International Best Practices

1. International Best Practices Distributors Channel Developers Export Mgmt Companies Independent Sales Reps Reseller Networks Retail Marketing The Global Sales Effort

2. Who is this Man and Why is He Here? Because just a couple of years ago, I was exactly where you are right now Gary Shallo • Spent 1975-1995 at the Xerox Corporation -Sales Rep, Sales Manager, Product Manager -Director of Distributor Operations in Latin America -Director of Sales and Marketing in Central Asia • Spent 1995-2010 in Business Intelligence Industry -Sale Director at OneSource -Vice President of Sales at True Advantage -Global Sales Director for Dow Jones SalesWorks

3. Current VP of International Sales ESP Power Filters Recreate the US Success of ESP Internationally Company created by copier dealers Noticed service problems increasing Identified problem as “electrical noise” Patented power protection technology Absorbs and dissipates power surges Lifetime warranty on filter and product Reduced service problems by 22% Increased performance by 16% Improved customer experience ESP started in 1985; $35 million in sales

4. ESP Focused on US Market till 2008 Owners decided to “Go Global” No Brains, No Plan, No Success • READY, SHOOT, AIM -Never developed an international strategy -Never spoke to OEM executives outside of US -Never conducted research on where to target efforts -Never created a supply chain program -Never worked with international bank on payment -Never developed a resource plan or budget -Never sold anything and lost their shirt Company bought in 2009 by Gridiron Investment Company

5. Why do You Want to Export Your Products or Services? Is there a strategic and quantifiable reason for making the investment, commitment and effort to launch overseas? The US recession has had just as serious an impact on the world economy The US economic recession has had a significant impact on our revenues Competitive pressures in the US have reduced our margins and decreased sales World markets are even more price sensitive than the US and flooded with Chinese products We have to manufacture outside of the US if we are going to be price competitive You can manufacture cost effectively in the US and “Made in America” has global appeal You have to be able to say that you are a “global” company to close big accounts Export Management companies located in the US can provide you with a global presence There are more business opportunities outside of the US that we are not getting What is the cost of closing and supporting business outside of the US…is it worth it? We already have most of the marketshare in the US; we have to go global to grow The world has gotten along fine without your product ; why do they need it now?

6. Go Global or Go Broke Explore, Export, Expand, Exist Darwins Theory of Survival of the Fittest • Economic Recession…the food supply is dwindling • Competition is Aggressive…eat or be eaten • Adapt and Evolve….or become extinct • One Dinosaur left….and it is a hungry Dragon

7. Research is the Most Critical Step in Going Global Think of it like planning a trip to another planet…what do you need to know to survive • How easy is it to get there; what will I need to bring • What resources do I have and how much will it cost • What will the alien culture be like; what do I need to know • Cash, Contests, Eyeballs and Unmentionables • How will I survive once I get there; will the aliens help me • Do they think the same way I do and play by the same rules • Can you say “Bakshish” • Will they want the items I brought with me to trade • Will they let me stay and help me prosper or send me home

8. Management probably has NO IDEA what this will take, has huge expectations, and has provided a small budget… The US Commercial Service is the most professional, informative and inexpensive team you can use • First Step: WWW.EXPORT.GOV or 1-800 USA-TRADE -Has the information and links you need to build a plan Will provide you with the specific details Will provide the contacts you need to speak with -Read “Basic Guide to Exporting” and forget Amazon -Speak to people you may know who have done it -Use the Internet and research your markets -Buy vital information if you can afford it -Contact potential clients and partners and ask questions

9. Build an Export Launch Plan The best way to gain senior management sanity, support, commitment, and funding • Is your product unique, innovative, patented • Research will tell you whether there is a market • Estimate the size of the market to determine whether it is worth it • Understand the culture to determine if they will buy your product • Determine if you need to make design changes in your product • Buy research or test data (if you can) to support your case • Find out what licensing you will need and how long to get it • Develop a supply chain to get your products to your market • Utilize the services of a qualified international attorney for contracts • Utilize the ExIm Bank; they are experts and provide credit insurance

10. Contact the US Commercial Service There is NOTHING more effective and less expensive than the US or NC Commercial Service…. • I contacted Sandra Edwards and spent an hour on the phone -She wanted to know about our company and objectives -What our timetable was and expectations -What my experience was and what I knew about exporting • We then met at her office in Morrisville and spent another hour -Company history, products, value proposition -Strategy, resources, past experiences -Target markets; channel strategy

11. Commercial Service Specialist The Commercial Service has a vested interest…they are evaluated on whether you achieve export success • Sandra Edwards and Kuldip Wasson then visited our company -She wanted to meet with our CEO, CFO and COO -She wanted to understand the corporate mentality/philosophy -She wanted to hear from them what their expectations were -She wanted to test their understanding of Exporting -She wanted to understand how smart and serious they were -She wanted to know whether we had the right product -She wanted to know whether we had the right resources -She wanted to know if we were ready

12. US Commercial Service Gold Key Service The Fastest Way to Reach Your Target • They will contact the embassy specialist in target country -They will review your questionnaire -They will insure that your value proposition is understood -They will discuss whether that specific market is right -They will contact you and tell you whether there is a fit • They arrange a teleconference for you with the embassy specialist -You will give an overview of product, benefits, objectives -Based on their knowledge they will discuss possibilities -They will then go to work for you to find the appropriate channel

13. Ihsan and Stanislava Each had 10-15 years of experience with the Embassy and US Service Highly educated in international business practices Experts in their industrial focus; they know everyone They spent weeks developing a list of profile companies to meet They prequalified each one of them; many times in person They prepared a complete dossier on each company We met before the calls and reviewed each one in detail They came on each call and helped with translation and support We reviewed each call at the end of the day and created an action plan GKS Real World Examples Finding Distributors in Turkey and Bulgaria

14. Never Confuse Effort with Results Progress in the last Three Years • From virtually no international business to over $1 million -Have developed “critical mass” of distributors that will double revenue each year -Bulgaria -Turkey -Germany -South Africa -Zambia and Nigeria -China -Southeast Asia - Mexico -Brazil -Colombia -Latin America

15. Never Confuse Effort with Results Looking Ahead to Next Year • Evolved from selling “cases” to “pallets” to “container loads” -Current prospects for 2013 -India -Pakistan -North Africa -Australia -Oman, Saudi Arabia, UAE -Russia, the Ukraine -Baltics

16. When Nobody Knows Your Name Create Awareness and Branding through US Commercial News Run Ad three times a year (buy two, get one free) Has generated over 200 leads in the last three years About 80% are “just looking” but 20% are serious

17. Additional US Commercial Support Programs The US Commercial Service will continue to help with tradeshows, delegations, and promotions NC Sponsorship of Cebit Hannover Fair…500,000 attendees NC Sponsorship of InfoComm in Beijing…500,000 attendees US Sponsorship of Tradewinds Brazil…meetings with key embassy staff NC and US Sponsorship of Trade Delegations…they bring them to you NC and US Single Company Promotions…help kick start your channels NC and US Ongoing Seminars, Webinars, Export University Programs NC and US “Step Grant” programs to help fund attendance at shows The US and NC Commercial Services is a ValuedPartner in my Business

18. THANK YOU! Good Luck and Go Global