What is Wrong With My International Import Export Sales?

 


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Few years ago on a sunny Friday morning I was scheduled to meet with the International Sales Director for a medical equipment manufacturer. The meeting came at the request of the company president whom I met at a trade show in Canada. The aim of my meeting with the International Sales Director was to try and pinpoint the reason behind the inadequate Middle East sales performance. As the company president summed it up by saying “Our products are better than the competition but the competition is doing much better in sales to that market. My IS Director attended trade shows in United Arab Emirates and Saudi Arabia. The feedback from many Arabian companies was positive but did not materialize into good sales nor what can be considered a good starting relationship. We can use an outside opinion".

Before the meeting day I did some initial research about the medical company and sure enough their products were better in quality than their competitor and the pricing was competitive. The meeting took place in their conference room. Just the International Sales Director, one of his associates and me.

From the beginning I felt some tension coming from the IS Director. Why not? The meeting was called for by the company president and the IS Director probably felt that his leadership was in question and he would be answering to an outsider who would report back to his boss. To ease the tension, I opened the discussion by mentioning some of the admirable accomplishments he made by successfully building the International department and achieving remarkable sales in the European market. My source was a newspaper article that I found during my initial research. This move proved to be a great ice breaker and then more. The more he talked about this subject, the more his facial features and speech pattern projected victory, achievements, confidence, and of course friendliness and openness. It worked and it should always work. Reminding others of their previous successful achievements will not only empower them and proves that you appreciate and trust them, but also they will be more open to listen to you and hear what you have to say.

He started talking about their Middle East operations and mentioned that his company had participated in two trade shows, one in Saudi Arabia and the other in United Arab Emirates. During these trade shows their products received positive feedback from many Arab businessmen and soon after coming back to the US, he started corresponding with these prospective partners. It has been 10 months now and nothing had happened. Their sales to the Middle East did not show any significant increase and the negotiations did not develop into solid relationships. No agents nor distributors. He continued venting his frustrations and he gradually shifted toward explaining what he thought was the problem. To him, the problem was the Middle East market and its business culture. He continued saying how it was easier to deal with the European market and to setup partners.

After he had ample opportunity to describe the situation, it was my turn to ask some questions and to express my opinion. A few points surfaced during our discussion indicating that they did not do their homework before plunging in. They did not perform any research in regards to the business culture of the Middle East market, so they were not aware of what they should and should not do and they were not aware of the steps needed to establish a good business relationship. In addition, the IS Director, approached his prospective Arab partners with the same distribution agreement used for dealing with their European distributors. No effort was made to check its adequacy and reality for the new market. In short, there was neither research nor a plan.

He should not have used his success with the European market and the relatively short time it took to achieve that, as a measuring tool for the Middle East operation. He had successfully dealt with the European market due to the fact that he had worked and lived in Europe for 5 years before joining the US medical equipment manufacturer. He knew the market, the business culture, business circumstances, and all the vital information needed to succeed in doing business in Europe. Throughout the 5 years he spent in Europe he gained the experience and knowledge that made him successful, but he was not able to clearly see the insight he gained by living there.

How could he miss that fact? It is not all unusual to do that. By the same token, many companies when going global forget that their products are being introduced to a new market and it takes time for the sales volume to grow to its expected goal, just like when they started introducing their products to the local market! As a result of this “lost comparison", sometimes companies set unreasonable conditions when dealing with their international agents such as “high" minimum purchase requirements and “unrealistic" expected sales volume conditions. An overseas company purchasing goods for the first time would usually prefer to order a small quantity which will be used to test the product's acceptance in the market. Companies that insist on a set minimum even with the first sale, which is in fact considered a test sample, are closing the door on overseas sales let alone encouraging any possible partnership.

Since I knew that the IS Director has his hands full managing successful sales to the European market, I suggested assigning the Middle East market territory to someone else who could devote all of their energy and time on developing marketing plans, acquiring partnerships and increasing sales. The IS Director answered back that he had already thought about that and handed me a copy of an advertisement he had placed in a local newspaper. The advertisment read:

Middle East Sales Rep. Medical equipment manufacturer seeking energetic professional person to assist the International Sales Director in his Middle East operations. Successful candidate will handle correspondences, distributing company literature and making overseas calls mostly at late night hours. Experience in telemarketing and bilingual (Arabic and English) a plus.

Clearly the ad echoed what I thought was wrong with their approach to the Middle East market. This advertisement was calling for an administrative assistant not a Middle East Sales Representative. In fact I have seen many companies handle their international operations by simply asking someone to type a letter or send a fax. To these companies the interest in the global market will only grow if they notice an outcome first. A significant outcome though, will not come from such approach and hence these companies’ correspondences are going somewhere but certainly not global.

Mohammad Al-Sabt has been active in international trade since 1995. He is also the author of Arabian Business and Cultural Guide, a book for visitors, exporters, and international traders to understand the culture, business culture, and how to do business with Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain, and other Middle East countries. The guide can be found at http://www.traderscity.com/abcg/ Importers and Exporters are welcome to join the free international trade import export forum at http://www.traderscity.com/board/

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