This week I have the pleasure of interviewing one of the top independent experts in the international business consulting field, Ed Marsh, from Boston. If you need expertise particularly in B2B manufacturing markets, Ed is a tremendous resource. His articles are an excellent read too. Here are Ed’s answers to my questions:
Q1: What are some of the changes you’ve seen in global markets over the past few years? Any important trends?
A1: I’ve seen three major changes shift the global sales growth environment. First, the concept of emerging markets is now a bit outdated. Most markets have emerged and are now developing. There are a few comparatively “green field” markets remaining in Africa, but most of the others, including many that most US companies consider too different, are actually fairly well developed. Chinese, German and other exporters are often already active, and so the growth play is no longer to seize a beachhead but rather to leverage the favorable “Made in USA” cachet as domestic consumer demand grows.
Second, nearly every country is undertaking export promotion efforts – from large, developed and wealthy nations down to recently emerged. And nearly every company is actively importing, even if they’re not yet exporting. That means that global trade is far more fluid. It no longer takes a large company infrastructure to manage the process. Logistics, payments, communications & travel are now essentially ubiquitous. In other words, it’s more feasible for small companies to export now, than ever. And therefore the barriers are more commonly internal (e.g. mindset) than external. And it’s also increasing competition in every market – including at home. So many companies can leverage export to overcome stagnating domestic sales.
Third, the internet. Ten years ago a company that wanted to export faced a lengthy, expensive and laborious journey that started with extensive research; then an educated guess (or gamble) on a market; then a long process of establishing a presence and building relationships, credibility and awareness. In contrast, today, with smart phones leapfrogging internet access into areas still lacking hard wire telephone, companies are growing rapidly – and any one of those rapidly growing companies is a prospect for US exporters (as well as Chinese, German, Indian, etc.) That creates a huge shift from a cumbersome market based approach to an ideal (profitable, long-term) prospect approach. In essence companies today can build a business by helping profitable buyers find them, regardless of passport or country code (almost) – rather than the herculean task of building markets.
Q2: Where do you think manufacturers are missing opportunities in key international markets?
A2: They’re not accounting for demographics. Most companies select target markets based on news headlines reciting population and GDP statistics. And companies that build their export growth on inbound results, or helping profitable buyers find them, will often develop concentrations in today’s most dynamic markets. But once a global sales capability has been developed within a company, then it’s appropriate to supplement initial activity with strategically selected market development. Diversification against regional concentration risk, and political and currency risk is built on a deliberate process of market analysis and selection. And that selection needs to anticipate the future – which is largely demographics driven.
Many of today’s active markets have demographic trends which point to substantially diminished future significance. That doesn’t mean that there won’t be profitable sales originating in those markets – but if a company plans to invest in a market anticipating success in ten years, that market should be one which demographics indicate will be growing and vibrant.
They also often overlook important opportunities in smaller markets, or metro concentrations (vs. pan national efforts.) For US companies with a domestic market of 330MM pax, markets like Colombia (48MM), Vietnam (93MM), Turkey (74MM) and Lagos (21MM) in the latter category not only punch above their weight economically, but represent substantial incremental market opportunity (15%, 30%,23% & 7% respectively.) And I recommend comparing that to US markets that they might have eagerly worked long and hard to enter. Charlotte (2.3MM), Seattle (3.6MM) and Dallas (7MM) for example. So companies looking to exports for revenue growth opportunities should not reflexively chase the BRICs. There are compelling markets with much lower barriers to entry.
Tune in next week for the rest of Ed Marsh’s interview!
About Ed Marsh
Ed was going to be an architect because he loved the nexus of engineering and design. That was before was going to be an engineer; before he graduated from Johns Hopkins; before he was an Army Infantry Officer (Airborne Ranger); before he set B2B industrial sales records; before he was partners with a German capital equipment manufacturer; before he founded a distribution/rep company for industrial products in India; until he decided that managing a business and employees wasn’t what he enjoyed. Now that Ed’s got all of that out of his system he runs a consultancy that helps US manufacturing companies grow by applying process excellence to business development, completing the full circle back to an engineering & design combination. His practice is built on a unique methodology which combines powerful digital marketing methodologies (a HubSpot partner) with his extensive international biz dev experience. Ed is also Export Advisor to American Express
About Consilium Global Business Advisors: Consilium assists American manufacturers in applying process excellence to their business development. In other words we help lean, well managed companies with rock solid bottom lines effectively and consistently grow their top lines to match. We work primarily with mid size industrial manufacturing companies, guiding them through a journey of designing and executing business grade B2B inbound marketing and focused, profitable global market expansion.