14 – International Sales Management

Introduction

Sales are a critical component of marketing. To live, all countries and individuals must sell something. Selling activities take place all over the world. The emergence of a worldwide market has opened up new opportunities for resourceful, growth-oriented sales leaders. The essential selling method and sales management task remain the same worldwide. The market and environmental variables fluctuate from country to country; thus, sales activities must change and be addressed accordingly. The primary elements to consider in worldwide selling are the impact of diverse cultures, labour regulations, local business consumers, religious rules (not changing of interest by specific nations), and so on.

International sales managers are responsible for directing and coordinating the work of sales organisations in countries where the company does business. In overseas markets, personal selling is quite crucial. The norms and regulations of the foreign country determine the promotion mix, distribution strategy, and so on. Sales managers must identify and address environmental issues in the global market.

14.1 Reasons for International Sales

It has frequently been observed that the domestic market becomes saturated while the international markets are in the development stage with the promise of growth. As a result, the worldwide market has sales potential. At the same time, the product life cycle differs across countries. The same product may be in the debut stage in one market and the growth, maturity, and decline stages in another. This also contributes to increased foreign sales. Some businesses have excess capacity, which is another reason for expanding internationally. It has been observed that globally focused businesses might generate up to 50% of their overall revenue from overseas sales. Many smaller companies are also drawn to overseas markets, increasing their global sales. Micro Soft Corporation, which sells software, and Siemens, which sells electronics, are two companies doing well in worldwide sales. Amway began in Canada and has now expanded into Germany, Japan, the Republic of Korea, and, most recently, India. McDonald’s is one of the most well-known fast-food corporations, with locations worldwide. Numerous organisations deal with a wide range of products concentrating globally and gaining market dominance.

When global business is well established, foreign markets must implement information and marketing strategies and the most up-to-date information and communication technologies. Sales managers must be aware of environmental changes, hazards, challenges, and hurdles they will not face in the domestic market.

14.2 Challenges faced by International Sales Managers

Economic

Economic factors play a significant role in worldwide sales tactics. Economic considerations determine the amount of purchasing power, which is reflected as GDP (Gross Domestic Product). As a result, economic progress can be divided into three categories:

1. Developed Economies: These include the United States, Japan, Canada, and most Western European countries. These countries dominate the economic system through private firms with high disposable income.

2. Developing Economies: These are in a more advanced stage of economic development. These countries’ economies are shifting away from export-led growth to domestic development. These countries already have sophisticated sales and marketing strategies. South Korea, Taiwan, Venezuela, and other countries are examples.

3. Underdeveloped Economies: These countries have a low level of life and are in the pre-industrial stage of economic development. They also have poor purchasing power, like that in Ethiopia, Pakistan, Haiti, and other countries. Another key aspect in the evolution of economic development is the financial structure, which includes communication, transportation, banking systems, and physical facilities that are important for effective marketing.

Legal

Trade obstacles and regulatory constraints imposed by the government cause roadblocks in foreign commerce. Some governments levy exorbitant import duties. When autos are imported into Columbia, a tariff of 300% is levied. Other countries, such as Japan, have significant restrictions on products such as medical equipment, agricultural commodities, telecommunications equipment, etc. Because of political disagreements, specific countries, such as Cuba and the United States, India, and Pakistan, impose a blanket restriction on imports and exports. Some countries encourage domestic entrepreneurship while discouraging the consumption of imported goods. Third-world countries (notably Saudi Arabia and other Middle Eastern countries) do not allow foreigners to hold 100% of the company and instead require partnerships with local partners.

Political unrest harms the majority of transactions. A change of government may revoke an agreement signed with a government, and earlier pledges may not be honored.

Culture

Culture can be defined as a distinct way of life for people or a group of people. Many variables contribute to cultural differences, such as linguistic barriers, a diversity of languages, attire, food habits, tastes, and limited time and space. These elements are crucial in personal selling and sales management.

Business and private customs might also differ from one culture to the next. North Americans are more likely to approach a commercial agreement directly, personally, strongly, and firmly. Before discussing business, Latin businesspeople get to know a person. Dealing with them necessitates a great deal of patience. Even in Japan, preparation and patience are required for a successful company. The Japanese ask many questions, and the transaction can take place if the salesperson has the necessary expertise and conviction.

Sales managers must grasp hand gestures and body language to communicate effectively. When welcoming consumers, both Americans and Europeans shake hands. Other cultures, such as Japan and other Asian countries, are content with a traditional waist bow or a Namastey. People in several countries do not work on holidays, Sabbaths, or prayer days. Eating habits vary from one country to the next. Kosher food is consumed in some countries. Some countries do not eat pig, and others forgo non-vegetarian foods entirely. These are critical elements for the sales manager to consider when developing foreign relationships.

14.3 Qualities of International Sales Force

The sales manager faces a challenging task in managing the sales staff. For an excellent salesman to be successful, many attributes are required.

Decision-making

He must be able to make decisions based on incomplete facts. Some risks are substantially greater in international sales. The buyer cannot be kept waiting for the salesmen to refer him to headquarters, which can delay the decision-making process.

Knowledge

He should have sufficient knowledge to receive appropriate guidance and information and understand the facts obtained. His work and tasks include research.

Adaptability to Culture

Credibility is essential for both the employee and the buyer to trust the salesperson. In the host country, the salesperson must work without supervision and overcome numerous obstacles. He should be able to carry out his responsibilities and demonstrate high accountability.

Physical fitness

Physical conditioning is essential in various climates because travel is very strenuous and demanding. The salesman is under a lot of pressure, and the food may be varied and served at different times.

Language

He should be fluent in any language required in the host country. He should be able to tell the difference between the terminology used in different countries. There are several variances in terminology used in the United States and the United Kingdom, for example:

Americans use the term “apartment,” while Brits use “flat.”

Americans say elevator, but Brits say lift.

Americans call them cookies, whereas Brits call them biscuits.

Americans refer to the living room as the living room, while the British refer to the drawing room as the drawing room.

Americans say gas, while Brits say petrol.

Americans say theatre, but Brits say cinema.

14.4 Issues for International Sales and Marketing

Because of the numerous factors mentioned earlier in the unit, the international market is more complete than the domestic market. One of the most essential issues to address is whether the company should use the same marketing strategy in all countries (global marketing) or adapt it to the local conditions of each country. International marketing is to have the same combination of P’s worldwide. This is more cost-effective but challenging for all businesses to implement. Coca-Cola, Kodak, and Sony are examples of successful global marketers.

In many circumstances, alternative sales techniques and marketing mixes must be implemented because of local competition pressures or technological specifications.

Another challenge is obtaining detailed information about the country and its markets. Customers doing business in that country or the Chamber of Commerce International Trade Show can provide information. Secondary data can be obtained from directions and other written materials.

Some governments have created a National Trade Data Bank (NTDB) containing massive amounts of information. The company’s sales forecasting system can likewise be used for this purpose.

Following the determination of the information, the corporation must decide on how to enter the overseas market. This can be accomplished in the following ways:

Passive Exporting

When orders are received from the overseas market, they are unsolicited orders that result from the company’s name appearing or being included in trade directories, etc.

Active Exporting

This might be accomplished through the company’s sales team or middlemen. The company’s sales volume grows, and it actively participates in exports. It can also be done through an export management company, which is the manufacturer’s representative for international sales. This method is cost-effective, but it does not provide adequate feedback.

Direct Exporting

Direct exporting involves dealing directly with international purchasers, who can be intermediaries or final consumers.

Licensing

Granting contractual authority to utilise distinct property rights such as patents, trade marks, and know-how in a specific geographic area for a set amount of time.

Counter Trade

Foreign sales are handled largely through bartering arrangements, i.e., delivering commodities to a foreign country in exchange for products.

Joint Ventures

This entails collaborating with overseas partners. This assists the indigenous enterprise in reducing political issues and its foreign character. Such collaboration is common in the United States and Japan.

Wholly Owned Subsidiaries

These are foreign subsidiaries of a parent corporation. These are legal in wealthy countries but require significant expenditure.

Management Contracts

Management contracts are agreements in which a company in the home country manages an operation for a company in another country. This is widespread among multinational hotels such as Hilton, Sheraton, and others.

14.5 Advanced International Selling

There are numerous aspects and critical points that influence overseas sales:

1. The salesperson must talk effectively and value execution, language quality, quickness, and delivery. This impacts the listener’s comprehension.

2. The salesperson must use visual aids to the greatest extent possible. He should select examples as illustrations with care, especially when it comes to humour. Because of social and cultural differences, humour and jokes are risky internationally. Many people fear making mistakes due to language difficulties, so alternative replies or multiple solutions should be supplied when asking questions.

3. Japanese clients have unique communication issues. They are less outgoing than Americans, so salespeople must be kind to Japanese consumers who cannot respond to open-ended questions.

4. Cultural variations have a wide range of effects. French people avoid talking about money and find it awkward to discuss prices. Americans, on the other hand, have no qualms about discussing costs. Because the French do not want to upset anyone, they take longer to make a request.

5. Salespeople in Italy must provide plenty of time for appointments. Italians spend several hours conversing with the salesperson; Swiss people value degrees and titles and welcome business cards highly. The Arab world regards touch as a kind of communication. Brazilians prefer to communicate in Portuguese and are quite proud of it. Unless otherwise requested, French should be addressed as Monsieur or Madame. Japanese people should be given plenty of time to earn their trust. In Hong Kong, salespeople should avoid wearing a navy blue suit and a white shirt. In Hong Kong, this implies a period of grief.

Because domestic markets are saturated, international sales have grown in importance. Because it is a more extensive field, a comprehensive perspective should be taken. A large amount of data must be processed to develop effective sales and marketing strategies. For successful worldwide sales, environmental concerns must be addressed in the best way possible. The information required for entering foreign markets and global marketing decisions must be taken very carefully, as global marketing may not be practicable in nations with distinct requirements. The manner of entry into the foreign market is also a significant consideration for these organisations seeking to go global. The salesmen’s training, selection, recruitment, and emphasis on language and other cultural characteristics should all be considered. On the other hand, the selling procedure remains the same, except for alterations that must be made to account for the variances between countries. If these factors are addressed, there is a good probability of success in foreign sales.