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The topic of internationalisation was the subject of Travel Weekly's most recent Business Breakfast event. Jennifer Morris reports
Be proactive and 'go large' when expanding overseas
Companies should “be big and go large” when looking to internationalise, but retain a clear vision.
Momondo Group chief executive Hugo Burge said that while it was important to have a solid strategy for internationalising, companies must adopt a proactive attitude and avoid “getting gobbled up byt he big players”.
“You need to go large,” he said. “In travel search, we believe that to be successful, you have to have scale, the best product, the best marketing techniques, and have a really strong brand and economies of scale. And you must compete with other players and not get gobbled up by them.”
Burge said Momondo brand Cheapflights entered the US in 2001 with a “test and learn guerrilla approach”, despite being advised by the board to raise £5 million first.
“We launched there with a light site and didn’t announce it until we thought we had the critical mass of advertisers on the site and product that made sense,” he said. “We grew out of cashflow.”
Oban Digital founding director Greig Holbrook added: “Many fall into the mistake of being passive about internationalisation. You have to be active.”
Burge said sometimes a market “comes to you”.
He added: “Our app is accessed every day by somebody from every market in the world. You put something out there, you start to market it, and you begin to see adoption from countries you wouldn’t have thought of.
“We’re lighter on research and stronger on testing and learning once we’re in a market.”
But Ruairidh Roberts, industry head for travel at Google, said: “If internationalisation is a new foray,y ou need to do lots of research before committing. It is critical from a marketing point of view.”
Firms advised to respect markets' cultural nuances
Businesses must be “humble” when looking to enter a new market and pay close attention to its nuances and logistical challenges, the panel agreed.
Oban Digital founding director Greig Holbrook said the firm’s recent research into ‘cultural clusters’ found that the Japanese, British and
French had similar attitudes towards the colours they preferred to see on a website.
“They’re not economically ?or language-linked but their attitudes to this are similar,” said Holbrook. “So we’ve developed a matrix of rules on launching sites into markets, which are not templated, but cater for these cultural clusters.”
Hugo Burge, chief executive of Momondo Group, said: “You can have a global vision but you need ?a local lens.
“You’ve got to be humble and nimble. You can do as much research as you like, but it really comes down to user behaviours.”Ruairidh Roberts, industry head for travel at Google, said: “We uncovered in the Indian market a propensity to search under acronyms of airports.
“No one else in the world uses that – it’s English, but not as we know it. You almost have to take a step down and say that you’ll have a separate strategy for markets speaking other languages.”
He added: “Generations change and different markets have different ideas. You need to understand their nuances, but never stop testing and learning, and do A/B testing on the side.”
Holbrook went on to warn: “Going into a new market is like starting a business from scratch.
“It might take a couple of years to start seeing success and the danger is pulling the plug too early without having time to breathe and learn.”
The panel recounted tales of woe from across the industry, as well as their own experiences in this area.
Examples included company names and phrases losing their meaning – and even causing offence – when translated into other languages and cultures, and the financial implications of not understanding tax systems in other countries.
An overseas office ‘isn’t essential’ for internationalisation
The two panellists with direct experience of internationalisation insisted that an overseas office was not essential for the process.
Hugo Burge, chief executive of Momondo Group, said: “We started with a country manager in every market, but we found that incredibly difficult to manage.
“We ended up centralising it so we have someone who’s in charge of that market, from that market, but in the main office, where the cultural values, systems and analyses are coordinated, so we can work together as a team. We found that’s much stronger than having people in individual markets. But if you want to do well in some markets, there comes a tipping point where you probably do need an office.”
Olly Brendon, chief executive of ATD Travel Services, which has launched in Ireland, Germany and Brazil, agreed with Burge. He said: “Not only is it quite exciting for the office to hear all the different language speakers, it’s good for them to see how we do things. The people who manage our international brands know the markets and manage everything.”
'Understanding the individual' is imperative
Business Breakfast attendees were advised to “understand the individual within every market”.
Kevin Ashbridge (pictured), account director at SDL, which was a sponsor of the Business Breakfast, said: “What we’ve really been talking about is relevance, not just for language markets, but with mobile too – that audience of one.
“It’s not one-size-fits-all any more. You might have a mother with two young children travelling with her family on one trip, but by herself on business on another trip. She is after two different types of content.
“Beyond trying to understand the language market, we feel that the biggest growth opportunity is trying to understand ?the individual within that market.”
Ashbridge stressed that as ?consumers made increasing use of mobile devices – “where the amount of space to deliver that content is diminished” – it became more important for suppliers to tailor their online material.
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