Spain and the United States - Real Instituto Elcano

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Exhibit 4.6 Ford’s Exports of Vehicles, 1976-2004 FOREIGN TRADE 79 preparatory work in many sectors by Spain’s trade authorities – the Secretariat of Trade, the Spanish Institute of Foreign Trade (ICEX) and trade offices in the United States. ICEX spent 16% of its global marketing budget in the United States in 2004, four times the US share of Spain’s total exports. Breaking into the US market requires more initial investment in advertising, sales networks, direct marketing, point-of-sale promotions and public relations than any of the European markets, all of which are closer, cheaper to service, and easier to export to. Some firms believe they can come on a single mission, go to one trade fair and start generating sales. This is not the way. It is generally agreed that the most important thing to do first is to find an importer, representative or agent and nurture that relationship. Forming a joint venture often helps to sustain the business relationship. The US business culture is very different. For example, Spanish companies are reluctant to give US importers the prices of their products before the first meeting. This can lead to the client refusing to see the Spanish firm. Spaniards prefer to discuss prices during their first contact as they believe it gives them flexibility to negotiate upwards or downwards, but this is a tactic that US buyers do not like, as they want to know where they stand right from the start. Spanish exporters tend to test the waters badly prepared, according to trade experts on the ground. Catalogues, labels and adverts are often badly translated into English. The regional government of Navarra, for example, raised many a laugh among the cognoscenti when it placed an advert in Time Out in February 2005 to publicise the participation of top chefs in New York’s gastronomic week. The advert was headed “Spanish fly”, an unfortunate expression because, among other meanings, it was the Mediterranean fruit fly that led to a ban on Spanish exports of tomatoes and citrus fruits. In another advert, the Madrid Chamber of Commerce placed a very expensive advert for fashion in the New York Times in 2004 that said, “In Spain fashion is with a capital M”. Americans were totally baffled. This was a play on words that worked in
80 SPAIN AND THE UNITED STATES Spanish (En España la moda es con M mayuscula, as both Madrid and moda begin with an “m”) but not at all in English. Spanish exports are also held back by Spain’s image in the United States – or lack thereof (see Chapter 6). Few countries have undergone as much change as Spain has in the past 30 years – and on all fronts: economically, politically and culturally. Yet the image that still persists among Americans, much more than Europeans, still tends to be the traditional one of bullfights and flamenco. Spain sounds Latin, exotic, sunny to most American ears. But that does not generate sales of the kinds of products that Spain makes, which are increasingly mid- to high-tech (and sold to Europe, but not that much to the United States). The gap between perception and reality is partly due to the fact that Spain is a lot further from the United States than most other European nations; only around 1 million of the 54 million tourists that visit Spain every year are Americans, so there is relatively little personal knowledge of the country. It is also remarkable how many firms still use stereotyped images in their advertising that do not fit well with putting across the idea of a modern country. Spain is not well known outside of New England, the TriState (New York, New Jersey and Pennsylvania), Chicago, California and Florida. It is not that the image is particularly negative, rather that Spain is a blank slate. As a result, Spanish products, outside of those areas where Spain is known, are often assumed to be products from Latin America and not from Europe. Americans are also confused by the institutional missions of Spain’s regional governments. Apart from the Basque Country, Catalonia and Andalusia, few of Spain’s regions are known abroad, and particularly not in the United States. For example, when the Castilla and León regional government (known in Spanish as the Junta de Castilla y León) sent a mission to New York and did not put Spain on its promotional literature, many people with a knowledge of Spanish thought it was something to do with a Latin American military government because of the word Junta. Such approaches create a confusing image of Spain that does not accord with the country’s reality. “If it is difficult to sell the Spain brand name, just imagine how difficult it is with one of Spain's regions or even an individual city,” said Luis de Velasco, Spain’s former trade commissioner in New York. 3 “All it does is create more confusion.” These missions sometimes spend more in a week than the annual budget of the Trade Commission in New York, and the return is minimal. They are essentially to impress voters in the home region and attract local media attention. 3. See “La Soportable Levedad de la Presencia Económica Española en EE UU” (La Estrella de Papel Independiente, December 14, 2003).
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Published by the Real Instituto Elc
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ACKNOWLEDGEMENTS This is the third
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CONTENTS Preface ..................
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PREFACE Once again, our long-time c
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CHAPTER 1 OVERVIEW Had it not been
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OVERVIEW 13 French of more than two
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OVERVIEW 15 committed Protestant, a
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OVERVIEW 17 money was used to purch
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OVERVIEW 19 Later, the runway at Ro
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OVERVIEW 21 a much more balanced re
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OVERVIEW 23 The position of the Eis
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OVERVIEW 25 The first such school i
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Page 43 and 44: OVERVIEW 43 The Spanish decision in
Page 45 and 46: OVERVIEW 45 There was a flurry of v
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APPENDIX 1 CLASSIFICATION OF US COM
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Keith Walking Floor Europe Jeld-Wen
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Valeant Pharmaceuticals Intl. Wyeth
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Packaging Equipment & Materials Alc
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Inc. FedEx Corporation Logfret Inc.
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150 Candela Hermanos Colomer Group
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152 Security & Safety Equipment BTV
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156 APPENDIX 6 FOREIGN DIRECT INVES
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