Initiating Sales in New Markets (PART 3): Product and Sales Team Readiness

In Part 1 of this four-part series, we discussed how strong ecosystem mapping can be used to engage with the right local players, at the right time, in an optimal manner. In Part 2 , we explored the importance of “socializing” new market entry with key local players as a way to lay the foundation for sales.

In this Part 3, we discuss a range of sales “readiness” actions that you should set in motion at an early stage of your market entry to ensure you are able to undertake full-fledged sales activities. Perhaps surprisingly, sales readiness preparation– which is critically important to successful market entry – all too frequently gets shortchanged in the buzz and excitement of breaking into new markets. Some important sales readiness areas include:

• Marketing materials

• Product licensing and documentation

• Shipping and customs

• Sales teams

Marketing Materials

Marketing materials, including websites, point of sale materials, product brochures, and other collateral present a good news / bad news scenario. The good news is that many, if not most, companies seeking expansion into new markets in Latin America already possess a wide range of marketing tools and materials that can be used with relatively few tweaks. For many companies, the messaging can be similar, if not the same, making readiness in this area a process more than anything of obtaining good local language translations (i.e., Spanish for most regions and Brazilian Portuguese if Brazil is in the plans).

The bad news is that care must still be taken from the outset to ensure that your messaging is appropriate for the markets that you wish to enter. Messaging that may seem entirely innocuous in one region of the world still needs to be vetted to ensure that it makes sense and effectively converts into the local culture and local business practices.

Moreover, the fact that many free and virtually automatic translating tools exist should not make you complacent. Materials that are not translated or that are poorly translated will reflect badly on your products and services and negatively impact customer perceptions and first impressions.

Whether the infamous story that Chevrolet’s Nova lead to disastrous results in Spanish-speaking markets (Nova means “doesn’t run”) is true or not, it provides a cautionary note about the importance of high quality translations and consideration of local nuance in meanings and interpretation. Toyota, for one, seems to have taken that to heart, for instance, when it updated its MR roadster a number of years ago, calling it the MR2 in the United States, but retaining just the MR moniker in France because M-R-2 sounded uncomfortably close to “merde” in French.

To be sure, while local help with translations will increase some costs, new entrants may counterbalance these costs with savings that will almost certainly come from using local printing and other documentations solutions.

Product Licensing and Documentation

A second area of important sales readiness planning involves focusing on legal and regulatory requirements, approvals, and documentation relating to the products and services to be sold. Although this seems somewhat obvious, for whatever reason, many companies tend to delay asking basic questions about licensing and regulations that affect when, where, and how they sell their products.

Alternatively, many companies fail to appreciate that applicable rules and regulations may derive from a large number of disparate areas, including communications, environmental, competition, and consumer protection laws and regulations. In addition, some countries require certification of inter-operability with local communications or other systems or more broadly, that product certification and testing be conducted in local laboratories or facilities.

As in many markets, so-called “homologation” standards in Latin America can be intricate. They can also be significantly more time consuming than companies may experience in their own countries. As a result, good local counsel on applicable laws and regulations is indispensable, including advice on estimating the timing for key dependencies and efficiently working through related processes and required procedures.

Translations also play an important role here. In addition to imposing local language requirements on non-marketing materials such as manuals and warranty-related information, consumer laws in many countries mandate the use of the local language in describing product features in product packaging and other customer-facing materials.

Shipping and Customs

Shipping and customs are intricately related to sales readiness, and companies seeking to expand into new markets should engage local experts early to help them identify and navigate issues. Shipping and customs considerations can be daunting even for the most experienced companies.

We recommend getting a good and, most importantly, reputable customs broker or other agent that can assist. The customs broker will prepare and file necessary papers, arrange for the payment of duties, assist in the release of goods, and represent you as necessary with respect to custody matters. In addition, a broker should have a strong understanding of applicable trade regulations and procedures and be able to advise, among other things, on transportation and shipping options, carriers, product classifications, duties, and dutiable value and even how to use export processing zones and customs-bonded warehouses.

Sales Team Readiness

Depending on your situation, your sales readiness may also need to include human resources considerations as opposed to those relating to just products and services. Do not underestimate the complexity of local employment laws, many of which prescribe mandatory employment benefits, social security and severance benefits, specified employment contracts, and collective bargaining.

If you have a need to establish a sales force, we recommend developing a close relationship with local recruiting firms that are knowledgeable about local talent, talent sourcing, salaries, and employment laws. Local payroll companies can also provide outsourced payroll and tax services to ease your initial administrative burden and help you ensure compliance with local laws and regulations.

Alternatively, you might consider hiring a company that provides a broader array of sales and marketing execution (“SME”) services. See here for a fuller discussion of these services and here for information on Nextant's services in this area. Such services might include deploying a dedicated group of professionals taking responsibility for sales and marketing activities pre-defined by you, who work toward your specific objectives and goals. Such services can help accelerate your company´s expansion efforts and initial sales without the need to invest in a sales force at the outset.

Successful entry into new markets requires a strong sales readiness focus. Attention to the above areas – along with many others – will help ensure that you minimize potential pitfalls and unnecessary delays in getting started.

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Nextant has extensive experience in assisting clients with Business Expansion. For more information on how Nextant can assist your company in socializing a market entry and initiating sales, please see here.

See here for case studies and client testimonials.

For more information about Nextant's overall services, visit our website at http://www.nextant.com

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Juan Pablo Navas is a founding partner of Nextant, currently co-leads Nextant’s Consulting practice. He has ample experience leading consulting and development projects in different industries and geographies. During his tenure at Nextant, Juan Pablo has led over 100 projects related to expansion and optimization strategies, organization, sales and marketing models, customer services and business transformation.

Email Juan Pablo at: jpnavas@nextant.com

Scott Hoing is a founding partner of Nextant. Scott has practiced as an attorney in a leading international law firm in Washington, D.C. and London, concentrating on international economic regulation and transactions. He also held positions as an executive and associate general counsel of a Fortune 100 company, where he served as secretary to the Audit Committee of its board of directors. Scott’s expertise centers around business and legal strategy development, regulation and compliance.

Scott's email is: shoing@nextant.com

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