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.