The Failure of Exporters to Penetrate the US Market

Article on US marketing by Chuck Klein

Every Exporter Wants to Conquer America

In today's competitive business environment, many manufacturers of products from Britain and the rest of Europe are making attempts to penetrate what they perceive as the large and lucrative American market. In fields ranging from software, telecommunications equipment, medical devices, industrial machinery and consumer products, it seems like everyone is interested in getting even a small foothold in the United States. This strategy clearly makes sense as business people in the US speak one language, use the same currency and are quite readily willing to trade with European companies. Unfortunately, the success rate for exporters to the US, especially among SME's (small and medium sized enterprises) is quite low. Why is it so difficult for Europeans to conquer American markets?

Obstacles to US Export

For my new book, Marketing to America: How non-US Companies can Profit Selling in the US Market, I recently interviewed exporters, trade promotion agencies, marketing consultants and others from countries around the globe where US marketing is a high priority for exporters. Their responses, together with my experience with exporters over the last 15 years, helped pinpoint the reasons for the difficulties marketers encounter selling to the world's largest market. Some of the key reasons include:


Exporters lack business intelligence

European companies targeting the US market need to have detailed information on their competitors, distribution channels, pricing, market trends and barriers to successful market entry. While exporters would never consider launching a product in Europe without this information, they readily seek out US importers and distributors before gathering critical business intelligence. While information available from the Internet is a good start, many exporters seem to suffer from "Net Disease", not realizing that field market research is critical in understanding how to penetrate US markets.


They are not willing to invest in US Marketing

British companies selling in Britain know that beyond developing a good product, they will need to invest in exhibitions, advertising, a sales force, public relations, Web marketing and other methods of generating sales. Many potential exporters to the US simply seek out "marketing partners", US companies in their field whom they hope will do all of these functions for them. The more successful exporters commonly hire US staff, open sales offices, maintain stock in a US warehouse and invest in developing the market. Relying on the Americans to do all of the work is a strategy which fails more often than it succeeds.


There is a need for specific US marketing training

Universities and executive training programs commonly teach "international marketing". Such courses and seminars, while valuable, do not distinguish between marketing to Moscow and selling to St. Louis, bundling all export markets into one package. While both American and British managers speak English, conducting business in the US is very different than in Europe. Learning how to research the market, develop a penetration strategy, target appropriate distribution channels, recruit manufacturers' representatives and hire staff are examples of skills that can easily be taught by experienced exporters and trade consultants who focus on the American market. The absence of training that is specific to American marketing results in exporters using the trial and error method, a great recipe for marketing failure.


Exporters fail to understand the size and scope of the market


European exporters to the US from smaller countries such as Ireland, and even from the larger countries such as Britain and Germany, commonly fail to understand the size and complexity of the US market. This results in various strategy errors, especially noticeable when European exporters give a US distributor exclusivity for the entire US market when the distributor lacks the wherewithal to be a national marketer. I know an exporter of swimming pool equipment that quickly signed a two year exclusive agreement with a company in Florida. After months of frustrating discussions and correspondence, the manufacturer discovered that the American firm really only sells in one US state and in one marketing channel! In order to get true national coverage, the manufacturer needed representatives in all major US markets covering both the home pool market as well as the institutional trade where equipment is sold to hotels, schools and community centers. The large size of the United States has created a system of specialization. California reps selling pool equipment to schools will rarely sell the same equipment to residential customers in Arizona.


Doing Your Homework

European exporters to the US from smaller countries such as Ireland, and even from the larger countries such as Britain and Germany, commonly fail to understand the size and complexity of the US market. This results in various strategy errors, especially noticeable when European exporters give a US distributor exclusivity for the entire US market when the distributor lacks the wherewithal to be a national marketer. I know an exporter of swimming pool equipment that quickly signed a two year exclusive agreement with a company in Florida. After months of frustrating discussions and correspondence, the manufacturer discovered that the American firm really only sells in one US state and in one marketing channel! In order to get true national coverage, the manufacturer needed representatives in all major US markets covering both the home pool market as well as the institutional trade where equipment is sold to hotels, schools and community centers. The large size of the United States has created a system of specialization. California reps selling pool equipment to schools will rarely sell the same equipment to residential customers in Arizona.

What are the real marketing intelligence needs?

The marketing experts we interviewed noted that targeting the US as an export market has become even more prevalent for non-Americans than in the past. Although major opportunities exist in the US for exporters of all sizes and in a wide range of industries, the large number of failed attempts at US marketing should be a signal to exporters worldwide to do their "homework". Companies that truly understand the market for their products, the strengths and weaknesses of their competitors, and their own relative advantages have a reasonable chance to generate sales and gain respectable market share for their products in the United States.

Conversely, exporters whose entire US marketing strategy is based on surfing the Net and sending e-mails are doomed to clicking at their keyboard rather then filling export
orders and building a profitable market for their products in the United States.

About the Author:

Chuck Klein is managing partner of Amcon Marketing Strategy International, which specializes in helping non-US companies profit in the USA. Amcon provides tangible marketing and human resource services in the US including market studies, competitive intelligence, strategic partner searches, rep searches and executive recruitment serving clients worldwide.

Klein is considered an expert on US marketing for non-US manufacturers and international trade. He has published over 100 articles and presented numerous seminars and lectures on marketing skills and strategy for non-US manufacturers interested in the American market. His book Marketing to America: How non-US Companies can Profit by Selling in the USA was published by the Financial Times/Prentice Hall.

Amcon's web site is: www.amconmarketing.com

e-mail: info@amconmarketing.com

Executive Recruitment Part-Time Sales Manager Recruitment Rep Searches
Marketing Intelligence Strategic Partner Searches Business Plans
Seminars and Workshops