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| Sweden |
| Marketing
and Distribution |
Imports and Wholesale Distribution
Wholesale companies fall into the following categories:
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Independent wholesalers, financially
independent companies that have ownership rights on goods and
who carry out most wholesale functions. |
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Wholesaling activities integrated
with retail activities, e.g., central warehousing and distribution
chain stores. |
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Producer’s wholesale activities,
which either takes place centrally from the manufacturing plant
or from independent offices or depots. Subsidiaries of foreign
companies are also included. |
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Agents, who negotiate the sale without
acquiring ownership rights to the goods. |
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Consumer Goods Wholesaling
A few large companies dominate the everyday consumer goods trade in
Sweden. Their purchasing function is often highly specialized and
may be located in various places in Sweden.
Retail Trade
For supermarkets and hypermarkets with an extended range, reduced
services and rationalized, handling of goods have come to play an
important role in the Swedish retail trade. However, to compete with
these forms of distribution, the rest of the retail trade is placing
increasing emphasis on personal services, a more clearly defined range
of goods and higher quality. The retail trade is conventionally divided
into two segments, i.e., the food and consumer goods market and the
specialist-goods market.
Selection of Distribution Channels
There are two closely related problems that potential exporters have
to consider when entering the Swedish market, i.e., how to enter and
how to stay in the market. To avoid costly mistakes, a strategy has
to be worked out before entering the market. There are two options
(if establishing a subsidiary is excluded):
1. Selling to importers - person or a company buying in its own name,
holding stocks and distributing products.
2. Selling through an agent - a person or company who has accepted
commission from principle to sell the goods by soliciting orders.
Selling to Importers
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Selling to several importers
In this case the importers will have no special loyalty to the
supplier. |
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Selling to one importer who
is the first link in a vertically integrated company
The share of the retail market is limited to that of the integrated
company. Prospects
of repeat orders may be uncertain. Marketing is generally outside
the control of the exporter. |
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Selling to one importer –
Sole Distribution
This will expose the product to the larger market than the option
above. More loyal to the supplier and more interested in investing
in marketing activities. |
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This will expose the product to the larger market than the option
above. More loyal to the supplier and more interested in investing
in marketing activities.
Selling Through an Agent
Commercial agents are used by most small and medium sized enterprises
that are entering the market for the first time. This is a wise marketing
strategy for inexperienced exporters.
Some advantages of using an agent include:
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An agent is experienced, knowledgeable
and familiar with the market. |
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Co-operation with an agent brings
the exporter’s merchandise to the potential customers
through an active salesman. |
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Payment is normally commission based and therefore
in line with results. This means "no sale, no cost". |
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The disadvantages in choosing an agent from the exporters point of
view is that the agent normally demands exclusivity of sales in the
region. The full commitment of the agent may not be there as he may
be involved in selling other products.
In Sweden anyone can be a Commercial Agent. No approval by any authority
is required, but the exporter must check on these agents before coming
to an agreement. It is impossible to make a general recommendation
on which agent is to be chosen.
Factors to be considered before making a choice of distribution channel:
Own resources
Type of products
Volume of business
Product target
group
If any, how
marketing support is to be provided.
Price and Pricing Policy
It is very complicated to make an exact breakdown of the total price.
Thus, it is often possible to make an approximate calculation of the
net purchase. Companies base the price structure on three main factors:
1. The costs associated with the products
2. The willingness of customers to accept a certain price
3. The price of competing products.
All these factors should be taken into consideration, but the extent
to which each factor will affect the price varies from product to
product.
Marketing Communication and Sales Promotion
Personal selling is the most effective method of establishing contacts
and entering a market. It also presents an opportunity to study the
competition. Personal visits should be planned properly. It is recommended
that potential customers are contacted and they should be visited
before hand. Sales literature is essential in making a positive personal
contact. Any document should be written in English. Most Swedish buyers
are professionals who appreciate facts and straightforward information.
Therefore the brochure should have details about the company and product.
When travelling to Sweden, the exporter should carry enough
samples of his/her product to which he can present to the interested
buyers.
Sales Promotion in Sweden
Advertising in Sweden should be carried out with close co-operation
with the importer/agent. Continued information on the development
of the product should be given to the importer/agent. In Sweden consumer
goods are sold by extensive use of advertising and promotion. In practice
it is the importer, retailer or wholesaler who takes care of marketing
and pays for the advertisement.
The main form of advertising is Daily News Papers. It accounts to
70% of all consumer goods advertising. Other important advertising
media are trade papers, magazines and other outdoor advertising, Television
and radio.
A few large chain store companies dominate the retail trade in Sweden.
These companies run one or more advertisements every week in Daily
News papers and such advertisements are read by most households. |
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