Prepare to Launch Setting Your Sights on International Expansion
BY NIMDZI INSIGHTS
Thinking of expanding your business in Europe? Here are a few things you need to know. It’s not just the James Webb telescope that’s about to scour new territory. Your company has finally decided to expand in Europe, and you have been tasked with this mission.
Depending on your brand positioning, this can be a delicate exercise. You want your European iterations to remain aligned with your core values, so there are no inconsistencies that could damage brand perception. But you also need to ensure you don’t alienate potential customers in your target markets. Rocket science it (almost) is.
Here are five steps to ensure the launch of your product in Europe is as flawless as the deployment of the telescope’s sunshield and mirrors.
YOUR NAME, YOUR PAIN
First things first, check that your brand and product or service names convey the right image in your targeted countries, so your name does not become a “pain point.”
International marketing textbooks abound with poor choices for product names, some of them leading to disastrous consequences. The Clairol Mist Stick hair straightener, launched in 2006 in Germany, is just one example (“Mist” means “dung” or “manure” in German). To ensure your brand doesn’t become the laughingstock of the next generation of MBA students, you need to do your research (or pay an expert to do it for you), and then decide what to do: retain or localize.
You may decide to keep your brand or product/service name, for example, when it’s generally understood or the same words exist in your target market (such as Nike Air, Nike Balance, etc.) or when foreignness is intended (Volkswagen with its “Das Auto” slogan, which capitalizes on the perceived quality of German manufacturing).
Some cultures resent the use of foreign words. Others simply forbid or limit them. And, of course, there is the risk that some consumers may not understand them at all. In some cases, the situation might be more subtle: The name can be used in another culture, but it conjures up slightly different connotations, which do not fit well with your positioning. Online travel website Travelocity was renamed Odysia when it launched in France because “travelo” is an offensive slang term for cross-dressers or gay males in French.
Volkswagen, with its “Das Auto” slogan, capitalizes on the perceived quality of German manufacturing
Key characteristics of products and services
Think of the key characteristics — the aspects that define your products/services — and how these fit within the culture of the country you wish to market to. For HSBC, “The World’s Local Bank” according to its slogan, one such key characteristic is to encourage business by underlining how all citizens of the world are connected. It led to the “Together We Thrive” campaign, launched in 2019. The ad, featuring a “We are not an island” message, clashed with the Brexit mood at the time, and HSBC was criticized by those who had voted for Great Britain to leave the European Union — though the brand did not suffer from a decline in sales.
Cultures can be tricky. It can be difficult, as an outsider, to understand how something that is perfectly common or acceptable in one culture can be seen as laughable or deeply offensive in another.
Think of the Netflix show Emily in Paris, for example. It has been very successful internationally but received mixed reactions in France, due to its sometimes caricatural rendition of Parisian life.
If your core product or service characteristics can be in any way linked to potentially contentious issues (gender, race, religion, money, values … the list goes on), be very mindful and consider tweaking them. The Global self-love index, a study conducted by The Body Shop in 21 countries in 2020, surveyed 22,000 people to find out how they rated their self-worth, happiness, and well-being. It showed discrepancies between European countries like Spain and France (scores of 48 or 49) and the United States (score of 61). If you are a skincare brand, this cultural gap in perceptions and body image can be very significant. It would mean that the words used to market body products can be perceived and interpreted very differently on each side of the Atlantic.
There are also more specific topics that are especially important in one country or culture because of its unique heritage or history (e.g. linked to colonialism), legal landscape (the Greek so-called “blasphemy” law was only repealed in 2019), economic situation, and so on. In the UK, for instance, animal rights are taken extremely seriously, with implications for the food sector (meat and dairy companies), skincare products (animal testing), and fashion (fur, leather products), to name only a few.
Distribution and pricing
Cost of living and incomes vary vastly between the US and Europe. According to Worlddata, Luxembourg and Norway are the only European countries with a purchasing power higher than the US. By contrast, Bulgaria ranks last among European countries, with the average Bulgarian able to afford approximately 70 percent less than the average American. This needs to be reflected in your pricing — whether you intend on selling your goods or services in Bulgaria or in Norway.
The retail landscape, while very different from what it is in the US, is contrasted across European countries. The superstores and warehouse-type stores, which represent around 25 percent of the American market, are virtually absent from Europe. For groceries, a sizeable chunk of Europe still shops in small butcher shops, bakeries, etc., although that isn’t the case everywhere across the continent. For example, according to Statista, 40 percent of groceries are bought in supermarkets in Italy. This rises to close to 60 percent in France (arguably the land of the hypermarket), a number similar to the US.
The knowledge of the varied retail models and channels of distribution (or lack thereof) are likely to impact your ability to penetrate a specific country. This will, in turn, impact your costs, and consequently needs to be factored into pricing, or you may want to rethink your margin calculations.
Once you have defined your price and your product offering for each channel, you can move on to the next phase.
HSBC’s “Together We Thrive” ad campaign was controversial in the UK for appearing to oppose Brexit. Source: Wunderman Thompson
Regulations and paperwork
Items to be particularly aware of include GDPR (General Data Protection Regulation), food regulations and food labeling, health and hygiene standards, and consumer rights for retail and online shopping. You will need experts to help you navigate the maze of regulations — a customs agent, a freight or logistics company, or import-export agents can all help. To get an idea of the regulation intricacies in Europe, this resource is a good place to start.
When in Rome, speak as the Romans do
Most, if not all of your communication needs to be translated, either for legal reasons or because not doing so could damage your chances of succeeding in your target market. To quote Willy Brandt, “If I’m selling to you, I speak your language; if I’m buying dann mussen Sie Deutsch sprechen [then you must speak German].”
In France, the “Loi Toubon” stipulates that all commercial communication must be in French. It is worth noting, however, that the law does not rule out advertisements made in a foreign language — it is sufficient to provide a translation in a footnote. You will often see English words blasted on the side of a French bus, only to decipher the French translation, at the bottom corner, in very small font.
According to Nimdzi’s own research, 74 percent of users will select French when using a website and some 60 percent are “unsure whether they’d buy from a company whose products/services are only available in English.”
This is true for other European markets as well, where a sizeable amount of the population speaks little to no English. According to the EU’s latest “Europeans and their languages” report, only 38 percent of EU citizens speak English as a foreign language. The report does not indicate whether this 38 percent of Europeans can in fact speak and understand English well enough to make out the jokes, innuendos, and puns commonly found in advertising, to recognize the words for the latest healthy ingredients in their favorite smoothie (lingonberry anyone?), or to extract meaning from the wording of a travel website’s cancelation policy (legalese feels foreign enough).
So, in order to reach your target market, you need to translate your communication. This means localizing or transcreating all above-the-line and below-the-line material: the copy on your website, packaging, social media, and other media campaigns (TV, radio, press, out of home).
“You haven’t done Paris right until you’ve had at least one wildly inappropriate affair,” is a quote from the Netflix series Emily in Paris.
What’s next for you?
There are a lot of variables to keep in mind when expanding into Europe. You need to check your brand and product or service names, set a proper price strategy, select the right distribution channels, ensure that you have the right paperwork and are complying with the latest regulations, and, of course, communicate to your target audience in a way they will not only understand but also converts them to happy, loyal customers. It may seem a lot to take in, but if you’re determined to make your European product launch a success, you definitely don’t need to go at it alone. Work with international marketing and growth experts such as those at Nimdzi Insights to help set your brand up for resounding success in Europe.
NIMDZI INSIGHTS is a Seattle-based market research and consulting firm specializing in language services, localization programs, technology, and M&A.