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Trade Routes: The Challenges of a U.S. Launch
By: Michael Long and Chris Czajkowski
Posted: March 5, 2007
page 2 of 3The Answer: Appropriate Partnerships
International companies can ally themselves with experienced U.S. management organizations to help navigate challenges and facilitate the achievement of corporate goals. If executed properly, the U.S. launch experience can be both profitable and rewarding.
Identifying the appropriate U.S. management partner is the first step to meeting the challenges ahead. Ideally, a management group should provide a full suite of services with the ability to ramp up support as growth dictates and be well-versed in all relevant disciplines—including brand and sales development, financial management and operational support. A launch in the U.S. is a complete business commitment and should be handled as such. All necessary elements must be considered, and all resources must be available for an immediate “call to action.” All things being equal, a retailer is more likely to choose a brand that can deliver hands-on management and service at an exceptional level—as well as a fine product.
A critical step in developing a U.S. launch is the creation of a business plan to assist in evaluating and developing a strategy, and to serve as a road map in the execution of said strategy as a finished product. Such a plan should identify and quantify all resources needed to maximize success. The business plan will identify the challenges and propose actions that address those challenges in a responsible and timely fashion. This will enable the brand to move quickly through the decision-making process. Attempts to launch without a plan will, most often, yield disappointing results.
Meeting the Challenges
The first challenge to launching a brand in the U.S. market is positioning the brand vis-à-vis its current positioning overseas. This involves a consideration of several factors best identified while working in conjunction with the U.S. management team. Very often, a brand established overseas will need to modify its approach to most effectively reach the U.S. audience.
The next challenge is to create an appropriate distribution strategy that reaches the target consumer and reinforces the brand’s positioning. Certain retailers are best suited to establishing a brand’s profile, while others are better positioned to provide consumer access. Even within a single distribution channel, each retailer has its own personality and appeal. Maintaining a brand’s long-term image and intrinsic value is directly influenced by its initial placement in the correct distribution channel. Once established in the appropriate channel, a brand is thereafter defined by that distribution. Each channel of distribution has its own margins, cost structures and brand spending requirements. Understanding these factors is key when developing a distribution strategy. Striking the right balance is critical to success.
Ensuring an efficient importation process can be a significant logistical challenge. A working knowledge of the pertinent regulations, restrictions and operational processes is critical, and one must consider compliance with various agencies—including the FDA, the Federal Trade Commision and U.S. Customs. Various nuances of this process are best managed on-site. In addition, there are a number of applicable insurance needs to be addressed.