From contacts to contracts

• 1. From Contacts to Contracts.A Guide to Practice.sippo.ch

2. 128 3. Published by:OsecSwiss Import Promotion ProgrammeStampfenbachstrasse 85P.O. Box 2407CH-8021 ZrichPhone +41 44 365 51 51Fax +41 44 365 52 [email protected] for SiPPOPhoto Credits:Mediacolors (www.mediacolors.com): pages 2008 by OsecAll rights reserved. 1 4. The Swiss Import Promotion Programme implemented by OsecOsec is responsible for mandates in import, investmentand export promotion as well as for promoting Switzerlandas a business location. An important task is to inform andsupport companies in connection with their internationalbusiness projects.As the official Swiss foreign trade promoter Osecconnects companies, know-how providers, private sectororganisations and public entities worldwide throughBusiness Network Switzerland.The Swiss Import Promotion Programme (SIPPO) is oneof Osecs mandates financed by the State Secretaryfor Economic Affairs (SECO). It supports small andmedium-sized enterprises (SMEs) from emerging marketsand markets in transition as well as Swiss and Europeanimporters.SIPPO supports SMEs from selected countries (see below)in gaining access to the Swiss and European markets. Theprogramme also helps Swiss and European importers tofind new market sources and interesting products. SIPPOprovides the importers with information on export offers,trade fairs and publications on a regular basis. SIPPOfocuses on the supply chain offering tailor-made businessservices in the last mile according to the needs ofexporters and importers in different sectors.2 5. IntroductionIn todays business world where competition is very keen, a company might have a competitiveadvantage over its peers or competitors if it can provide both high quality products andservices to increasingly demanding customers. For a company to achieve its goals it needs todetermine the needs and wants of its target markets and then deliver more effectively than thecompetition.Successful exporting is a complex process. Once a company has identified the product it wantsto sell in export markets, it must explore market opportunities. This process involves a significantamount of market research. Then, it should develop a production strategy, prepare the goodsfor the target market, determine the best strategy for getting the goods transported to itsdistributors for sale to its customers and then get the financial reward.These steps can be carried out successfully with careful planning and preparation. Part of theplanning and execution process requires relying on specialists such as freight forwarders, agentsor distributors to sell the products, banks to collect payment etc.The handbook From Contacts to Contracts provides the necessary information that oneneeds in order to prepare for a trade show and how to successfully participate during theshow or to make a direct contact and the important steps to take after the first contact hasbeen established in order to derive the maximum benefits from attending the trade show. It isimperative to note that, the after promotion and follow-up activities are the most crucial issueswhich are often not given the careful attention that they deserve. The handbook thus servesas a guide to help you to prepare yourself better for the Export Market and for internationaltrade shows so you can deal effectively with business issues that come up after the fair andpromotional activities for your products.It is important to realize that before you can attract and serve others, you must make it clearto them and yourself what you can offer them. Customers must have confidence and trust inyou before they will consider buying what you offer. Therefore credibility and trust are crucial inbusiness. You may want to ask yourself, if you are capable of delivering the volumes requiredand on time, if you can achieve a standard quality for your products and if you have thenecessary certificates and labels required and on time for your business.To achieve success with minimum loss of time, a company must deliver on its promises to thecustomer to guarantee satisfaction and a long term business relationship.It is the hope of Osec that this handbook will help you realize your export potential and we wishyou great success in your business endeavours.3 6. 4 7. 5 8. 6 9. 7 10. 8 11. 9 12. 10 13. Just-in-time delivery is not alwayspossible due to distance. Interme-diate warehousing has to bearranged - either by ones ownmeans or through third partiessuch as providers of logistic servi-ces or distributors. Dont forget -the more often a product is han-dled by third parties on its wayfrom the supplier to the end user,the smaller the remaining margin.Therefore, manufacturing orpurchasing costs of a producthave a determining influence onthe selection of appropriatedistribution channels. 11 14. Selecting appropriate distribution channels and partners are a deter- mining factor for success. However, in the rapidly-changing, globalized economy of today, the distribution concept has to be subjected to constant reconsideration and possible alternatives have to be evaluated. Market conditions may change saddenly unexpectedly immediately with major impact on distribution structures. A clear concept regarding promo- tion activities has to be set up in order to avoid wasted efforts and spending of money. Sales promo- tion includes:12 15. derive from them.PR includes all activities related todirectly supporting the corporateor product image and reputationin the respective market. Besidesissuing press releases, PR also inclu-des memberships of local clubs andassociations, sponsoring social andcultural events, maintaining goodcontacts with the local media, etc. 13 16. - Which ways of shipping andFinding the right balance between means of transport are most transport cost and warehousing suitable to ensure economical cost in order to minimize the total product movement from the expenses for logistics is very impor- supplier to the final customertant. Faster shipping keeps local while assuring product availa-warehousing low - but is more ex- bility when it is required by the pensive. Ensuring appropriate- customeravailability of the product in time is essential and of utmost improtance in cases where local competition is present. - How showd customer services be organized in order to assure on-time delivery, pro- vide reliable supply servives as well as offer appropriate after-sales service14 17. The marketing principles as presented on the previous pages are applicable whenever entryinto a new market is taken into consideration, whether domestically or in exports. The same goesfor the introduction of new products or services to existing markets. With respect to the key fieldsof the marketing model, the following presents some particular aspects to be taken into consi-deration while setting up a marketing concept for export. In foreign markets, not only productperformance and availability are determining factors but appropriate pricing complying withcostumers requirements.15 18. 16 19. - Are there any local restrictions regarding advertising (comparative advertising, ethicalor moral obligations, cultural or political conditions)? 17 20. 18 21. Whereas the price level for a companys products and services may be low in the do-mestic market due to general economical conditions, added value might be achievedin economically more developed markets - provided the quality of the products andservices offered are in compliance with the particular markets requirements.19 22. Any market is of potential interest, provided it offers the possibility of creating additional business at a profitable level. In order to ensure utmost benefit, care- ful evaluation of the new markets to be entered into is of highest importance. The relevant questions to be answered in order to take a decision whether or not a new market should be entered into are given in the checklist on page 23. To ensure careful evaluation, collecting as much reliable information as possible is necessary.20 23. arket Research - How to Collect Information on the Foreignarket Situation 21 24. 22 25. 23 26. 24 27. 25 28. 26 29. 27 30. - Is the fair known for being a trend-setting event? - Is the fair of regional, national or international importance? - Has the fair been well announced in print or electronic media? Have our competitors participated in the past, are they going to participate again? - Do our customers plan to visit the fair, what are their intentions, expectations, objectives?28 31. Participating at a trade fair entails many different kinds of costs from the beginning of theplanning period through to the realisation, participation and follow-up phase. Setting up aninitial budget facilitates decision making as to whether participation at a fair is feasible withrespect to the required investment. The following list of expenses involved is useful when settingup a basic budget: 29 32. - Trade fair-related ads in printed and/or electronic media - Invitation mailshots including free-entrance tickets - Advertising/registration in the official catalogue - Give-aways, gifts, samples - Translation, layout and printing of trade fair-related sales literature in local languages - Design, set-up and realisation of multimedia presentations (videos, movies, CDs, DVDs)30 33. 31 34. 32 35. 33 36. 34 37. 35 38. 36 39. 37 40. 38 41. 39 42. 40 43. 41 44. 42 45. 43 46. 44 47. 45 48. 46 49. 47 50. 48 51. 49 52. 50 53. 51 54. 52 55. 53 56. The bigger the booth, the higher the number of booth crew members required. A higher number of booth crew members means higher costs for transport, hotel accommodation and other related expenses. Furthermore, a bigger booth involves more demanding and thus more expensive infrastructure for operation and maintenance. As mentioned before, a general decision has to be taken regarding the booth type to be used (refer to the previous chapter for more details).54 57. When using direct mail, it is necessary to utilize appropriate address material. The mailshotshave to be addressed for the attention of the relevant person, otherwise they will end up in thewaste paper tray. Updated address material may be purchased from local direct mail organi-sations, chambers of commerce or industrial associations. 55 58. 56 59. 57 60. 58 61. 59 62. 60 63. Instead of paying attention to visitors passing by, unoccupied crew members start theirown discussions among themselvesThe booth crew members get stressed and nervous - giving the impression of insuffi-cient competence as they have not sufficient time to get into a conclusive discussionwith visitors.61 64. 62 65. 63 66. 64 67. 65 68. 66 69. 67 70. 68 71. 69 72. 70 73. 71 74. 72 75. 73 76. 74 77. 75 78. 76 79. 77 80. 78 81. 79 82. 80 83. 81 84. 82 85. 83 86. 84 87. 85 88. Negotiating and concluding contracts at a trade fair is rather seldom. Visitors tend to come tofairs in order to get an impression of the latest developments, to meet existing market partnersas well as to initiate contacts with potential new market partners. After their visit to the fair,they tend to be overfed with information - they may easily forget about new contacts. In orderto create contracts out of contacts, efficient, quick and appropriate follow-up after the tradefair is of highest importance. Below, the structure of an appropriate follow-up procedure isillustrated:86 89. 87 90. 88 91. 89 92. 90 93. Subsequently, the exhibitor has to keep himself in the mind of the visitor.91 94. 92 95. 93 96. 94 97. 95 98. 96 99. 97 100. 98 101. 99 102. 100 103. 101 104. 102 105. 103 106. 104 107. 105 108. 106 109. 107 110. 108 111. 109 112. 110 113. 111 114. 112 115. 113 116. 114 117. 115 118. 116 119. 117 120. 118 121. 119 122. 120 123. 121 124. 122 125. European Business Directory, at http://www.europages.com. Displays over 900.000companies from all over the world and is freely accessible.Kompass International Database, at http://www.kompass.com. Probably the largestsource of company profiles: having detailed product classifications, covering 2.3 mio.companies in 66 countries and 23 million products.WLW Online at http://www.wlw.de, covering more than 240,000 potential suppliers in10 countries. Website in various European languages.World Trade Center Association, at http://www.wtca.org/. Has 300 members in 180countries; offering a directory of 140,000 importers, exporters and related businesses.123 126. Country/Region Internet AddressAfrica http://africa.com/Argentinahttp://www.mecon.gov.arAustraliahttp://www.austrade.gov.auAustriahttp://www.wk.or.at/aw/Brazil http://www.brazilexportes.comCanada http://www.statcan.caEuropean Union http://europa.euCzech Republic http://www.mpo.cz/Finlandhttp://www.finland.fi/France http://www.ubifrance.frGermanyhttp://www.bfai.comGhanahttp://www.ghanaclassifieds.comHong Kong (China)http://www.hongkong.org/Irelandhttp://www.itw.ie/Japanhttp://www.jetro.go.jp/Mexico http://www.trace-sc.comMoroccohttp://www.magreb.netNetherlandshttp://www.hollandtrade.comPortugal http://www.portugal.orgRussian Federation http://www.online.ruSouth Africa http://www.cbn.co.zaSweden http://www.chamber.se/Switzerlandhttp://www.about.ch/economyIindex.htmlTurkey http://www.igeme.org.trUnites Stateshttp://www.stat-usa.govVarious countrieshttp://www.commerce.comITCs Index to TradeInformation Sourceshttp://www.intracen.orgOSECSwiss Import PromotionProgrammehttp://www.sippo.ch124 127. CIA World Fact Book, annual publication. Central Intelligence Agency. Available free athttps://www.cia.gov/library/publications/the-world-factbook/index.html. Also available inprint and on CD-ROM. Superintendant of Documents, P.O. Box 371954, Pittsburgh, PA15250-7954, USA. Tel: +1 202 512 1800, Fax: +1 202 512 2250, e-mail: [email protected] political geographical and infrastructural information, as well as economic indi-cators on individual countries.Country Commercial Guides, annual publication, US State Department. Available athttp://www.state.gov/ or http://www.buyusinfo.net. Superintendent of Documents,P.O. Box 371954, Pittsburgh, PA 15250-7954, USA. Tel: +1 202 512 1800, Fax: +1 202 512 2250,e-mail: [email protected]. Provides a comprehensive look at countries commercialenvironments, using economic, political and market analysis.Exporters Encyclopedia, annual publication with updates. Dun and Bradstreet, One Dia-mond Hill Road, Murray Hill, NJ 07974-1218, USA. Tel: +1 908 665 5000, Fax +1 908 665 5000.Subscription and sales: Tel: +1 800 526 065, e-mail: [email protected]. Update in-quiries: Tel: +1 610 882 7000. Hotline for export questions: The Americas, South-East Asia andthe Pacific: Tel: +1 610 882 6124; Europe and North and Central Asia: Tel: +1 610 882 6376;Africa and the Middle East: Tel: +1 610 882 7260. Information on trade regulations, docu-mentation requirements, transportation and legislation affecting commerce in over 220countries.Index to Trade Information Sources on the Internet, International Trade Centre UNCTAD/WTO (ITC). Available free at http://www.intracen.org/. The section entitled Products &Services contains links to market analysis tools and reference databases, the sectionConntries includes databases of full-text-publications, indexed by country.National Trade Data Bank STAT-USA. CD-ROM. Subscription fee: USD 75/month for a CD. USDepartment of Commerce, Washington, D.C. 20230, USA. Tel.: +1 202 482 1986, Fax: +1 202482 2164, e-mail: [email protected]. Over 20.000 full-text worldwide industry/country andmarket studies counducted by US Trade Counselors abroad. One CD-ROM a year wouldbe sufficient.Un March. Published by Centre franais du commerce extrieur (CFCE), Paris. Distributor:Librairie du commerce international, 10 avenue dlna, 75783 Paris Cedex 16, Tel: +33 1 4073 3460, Fax: +33 1 40 73 3146. Country economic/market reports in French.125 128. Expo Base, http://www.expodatabase.de. Offers a multilingual directory of 15,000trade fairs and over 25,000 service providers.Trade Show Centre, http://www.tscentral.com. Covers 20,000 trade shows, 35,000conferences and seminars and 500 vendors.OSEC, Swiss Import PromotionStampfenbachstrasse 85, P.O. Box 2407Programme CH-8021 Zrichhttp://www.sippo.ch Tel: +41 44 365 51 51, Fax: +41 44 365 52 02E-mail: sippo@[email protected], State Secrectariat forEffingerstr. 31, CH-3003 BerneEconomic AffairsTel: +41 31 322 56 56, Fax: +41 31 322 2749http://www.seco.admin.chE-mail: [email protected] Shippers Council Avenue Ruchonnet 57, P.O. Box 1346http://www.swiss-shippers.chCH-1001 LausanneTel: +41 21 320 32 39, Fax: +41 21 323 31 24E-mail: [email protected], Association of SwissGterstrasse 78, P.O.Box, CH-4010 BasleImport and Wholesale CompaniesTel: +41 61 228 90 30, Fax: +41 61 228 90 39http://www.vsig.chE-mail: [email protected] 129. Swiss Import Promotion Programme (SIPPO)SIPPO supports SMEs from selected countries (see below) in gaining access to the Swiss andEuropean markets. The programme also helps Swiss and European importers to find new marketsources and interesting products. SIPPO provides the importers with information on export offers,trade fairs and publications on a regular basis. SIPPO focuses on the supply chain offering tailor-made business services in the last mile according to the needs of exporters and importers indifferent sectors.OsecSwiss Import Promotion ProgrammeStampfenbachstrasse 85P.O. Box 2407CH-8021 ZrichPhone +41 44 365 51 51Fax +41 44 365 52 [email protected] 130. OsecSwiss Import Promotion ProgrammeStampfenbachstrasse 85P.O. Box 2407CH-8021 ZurichPhone +41 44 365 51 51Fax +41 44 365 52 [email protected] Our hotline: +41 44 365 53 91Copyright Osec November 2008. All rights reserved. www.sippo.ch