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Sales & Growth


Researching new markets? How asking your rivals for help can work

Researching new markets
Bluebeards Revenge has made the most of government and trade body support

Next time you’re researching new markets before moving into a new sector or geography who will you consult? Will it be a research company, a marketing agency or simply Google? There are other options out there.

As he developed his strategy to break into the US, Adam Twidell, CEO of PrivateFly, chose a rather unlikely source of information and advice – his competitors.

“I’ve always found that if you’re humble when you ask people’s advice the vast majority of them are willing to give you their time, certainly in the US,” explained Twidell, who leads the booking platform for private jet chartering. He said of his competitors: “I’ve known them for a long time and always had good relationship with them. But it surprised me how friendly they’ve been. Having had lunches and dinners, I’ve often been taken aback by it – I just asked them for their opinions.”

But why would a company help a competitor, especially one that is about to launch on their patch? “There are benefits for everyone in knowing a certain number of competitors well,” commented Twidell. “You can warn each other about things happening in the sector and share best practice. People will sometimes say to you: ‘We’ve had a problem here, have you experienced it too? If so, how did you get around it?’ With private aviation, in particular, it’s a big market out there and there’s enough to share around.”

Strength in numbers

PrivateFly has adopted an unusual approach to gaining market intelligence

Not everybody that Twidell approached was forthcoming, and he stressed that his conversations with competitors have been about sharing learnings when launching in new markets rather than revealing business secrets. “We’ll talk about things such as fraud prevention or regulations in a particular territory. After all, there’s strength in numbers.”

Today the US accounts for 26 per cent of the company’s sales, along with 43 per cent in EMEA and 31 per cent in the UK. With its UK base in St Albans, PrivateFly has a turnover of £27m is celebrating its tenth anniversary.

It was frustration at not being able to persuade his son to do his school work that led former Google executive Charles Wiles to create launch an education technology company.

Zzish is a software company that specialises in transforming all e-learning apps into classroom-ready tools and gives real-time insight on student and class performance.

The UK is the third largest market for education technology investments, with Zzish being one of a few British businesses experience demand for its product overseas, particularly in developing nations with disproportionately large younger generations. These opportunities lie particularly in Asian territories, such as China, where education technology is being used to upskill vast working-class populations.

Wiles began thinking like the lead of a global company from the moment Zzish was launched in October 2014 and had ambitions company valued at more than a billion dollars.

Thinking statistically

Wiles took a typically mathematical approach to researching new markets. “We focussed on the ‘expected deal value’. This is how much money you’d make if you got the deal,” he explained. “The ‘expected’ relates to the probability of getting it. For example, getting a deal with China where there are 300m students, who might each pay £2 a year, would net you £600m. However, the chances of getting that deal are very unlikely – so the deal is actually worth roughly nothing.”

He added: “On the other hand, go to the Philippines and there might be 21m students with an income of £2 per student – so that’s a deal value of £40m. But there’s a much greater probability of landing the deal here (perhaps a one in four chance) so the expected deal value is 25 per cent of £40m, which is £10m. You rank all the countries that you’re targeting and you end up with a hit list from which you can see where the expected deal value is the highest.”

Wiles looked at research agencies but decided that they were too expensive, quoting him fees of £10,000 to £20,000. Trade shows, however, have been a good way of carrying out research and of gaining insights into new markets and territories.

Brandauer is a 156 year-old metal pressings and stamping specialist based in Birmingham. Having started life as a pen nib manufacturer, it now supplies precision components, in high volumes, to the automotive electronics, domestic goods, medical and renewables sectors.

Brandauer Quality
Brandauer conducted an in-house competitor review

Turnover is just over £8m, with export sales about 70 per cent of total revenue. Recent export successes have included Holland, Israel and the US.

“We now supply millions of components every week to the US,” said CEO Rowan Crozier.

“We didn’t actively target these areas, quite the opposite. The customers actually found us though social media and the internet, recognising our ability to produce precision tooling and components for pharma, plumbing and telecoms sectors. That got us the immediate introduction and then we had numerous meetings overseas to convert them into orders.”

However, researching new markets, and then launching in them, doesn’t always go smoothly and Brandauer is one of a number of companies that have discovered that it’s often necessary to carry out research post-launch. In this case it was capacity issues and problems with the availability of materials caused by extended lead times for raw material and selective plating with semi-precious and precious metal finishes. Research led to new product launches.

“They were two factors out of our immediate control, but which we need to manage to ensure we don’t let the customer down,” said Crozier. “We did an in-house competitor review to identify our strengths and opportunities and invested in the outcomes.”

Follow trends

The Bluebeards Revenge, a premium men’s grooming brand, has seen substantial growth in emerging markets such as South America, Asia and the Middle East. “This is because these markets are now surfing on the same wave of exposure that the UK has experienced over the last few years,” said Grace Cunningham, sales development manager at the compamny. “The barbershop and salon sectors in these markets are beginning to follow the trends set by the UK and mainland Europe.”

However, she pointed out that launching in new markets is always challenging because of cosmetic regulations, testing procedures and export documentation requirements – all of which have to be thoroughly researched. The company looked to government departments and trading organisations for help.

“On a daily basis our team is researching emerging markets through international trade resources including the Department of International Trade (DIT), our local chamber of commerce and various other trading bodies including ASEAN (Association of Southeast Asian Nations),” said Cunningham. As well as marketing and promoting products, Twitter, Facebook and Instagram have been useful for research purposes when launching in new markets.

“In recent years we have also adopted social media as a way to engage, interact and discover new markets,” she explained. “We are also fortunate enough to have many international partners happily flying our flag – they always pass on exciting opportunities.”

Brompton Bicycles: Read about an An inspiring export strategy built on trial and error.

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