small medium sized businesses

SMEs in the Global Marketplace
 

Vocabulary

modify	enterprise	associate (2)
rival	applied	challenge (2)
arena	downsize	compete
budget	capitalize	restructure
adapt	landscape	testimonial
tough	dominate	particular
assess	ongoing	come across
crucial	sound (2)	survey (2)
venue	trade fair	merchandise
engage	expose	substantial
gap	offense	bridge the gap
staff	break in	capital (2)
booth	man (3)	passively
lure	attendee	warranty
set up	curiosity	pro-active
pique	authority	forthcoming
profile	universal	weigh heavily
mantra	telegenic	top of the line
call for	final say	specification
focus	evaluate	legitimate
afford	suspicion	transgression
recruit	wholesale	facilitate
outlet	giftware	word of mouth
prove	strategy	recommendation
boost	foothold	selling point
kit	beam (2)	distribute
access	tailor (2)	prefabricate
update	flexible	credibility
appeal	epitomize	cornerstone
extol	elegance	ideals and values
sample	respective	dynamism

 
 
 

SMEs

Nokia. That’s what everyone associates with Finland’s economy — one dominated by large, multinational corporations. In reality the telecommunications giant is an exception: most Finnish enterprises are small and medium sized (SMEs). As such they both face greater challenges, and have certain advantages over their larger rivals.

Presentation

In November 2008, Pirkko Varis of the PIRAMK University of Applied Sciences in Tampere, Finland gave a lecture at the International College of Tourism in Bulgaria on how SMEs can compete successfully in the global arena.

Flexibility and Adaptability

Varis explained to her audience that compared to large corporations, SMEs had less personnel and smaller operating budgets in marketing and other departments to begin with, especially since the 1990s when many companies underwent downsizing and restructuring.

To compensate SMEs need to capitalize on their strengths, namely flexibility and adaptability.

Customization

Case in point. At a certain large, landscaping equipment manufacturer, all their machinery comes in red, its brand color. If a customer prefers another color, say blue or green, then tough.

With a particular family-run gardening factory in Tampere however, products can be modified upon request. “The owners and managers take a more personal, direct approach in company operations and dealing with customers,” said Varis.

Market Research

For these reasons, she stressed the importance of market research. In particular, businesses must, on an ongoing basis

(1) accurately assess the demand and potential demand for various products or services;
(2) identify and profile target groups;
(3) know the forms of intercultural marketing communications that work best.

Such data can be obtained through surveys among consumers. Knowing what the competition is up to is also crucial in making sound business decisions.

Trade Fairs and Exhibitions

Besides advertising, which requires substantial capital, trade fairs provide an excellent venue for SMEs to expose their merchandise and themselves to the public.

Here again larger enterprises can better afford to staff such events, at more locations, and for longer periods of time. But SMEs can bridge that gap.

Students Working Part-Time

“Often businesses recruit students, especially those from their own country who are studying abroad,” said Varis. They are instructed on company products, and trained in setting up and manning exhibition booths.

The last part calls for more than just passively standing around, hoping to lure visitors. The representatives need to be pro-active and engage with fair attendees. This means piquing their curiosity and getting them to examine your goods — but without coming across as too forthcoming.

Cross-Cultural Business

Varis also emphasized the importance of doing your homework when dealing with different nationalities. Salespeople commonly assume that business culture in geographical regions, such as Southeast Asia, Central America, and the Eurozone, is the same — if not universal.

While they may share certain similarities, each country has its own way of doing business, even between next-door neighbours.

Final Say

She gave some examples, comparing Finland and Italy, countries she is familiar with. When it comes to making deals, a representative of a Finnish company generally has the authority to sign contracts; whereas the CEO of an Italian company usually has the final say.

First Impressions

In Italy, outer appearances weigh very heavily: sales personnel are expected to wear top-of-the-line suits. They must have telegenic displays, logos, showrooms, and advertisements. Their mantra is, “You don’t get a second chance to make a good first impression”.

A Jumper (Sweater, Pullover)

By contrast, Finnish customers focus on product specifications, performance, costs, warranties, delivery terms, servicing. They evaluate everything and compare them with other products and companies before coming to a final decision.

“If whatever you are offering is sound, they will take you seriously — even if you’re wearing a jumper,” Varis says.

Trustworthiness

This doesn’t mean that prejudice doesn’t come into play in Finland. She described how a few elements from certain nations have come to her country for the expressed purpose of committing criminal offenses.

Now even when perfectly legitimate business people from these countries travel there to do business, locals, on a subconscious level, will view them with suspicion.

But the ultimate transgression is dishonesty. “If anyone is found lying, word quickly spreads throughout the business community — effectively shutting out their enterprise from the Finnish market,” Varis said, matter of fact.

Distribution Channels

Such speed is facilitated by Finland’s centralized supply system in which a few large wholesalers virtually control the distribution of everyday, consumer merchandise. It can therefore be difficult for new or less-known SMEs to break in.

However for specialty goods like giftware and decorations, sellers can deal with smaller, specialised supply channels and outlets.

Word of Mouth

When Varis asked her attendees about marketing in Bulgaria, the general consensus was that though there’s lots of advertising, it still comes down to word-of-mouth, through recommendations by friends.

She then had the students, in groups, pick an SME in Bulgaria, and come up with strategies for them to gain a foothold in a foreign market or boost sales.

Yoghurt and Cheese

After ten minutes the students presented their findings. One group had selected a dairy company. “Our target is Germany. And our main selling point is that Bulgarian yoghurt and cheese are the BEST in the world!” To prove it, they would provide free samples at dairy fairs for visitors to try.

Prefabricated Homes

Another group had chosen a prefabricated housing company. They would find a distributor in Italy to market their house kits. “Our unique selling proposition would be very beautiful homes at affordable prices due to our lower material and labor costs,” said the spokesperson.

Varis mentioned that a Finnish company also exported prefabricated (log) houses. Their international marketing tools include direct personal selling and the participation in trade fairs and exhibitions.

Another important tool is the internet.

Business Website

Accessing their site, Varis showed how business websites must look appealing and be informative, with regularly updated newsletters as a way of engaging the viewer and presenting a sense of dynamism. Satisfied customers’ testimonials help boost credibility.

One heading presented a list of all the main purchasing countries in their respective languages.

She reminded the students that each nation’s link must be individually tailored to connect with their core values and ideals, thereby establishing rapport.

Values and Ideals

To illustrate this, Varis clicked on the link of the United States. Out popped a picture of a beaming mother, father and their children. “This webpage epitomizes the cornerstone of American society — the family.”

She quickly added that such a display would not sell in Finland, as she opened her country’s page. It extolled the elegance and utility of the homes — complete with snow and lakes.

*     *     *     *     *     *     *     *

1. What do many people associate with Finland’s economy? Why do they associate this? Has it changed?

2. What are the disadvantages and advantages that small to medium sized enterprises (SME) have?

3. Give examples of the importance of market research data in terms of products, clients, prospects and business culture.

4. Trade fairs and exhibitions provide good opportunities for businesses. Is this correct or wrong? What are some strategies of having a trade fair or exhibition?

5. Countries in geographic or market regions such as East Asia, Eastern Europe, the EU, South America, Southeast Asia, etc have similar business cultures. True or false? Compare Finnish and Italian business cultures.

6. What role does honesty and trust—or the lack thereof—play in business?

7. Compare conventional advertising and word-of-mouth referrals.

8. Should business websites only contain advertisements?
 
 
A. Does your organization conduct extensive market research; do you rely and instinct, experience and intuition or both?

B. We participate in trade fairs and exhibitions. Yes or no?

C. Is the business culture in your country similar to that of neighbouring countries?

D. What can you say about honesty and dishonesty in business?

E. What advice could you give to foreigners wanting to do business in your country?

F. What products does or could your country export? Whom does it export to? How could you open new markets or increase established ones?