Designing a Global Blueprint (776 words)
The foundation of any successful international venture starts with a solid marketing strategy. Before you begin plotting, ask a simple question: Why do you want to expand? "Your answer will dictate your approach to the international market," says Stephen Miles, former European managing director at Lands' End, who was responsible for the cataloger's entry into the United Kingdom and Germany.
According to Miles, who spoke to the U.S. Trade Mission to Europe headed by International Direct Marketing Consultants this past March, most companies decide to go international for one of two reasons—to boost sales or increase profits. Which reason governs their approach.
A mature business experiencing flat profits and sales will likely expand into international markets to raise profits. A marketer in this situation would likely choose to license its brand. This involves finding an overseas company that sees value in its brand and is willing to pay a percent of its sales to use it.
The advantage to licensing is that you don't incur overhead expenses. Instead, money is earned for providing the use of a brand and some level of support. Control is traded for profit.
In 1994, Lands' End entered into a licensing agreement with Australian-based Myer Direct to sell Lands' End products in Australia, New Zealand and other areas in the South Pacific. Lands' End terminated the agreement in 1996 and currently mails its U.S. catalog to the region. Products are fulfilled from its headquarters in Dodgeville, WI.
A Solo Enterprise
A second reason why a company may decide to "go global" is to increase sales. This may be a mature U.S. company with little or no room for expansion or growth in the domestic market.
Marketers can operate solely from the United States or by setting up an overseas operation. Often a publisher marketing an English-language publication will begin with an English-language package priced in U.S. dollars mailed to multinational lists. This strategy enables marketers to test international waters from its U.S. base using its existing fulfillment system.