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Too Many Flags , Not Enough Sales

By: Greg Seminara, Export Solutions

Export Managers proudly salute the flags on their country coverage map as part of their export credentials. A typical conversation starts with an introduction such as "Brand X  is a leader in Italy and we sell to 40 countries around the world. This year, we plan to expand into 10 new countries."
Your country coverage map, filled with flags planted, is important, but sales volumes per capita trends serve as a more accurate measure of export progress. Many brands claim a footprint in many countries, but only a few brands such as Barilla, Pringles, and Tabasco sell to more than 100 countries and are successful virtually everywhere.

This month, a well known European company approached me for help to fill in "white spaces" in their export coverage map. This brand claimed distributors in about 70 countries, including all of the important high growth regions of Asia and the Americas. Normally, I conduct distributor assessment projects in at least 20 countries per year. I knew that this good brand enjoyed acceptable presence in about 20 markets. However, a situation existed in at least 30 countries in their coverage universe where they "planted flags", through partnership with a distributor, but registered minimal sales. My response to this company is that their strategy and my involvement would generate better results through focus on a handful of countries where their brand was underdeveloped, versus stretching their export map to new countries to fill in coverage gaps.

Listed below are a few ideas to build sales in existing markets.

1. Conduct a 20/20 Analysis
Which export markets rank as your top 20 % in terms of sales per capita?
Which rank as the lowest 20 %. Why ? Proximity to home country, investment, distributor capability etc. ? What are the lessons learned from top and bottom 20 percent that should be applied to your export strategy ?

2. Segment Countries
Export Solutions segments countries as "Strategic", "Priority", and "Opportunistic".
Which strategic countries are in your bottom 20 % of performance ?

3. Focus on 1-2 Strategic Countries
Look at your gaps and focus on one country. Change your model, hire a local manager, and test a higher investment plan. Visit frequently. If you have a big team, concentrate on two countries, but the basic message is to align your energy on a big country, even though it's tough versus dividing your time and resources equally among a lot of countries.

4.USA is Bigger than BRIC
All companies claim sales to the USA, but per capita sales levels are usually quite modest.
The USA is a growing country, with 315 million relatively affluent consumers who appreciate brands. Invest in marketing and people to build your brand in the USA. The size of the prize and return on investment from the USA will be higher than all the BRIC's combined.

5. Change Distributors or Exit Markets
Selling one container a year to a large market is not worth the complexity and energy required just to claim another "flag on the map". If you partner with a strong distributor, provide them with more tools and investment. Change your distributor if they are small and under performing in a large country. You do more long term damage to your brand with an unqualified partner versus the benefits of a few extra shipments. You'll find this out when you try to enter the same country later and you are rejected by the retailers as your brand has "been here before and failed".

For many companies, there is more incremental business available through optimizing existing international businesses versus chasing new flags for the map.