FOREIGN COMPANIES MARKETING IN THE USA

Special considerations for foreign companies seeking to market products or services in the United States

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The American marketplace is the most complex, diverse, competitive, and rapidly changing market in the world. Any decision by a company to commence distribution in the United States is one that should be undertaken with much forethought and planning. Also, these decisions should be executed with the assistance of experts thoroughly familiar with all aspects of the market, who are in close contact with distributors and retailers in varying classes of trade.

A company either based or headquartered outside the United States, but contemplating expansion into the country, must address marketing, sales, and distribution concerns (in addition to finance and law) to achieve and maximize success. Competing with established domestic suppliers, which (naturally) are extremely protective of their market share, gives rise to uncertainties and pressures.

In addition to being a consulting group with expertise in marketing and distribution, PLI can take a position of "master distributor" to facilitate a foreign company's introduction into the U.S. market. When appropriate, PLI can also collaborate with the legal and financial communities to provide the basis for joint ventures.

Marketing

Companies distributing products in the U.S. need as much data as possible on the category (e.g., food, house wares, consumer electronics, etc.) in which their products will be marketed, as well as the options available as distribution channels (e.g., retail chains, mass merchandisers, department stores, discount drugstores, high-end retail stores, etc.).

Too often, foreign companies aren't prepared to implement sales and marketing objectives in the U.S. They may make casual appearances at trade shows or expositions in an attempt to secure distribution, but this can be a costly mistake if marketing or business plans are not complete, and if U.S. contacts are not thoroughly vetted.

So the decision of a foreign company to appoint a U.S. representative, distributor or importer (as opposed to handling its own presence within this country) is a decision that should be an integral part of the business and marketing plan, not an afterthought. Attention must be paid to all the variables if there is to be a successful product launch.

PLI is prepared to address the manufacturing, sales and marketing objectives of companies looking to establish or expand U.S. distribution by providing the following capabilities:

• Develop a business and/or marketing plan
• Determine applicability for joint venture relationships
• Conduct appropriate research, sampling, testing
• Evaluate merchandising, promotion and public relations needs
• Advise on the preparation of collateral material (including price sheets, catalog sheets, and direct marketing pieces)
• Determine the best way to handle distribution
• Analyze potential sales in non-traditional categories (e.g., incentive, co-marketing and co- promotion)

Addressing Legal Issues

Due to the complex and heavily-regulated nature of the American legal system, expert counsel in specialized areas is a prerequisite for a smooth, uncomplicated, and maximally profitable foreign business venture. A seemingly simple and straightforward business transaction can often raise a host of legal issues. Since litigation in U.S. courts is inevitably time-consuming and expensive, preventive legal counsel is essential.

In this regard, PLI assures that in-depth, personalized and experienced evaluation of the following legal considerations will be offered to any foreign client that intends to do business in the United States:

Importation

• Compliance with customs and other entry considerations
• How to structure transactions in order to minimize or eliminate import duties and the effects of quotas and other non-tariff barriers

Marketing and Distribution

• How laws governing pricing, competition, distribution, intellectual property and importation might affect the choice and development of product, marketing, and distribution

Business Form, Organization, and Relationships

• Analysis of one or a combination of various distributorship, agency, partnership, and/or corporate arrangements and the potential effects of such arrangements on control, growth, profitability, liability, and confidentiality
• Establishing the optimum combination of business arrangements and entities

Taxation

• Satisfaction of federal, state, and local reporting requirements, including those especially applicable to multinational enterprises
• Limiting "double taxation"

Real Estate

• Acquisition and maintenance of real property
• Evaluation of zoning, environmental, and tax concerns
• Site investigation and selection

Litigation and Alternative Dispute Resolution Procedures

• Method and forum for representation before the courts
• Likelihood of success or potential exposure to liability
• Settlement negotiations

Addressing Financial Issues

In addition to the marketing and legal support systems necessary for doing business in the United States, financial considerations may be critical to decisions having long-range consequences.

PLI has significant contacts in the areas of foreign currency and exchange controls, the examination of available capital sources and credit, and general banking arrangements. These affiliates are well-equipped to facilitate government assistance programs, participation in equity and bond markets, and financial reporting and disclosure requirements.

If you'd like to learn how PLI can be a powerful supplement to the business development of your company, feel free to call or email for a consultation.