How Should Businessmen Overcome the Difficulties of Entering the U.S. Market?
Cemil Ozyurt - This email address is being protected from spambots. You need JavaScript enabled to view it. - The U.S. market is a very attractive market for businessmen all over the world who want to get a piece of the pie. Whenever I meet manufacturers overseas, their first question is, how they can sell their products to the U.S.?
They have a very good point in asking how to enter the U.S. market. When we look at last year’s U.S. import numbers, even though it decreased 23 percent compared to 2008 and it was not a good year for the U.S. or the rest of the world, either, the country’s imports totaled 1.9 trillion dollars.
To consider only one month, May 2010, the U.S.’s importing of goods and services reached $194.5 billion. Imports increased to $194.5 billion in May from $189.0 billion in April. The U.S.’s monthly imports figures equal or surpasss Turkey total yearly exports, which was 102 billion in 2009.
The numbers are enough to get foreign exporters who have not yet encountered the market excited, but the real point is, how can they get started?
Anybody who does business in the U.S. could give you a very long list about what a businessman should do. First, find a lawyer, then an accountant, and so on. Those are crucial elements, but I have two simple pieces of advice. First, be patient, and second, find someone who knows marketing and don’t forget that you have to spend money to make money.
I have already assumed that you are patient, so I’ll go into the second one, marketing.
One of the most important decisions that a Small and Medium-size Business (SMB) has to make is how much money to allocate for its marketing budget. "How much should I spend on marketing?"
Scott C. Margenau, the founder and CEO of ImageWorks Studio and award-winning web design and branding firm, says both the Counselors to America's Small Business (SCORE) and the U.S. Small Business Administration (SBA) define the variable for a proper marketing budget to be between 2% and 10% of sales, noting that for B2C, retail, and pharmaceuticals, it can exceed 20% during peak brand-building years.
Most Fortune 500 companies typically spend about 5 – 7% of expected gross revenues on marketing. This could be a good starting point for companies that are just thinking of expanding their businesses into the U.S. market. According to Tony Fannin, President of BE Branded, who specializes in integrated marketing and work with Fortune 500 companies, if you are introducing a new line, a new service, or a revamped brand position, it takes about an additional 12 – 15% in marketing investment.
If I give a specific example for a mid-size Turkish company, the revenue of which is between $5 to $7 million, the company should spend at least $300,000 to $500,000 a year on marketing.
INTERNET TECHNOLOGY SPENDING
Once you decide to spend money on marketing for market reports, research, advertising with newspapers, magazines, and printing coupons, then the Internet has to be on the other side of marketing.
Investing in technology is a smart move for many small businesses. The U.S. has a population of over 300 million, and 240 million of them, 77 percent of the country, are internet users. If you want to establish a good business model, the Internet must be an indispensable marketing tool for you.
Forrester Research, an independent technology and market research company, conducts an Interactive Marketing Forecast which makes predictions for the next five years. Forrester Research estimates social media marketing to grow at an annual rate of 34 percent – faster than any other form of online marketing.
Forrester estimates that $716 million will be spent on the medium in 2010, growing to $3.1 billion in 2014. Social media will be a bigger marketing channel than both email and mobile.
Using all the tools of marketing helps your business grow, but first you have to be confident in your products and services. If you believe in your product; I wish you good luck and welcome to the United States.
- Published in TOA Authors
- Written by Cemil Ozyurt
