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  1. 1. A T L A N T I CI C Doing Business in EUROPE Understanding the Market As of 2007, 27 nations comprise the European Union, which has a population of over 500 million citizens and constitutes the largest trading bloc in the world. Generating almost $17 trillion of GDP in 2007, the EU maintains a common trading policy and has streamlined most of the economic differences within its member-states. However, O C E A N variations do exist from country to country, and certain cultural norms and traditions must be taken intoE A N O C account when dealing with specific nations. While many countries speak English as well as a second-language, translators are helpful in nations such as France, Spain, and Italy. The value of a native speaker cannot be understated. In most of Europe, the market possesses a considerable degree of government regulation and generous social welfare programs and protections. Most nations emphasize quality, making marketing extremely important. Label recognition is more widespread than in the U.S., which requires a large investment in advertisement for new Georgia goods. The largest markets for Georgia goods include the United Kingdom, Germany, the Netherlands, Belgium, Italy, and France. The top exports include aircraft engines, pharmaceuticals, IT equipment, electronic components, industrial chemicals, telecommunications and computer software. Georgia exports to the European Union totaled $6.47 billion in 2007. Distribution and Sales Channels DIrEcT SALE recommended in industries with few customers that need specialized technical support from the manufacturer. U.S. DISTrIBUTor Most European firms opt to work directly with the manufacturer or European-based distributor rather than a U.S. distributor. EUroPEAN coNTrAcT MANUFAcTUrEr To protect their intellectual property, U.S. companies will need a European patent. Additional information can be found at the European Patent office’s website, EUroPEAN DISTrIBUTor Working with a distributor allows the manufacturer to build on the expertise and client base of an established European business. Strongly recommended for U.S. firms, however, it is not easy to find qualified and aggressive distributors. Most of them expect a solid market entry strategy, competitive pricing and marketing support. Many cover only one country or just a part of one country. USA Georgia Department of Economic Development | 75 Fifth Street, NW, Suite 1200 | Atlanta, Georgia 30308, USA |
  2. 2. AGENT/rEPrESENTATIvEMost efficient option for reaching smaller cities and remote locations.WHoLESALErEfficient for consumer products along with business and industrial consumables.FrANcHISINGNo barriers to the franchising of any product or service in Europe.Opening an Office in EuropeAs Europe contains multiple cultures, belief systems, and lifestyles, deciding on whether to open an office in Europevaries from country to country. However, according to the U.S. commercial Service, most exporters choose to becomelimited liability corporations.Pricing a ProductDetermining the price on a product heavily depends on the country to which you wish to export. Every nation has differentpolicies. In general, price is increasing in importance as a competitive factor, but quality, timely delivery and service remainequally important, especially in business-to-business relations.U.S. exporters can compare U.S. and European retail prices by taking the net U.S. retail price and comparing it with therespective European retail price without the value Added Tax (v.A.T.), currently between 15 and 25 percent.Due DiligenceAs previously stated, please check with each country to find out their respective systems, as each nation possesses differentrules. companies interested in taking over European firms should always conduct their own due diligence before entering intobusiness ventures. once the U.S. company has identified several potential representatives, it should contact them directly inwriting and obtain a detailed description of their company. The U.S. firm is then advised to obtain at least two business andcredit reports to ensure that the distributor or representative is reputable.Essential Factors for Success • High quality products at competitive prices. • contact with the State of Georgia Europe office or the U.S. commercial Service, who can provide a wealth of knowl- edge on specific markets. • Export and market entry strategy, financing, delivery, brand name recognition, marketing, before and after sales sup- port and customer service. • Efficient business culture. • Strong personal relationships in all business transactions.Import Requirementscertain products require a “cE” marking before they can be sold within the European market. This mark affirms that theproduct meets the requirements of the EU Directives, which are part of the European health, safety and environmental-protection legislation, and the mark must be placed on it by the manufacturer.Unfortunately, determining whether or not a product needs a cE marking is difficult. It is generally required for medicaldevices, machinery, industrial installations, toys, electrical equipment and electronics, but does not apply to cosmetics,chemicals, pharmaceuticals and foodstuffs.More information from the U.S. government concerning the marks can be found USA
  3. 3. Government ProcurementAccording to the European Tender Information center, public procurement in the EU amounts to approximately $2.1trillion and the market is regulated by both the EU and its member states. current legislation provides procurement ofpublic authorities and utilities authorities a legal framework for tenders above certain thresholds. These tenders must bepublished European-wide, and all contracts must be awarded in a competitive, trans-European bidding. Please consult and for more comprehensive information on this subject.BUSINESS AND CULTURAL PRACTICES IN THE UNITED KINGDOM • The United Kingdom plays its role as one of the major economies in Europe. However, the country considers itself to be somewhat separate from the core of Europe in terms of outlook compared with other mainland European countries. The U.K. has still not adopted the Euro and is unlikely to do so in the foreseeable future. • The country has changed dramatically over the past 20 years and rapid change is now fully part of life and the economic system. However, traditional ways are still valued, though the class system is considerably diminished and only impacts lifestyles to a limited extent.Punctuality, Appointments, and Local Time • Always be punctual. • Schedule your visits at least a few days ahead of time and then confirm your appointment upon your arrival in the United Kingdom. • There are several days designated as national holidays in the U.K., including individual days of holiday (termed “bank” holidays). • The English are on Greenwich Mean Time, which is five hours ahead of U.S. Eastern Standard Time (E.S.T. +5).Negotiating • Business in the U.K. is now generally quite informal and approaches can be made directly to senior executives without any necessity for third parties. Frequently business people will move to first names during a first meeting or when telephoning or emailing. • Given the major changes that have taken place in business life in the U.K. in the last 20 years, most companies are used to rapid change, although change for change’s sake is not necessarily perceived as a good thing. • The British are now more increasingly given to showing their emotions, which was not the traditional way, but reflects the increasing multi-cultural nature and socio-economic upward mobility of British life. • The British traditionally underplay dangerous situations. Similarly, they refrain from extravagant claims about products or plans. • Avoid the hard sell. Expect meetings to be polite and reasonably casual. coffee, tea, water or juices will always be offered at the start of meetings. Declining refreshment is acceptable and will not cause a problem. Small talk about family, friends, hometown, etc. is welcomed, as the British like to understand the background and interests of those they meet with. They do not like to be too direct at the start or end of meetings. USA
  4. 4. • Do not rush the British toward a decision. • It is wise to send your senior executives to the United Kingdom, as they may be received with more respect and are usually more restrained in conduct. • Avoid controversial topics such as politics or religion, and do not discuss comparative work ethics. • Speak in complete sentences. Many U.S. executives have a habit of starting a sentence and then allowing it to trail off without ever completing the thought. This is a good way to provoke your British counterparts. • While the British are often self-critical, visitors should avoid joining in any criticisms—simply listen. Similarly, if they share their complaints with you, do not participate. • The British apologize often, for even small inconveniences. They also have a habit of adding a question to the end of a sentence; for example: “It’s a lovely day, don’t you think?”BUSINESS AND CULTURAL PRACTICES IN GERMANY • In business matters, Germans prefer sticking with the plan. Unexpected changes are often unwelcome. • Germans value consensus and unanimity while making decisions. This can slow the business process. • Whether you know German or use your own language, speak in complete sentences. In German, the most important word in a sentence is usually the final one. Germans are in the habit of listening for the end of a sentence and can be annoyed if it doesn’t materialize. • The trade fair (a.k.a. trade show) was largely invented in Germany. Germany hosts almost two-thirds of all international trade fairs, making your company’s participation essential.Punctuality, Appointments, and Local Time • Be on time for every appointment, whether for business or social engagements. • Germans rarely speak about private matters in a business setting. Avoid enquiring about family and friends and limit small talk as much as possible. • When writing the date, Germans write the day first, then the month, and finally the year (e.g., December 3, 2010 is written 3.12.10). • Schedule appointments well in advance. one week’s notice is customary. • Germans appreciate consensus in business decisions. If two Germans sign a business letter or if more than one German is consistently copied on an e-mail, this indicates that both of them must be in agreement before reaching a decision. • Do not schedule appointments on Friday afternoons and keep in mind that many people take long vacations during July, August and December. Also be aware of regional festivals, such as oktoberfest in Munich or carnival in cologne and Southwest Germany. • Germany is one hour behind Greenwich Mean Time (G.M.T. -1). This makes it six hours ahead of U.S. Eastern Standard Time (E.S.T. +6).Negotiating • Directness is appreciated and not meant to criticize. Try not to take it personally. USA
  5. 5. • Germans abhor hype and exaggeration. Be sure to back up claims with data, case studies and examples. • Be prepared to supply reams of information on short notice. • Germans require time to establish close business relationships. Their apparent coldness at the beginning will vanish over time. once they get to know you, Germans are very friendly and loyal. • Even if German executives speak your language, they appreciate receiving all promotional materials and instruction manuals in German. • When a problem arises, explain it clearly, unemotionally, in detail and in writing if possible.For more information on doing business in Europe or how to export to Europe, contact your Trade Specialist inAtlanta or the State of Georgia Europe or UK & Ireland office:Atlanta Office-International Trade European Office UK & Ireland OfficeGeorgia Department of Economic Development Georgia Department of Economic Development Georgia Department of Economic Development75 Fifth Street, NW, Suite 1200 Im Amerika Haus, Karolinenplatz 3 The Barn, Suite 2, Puckshipton HouseAtlanta, GA 30308 – USA 80333 Munich – Germany Beechingstoke, Wiltshire SN9 6HGT: +1 (404) 962-4122 T: +49 (0) 89-517-027-40 – EnglandF: +1 (404) 962-4121 F: +49 (0) 89-517-027-45 T: +44 (0) 1672-851-619E: E: F: +44 (0) 1672-539-619 E: USA