Designing a Global Blueprint (776 words)
Marketers looking to make a long-term investment in the global marketplace or marketing merchandise with a high-rate of return may have to set up shop overseas. This includes renting or building a facility and requires a big investment. However, full control of the operation is retained. Setting up an overseas facility is ideal for companies requiring a high level or particular standard of customer service.
Viking Office Products, an office supplies catalog, opens in-country operations for each new market it enters. In order to compete with local office product retailers, it stocks products for each market in local warehouses and offers either same-day or next-day delivery.
U.S. direct marketers can share both the risks and rewards of international direct marketing by partnering with a local company in the target market. Like a marriage, a joint venture can be difficult to maintain and has a high rate of failure, Stephen Miles points out. Problems often arise when partners have different goals. For example, one partner may need profits while the other is looking to increase sales. Size up a potential partner by comparing your short- and long-term goals. "Make sure you have similar objectives," recommends Miles.
Men's Health Magazine, which partners with local companies in South America and Germany, bases the decision to partner on the market, financial expectations and the company under consideration, according to Jeff Morgan, worldwide publisher of the Rodale title.
A fourth option is to buy a local company in your target market. This too, is an expensive proposition and is likely to be an option for a company looking to increase long-term sales rather than short-term profits.
The second part of the global equation is deciding where to go, which, according to Miles, is "part art and part science."
First, get an idea of the scale of the market. What is its size and potential? What is the maturity of the channel of distribution? If you are a clothing cataloger, this includes looking at the maturity of the catalog market, how big the clothing retail market is and what the competition is like.