CEO Global Insights Series
Featured CEO: Roy Paulson, President of Paulson Manufacturing
Could you tell us more about your firm’s product line of protective eye and face equipment and your customer base.
We feature three major product lines: Industrial, Fire and Tactical. We sell products to different types of businesses and all levels of government. Our product line includes face and body shields, goggles, knee and elbow protectors, and digital night vision goggles with accessories to protect our users from hazardous materials and arc flash.
When did you first begin exporting?
Prior to 2004, we exported in a random or reactive fashion which provided us with sales but no real growth. Then in 2004, we began our preparation phase where we developed our business plan, set our goals and mission, and implemented them to seek our vision for Paulson Manufacturing in the years to come. We began with a selection of key countries in the European Union such as Germany, France and the United Kingdom.
Roy Paulson, of Paulson Manufacturing
What are your perspectives on the international economy? Has your firm been affected and if so, what trends have you been seeing in terms of sales or markets? Have you seen any changes in behavior from customers?
The economic turmoil hit more or less every country in the world and the results were dramatic cuts in budgets and reductions of inventories. For our company, sales had dropped over several months but during the last three months our firm has seen sales slowly increasing. Most of the projects that were delayed from the downsized budgets remain, but we have delivered many other orders for our products that are not in the consumer field, for example, tactical products. We do expect that 2010 will be a very successful year for our business.
Have you adjusted your international marketing strategies as a result of the economic situation?
We have cut some expenses to adjust to the decreased market demand. For example, we reduced our travel expenses by using more remote Internet-based training. Also, as a result of the economic situation, we have relied more heavily on our distribution network to obtain orders. Paulson is represented currently in more than 70 countries with exclusive distributors. Part of the key to our success is maintaining close contacts with potential agents and distributors.
How do you market yourself against foreign competition, are there any advantages that U.S. firms in general have compared to foreign competitors? (American brand awareness, after-the-sale service, etc.)
Our philosophy is to provide high quality products for our niche market. Also, we are continuously and intensively training all of our internal and external partners stressing the importance of after-sale service. In addition, we take advantage of the low dollar ratio and the fact that all of our products (except the Night Vision Goggle) are made in the U.S.
Do you have any “lessons learned” when it comes to exporting that you could share with our readers?
Prepare your market goals very carefully and don’t expect a short term business; it takes 3 – 4 years to get a reasonable success. Start with countries that are easier and achieve your success there. Then, build on this experience in the more difficult markets.
Respect the foreign culture and the different trade behavior. Be prepared for international conditions, terms and customs. Also, consider different product solutions for applications in different parts of the world.
For financials, don’t neglect the financing of orders become it is important to be familiar with international finance instruments like L/C, Bank Guarantee etc. Also, in the beginning, don’t deliver on open account, and furthermore, be sure to prepare detailed documentation about the products.
It is important to be familiar with export rules and regulations. Check the necessity to have Product Certifications, as this is an additional expense for the international sales department.
How important has international diversification been to Paulson Manufacturing over the years, and has it enabled your firm to better weather the current economic situation?
International diversification has definitely improved our product portfolio. We have also benefited from state-of-the-art research and development activities. We have enhanced our awareness of the international market and customer needs.
What impact has exporting had on your firm in terms of growth and jobs? What percent of your total sales are international?
The Impact of exporting has had a deep effect on Paulson Manufacturing; we have grown to be a “world class organization.” Our international sales department contributes approximately 25% of our sales and jobs. If we added up the sales that we made domestically and then re-exported, I estimate the total exports would exceed 35%.
What advice would you give to companies who have yet to take that first step in exporting?
I would advise these companies to utilize the advice and experience of the U.S. Commercial Service. CEOs should work with their local District Export Council, and take the time for a comprehensive business and investment plan to carefully determine goals. Assess which countries are appropriate to approach, then analyze the price situation and needs of the local market. Products which are popular in the U.S. are not necessarily popular internationally.
In addition, you will need to obtain information about the target countries such as their political, economic, payment and consumer behavior. The CIA fact book is a valuable resource for this. It is important to determine the distribution method, which could be exclusive or non-exclusive. Make sure to prepare fair and reasonable international contracts. Take your time, and be ready to invest over the long term---short term benefits rarely happen. Finally, it makes a difference to know your customer. Try to visit each one in person and at the place of business in the foreign country.
