Take your market research to the next level

As negotiations over Brexit draw on, companies doing business with the UK must continue to prepare for contingencies in case a favourable deal with the European Union is not reached on single market access and other important considerations following Britain’s exit from Europe in March 2019.  The talks can be a lot to keep up with, but we at Kinetic Cubed think there are essentially two principles which are worth keeping in mind regardless of where things go from here:

  1. With 65+ million consumers, the UK will remain a hugely important market, particularly for English-speaking firms, even in the event that tariff-free access to wider markets on the Continent is not assured.
  2. Companies which are in export growth mode or consider themselves to be overly reliant on exports to the UK should start planning, now, for alternative export destinations.  Nothing needs to be set in stone, but with over a year still to go before March 2019, now is a great time to enter the market research phase and get an idea of which markets might be appealing for your unique product or service.

 

This article focuses on the second principle, and looks specifically at opportunities in the European Union, which with more than 440 million residents will still be the largest individual consumer market in the West even after the UK leaves.  For smaller Anglo economies like Ireland (through the EU) and Canada (through CETA as of Fall 2017), Europe presents a tariff-free market diversification opportunity which should be studied now so it can be capitalised on later.

 

European Market Research

Many Anglo newcomers to European exporting make one of two mistakes initially.  The first is to assume that “Europe” is all one market and that because a product or service has succeeded domestically in an Anglo market (for example the UK, US, Canada, Ireland…), that European success can be counted on just because the market fundamentals or high-level numbers look good.  This sort of overconfident outlook is all too common among firms who don’t appreciate Europe’s vast diversity in terms of consumer tastes and business culture, the existing level of technological capability in many countries across most higher-value sectors, or the importance of local language considerations even in markets with high levels of English speaking.

 

The second mistake, conversely to the first, is to be overly daunted by these obvious challenges, throwing up the white flag of surrender before properly investigating the opportunity across different the European regions.  Market research is only the first step in a much longer process toward cultivating successful exports.  At the same time, we find time and time again with our clients that bespoke market intelligence, geared toward a company’s specific product niche, can often turn up unexpected possibilities even in places where no opportunity was thought to exist.  Further to that, dedicated market research of this nature can help companies to set priorities; hone in on the most appealing market segments; and develop the right approach for networking and reaching out to target customer groups.

 

Europe is indeed a big and diverse place, however by splitting the Continent up into regions, some general areas of opportunity start to appear.  For example:

  • Northern Europe/Benelux (Belgium/Netherlands/Luxembourg, includes Scandinavia): Good for companies preferring to do business in English.  The Netherlands especially is known as “the Gateway to Europe” due to its historical trading legacy, the presence of many wholesalers and logistics operators, and the fact that finding a Dutch partner can be a convenient way to access two much larger neighbouring markets (France and Germany) which can be difficult to enter on their own.  Scandinavia is an extremely sophisticated market, in terms of both consumer taste and technology, however it is open to trade and higher-value products which fill a clear niche can succeed here.
  • German-speaking or DACH (Germany, Austria, Switzerland): Believe it or not, but with nearly 100 million combined inhabitants across the three key German-speaking markets, German is actually the most-commonly spoken native language in Europe.  While English may be the international language of business, don’t overlook the shared opportunity here for products targeted the consumer market, as well as important sectors like life sciences, clean energy, and ICT, the latter of which tends to lag behind in Germany especially.
  • France/French-speaking (France, Belgium, Switzerland): As with the DACH countries, the French language can also provide a common access point to multiple countries throughout Europe.  France is a notoriously difficult market for outsiders to enter, however the right products can find a fit here particularly if the offering is targeted toward local needs.  Life sciences, clean tech, and industry tend to be popular targets.
  • Southern Europe (Spain, Italy, Portugal): After high-profile economic challenges in the beginning of the decade, the economies of Spain and Portugal today are beginning to turn the corner.  Portugal in particular has high levels of English-speaking and is the only country in Continental Europe to have a time zone linkage with the UK and Ireland.  Italy, like France, can be a difficult market to enter, but Northern Italy is a bit easier and Kinetic Cubed have local associates on the ground who can help.
  • Eastern Europe (mixed): There is more enough diversity here for this to be more than one category, however it essentially breaks down along three lines.  The Czech Republic, Slovakia, Hungary, and Poland boast many common cultural similarities and share the characteristic of being among the most economically-developed nations in Eastern Europe, with higher levels of consumer spending power and many upwardly mobile young people in the key cities.  Poland with its large population and manufacturing base tends to be a good market for companies with b2b solutions around industrial efficiency/safety/process improvement.  Further to the south, Croatia and Slovenia stand out among the Balkan nations, but don’t tend to be common targets.  In the north, the Baltic countries of Estonia, Latvia, and Lithuania (particularly the former two) are among the most advanced in Europe when it comes to ICT, and are rising in wealth and trading potential.

 

The opportunity for your company obviously depends on many factors, not least the unique characteristics of your product or service, which markets you are already in, and your adaptability to the conditions on the ground in the markets you would like to consider.  Bespoke market research, supported by local knowledge and networks, is critical to answering these questions, and unpacking what they mean for your specific offering.  While general research is easy enough to come by on the internet, Kinetic Cubed takes pride in going “beyond Google” and beyond stock reports to dig a level deeper and find out where the opportunity is your company and product, and what it will take to get you there.

 

Exporting can be a long journey, but as with any business transaction (as a seller or a customer), doing your research in advance will increase the chances of success while wasting less time and fewer resources in the process.  Kinetic Cubed has been assisting companies from English-speaking markets since 2005 to discover and realise their export potential in Europe, and looks forward to continuing this tradition as businesses the world over aim to set themselves on a positive trajectory during these uncertain geopolitical times.

 

Are you an Irish company interested in exporting to the UK or Europe?  Join our upcoming Information Session in Dublin on 11 and 12 January for more information on our new in-depth market intelligence service, which is tailored to Irish SME firms and will be offered from the beginning of 2018 across Ireland in collaboration with our partner Digital Islands.

 

To schedule a call or book an appointment during our January info session, visit: http://exports.digitalislands.co.uk/

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