Guide To Software Export: A Handbook For International Software Sales

Roger A. Philips

• Publisher: Routledge
• Year: 2014
• Print ISBN: 9780789001436
• eBook ISBN: 9781136781902
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

An ideal reference source for CEOs, marketing and sales managers, sales consultants, and students of international marketing, Guide to Software Export provides a step-by-step approach to initiating or expanding international software sales. It teaches you how to examine critically your candidate product for exportability; how to find distributors, agents, and resellers abroad; how to identify the best distribution structure for export; and much, much more!Not content with providing just the guidelines for setting up, expanding, and managing your international sales channels, Guide to Software Export advises you on pitfalls to avoid, important legal and financial considerations associated with software export, and essential market and distribution information. In an effort to cover all the bases, this comprehensive text also discusses:

• negotiating partnerships
• electronic marketing
• evaluating the competition
• cultural assumptions and biases
• adapting software for use in Asian markets
• information sources on the Internet
• distribution channel strategiesIf you're not satisfied with your company's international sales performance or you want to get into the global market, Guide to Software Export can help you guide your company through the transition. With the book's easy-to-follow advice and checkpoints, you are sure to bring new levels of success to your company, so act now and get out in the forefront of software exporting.

Chapter 1

Your International Potential

Company Objectives

Entering a new international market requires investment. This investment will be in time, money, and management attention. The same would be true for entering any new market. If you are not prepared to make these investments, do not enter the new market—you will fail. How fast your company can grow its markets depends on the management and capital resources available.

If your product or products are not selling well in their home market, now is probably not the time to begin exporting. Shake the bugs out of both the product and the sales model at home before attempting to take them abroad. It is harder, because of the difficulties in travel, communication, and culture, to work these things out in a foreign country. Success in the United States usually drives a successful international software marketing campaign. Much of the U.S. computer industry trade press is either read or excerpted abroad. Your reputation will precede you, and foreign users (or at least sharp resellers) will already want your promising products by the time you reach them. You will have a repeatable sales model you know works in at least one country, and can base your international models on it.

There is also a more intangible requirement for success in world markets. Management must be prepared to be flexible, and to take a worldview. The “way we do things” might not be optimal for the new, international company. There will be accounting changes, organizational stresses, new travel policies, and unusual people wandering about the company offices. Strategic decisions, as well as the myriad daily ones, will have to take on a broader context. Yes, this packaging may be fine for the United States, but how will it be received in France? The pricing book makes sense here, but will it really be usable by 100 value-added resellers (VARs) in their various country markets?

How do we lead an organization to think globally? It takes time and persistence. Without full and enthusiastic support from top management, it will not happen.

Resources

Perhaps you decide that the domestic sales manager be given international responsibility as well. International requires a great deal of management time and attention at the outset, and as a result, domestic sales start to fall off. You have stretched management resources too thin and probably have not made a good decision.

If you spend time setting up an international VAR network, but lack the budget to adequately support it, you have not only wasted time, but quite probably also clouded your reputation in the international reseller community.

The first step, then, is identifying what resources are or can be made available to the international marketing process. How much money, over what time period can be allocated? How important is the associated sales growth to the firm at this time, and how fast can you afford to grow? The answers to these questions lie in such factors as the following:

• Cash available
• Cash flow from current operations
• Current management bandwidth
• How fast competitors are grabbing foreign market share
• The probable cost of the marketing investment
• Time to payback

As a rough rule of thumb, if you are not prepared to appoint at least one full-time manager to international sales, then your company is probably not yet prepared to enter those markets.

International operations will add a level of complexity to your company. For the first time, you may have to contend with foreign currencies, foreign laws, time zones half a day away, and non-English speaking customers. If today’s management is not securely in control of the operation, then you do not need these distractions now.

International operations will stress all parts of the company. Will worldwide pre- and post-sales technical support continue to be provided by the same organizations that provide them domestically today? Will resources be adequate? The marketing department will be faced with new types of campaigns in different countries’ markets. Development may have to get involved in localization and national language support tasks. All these stresses must be planned for and their solutions budgeted if the overall objectives are to be met. In fact, the entire corporate organization may have to change.

If management has not had significant international business experience, or has not traveled or studied extensively outside the country, this might be a danger signal. International experience must be gained or hired if the worldview is to be suffused within the organization.

There is another type of approach that can overcome some of the difficulties set out above. This is the solution of partnering. If your partner organization(s) have the capital, management depth, and international experience that your own firm lacks, and you can arrive at a mutually rewarding business arrangement, an accelerated entry into some or all of the world market can be achieved.

A few years ago, the small software firm, Knowledgeware, struck a deal with a Big 6 international accounting firm (Arthur Young, later Ernst and Young) to distribute and support its products throughout the world. This accounting firm had a presence in every major world market and handled virtually all of the marketing tasks. Knowledgeware stuck to its successful direct North American marketing. The partnership was phenomenally productive. Unfortunately, after a number of years, Knowledgeware canceled its distribution agreement and attempted to directly staff a worldwide sales operation. This led to disaster. Costs shot up and sales stopped as new offices were set up around the world and the newly expatriate American managers struggled to learn their new markets.

This is but one of the many possible partnership models available. They include distribution, joint venture, licensing, and other arrangements, and will be examined in detail in Chapter 2.

Market Potential

The first step in considering international sales is evaluating the export potential of your products. This way you can determine if the investments and disruptions discussed above will be worthwhile. Some products just cannot be reasonably exported. For example, if your product prepares a U.S. individual income tax return, there probably is not enough world market demand to justify your interest. Stay at home and be happy.

Global market potential can be affected by many factors, the most critical of which are intrinsic exportability, distributability, market size, and competition. This chapter addresses characteristics intrinsic to your products. The market-related factors are examined in Chapter 3.

Localization

Adapting a software product to the specific needs of a geographic market is called localization. Lack of localization is probably the most prevalent barrier to entry into foreign markets. Localization is more important for application software products than for system software products. With applications, the end user is less likely to be an information technology professional, and will be much less forgiving of foreignness in language, appearance, and approach.

Let us examine localization issues one-by-one:

Application Discipline

If the application product deals with processes affected by laws, business practices, or local custom, it is likely to need modification for each country market. Accounting standards, professional practices, and industry structure may all differ. One application firm that has been extremely successful in solving this problem is SAP, which basically delivers a “kit” of functional parts to the user, and lets each user assemble a system using tables which matches its own business practice. But if your product deals with insurance, the law, accounting, medicine, education, or virtually any other professional or industry area, it must be examined critically in light of the requirements of each market. Many basic attributes of these industries vary from country to country.

National Language Support (NLS)

Microsoft Word 6.0 (the single-byte version) supports over eighteen different natural languages and dialects, including three dialects of English. There are also versions for languages such as Chinese, Japanese, and Arabic, which require a double byte (discussed below) for each character. If Microsoft thought this extensive adaptation was necessary for success around the world, so might you. Or maybe not. Some system software products have never been translated from American English, yet are used by thousands of companies worldwide. The system programmers who use them are used to dealing with English software, and would just as soon not pay the increased cost that translation would add to the product.

The point is, you have to research the language issue. For consumer products (such as Word), the differences even between dialects of the same language (Canadian versus Continental French, for example) are critical. The British spell it “colour,” use petrol in their cars, and ring clients “on” (not “at”) their telephone numbers, or visit their offices located “in” (not “on”) their streets.

What has to be translated? Perhaps not everything, but here are some candidates:

• User manuals
• Packaging
• Installation instructions
• Help text
• Programmatic messages
• Screen legends
• Reports
• Internal documentation
• Support instructions
• Marketing materials
• Advertising copy
• Readme files

Full national language support (NLS) goes beyond merely translating foreign words using the familiar twenty-six letters of the English alphabet. Many languages use different letters, ümlauts, gràves, ácutes, diphthœngs, çedillas, tildes, and sø forth.

Most languages are less compact than English. Screens designed with only English in mind might look cluttered, or not even fit when translated into Spanish, for example, which takes roughly 40 percent more characters to represent the same thought as does English. Not all languages read from left to right. Arabic and Hebrew are bi-directional, with most characters written right to left, but with numbers and imbedded foreign quotes written left to right.

Then there is the world of double byte. The internal architecture of the hardware may come into play when dealing with double-byte characters. If your product parses character strings, or recognizes inputs in the user’s own language, you will have to allow for double byte if you wish to be successful in the 25 percent or so of the world market that uses more than 255 characters in its languages. Some hardware, as an example, recognizes special “shift-in” and “shift-out” bytes to delimit doublebyte text. In Japanese, double- and single-byte characters may appear together in the same sentence, delimited by shift-in and shift-out characters.

Not all ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Acknowledgments
• Chapter 1. Your International Potential
• Chapter 2. Global Marketing Approaches
• Chapter 3. Selecting Target Country Markets
• Chapter 4. Market Entry Strategy
• Chapter 5. Electronic Export and Marketing on the Internet
• Chapter 6. Managing the Channel
• Appendix 1. Characteristics of the International Company
• Appendix 2. Case Study
• Appendix 3. Sample Distribution Agreement
• Appendix 4. International Travel Tips
• Appendix 5. Internet Resource Guide
• Appendix 6. Checklist When Writing for an International Audience
• Bibliography
• Index