The good news about the imminent debut of the euro is that a
survey, carried out exclusively for Marketing, reveals that 97% of
marketers believe the single currency is an important issue for them.
The bad news is that while half say it will have a significant impact on
their business, a meagre 27% have a formal marketing strategy dealing
with the euro’s arrival.
The survey, carried out by the Chartered Institute of Marketing (CIM),
comes as momentum builds in the business community to get to grips with
the euro and its impact on the UK.
For the small- to medium-sized companies we have the obnoxious Martin
Skinner, star of the Treasury’s ad campaign created by TBWA GGT Simons
Palmer, to galvanise British companies into greater euro-awareness. Last
week over 100 City and business figures, including Tony Hales of Allied
Domecq, Lord Marshall of British Airways and Martin Sorrell of WPP
Group, declared their support for the euro in the Financial Times.
But whether or not companies support the UK joining the single currency
isn’t the main issue. With the majority of European Union countries
signed up to it, from January 1999 it is going to have an impact on UK
marketers, and they do not appear to be ready for it.
The effects of the single currency will include a reduction in trading
barriers and full-blown price transparency, with Europe-wide marketing
becoming the norm. All of which means marketers ignore its effects at
Steve Cuthbert, CIM director-general, says that the Institute carried
out the survey, which covers all sizes and sectors, because there was a
’sneaking feeling’ members weren’t as prepared as they should be.
Getting the facts right
He is right, judging by some of the main findings. Of the 200
respondents, 66% correctly said that the start date on the Continent is
The rest got it wrong, giving either January 2000, 2001 or 2002 (when
euro coins and notes appear) as the kick-off.
Of the 71% who say they have no formal strategy to assess the euro’s
impact on their marketing, the breakdown is also telling. Those involved
in distribution, not surprisingly, are the most prepared: 67% have a
formal strategy, leaving about one-third without.
A definitive 94% of marketers say that either their company doesn’t
intend to demand suppliers price in euros when the single currency
begins in a few weeks (66%), or they don’t know (28%).
The Treasury believes its message is getting through, however, if not as
fully as it would like. According to Lord Simon, minister for trade and
competitiveness in Europe, small- and medium-sized British companies are
waking up to the implications, as evidenced by the fact that the
response rate from the target audience to the Martin Skinner campaign
This is said to be three times the average for such campaigns.
Speaking to the first national meeting of the heads of the 12 regional
euro forums a few weeks ago, Lord Simon said that the advertising
campaign had led to 300,000 requests for fact sheets on business
preparations for the euro.
But he admitted the interest is patchy: while the best response levels
have been in the south-east and East Midlands, response from the
north-east, north-west and London has been 20% below the national
Cuthbert argues that the best approach for companies is to use some
common sense: ’Ask yourself what is the euro going to do to competition,
particularly in the euro zone (the 11 founding countries signed up to
single currency in the first wave)? What are the implications for you as
a competitive supplier in the marketplace? People really need to work
One of the biggest misconceptions still to be beaten is that the euro is
essentially a problem to be solved by the IT department. It isn’t just
about changing your IT systems to be able to convert from sterling to
the euro. The new euro zone will account for nearly half of British
exports and over 40% of British overseas direct investment.
Competition is also bound to intensify as companies of all sizes
formerly wary of trading across borders because of currency fluctuations
feel confident enough to push into new markets.
Of even more concern, says Cuthbert, is the fact that the four countries
staying out (Sweden, Denmark, Greece and the UK) become a minority in
terms of the weight of trade. So decisions on things such as pack size
and supply will be made with reference to harmonisation in the euro
zone, since it will have the most financial clout as a group.
It also becomes easier for buyers to use Continental suppliers because
of the ease of price comparability. ’You see this in all purchasing
patterns,’ says Cuthbert. ’If there is a simpler option, people take it.
They don’t like complicated options, or confusion marketing. At the
moment the UK is one of 15. Now there will be this big trading bloc. Too
many people have just failed to see the significance of it to them.’
Some of the trade associations have heeded the call by trying to bring
their members up to speed. The British Tourist Authority (BTA), for
example, has published an explanatory leaflet following research which
showed low levels of awareness among the more than 200,000 companies
that make up the British tourist industry. Considering two-thirds of the
UK’s 25.5 million overseas visitors come from Europe, this is not before
The tourist trade will be in the front line, warns the BTA. Even though
euro notes and coins don’t appear until January 2002 (national
currencies in the 11 participating countries disappear completely six
months later, on July 1 2002), companies, from conference organisers to
bed and breakfasts, should start preparing. This includes anything from
training staff to handle enquiries, to revising advertising and any
internet presence to reflect the ability to deal in euros.
The BTA believes that the extent to which businesses need to prepare for
the euro depends on a number of factors, including the following:
- The proportion of customers from the euro-zone countries
- The relationship a company has with businesses that operate in the
- The marketing done to the euro-zone, including indirect marketing done
through the internet or with brochures at ports of entry from the
A particular problem in the UK is that the political wrangle in the
press seems to be drawing attention away from the crucial business
issues, as the findings of media evaluation company Carma International
show. It is in the middle of analysing British and French national press
attitudes and perceptions with regard to the process of European
Monetary Union (EMU) and the euro.
While the full report will be published in January, interim results from
May to August of this year show that of a total of 696 articles, a mere
21 focused on the training and education of people about the euro and
what to expect.
The vast majority of the press coverage is not about what the euro will
mean, but concerns the political dogfight taking place over Britain’s
role in it.
Only 5% of articles mentioned a company’s own employees as an interested
stakeholder group, while the impact on communications fared even
Only 4% of the articles discussed the effect on external business
communications, with a paltry 1% looking at internal communications.
This is in sharp contrast to France, which according to Carma has moved
beyond political discussions to examine more practical issues and
For instance, coverage has slanted more to how French businesses should
be reorganising themselves and what investment is needed to get
Even more significantly, the message that the euro should be a key
element in business communications was emphasised in 10% of the 562
And while the UK is still trying to spread the euro message to
small- and medium-sized companies, the French government is now planning
a new communications programme for groups such as women, the elderly and
the less educated.
As Sandra Macleod, Carma’s European managing director, points out: ’This
has been a political football in the UK, and the media have focused on
the ’should we join/ should we not’ debate, without anyone taking the
responsibility of driving the message home that it will happen and we
must know about it and prepare.
’So it’s no surprise that so few businesses and people are informed. No
one has really taken ownership of that role in this country - so
Finding a company that is facing up to a euro future is somewhat of a
challenge, but Norwich Union, one of the UK’s leading financial services
organisations, has been working full tilt for the past year.
Charles Barrows, EMU programme director at Norwich Union, says that the
initial stage has encompassed getting ready for the first wave on
January 1 1999, since it has business in parts of the euro-zone such as
Ireland, France, Spain, Italy and Belgium. Between January 1 and 4 - the
’conversion weekend’ - it has to ensure that all bonds and equities are
re-denominated in euros.
But it has by no means ignored UK preparations. Despite the uncertainty,
Norwich Union has already carried out a detailed impact analysis across
its entire UK business operation. According to Barrows: ’We have worked
on the assumption of when the UK might join and how long the transition
’Using those assumptions, we have developed a plan for how we would
manage the conversion, looking in particular at costs and risks,’ he
’The key aim is to ensure a smooth transition, working to communicate
effectively with our customers and business partners throughout the
period of change.’
This is the nub of the matter: communicating with customers, complex at
the best of times but rendered even more so when talking in two
For example, he notes: ’At some stage we will have to explain to
customers how we have converted their policies and investments. Clear
communication is critical.’
Barrows is also active in getting this message across to others through
his work as chairman of the Association of British Insurers (ABI), which
includes sitting on one of the working parties of the Treasury’s euro
That group is planning to release a national changeover plan by early
next year to give high-level guidelines about the length and time of
transition that the government would aim to give businesses to
According to Barrows: ’Neither ABI nor Norwich Union are looking at this
as a good thing or not. What we are saying, from a risk and customer
management point of view, is how do we ensure that if and when we join
we have a smooth transition? That’s what people need to think
THE CIM SURVEY: WHO THEY ARE
The 200 respondents to the CIM’s survey are predominantly UK-based: 181,
compared with three in other EU countries, one from the US and two from
a non-EU European country. The location of their headquarters vary: 80%
are in the UK, 6% in another EU country, 6% in the US and 4% outside the
The majority (38%) employ fewer than 50 people, followed by 22% with
101-500 and 12% with 50-100. There are 16 respondents with between
501-1000 employees, 17 with 1001-5000, five with 5000-10,000 and 15 with
When asked whether they are in favour of joining the single currency the
majority were for, with only 27% against. This is also where size makes
a difference: the largest group against joining, at 37%, were those
which employed fewer than 50 people.
ROTHERHAM TRIES OUT THE EURO
Dual pricing was the name of the game in the Yorkshire mining and steel
town of Rotherham last month, when it become the guinea pig for euro
shopping in the UK.
The currency trial was the idea of Rotherham’s Chamber of Commerce and a
recognition of the amount of European investment that is helping to
rejuvenate the town.
Dummy euros were circulated to shoppers and they were given a week to
try to get to grips with the idea of the new currency. With an exchange
rate set of 70p to one euro, over 30 town centre shops were selling
products in both pounds and euros.
In Tesco a basket of mixed fruit cost 5.45 euros, or pounds 3.95, while
a florist had bouquets on offer for 3.60 euros, instead of pounds 2.50.
Reactions from the locals were mixed, with some just confused by the
whole exercise and others embracing it with enthusiasm.
But the attitude among business in Rotherham is that the euro is coming
and everyone should be prepared. British Steel, the town’s biggest
employer, will start invoicing in euros from January 1.