In recent years, and in line with what has happened in other countries around us, in Spain there has been a tertiarisation in the production pattern. Today Spain is a country with a significant services sector and, for this reason, the majority of Spanish overseas trade and exports take place in this sector. Consequently, the Spanish Institute for Foreign Trade (ICEX) dedicated Exporta 2007 (the “Congress for the Business Internationalisation”), held in Seville on 13th and 14th June, to the “Internationalisation Strategies and Opportunities in the Service Sector”.
One of the featured lectures at this congress was precisely the one organised by the Leading Brands of Spain Forum F(FMRE) about “brand internationalisation strategies in the services sector”. At this lecture-talk, presented and chaired by Miguel Otero, FMRE’s General Manager, important representatives from some of the main brands of the services sector linked to FMRE took part. In particular, Barceló, Garrigues and Mapfre described their internationalisation experiences in Seville, joined in their presentations by Julio Cerviño, Associate Professor of International Marketing at the Carlos III University in Madrid, and Salvador Palmada, Spencer Stuart Partner and expert in internationalisation in the hotel, leisure and catering sector. FMRE also invited Abengoa to take part in this interesting lecture. This Andalusian brand has a significant overseas presence and reputation, and was represented by Cándido Velázquez, Board Member of Telvent (Abengoa Group).
Without a doubt, in the last decades, brands have become the key tool for company competitiveness in the global environment in which we are living. Brands have changed from mere product and service identifiers into symbols of values and intangible features which are decisive in the consumer purchase choice. For this reason, it is especially important to become familiar with possible brand management and internationalisation strategies. The seminar organised by the Leading Brands of Spain Forum at Exporta 2007 was thus an unbeatable chance to get to know first hand the keys to success of some of the best-known international Spanish brands in the services sector. These brands help the Spanish service sector to meet the needs of millions of customers around the world, competing with the top global companies and achieving a high success rate in the most demanding of markets.
After a short introduction by Miguel Otero, the university Associate Professor Julio Cerviño explained the keys, strategies and opportunities for the internationalisation of service brands, in addition to presenting the main characteristics and peculiarities of the sector. Cerviño explained the steps towards internationalisation in the services sector, stressing that “it is through trade establishments or production centres overseas that the most intense investment is reached and therefore, the greatest degree of control over marketing mix decisions”. Julio Cerviño thus highlighted the importance of knowing how, when and which markets to enter, making smart choices between “a gradual entry, a fast entry, a well-timed entry or simply not entering at all”. Furthermore, Cerviño pointed to the need to discern between the entry method (with or without capital property) and the keys for investing in a new country and for choosing the degree of control over international activities.
José Palacios, Garrigues partner, described the experiences of his firm at international level, indicating “some of the peculiarities particular to legal services”. He mentioned the need for a “local product” and the “different requirements according to areas of specialisation”. Palacios said that there is “a need to undertake internationalisation as a means of reducing the risk of losing clients”, and explained that the initial international experience of his law firm was in services provided to multinational companies in Spain, followed by a second phase of advising Spanish companies in their business activities in certain markets. Palacios then explained the different entry models used by Garrigues for different overseas markets, which range from international alliances, exclusivity agreements or representative offices, to fully operational offices competing on the local market. Jose Palacios then listed the key factors involved in choosing a particular form of entry, and went on to comment on the particular experience of Garrigues. He explained how “from the beginning, Garrigues decided to give a different and priority treatment to Latin America, eventually creating a “Spanish American Office”, and the firms special focus on the individual cases of New York, Morocco and Warsaw.
Another speaker was Salvador Palmada, expert in the internationalisation of the hotel, leisure and catering sector from the consulting firm Spencer Stuart. Palmada, author of a study on “Hotel and Leisure Brand Management” published in early 2007, focused his presentation on brand management in the hotel industry. First he explained the situation of the main hotel groups and brands around the world, a group which he is certain that “will include a number of Spanish names in the upcoming years”. Palmada also set out the main challenges and opportunities to be found at present in the sector, highlighting the importance of emerging markets such as China and India in the future. The Spencer Stuart’s partner went on to explain some of the challenges faced by the hotel sector today, suggesting “the absolute necessity of creating a brand” as a solution, in addition to making two important points: “cornering a market niche, either in the top band of the market, or in the “low cost” segment. For those who fall somewhere in between, there is a high risk of the product becoming a “commodity” and making use of Internet opportunities, which “is offering more and more options to the customer and revolutionising the business model”.
In fact, the hotel industry was ideally represented in Seville with the presence of Raúl González, Managing Director of Barceló, a Spanish hotel group with an eminent international outreach, operating in 29 countries via hotels and travel agencies, and in 44 through the Barceló brand. González explained the internationalisation strategy of this Balearic-born group, a move which began in 1981, and stressed in particular “the importance of personal determination and opportunity; there must be a personal desire to support an international strategy and appropriate business opportunities must arise”. Raúl González went on to describe the different phases in the Barceló international process. The group operations are no longer limited to the Caribbean, but have gained significant ground in Latin America, Eastern Europe, Africa and Turkey. “The main difference of the Barceló Group are ‘the resorts’, the all inclusive package,” indicated González, who also emphasised some of the keys to the Spanish group’s success. Of these, he stressed: “support for a unique location: right on the back of spectacular beaches; horizontal constructions which blend into the landscape; offering a unique variety of facilities and services (20 restaurants, thousands of square metres of pool area…); and all under an “all inclusive” regime, at an exceptional price”.
The Seville-based brands in the sector were brilliantly represented by the Abengoa Group, who was kindly invited by the Leading Brands of Spain Forum to take part in this interesting seminar. It was Cándido Velázquez, Board Member of Telvent, a subsidiary of Abengoa specialising in “real-time information technologies”, who was responsible for presenting the main features and key elements of the company’s international strategy. Velázquez described the Seville-based group internationalisation experience and particularly emphasised the strong brand development for each group company and the diversification of the group line of business which operates in sectors ranging from information technologies to bio-fuels, from desalination to solar energy plants. Cándido Velázquez pointed out the “international reputation” of the group brands (Abengoa Bioenergy, Befesa, Telvent) as one of the keys to the company’s global success and its presence in 70 countries.
The field of expertise of MAPFRE, the main Spanish insurance company, with wide international presence, is very different. MAPFRE’s representative, Luis de Larramendi, after recognising “the extremely important work of the Leading Brands of Spain Forum in the promotion of a strong and credible image of Spain through its leading brands”, explained to the lecture delegates the keys to his company’s international experience. Larramendi began by describing the early days of the company and the brand creation process, until it became the great insurance company it is today. He then went on to talk about MAPRE’s bid for internationalisation which, as in the case of other Spanish companies, also started out in Latin America. One of the points that Larramendi emphasised most in Seville was the issue of “combining the international nature of the company with respect for local sensibilities”. MAPFRE entered the majority of markets via the acquisition of local companies, and Larramendi told how “sometimes MAPFRE continues to operate under the local company name, in particular when the company taken over has a good image and strong local bonds”. In any case, on most international markets, this Spanish insurance company operated under the MAPFRE name with the “surname” of the relevant country. Luis de Larramendi surprised his audience by ending his presentation with the recital of a poem in which he encouraged those present to go out and “travel wisely”.