Monday, 25 Mar 2013
An Asian supermarket
According to taste: adapting to overseas markets
Globalisation has shrunk the world, opening up lucrative new international commercial opportunities for UK companies in every sector. British businesses now have real opportunities to think big.
Yet when a business with global aspirations targets a new overseas territory, it should start by thinking small and focus on the local detail. This is because understanding a particular country’s unique values and attitudes may be essential for export success.
It’s why the most forward-thinking UK companies scrutinise the territories they wish to operate in - or distribute to - and then adapt to them accordingly to suit local tastes, demand, standards and regulations.
In the West Cheshire and North Wales region, for example, a recent survey - developed by the University of Chester and West Cheshire and North Wales Chamber of Commerce - revealed a clear interest among businesses to begin exporting. A significant number of these are already adapting a product or service range to target overseas customers specifically. In fact, the report revealed that 37 per cent of potential exporters are currently adapting a product or service range focusing on overseas customers in particular.
In some instances, the modifications a business must make to its products or processes are immediately obvious. For example, when exporting to the US, any UK electronics manufacturer will need to ensure that its products are 110-volt, rather than 240-volt.
Yet there may be more subtle reasons why the ‘cultural adaptation’ of a business model becomes necessary in an overseas territory.
Steve Newiss is Chief Commercial Officer at St Alban’s-based Burton’s Biscuits Company, a UK company which has a strong presence in the global biscuit market and whose product distribution includes North America, Australia, China, India and parts of Africa.
The company has studied each international market carefully before entering it to ensure maximum return on investment - and Steve advises any business eyeing similar overseas opportunities to do the same. The information you discover in your research, he says, may drastically affect your business approach.
"For example, in some South American markets, biscuits are traditionally eaten as a source of carbohydrate," he says. "That is to say they’re eaten as ‘food’ source rather than as a ‘treat’. This means that chocolate biscuits would only appeal to a small elite in those markets, which is why the biscuits that multinationals sell in countries such as Brazil tend to be more carbohydrate-focussed."
Adapt to the global market
UKTI can help you tailor your products and services to global audiences
The fact is, says Steve, that an internationally ambitious company cannot deploy the same strategies and the same products in every single country. "It would obviously be cost-efficient if you could," he says, "but international business simply isn’t like that. So it’s important to do your desk research first, understand the market you want to enter and then choose the brand from your portfolio which is the best ‘fit’ with that market - the one that will give your business the most national traction."
In Ireland, for example, Burton’s Biscuits Company leads with its mallow products, such as Wagon Wheels, because mallow biscuits are very popular with Irish consumers. In Scandinavia, the ‘cookie’ market is well-established so, in that instance, the company leads with its Maryland cookie range.
Although Burton’s Biscuits Company doesn’t change its recipes, it does adapt a product for marketing and packaging purposes. "We began selling Cadbury’s Fingers in ‘pocket packs’ in France," says Steve, "because 40 per cent of biscuit sales in that country are presented in portion-controlled quantities. That’s very different to the UK. Also in France, we launched a nougatine variant, because nougatine is the biggest-selling cookie type in the country.
"So we try to keep as true to our product as possible and then adapt it if necessary in a controlled way. My advice would also be to find a good local partner who can help you. It’s very difficult to manage international markets from a UK base, so you need someone on the ground who really understands the countries you wish to operate in."
Filling a gap
UK cheesemakers Ford Farm - which won the Queen’s Award for Enterprise in 2010 - first began exporting its products to the US market in 1999, slightly tweaking the recipe of one of its most popular cheeses.
"We had studied the US market in order to discover what was already there and to see if there was a gap that could be filled," says Mike Pullin, Ford Farm’s Director. "We chose one of our cheddars called Coastal - which we had launched in the UK with a US company - and added a slight adjunct to the cheese. This gave it a sweet flavour and made it taste completely different from American cheddar. It took away the ‘farmhouse’ taste and US consumers loved it."
Ford Farm also tailored Coastal’s packaging, with US labelling making clear that Ford Farm’s cows produce milk without the use of hormones, that none of its ingredients contain Genetically Modified Organisms, and that its cheese is ethically produced. American consumers responded very positively to this information.
Coastal has been so successful in the US that Ford Farm has successfully introduced the product to Canada and Australia and now exports 40 per cent of its cheese to countries across the world. "With Coastal, we found the gap," says Mike. "A gap on flavour, a gap on packaging and a gap on the product’s story. My advice to any business looking for international success would be to scan your product portfolio and find something original that the local market needs.
"If you have a good product you can always adapt it in terms of flavour or packaging — but there really is no substitution for getting on a plane, going to see the market for yourself and meeting buyers face-to-face."