In this series, we focus on the issues related to foreign mid-market companies entering the United States (US) market for the first time. We’ll cover the real-life experiences of many Chinese companies, as well as several companies from Canada, Europe, and Latin America.
Marketing and using marketing to maximize sales is the focus of this article as it is particularly relevant to companies with sales-oriented US operations. When foreign companies address the US market, we see two main issues:
#1: No specific plan and only a general “big picture” idea
For companies like this, our recommendation is to build a plan while testing or experimenting with tactics. The US is a very big and diverse market with a unique array of potential customers. To increase the likelihood of success and minimize your frustration, a business must be built methodically, not by relying on luck. You’ll save time and maximize profits while entering your new market.
However, many companies and executives face the entirely opposite problem:
#2: A very comprehensive plan, but difficulty in executing the plan successfully
Here’s a look at some of the marketing-related issues and misconceptions we often see while helping these companies:
- The US is a big market and we should be here. That is not always true and entering the US market is much more difficult than simply repeating the steps completed in your home country.
- The most important objective is to know your market.
- The US may be ranked as a leader in population, the number of companies, and total gross domestic product (GDP), however, is your product or service used by the general market, or only certain demographics?
- Is your product a commodity or specialty?
- Will the average American be familiar with your product or understand its benefits?
- Companies are often missing some key business fundamentals. For example, the lack of a solid marketing plan or marketing team back home. During the last few decades, a marketing plan was not necessary for Chinese companies operating in the Chinese market, thanks to China’s large population. (However, it is important to note, this is changing, too. Look for my future blog post: “Is China a big market?”)
- Business owners with a strong personal network which allowed them to start a business quickly. There was no need to develop a marketing team or the necessary materials. By comparison, US companies are marketing-savvy, compared to those in many other countries as consumers and decision-makers are much more educated buyers – requiring you to work harder to convince buyers to purchase your products.
- The US is THE marketing-driven market, thanks to competitive capitalism, less governmental influence, and fewer governmental regulations than other countries.
In order to survive and succeed in this market, especially without a local network, it is imperative to know:
- Your unique value proposition.
- Your exact targeted market (see our checklist for key elements that your best buyers have in common).
- Your competitors (direct, indirect, and disruptive).
- How to implement branding and public relations to grow your business.
- Your pricing strategy. (If you haven’t tested your pricing, you’re going to miss out on profits, guaranteed.)
- Your budget, resources, and timeline to develop and execute your marketing plan.For companies that don’t focus on sales, such as Research & Development (R&D) companies, marketing is critical when attracting local talent. For details, see our future blogs on “talent.”
The Final Takeaway
To maximize sales and increase your chances of success, make sure the team assisting you in making the transition from a foreign country is familiar with the US market.
Hire people who can guide you, either as consultants or employees. (Look for our future blog posts for details.)
If you are already in the US market but don’t have any plans, start the research immediately and build your plan ASAP. The US market is sophisticated and competitive. A poorly developed and executed plan in the US can permanently damage your chances of success in the global marketplace.
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Disclaimer: like humans, business has its own set of issues and corresponding solutions at each stage. All articles are based on mid-market foreign companies and their initial entry in the US market. Typically, these foreign companies have an annual revenue of $10 million to $100 million, have been established in their home countries for over 10 years, and have enough capital to fund an initial market entrance. Our articles are specifically related to this market and the unique issues these companies face during international expansion. If you plan to apply some of these concepts, please adjust them to your own business operation and business growth stage.
We are not lawyers or tax experts. As we often act as general business consultants and step in as interim CEO or project managers, we manage lawyers and CPA firm partners around the world. Our suggestions on legal and tax issues are solely from a practical management standpoint, and should not be considered technical, legal, or tax advice.
My background is in finance and accounting. I’ve worked in many Fortune 500 companies and Big 4 firms, as well as my family’s business. I’ve built my business from scratch, helping others build their businesses in a new country. I am a licensed CPA in the State of Texas.
Many of the ideas and strategies are based on real-life experiences from our clients as well as the books I’ve personally read – the two most influential: Scale by Jeff Hoffman, and Scaling Up by Verne Harnish.