Posted on Wednesday 16 November 2011 by Ulster Business
The Newtownards company has exported its expertly crafted products to a wide variety of countries in the more than 20 years since it was first formed.
Many of its traditionally strong markets have been flat during the past few years of recession as consumer spending has been constrained, but director Steve McIlwrath says there are some places where people still have money to spend.
“We’re seeing signs of activity popping up again in some places. We’re focusing a lot on Germany and we’re starting to see some progress in Austria, Holland, Switzerland, that little hub of countries. There seem to be less signs of economic pressure, consumers are spending money and traders are keeping a decent level of stock,” he said.
“This year we have also, unusually, sold a few guitars to Greece. We sold a guitar to a recording studio in Western Samoa, which is probably the furthest afield we’ve sold one to. This month we’ve also sold a few to Brazil. So there are markets now that are popping up and there is good business from them which you would never have included in a business forecast.”
Historically, Avalon had a strong presence in the US, which was its biggest export market. But even before the downturn sales had fallen away because of Sterling’s strength against the dollar, which removed the company’s flexibility on pricing and made it hard to remain competitive against established US manufacturers such as Martin and Taylor.
That has driven the company, which currently has seven employees, to focus on what makes it unique and look for new markets.
“What we’ve tried to do, and it is working well for us in Germany, is that we’re emphasising the fact that we are an Irish guitar, because that is a significant point of differentiation to those competitors. It lets us emphasise a different tonal quality to the guitar, and a different look and feel to the guitar,” says Steve.
Avalon has sold its products in different markets through distributors, through agents and by having its own distribution businesses. He believes the way local companies should approach export markets often depends on how far they are from the firm’s home base. In the US he believes a big enough business should distribute itself, while in somewhere like Japan a distributor is advisable because Asian markets requires the building of long term relationships.
“You can’t just treat the whole world as an export market,” says Steve.” You have got to look at the circumstances in each market because they all have their own quirks. For example you’d probably think that in America and Canada that because they speak English everything will be fine, but you have to jump so many hurdles because of bureaucratic systems and regulations, and there is a cost associated with that. In the EU you don’t find wide variation in the law with regards to moving products around, but there is variation in the documentation and the interpretation of the rules. It is mostly about cultural differences.”
Avalon’s guitars are used by a host of well-known musicians including the likes of Ed Sheeran, Teddy Thompson, James Morrison, Katie Melua and even musical greats such as Van Morrison and Bruce Springsteen. It has masterclasses planned with expert local guitar players in those countries such as Germany in which sales are doing well to further promote the brand.
“That hub of markets around Western Europe is what we’re focusing on, we think there is traction there, we’re getting a good response. So our outlook is cautiously optimistic. I am going back next month and we’re starting to appoint dealers in Belgium and Scandinavia, places where there are signs of economic progress. Even in the Republic of Ireland, where we haven’t had a distributor for a while, we’ve seen some dealers restock. So things are picking up.”
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