Sell overseas at trade fairs

Nation's Business, March, 1988 by Steven Golob

Sell Overseas At Trade Fairs

Iris Graphics, Inc., of Reading, Mass., showed its products at a 1986 West German trade fair billed as "the world's largest printing and paper extravaganza."

The company was just 2 years old at the time and had 24 employees producting its color-verification equipment for magazines and newspapers. As a result of its exhibit at the Dusseldorf fair, it received an unexpected order for a $125,000 unit, along with considerable interest from prospective customers and agents.

"The response was greater than we had anticipated, both in terms of quality end-users--the people who actually ended up buying units from us--and the folks that wished to represent us around the world," says Tad Thompson, an Iris Graphics executive. The company has since grown to 40 employees and has more than doubled its sales, which now exceed $2 million.

Some 25 percent of that sales growth can be attributed to overseas buyers who lined up at the Dusseldorf show, Thompson says. He adds that still more sales are scheduled from four overseas manufacturers that plan to use Iris Graphics units in connection with their own original equipment. Also as a result of the show, he says, "We now have a network of six distributors in Europe."

The company's strategy of utilizing a trade fair to find markets demonstrates the extent to which such shows can be fertile grounds for cultivating new customers for small and midsized businesses.

"For American businessmen, a trade fair can mean cutting entry time into exporting from six years to six months," says Dirk Meumann, New York-based spokesman for the Dusseldorf Trade Fair Organization.

Mountain Computer, Inc., of Campbell, Calif., is another example of a company that accelerated its growth substantially through trade-fair participation. The company makes data-storage subsystems and other upgrades for IBM and IBM-compatible microcomputers. The firm's sales have grown to $60 million a year from $5 million in 1984, the year before it first exhibited at the computer and information technology fair in Hanover, West Germany. Just how much of that sales increase in just three years came from overseas?

Thirty-five to 40 percent, the company reports.

Some trade-fair organizers in West Germany, site of many of the world's principal trade shows, report that first-time participants from the United States have sold as much as one quarter to one third of their annual production during just a few days on an exhibit floor.

While typically only 20 percent of those attending a U.S. trade show have traveled a distance greater than a day's drive, many foreign trade fairs attract 30 to 40 percent of their attendees from other countries.

A major advantage of exhibiting abroad is the prospect of making sales. While 60 to 70 percent of the business visitors at U.S. shows expect to purchase an exhibited product within two months, nearly 100 percent of business persons at foreign fairs are buyers with order books in hand, or distributors looking for products that can be sold in the United States.

"Meet me at the fair" is the message that U.S. companies looking for distributors should send out before a fair, says Philip Ullo, president of the Reed Exhibition Companies of Stamford, Conn.

Mailing lists of prospective distributors in a trade fair's country can be obtained from show organizers or the U.S. Department of Commerce.

At the fair, Ullo says, an exhibitor should display a sign welcoming inquiries about distributorships. Ullo's company, through its Cahners Exposition Group and its Industrial and Trade Fairs operating units, is the world's largest producer of trade and consumer exhibitions.

Jerry Kallman, whose Kallman Associates, in Ridgewood, N.J., is one of America's leading promoters of fairs overseas, says he has observed that American exhibitors have an advantage abroad. "Americans are known as being on the cutting edge of technology," he says, and foreign fair managers favor U.S. exhibits because of the attention they attract.

Kallman explains that "Americans invariably get a favorable location, given that the application is submitted early enough to allow the show manager to exercise this kind of discretion."

Yet because of their huge and homogeneous home market and because of the mixed reputation of some trade shows in the United States, American companies have not been as aggressive as their counterparts abroad in seeking foreign markets, and they have not been as committed to trade-show marketing. For example, while European companies earmark an average 33 percent of their marketing budget for trade fairs, the comparable figure for U.S. firms is 25 percent.

Also, chief executive officers of European companies consider it part of their jobs to work the trade-fair floors--albeit from private rooms behind their companies' displays. Their U.S. counterparts generally stay away from trade-show displays.

"Buyers won't buy what they don't see," says U.S. Rep. Dean A. Gallo (R-N.J.), who advocates foreign trade fairs as the way to get into exporting. New Jersey spends $430,000 a year on booths at foreign fairs. A New Jersey company can have its own representative at the state booth or pay $500 to be represented by a state employee.