Negotiate With Americans (2011)

Business negotiation with Americans

GoalsStructuring the negotiation : different success keys to negotiate with Americans

Preparing the negotiation: to understand better the culture and the expectations of American buyers

Negotiation’s strategy :to adapt your marketing strategy to increase your success

Understanding the entry barriers to the U.S. market

Entering Your Chosen U.S. Market

3 strategies:Direct sellingIndirect selling (sellingthrough intermediaries)Selling through strategicalliances

Module 1: Structuring the negociation : differentsuccess keys to negociate with Americans

Diversification Methods

Direct selling Direct salesAgents

Indirect selling DistributorsBrokersTrading House

Partnerships Co-Enterprise/Co-MarketingAgreement with other manufacturersLicensingTechnology Transfer

1. Direct selling

Direct exportation from a distanceDirect salesRepresentative (paid manager)

Establish a U.S. presenceOpening a U.S. branch of your companyEstablishing a separate U.S. subsidiary, such as a corporation

Direct sellingAllow you to operate a retail outlet in the heart of your U.S. marketProtect your company’s assetsBe seen as more «American»Autonomy in the administration Better knowledge of the marketPermanent networkAll the benefits

Business implicationImportant financial resources (high fixed cost) Risk exclusively assumed by the export departmentInternational expertiseNeed more time before getting sales

2. Indirect selling

Trading housesRepresentative (agent)ImportersDistributorsBrokersSociétés de gestion exportBureau d’achat

Indirect sellingGetting an immediate presence in the United State market without setting up your own sales operationLimited riskLow implication (human and financial resources)

Less controlGreater distance from your customer baseControl on commercial politics: very low / nullPaying commissions: short term vision Screen between the market, the clients and the exporter

3. Selling through strategic alliances

Formal or informal

LicensingFranchisingCross-licensingCo-marketingCo-productionJoint venture

Cooperation / partnership

Sharing risk, cost and investmentSharing resources, know-how, contacts Sharing export activities(custom clearance) Resolving problem related to professional accreditation, movement of personnel acrossthe border and U.S. tax and legal statusCombining the technical and financial strengths of the twobusinessBetter knowledge of marketspecificitiesAccess to public invitation to tenderAccess to technology

Business implication Partial control on commercial politicsRisk to loose the know-howUnderstanding difficulties(culture, language) Time required to administrate the partnershipDifficulty to select partners

Expectations of your agent

Exportable goodsExport knowledgeFair agreement / partnership

Questions & answers on videosHow frightening?How different?How do you get started?What is the role of partnership?Is the partnership a threat?

Module 2: Preparing the negotiation: to understand betterthe culture and the expectations of American buyers

Personnel control on the environment and responsibilitiesPositive and natural perception on changes Time = $$$Egalitarianism and equityIndividualism and independenceSmartness et initiative

The culture of the American buyerCompetitionVision oriented on the futureVision and action work-orientedLack of formalitiesHonesty, open-minded, rightness (Enron !)

Practical and efficient nature Materialism

Reminder on negotiation from : Executive Planet.com

Make up their minds quickly and decisively. Information must be straightforward and to the point.Money is a key priority and an issue that will be used to win most arguments. Status, protocol, and national honour play a smaller role.American businesspeople are opportunistic and willing to take chances. Opportunism and risk taking often result in Americans going for the biggest possible slice of the business, 100% if possible.

Dislike periods of silence during negotiations and in conversations, in general. May continue to speak simply to avoid silence.Persistence is another characteristic you will frequently encounter in American businesspeople; there is a prevailing belief that there is always a solution. Moreover, they will explore all options when negotiations are at an impasse.When they agree to a deal, they rarely change their minds.Future oriented. Innovation often takes precedence over tradition.

Reminder on negotiation

Thinking tends to be analytical, concepts are abstracted quickly, and the "universal" rule is preferred.There are established rules for almost everything. Experts are relied upon at all levels.Lawyers everywhere ! The most litigious society in the world.Negotiating = problem-solving through "give and take" based on respective strengths. Often emphasize their financial strength and/or position of power.

In negotiations, points are made by the accumulation of objective facts. This evidence is sometimes biased by faith in the ideologies of democracy, capitalism, and consumerism. The subjective feelings of the participants are not as much of a factor. Therefore, they will not spend much time seeking consensus.Try to extract an oral agreement at the first meeting. Sometimes bring final contracts to first meetings. In large firms, contracts under $10,000 can often be approved by one middle manager in a single meeting.Limited knowledge of other cultures. May assume that their way is the "correct" or only way.

Strategy to diversify your marketing strategy: 2 websites to keep in mind

Manufacturers’ Agent National Association (MANA): 22 000 professional sellers, by line of business. Since 55 years. www.manaonline.org(Americans like to have a direct access to your products!)

For public sector: www.dfait-maeci.gc.ca : SALE2USGOV

Why working with an American representative (MANA) ?

Predictable Sales Costs That Go Up And Down With SalesLower Sales CostsIncreased SalesImmediate Access To The MarketFree consulting servicesCost of Training And Turnover In Sales Personnel Is EliminatedHighly Experienced, More Aggressive Sales ForceSales Forecasting Is Equal Or Superior To A Direct Sales ForceBroader Sales Context For Your ProductProvides Marketing Flexibility At Less CostCreates A Systems Approach To SellingEvery Call Is A Relationship Call For Your CompanyMulti-faceted, Multi-skilled Sales TeamBetter Market IntelligenceVested Partner In Manufacturer’s Success

Selling to the public sectorIt takes 3 to 5 years to close a selling with the U.S. ArmyIt takes 3 to 4 years to close a selling with a government department

Examples of procedures:Federal Acquisition RegulationCentral Contractor RegistryTax Identification NumberHelp of DFAIT representative

Module 4: Entry barrier on the U.S. marketThe legal and logistical side of exporting to the U.S.

Labelling et packaging InsurranceCustom’s lawQuotasTransportPayment methodsIntellectual Property

Patent: United States Patent and Trademark OfficeTrademarkNorms, certificates, probateAmerican Standards InstituteFood and Drug Administration (FDA)Travel’s status (Entry’s fee & visas)

Post 9/11 context

To conclude…

Sources of informationwww.international.gc.ca

Advices

Thank you !

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Negotiate With Americans (2011)

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