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DIRECT SALES AGENT

The actual process of selecting a selling agent abroad varies with the commodity: Some commodities lend themselves to consumer advertising for the creation of consumer demand; in the case of such products as canned and packaged foods, drug sundries and pharmaceuticals, and other products of similar character, this often results in the creation of demand from retailers who may be supplied from wholesalers' stocks. The manufacturer may see fit to select a resident sales agent abroad, or an American manufacturers' agent with foreign branches that can take care of such distribution. In this case, the selling is actually done through advertising, and the real problem is one of effective distribution to meet the demand thus created.

DEMONSTRATION SALES AGENT

Where products must be demonstrated before their sale, such as automobiles, refrigerators, cash registers, or typewriters, a different type of sales agent is desirable. The printed word serves to inspire the curiosity of the prospect, but the actual selling invariably takes place through personal contacts. In addition, the question of service arises and must be skillfully woven into the fabric of the sales program. In this classification, the maintenance of a sales organization is only one of the vital problems, and the distributor must be prepared with ample capital backing to carry stock and to render the service that this type of merchandise selling requires.

ENGINEERING SALES AGENT

A third type of exportable product requires the so-called sales engineer. The philosophy of such an organization is essentially a combination of engineering and selling. Here we find that the distributor must be able to estimate the costs, make blue prints, prepare bids in accordance with definite specifications, and frequently install the product. In this field we find machinery for heating, drying, ventilating, and cooling systems, sound equipment for theaters, and other mechanical devices. Sales in this type of commodity are dependent upon engineering skill and the ability to closely figure a particular job. In the durable-goods field as a whole, such a set-up is absolutely essential.

CIRCULARIZATION FOR AGENTS

Agents may be chosen either through correspondence or by personal selection. Where the selling function is more or less routine (as in the types of standardized consumer goods already noted), satisfactory agents may be selected through careful correspondence. In this case, it is of vital importance to know something of the background of the distributor, the number of his salesmen, the territory covered, and his credit responsibility. If he represents other American manufacturers, this investigation becomes relatively simple.

FACTORY REPRESENTATIVE

When a product must be demonstrated or where engineering service is required, great care should be exercised in the choice of sales agents.

The personal-contact method of selection is practically imperative. Where the product presents a special selling problem, a factory representative should be sent to each market with the specific object of selecting distributing representation. In addition, it has been found profitable to have the factory representative make periodical trips into the territory for the purpose of stimulating the sales activities of the oversea distributor. Where a satisfactory sales representation is obtained, the factory representative's duties should next be concentrated on the training and development of the distributor's selling organization. The factory man in this case should be a high-grade individual, possessed of a wide sales experience in both domestic and foreign markets and capable of selecting salesmen and instilling them with the zeal and energy that all successful sales forces should possess.

ADVERTISING FOR AGENTS The factory representative may follow a number of methods in selecting new agents or replacing old ones. He has at his disposal the sales-information report file of the United States Government representatives and the trade lists issued by the Bureau of Foreign and Domestic Commerce. It is customary, however, for the factory representative (through personal efforts or through his own company's advertising department) to advertise for agents in export Trade journals before he departs for foreign territory. It is not unusual for this method to produce a group of eligible foreign distributors

among

whom he can make a final selection. Another method that has proved successful is the "agency advertisement” in local trade journals and newspapers. In any event, the factory representative must be prepared to spend several weeks in each territory in order to procure the best possible representation for his firm.

DIRECT SELLING Goods whose demand is created by consumer advertising frequently are susceptible to exploitation by direct selling methods. In the latter case a minimum amount of intermediation should exist between the exporter and his foreign distributor. Consumer goods as a rule rapidly reach the ultimate cash buyer. Therefore, experience indicates that the distributor should order frequently, even though in small quantities. He should not require more than a maximum of 90 days to dispose of his stock after the shipment arrives. The exporter, of course, will encounter the problem of the financial condition of the distributor or agent. In the event that he is unable to pay for his purchase upon delivery, the foreign importer will, of necessity, have to evolve a practical method of disposing quickly of his purchase. This is usually done through an intermediary or a wholesaler who, for a profit, will assume the credit burden for the exporter. This adds to the cost of the goods to the consumer.

Direct selling therefore, eliminates distributing costs but is seldom possible except in the case of consumer goods of relatively small unit cost. The exporter will find that the demand created by consumer advertising usually reflects itself in the immediate movement of the goods into the channels of consumption.

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FOREIGN SELLING THROUGH SAMPLES

The direct appeal to the consumer's senses is frequently accomplished through the distribution of samples. This method appeals not only to the illiterate or those who are isolated, but has been effectively employed to "put across” a new line among those who are skeptical of any merchandise that they do not know by actual experience. It is the most direct and, for a great many products, the most efficacious method of consumer appeal.

BILLBOARD ADVERTISING ABROAD

Consumer advertising is most effectively accomplished through the use of visual display. One form of this is found in the use of billboards. Here the advertisement is placed in a conspicuous place and may be seen by all. The product thus advertised should, therefore, have a universal appeal. There would be little reason for using billboards where the product would be limited to a narrow class or group of people. In other words, this is one of the most effective mass-appeal mediums.

FOREIGN NEWSPAPER ADVERTISING

Inasmuch as newspapers are read by more closely defined groups, some manufacturers consider the press to be the most direct method of sales stimulation. Incidentally, the manufacturer, by a careful study of the existing media, may "pick and choose” the papers that will reach the class of buyers that he seeks. He is, therefore, afforded some degree of discrimination. The Specialties Division of the Bureau of Foreign and Domestic Commerce has lists of advertising media in foreign countries, with information as to rates, circulation, reader influence, and territorial coverage. In addition, a number of private agencies in this country and abroad have full information on this subject.

FOREIGN TRADE PAPERS There is a comparatively limited field in the oversea territory. Incidentally, foreign trade journals are not as a rule media for consumer advertising except in the case of producers' goods. Thus, a grocers' journal would be an acceptable consumer medium for bakery equipment.

FOREIGN MAGAZINE ADVERTISING

The foreign magazine offers another source of specialized consumer appeal. In many countries there are magazines and class journals that appeal specifically to such groups as women, children, leisure classes, railroad workers, military men, farmers, industrial workers, and professional people.

CATALOGS Because of their peculiar adaptability to the machinery trade, catalogs have found their principal use in this field. Incidentally,

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the factor of cost has limited their use. Today, however, the exporters of consumer goods frequently resort to catalogs which are made up under the rotoprint method of photographic reproduction. Such catalogs are distributed to the consumer and result in direct sales without any intermediary in the foreign field. Mail-order houses have been operating abroad for many years, and it is encouraging to note that their business has shown a pronounced upward trend.

FOREIGN BRANCH OFFICES AND FACTORIES Another method of direct selling abroad is by the maintenance of branch offices and assembly plants. The complex international economic situation, with its regulation of foreign exchange and multiplicity of tariff restrictions, as well as the desire to reduce intermediate distributing costs, has caused a number of our manufacturers to adopt either or both of these methods. The opportunity to embark upon this procedure is limited to a few manufacturers who have a sufficiently strong capital structure to stand the expense. Also, they must have an assurance of sufficient volume to warrant the existence abroad of such offices and plants.

INDIRECT FOREIGN SELLING

In the field of indirect foreign selling it is imperative that the oversea agents and their sales organizations be highly trained. Here again we find the necessity for stimulating demand by personal contact. In other words, producers' goods do not lend themselves to consumer advertising methods, and each sale depends upon the ability of the salesman to convince the ultimate user that a saving will be accomplished and that it will be generally profitable for him to make the purchase. In the sale of automobiles, both types of selling are employed. For instance, the town-car sales talk would obviously differ from that used in the sale of a commercial vehicle. The same dual character of use and profit is often combined in one product. The salesmen of leather belting abroad spend many days making tests to show how their line will save the users' money. Lubricating-oil salesmen make elaborate tests to prove the same point. In each case, the demand is dependent upon factors other than mere desire, and the successful salesman must be able to arrange and clarify these factors. In other words, he must crystallize a demand that really exists but is as yet unrealized from the customer angle.

THE TRAINING OF DEMONSTRATING AND ENGINEERING SALES

AGENTS

The successful demonstration and engineering sales agent must have a thorough knowledge of his product, its construction, and per- : formance. Incidentally, a greater technical adaptability is required and should not be underestimated in the selection of such an agent; à clear indication of the uses of a product calls for a deeper knowledge and understanding than is required in the case of direct sales agents. Many manufacturers have found that sales engineers from their own factories assigned for a limited time or indefinitely to the foreign

agent have been highly productive. Other manufacturers have adopted the policy of educating the agent's organization through instructions given by an engineer of the American factory. The choice of methods depends entirely upon the character of the product.

TRAINING DIRECT SALES AGENTS

Resident sales agents or manufacturers' agents of consumer goods, on the other hand, should be trained in the method of distribution rather than in the use of the product. While the latter phase should not be neglected, it should simply be a part of the selling philosophy rather than a dominating factor. The sales arguments are supplied in the consumer advertising and are merely repeated by the retailer's clerk. It is a timely function of the resident sales agent dealing in consumer goods to see that adequate stocks are maintained by the retailers; that such stocks should be displayed effectively; that the proper advertising media are selected; that the local appeal is effectively projected; and that the salesman and retailer are sufficiently familiar with the product to be (1) “sold” themselves, and (2) able to get a fair trial from the consumer. He also should report back to the manufacturer all complaints as to quality, price, delivery, or packaging. Some manufacturers of consumers goods 'send factory representatives abroad to instruct personally the sales forces of large retailers in the proper method of presenting their particular products to the public.

SELLING THROUGH SERVICE

We find this phase of merchandise selling in direct contrast with the broker who sells on price, quality, and delivery. Here a branchoffice manager must depend to a great extent on his ability to "outservice” his

competition. He must clearly establish his superiority on such facts and factors as special deliveries, intermediate warehouses for quick delivery, and a hundred other efforts that should spring from a close and careful analysis of the customer's problems. In other words, the solution of each of the customer's problems should be a veritable service opportunity for the seller.

AGENCY CONTRACTS

Sales agency contracts (see appendix C) often are required in selling both consumers' and producers' goods. They include the duration of the agency, the territory allocated, the commissions or discounts involved, the quantity of merchandise to be sold annually, and certain price regulations that will safeguard the manufacturer against price-cutting on the part of the agent. Further, these contracts frequently establish the responsibility of the agent in the resale of ordered merchandise; they usually contain a cancelation clause, based most frequently on quotas, and, in general, any other equitable provisions that two reasonable business men would employ for their mutual protection. Some contracts deal with the matter of competitive agencies, advertising allowances, and the hiring of local salesmen for the introductory sales campaign and other matters.

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