Negotiate With Americans (2011)

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With a market of more than 300 million people, the …

With a market of more than 300 million people, the
United States is the world’s largest economy. Its size
gives it the power to influence global acceptance of
everything from consumer goods to industrial standards,
and makes it a magnet for exporters all over the
planet. Simultaneously, the U.S. is a major supplier of
goods and services both to its own domestic markets
and to markets around the world.

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  • 1. Business negotiation with Americans
  • 2. GoalsStructuring the negotiation : different success keys tonegotiate with AmericansPreparing the negotiation: to understand better the cultureand the expectations of American buyersNegotiation’s strategy :to adapt your marketing strategyto increase your successUnderstanding the entry barriers to the U.S. market © Consultation Contacts Monde 2007
  • 3. Module 1: Structuring the negociation : differentsuccess keys to negociate with Americans Entering Your Chosen U.S. Market 3 strategies: Direct selling Indirect selling (selling through intermediaries) Selling through strategic alliances © Consultation Contacts Monde 2007
  • 4. Diversification MethodsDirect selling Direct sales AgentsIndirect selling Distributors Brokers Trading HousePartnerships Co-Enterprise/Co-Marketing Agreement with other manufacturers Licensing Technology Transfer © Consultation Contacts Monde 2007
  • 5. 1. Direct sellingDirect exportation from a distance Direct sales Representative (paid manager)Establish a U.S. presence Opening a U.S. branch of your company Establishing a separate U.S. subsidiary, such as a corporation © Consultation Contacts Monde 2007
  • 6. Direct selling Allow you to operate a Business implication retail outlet in the heart of Important financial your U.S. market resources (high fixed cost) Protect your company’s Risk exclusively assumed assets by the export department Be seen as more International expertise «American» Need more time before Autonomy in the getting sales administration Better knowledge of the market Permanent network All the benefits © Consultation Contacts Monde 2007
  • 7. 2. Indirect selling Trading houses Representative (agent) Importers Distributors Brokers Sociétés de gestion export Bureau d’achat © Consultation Contacts Monde 2007
  • 8. Indirect selling Getting an immediate Less control presence in the United Greater distance from State market without setting up your own your customer base sales operation Control on commercial Limited risk politics: very low / Low implication null (human and financial Paying commissions: resources) short term vision Screen between the market, the clients and the exporter © Consultation Contacts Monde 2007
  • 9. 3. Selling through strategic alliancesFormal or informal Licensing Franchising Cross-licensing Co-marketing Co-production Joint venture © Consultation Contacts Monde 2007
  • 10. Cooperation / partnership Sharing risk, cost and Business implication investment Partial control on Sharing resources, know-how, commercial politics contacts Risk to loose the know- Sharing export activities how (custom clearance) Understanding difficulties Resolving problem related to (culture, language) professional accreditation, Time required to movement of personnel across administrate the the border and U.S. tax and partnership legal status Difficulty to select partners Combining the technical and financial strengths of the two business Better knowledge of market specificities Access to public invitation to tender Access to technology © Consultation Contacts Monde 2007
  • 11. Expectations of your agent Exportable goods Export knowledge Fair agreement / partnership © Consultation Contacts Monde 2007
  • 12. Questions & answers on videos How frightening? How different? How do you get started? What is the role of partnership? Is the partnership a threat?
  • 13. Module 2: Preparing the negotiation: to understand betterthe culture and the expectations of American buyers Personnel control on the environment and responsibilities Positive and natural perception on changes Time = $$$ Egalitarianism and equity Individualism and independence Smartness et initiative © Consultation Contacts Monde 2007
  • 14. The culture of the American buyer Competition Vision oriented on the future Vision and action work-oriented Lack of formalities Honesty, open-minded, rightness (Enron !) Practical and efficient nature Materialism © Consultation Contacts Monde 2007
  • 15. Reminder on negotiationfrom : Executive Planet.com Make up their minds quickly and decisively. Information must be straightforward and to the point. Money is a key priority and an issue that will be used to win most arguments. Status, protocol, and national honour play a smaller role. American businesspeople are opportunistic and willing to take chances. Opportunism and risk taking often result in Americans going for the biggest possible slice of the business, 100% if possible. © Consultation Contacts Monde 2007
  • 16. Reminder on negotiation Dislike periods of silence during negotiations and in conversations, in general. May continue to speak simply to avoid silence. Persistence is another characteristic you will frequently encounter in American businesspeople; there is a prevailing belief that there is always a solution. Moreover, they will explore all options when negotiations are at an impasse. When they agree to a deal, they rarely change their minds. Future oriented. Innovation often takes precedence over tradition. © Consultation Contacts Monde 2007
  • 17. Reminder on negotiationThinking tends to be analytical, concepts areabstracted quickly, and the "universal" rule ispreferred.There are established rules for almost everything.Experts are relied upon at all levels.Lawyers everywhere ! The most litigious societyin the world.Negotiating = problem-solving through "give andtake" based on respective strengths. Oftenemphasize their financial strength and/or positionof power. © Consultation Contacts Monde 2007
  • 18. Reminder on negotiation In negotiations, points are made by the accumulation of objective facts. This evidence is sometimes biased by faith in the ideologies of democracy, capitalism, and consumerism. The subjective feelings of the participants are not as much of a factor. Therefore, they will not spend much time seeking consensus. Try to extract an oral agreement at the first meeting. Sometimes bring final contracts to first meetings. In large firms, contracts under $10,000 can often be approved by one middle manager in a single meeting. Limited knowledge of other cultures. May assume that their way is the "correct" or only way. © Consultation Contacts Monde 2007
  • 19. Strategy to diversify your marketingstrategy: 2 websites to keep in mind Manufacturers’ Agent National Association (MANA): 22 000 professional sellers, by line of business. Since 55 years. www.manaonline.org (Americans like to have a direct access to your products!) For public sector: www.dfait-maeci.gc.ca : SALE2USGOV © Consultation Contacts Monde 2007
  • 20. Why working with an Americanrepresentative (MANA) ? Predictable Sales Costs That Go Up And Down With Sales Lower Sales Costs Increased Sales Immediate Access To The Market Free consulting services Cost of Training And Turnover In Sales Personnel Is Eliminated Highly Experienced, More Aggressive Sales Force Sales Forecasting Is Equal Or Superior To A Direct Sales Force Broader Sales Context For Your Product Provides Marketing Flexibility At Less Cost Creates A Systems Approach To Selling Every Call Is A Relationship Call For Your Company Multi-faceted, Multi-skilled Sales Team Better Market Intelligence Vested Partner In Manufacturer’s Success © Consultation Contacts Monde 2007
  • 21. Selling to the public sector It takes 3 to 5 years to close a selling with the U.S. Army It takes 3 to 4 years to close a selling with a government department Examples of procedures: Federal Acquisition Regulation Central Contractor Registry Tax Identification Number Help of DFAIT representative © Consultation Contacts Monde 2007
  • 22. Module 4: Entry barrier on the U.S. marketThe legal and logistical side of exporting to the U.S. Labelling et packaging Insurrance Custom’s law Quotas Transport Payment methods Intellectual Property © Consultation Contacts Monde 2007
  • 23. Patent: United States Patent and TrademarkOfficeTrademarkNorms, certificates, probateAmerican Standards InstituteFood and Drug Administration (FDA)Travel’s status (Entry’s fee & visas) Post 9/11 context © Consultation Contacts Monde 2007
  • 24. To conclude… Sources of information www.international.gc.ca Advices
  • 25. Thank you ! Subscribe to the CCM newsletter:www.contactsmonde.com © Consultation Contacts Monde 2007