Case study

Trading in the European Union

Building markets in the EU - Warmup PLC

Here's how we started building markets in the EU
Under-floor heating system manufacturer and retailer Warmup plc is based in north-west London. The business sells its products via retailers, building contractors and direct to consumers, and has customers in Germany, France, the Netherlands, Cyprus, Spain, Portugal and the USA. Howard Flood, international director at the company, explains how the firm started trading in the European Union (EU).

What I did

Understand each market's needs
"It's essential that you visit each target market and walk many miles in your potential customers' shoes. You need to understand what makes them tick and what triggers purchasing decisions.

"While the EU is a single market, there are significant practical and cultural nuances from member state to member state. For example, in cooler climates, such as Germany and the Netherlands, most houses are carpeted, whereas in warmer countries such as Spain and Portugal there's a greater use of floor tiling. For us, that means our sales methods, features and benefits and target customers are different.

"In the warmer climates, we work with architects and builders to get our products in at the specification and build stage, but in cooler climates we trade through specific retailers to catch the electrical contractors and those actually installing the product, such as professional master tilers and the DIY market."

Stay close to your markets
"We directly employed sales people in the local markets. They can spot any issues that might arise, whether they are language related, cultural or otherwise. It's more difficult to grasp these problems from the UK.

"For example, in one of our markets, we were advised by our local office to make sure that we additionally shipped installation instructions in Polish - as they were seeing a rise in the number of migrant Polish workers in that area. Without that local knowledge, we would still have been providing instructions for installers in a language that wasn't native to them."

Get the right stockholding
"In member states where we also have a warehouse presence, it helps us to keep a reasonable amount there, but without tying too much cash up in stock. For markets where we supply to order, particularly where our product is installed in new builds, it's essential for timely delivery so as not to hold up the construction. It's also well worth negotiating as much lead time with customers as you can, to give room for manoeuvre on manufacturing and delivery."

What I'd do differently

Take a closer look at country-specific regulations
"We're fortunate that our product generally translates well across all EU markets as the voltages required are compatible. However, while our British Electrotechnical Approvals Board mark has been enough to meet standards in most markets, we found out that we'd need an additional local certification in France. That's slowed our progress there a little, so it would have been useful to know it was compulsory slightly earlier."