breaking into the american technology market an essential guide for foreign manufacturers
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Breaking into the American Technology Market
An Essential Guide for Foreign Manufacturers
© 2012 Global Marketing Partners, Inc.No part of this eBook may be reproduced in any matter without the express written consent of Global Marketing
Partners, Inc.
Disclaimer This guide was written based on a several decades of combined experience in launching thousands of products through hundreds of companies in the channel. While we hope this guide is helpful and offers you some wisdom and new insight, our attorneys want you to know that it is not designed to incorporate every piece of information anyone would need to know about working with these resellers. Likewise, all products are different and results vary widely, so use any advice provided here at your own risk.
Breaking into the American Technology MarketAn Essential Guide for Foreign Manufacturers
© 2012 Global Marketing Partners, Inc.No part of this eBook may be reproduced in any matter without the express written consent of Global Marketing Partners, Inc.
Disclaimer This guide was written based on a several decades of combined experience in launching thousands of products through hundreds of companies in the channel. While we hope this guide is helpful and offers you some wisdom and new insight, our attorneys want you to know that it is not designed to incorporate every piece of information anyone would need to know about getting into the American technology market. Likewise, all products are different and results vary widely, so use any advice provided here at your own risk.
3
The American IT Supply Chain 2-Tiered Distribution Channel
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
The “channel” - the two-tiered (wholesale) distribution supply chain. In this chain, manufacturers sell information technology (IT) products to distributors who sell to resellers who in turn sell the hardware and software to end-user businesses and individuals.
Manufacturer Distributor Reseller Consumer
• 60% of all IT products bought and sold in the U.S. flow through the “Channel”
• 5 billion+ of credit extended to the IT channel each year
• 2 Million+ configurations annually• 50,000+ individual customers monthly• 150 Million+ items shipped each year• 100 Million+ software licenses managed annually
GLOBALTECHNOLOGYDISTRIBUTIONCOUNCIL
4
Pre-Launch PreparationEight must-do’s before your launch (1-4)
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
1) Study the Market Estimate the market size & potential Run a Competitive Analysis Do your SWOT Analysis
2) Set GoalsA Goal has: Qty, Revenue, and DateKnow where you are going before you throw yourself into the trip
3) Fix on a Channel Sales Strategy Direct (requires extensive domestic infrastructure) Brick & Mortar Retail (most expensive) e-Tail (least expensive fix costs – popular for emerging vendors) Solution Providers/VAR resellers (marketing & training at the distributor
and reseller levels)
4) Choose Your Target MarketTarget end-user Target Reseller Target DistributorWho is your customer and how will you get to them?Carefully choose the partners with whom you will be spending your time and resources
5
Pre-Launch PreparationEight must-do’s before your launch (5-8)
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
5) Develop a Marketing Plan How will you promote your product in the U.S.? How will you support your
customers? 3 layers of marketing plan: Consumer, Reseller Co-op, Distribution Customer service and support – key to U.S. success
6) Put together Your Financial Plan Product price strategy Allocate resources and commit to marketing budget Understand all your costs Allow for Currency Fluctuations Plan in advance how you will measure your success & ROI
7) Do Your Legal & Regulatory Due Diligence Patent and trademarks infringements search, get insurance. Material safety
datasheets may be necessary for transportation, find an U.S. attorney ahead of time.
8) Establish a U.S. Point of Presence Third party warehouse and logistics for shipments out, returns warehouse, toll-free
customer service number , etc.
6
U.S. Market ExpectationsWhat to know about Consumer Expectations
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
End-User Expectations
Home & SMB Consumers: Value. Ergonomic. Compatibility. English. Support. Warranty. Available @ Favorite Store. Returnable.
— In Stores: Eye-catching-confidence-inducing Packaging. Stocked Deep.
— On Internet Store: Strong Reviews. Rich Content.
Business Consumers:
— Immediate Customer Service (preferably free)
— Easy to find “contact info” on website (company’s address and phone #, not just an email us form to fill in)
— Downloadable Drivers
— Trouble Shooting Guide, FAQs, Usage Tips on website
7
U.S. Market ExpectationsWhat to know about Packaging
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
Packaging Expectations
Retail Strategy
— Always invest in good design.
— Don’t get creative on size and shape stick with the standards.
— Consider anti-theft if over $100.
— Hanging package design should also stand-alone.
Internet/VAR Strategy Only
— Outer box can serve as shipping to cut re-pack cost. (but clearly marked)
— Package design shifts to inserts. (re-confirm confidence in buying decision – avoid buyer remorse)
8
U.S. Market ExpectationsWhat to know about Shipping
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
Shipping ExpectationsStudy Your Partner’s Routing Guides(fines for non-compliance)
Bar Code: EAN/UPC Version A on all product packaging and master cartons (www.gs1ca.org)
Packing Slip: Required w/each shipmentIf the shipment has multiple Purchase Orders and/or multiple packing slips, a Master Packing Slip is required
Minimize Small Parcel Shipments A shipment is defined as the total number of cartons shipped on a given day to the same distribution center from the same vendor location. Shipments over maximum allowances should be sent via LTL.
Proper Palletization; stacking, stretch-wrapped/banded
Use a shipping company that provides tracking on your shipment and can provide proof of delivery.Do not ship via Postal Service.
Avoid TheseCommon Errors
• Non-compliance with Small Parcel Maximums
• Incorrect barcode/UPC label used on product
• Failure to provide Packing List
• Incorrect Standard Pallet used
• Pallet mis-stacked or mislabeled
• Weak pallet or carton material
• Excess or Double Shipments
• Shipping Product to Wrong Location
9
Your Website’s Channel RoleChannel Partner Expectations
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
Rich Product Content Source – 3rd party data fulfillment companies
get most product content straight from your website
Customer Service & Resource Center– Contact info– Drivers, manuals, etc.
Drive Sales– Direct Sales & Provide Leads to Key Resellers
(selling direct off your website weakens channel relationships and full solution sales participation)
10
The Distributor’s RoleIn the channel
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
Economies of Scale• One-stop source for resellers• Ship delivery on any order size• Cost effective fulfillment of Web sales• Most accurate/best in class• Breaks bulk: Receives product on pallets or case packs
then pick, pack, & ship • Stocks Product
Access to Resellers• Big distributors sell to 50,000 + U.S. resellers • Preferred source• Supplies credit on aggregate orders & consolidates payments• Serve all types of resellers• Vendor marketing opportunities to touch resellers
Custom Reseller Services• SLA guarantees with big resellers• EDI interfaces• Custom Private Label drop ships to end-users• Pass-through marketing
Note
Larger distributors
rarely provide
importation services.
(small regionals may but lack
reseller bandwidth)
NoteProduct stock limited to six weeks of inventory(will rotate out excess stock)
11
DistributorsWhat they Expect from Manufacturers
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
Profit•$50 + distribution cost•Most favored nation pricing•Stable channel pricing structure•Back-end Rebates
Sales•Drive sales to resellers•Co-op marketing support•Minimum sell-through•Growth
VARsSolution ProvidersSystem IntegratorsSystem BuildersGov/Ed ResellersB&M Retailerse-TailersInternet Resellers
VARsSolution ProvidersSystem IntegratorsSystem BuildersGov/Ed Resellers
B&M Retailerse-TailersInternet Resellers
VARsSolution ProvidersSystem IntegratorsSystem BuildersGov/Ed Resellers
CE FOCUSVARsSolution ProvidersGov/Ed ResellersB&M Retailerse-TailersInternet Resellers
Major U.S. Distribution Companies
DistributorsWho’s Who and Who They Serve
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
13
VARs & Solution ProvidersWho’s Who & What They do
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
VARs/Solution Providers/Integrators
Integrate Solutions
Layer Service
Trusted Advisor Role with Customers
Support B2B Customers
Major U.S. Technology VARs
Accenture ACS ASAP Software Atos Origin ADPAxciom BAE BearingPoint Booz Allen Hamilton Brightpoint BT Global CACI Capgemini Group CDW Ceridian CGI Group CognizantCompuCom Computer Science Corp
Convergys Deloitte Consulting Diebold Dimension Data DST Systems DynCorpEDSFidelityFiserv Galileo by Travelport General Dynamics (AIS) Getronics Harris IKON Office Solutions Insight Enterprises L-3 Communications Lockheed Martin Metavante Northrop Grumman
NTT Data PC Connection Perot Systems Qwest Communications Raytheon Technical Services SAIC Software House Int’l Siemens IT Tata Consultancy Services Unisys Verizon Info Sys World Wide Tech
Retail & eTailers
Provide Traffic (opportunity to sell)
Merchandise Product
Avenue for Promotion
Build Brand Awareness
Software RetailersElectronic Boutique /GameStop (4400+)
Computer & CE Stores ABC Warehouse (41)Apple Stores (125)Best Buy (1200+)Fry’s (34)H.H. Greg (84)MicroCenter (21)P.C. Richard (51)
Mass MerchandisersCVS (6200+)Kroger (2500+)Radio Shack (6000+)RiteAid (5000+)Target (1500+)Walgreen's (6100+)Wal-Mart (4100+)
Warehouse ClubsBJ’s Wholesale (170)Costco (529) Sam’s Club (580)
Office SuperstoresOffice Depot (1200+)Office Max (9000+)Staples (2000+)
Military ResellersAAFES (147)EURPAC (53)Nexcom (44)
Entertainment ResellersBlockbuster (7800+)Discover Channel (45)F.Y.E. (800+)Musicland Group (900+)Toy’s R Us (1500+)Virgin Megastores (11)
Internet Retailers4Sure.comAmazon.comAntonlineBestbuy.comBuy.comDelleCost.comGatewayInsightNewEgg.comOutpost.comPC ConnectionPC NationZonesScholasticStaples.comTechDepot TechWaveTigerDirect
Major U.S. Technology Retailers
Retailers Internet and Brick & Mortar
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
15
NEED MORE INFORMATION ON LAUNCHING IN THE US MARKET?
Global Marketing Partners, Inc. | 28038 Dorothy Drive Agoura Hills, Ca. 91301 USA | All Rights Reserved @2012 Global Marketing Partners | September 2012 Edition
Ready to Launch in the USA? Call GlobalWe can set you up with a U.S. office, get you national distribution, design a product launch campaign and start selling your product to resellers.
Rachel ZachariaBusiness Development Manager
rachel@globalwrx.com818.874.3216
www.globalwrx.com
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