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Nov 11 2010

Secrets to Market Share and Product Sales Growth

Like many US-based professional societies, you find more international customers are consuming your products, attending your U.S. meetings and contributing content to your conference, education and/or publication products.  As you grow increasingly reliant on this international clientele, you may find more volunteers and members demand that you be more “present and engaged” in their regions.

Meanwhile, your scan of the business news indicates a host of new global trends:

  • Huge expansion in global trade and business growth led by economies in Asia, Middle East and Brazil;
  • 24/7 global management pressure necessitating inter-operable standards, and procedures, fueling the demand for certification and training in emerging markets; and
  • Expectations for a consistent, “global” customer service experience from consumers whether they are located in Chicago, Rio, or Mumbai.

How do you act on these potential opportunities in the right way?

How does one determine where or how to enter a new market?  What is your market potential?   What do you need to do to achieve sustainable growth in product or membership sales?

No matter how established your brand or how rich and successful your product portfolio in your home market, for a US-based professional society to succeed in growing a sustainable business in a new region of the world requires three important operational values:

  • Local knowledge and relationships to understand market opportunities, barriers to entry, and competitive threats
  • Ability to design, deliver and promote locally relevant products and services to your target audience
  • Capacity to serve increasingly large and more complex transactions as demand grows

Unfortunately, many US-based associations are “under thinking and resourcing” their efforts to grow globally. In short, they expect quick returns with value propositions, strategies and infrastructure used to build their home markets.

Market Insight – Get It & Keep It

Pursuing business growth in a region outside your home market requires gathering, maintaining, and improving “local market intelligence” that can prevent you from taking inappropriate risk or increasing your chance of failure.   Defining your market potential from a “market analysis” requires:

  • Recognition of global/regional economic, business and industry trends –  as well as the implications stemming from these trends to help define broader opportunities & challenges to enter a market
  • Understanding customer segments – knowing the needs and expectations of your prospects can help shape your appreciation for what is locally relevant for adapting one’s value proposition
  • Adapting to competitive landscape – competitors can come from many places (the local government, for-profit providers, other associations,etc) therefore identifying and evaluating their capabilities is key to define competitive advantage
  • Alignment to cultural norms – even if your products are considered “generally accepted practices” or are standards around the world one must ensure that the design, distribution or promotion of your services are consistent with local tastes

All Product Value Is Local

Just as “all politics is local”…so too is product or membership value.

If you’ve conducted a proper “market analysis” to determine your market potential, you may know where you want to go, but you will not know how to get there.  To develop the roadmap, you need to learn how your products, services or membership can be adapted to the local needs of the market you seek to grow.  This requires local customer intelligence developed from a “product analysis” to measure the proposed product portfolio against:

  • Relevance – how close are your current products to local needs, expectations of service, and the desired outcomes of targeted customer segments?
  • Convenience – is the locally desired content readily available & sensitive to the local price your customer segments are able to pay?
  • Awareness – how strong is your brand in this market and how trustworthy is your brand to local prospects?
  • Granularity – is your product or membership experience “design” appropriately packaged to the capacity of the local customer to consume?

Local Execution Meets Expertise

Destination and road map in hand, the last item is a “business plan” that includes the business and operational model you plan to use to produce, distribute, promote and sell your products in that region.   Here is where many associations make their biggest mistake by under resourcing their ability to deliver effectively.

As the diagram above illustrates, the paths most choose to grow a market are not equally valuable.  There are tradeoffs that one makes when trying to sell products from HQ that are not adapted to the local customer (dotted line) or who attempt to sell the same unadapted products within the region with local partners (middle line).   Why does this happen?

  • Capacity – while the Internet may make it possible to sell products or membership from the comfort of your office HQ you aren’t likely to achieve sustainable growth without having the capacity to promote, sell or deliver product or membership experiences from within the region.
  • Scalability – the better your means of adapting product, membership or services to one’s targeted audience the better your chances of crafting a locally relevant value proposition for a product that meets the needs of the market.
  • Expertise – there is no substitute for a local partner with the previous experience and proper expertise that can build a business:  marketing, sales, distribution, customer care, and the local business license to collect revenues and manage accounts on your behalf.
  • Entrepreneurship – you are starting a business in a new market no matter how old and successful your association and that requires a partner who is part of the local culture and brings the essential ingredient of having built businesses in these regions.

What Makes a Good Local Partner

Here are some tips to help you evaluate local business partners as you develop your plans for 2011.

  1. Management – do they offer flexible, scalable, capacity-building “local” business services?
  2. Branding – whose brand would be featured as part of conducting business on your behalf?
  3. Competency – do they possess proven experience to help your association grow its business?
  4. Market Knowledge – Do they possess the people and practices to achieve results?
  5. Focus – Have they a track record for achieving a sustainable business & operating model?
  6. Commitment – Are they flexibile to work with your third party providers to ensure the customer experience?
  7. Viability – Are they financially strong and diverse in business and effective leadership?
  8. Business License – Can they offer access to you as a WOFE to conduct business locally?
  9. Back Office – Can they offer financial management and fully functioning office and/or IT infrastructure?
  10. Entry/Exit Costs – Can they keep your risk low and make it turnkey to enter or leave a market?
  11. Integration – Do they have the ability to coordinate with your HQ – practices, reporting metrics, and communication?
  12. Market Relations – Can they grow relations with government, and academic institutions, and private sector?

Conclusion

Since 2001, emerging market countries have replaced the US, EU and Japan as the economic leaders for growth globally, but few people appreciate they are also overtaking Western markets as hotbeds of business innovation. New product and service innovations are being introduced based on “frugal innovation” that go far beyond low cost production methods to deliver high quality at prices people in emerging markets can afford: the $3,000 car, the $500 handheld EKG, and $30 mobile phones using nationwide service for just 2 cents a minute.

Emerging markets are now home to 21,500 multinational firms and the number of emerging market firms on the Financial Times 500 list has grown to 62 from as few as 15 in just two years.

How well we prepare today to enter new markets outside our home will likely depend how effective we continue to be as leaders in our industries or professions.  Time to get to work.

About the author

Peter Turner

As MCI's Senior Advisor, Global Development Strategy, I help associations build and execute global growth strategies. Over the past 30 years I have served three associations (ASAE, MPI and IEEE Computer Society) as a leader of business, product and partnership development.

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