Exporting To Europe, An Introduction SIPPO - CBI

Export Manual.
Exporting to Europe, an introduction.
www.sippo.ch

Cooperation Partner

About us.
SIPPO, the Swiss Import Promotion Programme, is a mandate The CBI is the Centre for the Promotion of Imports from develop-
of the State Secretariat for Economic Affairs, SECO, within the ing countries and an agency of the Ministry of Foreign Affairs of
framework of its economic development cooperation. It is carried the Netherlands. Its mission is to contribute to sustainable eco-
out by Osec, the official Swiss foreign trade promotion agency. nomic development in developing countries through the expansion
of exports from these countries. Over the last 40 years, the CBI
The programme helps SMEs in developing and transition countries has opened the doors of European trade to thousands of export-
to gain access to the Swiss and European markets by providing ers in developing countries.
information, training courses and other matchmaking services.
SIPPO also assists importers from Switzerland and the European The CBI offers an integrated, needs-driven approach to both
Union with finding suitable partners and high-quality products from exporters as well as their business support organisations (BSOs)
selected developing and transition countries. and governmental authorities. Its activities focus on the link be-
tween producing exporters and European buyers and contribute
The programme has five main goals: to strengthening the competitive position of exporters sustainably,
assisting them in trading on the European markets.
• To inform the Swiss and European import economy about new
market sources

• To strengthen trade institutions and business sector associations
in the trade promotion process

• To increase the competitiveness of SMEs in selected
partner countries

• To develop the manufacturing and exporting skills of SMEs in
selected partner countries

• To establish qualified trade contacts between SMEs from
emerging markets and markets in transition and the Swiss and
European import economy

2 l Exporting to Europe

Exporting to Europe – an introduction.
Disclaimer
Although the content of its market information tools has been
compiled with the greatest care, CBI (the Centre for the Promotion
of Imports from developing countries) and SIPPO (Swiss Import
Promotion Programme) cannot guarantee that the information
provided is accurate and/or exhaustive, and it cannot be held liable
for claims pertaining to the use of the information.

In regard to the market publications, neither CBI and SIPPO nor
the authors of the publications accept responsibility for the use
which might be made of the information. Furthermore, the infor-
mation shall not be construed as legal advice. Original documents
should, therefore, always be consulted where appropriate. The
information does not release the reader from the responsibility of
complying with any relevant legislation, regulations, jurisdiction or
changes/updates of the same.

In the case of the Internet tools, CBI and SIPPO aim to minimi-
se the disruption caused by technical errors. However, CBI and
SIPPO cannot guarantee that its service will not be interrupted or
otherwise affected by technical problems. CBI and SIPPO accept
no responsibility with regard to problems incurred as a result of
using this site or any linked external sites.

The information provided is aimed at assisting the CBI and SIPPO
target group, i.e. exporters and business support organisations
(BSOs) in developing countries. It may, therefore, not be used for
re-sale, the provision of consultancy services, redistribution or the
building of databases, on a commercial basis. For the utilization
of the CBI market information tools by the CBI and SIPPO target
group on a non-commercial basis, the condition applies that CBI
and SIPPO are referred to as the source of the information.
All other use is prohibited, unless explicitly approved in writing by
CBI and SIPPO. See also Disclaimer CBI market information tools:
http://www.cbi.eu/disclaimer

Updated for SIPPO and CBI by:

E&M ExportManagement BV, Reuver, the Netherlands
Tove Antonissen, Monique Harmsen, Fred Janssen
2010

Photo courtesy: EU Audiovisual Service, Fotalia, Getty Images, NL Agency
(page 14 and 30 )
Design: Rüttiger Design, Germany

Exporting to Europe l 3

Welcome.
History has shown that integration into the world economy is The European market is vast: 27 EU (European Union) member
correlated with economic growth and poverty reduction. Countries countries with over 500 million consumers and four EFTA
that have opened up to trade have grown much faster than those (European Free Trade Agreement) member countries including
which have not. Today, trade constitutes an essential source of Switzerland, Iceland, Liechtenstein and Norway with an additional
revenues for many developing countries. However, still too often, 12 million inhabitants offer an attractive but also highly competitive
national and internal barriers prevent them from fully benefiting market. European importers and consumers demand high levels
from the global trading system. of product quality, product innovation and service delivery.

The State Secretariat for Economic Affairs SECO has recognized Successful exporting to European countries is a challenge and
the key role of trade for developing countries. Among the instru- requires profound skills and know-how. Europe consists of many
ments it deploys within its economic and development cooperation different regional markets with their own identities and characteris-
with poorer countries, trade-related cooperation including social tics. Likewise, suppliers and exporters are asked to come up with
and environmental aspects has a major importance, with the aim different pricing and marketing strategies in order to successfully
to boost trade as a trigger for growth and sustainable develop- enter the diverse European market. Another aspect of long-term
ment. SECO’s cooperation endeavours to strengthen trade-related market penetration includes the access to updated information of
capacities at the three interrelated levels of policy making, institu- European and EFTA legislation and regulations.
tional building and company development. SECO’s interventions
focus on areas in which Switzerland has specific know-how and International standards, labels, marking and certificates enforced
a comparative advantage: (1) enabling framework conditions for either by legislation or demanded by the market itself shall guar-
trade, (2) enhancing the international competitiveness of compa- antee that concerns of consumers and workers’ health and safety
nies and (3) improving their access to export markets. as well as the environment are being met. CE marking for product
safety, Hazard Analysis Critical Control Point (HACCAP) system
During the process of improving market access for enterprises for food producing companies to comply with strict hygiene stan-
from developing countries, SECO works on two levels. First of all, dards, International Food Safety (IFS) or GobalGAP for agricul-
on a general policy level, significant tariff reductions are granted tural products have become a prerequisite to introduce goods onto
to these countries on all goods which they produce and export the European market. Other market requirements based on social
to Switzerland. These concessions imply zero tariffs for all goods and economical concerns are not yet legally binding but result in
imported from least developed countries (LDCs). Secondly, on a internationally accepted standards, labels and certificates such
more specific level, SECO runs programmes to promote imports as Good Agricultural Practice (GAP), various ecolabels and social
to Switzerland and the rest of Europe. In this endeavour, SECO codes of conduct such as the UN Global Compact’s ten principles
has set up the Swiss Import Promotion Programme SIPPO which or the newly designed ISO 26000 standard. ISO 26000 will distil a
works directly with enterprises, providing them with counseling globally relevant understanding of what social responsibility is and
and market information services and directly fostering their access what organisations need to do to operate in a socially responsible
to markets via trade fairs. way.

The present export manual is an excellent example of SIPPO’s This brochure was produced in cooperation between Osec and
interventions aimed at fostering access to the European market CBI. It shall be your door opener to the powerful European market,
(including EU and EFTA). It provides the reader with tangible and inform you about the potential, requirements and expectations of
lively advice which should lead to market penetration in Europe. European importers and consumers and even inspire you to de-
I wish you a pleasant reading! velop your own export marketing strategy. Be well prepared, and
you are half way there!

Hans-Peter Egler
Head of Trade Promotion, Economic Cooperation and Development Rita Stupf
(SECO) Member of the Executive Management Board, Osec


Table of contents.
About us.
The Swiss Import Promotion Programme and CBI ............................................................. 2

Exporting to Europe.
An introduction .................................................................................................................... 3

Welcome. ................................................................................................................. 4
Table of contents. . ........................................................................................... 5
How to use this manual. ............................................................................ 6
Introduction. . ......................................................................................................... 7
Module 1.
Europe, A Social Overview ................................................................................................. 8

Module 2.
Europe, A Technological Overview ................................................................................... 14

Module 3.
Europe, An Economic Overview ....................................................................................... 22

Module 4.
Europe, An Environmental Overview ................................................................................ 30

Module 5.
Europe, A Political Overview ..............................................................................................34

Module 6.
Europe, Developments in Business-to-Business Markets ................................................ 46

Module 7.
Europe, Developments in Consumer Markets .................................................................. 54

Module 8.
Europe, Cultural Aspects .................................................................................................. 62


Introduction.
For over half a century, the European Union (EU) has brought
political stability and economic prosperity to its citizens. It has
created a frontier-free single market and a single currency, the
euro. It has reunited a fractured continent. Europe as a whole is
a major economic and commercial power and the world’s largest
donor of development aid to poorer countries. EU membership
has grown from six to 27 nations; combined with the four EFTA
countries (Switzerland, Norway, Iceland and Liechtenstein) this
brings the total population of Europe to over half a billion.

If you are prepared and willing to explore new markets, then this
should create opportunities for you as an exporter: the EU alone
is the major exporter in the world and the second largest importer.
The European Union is also an important trading partner for less
developed countries, most of whose exports enter the EU duty-
free or at reduced rates of duty. This preferential access to the
EU market is aimed at boosting the economic growth of poorer
countries around the world.

This publication is an update of the CBI manual “Exporting to the
EU – (2006)”. This manual is the first joint publication about the
European Union and EFTA co-financed by CBI and SIPPO. It
is meant to give you a quick overview of the European (EU and
EFTA) region, providing you with the basic knowledge you need
to decide whether or not it would be interesting for you to start
exploring export possibilities to Europe for your specific sector.

This manual is just one in a series published by CBI covering
certain aspects of exporting to Europe. More product specific
information can be found in CBI market surveys. Other issues
such as carrying out market research, selecting your target
market, market entry strategy, website promotion, trade shows
and corporate image are covered in other CBI export manuals.
You can find the titles on the CBI website:

www.cbi.eu/marketinfo.


How to use this manual.
The manual consist of 8 modules that can be read separately The manual has been structured to highlight the most important
according to your specific interests. To get the most out of this topics for familiarising yourself with Europe as a potential export
manual, however, you may find it beneficial to read in the order market. You can use this manual and its online CBI and SIPPO
given below for a more complete introduction. tools, additions and links (www.cbi.eu and www.sippo.ch) to
determine whether or not Europe might be an interesting market
Module 1 Europe, A Social Overview to investigate further for you and your products. In addition to
Module 2 Europe, A Technological Overview the information provided here, you will need to do more in-depth
Module 3 Europe, An Economic Overview research. To help you with this, each module provides you with
Module 4 Europe, An Environmental Overview useful sources and references to various internet sites.
Module 5 Europe, A Political Overview
Module 6 Europe, Developments in
Business-to-Business Markets
Module 7 Europe, Developments in
Consumer Markets
Module 8 Europe, Cultural Aspects

At the beginning of each module you will find a ‘route map’ which
will tell you exactly where you are in the manual:

1 2 3 4 5 6 7 8

The information provided has been analysed specifically for the
following main sectors:

• Agricultural
• Consumer
• Industrial
• Services

or indicating a certain fixed section that will help you to go further
in your research:

• What does this mean for you as an exporter?
• Practical next steps
• Read more


Europe, A Social Overview.
Why read this module?
If you read this module, you will acquire an overview concerning the most
important social issues and developments in Europe. This could be very
relevant to you in your capacity as an exporter or BSO (business support
organisation) from a developing country. Together with the other modules
on Technology, Economy, Environment and Politics, you will have access
to the basic components required for a STEEP analysis. This analysis
can help you determine whether Europe might possibly be an interesting
market for you to explore further.

1 2 3 4 5 6 7 8
Module 1 Exporting to Europe l 9

Introduction. Demographic indicators.
This module covers several demographic indicators and changing Together, the EU and EFTA account for a population of more than
life styles in Europe. Where appropriate, the differences between 510 million potential customers. The population is expected to
the EU and EFTA countries are highlighted. This module gives have risen by 5% by the year 2030 as a result of two main factors:
you basic information on the relevant social developments that are migration and longer life expectancy. These two developments will
taking place in Europe. In order to help you discover more about have an influence on European demography.
this subject, we have provided you with several links to both CBI /
SIPPO sources and external sources.

Figure 1.1: Total population and number of
foreign citizens (%) in European countries

Source: Eurostat 2010

10 l Exporting to Europe Module 1

The number of foreign citizens living in European countries is Table 1.1: Number of foreign citizens in European countries
increasing and this is the main driver behind the growing popula-
tion. In 2007, the EU included almost 29 million foreign citizens, 2005 2007 2009
whereas this figure had risen to almost 32 million in 2009. EU (27 countries) : 28913543s 31860300s

Belgium 870862 932161 :
Source: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&i
nit=1&language=en&pcode=tps00157&plugin=1 Bulgaria : 25500s 23838

Czech Republic 193480 296236 407541
The population in the EFTA countries Switzerland, Norway, Ice-
Denmark 267604 278096 320033
land and Liechtenstein is expected to rise from 12.6 million people
in 2008 to 14.1 million people in 2030. Germany 7287980 7255949 7185921

Estonia : 236400s 214437
Source: http://www.efta.int/statistics/statistical-data.aspx
Ireland 255400 452306 504068

Greece : 887600s 929530
The population profile is expected to age in basically all of the Spain 3371394 4606474 5650968
European regions. Between 1960 and 2008, the proportion of older
France 3623063 3650100s 3737549
people (65 years and older) in the EU-27 population has risen from
10 % to 17 %. According to Eurostat‘s projections, this trend will Italy 2402157 2938922 3891295
continue. The proportion of people aged 65 and older in the total Cyprus 98100 118100 128200
population is expected to rise in the period leading up to 2060. In
Latvia 487212 432951 404013
the EU-27 it is expected to go up from 17 % in 2008 to 30 % in
2060, reflecting an increase in the number of elderly from 84.6 Lithuania 32327 39687 41505
million in 2008 to 151.5 million in 2060. The largest percentages Luxembourg 183600 198213 214848
of elderly people in 2060 are expected to be found in Poland (36.2 %),
Hungary 143774 167873 186365
Slovakia (36.1 %), Romania (35.0 %), Lithuania (34.7 %), Latvia
(34.4 %) and Bulgaria (34.2 %), and the lowest in Luxembourg Malta 11999 13877 18128
(23.6 %), the United Kingdom (24.7 %) and Denmark (25.0 %). Netherlands 699351 681932 637136

Austria 774401 804779 864397

Poland 42763 54883 35933

Portugal : 434887 443102

Romania 25929 26069 31354

Slovenia 44285 53555 70554

Slovakia 22251 32130 52545

Finland 108346 121739 142288

Sweden 481141 491996 547664

United Kingdom 3066055 3659900s :

Norway 213303 238305 302908

Switzerland 1524663 1554527 1669715

1 2 3 4 5 6 7 8

Changing life styles.
However, it is not only the population profile that is changing. The The population of Europe is not very evenly distributed: some
number of households, women working and education levels is countries are more densely populated than others, and all of
also changing. To start with the education level, the European-wide countries contain both rural and urban areas. This is partly deter-
trend is that the level of education is becoming higher. More and mined by geographical factors: in the far north it is very cold and
more people have a university degree or have graduated from dark in the winter, and access to the sea for transport is at a great
other higher education institutes. Women are well-represented in distance; likewise, many cities have grown in places where pos-
higher education, with more women enrolling than men. In addition, sibilities for commerce are geographically favourable. The map
women are increasingly employed, thus making them more and below gives an overview of the density of population in Europe.
more financially independent. The past fifty years have witnessed great growth in the cities
(78% versus a population growth of 33%). In general, the people
The average household size in the EU has been decreasing during who live in cities are exposed to new products and trends,
the past decade. In 2008, it was 2.4 people per household. Within whereas those who live in rural areas are less exposed to these
the EU, the differences in the size of households is not very great. products.
In Germany, Finland, Denmark and the Netherlands households
are relatively small with an average size of 2.2 people or fewer. In http://epp.eurostat.ec.europa.eu/tgm/mapToolClosed.do?tab=map
contrast, households are larger in Malta, Cyprus, Romania and &init=1&plugin=1&language=en&pcode=tgs00024&toolbox=types
Slovakia with an average size of 2.9 people or more.

Figure 1.2: Population density
(people per square metre)

Source: Detail INTG

2.6 - 66.6
66.6 -104.8
104.8 - 184.5
184.5 - 379.5
379.5 - 9398.4
Data not available


Practical next steps.

The demographic developments described above can be
interpreted as trends for various sectors. See the module on
consumer developments for more information.

Read more
Publication:
“The Social Situation in The European Union 2009”, the
European Commission - http://epp.eurostat.ec.europa.eu/
cache/ITY_OFFPUB/KE-AG-10-001/EN/KE-AG-10-001-
EN.PDF

What does this mean for you as an Eurostat information on:

exporter?
• Population
• Ageing population: the opportunities for selling products that http://epp.eurostat.ec.europa.eu/tgm/mapToolClosed.do;js
offer comfort, that have an ergonomic design and that can essionid=9ea7974b30eae53c0125a43b491589d9802f038f
be used during leisure time will increase. The same is true of 98b6.e34SbxiOchiKc40LbNmLahiKb3mOe0?tab=map&init
products designed to meet the demands of the elderly. The =1&plugin=1&language=en&pcode=tps00001&toolbox=types
ageing population will continue to enjoy an active lifestyle and
it is wealthier than the previous generations. Subsequently, it • Population projections
represents an interesting segment. http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&in
it=1&language=en&pcode=tps00002&plugin=1
• Immigrants: this segment of the population can serve as a
gateway for introducing new flavours, tastes and styles from • Study on regional population projections
different parts of the world. They are already familiar with what http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-
is new to Europeans and they can thus act as ambassadors. SF-10-001/EN/KS-SF-10-001-EN.PDF
Moreover, as Europeans are confronted with new and different
cultures, their interest and willingness to try out new things will • Ageing population
increase. http://epp.eurostat.ec.europa.eu/tgm/mapToolClosed.do?ta
b=map&init=1&plugin=1&language=en&pcode=tps00028&
• Rising number of small households: the demand for one- toolbox=types
person packages is on the rise and what is generally required
for setting up a household. • Migration
http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&in
• Working women: as women become more financially indepen- it=1&language=en&pcode=tps00157&plugin=1
dent, they spend their money on products that appeal to them
(fashion, home design). A side effect of this is that time tends • Education (level & women)
to become scarcer, which in turn gives rise to an increasing http://epp.eurostat.ec.europa.eu/cache/ITY_OFF
demand for convenience products. PUB/978-92-9201-033-1/EN/978-92-9201-033-1-EN.PDF
- see part F

1 2 3 4 5 6 7 8

Europe, A Technological Overview.
This module will give you an overview of the most important technological
issues and developments in Europe that are relevant to you as an export-
er or BSO (business support organisation) from a developing country.
Together with the modules on Social Issues, Economy, Environment and
Politics, it provides you with the basic inputs for a so-called STEEP analy-
sis, by means of which you will be able to determine if Europe would be
an interesting market for you to investigate further.

1 2 3 4 5 6 7 8

Introduction. Infrastructure.
This module covers infrastructure, use of internet and the presence The functioning of the European internal market and the close
of and investment in know-how in Europe. When relevant, differ- trade relations between the member states are supported by
ences between EU and EFTA countries are highlighted. a dense and diverse transport infrastructure. Road transport
is the most important means of transportation for goods traded
The general idea is that this module gives you basic information within Europe, accounting for almost half of all transport.
on the various relevant technological developments in Europe. Maritime transport comes second and railways third. The
We encourage you to find out more about this subject by providing EU disposes of 5.000.000 km of paved roads, out of which
you with several links to both CBI /SIPPO sources and external 61.600 km are motorways; 215.400 km of rail lines, out of
sources. which 107.400 km electrified; and 41.000 km of navigable
inland waterways. Total investment on transport infrastructure
on the period 2000-2006 was € 859 billion. As traffic between
Member States is expected to double by 2020, the EU will
continue to invest in a trans-European network, particularly
in the newer member states as there are large differences
in infrastructure between European regions, western and
northern infrastructure being more developed than in the south
and, in particular, in the east and the new member states.
Investments are set at € 500 billion from 2007 to 2020.

There are several entry points into Europe. The single market
and customs union mean that entering goods will follow the
same procedure regardless of entry point. For more informa-
tion, see the module on Political aspects.

Sea transport is by far the largest mode of transport for goods
entering Europe. Europe has some 1200 ports, the Port of
Rotterdam, the Netherlands, being the largest one, followed
by Antwerp, Belgium. The function of ports has developed
through the years to become logistics centres, offering ser-
vices such as storage, cool-chain services and processing of
materials and goods.

Air transport is the second most important means of trans-
portation for exporting to Europe (in value). In trade between
European countries, air transport is very small. Frankfurt
(Main), Germany, is the largest European airport in terms of
freight traffic, followed by Amsterdam/Schiphol, the Nether-
lands and London/ Heathrow, the UK.


Table 2.1: Mode of transport

EU-27 External Trade by Mode of Transport 2008. Source : EU energy and transport in figures (2010)

Value (billion €)
Extra EU-27
Export Import Export + Import

Sea 621.1 47.5 % 836.1 53.4 % 1 457.2 50.7 %

Road 289.1 22.1 % 178.0 11.4 % 467.1 16.3 %

Rail 24.3 1.9 % 21.8 1.4 % 46.1 1.6 %

Inland waterway 5.0 0.4 % 3.1 0.2 % 8.2 0.3 %

Pipeline 4.6 0.4 % 123.0 7.9 % 127.6 4.4 %

Air 320.4 24.5 % 255.6 16.3 % 576.0 20.1 %

Self propulsion 31.9 2.4 % 14.4 0.9 % 46.4 1.6 %

Post 1.5 0.1 % 2.7 0.2 % 4.2 0.1 %

Unknown 8.6 0.7 % 130.3 8.3 % 138.9 4.8 %

Total 1 306.6 100.0 % 1 565.0 100.0 % 2 871.6 100.0 %

Weight (million tonnes)
Extra EU-27
Export Import Export + Import

Sea 396.4 74.8 % 1 288.3 71.7 % 1 684.7 72.4 %

Road 82.9 15.6 % 59.1 3.3 % 142.0 6.1 %

Rail 24.6 4.6 % 73.5 4.1 % 98.0 4.2 %

Inland waterway 8.4 1.6 % 13.0 0.7 % 21.4 0.9 %

Pipeline 3.7 0.7 % 275.5 15.3 % 279.2 12.0 %

Air 9.8 1.8 % 3.5 0.2 % 13.3 0.6 %

Self propulsion 3.2 0.6 % 2.2 0.1 % 5.5 0.2 %

Post 0.0 0.0 % 0.1 0.0 % 0.1 0.0 %

Unknown 1.2 0.2 % 82.2 4.6 % 83.4 3.6 %

Total 530.2 100.0 % 1 797.4 100.0 % 2 327.6 100.0 %

Source: http://ec.europa.eu/energy/publications/statistics/doc/2010_energy_transport_figures.pdf - p. 104

1 2 3 4 5 6 7 8

Internet.
Next to the traditional infrastructure of roads, railroad and airfreight, • To become a single digital market; at present the digital market
the digital infrastructure is becoming an important factor in the is still fragmented, hampering cross-border digital trade.
international trade environment. Half of European productivity
growth over the past 15 years has been driven by information • Teaching all Europeans, regardless of age and social back-
and communications technologies. The EU has set up a Digital ground, to use the internet. Whereas half of the Europeans use
Agenda to increase cooperation between Member States in the internet daily, 30% has never used it. The Digital Agenda sets
digital market; thus far this has mainly been the case in the market the goal to make online services accessible to everyone.
for physical goods, and to encourage the use of internet among all
its citizens. The Digital Agenda was launched in 2010 and sets the • Increased access to fast and ultra-fast internet.
following goals for 2020:
• Enhance trust and security by strengthening the rules on
personal data protection.

• Unleash social benefits, by making online medical records
Figure 2.1: Top 20 European ports available to patients wherever they are in the EU by 2015.

Source: http://www.portofrotterdam.com/en/Port/
port-statistics/Documents/top_20_european_ports.pdf


Half of the Europeans use internet daily, and 60% use the internet Europeans are also increasingly using mobile phones, as Figure 2.3
at least once a week (Switzerland: 75.3%) (Sources: Eurostat and shows. In 2008 (the latest data available), the number of mobile phone
the International Telecommunication Union ITU). subscriptions in the EU was 122 per 100 inhabitants, compared to 87 in
2004. This strong increase is seen in practically all European countries.
There are, however, differences between the countries, with Greece,
Italy and Lithuania being in the top, whereas Austria, France, Malta and
Figure 2.2: Europeans frequently using the internet, %. Latvia have the fewest mobile phone subscriptions.


1 2 3 4 5 6 7 8

Know-how.
The EU has set out many strategies to invest in research and
development, R&D. The EU aims to become “the most competitive
and dynamic knowledge-based economy in the world”, and the
member states have reached agreements to spend at least 3% of
GDP on research, of which two thirds should be financed by the
business sector. Key investment areas should be knowledge and
growth, according to agreements reached in 2006 and 2007.

Figure 2.3: Mobile phone subscriptions per 100 inhabitants



Despite EU investments in R&D, several sectors, for various rea-
sons, face a lack of skilled labour. These include engineers, ac- Practical next steps.
countants, IT professionals and technical specialists. Investments
in R&D are not expected to meet domestic demand, meaning
there will be a gap in knowledge which must be filled by suppliers Find out industry practices for your sector: how are goods
from outside the EU. transported? In which quantities? How are they packaged?
When would you choose air freight above transport by sea?
CBI market surveys, at www.cbi.eu/marketinfo, may offer
What does this mean for you as an a good starting point. In addition, your branch organisation

exporter? may be able to answer these questions.

• New technology / ICT offers new means for reaching EU con- Read more
sumers; see the modules on developments in consumer markets
& developments in the B2B markets. In addition, the use of • EU transport infrastructure
new technology offers increasing opportunities for (IT-based) http://ec.europa.eu/transport/infrastructure/index_en.htm
services, including customer service and digitisation.
• Eurostat information on ICT
• Know-how: shortage of know-how will need to be filled from http://epp.eurostat.ec.europa.eu/portal/page/portal/
abroad, e.g. by outsourcing more than just labour-intensive information_society/data/main_tables
work; see the module on developments in the B2B markets.
• Publication: EU energy and transport in figures (2010)
• Transport: transport by sea is the most common mode of trans- http://ec.europa.eu/energy
port and the most important one for exporters from developing second half of the report concerns intra- and extra-EU
countries. In some cases air transport may be more relevant, transport
e.g. in case of fresh produce. The point of entry may not be your
final destination, in most cases additional means of transporta- • Publication: Science, Technology and Innovation in
tion will be needed for intra-European transportation to the final Europe (2010)
destination. http://epp.eurostat.ec.europa.eu/portal/page/portal/
product_details/publication?p_product_code=KS-32-10-225
• Investment in infrastructure: in addition to ensuring smooth
transport between the European countries, investments in • Switzerland Mobility and Transport Pocket Statistics
infrastructure will mean increased demand from the construction 2010
sector. Also see the relevant CBI market survey at http://www.bfs.admin.ch/bfs/portal/en/index/news/
publikationen.Document.132198.pdf
www.cbi.eu/marketinfo
• Port of Rotterdam
http://www.portofrotterdam.com/en/Pages/default.aspx

1 2 3 4 5 6 7 8

Europe, An Economic Overview.
This module will give you an overview of the most important economic
issues and developments in Europe that are relevant to you as an ex-
porter or BSO (business support organisation) from a developing country.
Together with the modules on Social Issues, Technology, and Environ-
ment and Politics, it provides you with the basic input for a so-called
STEEP analysis, by means of which you will be able to determine if
Europe would be an interesting market for you to investigate further.

1 2 3 4 5 6 7 8

Introduction. The European Monetary Union
& the Euro.
This module covers the European Monetary Union, the Euro,
European economic performance and international trade. When The European Central Bank (ECB) was established in 1998
appropriate, the differences between the EU and EFTA countries to guide the monetary and fiscal activities of the participating
have been highlighted. This module gives you basic information Member States. These EU Member States have gone further in
on the relevant economic developments in Europe. We encour- their cooperation than the Customs Union and single market (see
age you to find out more about this subject by providing you with the module: A Political Overview) and participate in the European
several links to both CBI /SIPPO sources and external sources. Monetary Union, or EMU. In 1999, the participating Member
States fixed the exchange rates of their currencies to the Euro,
giving birth to the “Euro-zone”. The euro (€) is probably the EU’s
most visible achievement. It is the single currency, now shared by
16 Member States, representing over two thirds of the EU popula-
tion. These 16 countries make up the Euro-zone, where the euro
is used as common currency.

New EU members are all due to adopt the euro when they are
able to meet the criteria. Slovenia was the first of countries from
the 2004 enlargement to do so, and it joined the euro area in
Table 3.1: European currencies in euro and US dollars, high-low, 2007, followed by Cyprus and Malta in 2008 and Slovakia in 2009.
October 2009 - October 2010

Euro US dollar
Country Currency Low-high Oct 2009 Low-high Oct 2009 – Oct 2010
- Oct 2010
Euro-zone 2010:
Austria, Belgium, Cyprus, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, Malta, Euro 1 1.19-1.51

The Netherlands, Portugal, Slovakia, Slovenia and Spain

Bulgaria Lev 0.51-0.52 0.61-0.77
Czech Republic Koruna 0.04-0.04 0.05-0.06
Denmark Krone 0.13-0.13 0.16-0.20
Estonia Kroon 0.06-0.06 0.08-0.10
Hungary Forint 0.003-0.004 0.004-0.006
Latvia Lats 1.41-1.44 1.67-2.14
Lithuania Litas 0.29-0.30 0.34-0.44
Norway Krone 0.12-0.13 0.15-0.18
Poland Zloty 0.23-0.26 0.28-0.37
Romania Leu 0.00002-0.00002 0.00003-0.00004
Sweden Krona 0.09-0.11 0.12-0.15
Switzerland Franc 0.66-0.78 0.85-1.03
United Kingdom Pound sterling 1.06-1.24 1.42-1.69

Source: www.oanda.com


Economic performance.
The EU and EFTA countries experienced years of continued
economic growth, until the financial crisis brought an end to it in
2009. The economy is expected to begin to recover with growth
forecasted already for 2010.

Figure 3.1: Real GDP growth rate in the EU 27 2003-2011
4

3

2

1

0

-1

-2

-3

-4

-5

1 2 3 4 5 6 7 8

Figure 3.2: GDP per capita in Purchasing Power Standards compared to EU-27 (=100)

There are large differences between the countries, however, which
can be seen in Figure 3.2, showing the variations in GDP per capi-
ta between the countries. Nonetheless, the gap tends to decrease.

For example, the regions between the south of England, through
the Benelux countries, France, Western Germany and the north
of Italy are the wealthiest areas. On the other hand, Eastern Ger-
many, the south of Italy, Spain, Portugal and Greece lag behind
economically. As well as lower income levels, these areas tend to
have higher unemployment, a less educated/skilled labour force,
lower population density and a migrating population.

International trade.
The EU is the major player in world trade, and it is ahead of the
United States and China. The most important trading partners
are the United States, China and Russia. After years of growth,
both imports and exports saw a decrease in 2009 as a result of
the financial crisis. In September 2010, the EU reported that the
European economy was recovering faster than expected.


Table 3.2: Extra EU-27 trade by main partners, 2000-2009 - value in billion euro.

Exports Imports Trade balance
2000 2008 2009 Growth Share of 2000 2008 2009 Growth Share of 2000 2008 2009
2008- extra-EU-27 2008- extra-
2009 exports 2009 EU-27
2009 imports
2009
Extra EU-27 849.7 1306.5 1094.4 -16.2% 100.0% 992.7 1565.0 1199.7 -23.3% 100.0% -143.0 -258.5 -105.3
United States 238.2 249.9 204.5 -18.2% 18.7% 206.3 186.8 160.0 -14.3% 13.3% 31.9 63.2 44.5
China 25.9 78.4 81.6 4.1% 7.5% 74.6 247.9 214.7 -13.4% 17.9% -48.8 -169.5 -133.1
Russia 22.7 105.2 65.7 -37.6% 6.0% 63.8 177.9 115.4 -35.1% 9.6% -41.0 -72.7 -49.7
Switzerland 72.5 97.7 88.6 -9.3% 8.1% 62.6 80.3 73.8 -8.2% 6.1% 10.0 17.3 14.8
Norway 26.4 43.7 37.6 -14.0% 3.4% 47.2 95.9 68.7 -28.3% 5.7% -20.8 -52.2 -31.1
Japan 45.5 42.4 36.0 -15.1% 3.3% 92.1 75.2 55.8 -25.7% 4.7% -46.6 -32.8 -19.8
Turkey 31.9 54.3 43.9 -19.2% 4.0% 18.7 46.0 36.1 -21.5% 3.0% 13.2 8.3 7.8
South Korea 16.7 25.6 21.5 -15.8% 2.0% 27.0 39.6 32.0 -19.0% 2.7% -10.2 -14.0 -10.5
India 13.7 31.5 27.5 -12.7% 2.5% 12.8 29.5 25.4 -13.9% 2.1% 0.8 2.0 2.1
Brazil 16.9 26.3 21.6 -18.0% 2.0% 18.7 35.9 25.6 -28.6% 2.1% -1.8 -9.5 -4.0
Others 339.3 551.6 466.0 -15.5% 42.6% 369.0 550.2 392.2 -28.7% 32.7% -29.6 1.4 73.8

Source: Eurostat Statistics in Focus 28/2010

1 2 3 4 5 6 7 8

The EFTA states, with Switzerland and Norway as main markets,
show similar developments:

Figure 3.3: Evolution of EFTA States’ trade with the world, 1998-2009

Source: EFTA 2010
http://www.efta.int/free-trade/~/media/Documents/free-trade/ The EU is the largest trading partner for LDCs (Least Developed
Trade%20Statistics/world-evolution.ashx
Countries) and has an open regime towards ACP (African, Carib-
bean and Pacific) countries; see the module A Political Overview.
EU imports from developing countries also saw a steady increase
up until 2008, when the financial crisis led to a drop in most of the
imports from developing countries to the EU area. For figures on
your sector, please refer to the CBI market surveys which you can
find on


Source: http://trade.ec.europa.eu/doclib/html/122532.htm


What does this mean for you as an
exporter?
Economic growth leads to an overall increase in demand. At same Practical next steps.
time, exchange rates will have an influence on trade: a strong
currency means that imports will become attractive as these are
relatively cheap, whereas a weak currency will make imported • Find out how your sector is performing in the EU. Read
goods relatively expensive. Exchange rates also give rise for un- the relevant CBI market survey which you can find in the
certainties in international trade. The Euro-zone helps to eliminate CBI Market Information Database: www.cbi.eu/marketinfo.
these uncertainties among the participating countries. Choose your sector and the EU. Choose “Sector surveys”
and download the relevant survey.

• Have a look at EFTA trade statistics:
http://www.efta.int/free-trade/trade-statistics.aspx

Take it a step further, and find out about the trade
for your product:

• EU Export Helpdesk: http://exporthelp.europa.eu
Choose “Trade statistics” and “Input Form”.

• Norway: Consult the Norwegian statistics office:
http://www.ssb.no/english/

• Switzerland: Consult the Swiss statistics office:
http://www.bfs.admin.ch/bfs/portal/en/index.html

Read more
• Actual exchange rates http://www.oanda.com/

• Eurostat information on the financial crisis
http://epp.eurostat.ec.europa.eu/portal/page/portal/financi
al_crisis/introduction
all statistical information gathered at European level in
view of the financial crisis.

• EU Trade in the world up to 2009, including imports
from DCs & LDCs
http://trade.ec.europa.eu/doclib/html/122532.htm

• Eurostat Publication: External trade (Eurostat 2010)
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-
SF-10-028/EN/KS-SF-10-028-EN.PDF

1 2 3 4 5 6 7 8

Europe, An Environmental Overview.
This module will give you an overview of the most important environ-
mental issues and developments in Europe that are relevant to you as
an exporter or BSO (business support organisation) from a developing
country. Together with the modules on Social issues, Technology, Econ-
omy and Politics, it provides you with the basic input that is necessary
to make a so-called STEEP analysis. This will enable you to determine
whether Europe might be an interesting market for you to investigate
further.

1 2 3 4 5 6 7 8

Introduction.
This module describes key areas in European environmental Waste
policy that affect international trade. When relevant, differences As Europe has grown wealthier, the amount of waste that it produces
between the EU and EFTA countries have been highlighted. has increased as well! To tackle this, the EU has introduced a
This module provides you with basic information concerning the policy with three key areas: 1) waste prevention, 2) recycling and
relevant environmental developments in Europe. We would like re-use and 3) improved final disposal and handling.
to encourage you to find out more about this subject by offering
several links to both CBI /SIPPO sources and external sources. When it comes to trade, the first area, waste prevention, is the
most important, as the best way to prevent waste is to use as little
unnecessary material to begin with! In support of this view, legisla-
Priority areas & international tion on packaging has been established. In addition, legislation

cooperation. on what should be done with the waste produced by electric and
electronic equipment (WEEE) has been drawn up, which obliges
The EU and EFTA countries have signed many international the importer to participate in product take-back schemes. The
agreements and they participate in making a global effort to deal importer is likely to pass on some of his obligations to his suppliers!
with key environmental issues, such as climate change, nature Switzerland and Norway have introduced corresponding measures.
and biodiversity, environment and health and natural resources.
Below, some key areas are described that have a direct link to
international trade. For more information on multilateral agreements, Buying green.
please refer to the ‘Read More’ section.
Besides the areas mentioned above which result mainly in restric-
Biodiversity tions, actors in the EU go further than that in order to stimulate
The most important act on biodiversity in view of international environmentally-friendly products. Certain industries go beyond
trade, is the Convention on International Trade in Endangered legal requirements in their sector-wide agreements, whereas
Species (CITES). Signatories to CITES have agreed to strictly authorities are also pledging to buy ‘green’ under so-called Green
regulate trade in endangered species. The EU and EFTA Member Public Procurement (GPP). Under GPP, criteria are outlined for
States have signed CITES. In addition, the EU has introduced product groups, and public authorities pledge to buy according to
CITES in EU-wide legislation. This means that endangered plants these criteria. EU consumers are also paying more attention to
and animals, or products made from them, are strictly restricted in environmental issues when making a purchasing decision. In ad-
Europe. dition to the environmental themes mentioned above, issues such
as energy use and green energy play a role, in which one more
Chemicals recent trend is to look at CO2 performance, with the aim to bet
Chemicals and their possible negative health effects were placed “CO2 neutral”. Good environmental performance might enhance
high on the agenda in the EU as it soon became clear that the your chances of success in the European market! We would like to
legislation at the time was not adequate for protecting consumer refer you to the modules Developments in Business-to-Business
health. That is why in the mid-nineties a lengthy process took Markets and Developments in the Consumer Markets for more
place to reform the EU legislation on chemicals, which in turn information.
led to the introduction of the much-discussed REACH legislation.
Under REACH, industry is required to provide information on the
chemicals used, and those chemicals which are found to be harm-
ful will be disbanded with. Although this ruling forms part of EU-
legislation, the EFTA Member States will also need to amend their
legal requirements so that they are in keeping with the REACH
legislation. In this way the trade barriers can be abolished.



Biodiversity: Check out the restrictions in CITES & EU
legislation. A good starting point is the CBI information guide
which outlines CITES & EU legislation in a step-by-step plan:

Chemicals: Find out whether your products fall within the
scope of REACH! A good starting point is the CBI informa-
tion guide, which explains the legislation and which contains
more than 400 pages! See: www.cbi.eu/marketinfo

Waste: Legal requirements on packaging and the WEEE
legislation are good starting points, check out the information
in CBI’s Market Information Database:
What does this mean for you as an - WEEE (search word): www.cbi.eu/marketinfo

exporter? - Packaging (search word): www.cbi.eu/marketinfo

• Biodiversity: make sure no materials or (parts of) products you Buying green: find out about public criteria and industrial
work with are restricted under CITES. initiatives in the CBI Market Information Database.
Go to www.cbi.eu/marketinfo
• Chemicals: REACH goes beyond the legal requirements Select your sector and choose “Non-legislation” in the filter
that were set in place before when it comes to restricting and that appears. Also take a look at http://ec.europa.eu/environ-
banning hazardous chemicals. These substances will also be ment/gpp/index_en.htm where you can find more information
phased out when used in products, and it is therefore important about GPP, including criteria for product groups.
to find out whether your products are affected or not.

• Waste: everything that makes up a product eventually ends up Read more
as waste. With this in mind, chemicals and other substances
are restricted as early as the production stage. You need to be • EU Environment http://ec.europa.eu/environment
aware of legal requirements, as well as industrial practices in
support of this view. • EU Multilateral environmental agreements
http://ec.europa.eu/environment
• Buying green: Taking advantage of the trend to search for
environmentally-friendly alternatives could create more opportu- • Trade & environment http://ec.europa.eu/trade
nities. By first finding out what are the criteria – these are either
set in industrial initiatives or in GPP, or as a preference shown • EU Wildlife trade; outlining EU legislation and CITES
by consumers – you might even be able to benefit. www.eu-wildlifetrade.org

• CITES www.cites.org

• REACH http://ec.europa.eu/enterprise

• GPP http://ec.europa.eu/environment/gpp

1 2 3 4 5 6 7 8

Europe, A Political Overview.
This module will give you an overview of the most important political
issues and developments in Europe that are relevant to you as an export-
er or BSO (business support organisation) from a developing country.
Together with the modules on Social Issues, Technology, Economy and
Environment, it provides you with the basic input required for making a
so-called STEEP analysis. In this way you can decide whether Europe
would be an interesting market for you to investigate further.

1 2 3 4 5 6 7 8

Introduction.
This module covers an introduction into the EU and EFTA, the • Trade between EU countries
single market and customs union, trade rules & agreements,
legislation and information on how goods enter the market. When • Removing technical barriers to trade
relevant, the differences between the EU and the EFTA countries
have been highlighted. This module gives you basic information on • Opening new markets for public contracts, etc.
the political developments taking place in Europe. We would like
to encourage you to find out more about this subject and we have • Eliminating queues at border crossings
therefore suggested several links to both CBI /SIPPO sources and
external sources. Since its founding nearly 60 years ago, the EU has been like a
magnet, attracting a constant stream of new members, achiev-
ing its historic and successful expansion from 15 to 25 Member
The EU & EFTA: an introduction. States in May 2004. The last two Member States joined in 2007,
making the current number of Member States 27.
The EU and EFTA together consist of 31 European countries,
which subsequently form a market of more than 510 million poten- These are:
tial consumers.
• Belgium, France, Germany, Italy, Luxembourg, The Netherlands
(joined 1952)
EU.
• Denmark, Ireland, United Kingdom (joined 1973)
The European Union (EU) is a group of European countries,
committed to working together. Its Member States have set up • Greece (joined 1981)
common institutions in which they share some of their decision-
making so that specific matters of joint interest can be made at • Portugal, Spain (joined 1986)
European level. The idea for a European Union was conceived
in 1950 with a co-operation between six Member States, which • Austria, Finland, Sweden (joined 1995)
was mainly concerned with trade and the economy. Nowadays,
in 2010, the EU embraces 27 Member States and almost half • Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania,
a billion people, and it covers a wide range of issues that are Malta, Poland, Slovakia, Slovenia (joined 2004)
significantly important in everyday life.
• Bulgaria, Romania (joined 2007)
Although differences exist in many of the traditions and lan-
guages that can be found in the Member States, the EU fosters Further enlargement
cooperation among the peoples of Europe, promoting unity while Any European country can join the EU, provided it has a stable
preserving diversity. However, remain aware of the key differ- democracy that guarantees the rule of law, human rights and the
ences (social, technological, economic, political and cultural, see protection of minorities. It must also have a functioning market
respective modules) within the EU as they may affect your export economy and a civil service capable of applying EU laws. The
development planning. Despite their differences, the EU has EU has started negotiations with Croatia and Turkey, while the
been operating as a single market for quite some time. This has Former Yugoslav Republic of Macedonia has been recognized as
been advantageous to the Member States of the EU in terms of: a candidate country.


Figure 5.1: EU and EFTA Member States 2010

Source: http://europa.eu/abc/12lessons and www.efta.int

1 2 3 4 5 6 7 8

EFTA. Taxes.
The European Free Trade Association (EFTA) is an intergovern- The EU tax system is not harmonized between the Member
mental organisation set up for the promotion of free trade and eco- States (meaning each EU country has its own tax system), but
nomic integration to the benefit of its four Member States. EFTA there are certain common rules that must be respected. VAT
was formed in 1960 as a response to the formation of what we (Value Added Tax) rates have been partially aligned, but there
today know as the EU. Some countries which did not participate are still differences between Member States.
in the EU formed EFTA and took similar steps towards a better
trade climate between the Member States. EFTA has seen several
changes in its members, with several countries joining to later What do the EU & EFTA mean for
leave to join the EU.
you as an exporter?
EFTA today consists of four Member States: The objectives for having a single market that facilitates trade
between countries: the same import duty rates for products
• Norway and Switzerland (joined 1960) from outside the area are applicable in all countries, and goods
accepted in one country are also accepted in other countries.
• Iceland (joined 1970) Candidate countries will need to adjust their trade environment to
be in line with the rest of the EU. But it also means that the single
• Liechtenstein (joined 1991) market is made up of several different countries – although much
has been done to facilitate the technical aspects of trade, you still
do business with people. Europe is a diverse market in terms of
Single Market & Customs Union. languages, cultures, business practices, consumer interests and
needs. You need to know when the “single market” idea applies,
The EEA, European Economic Area, combines the 27 EU Mem- and when you are better off adjusting your approach according to
ber States and the EFTA states (except for Switzerland) in an regional or national differences.
internal, or single, market, where the participating countries follow
the same basic rules. This entails the free movement of goods,
services, people and capital. In other words: products accepted
on one EEA market are also granted access to the other EEA
markets.

The Customs Union is an important aspect of the single market. It
means that there is a general application of common rules at the
external borders of the single market. Custom duties and tariffs
are the same in all countries when a product enters from outside
the area.

Switzerland does not belong to the EEA, but it does have a
number of bilateral agreements with the EU. Switzerland largely
follows EU legislation with impact on international trade, including
product legislation.


Trade rules & agreements.
WTO - Trade rules and agreements
Read more. The EU and EFTA are part of the global trade environment, and
trade practices introduced and handled by the EU and EFTA must
be in line with international practices. The World Trade Organisa-
• EU in 12 lessons http://europa.eu/abc/12lessons tion (WTO) is the main organisation that deals with international
an overview of the EU’s history, its goals, areas of trade rules. These rules include WTO trade agreements such as
cooperation, the euro, member states, etc. the GATT, GATS, TRIPS, SPS and TBT as well as individual coun-
tries’ commitments to lower customs tariffs. The WTO is composed
• EFTA www.efta.int of governments and political entities (such as the EU). Today, in
2010, the WTO includes 153 members. A vast majority of these
• EEA www.efta.int/eea.aspx members are developing countries.

• EU enlargement http://ec.europa.eu The Doha Development Agenda started in 2001, and it pro-
vides a platform where global trade can be discussed between
• Single market http://europa.eu/pol/singl the members, and where developing country needs are given
special attention. Tariff cuts and farm reform have been part of the
• European Customs Information Portal negotiations, but so far the parties have not managed to reach an
http://ec.europa.eu/ecip agreement and the future of Doha is uncertain at the moment.

• Switzerland and EU cooperation Internationally accepted standards
http://eeas.europa.eu/switzerland Codex Alimentarius: this is the most important international or-
ganisation which establishes internationally recognized standards
• Find out about the different VAT levels in various related to food safety. Although the Codex standards are not
countries. mandatory, the EU uses them as a basis for the development of its
own food policy and standards. EU legislation frequently refers to
- You can find a list of applicable VAT rates in the different the Codex as the basis for the established requirements.
Member States here:
http://ec.europa.eu/taxation_customs ISO: the ISO, International Organisation for Standardisation, has
set up technical regulations for a number of product groups. These
- Alternatively go to the EU export helpdesk: are widely used and often requested by (European) buyers. Also
http://exporthelp.europa.eu/index_en.html. read the module on developments in business to business for
Choose “Requirements and Taxes” and “Input Form”. more information on this topic.

Other relevant trade agreements - EU and other countries
See also module Europe, Cultural Aspects. A number of additional trade agreements exist with different
groupings of developing countries. The EU has Economic Partner-
ship Agreements (EPAs) with seven regions in ACP countries:
five African regions, one in the Caribbean and one in the Pacific.
The EPAs include technical support and training for the countries
to comply with standards set by the EU. Another EU instrument
is “Aid for trade”, which is financial assistance for developing coun-
tries specifically targeted at helping them develop their capacity to
trade.

1 2 3 4 5 6 7 8

Under the Generalised System of Preferences (GPS), 176 devel-
oping countries have reduced tariffs for their goods when entering Practical next steps.
the EU market. The EU’s GSP is implemented following a cycle of
ten years. The present cycle lasts from 2006 to 2015.
Find out about trade agreements between the EU, EFTA and
Everything But Arms (EBA) provides the most favourable regime your country:
available. The EBA gives the 49 least developed countries duty
free access to the EU for all products, except arms and ammuni- • Find out about bilateral agreements between your
tion. country/region and the EU:

- EU information: http://ec.europa.eu/trade/creating-
What does this mean for you as an opportunities/bilateral-relations/

exporter?
- EU export Helpdesk, choose “Preferential arrangements”:
Preferential trade agreements between your country and the Euro- http://exporthelp.europa.eu/index_en.html
pean countries will give you a competitive advantage compared to
exporters from countries where there is not such an agreement. • Find out about bilateral agreements between your
country/region and EFTA::

- Free Trade Agreements:
http://www.efta.int/free-trade/free-trade-agreements.aspx

- EFTA & WTO: http://www.efta.int/free-trade/fta-and-wto.aspx

• WTO Regional Trade Agreements Information System:
http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx

• Find out about tariffs:

- EU Export Helpdesk, choose “Tariffs”:
http://exporthelp.europa.eu/index_en.html

- EU customs tariffs data base TARIC:
http://ec.europa.eu/taxation_customs

- EFTA:
Swiss Federal Customs Association: http://xtares.admin.ch
Norway: www.toll.no

- As an alternative, you can check at the customs office in
your target country!


Read more.

• WTO: www.wto.org Other relevant international organisations are:

• Doha Development Agenda: • UNCTAD (UN Conference on Trade & Development):
http://www.wto.org/english/tratop_e/dda_e/dda_e.htm http://www.unctad.org

• ACP EPAs: http://ec.europa.eu/trade/creating-opportuni • OECD (Organisation for Economic Cooperation &
ties/bilateral-relations/regions/africa-caribbean-pacific/ Development): http://www.oecd.org

• Codex Alimentarius: http://www.codexalimentarius.net • FAO (Food & Agriculture Organisation of the UN):
http://www.fao.org
- See the CBI Market Information Database:
www.cbi.eu/marketinfo. Type “codex alimentarius” in the • ITC (International Trade Centre): http://www.intracen.org
keyword search option.
• ICTSD (International Centre for Trade & Sustainable
• ISO: www.iso.org Development): http://www.ictsd.org

- See the CBI Market Information Database: • ILO (International Labour Organisation): http://www.ilo.org
www.cbi.eu/marketinfo. Type “ISO” in the keyword search
option. • CEN (European Committee for Standardisation):
http://www.cenorm.be
• Aid for trade: http://ec.europa.eu/trade/wider-agenda/
development/aid-for-trade/ • Taxes in Europe database:
http://ec.europa.eu/taxation_customs/taxinv/welcome.do
• EBA: http://ec.europa.eu/trade/wider-agenda/development/
generalised-system-of-preferences/everything-but-arms/ • EU bilateral relations - http://ec.europa.eu/trade/creating-
opportunities/bilateral-relations/
- look up EU trade relations per country or region.

1 2 3 4 5 6 7 8

Legislation.
Consumer safety is the main driver behind legal product require- This is how the legal system works:
ments. In addition, reducing the negative impact products might
have on the environment has increasingly become an important 1. The scope of legal requirements
factor when setting product legislation. The EU/EEA/EFTA or any trading partner outside your own
country can only set legal requirements related to the product that
One of the aspects of the single market is the freedom of move- has been placed on the market. Production processes which do
ment for goods. This means that a product accepted in one coun- not directly influence the quality/safety of the product cannot be
try, is also granted access to another country within the single controlled by legal measures. In practice, this means that EU legal
market. For this to function optimally, legal product requirements requirements have the following general characteristics for the four
must be harmonized. This is also what the EU/EEA is aiming at, main sectors:
and the countries have come a long way in terms of harmonisa-
tion. Switzerland, though not a Member of the EU/EEA, has also • Agriculture: General food safety has been outlined in the frame
taken steps to keep in line with EU/EEA legal requirements. work General Food Legislation, and in accordance, all food
must be safe. To guarantee this, the general principle of only
checking the product entering the EU/EFTA region has in
practice been extended to include hygiene and traceability
measures throughout the chain. Norway and the other EFTA
countries participating in the EEA are in line with EU food
legislation. In Switzerland, different legal acts form a legal
environment which corresponds to that of the EU, and products
accepted in the EU or one of the EFTA Member States have
access in all of the EU/EFTA countries.

For non-food agricultural products, the focus is on the product
entering the market, which in practice often means that the
presence of certain substances has been restricted in the
manufacturing of the product.

• Consumer goods: Safety aspects are established in a
framework agreement, the General Product Safety Directive,
and in addition requirements are set for the presence of
hazardous substances. CE-marking also applies to some
consumer goods, for instance toys.

• Industrial products: Limits have been set for hazardous
substances present in the final product. In addition, safety
requirements have been set for many industrial products in
legislation which have established the so-called CE-marking.
hazardous substances.

• Services: As services are not physically traded, legal
requirements are generally not applicable. Be aware though that
your European trading partner may have other requirements!


Figure 5.2: Scope of legal requirements for any given product 3. Finding out differences for specific countries:
The EU sets legal requirements in a) regulations and b) directives.
In temporary cases c) decisions can be used, addressing specific
issues and specific Member States. Regulations apply automati-
cally in all EU Member States; the other EEA states must imple-
ment the requirements in their national legislation. Directives are
harmonized in terms of the goals they should achieve, but they do
not automatically apply in the Member States and therefore must
be implemented in national legislation to become applicable.

exporter?
Legal requirements form the minimum set of requirements for all
products entering the market. Products which fail to meet these
requirements are not allowed market entry!
Note of warning! In addition to legal requirements, the private
sector - your (potential) buyers - may have set their own sets of
requirements. Read more about these in the CBI market informa-
tion database: www.cbi.eu/marketinfo.

Look up your sector & country (e.g. EU). Choose “Non-legisla-
tion” in the filter that appears.

2. How are legal requirements set?
Legal requirements are not set for specific products. Instead,
legal requirements are included in:

1.Framework legislation, setting the basis for a sector, such as the
General Food Law and the General Product Safety Directive for
consumer goods.

2.In addition, substances, chemicals, contaminants and similar
materials found in products may be restricted. These have not
been set for specific products as restrictions may apply for all or
several products and you will have to remain under the limit set.

3.Finally, there are a few cases regarding product-specific legisla-
tion. These do not exclude the first two points mentioned above;
however, they should instead be seen as add-ons, specifying
certain requirements for specific products.

1 2 3 4 5 6 7 8

Practical next steps. Read more.

Find out which legal requirements are applicable to your • All EU legal texts can be found in the EURlex database:
product: framework, substances and product-specific. http://eur-lex.europa.eu/

• Search the CBI Market Information Database: • For legislation in the making, turn to Prelex which monitors
www.cbi.eu/marketinfo. Choose your sector and the EU. the decision-making process between the EU institutions:
Choose “Legislation” in the filter that appears. The http://ec.europa.eu/prelex/apcnet.cfm?CL=en
documents displayed are all relevant legal requirements
for your sector. Screen them in order to determine which • EEA decision-making process: http://www.efta.int/eea/
requirements are relevant for your specific product. The eea-institutions/eea-decision-making.aspx
end result will provide you with an overview of legal
requirements for your product. • Switzerland, EFTA and the EU: have a look at SIPPO
• Alternatively, go to the EU export helpdesk: publications: http://www.sippo.ch/internet/osec/en/home/
http://exporthelp.europa.eu/index_en.html. import/publications.html
Choose “Requirements and Taxes” and “Input Form”.

Find out if your target country has additional
requirements:

• Search the CBI Market Information Database:
www.cbi.eu/marketinfo. Choose your sector and your
destination country. Choose “Legislation” in the filter that
appears. Note that EU legislation sets the basis! EU
regulations apply in all Member States and are therefore
binding in your EU target country as well as in Norway.
Additional requirements for your destination country are
indicated as such in the CBI database.

• For Norway and other EFTA countries participating in the
EEA, have a look to see if the EU legal requirements have
been implemented in national legislation. To find out, go to
http://www.eftasurv.int/internal-market-affairs/
implementation-status-.

• Switzerland does not participate in the EEA. Swiss
legislation can be found at:
https://www.swisslex.ch/cms_swisslex/slx/Index.aspx

• Alternatively, see the Federal Authorities of the Swiss
Confederation: http://www.admin.ch/index.html?lang=en


How are goods entering the EU
market controlled in practice?
In order to enter the EU market, the legal requirements must serve
as a basis. The principle of a single market goes further than Practical next steps.
granting access to all countries for products that have entered one
of the countries; it also includes cooperation between the Member
States when it comes to recalling or rejecting products. Find out border rejections and product recalls for your
type of products!
Products entering the EU customs are checked. You can follow the
process by watching this video: • Non-food: search the RAPEX database:
http://ec.europa.eu/consumers/dyna/rapex/rapex_
http://ec.europa.eu/food/food/rapidalert/rasff_video_en.htm archives_en.cfm

Member States keep each other informed on product recalls and • Food: search the RASFF database:
border rejections through two databases: http://ec.europa.eu/food/food/rapidalert/rasff_
portal_database_en.htm
• RAPEX is the EU rapid alert system for all dangerous consumer
products, with the exception of food, pharmaceutical and medical Read more.
devices.
• RAPEX Annual Report 2008: http://ec.europa.eu/
• The Rapid Alert System for Food and Feed (RASFF) was put in consumers/safety/rapex/docs/rapex_annualreport2009
place to provide food and feed control authorities with an effec- _en.pdf
tive tool for exchanging information about measures taken when
responding to serious risks detected in regard to food or feed. This • RAFFS Annual Report 2008: http://ec.europa.eu/food/food/
exchange of information helps the Member States to act more rapidalert/report2008_en.pdf
rapidly and in a coordinated manner in response to a health threat
caused by food or feed.

exporter?
Knowing how the EU borders work and how products are checked
– even which products are checked – gives you insight into which
areas the EU prioritises. Have a look at the annual report pub-
lished by RAPEX and RASFF (see links below) to find out which
products have been withdrawn from the market and which issues
have been put on the agenda in the reporting years. For instance,
in 2008 several member states reported consumer complaints as
results of reactions to DMF, dimethyl fumarate, in leather furniture
and footwear. The biocide is used to protect against moulds, but
as a result of member state notifications, the EU took measures to
prohibit DMF in all consumer goods as of May 2009.

1 2 3 4 5 6 7 8

Europe, Developments in Business-to-Business
Markets.
This module will give you an overview of the most important develop-
ments that are taking place in the European Business-to-Business
markets and which are relevant to you as an exporter or BSO (business
support organisation) from a developing country. By knowing which
developments are currently prevalent, you can anticipate what your
potential buyers are looking for and better prepare yourself for the
European market.

1 2 3 4 5 6 7 8

Introduction.
This module covers the most recent developments in international Subcontracting and outsourcing: increasing complexity
trade channels, the role of the internet and supplier requirements Subcontracting is the traditional form of partnership where a
in B2B. When relevant, the differences between the EU and EFTA company specialises in a particular product, process or service
countries have been highlighted. The general idea is that this mod- and uses a supplier to provide them with parts, subassemblies,
ule can provide you with basic information on the developments capacity or services. Nowadays the term outsourcing is more
in the European Business-to-Business Market. We would like to commonly used for transferring the production from one compa-
encourage you to find out more about this subject and therefore ny to another, sometimes even to a different country. Offshoring
we have included several links to both CBI /SIPPO sources and can refer to a company’s own activities when manufacturing or
external sources in this module. when services are transferred to another country but the owner
remains the same.

Developments in international Many European companies seek cost benefits by (partly) out-

trade channels. sourcing their production. The general rule is that labour-inten-
sive work is outsourced to best-cost countries (BCCs), whereas
Once you have decided to export your products to the EU, you European companies take care of assembly, packaging, brand-
have a number of options, varying from direct exports to the ing and marketing. However, as European companies seek more
retailer or OEM-er (Original Equipment Manufacturer), to a trade benefits from outsourcing, the tasks that are outsourced tend to
channel with various middlemen such as agents, importers, whole- become more complex. This trend can be seen in many sectors,
salers and retailers. Which trade channel you decide to use and for instance in fashion where design elements are increasingly
which operators you choose to deal with depends mainly on your being outsourced as well, but also in the service sector where,
place and strength in the value chain. for instance, business process suppliers now offer a whole pack-
age of services instead of only one specific task.
Closer cooperation in value chains
International trade is gradually moving away from the traditional Private labels on the rise
concept of export-import to closer cooperation in the value chain. Private labels or ‘own-brands’ are gaining ground in the EU, with
This means that long-term relationships between suppliers and market shares growing in most European countries. Originally
European partners, or (co-)ownerships and co-makership, are established in the food market, private labels exist in many
becoming increasingly important. Supplier-importer relation- consumer and industrial markets now, such as cosmetics, shoes
ships are extended to jointly developing products, with more and clothing, over-the-counter drugs, household and laundry
value added for the supplier and possibly even cooperation in products, DIY, lawn and garden, paints, hardware, car parts and
distributing the products. As a result of closer cooperation in the accessories.
value chain, more demands are placed on suppliers (for instance
in terms of delivery times and quality), who team up in order to A private label is a brand which belongs to the retailer, in order
meet the expectations of their European partner. Suppliers thus to enhance and reinforce the loyalty of the consumer to the
become larger, and as the relationships become closer with their store. This means that the retailer is the owner of the brand, but
European partners, it will become more difficult for newcomers to is also responsible for the marketing activities of the brand. This
enter the market. could include focusing on a niche market such as fair trade and
organic. For more information, we refer you to the module on
Due to the complexity of regulation, quality issues and flexibility Developments in Consumer Markets.
in the logistic value chain of the European partners, we can see
that a conglomeration trend is appearing in commodity products. Large retailers and importers are increasingly entering into
Suppliers are taking over smaller suppliers in order to create syn- direct contract with manufacturers to produce under the retail-
ergies in their company (logistics, production, purchasing, etc). ers’ brands. There are large differences between regions, with
This also helps to create a large “obstacle” against the growing Western European countries being more mature, but Eastern
buying power of their customers (=European retailers). European countries are gaining a market share at a rapid pace.


Switzerland has the largest market share for private labels: Private labels saw a growth of 3% in 2009, whereas A-brands have
53%, followed by the UK with 47%. Spain, Slovakia and Germany been decreasing in turnover and margins. Private labels are beco-
all have market shares above 40%, whereas the Scandinavian ming more and more professional and they are manifesting them-
countries account for around 25% (Source: Private Label selves as if they were real brands (e.g. Tesco Finest in the UK, AH
Manufacturers Association, 2010 yearbook). Excellent in The Netherlands, Migros in Switzerland).

Figure 6.1: Private label share by country (Volume)

Source: Private Label Manufacturers Association, 2010 yearbook

1 2 3 4 5 6 7 8

exporter?
Added value & a closer relationship:
overall, your chances on the EU market will improve if you can
offer more value additions to clients. Trade channels become
shorter as the products and services become more complex and
supplier-buyer relationships get closer. In this view, exporter com-
munication, relationship management and a pro-active attitude will
become even more crucial for conducting business successfully.
Clients will become more dependent on the performance of their
suppliers and the supplier will need to visit his or her clients more
frequently.

Communication:
this becomes increasingly important and the supplier’s PSU (Prob-
lem Solving Unit) will need to communicate more (both in frequen-
cy and in number of topics) with their customers’ DMU (Decision
Making Unit). The departments from both partners that could be
involved are sales, logistics, R&D, engineering and quality.

Supply chain management:
this becomes more important on-time delivery. Client demand and
forecasts need to be communicated and implemented throughout
the supply chain at the supplier (exporter) level and sub-supplier
level including the interchange of Enterprise Resource Planning Read more.
(ERP) data regarding logistics. On time delivery is of great impor-
tance.
• For more information on distribution strategies and trade
More powerful suppliers: structures, we refer you to CBI’s sector surveys:
larger suppliers are concentrating on commodities, but that leaves www.cbi.eu/marketinfo
a lot of niche markets for small specialized partners. These niche
markets can be very interesting as they concern specialty prod- Select your sector and the EU and choose Sector surveys
ucts for which consumers are willing to pay more for the perceived in the filter that appears.
added value.
• For more information on private labels see the Private
Private label: Label Manufacturers Association: www.plma.org
this could offer opportunities for developing country suppliers.
Within Private label the exporter is producing upon the commis-
sion of the retailer and under a long term contract, and therefore
the retailer is responsible for the stock. The investments and risks
are very low in this case. However, the exporter must assure a
constant quality, since a quality problem (such as in case of a
recall) will reflect on the total formula of the retailer which will
automatically lead to claims.


Internet.
In January 2009, 93% of enterprises of ten or more people em- Table 6.1: E-commerce, 2008. Source: Eurostat 2010
ployed had access to the internet in the EU and 82% of enter-
E-commerce, 2008
prises had a broadband internet connection. Among other uses,
E-commerce turnover by
internet access enables enterprises to buy and sell products
destination
electronically: in the EU in 2008, 12% of EU enterprises’ turnover
(% of e-commerce turnover):
was generated through e-commerce.
E-commerce Own Other Outside
turnover country EU27 EU27
There are significant differences between the Member States, (% of total Member
however. The highest shares of e-commerce were recorded turnover) State
in Ireland (26%), Finland and Sweden (both 18%), the Czech EU27* 12 73 19 8
Republic, Germany and the United Kingdom (all 15%), Hungary Belgium : : : :
(14%) and France (13%). The lowest shares were observed in Bulgaria 1 85 14 1
Bulgaria and Cyprus (both 1%). Czech Republic 15 61 36 4
Denmark : : : :
Most e-commerce comes from within the country itself: 73%.
Germany 15 73 20 6
Only 8% comes from outside the EU. One reason for this is the
Estonia : : : :
actual distribution and postage costs.
Ireland 26 38 39 23
Greece 2 82 11 7
Internet & trade with developing countries
E-commerce has not yet become a major factor in international Spain 9 81 15 5
trade, as personal contact with your client is still the key formula. France 13 82 11 8
Internet-based means of communication, however, do offer op- Italy : : : :
portunities in view of maintaining good contact with your client. Cyprus 1 29 51 20
As such, e-mail and Skype are increasingly being used, and Latvia 5 88 9 3
e-newsletters present a good opportunity to keep all of your cli- Lithuania 9 66 24 10
ents up-to-date about your developments. In addition, a supplier Luxembourg : : : :
normally visits his client twice or three times per year. Moreover, Hungary 14 33 60 8
in new relationships a first contact can be done by e-mail, but Malta 11 7 37 56
this should be followed up by a telephone call and personal visit Netherlands 12 69 24 7
with a (brief) company presentation (see the module Cultural
Austria 11 : : :
Aspects as well).
Poland 7 71 24 6
Portugal 12 74 22 (4)
However, Internet is used more and more often when tenders are
Romania 2 59 24 16
bought for commodity products. So- called ‘internet auctions’ per-
Slovenia 12 76 21 3
mit the buyer, after the first negotiations have been conducted, to
finalize the process by getting the lowest price from the market. Slovakia 11 22 44 34
The main factors behind this development are time pressure and Finland 18 : : :
the financial crisis, which have led to buyers focusing more on Sweden 18 58 23 16
prices. United Kingdom 15 83 11 6
Croatia 14 81 13 6
Norway 21 94 5 1

Source: Eurostat 2010 http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/4-
19012010-BP/EN/4-19012010-BP-EN.PDF , p.2
* EU27 aggregate for turnover from e-commerce excludes Belgium. EU27 aggregates for
e-commerce turnover by destination exclude Belgium and Finland.
: Data not available or not reliable, ( ) Data shown in brackets are less reliable

1 2 3 4 5 6 7 8

Buyer requirements:
CSR & QUALITY.
Specific software also replaces paper versions for handling orders.
EDI (Electronic Data Interchange) is an example of such an CSR
internet-based tool through which orders, invoices and packing Corporate Social Responsibility (CSR) is a concept whereby
lists can be transferred from one trading partner to another trading companies integrate social and environmental concerns in their
partner without human intervention. In case of co-makership, an business operations and in their interaction with stakeholders
ERP (Enterprise Resource Planning) or sometimes MRP (Material on a voluntary basis (definition: CSR Europe). CSR has been
Requirement Planning) system may be used, in which the supplier placed higher on company agendas in recent years, where it is
automatically signals demand from the customer. now common practice among European companies to include at
least some consideration for environmental and social perfor-
The increasing role of the Internet does, however, have the pos- mance in their business practices. These developments can be
sibility to change the trade environment, as end-consumers find signaled mostly in Western and Northern European countries.
products and services online directly, hence potentially excluding
the role of the importer. There are, however, some challenges in Where legal requirements (see the module A Political Over-
terms of customs clearance for instance, and transport costs may view) set the basis for products to be granted market access
be high. For more information on how the Internet can act as a in Europe, CSR requirements go even further. These look into
means for reaching consumers, we refer you to the module on the social performance of not only the European company, but
Developments in Consumer Markets; see the section on Social increasingly also of the suppliers. Likewise, environmental con-
media. siderations in the production process are no longer considered
only in European locations, but also within the total supply chain,
starting at supplier facilities in developing countries.
exporter? In practice, the social and environmental performance of Euro-
pean companies often comes down to additional requirements
Client relations: frequent contact with customers by phone and put on their suppliers. As such, there has been an increase in
the use of e-mails, Skype and newsletters are essential for certification schemes which are now required by the suppliers to
developing and maintaining good customer relations and for the European market. Depending on how well the supplier per-
exporters to become successful. English is the main business forms in other areas – price and quality – the European counter-
language used; see also the module Doing Business - Cultural part may be willing to work together to achieve better social and
Aspects. environmental performance. ISO 26000 on social responsibility is
being developed to provide guidance for companies dealing with
Internet auctions: this might be a good entry strategy, but only if CSR.
you keep in mind what the lowest prices are that you can offer
- do not feel seduced by the order and do not offer below cost Quality
price! Companies can also surpass the quality requirements that are
legally required. Sometimes this is done by means of request-
Specific software: in case of existing, close client relationships, ing their suppliers to work according to a quality management
the introduction of software integration to minimize paper in system, such as ISO 9001, which in some, especially industrial
handling order might also be an option. sectors, have become such standard practice that it can be seen
as a mandatory requirement for entering the EU market.

The food sector also goes a step further, as GlobalGAP (Global
Good Agricultural Practice, previously EurepGAP), is requested
by supermarkets and other retailers so often, that entering the
EU market without GlobalGAP certification has become very
difficult.


• Industrial: The implementation of a management system by
means of ISO 9001 certification is already a minimum require-
ment for any exporter in order to be accepted by a European
importer. Additional requirements on certification against ISO
14001 for environment and OHSAS 18001 are becoming
increasingly important within the industrial sectors. There are
sector-specific schemes that are widely applied, such as Re-
sponsible Care in the chemicals sector.

• Services: Certain management systems are used, for instance
ISO management systems for services and the eSourcing Ca-
pability Model for Service Providers (eSCM-SP).


Find out about distribution strategies and trade structures in
your sector. Refer to CBI’s sector surveys:
www.cbi.eu/marketinfo. Select your sector and the EU and
choose Sector surveys in the filter that appears.

Learn about the environmental and social requirements in
What does this mean for you as an your sector. You can start by checking out the information

exporter? available in CBI’s Market Information Database. Select you
sector and the EU and click on “Non-legislation” in the filter
• Agriculture: GlobalGAP is an essential requirement for entering that appears. Another option is to study the supplier codes
the EU. Other requirements include more stringent require- of European players in your sector. In many cases, these are
ments for pesticide residue levels, maximum residue levels, or available on the companies’ websites.
MRLs, for fruit and vegetables, introduced by some German and
other Western European supermarkets. In addition, compliance Read more.
with different (food) standards and management systems, e.g.
BRC, IFS and ISO 22000 on food safety, is being increasingly Find out more about CSR in Europe, including all of the
requested. initiatives mentioned above, in CBI’s market information
database. Select your sector and the EU and choose “Non-
• Consumer: the apparel sector received a great deal of nega- legislation” in the filter that appears.
tive publicity in the media a decade ago, when reports on poor
working conditions in sweatshops were reported. Since then, • CSR Europe http://www.csreurope.org/
the sector has increasingly introduced social requirements in
its supplier requirements. In the timber sector environmental • Publication: A guide to CSR in Europe (2009) http://
concerns have received more attention than social, with illegal www.csreurope.org/data/files/20091012_a_guide_to_csr_
timber on the agenda, which has giving rise to e.g. increasing in_europe_final.pdf - information on individual countries
FSC-certification.
• GlobalGAP www.globalgap.org

1 2 3 4 5 6 7 8

Europe, Developments in Consumer Markets.
This module will give you an overview of the most important develop-
ments in the European consumer markets that are relevant to you as
an exporter or BSO (business support organisation) from a developing
country. By knowing which developments are prevalent, you can
anticipate what your potential buyers are looking for and better prepare
yourself for the European market.

1 2 3 4 5 6 7 8

Introduction. New experiences.
This module covers the main consumer trends in Europe and their European consumers are thirsty for new experiences. They are
relevance for developing country suppliers. When relevant, differ- open to exotic designs, tastes and flavours. Modern Europeans
ences between EU and EFTA countries have been highlighted. have travelled more than ever before and have developed an inter-
This module is meant to provide you with the basic information est in foreign cultures.
you will need concerning the most recent developments in the
European Consumer Market. We would like to encourage you to At the same time, many consumers are interested in more than
find out more about this subject and that is why we have supplied just the product or service itself, they want to know the story
you with several links to both CBI /SIPPO sources and external behind it. In brief, the European consumer is not only looking for a
sources. specific product or service, he or she is looking for an experience!

This trend originates in the need for individualism, which in turn
Individualism / uniqueness. has developed toward the so-called ‘experience economy’. In the
70’s consumers were seduced by the growth in assortment (for
The European consumer wishes to distinguish himself or herself example olive oil in the Netherlands); in the 90’s product differ-
from others. Consumption becomes a means of self expression, entiation appeared in the shape of added value products (for ex-
where personalized and customized products are the key. ample olive oil with lemon or olive oil from black olives); nowadays
consumers want to “experience” the product (for example olive oil
with added value but also mentioning its source; with the added
What does this mean for you as an option for the consumer to go on the internet and look up how

exporter? these particular olives have been grown, on which farm, and to
see how the cultivation process takes place).
• Agriculture: flexible combinations instead of standard packs are
being introduced where, for instance, meals can be combined
by adding different components instead of the usual ready-made What does this mean for you as an
meals.
exporter?
• Consumer: products which differentiate themselves from • Agriculture: exotic products, such as flowers and plants not yet
the mainstream, or allow for flexible use in terms of multiple widely known in the EU, or new flavours and food are increas-
purposes or mix & match by different combinations fit with this ingly in demand. Exotic origins as part of the marketing of a
trend. Another possibility is to offer the opportunity to personal- product are also gaining ground, for instance for coffee, tea
ize a product. and wine. Also, new flavours in fruits and vegetables are highly
popular, as well as the use of exotic plants and fruit ingredients
• Industrial: only indirectly relevant, for instance through demand in cosmetics.
for parts used in products tapping into this development.
• Consumer: ethnic designs are popular and adding informa-
• Services: especially relevant for tourism, where travellers want tion on where and how a product was produced, or how it is
to have individual, authentic experiences and not be part of the used in its local culture, can raise the interest of the European
mass-tourism culture. Travel agencies are less and less involved consumer.
as travellers want to experience their own journey; by using the
internet they wish to create their own unique travel experience. • Industrial: only indirectly relevant, for instance through demand
for parts used in products tapping into this development.

• Services: Especially relevant for tourism, where the desire for
new experiences and exotic places fits the taste of this Euro-
pean development.


The EU organic market is dominated by four countries: Germany,
UK, France and Italy, which together are good for 80% of EU
demand. Germany is the largest market. After several years of
increased growth, the demand is now stable but it may continue to
grow when the economy picks up again. France and Italy are still
seeing a growing demand, whereas the UK saw a drop of 13.6%
in organic demand in 2009. Switzerland (not a member of the EU)
saw its organic market grow greatly in 2009, by 7%. In the EU, the
demand is expected to remain higher than the supply, which will
create opportunities for suppliers from developing countries. How-
ever, part of the demand will also be met through intra-European
trade, as production in Central and Eastern European countries is
increasing faster than the demand.

Fair trade is also showing much growth and has already reached
a large market share in countries such as Switzerland and the UK.
Retail sales grew by 15% in 2008-2009, reaching 3.4 billion.

Social and environmental concerns. Organic and fair trade are still niche markets and large multina-
tionals do not care to make such an effort. Instead, they are trying
Social and environmental concerns, often called CSR (Corporate to make their existing products more environmentally-friendly. At
Social Responsibility) in a business context, are an on-going the same time, there is an increasing demand for organic and fair
development that has gained solid ground among European trade, both separately and in combination (double certification).
consumers. Consumers expect the products or services they This gap in the market is filled by retailers who are introducing
buy to not cause unnecessary harm to the environment, and to more and more organic and fair trade product lines and segments,
be produced under acceptable social circumstances (companies for example AH Puur & Eerlijk (“pure & honest”) in the Dutch
respond for instance by demanding compliance with the main ILO supermarket Albert Heijn and Tesco Organic in the UK. Overall,
conventions in this regard). supermarkets are increasingly including organic and fair trade in
their assortments, for instance in the Swiss supermarket chains
There are clear differences between European regions in terms of COOP and Migros.
how much attention social and environmental concerns receive,
and there is also a difference as to which aspect receives more The main means of communication towards consumers is by la-
attention; sometimes this depends on the product in question, but bels: environmental labels and social / fair trade labels. There are
also on the region. In general terms, Eastern European countries many different labels in use, ranging from organic to fair trade, but
pay less attention to environmental and social circumstances, covering combinations of the two as well, which offers opportuni-
whereas Western and Northern European countries are the most ties for producers in developing countries. Different labels are
aware consumers in Europe. used in different regions. Although there are European-wide labels
for organic food and some non-food products, many countries
are still more familiar with their own local labels. Social labels
and labels combining social and organic aspects are also used
regionally rather than European wide, as they are better known in
certain countries than others. ISEAL Alliance is the global alliance
for social and environmental standards, and many of the known
labels (Fair Trade, MSC, FSC) are members.

1 2 3 4 5 6 7 8

exporter?
• Agriculture: an EU-wide organic food label has been devel-
oped, and in addition there are several regional or national initia-
tives. The national labels are still often better known than the EU
label, although efforts are being made to promote the EU label.
In Switzerland, the Bio Suisse seal is used, among other labels,
and in Norway consumers recognize organic products by the
Ø-label. MSC is the most widely used label for fish. FSC is the
best-known consumer label for timber, and the demand exceeds
the supply in Europe. There are also numerous options for fair
trade / social certification, applicable for food products, flowers,
wine and even natural stone.

• Consumer: there are several different labels used for consumer
goods, ranging from organic cotton to FSC-certified paper or
timber used in toys or stationery. Eco-fashion and ethical fashion What does this mean for you as an
is also gaining ground, with trendy brands being established.
exporter?
As an exporter, you need to find out which labels are recog-
nized and being used in which markets. The choice of material • Agriculture: food is the main sector influenced by the health
is another possibility: bamboo is an environmentally-friendly trend. Starting with choice of food: fish is considered healthy,
alternative, as it grows quickly compared to e.g. tropical timber. whereas sugar is not and snacks made of fruit or vegetables are
Making use of recycled materials is another option. And treating healthier than junk food; there is a tendency to choose a health-
materials (timber, textiles) with environmentally-friendly materi- ier variety of the same product: vegetable oils are healthier than
als instead of hazardous chemicals is another way of showing animal fats and dark chocolate has healthier properties than
good environmental performance. Fair trade is a social label and light; and light wines are a relatively healthier choice. Food label-
certification schemes are available for many consumer products. ling and health claims are important marketing tools, and as this
trend has evolved, legislation is being established to provide a
• Industrial: although mainly relevant indirectly, certain industrial fair playing field and well-informed consumers. More and more
products are being developed to meet consumer demand in national governments are creating quality systems and logos
this regard. Paint manufactured on a water basis is an example which represent a healthy choice of food for the consumer. Take
of a product choice which could be based on environmental for example the “Ik kies bewust” (“I choose consciously”) logo
considerations. used in the Netherlands:

• Services: eco-tourism and sustainable tourism are gaining • Consumer: products geared towards hygiene or ergonomics fit
ground, with consumers being more aware of the impact their this trend. Also products with a calming effect, for instance with
travelling has on the environment and the local communities. a fragrant scent, can attract health-conscious consumers.

• Industrial: the effects in the industrial sectors are mainly indi-
Health consciousness. rect, but this could affect the use of chemicals and hazardous
substances in products and there may be a tendency then to
One major development that can be identified is the increasing favour more natural products such as natural pharmaceuticals
consciousness consumers have concerning health and well being. instead of those produced by conventional industry.
Consumers want to be good to their bodies, not just by leaving out
destructive behaviour, but by treating themselves well. • Services: within the tourism sector, health & wellness is devel-
oping as a distinct market segment.


Convenience.
Demographic developments such as more and more women
working in combination with a hectic lifestyle, have given rise to
the demand for more convenience products. Where time is scarce
and consumers are experiencing many different demands, this is
a growing segment.

Internet is a growing channel for purchasing or making purchase
decisions. Read more in the section below.

exporter?
• Agriculture: in food, especially packaging plays an important Price consciousness.
role: for instance portion packs offering ready-to consume prod-
ucts, or ready-made mixes of products. Meals that are already The European consumer is becoming more demanding and he or
partially prepared in order to speed up the cooking process are she wants to have value for money. There has been a general shift
another example, as well as those meals that are consumed from luxury to lower-end products, and although the economic
outside the home and enjoyed on the street where purchased. crisis has had some influence, this shift had already started prior
to the crisis. Consumer price consciousness has also given rise
• Consumer: practical, functional products make use of this to an increasing demand for private label products (see also the
development, for instance shoes or clothes which can be used module Developments in Business-to-Business Markets) and low-
for different purposes with small adjustments, e.g. office and budget options such as discount stores.
leisure time.
However, the extremely luxurious products (such as Louis Vuit-
• Industrial: the relevance is mainly indirect, but it could affect ton) have not been affected at all by the crisis, as consumers are
some products. For instance, products should be easy to use, willing to pay good money for unique and high quality products. In
have low-maintenance, perhaps they might have a soil-resistant other words, consumers are more and more aware of prices and
finishing treatment if applicable. they are only willing to pay for a good product / quality balance.

• Services: the role of internet has an impact on the service Cocooning is another development that has been on the rise
sector; we refer you to the section on internet below for more since the crisis. Cocooning means that people stay at home and
information. enjoy themselves there, instead of spending money on going out.
This development had already started before the crisis, but it has
picked up popularity as a means of saving money.

1 2 3 4 5 6 7 8

What does this mean for you as an Internet / social media.
exporter?
Internet is becoming a major channel for purchasing goods and
• Agriculture: consumers search for good alternatives to “luxury” services. The use of internet for purchasing goods and services
products, for instance cheaper (foreign) fish species that taste has seen a continuous increase in the past few years, with 20% of
good instead of the more expensive European ones. Also the EU citizens purchasing online in 2004 compared to 37% in 2009.
increasing popularity of fish has had an effect in this sector. In Norway, 70% of consumers did this in 2009 (Source: Eurostat).
There are great variations between countries, with Western and
• Consumer: the market share of different retailers may shift, as European countries making more use of online shopping than
many consumers choose to shop in discount stores or super- Eastern and Southern countries.
markets and look for cheaper alternatives online. In view of
the fact that people tend to stay in rather than go out, home- Internet is not only used for making an actual purchase, however.
experience becomes a factor, e.g. home spa, or wining and It is also a source for learning about products and for comparing
dining at home with all the necessary household appliances and products and prices. As such, you can gain recognition by being
tableware. visible on the Internet where consumers can find you.

• Industrial: the relevance is mainly indirect, but as people Social media is becoming increasingly important when deciding to
postpone buying new homes, they may need to renovate and make purchases. Consumers show more faith and trust in reviews
or redecorate their existing homes which in turn could give rise made by other consumers, than they do in advertisements and
for an increased demand for products related to renovating and commercials (see table ##). It is expected that social media will be
redecorating. the most important source for product or service information within
the next 6 to 8 years. Social media, such as Facebook, Twitter,
• Services: the increasing role of the internet, particularly when etc., will create platforms where consumers can exchange
searching for price-competitive options. information on products. Furthermore, apps (‘applications’) will

Figure 7.1: Have some degree of trust* in the following forms of advertising

Source: Nielsen
Global Online Consumer Survey
April 2009

* “some degree” is defined as “completely”
or “somewhat” trusting recommendations
from people they know


be widely used on iPhone and similar smart phones and many
companies are currently creating these apps in order to spread Practical next steps.
their content. Websites will then become less relevant.

Over a third of Europeans read social content, and one in four ac- You can find more trends and developments for your sector
tively contributes to a blog or writes his or her own blog, according and/or product group in CBI’s market surveys.
to a study carried out for the European Commission. Compared Go to www.cbi.eu/marketinfo.
to the US, Europe is more active in social media. For example:
almost 4 out of 5 Italian internet users read blogs compared to Also take a look at the CBI and Sippo publications on doing
60% in the US, 41% of Spanish users write blogs but only 26% in market research, at www.cbi.eu and www.sippo.ch.
the US, almost 60% of Czech internet users upload photos and
48% of Polish internet users subscribe to RSS feeds, all ahead of In addition, to stay up to date, you can sign up for e-news-
the US (Source: European Commission). letters and rss-feeds on relevant stakeholder websites. For
instance, look at relevant trade fairs and branch organisa-
Global Web analyses the motivation for being in social media. The tions, where you can find links to CBI’s market surveys.
outcome shows that in Germany and the UK the most purchase-
oriented social media users can be found: Germany 51%, UK
49%, Spain 34%, Italy 32%, France 31%, and the Netherlands Read more.
26%.
Consumer trends: relevant CBI sector surveys. Go to
Different social media are used in different countries, and as the www.cbi.eu/marketinfo. Select your sector and country of
social media landscape evolves it will continue to change. Face- interest. Choose “Sector surveys” in the filter that appears.
book, MySpace, LinkedIn and Twitter are the best known social
networks and are used throughout Europe, but for local markets Environmental and social certification schemes: the CBI
other networks may be more relevant. Market Information Database: www.cbi.eu/marketinfo. Select
your sector and country of interest. Choose “Non-legislation”
in the filter that appears.
exporter? Internet use in the EU: http://epp.eurostat.ec.europa.eu/tgm/
table.do?tab=table&init=1&language=en&pcode=tin00096&
All sectors: You can use social media in your market research. plugin=1
Through social media, you can find your end-users, competitors
and potential buyers in Europe and learn about them. You can use Social media use in different countries: http://www.slideshare.
social media for staying up-to-date and for learning what is going net/stevenvanbelleghem/social-networks-around-the-world-2010
on in Europe in your sector. On the other hand, social media is
also something you can use to promote yourself and your com- Iseal Alliance - http://www.isealalliance.org/ - global associa-
pany, and hence build trust. For all intents and purposes, you need tion for social and environmental standards
to find out in which social networks your target group is present.
Note however, that social media is a means for reaching your end Fair trade – www.fairtrade.net
consumers. In business to business relationships, social media
does not yet play a role. We would like to refer you to the module
on Developments in Business to Business for more information.

1 2 3 4 5 6 7 8

Europe, Cultural Aspects.
When doing business with people from other cultures, misunder-
standing and conflict can easily arise. To succeed internationally,
it is essential to be aware of the differences between you and your
(potential) business partner with regard to culture, language and
set patterns of thinking. It just might give you the advantage over
your competitors!

1 2 3 4 5 6 7 8

Introduction. Step 1: Cultural awareness.
You have probably already looked at the broad trends and devel- Cultural awareness is an indispensable step towards achieving
opments within the EU/EFTA region that may impact upon the ‘feeling’ for a foreign market. The enlargements of the EU in the
market in which you are operating. You may already have a clear last few years have increased the size of the EU, and also signifi-
idea on which products you would like to export and to which cantly increased its complexity. The EU and the EFTA are both
country. This module explores the cultural aspects of doing busi- still relatively new entities and have not yet had the time neces-
ness in Europe which will help you to export more successfully. sary to develop a common culture. This is further hampered by
For more information on European cultures, quizzes and tips & different languages, religions, educational and political systems
tricks, please visit the CBI website. and by the absence of more symbolic and emotional things like
European representation in high profile sports events.

Europe: cultural implications Cultural awareness is a critical skill in securing success as an

for doing business. exporter. With more people from culturally diverse backgrounds,
effective communication is vital. Although in many cases, even
If the names ‘European Union’ or ‘European Economic Area’ give if English is the spoken language, cultural differences can still
you the impression that the countries of Europe really form an cause problems. To avoid these problems, try to be aware of
internal unity, you are, unfortunately, mistaken. You just have to differences in meeting and greeting people (use of names, body
visit a European expo or trade fair to find this out for yourself. The language, etc.) and in building relationships. There are also dif-
Norwegian businessman in booth 23 speaks a different version ferences in dealings with hierarchy, presentations, negotiating,
of English than his Greek neighbour from booth 25. The English- decision making and handling conflicts.
man from booth 26 across the corridor gets uncomfortable if
the Italian client stands too close to him. Meanwhile, a German Basic differences:
customer looks impatiently at his watch, complaining that his
Hungarian vendor is ten minutes late for their appointment… • Language
In short, nobody in Europe speaks or even acts, European. • Religion
• Approach
This is a challenge for everybody that wants to enter the Euro-
pean market. It is important to become familiar with the different Language
ways of doing business in the various European countries and The use of language is critical to cross cultural business success
to take the right actions. To do so, it is easier when you structure in two distinct ways:
your approach. This section explains a 3-step process with all
the relevant issues you have to think about and put into practice • Written language in materials such as leaflets, manuals and
before entering into business with a company in one or more of websites.
your target markets.
It could be an advantage, although it is not essential, if certain
facets of your business and product or service are translated. These
include business cards, company brochures, leaflets, emails, web-
sites and information about your product such as manuals.

• Spoken language to communicate with international clients.

If you have a product or service that you feel can sell well outside
your country, you need to be able to present it in foreign languages.

You should not expect everyone in Europe to be able to read, write
and speak English. There are over 20 separate major languages
used in Europe, excluding regional and local dialects. For specific


details of the different languages used in each country see
http://www.ethnologue.com.

When doing business, be aware of the following points:

• Consider investing in multi-lingual staff. Ideally the main
people behind your company should either know or learn a
European language that is spoken in the countries you select.

• An alternative solution is having staff who can speak to
foreign clients on the phone or via email in their own
language. This capability dramatically increases the possibilities
for successful exporting.

Religion
Religion is an important part of the lives of many people in Euro-
pe. Although a significant proportion of the population claims to
have no religion, religious influences still prevail in many societies.
In Europe most people have been educated within the patterns
of one of the variants of the Christian religion. As with language,
many non-natives who now reside in some European countries
continue to practice the religion of their forebears. An apprecia-
tion of this can help exporters. Whilst someone may be inclined
to learn a new language, it is unusual for people to change the
religion of their birth. In this sense, religion can be a stronger cul-
tural determinant than language. This serves to add to the cultural Approach
complexity of the region, as well as helping to explain some of the Differences in approach stem from the local cultural and historical
cultural practices in each country. background in each country and you may recognize them after
spending some time with your business partner. When in another
See http://www.eupedia.com/europe/maps_of_europe.shtml country, you may decide on quality, service, design and price ac-
for a map of the main religions in Europe. cording to your own judgement, based on your values and norms.
However, ‘excellent’ quality may be regarded as ‘moderate’ by, for
When doing business, be aware of the following points: instance, a German buyer who may also criticize the high perfor-
mance of, for example, your power tool, finding it too dangerous
• Take care not to over-generalise. While some factors may be for consumers in his country.
relevant in every situation, it is usually prudent to be sensitive to
the individual situation in which you find yourself. He may be right, or not, but the truth is that the German buyer has
a different perception of what is good and safe than you might do.
• Beware of stereotyping. From your own experience of your In addition, within Europe, Germans think and act differently from
own country, whatever image or reputation it has internationally, Italians, the English do not react the same as the Dutch, etc.; in
you know that it can be inaccurate or even misleading. fact, mainly due to different national or regional cultural approa-
The same applies to European countries. ches, there is no one clearly identifiable European buyer. So try
to find out how people in your intended target country think about
quality, service level, design etc. and take this into account in your
marketing efforts.

1 2 3 4 5 6 7 8

When doing business, be aware of the following: • Sensitivity - be prepared for the unfamiliar

• Take care not to over-generalise. While some factors may be Sensitivity and consideration underlie all good business eti-
relevant for every buyer, it is usually necessary to find out more quette. Being prepared for unfamiliar methods and responding
on the particular interests, needs and wishes of the buyers in thoughtfully is achieved through experience. By avoiding misun-
your selected European country or countries. derstandings and misinterpretations you lay the foundations for
a strong business relationship.

Step 2: Business etiquette. • Diplomacy - think about the interest of others

Business etiquette is the action or actions people take when they Avoiding inconsiderate words and actions protects you from
are with others. How ‘polished’ is your behaviour and your appea- negative consequences. Good business etiquette encourages
rance when in a business environment? In European countries, the careful thought of the interests of others and choosing ac-
this applies just as much as in your own country. It is how you ceptable forms of expression.
relate with other business people that will determine your success
or failure. Business etiquette is about building relationships with • Appearance - make a good impression
people and getting the best out of them. If you feel comfortab-
le around someone and vice versa, better communication and Dressing appropriately, standing and sitting in the right place at
mutual trust will develop. This is achieved by presenting yourself the right time, good posture and looking physically presentable
effectively. Business etiquette helps you achieve this. It revolves are all elements in making a good impression. Some European
around a consideration of the interests and feelings of others and countries prefer more formal dress in business meetings, while
minimising misunderstandings, especially when you are aware of others are less formal.
the basic differences and the cultural dimensions in your target
market. These points represent the basic elements of good business
etiquette. Try to translate these points into good business practice
Business etiquette varies from region to region and country to in each of the European countries, by applying them to the 3-step
country. However, there are some key pillars upon which good process for your target market.
business etiquette is built. These are important in every market:

• Honesty - building your reputation Step 3: Business practice.
A reputation for delivering what you say goes a long way in the 1. (Re-)Presenting your company, yourself and your products
business world. A reputation for integrity is slowly gained but
quickly lost. Before you can present yourself in Europe, you must be confident
about the organisation you represent. Does your organisation
• Character - when to speak and when to listen have a corporate identity, such as a logo or company theme
or message? Does this identity positively reflect the business
This refers to what you as an individual bring to the business in which you are involved? Is this identity consistently carried
table. Your manners and attitude will speak volumes about you. through the key pieces of printed communication such as letter-
They will point to your inner character. If you come across as heads, leaflets, promotional literature and brochures etc.? This
selfish or undisciplined, your relationship is unlikely to last long. could make a good impression on buyers, especially in Western
Proper business etiquette allows you to exhibit your positive and Northern European countries.
qualities. For example, know when to speak and when to listen.
By learning another’s business etiquette you demonstrate an
open-mindedness that will earn you respect.


Your website is probably the main vehicle through which potential
customers will view and form an impression of you before actually
meeting you. The website must be consistent with the other ma-
terials you produce. It must be regularly updated and enable the
most up-to-date interaction. You can find more information on this
in the CBI export manuals ‘Website Promotion’ and ‘Your image
builder’. These can be downloaded from www.cbi.eu/marketinfo.

Presenting yourself is an important part of meeting a potential
client; it applies to how you introduce yourself, how you present
your business card, how you come across to people in the way
you write letters and emails and how you make phone calls.

Business cards
In all European countries the exchanging of business cards is of
great importance. Making phone calls
As far as the telephone is concerned, try to be clear in your
• Business cards are recognised means of presenting personal communication to a European buyer and try to avoid misunder-
contact details, so make sure you have a plentiful supply. standings. Most people can remember a phone call that left them
feeling frustrated or irritated. How much of this was due to poor
• When travelling abroad for business it is advisable to have phone etiquette? Be prepared. It is important to know who you
one side of your business card translated into the appropriate are calling in any company in Europe. Ask yourself when the most
language. convenient time would be to do so, the reason for your call and
what you can do for them. Be structured, short and to the point. If
• Business cards are generally exchanged at the beginning of or you do not know the person you are calling, it is important that you
at the end of an initial meeting. establish the purpose of your call and your credentials immediate-
ly. A short introduction shows good phone etiquette and allows the
• Present the card so the recipient’s language is face up. receiver to set the forthcoming information within a context.

• Acknowledge receipt of any business card. You could put some Purpose of the call - Do not assume the receiver in any European
brief information on it as a reminder, before putting it away. country knows why you are calling and what you expect from
them. Specify the purpose of the call. Give information that the
receiver will understand, appreciate and find useful.
Writing letters and emails
The way you write a letter or an email and the etiquette you Presenting your products is the final step in the process: once
employ may impact on your success or failure in approaching a you have made contact with your potential European customer, it
potential European customer. Failure to observe correct business is likely that you will need to make a proper business presentation
letter etiquette can result in you adopting an inappropriate tone, to outline your proposals.
causing offence or misunderstanding, and lack of clarity. The foun-
dation of good business letter etiquette is to ‘think before you wri-
te’. You should consider to whom the letter is addressed, how and
why. This will then influence style, content and structure. Details
on writing letters you can also find in the CBI export manual ‘Your
Image Builder’ (www.cbi.eu/marketinfo) and the SIPPO manual
“From Contacts to Contracts” (www.sippo.ch).

1 2 3 4 5 6 7 8

Target, content and audience of your presentation Language& Body Language
Try to think about the objective of your presentation first, for The language you use in a presentation is important. Although
example: the majority of the language that is used in a cross cultural
presentation will be understood by an English speaking foreign
• You want to present your company and its products audience, a speaker must be careful when it comes to slang,
idioms or phrases. Try to keep language simple.
• You want to convince the audience about the quality/price ratio
of your product, i.e. you don’t want to sell it for too low a price Southern and Eastern European people are quite animated and
appreciate hand gestures and the expression of emotion. People
• You want to show that there are good opportunities for your in Western and Northern Europe expect speakers to remain
product calm and would find such behaviour excessive. Pay attention to
the use of gestures. Eye contact can also be a major difference.
• You want to sell a volume of 10,000 products next year – how Some cultures consider strong eye contact a sign of sincerity,
to convince the buyer that this would be a good investment others find it overbearing and an invasion of privacy.

You could aim for one of these points or a combination of points. Time
Once the objective is set, think about the content of the presen- In Western and Northern parts of Europe a structured approach
tation. Think about the sequence of what you are going to say is preferred, while Southern and Eastern European people are
e.g. introduction of company, overseas sales network, product more casual. Where a start time is considered a guide rather
range or services, quality assurance, competitor’s price overview, than a definite, allow time for networking or light conversation be-
meeting market requirements, opportunities and growth potential fore starting the presentation. Arriving late in a punctual culture
in the European market etc. will generate negative feedback. Show the appropriate punctual-
ity or flexibility depending on the culture.
Try to find out whether your audience will appreciate factual,
statistical information presented visually, or whether they prefer Emotions
a more personal approach. In presentations, different cultures Keep your emotions under control. In some cultures some cross-
expect different things. Companies in Eastern European coun- examination or scrutiny may occur. If this happens bear in mind
tries, for instance, prefer to see future projections and figures as the positive intentions behind such actions, i.e. the questions are
they tend to think more in terms of economic growth. Companies only being posed to establish facts, not to undermine you. Never
in Southern European countries would rather learn more about lose patience, show frustration or display anger. To do so will
the presenter’s credentials and experience. lead to a loss of credibility.

Style of presentation Use of technology
Tailor your presentation style to your audience. Southern and Power Point is the most widely used method of giving a presen-
Eastern European countries prefer information to be presented in tation in European countries. It can create a good professional
detail and in a way that builds up to a final argument, conclusion impression if it is prepared appropriately. But be careful: some
or recommendation. Here you should gradually lead the audi- people do not like to rely solely on visual presentations and find
ence, using a logical succession of points, to a conclusion. On much more value in words and personality.
the other hand, some cultures, particularly Western and Northern
European countries prefer a much faster paced presentation that
gets to the point more quickly (usually the price).


Audience participation and feedback
Audiences react in different ways. Some are very engaging and
want to ask questions, others are the opposite. They also show
appreciation in different ways. Be prepared to get instant feed-
back to your presentation. However, you may get no reaction.
This is not always a bad sign. Whatever reaction you receive,
always be polite when concluding the presentation and show ap-
preciation for the time your audience has given you.

Read more on presentation techniques, templates etc:

www.businessballs.com/presentation.htm
www.presentationmagazine.com
www.prezi.com

2. Business meetings & dealing with hierarchy

You may have already had a written communication or telephone Greetings
conversation with your potential European customer, but it is Stand up, make eye contact and give a firm, quick, confident
when you actually meet them that the key impressions are made. handshake when greeting people and again at the conclusion of
Here are some useful tips when meeting potential customers for meetings. Italians will shake hands often. When greeting older,
the first time: more formal Germans, they may bow slightly. Nod your head,
but do not try to imitate them. In Austria, you might witness the
• Be properly dressed kissing of a lady’s hand or very formal heel clicking following a
There are differences between Member States as to the ac- greeting. Do not to try to copy this. In some places be prepared
ceptability of formal or informal clothing. Know what is accept- for a two-cheeked kiss, even from another man, but wait for it to
able in the country you are visiting. be initiated after the relationship has been established.

• Address people correctly
Some Europeans can be formal. Always introduce the less
important person to the more important one. Extend a greeting
before asking any questions. Your business proposal could be
severely affected by an unintended breach of etiquette. Formal-
ity and respect are very important.

• Be punctual
Arrive on time for your meetings; particularly Germany, Scandi-
navia, Switzerland and Austria are countries where punctuality
is scrupulously regarded. In the UK, be early. You have about
a 10-minute flexibility in France. In Italy, you can expect to wait
but do not expect the same of others. In Spain, meeting times
can be more flexible.

1 2 3 4 5 6 7 8

Body language Dealing with hierarchy
Body language is very important, particularly in a first meeting. Every organisation has its own structure. Relationships within
Without trying to generalise, it has been said that while Danes each organisation are based on a combination of each person’s
prefer more space when talking, it is common for Spaniards to job function and the personal dynamic between individuals. It
stand very close. Don’t step back to increase the distance or they is advisable to try to make contacts at different levels within an
may take offence. Keep your hands out of your pockets in France organisation. Dealings with hierarchy differ within the European
and Sweden. When you are in another country, it is always wise countries. The organisational structure in some countries can be
to limit your gestures and never assume that domestic gestures quite formal and rigid (e.g. Germany and Switzerland). In these
mean the same thing overseas. For example, if a Frenchman cases, there are clear procedures and protocols you should
gives you the okay sign during your presentation, it means “use- follow. In Southern European countries such as Italy, Spain,
less”. The gesture you would rather see is a thumbs-up. Portugal and Greece, with many companies being family-owned
businesses, you will find that senior people in an organisation
During meetings will only deal with a counterpart of similar rank and seniority.
Agenda: In Southern and Eastern Europe the agenda of the In this case you must try to provide someone of equal stature.
meeting is taken as a loose guideline and there is openness Sometimes senior people in organisations choose not to meet
towards new topics and some speakers may talk for a long time. outside suppliers at all. If your contact in the organisation is not
So make sure to get enough time to cover your points. In West- of a senior level, you may need to talk to someone higher in the
ern and Northern countries the agenda is strictly followed and organisation to progress your proposal. Do this through your
you have to make sure beforehand that your points are included. contact, otherwise you may offend him.

Content: Try to find out in advance when you will be speaking, if You may find you cannot make progress in an organisation
there are more persons at the meeting. When speaking, be clear because you have not appreciated how the organisation works.
in saying what you want and try to be specific in terms of a re- This is not a reflection on the quality of your product, but a
quired time frame and budget. In Western and Northern countries reflection on how you have tried to deal with and understand
try to be direct and do not waste time. However, in Southern and the organisation. Do not pass judgement on the structure of an
Eastern Europe you can take a bit more time for your introduc- organisation. There are usually very sound reasons why organi-
tion and give some detailed information. At the conclusion of sations have evolved to work in the way that they do. Some of
the meeting, make sure that your points and wishes are clear to these reasons are cultural; others are a function of the nature
everyone. of the business. You will find some organisations very bureau-
cratic. Others will be very simple. Respect everybody you meet
Follow-up: Here you do what you have promised e.g. sending in an organisation, irrespective of their status within it. You may
samples, detailed product information, technical specifications find that anybody could be of assistance to you at some stage
etc. After the meeting you could thank the people involved by in your dealings. Do your homework on the organisation before
email or phone and keep in touch with them. This means in West- you approach them. A mistake here can be costly. For example,
ern and Northern Europe that you only contact them if there is a you may wish to have a meeting with the most senior person
good reason. In Southern and Eastern EU states you could send in an organisation because you feel that this person will be the
an email once in a while to ask how people are doing. ultimate decision maker. However, you should not make such
assumptions. If you are referred to someone else, accept this to
be the way to work with this organisation, rather than an attempt
to reject your approach.


3. Negotiating

After you have met a potential client and made a business pre-
sentation, if the relationship progresses you will need to get into
more specific negotiations around a sale or a contract. Negotiat-
ing styles vary around Europe. The following aspects need to be
considered before entering into negotiation:

The basis of the relationship
In Northern and Western Europe business is contractual in
nature. Personal relationships are seen as unhealthy as they
can cloud objectivity. This contrasts with Southern Europe where
business is more personal. Partnerships will be made with those
they know, trust and feel comfortable with. It is therefore neces-
sary to invest in relationship-building before conducting business.

Information at negotiations
European business practice places emphasis on clearly present-
ed and rationally argued business proposals using statistics and
facts. The degree of detail required before finalising a contract
will vary between states.

Negotiation Styles
For example, you may wish to have a meeting with the most se-
nior person in an organisation because you feel that this person
will be the ultimate decision maker. However, you should not
make such assumptions. If you are referred to someone else, ac-
cept this to be the way to work with this organisation, rather than
an attempt to reject your approach.

1 2 3 4 5 6 7 8

4. Decision-making 5. Dealing with conflict & retaining clients

Once you have made your presentation and you have been Most disputes tend to originate from poor communication. There
through the negotiation process, you may find yourself in a posi- may not be a cultural component involved. The existence of a
tion of having to make a decision yourself, or of waiting for your written contract between parties may help to minimise any pos-
partner or client to reach a decision. A decision-making process sible conflict. However, disputes can still occur even when a clear
can be simple, or it could be very involved and time consuming, contract is in place. Some disputes can be more serious than
depending on the significance of the decision. others. The nature of the dispute can usually determine the best
way to deal with it. The following are the main strategies you can
Southern Europeans generally take more time to reach a deci- employ when trying to settle a dispute with a European partner:
sion than other European countries. However, it may also take
a long time in other European regions, especially when you • Work together to solve the problem. This approach usually
deal with large importers or retail organisations with a complex applies to business relationships where damage has been
hierarchical organisation structure. Patience can be an essential done but there is much interdependence and joint commitment
virtue when waiting for a decision to be made, although if it takes involved. It can be time consuming (and possibly expensive) but
several months you could contact the company and ask what is the relationship is so important to you that you are prepared to
going on. It is important to stay positive, enthusiastic and polite go to such efforts.
in your approach. Once a decision is reached, most European
business people act upon it immediately. They also expect that • Accept or accommodate the problem. In this situation, you
you can immediately fulfil your part of the bargain. Make sure may feel that doing this is in the best long-term interests of
that you are in a position to do this, otherwise your respect and maintaining your relationship. You may feel that the significance
credibility may suffer. of the conflict is not so great. Take care that this is not perceived
as a sign of weakness.
Be clear as to the terms and conditions of any proposal before
you reach this decision-making stage. The way you behave at • Compromise. This is often a fallback position. You may have
this moment is very important for how your business relation- reached an impasse over a problem. Sometimes a speedy reso-
ship may develop. In Europe it is expected that decision making lution of a conflict is more important than reaching a principled
should be done in a clear, unambiguous manner. Your clarity of or optimal outcome. Take care that this pragmatic approach does
thought and confidence are being judged when you take a deci- not create problems for you in the future, or that it does not get
sion. to the bottom of what the conflict is about.

You need to know who the main decision-maker is in the organi- • Fight for your position. This approach applies when you feel
sation. In companies in Western and Northern Europe, decisions you are strongly in the right. You may also feel that you are
are often made by committee. In smaller family businesses in prepared to sacrifice the relationship for your principles and that
Southern countries, decisions tend to be taken by the most the goodwill of the company is not so important to you. Your
senior person. However, in larger organisations, this is often European business partner may respect you for taking such a
delegated. You need to understand the decision-making process stand. Take care not to be too rigid, or to alienate key people.
of the organisation you are dealing with.
• Avoid the conflict. If you do not feel capable, or you do not
wish to become involved in the implications of taking a conflict
further, you can avoid it. It may initially be seen as an easy
option but take care not to lose the respect of people who might
expect you to try to solve it. You may discover that with more
courage or confidence you could have found a way to negotiate
the situation successfully.


These approaches can apply in any business environment. How-
ever, some cultures in Western and Northern European countries Practical next steps.
prefer to minimise or avoid conflict. Cultures in most Southern
European countries prefer a more direct, open and potentially more
confrontational style. Have a look at the following section on the characte-
ristics of different European regions to gain a better
Retaining clients understanding of your potential target markets.
Once you have won an export contract, this is an occasion for
celebration. However, your European business partner is always
receiving invitations and offers from other competitors. Because
of this, you should always maintain a high level of service to your
overseas client. A client will be disappointed if your price offer for Practical examples and tips for
the first project was seen as good value only for the price to go
doing business.
up afterwards. The same applies if your level of product quality or
after sales service decreases after your first success. Maintain high To illustrate just how much detail you may need to have before
professional standards at all times. As your relationship develops, approaching a particular European market, the following section
it may become less formal. Even if the relationship develops more gives examples of the different ways in doing business in specific
personally, always remember that your relationship is sustained by regions. The regions selected reflect the major differences in doing
the ongoing quality of the products and services you provide. It is business and communicating within Europe. They are:
much easier to lose a client through poor service than to win a new
client. Winning new business is the lifeblood of any organisation, but • Northern European countries
never underestimate the importance of looking after your existing (examples: Sweden and Netherlands)
clients. You can also find information on dealing with clients (trade
partners) in the CBI export manual ‘Export planner’. It can be down- • Western European countries
loaded from www.cbi.eu/marketinfo. Go to ‘Search CBI publications’. (examples: United Kingdom and Switzerland)

Practical tips: • Southern European countries
(examples: Spain and Italy)
• Maintain a high level of quality and service and do not increase
your price at the second order. • Eastern European countries
(examples: Poland and Hungary)
• Look after your existing clients…. it is easier to lose a client than
to win a new client For countries that are not individually addressed, please refer to
http://www.worldbusinessculture.com/countries/business-with-
other-countries.html, or visit any of the other websites mentioned
What does this mean for you as an under ‘Read more’ at the end of this module.

exporter?
By looking into the cultural roots of behaviour and being prepared,
both in society and business, you can foresee to a certain extent
how your (prospective) customers or business partners will react
and respond to you. Gaining a greater understanding of what
makes them tick will ensure that your export activities will make
the right appeal to your chosen market(s).

1 2 3 4 5 6 7 8

Northern Europe.
The Northern countries of Europe are the Scandinavian states In both Sweden and the Netherlands, personal freedom is
of Sweden, Denmark, Norway and Finland together with The highly important and they like to feel fair-minded
Netherlands.

The key aspects of doing business here are directness and a Personal freedom is highly important. Life, in their perception,
sense that everybody is equal irrespective of their age, gender or centres around the individual and not around the group as it does
status. This means there is little hierarchy between people in busi- in most countries throughout the world. The individualist assumes
ness. Your Northern European client’s secretary will talk to you in responsibility for his acts in personal life but also in business.
the same way as her boss does. A very young employee may give The family nucleus tends to be small, consisting on average of a
you instructions, regardless of the fact that you are far superior to mother, a father and one or two children. Parents are considered
him in rank, education and age. Northern Europeans also like to responsible for this nucleus, but not for the extended family. This
feel they are fair-minded, they are not hard-line negotiators. They means that there usually is no grandmother or aunt looking after
want all parties to a contract to feel they are getting a fair share the kids while the parents work.
out of it.
All the countries in this part of Europe are social democratic wel-
fare states. This means that the old, the sick, the disabled and the
jobless are provided for by the government. In order to maintain
this social system, those who do work have to pay a considerable
amount of tax to the government.

Women make up almost half the Swedish and Dutch work-
forces. In meetings women are treated in the same way
as men. This applies to the etiquette for meeting them. It
also applies to the fact that they have the same decision-
making powers as men. It is accepted that women can pay
the bill in a restaurant.

Candid speech is considered respectful. In this environment of
equality, again, everybody assumes his or her own responsibility
for matters. A client may seem very young to you, but nonethe-
less he will take full responsibility for his negotiations. He does not
have to consult his boss before making deals. This explains why
he will ask you many direct questions, in order to know exactly
what he is buying. So be prepared to make quick decisions and
remember you only have to persuade the client you are dealing
with – not the entire company.


English is commonly used in business. Business cards in
English are acceptable. The use of titles on business cards
is not important. Having well produced printed material
and a good website is important.

Business versus relationships
No matter where you live on the globe, we all want to maintain
good relationships with our clients. Our ideas on what makes a
good relationship can differ, however. Having lunch together in
order to get to know each other better is one way of maintaining a
good relationship. If you come from a culture that is relationship-
oriented, this may work well for you. The individualist, however,
may find this a waste of valuable time. Northern Europeans can
tend to be task-oriented: to them, a good relationship is based on
complying with the details outlined in the contract. On-time deliv-
ery and a smooth operation, to him, are more meaningful than a
In business situations in Sweden, dress conservatively. good lunch: he wants to make as many deals as possible in the
Avoid wearing anything that is pretentious. This applies to little time he has available.
both men and women. Suits and ties are worn.

In the Netherlands, dress is somewhat informal. To some Presentations should be clear, logical and detailed. In-
extent, dress code is determined by industrial sector. The formation should be properly backed up with facts and
more conservative areas such as banking tend to veer to- figures. Try not to show emotion during a presentation.
wards suit and tie whilst the newer industries take a more Swedes tend to be favourably impressed if you appear
casual but smart approach. reserved or even shy. The Dutch process information
objectively and analytically; they do not accept subjective,
emotional arguments.
Contracts
If you’re negotiating a contract, check during the conversation
whether you have properly understood your client by summariz- Direct communication
ing his words. After the meeting, summarize your verbal deal in Bringing a present for a client may be fine as long as it is not too
an email to your client, preferably the same day. This will improve expensive or large, otherwise your client may feel morally obliged
your credibility. You may be accustomed to a culture in which you to buy your products. This goes straight against his philosophy,
seek trust and security by building strong relationships with your which is all about being free to make the choices he considers
clients and their companies. The individualist client of Northern best without any obligations to anyone. Often, it is even company
Europe, however, seeks trust and security through making written policy that they are not allowed to accept gifts. In fact, he may
agreements on the deals he closes with you. These agreements even respond to your invitation for lunch and your present with a
or contracts are supported by the law. flat rejection. The Dutch are especially known for their directness.
It is often interpreted by others as bluntness. But in the Nether-
lands, using social lubricants is paramount to concealing the truth.

1 2 3 4 5 6 7 8

Western Europe.
In Sweden, your best approach is to defer to their wish for The Western members of the EU are Germany, Austria, Belgium,
long, all-round consultations and demonstrate clearly your Luxembourg, the United Kingdom and Ireland. Culturally speaking,
own patience and understanding, allied to firmness and Switzerland and Liechtenstein are also part of Western Europe.
integrity. France is sometimes seen as a western European country, some-
times as a southern European country and has characteristics of
In the Netherlands, be frank, direct and strive to appear both areas.
straightforward. They are looking for trust, energy and
reliability. Always deliver what you promised.

A few tips
Here are a few tips that may help you get familiar with the
business culture of Northern Europe:

• Watch local television and observe how people behave before
going to a trade fair;

• Never forget that all people are considered equal, regardless
of social status or age;

• Aim for a win-win situation in your negotiations;

• Invite your client for lunch but understand if he declines;

• Directness is not rude, but is a way of telling the truth.
Be very clear about what you want!

More info on doing business with Sweden:
http://www.worldbusinessculture.com/Business-in-Sweden.html

Netherlands: http://www.worldbusinessculture.com/Business-in-
Netherlands.html The Swiss people value order, privacy and punctuality.
Their home is very important to them. They are also hard
working and have been called perfectionist. There is a
strong desire for belonging, as well as a sense of commu-
nity and social conscience.

In the UK, there are established rules for everything, and
this gives a sense of stability to life. They are very time-
oriented, and emotions are not to be shown in public.
There is an inherent trust in the roles people play within
the social or business system, and a strong sense of the
interdependency of these roles.


There is more formality in business in this part of the EU, compa- The English tend to avoid talking about matters that they
red with Northern Europe. Western Europeans tend to be recep- consider to be personal and controversial topics such as
tive to new business if they can see a reasonably quick return. politics or religion. The Swiss are extremely polite conver-
Efficiency and accountability are key words in doing business sationalists, in both social and business situations. They
in this part of Europe. They are very results orientated. You can shun inquisitiveness and rarely pry.
show emotion but be measured in how you do so. Transparency,
assertiveness and equality are important values. Say what you
think. There is no issue with disagreeing with someone in Western Western and Northern Europeans have to account for every
Europe if you can clearly argue your reasons. hour spent at work, so the boss can calculate their productivity.
Consequently, they are highly result-oriented. Little time is spent
on maintaining relationships that do not involve direct business.
Swiss people may appear somewhat unfriendly and reser- Success is measured by the completion of a task or the fulfilment
ved until you get to know them. They value everything to of a contract. If you do a good job, buyers will be back for more
be highly structured and have respect for rules that make when the demand is there. You should only contact your European
people know what is expected of them. Only the Germans partner if you have relevant ´news´.
rival the Swiss in their respect for, and submission to,
timetables and schedules. Structured meetings
Meetings are highly formal. In face-to-face meetings, start the
The English are highly individualistic, taking responsibility conversation with just a few minutes of small talk. Then propose a
for their decisions, but always within the framework of structure for the conversation. You might say, for instance, ´I would
the family, group, or organisation. Individual initiative and like to talk to you about our bulk prices and the expansion of our
achievement are emphasised, resulting in strong individual airfreight capacity. This should take about forty minutes of your
leadership. The English do not often reveal excitement or time.´ Agree together on the content and the time frame of your
other emotions. conversation, so the person you’re speaking with knows what to
expect. Also, ask him if he wants to add something to the agenda.

Western Europeans usually are open to new business if you can Summarize several times during the conversation to check
convince them that they´ll have a return on their investment on a whether you and your counterpart have the same understanding.
relatively short term, that is, within about a year. Business people At the end of the conversation make matters ´SMART´: Specific,
working in larger organizations have annual targets to reach. A Measurable, Achievable, Realistic, Time-related. Send written ma-
salesman selling machinery, for example, may have a sales target terial before the meeting if you can. If several persons are taking
of half a million euro a year. Reaching the target means he will re- part in the meeting, it may be helpful to email them your agenda
ceive a bonus at the end of the year. Targets are internal matters, ahead of time.
so do not ask about them. But do remember that if you can help a
businessman reach his target, he will be interested in your offer.

Strong proposals are essential. Your supporting product docu-
mentation should give structured information, backed up with the
necessary figures, in a quick and easy-to-read format. Western
and Northern Europeans prefer well-ordered written material with
figures over glossy brochures. If you receive a request for an offer,
try to respond within two days. Do this via email if you can, so that
information can be forwarded to others within the organization.

1 2 3 4 5 6 7 8

Although English is widely spoken, do not always assume Transparent communication
this about all Western countries. The professional nature In the Western European culture, transparency, assertiveness and
of your printed material and your website are valued highly equality are important values. When you speak, be direct. Go right
in the UK and Switzerland. A formal approach should be to the heart of the matter and then move on to the details. If you
adopted in sending letters and using the telephone. do not agree with a proposal, say so. People expect you to speak
up. Saying ´no´ is perfectly accepted in Western Europe. Most We-
Business cards in English are a must (UK) and usually stern and Northern Europeans are unable to read the body langu-
acceptable in the other Western countries (Switzerland age of non-Europeans: you have to make yourself understood in
itself has four languages, for example: German, Italian, words. If you do not, your partner may get the impression you´re
French and Romansch). Appointments must be made 1 to withholding information. When people talk they look each other in
2 weeks in advance and confirmed upon arrival in the UK the eye. This applies to conversations between men and women
or Switzerland. Punctuality is taken extremely seriously. alike. If you do not look a person in the eye, he or she may think
Telephone if you expect to be delayed. It is extremely rude you´re being dishonest or lack confidence. Be prepared for the
to cancel a meeting. fact that Western Europeans, men and women alike, are hard-line
negotiators and there is tough competition amongst businesses.

Professional presentations
If you want to make use of a PowerPoint presentation, make sure Traditionally there has been limited acceptance of women
it suits your specific audience. Do not put too much information on in positions of authority but this is changing. Women have
one slide. And remember that content is more important than co- needed to demonstrate their ability before conducting
lours or special effects. Be enthusiastic, but not openly passionate business successfully.
about your services or products, otherwise you may be considered
unprofessional. Emotions are expressed only with measure. You
may perceive people as distant and cold, but this does not mean Showing respect
they are not interested in your services. Western Europeans are more sensitive to social status then Nort-
hern Europeans. They are also more formal. Men and women are
generally treated equally in society and business. People shake
Being properly dressed is very important in the UK and hands when they meet. Introduce yourself by your first and last
Switzerland. Casual clothing is not welcomed. Dark co- name. Keep at least an arm’s length distance from the person you
loured suits for men and women are often expected. are speaking with and do not touch him or her while talking. Only
call someone by their first name if you have been invited to do so.
Western Europeans like to be well informed in advance In Germany and Switzerland, persons with an academic title must
of a presentation. Make sure you have the appropriate be addressed as such, (´Doctor Friedrich´).
information to back up the points you are making. A clear-
ly argued presentation is preferred to a lively one. Keep
the language simple and direct. A technically competent Titles are important. Use a person’s surname unless they
presentation is also respected. The Swiss are good liste- invite you do otherwise. Wait to be introduced.
ners, and do not have the urge to expound ideas at length
themselves. They forget little of what you tell them, often
taking notes while you speak, and they will almost never
interrupt.


Continuity and networking In the UK, objective facts are the only valid source of truth.
In Western and Northern Europe, people change jobs more Little credence is given to the feelings one has about an
frequently than in Southern Europe. This means that when your issue. The English are the masters of understatement.
contact, say Mr. Smith, leaves the organization, you may have to After a meeting, be sure to leave detailed data.
start lobbying all over again with his successor, Mr. Johnson. In
the worst case, Johnson may introduce his own network of sup- You do not have to be exciting to make a Swiss like
pliers and your name will be forgotten. To prevent this, make sure you; they are looking for solidity and reliability in the
you have at least three or four contacts in each organization and people they deal with. You should show that you are in
at different levels. Schedule an appointment with Johnson and get good control of your emotions, private life and financial
acquainted quickly. In the meantime, keep in touch with Mr. Smith, arrangements.
too, as he may need you in his new organization.

More info on doing business with the United Kingdom:
http://www.worldbusinessculture.com/Business-in-Britain.html

Switzerland: http://www.worldbusinessculture.com/Business-in-
Switzerland.html

1 2 3 4 5 6 7 8

Southern Europe.
The southern countries of Europe include Spain, Portugal, Italy, Family is important and sociability and informality are part
Malta, Greece and Cyprus. This area is also known as Mediter- of Spanish and Italian business
ranean Europe. France (Western Europe) is also sometimes seen
as a southern European country; it shares certain characteristics
with the countries mentioned here. Southern European countries are primarily group-oriented
cultures. The principle characteristic of this part of Europe is the
importance of family and other groups. The extended family is an
important social framework. Family units function as a tight social
framework in which each family member has duties and respon-
sibilities. The interests of the individual are subject to the interests
of the group or extended family. You will find more small and family
businesses in this part of the EU. The key consequence for this in
terms of business practice is the importance of building a relation-
ship with someone before doing business.

The Spanish are a vivacious and sociable people. You
are judged on the quality of your character. The ability to
be amusing and entertaining is much prized and humour
plays an important part even in business discussions. Per-
sonal small talk is acceptable. Italians like to share details
of family, holidays, preferences and to discuss beliefs and
values. Try to adopt a certain Italian smoothness or deli-
cacy and use flattery.

People from group-oriented cultures are used to building relation-
ships based on trust before they do business with a new company
or person. The Italian businessman will invest in the relationship
with a new English or Danish client by spending quality personal
time together. During this time trust is built for a solid future col-
laboration. The Englishman and the German might experience
this as a waste of time. In Northwest Europe, trust is established
by the quality of the product one has to offer, the compliance with
contracts made together and the turnover of the past few years.

Personal contacts and relationships are essential for suc-
cess in Spain and Italy. English may be spoken in large
companies, but it may be advisable to use an interpreter
if dealing with some smaller family businesses. Have your
business card printed in English on one side and Spanish
or Italian on the reverse.


Dress and colours Spaniards are extremely dress-conscious and will perceive
There are a number of things that Southern European countries your appearance as an indication of your professional
have in common. For instance, they tend to like bright colours, achievement and relative social standing. Business dress
whereas North-western Europeans prefer darker colours like in both Spain and Italy is stylish yet conservative.
black, gray, navy blue or beige. Mediterranean people spend a lot
of time outdoors and, in general, like to go out in groups. Fashion- Personal appearance, image and human relationships are
able dress is very important and the appreciation for form and very important.
fashion dates back to ancient times. One makes a good impres-
sion by wearing fashionable clothes suitable for the occasion. A
compliment to your business partner on his good taste in dress-
ing will be appreciated. By contrast, people of Northwest Europe
tend to prefer soberness and simplicity. To them, a compliment
on someone’s appearance could be seen as unnecessary and
unwanted flattery.

1 2 3 4 5 6 7 8

Hierarchy and status Verbal and written agreements
Mediterranean people are sensitive to hierarchy and social status. When it comes to business, the French tend to be more hardcore
They will openly show respect to important people and defer to negotiators than the Italians, Spanish and Portuguese. Verbal ag-
the wisdom of an elderly person, which is less likely to happen in reements will do only if there is sufficient trust between business
Northwest Europe. In the many family businesses in the region partners. The French, however, will want to see all prices on paper
the boss may be perceived as a father figure who sees to it that before making any decisions. It is advisable to always work with
everyone is provided for. In large companies the president is seen clear written agreements, especially when transport is involved.
as a distant leader. There are clear hierarchical differences. Make
sure that the person you do business with in the organization has Indirect communication
the power to communicate with the levels above him as well as You may notice that the way people communicate in Southern
the levels below him. It is advisable to get to know many people in Europe is very visual. Hands and arms are used to illustrate or
an organization. It will stand you in good stead if difficulties come emphasize and there is a tendency to speak loudly. Interrupting a
up or when a person leaves the organization. Being introduced by conversation is allowed and sometimes expected. Mediterranean
an important person to a prospect or client is by far the best way people tend to use considerably more words to express them-
to enter a business relationship. selves than people from Northwest Europe. They will take special
care to prevent loss of face. The Italians, Spanish and Portuguese
may tend to joke more than people from Northwest Europe and
Appointments are not always kept as timetables are not might expect light conversation. The French, by contrast, can get
rigidly adhered to in Spain and Italy. into lengthy conversations about serious subjects right from the
start. People in the south of France tend to be more open and
informal than their fellow citizens from Paris and the North.

Italians and Spanish are rather informal after the first in-
troduction. They will stand close to you and may frequent-
ly touch your arm or shoulder. The French usually remain
formal throughout the conversation.

The Spanish prefer to talk through a problem rather than
make a formal reply. Conversation is often expressive.
People are more talkative than in Northern or Western Eu-
rope, and they are more likely to use humour. The Italians
are excellent communicators and have a keen perception.
They are very outgoing, and are less sensitive or touchy as
the Spaniards. They are also more accepting of criticism
and are very flexible.


Meetings A few tips
In Spanish business meetings the chairman takes control with
some authority and personal opinions are not as important as • Invest in building relationships and spend quality time with your
facts. People are not always prepared to argue or disagree when client.
a superior is in the meeting. Although hierarchy is not as important
in Spain as in other European countries, senior people, particular- • Pay compliments to dress, food and wine from the area.
ly in small companies, like to be treated with respect. Agendas are
not always used. You may be interrupted when you are speaking, • Prepare yourself for light conversation. Think of some light,
and you may find several people speaking at once, often on diffe- current topics to talk about.
rent subjects. Be patient.
• Make sure your contact is able to communicate to different levels
At meetings, Italians do not follow agendas very strictly. They will in his or her organization.
jump ahead to later points and will re-discuss points you think
have already been settled. They will talk loudly, excitedly and at • Bring your client or business partner a small present.
length. Often several people will talk at the same time, and you
may find two or three micro-meetings going on simultaneously. • Bright colours do well in the Mediterranean.

Presentations • Adapt your verbal and written presentation to the country you are in.
If you have to hold a presentation in southern Europe, make it vi-
brant, preferably using Powerpoint or video, and use bright colours To retain your Spanish and Italian customers you have to maintain
and lively images. Quality and form are often more important than a regular dialogue. Even if the service you provide is excellent,
boring images about figures. You can support your presentation without the personal touch your relationship will not thrive.
with the necessary figures on paper handouts, which you can
distribute before the presentation. If the presentation is in English, More info on doing business with Spain: http://www.worldbusi-
remember that this may not be the first language of all people pre- nessculture.com/Business-in-Spain.html
sent. Create trust and credibility by mentioning that your company
has a long history in your country or region. Italy: http://www.worldbusinessculture.com/Business-in-Italy.html.

1 2 3 4 5 6 7 8

Eastern Europe.
The EU Member States that are part of this area include the The geographical centre of Europe
Baltic States of Latvia, Lithuania and Estonia, as well as Poland, Slovenia, Hungary, the Czech Republic, the Slovak Republic,
Hungary, the Czech Republic, Slovakia and Slovenia. As south- Poland, Lithuania, Latvia and Estonia are the EU´s easternmost
eastern European countries, Greece and Cyprus share certain countries. They are among the newest EU members, having
characteristics with the countries forming Eastern Europe.. joined in 2004.

Located in the centre of Europe, they themselves like to be
referred to as Central European rather than Eastern European
countries. They feel this helps to distance themselves from their
past associations with the Communist era. In the nineties these
countries opted for democratic systems, after having been under
communist rule for decades. In the communist era marketing
was not used in business. Today the younger generation, often
educated at business schools abroad, manages these countries´
international businesses. If you do business with one of these
countries, chances are you will be dealing with a bright, young,
marketing-oriented person. But behind the scenes, the older gene-
ration at the top is still making the final decisions. So to really get
your foot in the door, make sure that you give the young manager
enough information for him to convince his boss to purchase your
product.

Old-style procedures
Many of the above mentioned countries are still restructuring and
privatizing their large agriculture and heavy industry sectors and
are therefore open to innovation. Some characteristics of the old
system still remain: you´ll find more regulating procedures here
than in other European regions. This makes it important for you
to understand how a purchasing process takes place here: know
A characteristic feature of Polish culture is its commit- who is involved, what the position of your contact is, who the
ment to and involvement in the life of the country. Both the final decision maker is and at what level in the organisation he
Polish people and the Hungarians are patriotic, united by operates. Calculate ample time to proceed in small steps to obtain
a strong sense of community. In Hungary as in Poland, the your goal.
family is the most important institution, and the building of
close personal relationships is very important.
Rules are an important part of the Polish business en-
vironment, therefore you will be expected to know and
There are cultural differences within this region. Communication is appreciate established protocol and business etiquette.
more straightforward and direct in the more northerly parts. Hungarians pride themselves on using proper etiquette in
all situations and expect others to do the same.

Women do not have many positions of authority in Polish
and Hungarian business but this is starting to change. The
traditions of a male dominated society are still reflected in
the business world.


Emails
When you write emails, ask your business partner at the other end
of the line if it may be good to copy someone else on the email.
If a superior is being copied make sure, if possible, that your
superior is also copied in, so that communication takes place at
the same levels. This will also make you and your product more
widely known in the organisation, often at different levels, and
you´ll be able to build trust with several people. This may also help
your counterpart to feel more comfortable in his interactions with
you. Hungarians prefer face-to-face meetings rather than more
impersonal vehicles of communication such as letters or emails.

Meetings
Wait to be introduced and to be invited to sit down. It is usual to
start business meetings in Poland with some introductory small
talk. This allows you to get more acquainted with your counter-
parts and establish an initial business rapport. Openness and
honesty are appreciated. Organisations in Poland have a strong
respect for hierarchy and authority, with structure and delegation
coming from above. This is reflected in many Polish business for-
malities and settings, including the decision making process and
the use of professional titles.

In Hungary, rarely quiet and orderly and agendas are often not
respected. Bargaining is normal, prolonged and popular. They
will avoid saying no, but often fail to answer questions directly.
You have to read between the lines. Expect some small talk and
getting-to-know-you conversation before business is discussed.
Do not move the conversation to business yourself.

In Poland, the work day starts early; appointments at 08.00
a.m. are not unusual. Requests for appointments must
be made in writing when possible; translating the reque-
st in Polish will make a good impression. Hard facts are
important so participants come well-prepared with facts
and figures to back up their statements. Foreigners would
be expected to do the same. Business decision-making
processes tend to have a hierarchical basis, and there-
fore many decisions will be taken at the top echelons of
the company. Final decisions are translated into rigorous,
comprehensive action steps that you can expect will be
carried out to the letter.

1 2 3 4 5 6 7 8

In Hungary, appointments are necessary and should be In Poland, dress modestly but smartly in smaller sized
made two weeks in advance in writing. It is often difficult companies. Ostentatious displays of wealth are not liked.
to schedule meetings on Friday afternoon or from mid It will be noticed if your clothing is clean, well pressed and
July to mid August. Also avoid scheduling meetings from in good condition. Conservative dress is common in larger
mid December to mid January. Punctuality for all social companies.
situations is taken extremely seriously. I f you expect to be
delayed, telephone immediately and offer an explanation. In Hungary, business dress is formal and conservative.
It is considered extremely rude to cancel a meeting at the Men should wear dark business suits with a white shirt
last minute and could ruin your business relationship. and tie. Women should wear either business suits or
elegant dresses, complimented with good quality acces-
sories.
Advertising
In the southern European countries companies tend to draw
attention to their products with advertising images of attractive Communication
young women presenting the product – whether it is organic fruit, In south-eastern countries like Hungary and Slovenia, people tend
furniture or toothpaste. More to the north-east, consumers are to speak in a loud voice, and enjoy lengthy discussions about any
more likely to be attracted by a clear emphasis on the function subject, gesturing heavily and showing emotion.
of the product: a doctor in a white coat explaining the health
benefits of organic fruit or furniture. The image of the doctor lends Be sure to make your own points. Interrupting is fine. People are
credibility to the product, suggesting that research has been done usually indirect in telling you what they exactly want. They will
to ensure its health and safety for the consumer. As a foreigner frequently tap you on the shoulder or arm. In countries like the
you can gain credibility by mentioning that your organization has Czech Republic, the Slovak Republic and Poland, communication
been in business for many years. Another form of building trust is is somewhat more direct and people touch less frequently. Here,
mentioning the names of your clients on your website, with their too, you may get involved in deep, thought-provoking discussions,
consent of course. although you should try to avoid politics.

Status A few tips
East Europeans are generally more sensitive to status than other
Europeans. Avoid jumping levels in the organization if you are not • Use the term Central European to describe the region and avoid
invited to do so. Address people with their academic titles or with the term Eastern European
their job title until you´re asked to call them by their first name.
Usually people are formal in the presence of others and informal • Copy in a superior on important emails
in individual meetings: the amicable fellow you met at the trade
fair somewhere in Europe may appear to be a completely different • Analyse what type of advertising attracts the consumer
person in an office setting with his boss or staff. Lunches and
dinners away from the office are perfect occasions to get to know • Be sure to make your point in emotional discussions
a person: people often feel freer to talk when they are out of the
office. • Address people with their academic titles


Although Hungarians are transactional and do not require
long-standing personal relationships in order to conduct
business, being introduced by someone they know and
trust can often help. Socializing is an important part of the Try to find out as much as possible on the (business) culture
relationship building process. Expect many invitations to and cultural preferences that are relevant to your product/
dinner or cultural events. Hungarians are emotive spea- service in your European target market(s) to avoid any major
kers who say what they think and expect you to do the blunders. See below for links to websites which contain more
same. They do not like euphemisms or vague statements. information on culture.

Treat such concepts as honor, chivalry and old-fashioned Read more
gallantry as meaningful qualities in a Polish context. Poles
are courteous and rarely interrupt. Poles are direct com- • Languages Information on the different languages and
municators, believing that it is better to express opinions religions in the EU: http://www.ethnologue.com
directly, rather than hiding the truth behind diplomacy or
coded language. • Cultural differences
Information on business etiquette in the EU and specific
information on cultural differences between Member
More information on doing business in Poland: States has been taken from a number of sources including:
http://www.worldbusinessculture.com/Business-in-Poland.html
http://www.kwintessential.co.uk
Hungary:
http://www.worldbusinessculture.com/Business-in-Hungary.html http://www.executiveplanet.com

http://www.msi-network.com/content/doing_business_in_
general.asp
exporter? http://www.culturosity.com

If you are in a business meeting, in negotiations, part of a joint http://www.intercultures.ca
venture or just face-to-face with a potential customer from a
European culture, you gain a competitive advantage from having http://www.intercultural-crosscultural-communication.com
strategies to deal with the cultural differences you will encounter.
• Business practice
Information on culture in EU countries, their differences
and how to do business in each EU state can be found on
the following sites:

http://www.doingbusiness.org

http://www.executiveplanet.com

http://www.worldbiz.com

http://www.worldbusinessculture.com/countries/business-
with-other-countries.html

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Exporting To Europe, An Introduction SIPPO - CBI

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