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Increase your chances of success in the biggest market in the world.
North America is the world's largest pharmaceutical market. Opportunities for high margins, strong demand and exceptional market potential are compelling factors that prompt European manufacturers to start supplying the North American marketplace. As home markets mature, however, competitive presence becomes painful and opportunities for growth become limited.
The vision of successfully expanding into North America is one that has been shared by many companies over the years. While the English language does not pose undue hardship for most educated Europeans, American culture and business often present unexpected and unique challenges.
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As a case in point, a European manufacturer seeking to develop new business supplying the North American pharmaceutical industry with an innovative technology engaged the services of a local independent sales agent. Initially, things looked promising, but after several false starts and months of inactivity, expectations for new sales were unmet.
The manufacturer then replaced the sales agent with a dedicated sales office staffed with some of the best and brightest long-time employees. After all, he rationalized that they were familiar with the technology, loyal to the company, had a reliable command of the English language and could communicate with the factory in great detail.
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Unfortunately, while opening a North American office might have been a good idea, it did not meet with success for many reasons, and after several years and several million dollars were spent, the office was closed.
Each market is very different. There are 'needs' and 'wants' that differ by company and by specific job-related corporate hierarchies. North American purchasing decisions are made in ways that are distinctly different from European purchasing practices, and the culture, which at first glance may seem to be so open, is actually very complex and challenging. In Europe, a great product sold into a good market is expected to return a reliable profit. In North America, the same product may meet limited customer interest, develop minimal customer interaction and result in considerable cash, and brand losses.
To limit the risk of failure, it is important to understand all of the potential risks, which may include:
North Americans buy from companies whose products meet a need and from people who are easy to do business with. Companies looking to expand into this market should:
A knowledgeable, experienced local sales and marketing partner can be an invaluable resource for guiding your company through the critical first steps in developing a North American presence. Frank and open assessments, recommendations, a defined brand strategy and direct, personalized selling programmes can make the difference between your company's success and failure.
William C. Cairns is President at BCM Group (USA).
Gail Steckler is Chief Strategy Officer at BCM Group (USA).