Tuesday January 31, 2012

Distributors Are Key To Entering EU Market

Cologne, Germany — Listing fees, promotional budgets and regional differences are challenges U.S. suppliers face when entering the European market, according to Klaus Smuta, CEO of the European Sales & Marketing Assoc. (ESMA).

Smuta, who spoke yesterday morning at the NCA-sponsored USA Pavilion Lounge at ISM, explained that distributors can help U.S. manufacturers overcome these hurdles. Unlike in America, the European market relies on distributors not broker networks, according to Smuta.

“If you are going into Europe, you have to realize retailers will ask for things you are unfamiliar with,” Smuta said. “There is no idea of unfair use of power in Europe.”

He went on to explain that aggressive retailers can control the market, citing Sweden as an example, where two retailers hold account for 80 percent.

In addition to fees for product placement, he said requirements change from country to country presenting additional challenges.

“There is no one Europe,” Smuta explained. “Different cultures have different prejudices, preferences and perceptions.”

Choosing the right distributor who understands these differences is key to succeeding in Europe, according to Smuta. ESMA’s main function is developing and maintaining relationships with distributors. For a list of the association’s partners broken down by country and more information on entering the European market visit www.esma.org.