Selling Cookies in Egypt - Essay Example

? Selling cookies in Egypt Distribution There are many ways to sell cookies in Egypt, but for a company that wishes to venture in marketing in Egypt, it has to comply with the government rules and the accepted norms of doing business in Egypt. Foreign firm has the following choices of distribution in Egypt (U.S. Commercial Service Egypt). First, it can enter into a general partnership or a limited partnership companies. Under this set up, there is a foreign partner and Egyptian partners. It is required that Egyptian partners own at least 51% of the capital and that head of the company must be an Egyptian national. In this kind of distributorship arrangement, the company cannot be an importer nor act as a commercial agent unless it is 100% Egyptian owned and managed. Second option is the Limited Liability Company wherein company has no limit on the percentage of ownership, provided that there is at least one or more Egyptian managers in the company, there are at least two shareholders or partners in the company and the capital should not be less than $9,000. Again, in this set up, the company cannot be an importer nor act as a commercial agent. Third option is a joint stock company that requires 49% of shares of stocks to be offered to Egyptians upon formation. Eventually, foreign stockholders may own 100% of the company provided majority of the board of directors is Egyptians and capitalization should not be lower than LE 250,000, with at least three Egyptian shareholders. Again, this type of distributorship may not import or act as commercial agent unless it is 100% Egyptian owned and managed. Another alternative is for foreign firms to register and sell direct to Egyptian consumers. They can do this by establishing their own subsidiary in Egypt or put up its own manufacturing assembly operation in Egypt. Foreign firms can use free zones areas or bonded warehouses to store goods and hire their own employees to sell their own goods. Foreign firms can also rely on Egyptian companies for wholesale and retail distribution who are specialized on wholesale and retail distribution. Besides, according to USCS (March 2011) Egyptian commercial agents are required for foreign firms to bid on most government tenders. Statistics from USCS provides the following data: As of 2007, there are 5,800 registered importers in Egypt, 9,600 exporters, 4,330 commercial agents representing 106,200 firms and 4,250 factories licensed to import components. Most of these firms are privately owned, but the government sector includes some 279 separate companies affiliated with 16 holding companies; nearly 30 military factories that also make civilian products; and 1,500 companies owned by one of the 26 provincial authorities.   Trade Guide for Egypt considers U.S., Germany, UK, France and Italy as main suppliers. An important regulation that pertains to export regulations for foodstuffs is the quality inspection upon entrance to Egypt. Packaged items must be labeled in Arabic and should contain the name of the product, its trademark, its bran name, the product’s technical data and mode of operation, international marks and information that should be observed during transportation and handling, country of origin, production and expiry dates and manufacturer’s name. Exporters should also observe the international shipping and handling symbols, but should specify any special handling instructions in English and in Arabic. One channel of distribution that is getting to be popular in the internet is the B2B websites. B2B is the exchange of products and services or information between business rather than business to consumers. Growth of B2B is estimated to be worth $7.29 trillion dollars in 2004 (Jones, Paula, 2000). Retailers and businesses in Egypt has its own B2B websites wherein business can view offers to buy, post offer to sell, view company directories, request shipping quotations and other details for trading business (Tradenetwork.com). B2B transactions have made trade faster and a reliable means of distribution. 2. Promotion Promotion is very much needed when entering a new market. It is basically, an exercise in information, persuasion and influence. (Stanton, 1975, p.469,) Widely used methods of promotion are personal selling, advertising and sales promotion. Personal selling involves direct contact of the seller or his representative with the buyer. This comes in variety of forms that include across the counter selling; house to house selling; salesmen employed by the company to call upon retailers and wholesalers, call to important customers (Philips & Duncan,1968, p. 704) Purpose of advertising is corollary with selling and promotion as its main objective is to gather attention of buyers to create interest, desire and action towards the product. During the recent years, advertising methods have been improved, its accuracy and helpfulness to the buyer increased and its appeal more firmly based on facts determined by research and scientific testing. One very important decision company faces is choosing the appropriate media as vehicle for advertising. Most common methods used are newspapers and magazines, radio and TV, direct mail, outdoor signs, transit ads, theatrical films, handbills and package inserts, yellow pages, window displays, and packages and labels. (Philips & Duncan, 1968. p.729) In the age of computers, a new kind of advertising media emerges, a fast, cheap and direct means of getting into target customers. These are the social networking sites such as Facebook, Twitter, and other web search engines as Google and Yahoo, SMS and B2B network. B2B directory serves as a trading, exchange and marketing information for retailers and wholesalers. SMS advertising in Egypt has also been one of the successful media vehicle used for campaigns because it can deliver messages exactly to target customers. SMS stands for short messaging service and is becoming a small but growing part of advertising campaigns of many businesses. SMS messages are limited to 160 characters or less, but it has the ability to encourage customers to buy their products and services. A short effective SMS message would appear like this: “Big Sale of Biscuits today”. According to Best Text Marketing (2011) doing an SMS advertising campaigns need preparations that include the following: determining the market, creating an advertising budget, deciding on the general message, setting up of an SMS service, get customers to opt in, send messages with appropriate frequency, and tracking success. One very important thing to consider in SMS advertising campaigns is the willingness of customers to receive messages from the company. One way of doing this is by offering discounts, coupons or exclusive deals to customers who sign up to receive text messages from the company. Sending text messages without their consent will create negative reactions and will just drive away potential customers and will violate rules of SMS provider (Best Text Marketing, 2011) Sales promotion complements the efforts of personal selling and advertising and activities include store displays, holding of exhibitions and trade shows, using samples or premiums (Management.hub.com) To sum up, distribution system of the Biscuit Company will depend on its capacity, target customers and trading requirements. Company can choose different options of distributorships available in Egypt. When settled in Egypt, promotions are needed by the Biscuit Company to introduce the product to the market; to influence the public with the help of new uses of the product; to increase the frequency of purchase by buyers, to encourage dealers to stock more goods and to withstand the competitive field. Again, the company has several options on methods of promoting the biscuits to its target market, but generally, it is advertising, personal selling and sales promotion. Company can take advantage of the emerging internet service of promoting the biscuits because of its cheap cost and fastest way of reaching customers, but do not necessarily mean setting aside the conventional means of promotion. References Best Text Marketing, 2011. Developing SMS Advertising Viewed 25 April 2011 from http://www.besttextmarketing.com/guide/developing-sms-advertising-campaigns/ Jones, Paula, 2000. B2B Business to Business. Search CIO.com Viewed 25 April 2011 from http://searchcio.techtarget.com/definition/B2B Management.hub.com. Sales promotions, methods and ideas. Viewed 25 April 2011 from http://www.management-hub.com/marketing-sales-promotions.html Phillips, Charles f. & Duncan, Delbert J. Selling policies and practices. Marketing Principles and Methods. Richard D. Irwin, Inc. Ill. 6th ed. 1968, pp.704 & 729 Stanton, William J. Promotional methods. Fundamentals of Marketing, McGraw Hill Kogakusha, Ltd. Tokyo, 1974, 4th ed. p. 469 Trade Egypt.com. Egypt and Global B2B Marketplace. http://www.tradeb2b.net/middle-east/tradeegypt/ Trade Network.com. Trade Guide for Egypt. Viewed 25 April 2011 from U.S. Commercial Service Egypt. Distribution and Sales Channels in Egypt. Global Trade.net. Viewed 25 April 2011 from Read More