The ability to access new investors globally, either through economies of scale or applying a particu...
In the first of the series, we examine investment groups in Scotland, which have proven capabilities of being able to successfully export their expertise and products. We surveyed the major companies to assess how they want themselves and their products or services to be recognised through their international marketing strategies.
Each company was asked nine questions including, the number of international offices, types of products and funds under management, as well as questions regarding their general marketing strategy and any regulatory or cultural problems they feel the face.
Scottish Amicable, although no longer technically a Scottish company, has also been included in the survey. Acquired by the Prudential in 1997, all the company's international marketing is know conducted from the group head office in London. As a consequence, the coverage that this group offers is now substantial, with 11 offices in Asia, one in South Africa, two in Europe and Jackson National Life company in the US. In addition, this investment giant has total assets under management of £157bn.
All the Scottish investment companies surveyed tend to use a country-by-country approach for the markets they cover, with the exception of the smaller Scottish Value Management (SVM). However, even SVM, which uses a pan-European approach, still requires an element of country-by-country focus that is determined by regulation and accessibility under current regulations for their products. A country-by-country or regional approach is more appropriate due to the varying standards of legislation and cultural differences, and this remains the case both within Europe and the rest of the world.
Sam Batchajr, business development director at SVM, looks to Switzerland as an important area for the company, particularly for its hedge funds, as it represents an investment vehicle that the Swiss are familiar with. He also views South Africa as a market for SVM's fund-linked funds, as this is a preferred channel for investment in the country and marketing the correct product for individual tastes and requirements is a vital part of a marketing strategy.
But while Batchajr recognises the significance of branding of particular products and services, the importance of the individual company is also necessary.
He remarks: "We are well known globally by consultants and, in terms of investment style and process, we would expect to be rated above average. At the heart of it all we are known for our investment style, not necessarily our brand. Yes, the brand is there to provide confidence, but we are a small, privately-owned company. Our managers here have a stake in the company and that is important when people are handing over assets to be managed by our company."
Deregulation of pensions in Europe is of particular interest to Scottish Amicable, making it a prime target market for the future, while Standard Life looks more specifically at Germany due to the changes in the tax system and pension provision. Scottish Mutual International (SMI) also view Germany as important, not only because it is Europe's largest market, but primarily because it is underdeveloped when compared to the UK as a result of a long history of public provision.
In a similar way, Spain and Italy are also seen as important markets. SMI highlighted the Benelux countries because of a tradition of investing in Anglo-Saxon-type contracts and funds, a trend that will hopefully spread to the rest of Europe.
However, there are many problems associated with marketing products and services in Europe and Keith Falconer, managing director of sales and client services at Martin Currie, is in no doubt as to where the difficulties are: "We all know Europe holds huge opportunities, but I think that few people have been successful there because it is not as advanced as many like to think. It is not a common market, with different languages and different cultures. It tends to be protective, insular and is not exactly an equity culture. But having said that, there are exceptions. The Dutch, for example, have an extremely sophisticated pensions scheme and attitude towards equities. Each market has to be approached fairly sensitively, understanding the differences between them."
Falconer does not think the situation is likely to change overnight.
"We watch the situation with great interest. Some days we are encouraged and other days discouraged. It is a question of where we are and I believe at the moment that it has a long way to go - so much so because resistance built in all the way. We are trying to create something that is alien to everyone, and it has a long way before it becomes similar to the US."
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John Allison of Scottish Life International agrees that there are a number of problems Scottish companies encounter when marketing products internationally.
He remarks: "Language and regulation are the main two issues that the entire industry continues to face. But for Scottish Life International, our 80% growth in new business suggests that we may well be overcoming them.
"We currently produce our marketing literature in three languages and are recruiting more linguists this year for our back office. Resolving any nuances created by translating languages is vital as they can result in sentence meaning being changed."
However, language is not such a large problem for those companies that us
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