Global Traders October-November ’12
Viking Spas gets friendly with the neighbor
Tom Kneeshaw, Viking Spas’ director of sales and marketing, says adjacency to Canada has been a blessing for the company’s exporting strategy, which earned a Presidential “E” Award this past spring. The company operates from Wyoming, Michigan, just a short drive from the border, and has steadily built a sales strategy that leverages the proximity and climate of its northern neighbor.
“The benefit we have is that there are only a few spa manufacturers in the eastern part of Canada,” Kneeshaw says. “Since we’re in the Midwest, it’s just a hop, skip and a jump over the border, taking the bridge over to Ontario and into Quebec. We obviously have an advantage with regards to transportation cost.” In addition to saving on transportation, Kneeshaw attributes Viking’s success to a Canadian dollar that finds itself on the climb, making U.S. imports become cheaper and leading to more spas crossing the border.
Exports make up 58 percent of Viking’s revenue, in large part due to the Canadian market and some successful partnerships in Europe, with sales to Canada accounting for 40 percent of the company’s total revenue. Though spa manufacturing has mostly taken place on North American soil, Chinese manufacturers have begun to compete in Europe and even penetrate the Pacific Rim by exporting to countries such as Australia. Though Viking does business across the oceans, the company has been particularly efficient in cultivating sales to their closest neighbor. Most recently, Viking’s foothold in the east yielded to a new distributor in Calgary.
Viking’s product strategy mirrors that of its global sales—in a word, practical. Quality comes before the “bells and whistles.”
“We feel we provide a safer product than our competitors,” says Kneeshaw, highlighting the spas’ Soft-Touch, slip-resistant surface, an overall value that offers more bang for the buck than its competition and a dependability that can’t be beat.
“It’s kind of like the auto industry. The entertainment package, a little DVD player, will cost you $5,000,” he says. “In today’s economy, worldwide, we offer more for less. We feel we’ve made great strides in providing great features to their spas without having to pay a lot more for them.”
The Case for Exporting
Pelican Products’ Search For an Ideal Partner.
“I would say our No. 1 challenge is finding the right international trading partners,” says Scott Ermeti, vice president of international business for Pelican Products. “Even in countries where we’ve been for quite some time, and we like to think we’re well developed.”
Makers of sturdy, sleek protective cases for items ranging from iPods to Rolls-Royce jet engines and portable LED lighting units powered by rechargeable batteries, Pelican has emerged as a global brand over the past 20 years thanks to an aggressive export strategy.
“Our model is to try to have local salespeople, as many as we can, covering their local territory,” he says from Pelican’s Torrance, California-based headquarters. “Local people speaking local languages who know the culture and who know the channels.”
To remain nimble abroad, Pelican has expanded their definition of “partner.” As the company looked to grow its presence in Germany’s electronics market, it recognized necessary tweaks in strategy, despite Germany being their second-largest market. With a limited knowledge of the country’s electronics market, Ermeti says the company turned to an agent to represent their product.
“We didn’t find a good reseller to work with, so we’re now working with an agent who’s helping get us to the consumer electronic market—the equivalent of the Best Buys.” Ermeti adds that Pelican has historically shied away from using an agent because of tricky international laws, typically using distributor importers and resellers. “But we’ve gotten a little bit bigger and we’ve got a legal council now. We feel a bit more comfortable working with agents whereas we didn’t probably five or ten years ago.”
It took more than six months to find the right partner, a difficult process but ultimately one that Ermeti believes will prove worthwhile for Pelican.
“The objective when finding someone new is convincing them that our brand is strong in some areas and has the potential to have that sort strength in the market they’re pursuing; getting them motivated and passing that on to the reseller.”
If the success Pelican has already achieved on the global market is any indicator of what’s to come, motivating agents should not prove problematic.
Sell Outside the Box
Advice from the most traveled packaging salesman
“I never did any business in Morocco,” says Bob Harris, the world’s most well-traveled box and paper salesman, still making calls at 80-years-old for packaging companies such as RockTenn, Inland Container and KapStone, to name a few. “No,” he recalls, “it was too well covered by the French.”
If not doing business in Morocco doesn’t immediately register as noteworthy, that’s understandable. You just haven’t met Bob Harris. Over the past 50 years of working the paper and box industry, he’s visited more than 160 countries and still maintains clients in many of them (except Morocco, of course). Julie C. Morse’s new biography, Out of the Box: The Mostly True Story of a Mysterious Man, chronicles Harris’ adventures as part travelogue, part business how-to.
Asked to distill tips for a young salesman, Harris offers something more akin to philosophy: Go anywhere in the world on your own nickel, build relationships with the No. 1 company distributing your product, and you’ll get your commission. For Harris, this works as well in 2012 as it did in the 1960s.
“It’s amazing, the little countries that have a box factory,” he says. “There’s no industry in these countries, but they have a crop they have to export. Like the Canary Islands, for instance. There isn’t a single thing in the Canary Islands except three corrugated box factories. They are justified because they have a crop of citrus, a crop of bananas and a crop of tomatoes.”
The universal demand for packaging has allowed Harris to operate with a certain amount of freedom. In places like the Somali Republic where there isn’t already an established market, Harris says he creates one. “I went there and did a feasibility study. They had a huge crop of bananas. That’s the only thing in the country that they could export. The study was developed and sent. A company in Italy built the factory, and I helped supply that later on.”
Emerging markets continue to offer great potential for Harris, who will head to Myanmar for his next sales adventure. In the past he’s supplied fish packaging materials for Iceland exports, and carved niches for himself in countries from Macedonia down to Australia. “Emerging countries are really where it’s happening,” he explains about the current market. “Some of the best economies are the emerging countries, like Indonesia, Brazil, Turkey and Vietnam. They’re not big but they’re not tiny, and there’s a lot to be developed there.”
Harris says his way of doing it is still applicable and that it can be that simple, adding only one caveat for the young salesman: “I wouldn’t recommend this approach for someone who doesn’t love to travel.”
Cleared for Takeoff, Finally
Boeing’s struggle to launch its Dreamliner
The drama surrounding the Boeing 787 Dreamliner has reached its apex with Air India, the state-owned conglomerate that merged with Indian Airlines in 2007. Boeing delivered its first 787 in early September after a four-year delay, exacerbated by a strike from Air India pilots demanding exclusive rights to fly the new Boeings.
The compensation for Boeing’s tardiness has not been disclosed, though an Indian government official put the number at a half-billion dollars last March, which was later disputed by Boeing’s Jim Albaugh, president of the commercial aircraft unit. “I think if we settled for $500 million, somebody would have told me,” said Albaugh. Air India received its first plane at Boeing’s Charleston, South Carolina, assembly plant, which has been challenged to increase Dreamliner production to 10 per month after a $750 million expansion.
The Boeing 787 Dreamliner is the proud new bell cow of the American airplane titans. Featuring a one-piece body made primarily of carbon composite materials and 15 to 20 percent better fuel efficiency than previous models, Boeing has championed the new jet as the world’s most advanced wide-body, long-range aircraft. Unfortunately for Boeing, the 787 has become infamous for being dreadfully behind schedule.
Since receiving its first orders back in 2004, Boeing has distributed just 21 787s to five different airlines: All Nippon Airlines and Japan Airlines of Japan, Ethiopian Airlines and, most recently, Air India and LAN Airlines. Nearly 800 orders have yet to be filled. All Nippon Airlines received its first 787 in September of 2011 after a three-and-a-half year delay, and as recently as this past July was forced to ground two new jets due to issues with the Rolls-Royce engines. Several manufacturing errors with the 787 and its components, including problems with the horizontal wing built by Italian company Alenia, had contributed to the stalled deliveries to Japan Airways and Ethiopian Airways, both groups receiving their first 787 earlier this year.
HMM Will Sell Ships for Funding