This short series of articles is related to expats earning a living in the Philippines. I am focusing on sales and marketing, because that is the area of my expertise… It is my trade, and it is where my education focused. I hope to pass on some of that knowledge to readers on this site. Sales, or marketing for that matter, despite what the textbooks might tell you, is not a science, but an art. There are no hard and fast laws or rules, but the influence of marketing is felt throughout the business world. It is my observation that many, if not most, expats who fail in trying to earn a living in the Philippines fail, in part, because they lack an understanding of basic sales and marketing principles. However you decide to earn a living here, you must always remember that without sales, you are not in business.
This article is the last in the short series. I hope you found it useful. Next week, back to normal.
In an old Three Stooges short, the Stooges took jobs as salesmen. They took the job, but didn’t know what the product did. Is it a car polish? Medicine? So, Larry asks Moe, “What is it for?”
Moe’s response, “You wanna know what it’s for? You really wanna know? IT’S FOR SALE!” Naturally, followed by slaps and eye pokes.
Those who are truly salesmen, like the Stooges or not, will agree. Some people seem to have a natural ability to sell anything, to anybody. As an entrepreneur, whether you like sales, dealing with customers directly, or not, you must either possess this ability, or hire someone who does possess it.
What you are selling also makes a difference. In many respects, selling a tangible item, say a TV, is easier than selling an intangible, such as a service or even more difficult, information. With a tangible, the customer can see, feel, and touch what he is buying. Not so, with a service.
Likewise, is your product or service geared towards other businesses (BtoB, or B2B), or retail, direct to the consumer? How long is your distribution chain? Are you manufacturing yourself, or acting as a company representative or someone’s agent? Each offers different levels of control, and impacts profitability. This is also, in part, why so many people never make any money with Multi-Level Marketing (MLM)… Like Avon, Vacuum Cleaners, or similar products. The first adopters make the serious money. Those further down the food chain, far, far less.
These questions determine how you position your product to the customer. I will use my current job as an example (Greatly simplified).
My company makes drive systems for very fast boats. I have several groups of customers, and I will detail under each listing the concerns and how I sell the product:
- Shipyards and Naval Architects. We can be vendors towards shipyards. As the drive is only a component of the finished vessel, the shipyard is concerned about the following things:
- Cost / Price. I am always in a competitive bid with shipyard orders.
- Performance. We are selling a vessel speed with our drives. Most shipyards are penalized if the finished vessel fails to deliver that speed. They require stacks of test data and customer references that back up our engineering claims. The shipyard accepts this liability as part of the contract.
- Production / Delivery time. This is critical. Most shipyards run on just in time (JIT) inventory. If we are late on production, the whole project is delayed.
- Warranty. The shipyard is normally liable should our equipment fail in the first year. They want assurances from us that we cover, through insurance or bonds, equipment failure.
With shipyard sales, the process is usually a straightforward bid / tender process. I receive a list of requirements and make a bid / proposal. Lowest price usually wins. I sell price and matching technical specifications with these customers.
- Performance. Navy organizations are most concerned if our equipment helps them meet their mission objectives.
- Maintenance. Naval equipment must be easy to maintain.
- Availability of spare parts. Likewise, spare parts need to be on site, when needed.
- Training. We design drives and vessels that can sometimes reach speeds exceeding 90 knots. At these speeds, specialized crew training is an absolute requirement and liability on our end. You can easily kill yourself with these boats.
- Self-sufficiency. Most navy orders for us include a significant amount of onsite consulting.
Navy sales are normally requiring a different approach. Notice that cost and price are missing entirely from the list. I sell based on the unique aspects of our products and position the sale towards our technical expertise and the navy’s operating concerns. Occasionally, we provide technical assistance but the bidding process in most countries is public, meaning we may help define the requirements, but still lose the sale.
- Coast Guards / Police / Customs / Fisheries
- Performance. Mission readiness is most critical.
- Cost. In most countries, Coast Guard and Police budgets are significantly lower than with navy bids.
- Training. Same as Navy.
- Spare Parts. Same as Navy.
- Operations assistance. Typically, Coast Guards and Police have many more types of missions than a navy would have. They might need patrol, rescue, oil spill response, and even pilot boat capabilities.
Coast Guard sales for us require a substantially larger amount of consultation, but are easier in terms of the bidding process, since in many countries sole source designation or direct sale becomes an option.
- Yacht Owners / Retail
- Performance. Yacht owners have money, but always want to go faster, with a smoother, quieter, ride.
- Showing off. The look of the drive has an impact. Our Al-Ni-Bronze composition helps, with big, shiny gold propellers visible. Much the same owners who buy luxury cars, airplanes, and mansions. Function is not always as powerful as visibility.
- Price. Though the market has money, price can be a deal killer. It has an impact. Speed costs money. Most yacht owners understand this, and many don’t care. However, it always has at least some bearing on the sale. I have videos of yachts with our drives travelling at high speed for this type of sale (It is very visual).
Now, with the information above, I briefly identified my market and the market’s needs. How do I reach them in order to make a sale? I approach a yacht owner differently than government, military, or a shipyard.
Shipyards and Naval Architects
- Lots of technical references.
- Pricing very quick.
- Lists of yards and naval architects are easy to acquire, making direct mail / email viable.
- Use of local agents.
- Trade Shows.
- Online Presence.
- Trade Shows.
- In-person presentations (Direct to Operations and Technical officers.)
- Local Agents. (Very important)
- Factory tours / junkets.
- Video presentations.
- Printed brochures (These are often passed around… They normally like something in hand to hold)
- Case studies.
- List is identical to Navy, but I focus on different product aspects, since the missions are normally different.
- Consumer Boat Shows
- Online presence (esp. company blog)
- Local shipyard contacts (referrals).
So, as you can see, I use distinct methods for reaching different market segments and positioning my product to reach those segments. It helps that my company’s brand is well known and well regarded. I spend minimal time with branding.
Now, were I sending my message in a retail setting, I would focus differently. A restaurant sells food, quality, ambience, and the experience. Print ads, mailers, free samples, and coupons are very effective media that can help reach customers. In a retail setting, price is more elastic… That is, price differentials influence, and are influenced by, supply and demand to a far greater extent than in a B2B setting.
So, looking at my list above, you can see that much of the time, the price of my product is irrelevant. If you run an Internet café, price becomes extremely important, if not the most important thing. Likewise, you can often become a slave to economic conditions. For example, there are companies that exist only to manufacture and sell equipment to McDonalds. What happens to them if McDonalds has a bad year?
These are the things you need to think about when determining your business strategy. It all goes back to: Who, What, Where, When, Why, and How?