Building and sustaining an international distribution

network
Pekka Santanen

Haaga Helia 160915

Market entry evaluating models

High
Direct investment
Join Venture

Investme
nt risk

Joint Marketing Franchising

Direct export

Online-sales

Outsourcing Channel sales

Licensing
Indirect export

Low
Source: Adapted from Ahokangas & Pihkala

Engagement, control

High

Phases of internationalization
Preparing the
Growth

Planning the
Market Entry

Establishing the
Presence

Improving the
Market Position

International
Growth Plan

Entry Options

Partner Search

Sales
Accelerator

Test Drive

Sales Channel
Development

Direct Sales

Market
Monitor

Establish
Company

Acquisition
Candidate
Search

Supplier
Evaluation

Trend Pulse

Right Markets

Export Partner
Groups
Finpro

Growth curve of an international

Company
Preparing the
Growth

Planning the
Market Entry

Establishing the
Presence

Companys internationalization process

Companys business growth path

Finpro

Improving the
Market Position

Preparing the
Growth

Planning the
Market Entry

Establishing the
Presence

Improving the
Market Position

International
Growth Plan

Entry Options

Partner Search

Sales
Accelerator

Test Drive

Sales Channel
Development

Direct Sales

Market
Monitor

Establish
Company

Acquisition
Candidate
Search

Supplier
Evaluation

Trend Pulse

Right Markets

Export Partner
Groups
Finpro
5

Pekka Santanen
Work experience:
Rauma Repola
IBM
Setec
Sonera
iCare Finland
Navicore
4TS Corporation
Finpro
Image Soft

Education & training:

M.Sc. International Economics
MBA, Corporate Strategy
CMC - Certified Management
Consultant
Diploma in International
Business Administration, Fintra
IBM Sales School
High school examinations:
Columbian High School (USA)
Pohjois-Haagan Yhteiskoulu

Military service: Field Sergeant

International sports career

Based in Pohjois-Haaga, Helsinki

Est. 1990 with moderate growth, profitable
Simulators for maritime training
Customers: maritime institutions,
shipbuilders, navies
Focus in Europe, Middle East and Asia
Also solutions in defence technology

The basic elements of (any) business

Our
offering

Potential
customers

SEGMENTATION
- Who benefits the most of our solution?

Our
solution

Competitors
solutions

COMPETITIVE EDGE
- Competitive positioining, Differentiation
- Unique Selling Points

Benefits
of our
solution

Customer
need

VALUE PROPOSITION
- Strong & measurable cost benefits /
additional income
- Functional, emotional, symbolic

Alice in Wonderland meets Chesire Cat

If you dont know where you
are going you will most
probably NOT get there.
or you just might, by accident

It is a jungle out there...

Short term
priorities
Partner
mismatch

Blurry
plans
Unclear
offering
Lack of
resources

Ambiguous
goals
Lack of
skills

Inaccurate
focus

Building and sustaining a distribution

network
Building
Sustaining
Mapping
customer
needs

Market
data

Value
chain

Value
prop. to
customer

Our
offering
Partners
earning
model

Roles and
responsibilit
ies

Value
prop. to
partner
Partner
criteria

Practical tools:
- Partnership
Donut
- Joint Marketing
Plan

Selecting a business partner

A Partner is a Partner is a
Partner?

Selecting a Partner
Ideal partner profile:

Partners
Partners
Partners
Partners
Partners
Partners
Partners
Partners

target (customer) segment?

product portfolio?
Sales & Marketing capacity?
resources?
skills & competences?
reputation?
motivation?
long term commitment

Finpro

Sustaining a Partner
Ideal Principal:

Our
Our
Our
Our
Our
Our
Our
Our

target (customer) segment?

product portfolio?
Sales & Marketing capacity?
resources?
skills & competences?
reputation?
motivation?
long term commitment?

Partner donut
Lead generation
and management,
Marketing activities

Client relationship
management

1.

F2F sales contacts

- product presentations
- demo units

8.

2.

Warranty
service
calls

Quotation with
Specifications

7.

3.

Help desk

Negotiations

6.
4.

Delivery
and installation

5.

Ordering

Deal closing

Division of tasks:
Who does what?
Rights?
Liabilities?

Building a Joint Action Plan

Turnover
Target market

Target segment /
customers
Sales resources
Technical
resources
Marketing
material /
resources
Activities
Budgets
Relationship
management

Turnover / sales goal for the Partner

Agreed in the Contract
Which segments should the Partner actively
approach which ones not

Partners appointed sales resources to us

Partners appointed technical resources to
us
Division of responsibilities and tasks (brand
book, marketing material, resourcing etc.)
List of Grand Slams and local events
(according to previous) Annual Action
Plan, Vuosikello
How the activities are funded
Reporting procedures, partner management
program

Finpro

The channel does not sell selected excuses

Product related
Lack of competitiveness
Deficient product related services
Unappealing sales argumentation

Principal related
Poor partner selection criteria
Stumbling in getting started
Poor management of the
partnership

Partner related

Bad partner profile

Partners business model / culture
Poor motivation
Competing products in portfolio

, $,
18

The channel does not sell

80% are Principal related

reasons

19

Bonus topics
Contracts, contracts, contracts
Channel development in the long run?
Cost pressures
How to measure success
Reseller paradox

Cases
4TS:
Segmentation
Navicore:
Channel evolution
North Force:
Adapting to market requirements &
culture
PowerKiss:
Positioning in the value chain
Gymstick:
Ideal partner case
Valtavalo:
Strong value proposition
Aimo Kortteen Konepaja: Segmentation, Right Market

Thanks so much!
pekka.santanen@imagesoft.fi
040-1391204

Haaga Helia 160915