Top 10 Most Important Considerations for Going-to-Market in Latin America

Friday, May 08, 2009 5:04PM

KNOW YOUR TARGET MARKET – Select the market based on demand for your product. Is there an actual need now? Ask customers, partners, and even competitors. Check magazines, trade shows, local agencies that promote business in-country.

KNOW YOUR COMPETITION – Who are your competitors in the U.S.? Do they sell in Latin America? Who are the distributors or sales channels in the target market? Do you have local competitors? Does your pricing compare to other products? What’s the value proposition of the competition? Is your value proposition better, unique, or the same? Is the competitor more or less sophisticated than your company? More or less established?

TO GO OR NOT TO GO? – Decide if it will be worth the effort to proceed. Usually the decision to go-to-market has far-reaching effects on product development, sales, marketing/pricing, and financial/operational/sales staffing. Do you need to conform to special laws or standards? Does your product have export restrictions? Are you ready to manage currency fluctuations? Does your product require specially-trained technical support? Do you need to translate and localize documentation or the product?

PARTNER vs. EMPLOYEE – Should you market the product directly or through a channel? Using your own sales force gives more control over sales efforts and presence in-country. However, unless you are physically onsite, you don’t have as much control over daily activities. There will be a ramp-up since any sales group won’t hit the ground running. Partners, in contrast, are established companies with presence, infrastructure and customers. They are staffed, have a market established, and may have prospects for your product. The downside is, they usually represent many other products as well, sometimes want exclusivity, and usually want you to help generate demand for the product. Have you considered Outsourcing to an expert?

CHOOSING A PARTNER – Ask customers about their current partners or suppliers; ask distributors about their reseller base. Check trade directories for the country and local trade publications for ads. Ask another company with similar products (but not competitive). The local embassy/consulate often has directories of local companies. After you contact potential partners, find out who they represent, how many products, how many sales reps they have, annual volumes, what they feel the market for your product might be, if they have technical support people (if that’s what’s needed for your product). After interviewing several potential candidates (on the phone), conduct a recruiting visit in-country. Some partners have offices in multiple countries. Be cognizant of cultural, political, and social differences.

AGREEMENTS – Execute a partner or sales rep agreement that has been reviewed by an attorney with local contract experience. Such agreements should contain, aside from the boiler plate clauses, length of term, information to what degree the distributor has the right to disclose information, pricing policies, discount policies, technical support policy, training, customer training, who pays for documentation, translations (if applicable), commissions and/or royalties, sales quotas, and penalties or actions taken for non-performance. If a partner gets exclusive rights, then a quota should be included. If the partner does not make quota for a specified term, he can lose the right to sell or the exclusive status. Establish policy on multi-national accounts, “house” accounts, referrals, other partners, etc.

SUPPORT – Consider the kind of support and related training to offer partners and/or sales reps. IT products require skilled technical support for partners and end user customers. You need to want to consider having the partner provide support at first. If so, you will need to conduct training. Who pays for support? (Put that in any agreements.)

POTENTIAL FOR YOUR PRODUCT(S) – Establish in advance the potential market for the product. Although a variety of market research may be available from the country’s embassy/consulate or Dept of Commerce, trade publications, etc. you may have to do some research through local channels. What is the “life” of the product? Do you need installers or implementers? What about maintenance, premium technical support, or other value-added services?

COST OF MARKETING – When creating a marketing plan, consider country-to-country variables. One marketing plan may not work for all countries. Consider travel and related expenses, regional and local trade shows, public relations, lead generation, events, local training, documentation localization, translation, added technical and other support, communication costs, licensing, adaptation to local standards and laws, etc.

LONG TERM COMMITMENT – When a decision is made to sell the product, it should be a medium to long-term commitment. The first 12-18 months will be difficult at best. The product, the channel and/or the sales force must build up customer confidence. When creating a marketing plan, forecast sales and costs for five years and updated quarterly. A comprehensive business plan is essential. Don’t dabble. Customers and partners can perceive the lack of support and will reciprocate. The sales force will exude a lack of confidence.