Commoditization, is it happening to you?

“We are living in an era where there are too many retailers serving too few customers and where there is no longer any brand loyalty or retail loyalty” Kevin Burke, President/CEO. The American Apparel and Footwear Association.

From this comment by Mr. Burke I believe the apparel and footwear industries are in the midst of an important struggle, to move away from their current status of a commodity business.

The winners will be those with strong design, distinct brand, and smart developed distribution systems. The same can be said for almost any current industry.

Too many retailers and points of sale? I doubt it. What I interpret from this comment is that there is intense competition between retailers, and instead of seeking exclusivity or innovation to attract and maintain customers, they are using the oldest,simplest trick known….lowering product prices and with it, the quality of the shopping experience.

It is a classic example of commoditization.

Manufacturers are also to blame. The rush to sell their product to high volume buyers insures loss of control of the marketing and retail channels.

The rush to sell everywhere, to everyone, at the same time allows and promotes price competition and price wars between the various manufacturers and retailers.

Too few customers? The real problem is overproduction. Current manufacturing focuses on high volume production and this encourages the standardization of product. The desire to reduce fixed costs drives manufacturers to seek out cheap world labor, increase productivity through mechanization (which encourages product standardization) and the outcome is a mountain of finished products, created all over the world, that are indistinguishable from one another.

Commodities. Most apparel and footwear companies focus on low cost, high volume manufacturing, they sell to wholesalers or retailers that also focus on volume. So suddenly branded products can be found in department stores, boutiques, grocery stores, flea markets and the Internet. The product is everywhere, consumers have learned that one should just look for it where the price is lowest.

This also makes it easier to pirate and sell a product to a growing network of sales outlets focused on offering a brand name for less.

No brand or retail loyalty?
If there is no customer loyalty (read as no perceived advantage to shopping with you versus the competition), and loyalty is important for continued growth, profit and success, then it’s time for a serious reevaluation of how one is doing business.

How can one stand out from the crowd, do something different and unique, and create a sense of exclusivity and prestige for the consumer?

This is the future.

Related Links

The easy way

10 top reasons for poor customer service and their solutions

Give this away

Are you listening to what the customer needs?

Need to know about Leon Guanajuato?

Yet another Squidoo lens. This time focused on Leon Guanajuato Mexico. Happens to be the town I’ve been living in for the past 15 years.

Information about Leon Guanajuato

Leon is internationally “famous” for the shoe making and leather industry (80+% of all Mexican shoes, boots and leather goods come from Leon).

Leon is also growing due to the automotive industry and an “industrial corridor” being created between Leon and Celaya.

On top of all this, the service sector continue to expand and grow due to the population growth, the Poliforum Convention and Exhibition Center and the Poliforum Cultural Center.

Related Links

Information about Leon Guanajuato

Hotels in Leon Guanajuato

SAPICA International Footwear and Leather Goods Show

ANPIC Fair of the Americas

Mexican Footwear – How to Find Competitive Suppliers in Mexico

ANPIC 2007 Leon, Guanajuato Mexico

ANPIC 2007. This is the annual international trade fair for leather tanning, leather chemicals, machinery and supplies for the footwear industry held in Mexico since 1980.

The “Fair of the Americas” (Feria de las Americas) is held in Leon, Guanajuato, Mexico from February 17, 2007 through February 20, 2007 at the Poliforum Exhibition Center in Leon.

Leon, Guanajuato is the leather tanning and shoe making capital of Mexico.

Visitors will find 1200 national and international suppliers of:

• Shoe machinery and equipment
• Tanning machinery and equipment
• Chemical products
• Hides and skins
• Synthetic materials and textiles
• Lasts, heels and soles

Related Links

How to do business in Mexico 

ANPIC 2007

ANPIC 2007 calendar of events

ANPIC 2007 Hotel list

ANPIC 2007 contact information

Business South of the Border

Foreign direct investment in Guanajuato, Mexico

The State of Guanajuato, Mexico has over 572 companies with foreign capital registered and located in the state.

The following information has been translated from an article dated November 6, 2006, published in the newspaper Correo, by Vicente Ruiz, Link.

49% of these foreign companies in Guanajuato are involved in manufacturing, and 29% are commercial operations which together represent an investment greater than 1,000,000,000 (one billion US dollars).

Due to changes in laws regarding foreign investment in Mexico (in 1993, 1995, 2001), 90% of all economic activities in Mexico are completely open to foreign participation and investment.

Mexico’s growing national economy, free trade agreements with 32 countries and geographic location provide great economic and logistics advantages to companies opening operations in Mexico.

In Guanajuato, 50% of all the foreign companies are located in the city of Leon (281), followed by Irapuato (71) Celaya (52), San Miguel Allende (31), Silao (26), San Francisco del Rincon (25), Guanajuato (19) and the rest (67) throughout the state.

Guanajuato occupies the first position for foreign investment of the all the Mexican states in the North-Central region.

Principal industries in Guanajuato that received direct foreign investment include:

• The automotive industry received US $ 874.2 million
• Processed food industry (concentrates, preserved products) received US $ 99.1 million
• Manufacture of paper, cellulose and derivatives received US $ 18.9 million
• Commerce of non-agricultural items received US $ 17.3 million
• Chemical manufacturing received US $ 15.9 million
• Clothing manufacturing received US $ 7.5 million
• Textile manufacturing received US $ 5.2 million
• Plastics manufacturing received US $ 5.4 million
• Food products received US $ 4.8 million

Who has invested in the State of Guanajuato, Mexico:

Country…. Investment (Millions of US dollars)…… %

United States of America……..1’ 009, 214.00………..92.7

Holland………………23, 277.90………….2.1

Spain………………….18, 234.00………….1.7

Germany……………14, 267.30………….1.3

Denmark……………..4, 913.90………….0.5

Taiwan…………………4, 426.00………….0.4

Others………………..14, 549.60………….1.3

Total: USD $ 1’ 088, 882.70 (Millions)

Related Links

Aumenta inversion extrañjera en el Estado de Guanajuato: SE (Spanish)

Secretaria del Economia de Mexico (English)

State of Guanajuato webpage (English-Spanish)

Correo (Spanish)

How to negotiate with Mexican business people

Mexico has a culture that embraces and enjoys negotiations. From the schoolyard to the local markets to the executive boardrooms, negotiations are an important part of everyday life for Mexican citizens.

Mexican business people are good negotiators and enjoy the process.

You can expect tough negotiations if you are doing business in Mexico. Tough negotiations in the sense that they will question everything, and spend a great deal of time trying to get you to accept their point of view or conditions. The arguments may be based on emotions or facts, or both.

You should always come into the negotiation very well prepared. Know what you want, and have the evidence to support your claim. Your arguments, supported by facts, will be heard and processed by your Mexican counterparts. If facts are presented that are new, take the time to verify the information and sources before you reach a conclusion.

Negotiations in Mexico can be compared to the first round of a sporting event, both sides desire to “win”, but rarely do they burst onto the field with all their energy in the first 5 minutes. The process of “feeling out” the opponent, observing their strengths and weaknesses, are critical to understanding how to develop a winning strategy and understanding what you are up against.

Mexicans are often seeking a long term, stable relationship with suppliers and clients. Focus your negotiations and decisions on creating a long term business relationship and strategy with your Mexican counterpart.

Your ability to negotiate will be a reflection of your company, your character, and your abilities as a business person. Take your time, don’t get emotional, support your arguments with facts, and be consistent with your demands or desires over time. The negotiation process is helping to build trust and credibility, it’s important to build solid foundations for your future relationship.

Don’t be in a hurry to end the negotiations. The Mexican culture is more permissive about time and deadlines than you find in USA or Europe. If you are in a rush, you will lose important negotiating power.

Always start your negotiation with some margin and leeway. It will always to be to your advantage to “give” a little before the negotiations are over. It may take 4 hours for you to “give in”, but the gesture will be seen as your willingness to do business and enough for the negotiator to claim a little victory. Everyone wins.

Write down your final agreement, and the results of your negotiations and have both sides sign and retain a copy. This simple step will avoid any language, communication or interpretation problems that may develop in the future.

Related Links

Meeting People in Mexico – kiss, shake hands or hug

Before you go on a business trip to Mexico

How to do business in Mexico, parts 1 – 28

16 Essential Questions – International Business Traveller’s Quiz

Leon, Guanajuato – Footwear and Shoe Industry contacts

I live in Leon, Guanajuato, Mexico….which might mean nothing to you unless you are involved in the leather industry or shoe business. Leon is home to the majority of the leather tanneries and shoe factories in Mexico.

For those of you seeking industry contacts, here is a brief list of links to the major shoe related organizations in Mexico.

SAPICA

The biggest and most important international shoe fair in Mexico. Held two times per year. Spring/Summer and Fall/Winter.

CICEG

The Mexican Shoe Association in the State of Guanajuato.

ANPIC

The National Association of Suppliers for the Footware Industry.

COFOCE

If you want to find reliable exporters of shoes, leather, and leather goods contact COFOCE. Highly recommended.

State Government of Guanajuato

Good overview of the State of Guanajuato, business opportunities and contact information for government and industry.

For more information or consulting assistance, do not hesitate to contact me.

Related Link: Mexican Shoe Manufacturing on Squidoo

Current Resume – Lee Iwan – March 2007

 

Lee Iwan

International Business Development

Sales & Management Executive

Accomplished bilingual and bi-cultural executive with broad based domestic and international experience in business discovery and development; sales, marketing and operations for start-ups, growth and mature organizations.

Results oriented, proven success in new market identification, strategic thinking, negotiations and pragmatic problem solving. Track record of “hands on” leadership increasing communication, sales, efficiency and profitability.

Thrive in dynamic and fluid environments requiring enthusiasm, creativity, communication skills and organization.

Core competencies include:

Relationships and Communication

Team Leadership

Cross Culture Liaison

Innovation and Change Management

Global Focus

Entrepreneurial Focus

Contingency Planning

PROFESSIONAL EXPERIENCE

QUIMICA CENTRAL DE MEXICO S.A. de C.V. Leon, Gto., México July 1998 – Present

Business Manager, Strategic Business Discovery & Development May 2005 – Present

Serve as independent executive working directly with CEO and Board of Directors. Fully responsible for the visualization, research, creation, communication, follow-through, analysis, planning and implementation of new business development and corporate strategic diversification projects.

Key Achievements:

• Project Leader, pharmaceutical joint venture (Swiss-México), manufacturing and commercial operations .
• Spearheading strategic alliance negotiations to increase long-term market share and global positioning.
• Ongoing negotiations with India and China for product representations, agencies and toll manufacturing.

Business Manager, International Business March 2000 – May 2005

Served as Business Manager, responsible for global sales and marketing, distribution and logistics, and all corporate international negotiations with clients and suppliers.

Directed export sales and market development, international supplier strategic alliances; leadership of export sales distribution and agency networks; cross-functional team participation; business intelligence; sales and marketing strategy and leadership for the Asia Pacific and Latin American regions; sales implementation and market development; logistics and supply chain management, cross cultural communications, “globalization” of company culture and corporate special projects.

Key Achievements:

• Created and implemented commercial entrance for Asia-Pacific market, first 3 years revenue $ 5 M (US), projected annual sales growth of 200%.
• Initiated and maintained strategic alliances with international suppliers, raw material cost savings of $ 2 M (US) fortified long term strategic positioning.
• Negotiated exclusive agency representations in Mexico for South African and US specialty chemical manufacturers.
• Increased company global competitiveness utilizing the export department to drive corporate cultural changes in strategic planning, production, time to market, supply chain and logistics, sales, marketing and administration.

Export Manager July 1998 – March 2000

Served as Export Manager, responsible for sales, distribution and marketing strategy and management for 20 countries including Latin America, US, Europe and Taiwan.

Key Achievements:

• Created new commission and base price structure for agents and distributors resulting in increased loyalty and increased revenue of 8%.
• Re-engineered department systems to increase revenue and customer loyalty through increased efficiency in communications, administrative processes and product shipping.
• Managed international sales force in Latin America and Asia Pacific regions (18 distributors / agents).
  

NUVIDA S.A. de C.V., León, Guanajuato, México January 1993 – July 1998

Owner–President–Entrepreneur

Served as President for start-up specialty service business, corporate and government clients.

Key Achievements:

• Alliance between private industry, State and Local government to create and maintain 100-acre interactive ecological area – Parque Explora.
• Managed workforce of 45.
• First workforce in the State to receive State Certification (training and operations procedures).

FLOWERS FLOWERS INC., Evanston, IL, USA March 1986 – August 1993 Owner–President-Entrepreneur

Served as President for start-up innovative luxury consumer goods and service business.

Responsibilities included: strategy and planning, management, sales and marketing, purchasing and operations.

EDUCATION

Bachelor of Science Agricultural Economics * University of Illinois – Urbana, IL 1980

PROFESSIONAL ACHIEVEMENTS

Board Member, State Chemical Industry Export Committee, COFOCE, February 2007 – Present

Weblog: Business South of the Border August 2006 – Present

Weblog: Lee Iwan Accumulated Experience April 2006- Present

Business Development Mission, Chennai, India, February 2007

Chromium Industry Conference, Cape Town, South Africa, February 2006

Commercial Mission, New Delhi, Mumbai India, November 2005

Course: Finance for Non-Financial Managers, 2005

Business Development Mission: Buenos Aires, Argentina, 2004

Board Member, State Leather Industry Consulting Committee, COFOCE, 2000 – Present

ANPIC, Mexican Leather Industry Fair, Leon, Gto., Mexico, 1999 – Present

ISO 9001:2000, Certification Process, 2003 – 2006

Business Development Mission: Geneva, Switzerland & Moscow, Russia, 2004

Business Development Mission: Istanbul, Turkey, 2003

All China Leather Exhibition (ACLE), Shanghai, China 2002 – 2005

Guangzhou Leather Fair, Guangzhou, China, 2002 – 2005

Business Development: Geneva, Switzerland, 2002

Commercial Mission: Mexico – Central America, 2000 – 2002

Asia Pacific Leather Fair, Hong Kong, 1999 – 2005

Linneapelle, Bologna, Italy, 1999 – 2005

Commercial Mission: Mexico – China, 2000 – 2001

Business Development: Amsterdam, Holland, 2000

Business Development: Guatemala, El Salvador, Honduras, 2000

Miami Leather Fair, Miami, FL, USA 1999 –2001

Business Development: Uruguay, Brazil, Argentina, 1999

FENAC, Leather Fair, Novo Hamburgo, Brazil, 1999

Course: Mexican International Commerce Legislation, 2001 – 2004

Diploma: Modifications in the Mexican Customs Legislation, 2003

Diploma: International Commerce – Logistics, 2001

Diploma: International Commerce, 2000

Course: The Strategic Salesperson, 1999

Periodico AM, Newspaper Columnist. 1994 – 1996

Society of American Florists, Editorial Board, 1990 – 1992

Chicago-Dempster Merchants Association, Vice President, 1988 – 1990

Lee.iwan@gmail.com