Topps Tiles has taken the decision to close its Dutch subsidiary. The company entered the Dutch market in 2001 but has been making a loss in the last two years and haemorrhaged £4.9 million in the year to September 09. However a large chunk of that was from the costs of closing 10 stores, leaving 12. Topps has admitted that they never really sold enough tiles as the Dutch tend to purchase from bathroom and kitchen specialists rather than going to a separate tile store.
Overseas Expansion
This underlines how difficult it is to change an existing market unless you are offering something revolutionary that makes people's lives much easier. Unfortunately for Topps, the Dutch were used to buying their tiles at the same time as their kitchens and bathrooms in a one stop shop and saw no reason to change to having to visit an extra store and make a separate purchase for tiles. Before going in to a foreign country it is imperative to research the market thoroughly and make sure that your business model and products are going to answer the needs of the people in that country, and adapt in any way necessary to ensure success.
Adapt marketing materials
Another mistake made by many large multinationals which should know better is to assume that they can save money and ensure brand continuity by using the same publicity materials across all markets. If you do this you risk ending up with the Ferrero Rocher syndrome, whose ads were supposed to make you think of the chocolates as the ultimate in luxury, but ended up being a by word for naffness. In fact they were so naff that they appealed to the British sense of humour, and we bought the chocolates anyway, but it is safer to assume that different approaches appeal to different cultures and adapt your material accordingly.
For example Italian firms tend to use much more complicated and flowery language than the British and to assume that their audience is technically aware to a greater degree than we would. It is best to assume in general in the UK that you have a very short time span, a few seconds in most cases, in which to engage your audience and get your message across, so text is kept to a minimum and images are used for instant visual communication. Most British firms tend to follow the KISS (Keep It Simple Stupid) maxim for technical information and keep things as simple and easy to understand as possible. Italian companies who don't adopt this approach have a harder time breaking into this country than those that adapt. And the converse is doubtless true, if a lot less common an occurrence. If trying to sell in Italy, you should expect to cater for an Italian rather than a British audience.
So to sum up, always always always research and adapt your company's offering and methods of doing business before entering a new country and localise any marketing materials. Don't assume that the target customer will react in the same way as the customer in your home market, because it's more than likely that they won't.
