United States, a market with great expectations

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A market with great potential for Italian companies of machinery for packaging and processing. The features that should not miss are: automation, flexibility, cost savings and an efficient sales service, spare parts and servicing.

More than 300 million consumers with high purchasing power and faithful to the brand live in the United States. The US market, enormous from every point of view, is therefore able to accept Italian innovative and reliable products and services. Today Italian manufacturers, in particular small and medium-sized enterprises, must deal with an economic situation where in response to decline in demand there is greater competition, especially against suppliers who work on the price factor. However Italian products are known in the USA for their innovation characteristics, their attention to final customers, their design. According to the “Guide to business in USA for SMEs” by ICE (Italian Institute for foreign trade), if Italian companies showed deficiencies in the past, these are not to be seen in products or technology, but in the way of dealing with American customers: it is a problem of organization and procedures (organization, marketing, distribution, customer service, pricing and IT).

Knowing the market
The United States represent a high-potential market for Italian companies. Private consumptions, which contribute for nearly two-thirds of GDP, support strong demand for investment goods that US companies aren’t able to cover. As a consequence many services, technologies, imported consumer and industrial products are required. The United States are one of the most important markets, characterized by transparent legal system, excellent infrastructures and access to the most lucrative consumer market in the world. According to ICE, to succeed on this market, Italian companies must maintain good relationships with partners, distributors and customers by respecting delivery times, being punctual in payments, respecting contractual conditions and being timely in communicating any changes in production; complying with federal, State and local regulations concerning licenses, taxes, import products and technologies, and so on; in most cases these standards are similar to those in force in the European Union and are often even less severe. Concerning sales channels, explains ICE, technical products and custom designed products for clients, such as machines for packaging and processing, are commonly sold through a manufacturer’s representative or agent that works on the order. Another common method is sale through distributors who purchase imported products and sell them to their clients, along with other similar product lines. It is more expensive in terms of fees, but distributors also offer after-sales service and tend focusing on fewer products. Alternatively, a partnership can be established through joint venture or license agreements, with a US producer that operates in a complementary industry. This option would allow Italian manufacturers to instantly access the partner’s sales network.

Food technologies market
Food products account for a growing share of US foreign trade. It is expected that in USA car demand in this segment will be steadily increasing. Technological innovation has taken a major role in the development of this sector, mainly driven by the need to reduce costs. The advantages from newer machines, which are more productive and less expensive, have led many manufacturers to replace the old and less efficient ones. ICE describes the US industry of food-processing machines as characterized by intense competition among manufacturers, which include both small private companies and multinationals, and by considerable fragmentation due to highly specialized production quality. The increasingly complex technology tends benefiting large companies, supported by major financial and technological resources. At the same time, although there are more than 20,000 different manufacturers of machinery for food processing only a few companies are able to offer a complete line of products. The factors that mostly influence the market of machinery, equipment and food processing systems include economic conditions, demographic trends, and trends in capital investment, as well as changes in food consumption which have direct impact on production, cost of raw materials, technological innovations and competition with other producers. US food companies can choose among several alternatives, such as renting, buying, adaptation of existing machinery. In such context, the price factor is extremely important. According to ICE, Italian vendors must pay particular attention to demand for more automated and flexible machines, designed with a view to costs reduction. What’s more, to compete on the American machinery market, reliable and high quality products are needed, as well as efficient sales service, spare parts and servicing. American buyers expect to be served by manufacturers with complete technical assistance, spare parts that are locally available, technicians able to install, test and repair the systems, and the possibility of credit purchase or facilitations.