1. Italy – an overlooked market
ITALY
! General about Italy
! Aspects about Italy
! Factual
! Cultural
! Operational
! The Italian retail trade
! Advantages of dealing with Italy
! How to get started in Italy
2. Italy – a general presentation
Source: Danish Foreign Ministry
3. Italy – a general presentation
ITALY
Population: 59,8 mio (2009)
• of which 3,9 mio non-native Italians (6,5%)
Biggest cities (incl. provinces):
• Milano: 3.9 mio
• Roma: 4,1 mio
• Torino: 2.3 mio
The northern regions among the richest in
Europe (Lombardia, Piemonte, Veneto, Alto
Adige)
Economic growth approx +0,5 % p.a. (Q1 2010)
Disoccupation: 9,1% (Q1/2010) – (7,9% Q1/09)
• North: 6,4% (5,1% Q1/09)
• Centre: 8,4% (7,6% Q1/09)
• South: 14,3% (13,2% Q1/09)
4. Italy – a general presentation
GDP per inhabitant in PPS as a percentage of the EU-27 average (2004)
(PPS: purchasing power standards)
5. Italy – crucial aspects for succes on the market
The cultural aspects The factual aspects
The operational aspects
6. Italy is not one but 20 markets
Italy is extremely regionalised due to its history
• More like 20 different markets
• Even within each region there are huge differences in consumption patterns
8. Prepare for 3 times the number of competitors
> 400 different cheese types
> 2200 dairies
(250 > 5mio € turnover)
450 producers of mozzarella
9. Extreme fragmentation and little transparency
The Italian market is highly fragmented, regionalised as well as competitive
> 325 retail organisations
> 400 supermarket logi
Approx 30 main buying groups
Fragmented Distributive system (Food)
• Tot.Stores : 217.000
Ambulanti 27.000
Ord. stores 190.000
» Hypermarkets : 415
» Supermarkets : 9.026
» Superettes : 6.756
» Discounts : 4.129
» Traditional : 170.000
Source: Federdistribuzione 2009
10. Extreme fragmentation and little transparency
The Italian cheese market
Zuvi, Spressa, Frachet, Motta, Bettelmatt, Mezzapasta, Grasso d’Alpe, Caprino Piemontese,
Taleggio, Toma Piemontese, Bra, Tomino di Talucco, Murianengo, Moncenisio, Sargnon,
Tomini, Mortarat, Toma del Maccagno, Ricotta Ossolana, Toma di capra, Ossolano, Toma brusca,
Robiola, Nostrano, Paglierina, Seirass del fen, Acceglio, Castelmagno, Murazzano, Ceva,
Castelnuovo Ceva, Clavesana, Montezemolo, Sale s. Giovanni, Priero, Bruss, Casteliosino,
Ormea, Rebruchon, Roccaforte, Robiola d’Alba, Sora di Val Casotto, Testun, Tometta,
Toumin del Mel, Raschera…….
AND
Gorgonzola, Grana Padano, Toma, Ricotta, Robiola…….
In total more than 50 registered cheese types –
just in Piemonte
12. Italy is a branders paradise
The average advertising spending in Italy is among the highest in Europe
Italians love their brands and accepts paying a premium for them
Italy is still very much a branders paradise – less than 10% of retail is private label – depending on
category
13. Bureaucracy and control – both are heavy
Bureaucracy is getting lighter though still more outspoken than in the Nordic countries
• Important that the paperwork is correct – signed and stamped correctly
• Intentions are fine – control is better
• Authorities in Italy are in uniform and armed
14. Documentation – get it right
The Italians have attention on documentation and paper work
• ISO, HACCP, etc – Italians put great emphasis on this kind of documentation
• Product specifications have to be detailed and correct
• Written proof is important
15. Italy – crucial aspects for succes on the market
The cultural aspects The factual aspects
The operational aspects
16. Relations are key
Trustworthiness – has to be earned
Loyalty is strong
• You do not trust people up front – it is always important to have someone vouch for you
• Strongly build into the Italian soul – you are sceptic of strangers until otherwise proven
• You can have the best product in the World – if the Italian counterpart do not like you, there will be
little chance of succeeding with a sale
17. Language is key
Italians basically speaks Italian
• Communication can often be difficult in English
• Often discussions with decision maker will have to go through 3rd party
18. Decisions are taken from the top
Rank matters as well as format
Italy tends to be more hierarchical than Nordic countries
• It is important to show respect
• Your position is important
• Never be sure of a decision before it has been approved by the boss
• Showing off is an important part of the Italian culture
19. Creativity is strong
Willingness for change is limited
• Italians are good at identifying solutions for problems at hand
• Can be both in the positive as well as the negative way
• Stability is GOOD – far from the Nordic mentality
• Little job rotation during work life
20. Accept that logic will seldom prevail over feelings
Information not necessarily build on facts
A logic, to-the-point Nordic mind-set is not the way forward on the Italian market
• Do not expect that a selling argument will win if served by the wrong person
• Personal relationships are very important
• Information is often given so it serves the sender
• An in-transparent market makes it difficult to evaluate given information
A Nordic buyer will be studying your presentation and arguments – an Italian buyer will be
studying you and your attitude
21. Italy – crucial aspects for succes on the market
The cultural aspects The factual aspects
The operational aspects
22. Respect the culture
Italy is a lot different to the Nordic culture in many ways .....
• Working hours are different
• Appearance and education is important
• Respect in itself is a key word for the Italians
• A Nordic approach can be an advantage – but do not push it !
…… so when in Rome do like the Romans……
23. Analyse and understand
Information is often plenty available but analysis are not
• The Italians usually have their own version of the reality
• Make sure you have hard data – then make your own analysis and conclusions
24. Be firm on politics
Do not leave things up for too much interpretation
• Italians are not used to systems building on guidance and intentions
• Italians are used to strict laid out rules....
• .... though follow these only if they are strictly policed
• Be aware of different interpretation of rules depending on region
…….. Intentions are nice – control is king
25. Control your sales and distribution structure
Be present or find a partner
• Fragmented and often complex market, though competition
• Italians like first hand relations so that they can “feel” their supplier/customer
• Operating agents or a sales team from the distance can prove difficult and with little results
• Due to the fragmented structure of the market and different agendas by different distributors and
agents it can prove fatal for a product if left to the decisions of the sales & distribution structure
26. Challenge the existing
Italians often likes ”business as usual”
• The Italian mindset is usually not as eager for chances as we are used to in the Nordic countries
• The average Italian will change job 2-3 times less during a career compared to a Dane
