Exhibiting overseas is one of the fastest and most cost effective ways to identify the best foreign markets for your products/services. International trade shows and fairs offer opportunities for multilateral contacts and business deals. They allow you to test your product's export suitability; explore the strength and scope of your competition; and gain exposure to potential suppliers, in-country distributors and customers before making any sizable financial commitments. However, to effectively trade internationally, top management must commit to developing foreign markets.
More than 2,000 shows are organized worldwide each year, and approximately 150 of these events have significant global attraction. Most are held in the major trade show centers in the United States, Germany, France, Italy and the United Kingdom. The following A-Z guidelines will help to take the fear and anxiety out of your overseas exhibiting ventures:
Ask questions and thoroughly research overseas shows to find the ones that attract your target market. A good starting point is the U.S. Foreign Commercial Service (FSC), part of the International Trade Administration of the Department of Commerce. Other sources of information include banks, trade associations, foreign embassies and consulates, bi-national chambers of commerce and the Internet.
Book space early. Allocation for space is a "first-come, first-served" basis. Applications for space need to be submitted as early as possible -12-18 months prior to the event. Reservations are made with the show organizer or their international representative. Most of the large shows, especially the German ones, have global sales offices.
Coordinate shipping arrangements. Most international trade shows have an officially designated freight forwarder who is familiar with all the relevant details. They will handle the invoicing, arrange for licenses and declarations, prepare packing list, issue bills of lading, handle insurance and prepare all necessary documentation. A duty charge is not normally assessed on equipment, unless it is destined to remain in the country after the show ends. An international carnet facilitates importation and movement of samples and professional equipment between countries.
Determine that your product complies with international technical and safety standards. Germany, in particular, has extremely stringent laws regarding testing products to comply with applicable specifications. Overseas companies are allowed to exhibit products at German trade fairs before their products have been inspected. Formal certification of required is necessary to legally sell your products in Germany. Certain types of merchandise are also subject to specialized safety codes and technical requirements. It is advisable to use a local consultant to help you through the compliance process.
Establish a realistic budget. Costs of overseas shows vary widely, depending on a host of variables, for example, location, exchange rates, time of the year. In addition to your display, shipping, promotional and staff costs, also take into consideration, import duties and export regulations. As a safety net, add 25% to your budget to cover unexpected costs, tipping and exchange rate fluctuations.
Familiarize yourself with overseas union policies. Strong unions exist in the U.K., France and Italy. Understand and appreciate the rules and treat everyone with respect. Offering to buy your union labor lunch or a beer, as well as tipping, often helps to minimize pilfering, loss and damage. When working with contractors, always have someone who can speak the language and give logistical instructions. Arrive at least a week prior to the show to iron out any kinks.
Get to know pricing. Your company representatives should be prepared to negotiate and agree to terms at the show. They should also be fully conversant with tariffs, the European Community's Value Added Tax (VAT) and other tax implications, and importation and delivery procedures. When quoting prices, most buyers expect prices quoted c.i.f. (cost, insurance, freight), including duties, taxes and other charges. For a small fee, local freight forwarders will assist and prepare c.i.f. costs.
Have arrangements for credit and payment. You should make arrangements with a bank that has international banking affiliations to facilitate your banking needs. Discuss arrangements for transfer of funds, letters of credit and bills of exchange. Potential customers or representatives will expect a credit check. Individual profiles on overseas companies can be found through the World Trader's Data Reports, available for a small fee from the US Commercial Service.
Since exchange rates fluctuate daily and can affect pricing, especially when dealing with Latin American countries, consider getting paid in U.S. dollars.
Insist on using a native-born translator. When translating copy or business communications, always hire a local translator who has technical knowledge of your products/industry. Embarrassing mistakes occur when a translation is done by a non-professional with limited knowledge of a language and little or no understanding of slang, colloquialisms and double-entendres. Prepare product/service literature, data sheets, catalogues, etc. in the principal languages of the major countries represented at the show. Remember that most countries outside the U.S. use metric measurements.
Judge the context. Some cultures are more direct and explicit in their communication. Swiss, German and Scandinavian cultures are considered low context. Their words have specific meanings. In contrast, Japanese, Chinese and Arabs are high context. Their language is often vague, inexact and confusing for English-speaking cultures to understand. Reading between the lines is a must.
Keep language simple. Many of your international business contacts will speak English. Problems occur when you use slang, colloquialisms, idioms, jargon, buzz words, lingo, officialese, acronyms, and metaphors. These are often difficult to translate. It is far more effective to keep communication, written and verbal, basic and easy for anyone to understand.
Learn to speak body language. Seventy percent of our communication is nonverbal. We communicate by the way we stand, sit, tense facial muscles, tap fingers, etc. There are also hundreds of gestures to get across almost any meaning, from greetings, beckonings, and farewells, to terms of endearment and insults. Gestures and body language, with the exception of smiling, are not universal in meaning. Be aware of the etiquette on personal space, eye contact and when, what and how to touch.
Make sure that your top executives are available. Overseas shows, particularly in European and Asian countries, are serious business as they focus on sales. Top-level management attend these shows expecting to place orders. They expect, and want, to deal with their counterparts in your company. They expect to spend time discussing technical details and will often want to close major deals on the show floor. Technical staff, sales people and in-country representatives will help form a complete team.
Nail negotiating. Negotiating in international business is extremely complex. Socializing is often considered essential to the negotiating process. Learn the cultural rules, especially as they relate to timing and how business is conducted. Patience is often a real virtue.
Offer quality and uniqueness. High quality products and services are expected, particularly when dealing with the Japanese and South Koreans. The packaging is as important as the product. If your products and services compete directly with native companies, there needs to be something unique in the technology, innovation, design, styling or image to gain acceptance in the Asian market.
Plan on having a third-party contact. Many Asian and Latin American cultures prefer to do business with people they know. Meeting the right people often depends on having the right introduction. If the person you wish to meet respects your intermediary, then chances are you too will be respected.
Question whether "no" really means "no." Much confusion, frustration and irritation can occur when different cultures communicate real meaning. In some countries, such as France, "no" can often mean "maybe' and "maybe" can mean "no." In many Asian cultures, individuals will not say "no" outright. Rather, they use subtle clues, for example, saying "It's very difficult," or "I'll consider it." A "yes" or a nod of the head may very well mean "maybe" or "I understand," instead of it being the affirmative response you might interpret. To avoid saying "no," Koreans in particular will often give you the answer they think you want to hear. Learn to listen to the subtleties by asking open-ended questions. It is at times like these that a cultural mentor can be particularly helpful.
Recognize the role of women in business. Research the customs of the country you are visiting as they apply to women. Although female business travelers account for one of the fastest growing segments of the travel industry, problems still exist. Be prepared to prove yourself as you may not be taken as seriously as your male counterparts. Familiarize yourself with local and regional attitudes and cultural differences about women in business. This will help to define your approach and avoid potential problems and embarrassing situations. However, business overseas is based on trust and relationships. And women, like men, are responsible for creating the necessary rapport to accomplish their goals.
Supply all your company representatives with bi-lingual business cards. In Europe and Asian societies, business cards are essential. They act like a business passport. For countries where English is not widely spoken, have cards printed on the reverse side in the local language. This is best done in the country you are visiting. Also be aware of the specific etiquette that exists, particularly in Asian countries, for presenting cards. For example, in Japan, business cards are exchanged ceremoniously using both hands and a bow. Both parties will read and study the card. It is extremely impolite to write notes on the card or shove it in your pocket.
Train your people. Make sure that the people who represent your company at overseas shows are well trained and know and understand the cultural differences of the people with whom they will interact. They should know how to greet and address visitors. Formality is the norm in Europe, whereas a more casual and friendly style is acceptable in the U.S. Understanding different business negotiating styles, conversation sensitivities, and how women are treated in business, is essential, in addition to knowing eye contact, handshakes, body posture and spatial distance differences. The key is to develop relationships of trust and sincerity as they are critical for successful business.
Use ATM's (Automated Teller Machines) to get local currency. They give you the wholesale exchange rate of 5-10%, which is a far better rate than you would get at hotels or currency exchanges. Always try to purchase enough local currency before leaving home to pay your transportation from your destination airport to your hotel, plus a little extra for tips.
Value different decision-making processes. The key is not to sell but rather to build relationships. Decision-making differs around the world. For example, in Asian cultures, it starts from the lower levels in the organization, and works its way up the ladder. Many times, lower level employees will visit a trade show to gather information, which they will include in a report to a higher manager. Don't expect a decision from an initial meeting. Decisions are usually made collectively, and the process is often slow and thorough. However, once a decision is made, especially in Japan, a quick execution is expected. The key, once again, is to do your research.
Watch out for cultural differences. Know and understand the cultural differences of the people with whom you will interact. Be sensitive to color and symbols and their meanings in different countries. For example, mourning is symbolized by white in Asia, purple in Brazil and yellow in Mexico. If your product, packaging and literature are in the wrong color, you will lose sales. Red and yellow are lucky colors in China -conversely, never use red printing in South Korea. In many of the Asian countries, the number four denotes death and should be totally avoided, including products packaged in fours. If possible, avoid the number nine, as it has connotations of suffering. Seven and eight are considered lucky. Be safe and always do your research!
Expect to follow-up personally. Personal contact and immediate follow-up after the show is the best way to establish foreign buyer/seller relationships to produce future orders.
Yield to a time investment. Building relationships is a key component to doing business overseas. Behavioral differences are real. It is wise to recognize them and to make allowances when doing business. Willingness to cultivate business contacts through personal visits plays a major role in export success. Plan regular visits to your major buyers, agents, or distributors. Be available, interested and quick to react to problems or complaints.
Zero in on the fact that doing business overseas demands time and patience. It may take several appearances at trade shows before your company is taken seriously. Foreigners want to feel confident that you are sincere and totally committed to your involvement in their country.
by Susan Friedmann