so you want to do (more) business in europe © presentation at the nafem international conference...

So You Want to do (More) Business In Europe ©

Presentation at the

NAFEM International Conference

June 22, 2004

Copyright June, 2004 by William J. Stella, DMS International All Rights Reserved and pertains to this entire presentation.

Where to Begin!!

From the Beginning

There are 46 Countries

3,837,081 Sq. Miles

6.7% of Earth’s Land

Population = 730,916,000

# of Languages = a Ton

So many that 95 Languages are on UN Endangered list

European Facts…

24 Members

3 Applications

Español ES SpanishDansk DA DanishDeutsch DE GermanElinika EL GreekEnglish ENFrançais FR FrenchItaliano IT ItalianNederlands NL DutchPortuguês PT PortugueseSuomi FI FinnishSvenska SV SwedishCeština CS CzechEesti ET EstonianLatviski LV LatvianLietuviškai LT LithuanianMagyar HU HungarianMalti MT MaltesePolski PL PolishSlovencina SK SlovakSlovenšcina SL Slovene

20 Languages Spoken in the EU

Population

USA – 293,000,000

EU - 444,000,000

Europe – 730,916,000

Breakout of the Population

Western Europe

Country Population Capital CityAustria 8,211,000 Vienna (Wien)Belgium 10,161,000 BrusselsFrance 59,080,000 ParisGermany 82,220,000 BerlinLiechtenstein 33,000 VaduzLuxembourg 431,000 LuxembourgMonaco 34,000 MonacoNetherlands 15,786,000 AmsterdamSwitzerland 7,386,000 Bern

Total 183,342,000

Southern Europe

Country Population Capital CityAlbania 3,113,000 TiranaAndorra 78,000 Andorra la VellaBosnia and Herzegowina 3,972,000 SarajevoCroatia (Hrvatska) 4,473,000 ZagrebGibraltar 25,000 GibraltarGreece 10,645,000 AthensHoly See (Vatican City State) 1,000 Vatican CityItaly 57,298,000 RomeMacedonia 2,024,000 SkopjeMalta 389,000 VallettaPortugal 9,875,000 LisbonSan Marino 27,000 San Marino

Serbia and Montenegro (former Yugoslavia) 10,640,000 BelgradeSlovenia 1,986,000 LjubljanaSpain 39,630,000 Madrid

Total 144,176,000

Northern Europe

Country Population Capital CityDenmark 5,293,000 CopenhagenEstonia 1,396,000 TallinnFaeroe Islands 43,000 TórshavnFinland 5,176,000 HelsinkiIceland 281,000 ReykjavikIreland 3,730,000 Dublin (City)Latvia 2,357,000 RigaLithuania 3,670,000 VilniusNorway 4,465,000 OsloSweden 8,910,000 StockholmUnited Kingdom 58,830,000 London

Total 94,151,000

Eastern Europe

Country Population Capital CityBelarus 10,236,000 MinskBulgaria 8,225,000 SofiaCzech Republic 10,244,000 PragueHungary 10,036,000 BudapestMoldova 4,380,000 ChisinauPoland 38,765,000 WarsawRomania 22,327,000 BucharestRussian Federation 146,934,000 MoscowSlovakia 5,387,000 BratislavaUkraine 50,456,000 Kiev

Total 306,990,000

Huge Future Market?

Country Population Capital CityRussian Federation 146,934,000 MoscowGermany 82,220,000 BerlinFrance 59,080,000 ParisUnited Kingdom 58,830,000 LondonItaly 57,298,000 RomeUkraine 50,456,000 KievSpain 39,630,000 MadridPoland 38,765,000 WarsawRomania 22,327,000 BucharestNetherlands 15,786,000 AmsterdamGreece 10,645,000 Athens

Serbia and Montenegro (former Yugoslavia) 10,640,000 BelgradeCzech Republic 10,244,000 PragueBelarus 10,236,000 MinskBelgium 10,161,000 BrusselsHungary 10,036,000 Budapest

Sweat Sixteen

Some Challenges to Doing Business in Europe

Challenges….Commitment

To be Successful in Europe, all you have to do is answer one question…


“(As a European) Why Should I buy Your Product over a Product that I can get from a local European Supplier?”


The European customer and the American customer has the same expectations!

Challenges…Expectations

1. A Quality Product made for HIS market

This Means passing all Certifications

This Also Means addressing Voltage

220V - 50 Cycle Motors

Different Cord set than USA

Cord set between UK and the rest of Europe

Challenges….Expectations

2. A Product Priced competitively in HIS currency

Challenges….

Currency

The euro is the currency of twelve European Union countries, stretching from the Mediterranean to the Arctic Circle (namely Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland

Challenges….

A Competitive Product has to address Duties and

Tariffs

Challenges….

Some Duties and Tariffs are unexpected….


3. General Availability of the Product in Days not weeks or months

LogisticsUSA to Europe = 2 ½ to 3 Weeks

Extended Lead-times

Who wants to wait?

Challenges….

Warranties

Requirement for 2-Year warranty?

When the product stops working, someone had better fix it quickly.

A brand new Mercedes Benz is a work of art in the showroom but a ‘piece of junk’ by the side of the road.


4. An Empowered and Knowledgeable Customer

Service who can respond quickly to his needs in HIS time zone

speaking HIS language

Challenges….

Culture and Languages

UK and USA: Two Countries Divided by a Common Language

•English is the language which is most widely "spoken" in the EU. While it is the mother tongue for 16% of the European population, a further 31% of the EU citizens speak it well enough to hold a conversation. •Apart from English, the rank order of languages more or less follows the rank order of inhabitants.

M64, NGC 4826, Black Eye Galaxy

Approximately 17 million light-years (5.2 Megaparsecs).

Does your Organization think that Europe is here?

Instead of on this planet

Your Perception of Your Customer Service Department

Is it the same as your customer’s Perception of your Customer Service Department…

I hope not

Yours His


5. Literature and supporting information such as web sites

available NOW in HIS language


6. Representation that lives in HIS world providing excellent

Service after the sale, Information on New Products and Ideas, Providing Training while communicating in HIS

language

So How Should I Market in Europe?

Strategy CirclesGeographic Strategy Circles

Market Strategy Circles

A Strategy Circle is a clearly defined geographical or market entity in which you have developed a comprehensive program including pricing, product development, distribution, and any other related factors

needed to establish your product within that location or market that is tailored to match the

needs of that location or market.

Strategy Circles Examine many things including:

Price

Customer Service

Potential

Competition

Logistics

Language Issues (Literature, etc.)

Service

Support

How to distribute the Products

FoodserviceMaterial Handling

Janitorial

Retail

Electronics

Plumbing

Construction

Military

Government

Health Care

Most of the time there are Markets Circles within Geographical Circles

Examples of Circle Strategies

Market Analysis – UK One Market

Europe as One Big Market

Europe Split in Two – UK and Continent

UK, Continent, Eastern Europe

Pan Europe

TypicallyThe More Circles the Greater

Penetration Your Product Has in the Market

The More Areas of Focus the Greater the Prospect of Finding More Opportunities

Every Company’s Circles are Different

Distribution Models

E xp ort M a n ag e m e n t C o m p a ny

D e a le r/D is trib u to r D e a le r/D is trib u to r D e a le r/D is trib u to r D e a le r/D is trib u to r

E xp ort M a n ag e m e n t C o m p a ny

U S A M a n u fac tu re rE xp ort D ep a rtm e n t

Com pany Direct to Distributor V iaAgent or Representative

D e a ler D e a le r D e a le r

D is trib u to r

U S A M a n u fac tu re rE xp ort D ep a rtm e nt


C u s to m er C u s to m er C u s to m er



D e a ler D e a le r D e a le r

D is trib u to r

A g en t o r R ep re se n ta tive


Com pany With JV or FS

C u s to m er C u s to m er






U S F o re ig n S u b s id ia ry,A cqu is it ion , o r JVW a reh o u sin g , Invo icin g ,C u s to m e r S e rv ice

U S A M a n u fac tu re r

And there are a host of others including different combinations

So which one should you use?

One, Some, All

It all depends upon your product, your

time, and your commitment.

There are advantages and disadvantages to every model.

How many Reps do you need to maximize your product exposure?

State Population # of Reps Country Population # of Reps

California 35 million ? Germany 82 million ?Texas 22 million ? France 60 million ?New York 19 million ? UK 59 million ?Florida 17 million ? Italy 57 million ?Pennsylvania 12 million ? Spain 39 million ?Illinois 12 million ? Netherlands 15 million ?Ohio 11 million ? Greece 11 million ?Michigan 10 milliion ? Belgium 10 million ?

What are some of the things Successful Companies Do In

Europe?

Successful International Companies….

Think Internationally

•The US Market is only One of Many throughout the World.

•International is not contribution to overhead but a fantastic opportunity

•YUM, McDonalds story….


Have a Plan

•Management at the top is committed to international growth

If they buy the boat, you can fish the entire ocean

Otherwise you only catch the fish that come close to the pier


Have a Plan•They study the market and the competition

•They evaluate price points

•Must think “outside the box”

•Should they Create Products Specific to the European Market?


Are Patient and Deliberate

•The plan is long-term – 10 years not 2 years

•Willing to ride out the highs and lows especially from currency fluctuations and low cost competition

•Growth will not happen overnight but Expect increases each year if resources are put in place.

•They allow their distribution method to evolve.


Organize to Meet the Plan

•Director or VP International as a part of key management

•…providing international prospective to future products and company direction

•Customer Service well educated in international transactions… ”I wish it would just go away” does not exist.

•Do not ‘rent’ out the market that they own – a lot of Strategic Circles

A ge nt A ge n t

V P In te rn a tio n a l

Typical Circle Strategy ConfigurationsMultiple Circles within Countries







U S F o re ig n S u b s id ia ry,A cqu is it ion , o r JVW a reh o u sin g , Invo icin g ,C u s to m e r S e rv ice

U S A M a n u fac tu re r

Ultimately Organized Similar to a JV or FS


Become Transparent Alternative to

European Customer

They answer the question: “(As a European) Why Should I buy Your Product over a Product that I can get from

a local European Supplier?”

1. A Quality Product made for HIS market

2. Priced competitively in HIS currency

3. An Empowered Customer Service in HIS time zone speaking HIS language

4. General Availability of the Product in Days not weeks or months

5. Literature and supporting information such as web sites available NOW in HIS language

6. Representation that lives in HIS world providing excellent Service after the sale

Successful International Companies provide….


Finally They Understand that Relationships in

Europe is the Foundation for Doing

Business

COMMITMENTHow Far are YOU willing to go

(to invest) to assure success?

A Reverse Example using Electrolux….

Electrolux Ready For U.S. Sales

Electrolux has announced some of the details surrounding its entry into the U.S. foodservice E&S market.

According to the leaders of the European company, which is perhaps best known in this industry for its high-end cooking suites, 95% of the firm's foodservice products have been approved by Underwriters Laboratories and are now for sale domestically.

Currently, the company employs approximately 80 salespeople in four offices in the United States, located in Nashville, Tenn.; New Jersey; Orlando, Fla.; and Rockland, Calif. Electrolux anticipates increasing its U.S. sales staff to 150 during the next year while opening additional sales offices in Atlanta, Dallas, Chicago, Los Angeles and New York.

Though the company currently has only one warehouse in the country, located at its U.S. headquarters in Ft. Lauderdale, Fla., it expects to add more as it gains a foothold in this market.

As part of its move into the United States, Electrolux has also announced that it is constructing a service agent training center at its headquarters. The facility, which will also include a culinary events center stocked with professional cooking equipment, is scheduled to open early in 2005.

http://www.ditousa.com/repsmap.htm

How to Do it Resource Guide

Travel – Travel – Travel

Trade Shows

Talk to Customers

Network with other International Colleagues

Subscribe and Read International Periodicals

Trade Shows and Meetings

Hotelympia – London England

Milan Fair – Milan Italy

EquipHotel – Paris France

Hogatec – Dusseldorf, Germany

Conference – Venue Changes usually summer

Hostelco – Barcelona Spain

Equiphotel – Moscow, Russia

Internorga – Hamburg, Germany

FCSI International – Meetings Usually Once per Year

Confucius: A Journey of 1000 Miles Begins with a Single Step

International Proverb: “A Journey of 3,458 Miles (distance from NY

to London) Begins with a Time and Cash Advance (investment).

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