A global strategy for Cini&Nils

Internationalize: this was the call to action. Grow and expand onto the global market: this was now the number one goal for management at Cini&Nils , the Italian company specialized in luxury lighting systems. Growth was a must to continue to sustain the cost of developing and realizing their final products, but achieving this goal was not coming easily. Although many Cini&Nils products were highly prized by Italian customers, and even showcased in major design exhibitions and museum collections, the company had not successfully made the leap into foreign markets.

Because of the low purchase frequency of retail customers (generally people buy a lighting system once every few years) and the positioning in niche segments, the company was disinclined to activate a more extensive retail network in foreign markets. Instead, management believed that they needed to channel resources into a small number of carefully chosen markets, and adapt the products accordingly (basically going global in appearances alone).

A major product revolution was set in motion by the ban on manufacturing incandescent light bulbs and the consequent adoption of led technology. This ban took effect in various countries at different times around 2010, and coincided with sizeable investments of financial and human resources by Cini&Nils. The company adapted the product range to the new technologies, and this change absorbed a considerable amount of attention of managers and employees, to the detriment of the other areas and functions.

However, investments by Cini&Nils in the meticulous process of developing and realizing lighting systems risked being lost because of low-cost producers. With reverse engineering, the company’s innovative solutions could be replicated and reintroduced on the market via online stores at more convenient prices. In order for the original product, realized with top quality components, to be fully appreciated, the story behind it had to be told by retailers or interior designers, indispensable intermediaries between the company and the final customer. To build and maintain relationships with retailers and interior designers, who were also the focus much attention from competitors (especially in foreign markets), Cini&Nils had to make new investments in terms of time and human resources.

What’s more, for some time now shops specialized in design luminaires and lighting systems, like many physical stores, have been struggling for survival in the face of encroaching e-commerce. Yet these are the traditional sales channels for high-range lighting products.

In light of all these criticalities, growth strategies had to be carefully crafted and focused.

Physical stores have been exploring new strategies to survive the changed business climate. Considering the rising technological content and growing sophistication of the design of lighting fixtures, private customers have little knowledge of the final product. This means that the main challenge for traditional retailers is to win them over with expert consultation and possibly innovative product displays. In 2017, Cini&Nils decided to revamp its online strategy through partnerships with web agencies specialized in design products. This tactic helped the company to develop e-commerce and establish relationships with major retailers of such products.

Also essential for the company is to offer stores a product selection that matches the expectations of their customers. The choice in this case centers on iconic products, which are particularly popular thanks to the fact that the aesthetic of these best sellers is easily recognized by specialists and the public alike. (Cubo Luce, the company’s flagship product, alone accounted for 15% of total revenues.)

Beyond targeting a number of select European markets, in 2017 the company started collaborating with an exclusive distributor for the US and Canada. This move necessitated adapting products and obtaining export licenses and quality certification. In the US market, product plugs were switched out, replacing the 220 volt format with 110 volts; wall lights were equipped with a backplate to hide the wiring of the electric system, and the distributor had to apply for the necessary safety certification.

Cini&Nils then overhauled its global sales network, with two agents who began working outside of Europe in 2017: one in the Middle East and the Gulf States, and one in the Asia-Pacific region based in Singapore.

To reach customers more quickly, Cini&Nils started considering partnering with a number of lighting designers and interior designers, in part with an eye to facilitating access to corporate contracts with hotels, airports and offices. There is huge sales potential in contract channels (sales of lighting fixtures for major residential or commercial projects), a highly demanding arena where the company still has to shore up its presence, especially outside of Italy. This could be exploited by introducing a different approach: product personalization (sizes, materials, positioning options, and installation) and design services (for example, calculating light output).

• For small companies, the decision to focus on a few specific markets can be a good solution for relaunching international growth. At the same time, fashioning a product and service offering tailored to the needs of each market can also prove to be a winning strategy.
• For small companies interested in internationalization processes, digital sales channels can be developed via targeted partnerships, while taking care to align communication to their specific product. What often happens, in fact, is that customers look for a specific brand rather than a product category.
• Communication to the final customer is a key component in the differentiation strategy for foreign markets: investments in research and development along with the constant drive to ensure quality products are cancelled out unless these efforts are effectively communicated to customers.