SUBSCRIBE NOW

Join our list and receive articles we like, articles we write and the occasional infrequent musing.

Subscribe Now

Our Friends

Awful Deals

Market Access Toolkit

Partners International

Lessons From The Road

Ten Myths About Entering International Markets

>> download .pdf

Here are 10 misconceptions by companies about entering overseas markets.

  • 1. If we make a better mousetrap, they will buy it.
    The question here is, do you think that factor alone is the necessary and sufficient condition to sell overseas? If it was always about quality, then why doesn't everyone always buy the best product?

    Many overseas buyers will purchase an inferior product from someone who has a closer relationship with them, knows their business and culture, and understands them personally.

    The sales cycle can take a great deal of time, because the customer intimacy takes time to develop. Contrast this to the United States, where we often change vendors without a second thought.
  • 2. English is the universal language, so we can simply sell in English.
    This speaks to several issues: Does everyone in the client organization speak, read and write English? Remember, decisions often are made on a consensus basis, and your marketing materials may travel quite a bit within the clients' firms and sit on many desks.

    And even if everyone in the company is comfortable with English, why not take the extra step and make it easy for them to buy (instead of easy for you to sell)? Translating materials is one of the simplest and most effective ways to show investment into a market, and will differentiate you from your competitors, who make no effort at all. Speaking the local language (at least enough to apologize for not speaking it) will help greatly.
  • 3. Our labor cost is too high to market our product overseas.
    This myth can be refuted with one statistic: Fifty-five percent of Japan's trade surplus with the United States comes from industries where their labor cost is higher than ours. If labor cost was the deciding factor, then how on earth could Germany possibly sell anything abroad? Why aren't we simply buying everything (from automobiles to wine to satellites) from Zimbabwe, where the labor cost is among the lowest?
  • 4. Our price is too high for overseas markets.
    Are you intending to compete only on price? Many commodities (oil, wheat, cement, corn) are price-sensitive, but the vast majority of international successes aren't. Ipod is successful around the globe (and certainly not the low-cost option), as are Mercedes, BMW, Coca Cola and Tanqueray. In many cultures (e.g. Japan, Korea), service would be the differentiator.
  • 5. Our skilled marketers can take on overseas markets.
    If we define marketing as awareness, understanding and belief, we need to ask:

    Do my marketing people know how to make overseas markets aware of the product? Do they know how to explain the products, attributes and benefits in terms that make sense to the locals?

    Can they convince overseas buyers of the merits of working with your company? Do they understand how markets are organized and how buying decisions are made?
  • 6. Our in-house foreign nationals can sell to overseas markets.
    In one example, a U.S.-based CEO told me his Chinese wife could negotiate with the Chinese government for market entry. My questions were: Is she a skilled negotiator? Does she understand the sales process? Does she have the motivation and energy to break into this difficult market?

    Does she have the correct contacts and support needed to gain entry? Does she understand how to navigate the Chinese system? Language and cultural skills alone don't suffice.
  • 7. Our local partners will handle all of the marketing.
    This idea of relinquishing market control while enjoying great success is rare. Most of the time, overseas partners will look toward the parent to help stimulate demand, deal with problems as they occur, get to know the distribution channels, offer subject matter expertise and show that the parent company has indeed invested in the market.
  • 8. The customer expressed all of the buying signs, and even said "yes" to our proposal.
    Many firms overseas conduct their market research by posing as buyers. They conduct competitive intelligence the same way. Your banker will tell you that the sale is complete only when the money has been deposited into the bank.

    "Yes" when uttered in business meetings may simply mean "I understand you," not acceptance of your proposal.
  • 9. We don't need to invest a lot; our Web site gives us a presence.
    Actually, your Web site gives you a brochure, but no real place where businesses and consumers can get support, touch and feel your product, get to know your company and its staff, deal with returns, make product modifications and enable co-marketing agreements.

    It's necessary to have a localized Web site for market presence, but it needs to accompany many other things to make your efforts a success.
  • 10. If it worked here (in the United States), it will work there.
    This speaks to local ethnocentrism. Success at home also can be a hindrance to overseas success. Arrogance and impatience are often byproducts of domestic success. Market conditions, buying conditions, business practices, negotiation tactics and product specifications all differ by market.


The firms that realize this quickly always will have the advantage.