seem obvious, but needs to be addressed internally as the driving force behind company changes required for a successful international effort. International markets can serve to diversify revenue sources and alleviate dependence on the domestic market and its economic cycle. Without having to go into riskier domestic markets, firms can leverage existing technology and products to grow sales and likely gain competitive advantage by offering solutions to existing customers and new prospects that have international operations or that also are looking to grow internationally. Developing and marketing a product internationally will help a company identify and meet customer needs at a quicker, more competitive pace. This is reflected in equity markets as firms with international operations typically have higher valuations than solely domestic-focused companies.

Key success factors
Whether a whim of the CEO, response to a key customer or ambitious initiative by marketing, a successful international effort will require “buy-in” and commitment from the top: a recognition that international is a long-term venture and that it is important to stick with it. A quick rule of thumb is that management should anticipate committing a minimum of ten percent of its time to international. U.S. companies are renowned for entering markets and then, if things don’t work out, leaving in a short time period. It’s a very negative reputation to have and will be used against you by local competitors.

Companies should anticipate that there will be additional costs in the early stages of a marketing effort and that these must be budgeted for and supported. Costs will be associated with localizing a product to accommodate differences in non-U.S. markets. Products often have to be adapted to local requirements to be successful. Language, cultural and business-practice differences exist, and changes (and investments) must be anticipated related to sales channels, after sales service and support. New customer relationships can be a challenge and learning experience. Companies must be willing to commit to these decisions.

Management commitment will best be implemented in a comprehensive planning process that attempts to address the full impact—financial, resource requirements, changes within the company, etc.—required of the international effort. The business and operational plan should include an internal evaluation of present capabilities and future needs to be developed involving all segments of the company. The model should be to plan, prepare and implement, in contrast to the “fire, aim and ready” approach.

Variables affecting an international ROI
As firms review their internal capabilities and checklist, it is appropriate to address core company functions versus international issues that can be handled externally. Issues as diverse as legal advice and shipping may best be handled outside the firm, but need to be recognized as a key part of the overall effort.

Here are the factors with the greatest impact on international ROI:

Technology: Is the product architected (more commonly referred to as internationalized) for non-US markets? If it was created in the past 5 years, it probably is, but if the code is older than that, it might require changes. If you are unsure, then undertake an internationalization audit of the code. Depending on the market, there will likely have to be product changes to meet local requirements and conditions (called localization).

Distribution strategy: Typically, software is sold internationally through an independent software reseller/partner channel. If your current, domestic distribution model is through a channel, then you probably understand how to find, train, manage and support this method of distribution. If the domestic model is direct sales, then you have a learning curve (and investment) to understand how to develop an effective international channel.

Product type: Whether the product is a business application, embedded tool, Web-based or open-source related will affect many cost and revenue decisions and required investments.

Marketing and support: The need for and importance of corporate and product branding, and the strategy for corporate lead-generating campaigns versus partner-led and -funded campaigns can have a critical impact on market introduction and success. Support issues—corporate-provided support versus local partner support responsibility—will require strategic decisions and planning.

Finance: Companies should also review their finance departments and banking relationships to ensure that foreign sales and payments can be handled smoothly and effectively.

In sum, you want to have all parts of the company positioned to handle new responsibilities associated with international sales.

How much it costs, how long it takes
There are a lot of variables that can have significant cost impacts, but a rule of thumb is between $10,000 and $50,000 per country, and if everything goes smoothly, a regular revenue stream can be expected in three to six months. More realistically, you shouldn’t budget revenue to occur in less than 12 months. Finally, note that international success is measured by the percent of total revenue coming from international, and a minimum success level is considered 20 to 25 percent, ramped up over time.

Conclusion
The key to success will be commitment planning and preparation. International sales will be profitable and challenging, but should not be approached in a haphazard, “learn on the fly,” manner. Conducting a thorough internal evaluation of your company’s strengths and weaknesses is the best place to start. External resources from marketing consultants to the state and federal government also exist to assist you in this initial (and subsequent) efforts. Consider their use a critical part of your planning effort.

Also note that the resources of the SAO’s International SIG are readily available and we welcome inquiries on specific issues of interest to the membership.

About the author
Scott Goddin is director of the Portland US Export Assistance Center (www.buyusa.gov/oregon) and has been working in international trade with the US Department of Commerce for more than 20 years. He works with Oregon and Southwest Washington high-technology companies to develop international markets, specifically helping them to design market-entry strategies; find and evaluate distributors, VARs or agents; evaluate product or service delivery methods; and “internationalize” their companies.

Goddin has served as a US trade negotiator working on Asian market access and standards issues for US high-tech and communications companies and intellectual property rights issues in Korea, Taiwan and China. Goddin also has served in temporary assignments as a commercial attaché at American Embassies in Seoul, Taipei and Nairobi and has managed the office in Portland supporting local Oregon firms since 1997. You can learn more about export assistance at www.export.gov or contact Goddin directly at scott.goddin@mail.doc.gov.