Can one product fit all markets?

A fluorescent light fitting - now a luminaire.

You might have thought that one product could suit all markets, or be made to suit all markets. After all a light fitting was in essence a relatively simple product. Like most companies in the UK at the beginning of the 1970s our products had been developed with the British market foremost in our considerations.  But before going down that route lets think about the market influences at that time.

In 1973, Britain, along with Ireland and Denmark was about to join the Common Market, with its six existing members of France, Italy, Germany, Belgium, The Netherlands and Luxembourg. As a Product Manager, my brief was to specify new products taking input from the UK  sales team, obligatory  design features to meet legislation, to figure out the price and unit cost, tooling investment  etc and then steer the product through all the essential design to production stages then on to building stocks and getting  them selling. Sales were mainly to national electrical wholesaler chains.Wholesalers bought at a discounted price from the manufacturer, then sold on to electrical installers at a further discount. So the business model was the manufacturer usually held a national buffer stock, distributed  the goods to wholesalers, who in turn held stock and sold over the trade counter to the contractor. Pricing structures were retail trade price or net trade price with discounts talked about as '20 and 5' or '40 and 10'. Keeping the supply chain full of stock was the prime aim. The brand leading lighting fittings sold in tens and hundreds of thousands, even millions, so there was a huge manufacturing investment in production lines allowing us to be the lowest cost producer.

So what effect did the Common Market have? We were set up to be the lowest cost producers in the most commonly used products, always have stock, promote the product with incentives for the wholesalers to stock and electricians to buy and install - a business model that saw volume grow year on year. But the Common Market knocked all this on the head. For the same generic fitting, which by the way we now had to call a luminaire, the supply voltage was 220volt (on a good day) not 240 volt, electrical connections were different, lamp caps were different, electric plugs and sockets were different and building module sizes were different. But what was really interesting was that there were differences from one Common Market country to the next! Oh yes! Britain had gone metric in anticipation of this happy day when we became European, but large parts of this same Europe expressed dimensions in metres and centimetres but  used the internationally standardised BSP for screw threads. So when at the behest of the Common Market, screw threads were changed to the shiny new metric sizes we phased out the one inch BSP etc and phased in 25mm threads instead. Then the complaints started to arrive from all over Europe that your light fittings (sorry luminaries) don't fit our conduit anymore. It then emerged that not everyone had signed up to be metric in Europe, they stayed with the international standard of BSP! And what does BSP  stand for? Why, British Standard Pipe of course whose origin may have been in the age of gaslight.

But this was just the first step in encumbering manufacturing industry with unnecessary and unwanted additional costs which ended with manufacture moving off shore to China.


As Britain votes to stay in the European Union or leave, this blog will run a seri es of articles on some of there practical experiences of business in the EU.

The market environment

The markets in which we sell our products and services can be influenced by several external factors which establish the market environment.

Some of the important factors are product related and will include compliance with local legislative and safety standards, custom and practice and functionality among others.  Competitive issues can affect the product design and will also include price, distribution and post sales support and service. Then there are the political factors which can have a bearing on all the rest.

Moving product across borders can be challenging as it often will involve meeting not only safety and performance requirements,  over coming local preferences and local competition, but tariff barriers imposed by politicians.

At one time and not so very long ago, British manufacturers divided the world into two main areas of operation - the home market and the export market. The product was designed primarily for sale in Britain and export sales mopped up surplus production capacity and as exports were to British influenced and English speaking markets it all worked quite nicely. British Standards were usually well accepted in Commonwealth countries and the bigger British companies through their membership of trade organisations often had a seat or two on the BSI  committees that wrote the standards. To some extent the resulting standards reflected best practice and realistic test procedures.

Then it all started to change as Britain became a member of the EEC or what was usually referred to as  the Common Market. In Europe there were different standards and criteria to meet. In the lighting world not only did lamps in Europe have screw caps instead of bayonet caps, but they worked on a different supply voltage, the light fittings had different plugs and products used metric screws. The style was different too.  Commonwealth preferences were scrapped, making raw materials more expensive for British manufacturers. In short the political lure of access to a much larger market was not what the manufacturers wanted really. We were now operating inside a tariff union, but not in a uniform market, instead a series of national markets. As marketers looking at continental Europe we faced a number of challenges - the product typically didn't suit any of them, a number of different languages to contend with, lower priced local competition, different local custom and practice and no 'in place' infra structure or service support. The markets were reviewed by sales opportunity - Germany was the biggest and had the hurdles of DIN  standards and TUV Test Houses to navigate, Italy led the Latin sphere of design influence and Sweden led the Scandinavia area - both were far superior in creative design and elegance which at that time was fairly brutal in the look of British products. Smaller countries acted  as wholesalers and grey importers to the bigger countries over the land border. Fortunately for Britain  the soaring oil priced which quadrupled in the early 1970s created a building boom in the Middle East, with countries like Iraq, Iran, Saudi Arabia and the Gulf States whacking in big orders for our standard products. Our challenge was not to develop products for all Europe' arcane custom, but how to churn out enough standard product. And it wasn't long before Britain itself became an oil state.

As Britain decides whether to vote to stay in the European Union or  vote to leave, this blog will run a short series of articles on some of the practical experiences of business in the EU.

This is a club we should never have joined ... continued

The euro flag

Over the weekend Prime Minister David Cameron returned from day and night negotiations in Brussels with a fantastic deal for Great Britain. He wisely avoided stepping off a British Airways plane waving a piece of paper and declaring it heralded peace in our time. So good a deal in fact that a Cabinet  meeting was convened on the Saturday morning - the last time that happened was when Britain had to go to war to eject Argentine invaders from British territory. It seems we will never as a country have to join the Euro currency, neither do we have to be more deeply integrated politically and some changes in immigration would be permitted as well. The Referendum is set to take place on 23rd June. Some cabinet ministers and a large number of the PM's governing party immediately came out in favour of leaving.

So far the 'stay in' campaign has taken the line that leaving will be sure to end in tears, that we are far better off as a member of the European Union and will lose all the great things the EU membership bestows on Britain, should we vote to leave. Those advocating leaving take a more optimistic view that we will be breaking free from an old fashioned trading bloc which is in decline to return to the global trading world where we will flourish once again.

The British membership of what is now the EU has so far been just over 40 years - a small period compared to the centuries when Britain was independent and incredibly successful. In fact  by 1922 the British Empire extended globally with dominion over no less than a quarter of the earth's surface and some fifth of the world's population all, democratically ruled from London.  London was and remains a global leader in the financial markets and of course introduced English as the language of business. It was the Empire upon which the sun never set. But by the mid 1960s the Union Flag was being hauled down all over the world as country after country became independent. It left a question mark over where Britain would now go. Europe suddenly looked attractive - perhaps we could join that. Centuries of keeping Europe at arms length and interfering only to avoid any one country dominating and being a threat to Briton. So while Europe raised large armies for land based wars, Britain looked outward to the world, became a maritime nation and colonised a quarter of the world and where the flag was planted trade followed. Not surprisingly Europe was not a replacement for the Empire and was dominated by Germany and France.

Few people in Britain considered themselves European and the place if mentioned at all was generally referred to as the continent. It was once said that a newspaper headline announced, "Fog in the Channel - Continent cut off." It helps explain the relative disinterest in Europe, even the outbreak of World War 2 vied for attention with news of the Test Match. Only England and its Empire played cricket - another  cultural difference. In the post war years for most people the continent was not a holiday destination, those who could afford a holiday at all headed for the British seaside resorts. For many families the only experience of the continent was with the army, people didn't hold passports in the main and anyway considered the continent to be a rather dirty place where it was unsafe to drink the water and to cap it all they spoke a number of foreign languages. In short the English speaking world did things differently and the geographical proximity of France merely coincidental.

It is surprising that the political class were so optimistic that it would all work, but then we were only looking at trade opportunities, not political union.

This is a club we should never have joined

So the lights burned brightly through the night in the chancelleries of Europe last night without reaching an agreement. The occasion? The latest bid by a British Prime Minister to change at least one or two of the rules of the European Union that are currently most irksome to the British electorate. David Cameron, the smooth former PR man, was hoping to conclude his charm offensive and win some concessions which would be welcomed back home and allow him to hold a referendum and back the case for Britain to remain a member of the EU.  Of course he was following in the footsteps of the 'Iron Lady' who had famously banged her handbag down on the table and demanded her - well Britain's actually - money back.

Neville Chamberlain

   The whole theatre of the current Cameron initiative merely serves to highlight the huge difference between the British way of doing things and that of what earlier generations would have called 'Jonny Foreigner.' Of course some sort of deal will be done, the issue however is will it really mean anything? Turn back the years to the Munich Agreement of 1938 when then PM, Birmingham boy Neville Chamberlain returned from Europe flourishing a piece of paper and to a cheering crowd gathered around a British Airways aircraft, extravagantly declared it was 'Peace in our Time' - Britain and Germany would never fight and the future of Europe would be one of peace.

By 1946 Europe was beginning to emerge from the ravages of the Second World War which had been the actual outcome of the Munich Agreement. It was said "The Second World War had one victor, the United States; one loser, Germany; and one hero, Britain." Winston Churchill was the personification of the hero due to his wartime leadership and gift for finding just the right phrase for each occasion - the enduring sound bites. By 1946 he was talking about the United States of Europe and by 1949 the Treaty of London had established the Council of Europe. Meanwhile the repair of collateral damage was being organised by the British Army with the European Coal and Steel Community being the first practical example of a co-operative production and marketing.

Ted Heath

So where did this whole thing go wrong for Britain? The EU  was as much a British idea as anyone's but some how we found ourselves on the outside as it evolved into The European Common Market and kept out by General Charles de Gaulle's use of the French veto. De Gaulle was the highest ranking officer who made it to Britain following the fall of France and was kind of invented as the leader of the Free French by Churchill - a rallying point and propaganda opportunity. His war years spent in Britain would have given him ample scope to figure out that the British way was at odds with the European ways of doing things. There was little public interest in joining the Common Market as it was presented as a trading group, certainly not a political alliance, still less a single European country. There was no referendum to decide should Britain be in or out and anyway the French veto kind of made the decision for us and after all it was only 6 war torn countries banding together. But one leading negotiator, Edward Heath was sufficiently determined to get Britain in which when he became Prime  Minister himself he achieved in 1973 having signed away many of Britain's  rights and assets including access to our own waters for fishing. In 1975 Prime Minister Harold Wilson held Britain's first ever referendum in which 67% of the electorate voted to remain members.

The last election of members to the European Parliament in 2004 was won by the United Kingdom Independence Party [UKIP] with24 seats and 4.36 million votes leaving Labour [20] and Conservatives [19 ] in 2nd and 3rd places.

 This is the first of a series of articles leading up to the UK referendum.





   

Media - As The Independent goes digital only, Parliament stays with vellum

In a week when the Independent newspaper announced the end of the printed version, British laws will apparently continue to be recorded on vellum. Not perhaps a good week if you are a paper maker then.

I am sure I am not alone in being unaware that Parliament recorded laws on vellum - or calf skin. Apparently recording our laws on vellum is a millennium long tradition and surprisingly cost effective. Apparently vellum lasts for 5,000 years, paper a mere 200 years. How does digital fare I wonder? Old files and I am talking perhaps a little more than 10 years, stored on the original current media are pretty much inaccessible now. Optical storage, floppy disks, CD s, flash memory - whatever quickly disappears and old files mysteriously corrupt. Is digital more an ephemeral storage medium, will digital work actually survive? Will our thoughts survive - does anyone care?