Local Market Representation – It Matters.
It is easy for manufacturers to underestimate the importance of professional, knowledgeable local representation. Afterall for years the staple diet of tradeshow, factory visit and proactive Western buyers doing their own leg work has kept the order book filled. Now, COVID-19 is causing havoc with supply chains globally, throwing the traditional interfaces into question. Even so many manufactures report an uplift in sales as desperate buyers try and compensate for delays in supply by increasing their standard orders.
What happens next is more of an issue for shrewd manufacturers.
“Closer cooperation beyond just the next order has never been more important as resources get stretched like never before”
Having a real understanding of the market you are trying to penetrate can prove to be an invaluable time and cost saver. Whether it be developing closer ties with well places distributors for the next big product roll out or finding new business clients to replace the inevitable shrinkage in existing client base. After all, the existing customer is constantly looking around the market, looking for a better or newer product, better terms, better price, easier customer service, smoother warranty arrangements and so forth. It is part of their due diligence to do so.
There are also a multitude of other reasons why manufacturers loose existing clients. Some distributors may change their own plans and move away from markets they previously served. Some may even sadly go out of business.
Thus, even the most effective customer retention plans will see some shrinkage in client base. When that becomes cashflow critical many manufacturers will then enhance or turn on to new business activities. These plans are often hastily put together strategies that do not fully consider the way in which their target market wishes to do business.
Fundamentally business has always been about people, building trust and mutual benefit.
The Needle in the Haystack.
- At the most basic level a Google search for “LED light manufacturers in China” produces over 30million results. Granted most of these may not even be manufacturing lights, but that in itself is part of the issue.
From this sheer overwhelming number of hits, any new potential prospect must find, shortlist, and then conduct negotiations with possible manufactures willing or able to sell to them.
- Industry statistics show that a typically webpage has around 15 seconds to grab the viewer’s attention, before they move on. Even the most optimistic SEO executive would put the figure at no more than a minute before the client is engaged or “bounced”.
- Web pages are seldom the proactive sales tool they once were.
It becomes a virtual “needle in the haystack” that rules out all but the most dedicated or deep pocketed distributors proactively finding what they need.
The shrewd factory sales team may decide to approach clients directly. Assuming, of course, that they can find the correct prospects to target.
- It is a commercial reality that email marketing direct from the Far East into the Western markets rarely gets looked at.
The issue is that a poorly constructed email will not get past the spam folders.
Anything misspelt or obviously poorly translated materials are also normally rejected immediately.
Added to this is the sheer volume of email marketing aimed at the buyer. It is a significant concern. Most manufacturers in the Far East are working from the same few database or Internet search terms.
- Even if the approach gets to the point where the correspondence is actually read, the absolute best constructed messages are two dimensional, sterile and can never hope to convey the USP’s and excite a buyer as well as having the actual product in hand or a trusted relationship telling them about it.
It all just becomes a background hum, the “white noise” of constant spam and approaches that most distributors accept with resigned frustration is part of doing business with China.
Larger manufacturers and distributors will have expensive teams of people dedicated to sifting through these issues to help locate the best products and deals. Consequently, only those manufactures or distributors with the most money and time find their way through to each other.
This often leaves the genuinely great innovations and smaller teams overlooked.
Touch and Feel.
Furthermore, thanks to COVID-19 the traditional formatted tradeshows are fast becoming a thing of the past. So, getting to physically see a new product sample can be a costly and time-consuming process for any speculative buyer. Typically, there will be little time or room in the budgets for reviewing many samples and the manufacturers have been reluctant to speculatively send samples out FOC.
“It is a hard reality to face, but in the end, from many buyer’s perspective, the manufacturer’s often seems confusing, poorly represented, and hard to communicate with. “
In the end similar products end up considered to be all the same with the only defining difference being a cheaper price. In other words all the features, benefits and unique selling points of a product that the manufacturer has worked hard on creating, never get fully understood by the potential buyers. All that remains to help define things is “How much does it costs and what’s the MOQ?”
Far from ideal.
These are just some of the consideration covering the initial approach from Far Eastern Manufacturer to Western Distributor. Once past this initial marketing activity then the actual sales of the product and final negotiations start to come into sharp focus. At this “closing” stage, in order to have the best chance of converting a prospect into a client, it significantly helps to have a full understanding of the fundamentals of the target market. There is no substitute for knowledge of the ebbs, flows, wants, needs, seasonal changes, political subtleties and so forth. It builds credibility and helps foster genuine long-term cooperation
The Bottom Line
The $’s and time wasted on poorly executed sales campaigns into misunderstood markets can be defined as a false economy. It may seem cheaper to use existing resources. Let us be honest, the labour rates are far cheaper in the Far East than in the Western markets. However, the results are typically poor in comparison to a well-executed campaign utilising local market expertise and knowledge.
Those businesses that wish to stand out from the crowd and build a solid foundation of forecasted sales and growth, seek out professional local representation in the markets they wish to trade within.
Dedicated sales and marketing campaigns focussed on finding the right clients for their products.
Redirecting cash resources previously wasted on “just another tradeshow” or unread email, into something more worthwhile.
Effectively using local experts to help a manufacturer stand out from the crowd can be a powerful differentiator and should not be overlooked.
Simon Napier – November 2020