alfred griffioen business in europe.pdf · choose your export country start selling optimise your...

Doing business in Europe

Alfred Griffioen

Alliance experts is a global network of business development specialists

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We help companies to enter new markets profitably

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Choose your export country

Start sellingOptimise your profit

• Country data• World Trade Analytics• Market Quick Scan• Market Research

• Orientation Visit• Business partner

search• Online sales• Own sales team

• Business case check• Negotiations &

agreements• Country management

One Europe, many countries

Focus on France

Prepare for the international market

Selling to Europe

Test your products in France

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Contents

One Europe, many countries

One Europe, many countries

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Germany: strong as ever

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France: concentrated in Paris

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UK: open economy, but for how long?

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Italy: something went wrong...

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Netherlands: tulip paradise as ever

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Cultural differences (roughly)

North/West

• Focus on the business

• Short lunches

• Direct communication

• Limited price negotiations

• Business and private separated

South/East

• Focus on relationship

• Long lunches

• Indirect communication

• Price negotiations possible

• Business and private combined

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Doing business in Germany

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Longer term economic developments

• Population growth is limited, population is ageing

• Eastern Europe is still developing and will get closer to the level of Western Europe

• EU will remain dominant and will include more countries

• Economies are mostly stable: no new Greek situations

• Western Europe will remain strong in innovation and productivity enhancements

• Tourism to Europe will continue to grow

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Brexit: short term gain, long term pain

Focus on France

Geography and Population

Location: Western Europe

Time zone: CET (= GMT+1 / +2 in summer time )

Capital: Paris

Surface: 550,000 km²

Population: 64 million

Density: 116 /km²

Language: French

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*Figures for metropolitan/mainland France

Significant Facts France has two coastlines: Atlantic and Mediterranean France has borders with 7 countries (clockwise): Belgium,

Luxemburg, Germany, Switzerland, Italy, Spain and the United Kingdom

France has a natural population growth and a very high life expectancy (over 82 years)

Main regions and major cities

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10 major urban areas population1. PARIS 12.32. LYON 2.23. MARSEILLE 1.74. TOULOUSE 1.35. LILLE 1.26. BORDEAUX 1.27. NICE 1.08. NANTES 0.99. STRASBOURG 0.810. RENNES 0.7

… and over 35,000 townships!

Phone # begins with01 ILE DE FRANCE02 NORTH WEST03 NORTH EAST04 SOUTH EAST05 SOUTH WEST

Economy and international trade

GDP: $2,600 billion (#6)

GDP per capita: 40,000 € (#20)

Currency: Euro (€)

Exports: $580 billion (#6)

Imports: $640 billion (#6)

Inflation rate: 0.5 %

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Significant Facts Government spending is high but it protects the purchasing

power of the population in difficult times France is a net importing country located within the European

Union and the Eurozone The transportation and communications networks are among

the best in Europe.

Agriculture: 1.7% Industry: 19.8% Services: 78.5%

Industries and companies

3,14 million companies

31 companies within FG500 (#4)

FDI stock is over 1,000 billion USD

Strong industries: food, cosmetics, aeronautics, automobile, health, banking, insurance, fashion, culture, tourism, distribution, internet and high-tech

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Significant Facts

22,000 foreign-owned companies (FOCs) operate in France

FOCs employ 13% of the working population

FOCs generate 1/3 of French exports

FOCs undertake 20% of French R&D

Every year, 80 million tourists come to France!

Major French global companies

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How to do business in France?

The language issue

Be formal and professional

Be eloquent and logical

Watch your manners

Be curious and share opinions

Take your time and enjoy

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Prepare for the international market

Rule #1: Make sure your product stands out

Coming from abroad you will always have a disadvantage compared to local producers. So make sure that your offering either is:

• Unique (so you won’t have any competitors)

• Better (or being perceived as better), and/or

• Cheaper

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Estimated costs to enter a new market (before any substantial revenue comes in)

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Nr. Offering / Market Simple Average Complex

1 Simple product 20,000 USD 50,000 USD 80,000 USD

2 Service from abroad 30,000 USD 50,000 USD 80,000 USD

3 Product with service 70,000 USD 100,000 USD 150,000 USD

4 Customised product 70,000 USD 100,000 USD 150,000 USD

5 Customised service 100,000 USD 150,000 USD 250,000 USD

Hours based on a all-inclusive cost-based rate of 100 USD/hour, travel on economy flights and 4* hotel

Importance of branding

Why branding

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$

A well chosen Western brand name is necessary

• Milward Brown research:

– Only 23% of Western consumers could name a Chinese brand

– Only 32% said they had faith in product made in China

• Don’t take the literal translation of your company name

• Choose a name that may resemble your name but has the right sounds and elements in it.

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Iran brands are not well known in the rest of the world

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‘Persia’ has higher brand value

• Associations with Persia are have to do with ‘warm’, ‘romantic’, ‘ancient’, ‘mysterious’

• Using this in your brand of product name gives a positive connotation

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Important things about branding

• What, How, Why

• What’s your story?

• Authenticity is key

• You have to develop key values first that fit your company

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Spending money on branding

• For retail products, the right packaging can ensure up to 5 times higher prices

• Also for TV-commercials, development costs are 10-20% of the total costs

• Knowing your target group is where it all starts, so it starts with research

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Do you want to export to a new country? Go there first for orientation

• Especially if you have never done business there before or if you are introducing a new product or service

• What we mostly do:

• After the visit you will have a better understanding how much you can sell and what your investments will be

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Day 1:• Business environment & trends• Review of your product and

marketing materials• Visiting potential clients/retailers• Competition analysis

Day 2:• Meeting with parties who can

play a role in the distribution• Discussing the best approach to

enter the market• Defining next steps

Selling to Europe

First question: what product or service?

• West-European market is moving to

– more design

– more sustainable

– more individual choices

• Cheap mass-market products are still sold, but at low prices, so also low margin for the manufacturer

• Services are mostly local: but opportunities should be there with Software-as-a-Service

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Selling to Europe: where to start?

• Germany

• UK

• France

• Italy

• Spain

• Netherlands

• ...

Country selection: from general to more specific

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General country data:like spending power, country size and ease of doing business

World Trade Analytics: trading information for your specific product category, based on the HS-code

Market Quick Scan: an insider’s view on the chances of your product or service in a country.

Market Research: in-depth insights, numbers, distribution channels and competition analysis

Finding distributors for products

• Agent or distributor?

– Agent receives a commission but is no part of transaction

– Distributor buys your goods and resells them

• Distribution structures differ per country

– Germany: per state, or per major city

– UK: focus on London, then the smaller cities

– France: everything controlled out of Paris

– Italy: start in the north, work to the south

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Example: Ecocam

• Kodak and Minion branded webcams, with cloud storage

• Product already sold in the US through Wallmart

• Focus in Europe on France and Italy, because they already had an agent for Germany

• Alliance experts did partner search and the first meetings with large retailers

• Their products can now be bought at FNAC, one of France’s largest retailers

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Example: Iprosport

• Sportsdrink, isotonic, no sugar

• Good reception in the UK

– deals with the army

– sports sponsoring

– advertising

• Have appointed an agent for the Middle East, who wanted to start in Turkey

• Turkish distributor should do all the marketing

• Still nothing sold in Turkey

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Example: Bona

• Swedish family company

• Provides a complete range of maintenance products for wooden floors

• They train their distributors to become the local specialist in wooden floor maintenance

• Distributor gets extensive marketing materials and they co-fund advertising

• Alliance experts found them distributors in Thailand

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How to stand out from the crowd?

• A Western brand name

• Website and product materials in English, and in Western style

• Good customer/distributor support

• Reaching out: trade shows or approaching distributors directly

• Brand positioning and brand marketing

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If you go to trade shows, what are your targets?

• How many people will you speak? 40 people per day is the max.

• How many people will grab your materials?

• How many of these people are the right people?

What are your targets?

• Do you want to reach customers?

• Do you want to find agents or distributors?

• Do you want to create brand awareness?

Trade shows versus direct approach

Trade shows

• High fixed costs

– Booth easily 10,000 USD

– Flights + hotel 3,ooo USD

– Staff time & costs

• Results

– 40 chats per day

– only 10 interesting

– 2 or 3 potential (small) distributors

Direct approach

• Partnering profile: what do you want and offer?

• Long-list of over 20 potential distributors

• The local Alliance experts partner approaches them

• This way we work towards a short list of 3 to 5 interested and suitable companies

• You can then come over and meet them in a few days

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Example: Joysun vacuum pumps

• Joysun is located in Shanghai

• Joysun has assimilated advanced German vacuum pump technologies

• Alliance experts did partner search in India, Iran, Russia and Brazil

• Defining the partnering profile was an important step directly related to their export strategy

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An all-inclusive e-commerce and fulfilment solution to test your products on the French market

Test your products in France

What is E-Marketest France?

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E-Marketest France is an integrated “all-inclusive” solution to test your products on the French market, which includes:

Warehousing solutions

E-marketing solutions

E-commerce solutions

Fulfilment solutions

Only 2 weeks* to

set up!

* from Europe

What does Emarketest means for you?

• You send a batch or pallet of your goods to France

• We place them on a website with the right pictures and descriptions for the French consumers

• We arrange all sales processes, logistics and return

• You’ll get clear feedback how you product is doing. We can experiment with pricing and descriptions.

• All costs our being covered out of our sales commission, you only have set-up costs of 2000 Euro.

Different products on the website

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Product listings

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Cross selling suggestions

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Questions

We help companies enter new markets, profitably!

Please contact us for any questions!

Mahdi Hayatbakhsh

+98 912 618 6855

mahdi.hayat@allianceexperts.com

Alfred Griffioen

+31 6 2477 6865

alfred.griffioen@allianceexperts.com

Arnaud d’Halluin

+33 6 66 32 59 59

arnaud.dhalluin@allianceexperts.com

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