This figure illustrates that when these five strategies, from the strategic/consultative selling model, are integrated with an appropriate personal selling philosophy, the result is a high-quality partnership.
In some societies, it is difficult to identify the highest-ranking individual based on observable behavior during group meetings. This crucial bit of strategic information often is uncovered only after the rep has spent considerable time developing rapport and getting to know the overall customer organization from various perspectives and in various contexts.
In the United States, the presentation is typically designed to sell and persuade, whereas the intent of the international version should be to educate and inform. High-pressure tactics rarely succeed in global selling, despite the fact that they are natural components of many American sales pitches. The message is equally critical because what may be regarded as fully acceptable in U.S. discussions may either offend or confuse the overseas sales audience.
A humorous example of this occurred during a session between representatives from Adolph Coors Company and a foreign prospect. The first slide in the presentation contained a translation of Coors’s slogan “Turn It Loose,” but within seconds of this slide being shown, the audience began to chuckle. As translated, the slogan described diarrhea—obviously something that the presenter had no desire to convey to this group!
This step represents one of selling’s important advantages as a promotional tool. The prospect’s senses become involved, and he or she can actually see the product in action, touch it, taste it, or hear it, as the case may be.
Experienced American sales reps know that persistence during the negotiation stage is one tactic often needed to win an order in the United States. However, American-style persistence inferring tenacity or arm-twisting can be considered rude and offensive by some foreign customers. This can end the negotiations quickly—or, in the worst case, such behavior can be taken as a display of self-perceived American superiority, which then must be countered aggressively or brought to an immediate end. Inappropriate application of American-style negotiation tactics has plagued some U.S. sales reps attempting to assertively close deals with Canadian companies. Conversely, in other countries, persistence often means endurance, a willingness to patiently invest months or years before the effort results in an actual sale. For example, a company wishing to enter the Japanese market must be prepared for negotiations to take from 3 to 10 years.
In Latin America, a bold closing statement is respected, whereas in Asia, it is something that must be done with more deference toward the decision maker. As with objection handling and negotiation, the close is a selling skill that comes with both knowledge and experience in global business and sales.
Implementation can be complicated because of logistical and transportation issues as well as potential problems with the in-country resources to handle all the necessary steps. Transportation alternatives were discussed in Chapter 12. There are cost benefits to using in-country nationals for implementation, but quality control is more difficult to guarantee. Establishing expatriates for the primary function of implementation is costly and normally cannot be justified until international operations are more mature and profitable. However, sending an implementation team to the host country creates a variety of expense and regulatory concerns. Even when implementation has been adequately addressed, the requirement for solid customer service raises all of the same questions again: in-country nationals, expatriates, or third-country nationals?
A basic issue for companies that sell globally is the composition of the sales force in terms of nationality. It is possible to utilize expatriate salespersons, hire host country nationals, or utilize third-country sales personnel. The staffing decision is contingent upon several factors, including management’s orientation, the technological sophistication of the product, and the stage of economic development exhibited by the target country.
These are summarized in Table 14-5. Not surprisingly, a company with an ethnocentric orientation is likely to prefer expatriates and adopt a standardized approach without regard to technology or the level of economic development in the target country. Polycentric companies selling in developed countries should opt for expatriates to sell technologically sophisticated products; a host-country sales force can be used when technological sophistication is lower. In less-developed countries, host-country nationals should be used for products in which technology is a factor; host-country agents should be used for low-tech products. The widest diversity of sales force nationality is found in a company in which a regiocentric orientation prevails. Except in the case of high-tech products in developed countries, third-country nationals are likely to be used in all situations.
Maintaining expatriate sales personnel is extremely expensive; the average annual cost to U.S. companies of posting employees and their families overseas exceeds $250,000. In addition to paying expat salaries, companies must pay moving expenses, cost-of-living adjustments, and host-country taxes. Despite the high investment, many expats fail to complete their assignments because of inadequate training and orientation prior to the cross-border transfer. In addition, studies have shown that one-quarter of U.S. expats leave their companies within a year of returning home.
Locals offer several advantages, including intimate knowledge of the market and business environment, language skills, and superior knowledge of local culture. The last consideration can be especially important in Asia and Latin America. In addition, because in-country personnel are already in place in the target country, there is no need for expensive relocations. However, host-country nationals may possess work habits or selling styles that do not mesh with those of the parent company. Furthermore, the firms' corporate sales executives tend to have less control over an operation that is dominated by host-country nationals. Headquarters executives may also experience difficulty cultivating loyalty, and host-country nationals are likely to need hefty doses of training and education regarding both the company and its products.
A third option is to hire persons who are not natives of either the headquarters country or the host country; such persons are known as third-country nationals. For example, a U.S.-based company might hire someone from Thailand to represent it in China. This option has many advantages in common with the host-country national approach. In addition, if conflict, diplomatic tension, or some other form of disagreement has driven a wedge between the home country and the target sales country, a sales representative from a third country may be perceived as sufficiently neutral or at "arm's length" to enable the company to continue its sales effort. However, there are several disadvantages of the third-country option. For one thing, sales prospects may wonder why they have been approached by someone who is neither a local national nor a native of the headquarters country. Third-country nationals may lack motivation if they are compensated less generously than expats or host-country sales personnel; also, they may find themselves passed over for promotions as coveted assignments go to others.
Sales agents: From a global perspective, it often makes a great deal of sense to set up one or more agent entities to at least gain entry to a selected country or region. In some cases, because of the remoteness of the area or the lack of revenue opportunity (beyond servicing satellite operations of customers headquartered elsewhere), agents are retained on a fairly permanent level. To this day, the majority of U.S., Asian, and European companies with an Africa-based sales presence maintain agent groups to represent their interests.
Exclusive license arrangements in which a firm will pay commissions to an in-country company’s sales force to conduct personal selling on its behalf. For example, when Canada’s regulatory agency prevented U.S. telephone companies from entering the market on their own, AT&T, MCI, Sprint, and other firms crafted a series of exclusive license arrangements with Canadian telephone companies.
Contract manufacturing or production with a degree of personal selling made available through warehouses or showrooms that are open to potential customers. Sears has employed this technique in various overseas markets, with the emphasis placed on the manufacturing and production but with the understanding that opportunities for some sales results do exist.
Management-only agreements through which a corporation will manage a foreign sales force in a mode that is similar to franchising. Hilton Hotels has these types of agreements all over the world; not only for hotel operations but also for personal selling efforts aimed at securing conventions, business meetings, and large group events.
Joint ventures with an in-country (or regional) partner. Because many countries place restrictions on foreign ownership within their borders, partnerships can serve as the best way for a company to obtain both a personal sales capability as well as an existing base of customers.
