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This article was written by Jeffrey P. Graham and it originally appeared on Citibank's now defunct international business portal.

Now that the U.S. economy is faltering, many business executives are going to give serious consideration to taking their dog and pony shows on the road, so to speak.  Trade missions are frequently mentioned in the how-to-export literature as a sure fire way to quickly develop sales in foreign markets.  As with most things written about in the general business press, the reality is quite significantly different than the perception.  Unfortunately, this is problematic for many small and medium sized companies.

First of all, there is a persistent notion that merely bringing business people together will result in business deals.  Business development specialists frequently make this argument and are often very persuasive.  However, anybody who has ever actually sponsored a trade mission or overseas business development conference and then taken the time to do a follow up evaluation will readily tell you that the results are quite often mixed even in the most optimistic scenarios.  Why?  Well, there exists in the minds of too many people the notion that most business deals are actually done in what are basically social situations; grown men playing golf, women executives getting together for lunch, after hours cocktail parties, and so forth.  For this, we have Hollywood writers to blame.  While all of these occasions can be a part of the give and take of developing a business relationship, they are not necessarily the focal point upon which closing a deal might rest.  There are many complicated factors that go into making a buying decision or closing a business deal across national borders and therefore it is not very realistic to assume that merely bringing the parties together in the same physical space with free or cheap alcoholic drinks will supercede these other very important issues.

 

The next problem is the actual nature of the trade mission itself.  Business development specialists will argue that the trade mission is an integral part of the international marketing mix. Historically, this has been true to some extent.  What has been likewise true is the fact that industry organization sponsored trade missions are probably more successful than those sponsored by government agencies.  But if one examines closely who sponsors the vast majority of trade missions, you will often find the hand of a government agency somewhere.  Trade missions are supposed to be about developing trade opportunities. However, once government agencies become involved, the mission of the trade mission has been fundamentally changed.  The reason for this is very simple. Trade missions sponsored by private industry groups tend to pick venues and choose local partners who have the necessary expertise to produce successful events.  Industry organizations represent the industry and are not beholden to other private political interests.  When government agencies become involved, the actual reason for doing the trade mission may have nothing at all to do with the particular industry selected or the actual companies selected to participate. To suggest that this is troublesome is to egregiously understate the case.  Politics, especially international politics, and business do not mix very well.

 

The people in government who have power over the budget and appropriations are quite often dictating policy to career civil servants. This dichotomy serves to actually undermine the quality of the intellectual output of those within various government agencies who have the authority to declare which trade missions will be supported and which ones will not. These political appointees who control the purse strings seldom have the prerequisite international business experience to understand the folly of their decisions. When such people oversee the decisions of their more knowledgeable junior colleagues, anything can and will happen.  Consider the following:

 

bulletTrade shows are actually joint ventures between two government agencies or two private entities supported or sponsored in part with government funds.
bulletChoosing the target industry and the participants is a crucial aspect in any successful trade mission. When experienced business or economic development professionals have an opportunity to control these decisions, there is usually a consensus about the goals of the mission and the actual particulars of how it will be executed. When this decision is moved “upstairs”, so to speak, back room political motives enter the fray and such motives do not always play as expected in foreign markets.
bulletThe foreign counterparts play an enormous role in the success of a trade mission.  If the proper venues are not chosen, there has been insufficient marketing and promotion of the event or there is little interest on the part of the intended target market, attendance can fall off and failure will be a consequence. Such mundane things as failing to set up appointments with the proper officials of government and business and economic development agencies or industry related groups could be disastrous.

 

Beyond the inherent problems with trade missions, there are some very simple practical considerations.  Whenever a business executive is approached as part of a recruiting effort to join a trade mission, there are several factors that must be considered:

 

  1. What is the cost-benefit analysis?  Many business executives approach foreign trade missions from a cost recovery approach. That is, they base their decision upon the likelihood of recovering their cost outlay.  While this is a popular notion, we do not heartily endorse it simply because of the lengthy sales cycle in international business. Of course, executives do have to analyze the costs and the possible future benefits to their companies.  With rare exceptions, your company is not likely to get many orders as a result of participating in a trade mission.  Executives who do anticipate closing sales and who are unsuccessful often sour on the trade mission process and this is unfortunate. Trade missions are not inexpensive, even when they are partially subsidized by a government agency or private industry trade development group.
  2. Seek referrals from other business executives.  It is always a good idea to speak with people who have gone on similar trade missions to the same country and/or region in order to get their feedback.
  3. Carefully evaluate the agenda.  Trade missions that are tightly scheduled and packed with several meetings in different locations present significant logistical difficulties at best. At worse, such agendas do not provide sufficient time for actual partnering to take place.
  4. Consider the other trade mission participants very carefully.  If your company is a custom machine shop ostensibly going on an industrial trade mission, you should be alarmed if six software companies decide to tag along unless they produce software for industrial controls and processing. If they manufacture computer games, then they might know something that you do not. Surprises upon arrival at your foreign destination are definitely a bad thing.
  5. Do not trust trade mission organizers to tell you the truth. This is very difficult for many business executives because it requires them to approach government officials with a heightened sense of skepticism.  However, once recruitment starts for a trade mission, mission organizers become focused on filling slots. If the departure date for a trade mission is quickly looming, expect criteria for admission to slide backwards until all slots are filled.
  6. Ask the tough questions. What is the intended target audience? Why are members within the target audience attracted to this mission? Are there any specific incentives for them to attend? Is there a screening process to eliminate employment seekers, sample grabbers and other such distractions? What has been the history of prior missions? Have there been any follow up evaluations done and what do the results indicate? What arrangements have been made for me to have a specific amount of allotted time to privately meet with companies that show an interest in my company’s products and/or services? Are foreign language translators fees included in the mission’s cost structure or are these additional fees? What types of equipment and facilities will be available for presentations and more importantly, are there enough to go around for those companies who might need them? How extensive is the pre-mission briefing and what areas does it not cover appropriately? What types of collateral marketing materials are required and must they be localized?

 

Trade missions are designed to transport business executives into a foreign business environment but within the protective umbrella of the mission itself. The mission itself is supposed to compensate for the inherent weaknesses of many individual executives with little or no foreign business experience. The purpose of most trade missions is not the goal clearly stated to the companies recruited to join the mission. In fact, this goal is almost never the real purpose of the mission, even though trade mission organizers will argue thusly to their graves. The usual purpose of a trade mission is to either satisfy some industry segment for partisan political purposes or to demonstrate to the electorate that an administration is hard at work promoting exports and therefore protecting existing jobs while going forth to create new jobs.  While all of this is certainly true, it is likewise true that even with such constraints, trade missions do present companies with an opportunity to test the waters in selected overseas markets.  In order for your foray into a trade mission to be successful, you are going to have to be open minded, skeptical, wary and you’re going to have to be willing to ask lots of very unpleasant questions. If you can do all of those things, then you just might be able to actually participate in a trade mission and accrue some tangible benefit.

 
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Last modified: June 18, 2005