A study in differences

In the previous article, we described the impressions that Michael Tobin, a Germany-based manufacturers' representative gained from his first year in the MRERF CPMR program. In the course of our discussions with the rep, he makes the point that while globalization has made many industry practices

Despite the fact, Tobin maintains there is a wealth of similarities in business practices that allow the CPMR subject matter to work well for non-U.S. reps, he adds that there are many differences in how reps in North America and Europe work. In a far-reaching interview with Agency Sales, Tobin takes a look at many of those more important differences.

Language

"The European rep," according to Tobin, "speaks at least English or one other foreign language in addition to his mother tongue. Overcoming the language barrier is a responsibility that the European rep carries. With the increasingly global market and the fact that the most common spoken language in the business world is English, the importance of language has diminished in comparison to the situation in the recent past. Nevertheless, customers prefer to conduct business in their mother tongue, and a rep's role should be to sell to all levels of the chain within a customer's organization. Just because the boss can speak several languages, that is no guarantee of success if the buyer or daily contact has problems communicating in a foreign language."

Culture

Once the language barrier is overcome, then there's the concern of operating in different cultures. According to Tobin, "Buyers in different cultures respond differently. An extreme example occurred when I visited an Italian buyer. While I had arranged the appointment well in advance, I was left to wait three and one half hours without the buyer coming out to apologize or explain. One might conclude that this was an example of poor manners, but it also is indicative of an attitude still prevalent in parts of Italy and one that is not consistent with the supplier as 'partner' approach that you would experience in the United Kingdom, for example."

Then we have the issues of the law, employment practices and market-driven differences.

Legal Practices

"Laws and related practices vary from country to country in Europe. For example, while a paper manufacturer enjoys great success selling a flame-proof paper in France, he can't understand that the German rep has no similar success. Only when it is understood that French law dictates that flame-proof paper be used in certain circumstances, while in Germany the law advises but does not insist, is it clear why demand in France outstrips demand in Germany. In a commercial environment, a lower-priced non-flame-proof alternative is acceptable in Germany."

Employment Practice

"In Europe we have different rules than the United States regarding employment. In comparison, we refer to the 'hire and fire' approach practiced in the United States that is reflective of their relative freedom to dismiss employees. This practice also is reflected in the contracts that U.S. reps have that contain 30 days' notice. In our industry, we have varying notice periods dependent upon how long the contract is valid. However, it is not unusual for us to have a six-month notice period, and in the event of a principle dismissing us, we have the right to compensation (representing one or two years' commissions) depending upon contract basis, etc.

Market Practices

"The role of the regional rep that sells for a German manufacturer within Germany has significantly decreased in recent years in our industry. I was struck by the fact that most of my U.S.-based CPMR course colleagues were representing domestic producers. Naturally the geographical size of the United States market provides an explanation for this. However, I believe also that there is an inward-looking approach by the United States.

"I believe that traditionally the United States has a reputation for being more inward-focused in general, and this is reflected in the U.S. rep's line card. We only sell for foreign-based manufacturers. The few German paper mills still using German reps do so primarily because of traditional relationships with the respective mill.

"As globalization has increased market transparency, many non-German European manufacturers see each European country as a 'home' market and the potential for the independent rep has been squeezed further. As a result, we and our fellow rep colleagues look to Asia, the United States and the former East European countries for new agency opportunities. What has resulted is a flood of imported competition from China, for example. These imports represent entirely new challenges for some of our U.S. colleagues. They will have to be open to these facts and begin to proactively develop relationships with foreign-based manufacturers in order to turn that threat into an opportunity."

Agency Sales has featured many articles on globalization and the fact that members need to recognize and work with differences and similarities between cultures to conduct business at an optimum profit level (see sidebar for a partial listing). As global competition escalates, so too will MANA members' acumen as complete businesspersons and their knowledge of the ways business is done outside of the United States, to the benefit of all involved.