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February 1996 issue


  • Internet, WORLD -- Will Visa and Mastercard become the Global Currency of the Future? As online commerce continues to develop on the internet, proprietors (who once operated in a domestic marketplace) are becoming more aware of the issues involved in dealing with customers from around the world -- and the added difficulties and costs associated with foreign currency transactions. Digital Connection(tm), a leading software developer for internet providers and commercial online services, recently told PANGAEA(tm) that when Visa and Mastercard consolidate their efforts and offer protection to encourage consumers to pay with their credit cards online, we are going to see an important evolution in online commerce. What he was referring to, primarily, were the standards, the security issues and the availability of simple, online, instant transaction options for the customer. For the global merchant, this development is even more important to help address currency standardization issues. Meanwhile, until recently, the two major credit card companies, Visa and Mastercard, were developing competing standards -- just another complication for merchants and consumers. However, just this week, through a joint effort, these two leaders announced publicly their plans to pursue a single standard. This new, joint approach is said to make credit card transations on the internet even more secure than those currently taking place in the "real" world, according to an IBM spokesperson, as one of the companies endorsing this new standard. And for global merchants on the internet, we may be one step closer to a standardized, electronic "global currency."
    What are your thoughts on this?

  • On the Ground, WORLD -- In a recessionary climate, the poshest neighborhoods in New York, Tokyo and Paris still command the highest rents from retailers. Using figures from the Hirschfeld Group, we calculated rental costs for a 1000 sq. foot retail space in the world's six most expensive shopping districts. New York City is the most expensive (on 5th Avenue between 49th and 57th Streets). Expect to pay about US$500,000 for a shop, compared with US$440,000 around the corner on 57th Street (between Madison and Fifth). Tokyo's Ginza (hit by recession) was the most expensive in the world until last year, and now ranks third. The same shop? Expect your rent to be about US$350,000. Fourth place is tied between San Francisco's Post Street/Stockton Street and (again) New York's Madison Avenue (between 57th and 69th Streets) -- US$300,000. Paris, on the Champs Elysees, almost seems like a bargain at US$280,000.

  • Varadero, CUBA -- Club Med to open new resort in Cuba in November. This is a government- financed project targeted at tourists from Europe, Latin America and Canada. Despite recent efforts in Cuba designed to open up trade, American citizens are still prohibited from traveling to Cuba. (Source: YOUR LINK HERE)

  • Tokyo, JAPAN -- Japan's Trade Surplus Declined (by 11.4%) for the first time in five years, headed by a sharp trade surplus decline with the US (17% and growing), and there are signs that tension between the two nations is subsiding as Japan accepts more US exports. But a closer look at global trends indicates that tension may soon heat up again between the two countries as Japan shifts is point of export to Japanese factories operating abroad. Surely a strong yen contributed to Japan's growth of imports and decrease in exports. But much of Japan's increased imports last year were products entering Japan from their factories abroad. For example, the biggest importer of cars to Japan in '95 was Honda. The majority of consumer electronics (VCRs, color TVs, CD players) came from Japanese-owned factories in Southeast Asia. Taking the focus off Japan for the moment, China is expected to replace Japan as the country maintaining the largest trade surplus with the US over the next two years and the US is making efforts to ease relations with Japan to keep American military bases there. (Source: YOUR LINK HERE)

  • MEXICO -- Mexico reports its first trade surplus since 1989, as the country opens its market to world competition. Despite a substantial (US$18.5 bil) trade deficit in 1994, Mexico reported a US$7.4 bil trade surplus in 1995. Exports surged 31.2% due to the Mexican peso's sharp decline, making goods produced there even more affordable abroad. The recessionary climate in Mexico further contributed to their even lower demand for imports, while the local economy slumped 7%. The emergence of small export companies in Mexico accounts for much of this recent growth, and is expected to lay the groundwork for an enduring ``export culture.'' (See this month's Feature Article.)

  • Beirut, LEBANON -- Beirut's stock exchange resumed trading last month after a 13 year hiatus. The exchange was forced to close in 1982 due to Civil War and listed 42 companies at that time. It reopened in '96 with 3 companies listed and 10 employees. (Source: YOUR LINK HERE)

  • Orlando, USA -- ``Sports is a growing part of the public's appetite for entertainment -- not just in this country, but internationally,'' said Reggie Williams, Walt Disney Co.'s Vice President of sports development. In addition, Al Weiss, Disney World's Executive Vice President, values the theme park business at $25-30 billion a year, and the sports industry at $250 billion/year. To capitalize on this trend, Disney is building a $100 million amateur sports complex just south of its Epcot and Magic Kingdom theme parks in Orlando, Florida, scheduled to open in the 2nd Quarter of 1997. This sports complex is part of Disney's move into the sports industry, including their 1993 purchase of the Anaheim, California, Mighty Ducks (National Hockey League) and a 25% stake in California's Angels professional baseball team. Disney is also soon to own the ESPN sports network upon completion of its US$19 billion acquisition of Capital Cities/ABC Inc. (Source: YOUR LINK HERE)

  • London, ENGLAND -- In an effort to boost sales, product marketers around the world are exploring new target groups and new uses for old products. Founded in 1870, Fisherman's Friend mint lozenges is losing market share as its primary target -- older adults -- is dying off. Though traditionally positioned as a cold lozenge, they are being repositioned to appeal to the 16 - 34 age group, as a trendy sweet for the European club set. How? Using a highly explicit sexual campaign that emphasizes the product's strength and off-beat flavor. The campaign has been successful in Germany and the UK, but does not plan to follow suit for the US market, where the product is registered with the Food and Drug Administration and sold as an over-the-counter medicinal cold lozenge, by Bristol-Myers Squibb Co. Fisherman's Friend is available in 112 countries. (Source: YOUR LINK HERE)

  • USA -- Only in an over-developed market economy like the US, could marketers continue to develop new benefits for a staple like toilet paper. In many countries, access to any toilet paper is a luxury. But in the USA, Proctor & Gamble, James River and Scott have decided to give the 35% of the American toilet paper using public what they've been lacking -- softer, more quilted tissue, odor-reducing toilet tissue, hypo-allergenic bath tissue, sturdier (even when wet) bathroom tissue and pre-moistened wipes. These new products were introduced to the American market during the last year to differentiate brands and more successfully meet consumer needs. In 1994, US toilet tissue sales were more than US$3 billion, a 6.3% increase over 1993. (Source: YOUR LINK HERE)

  • Beijing, CHINA -- China plans an ambitious five-year project (1996 - 2000) to expand its radio and television broadcasting facilities to improve transmission quality and extend its reach to remote areas. But marketers beware, broader reach may translate to stricter control. (Source: YOUR LINK HERE)

  • Berlin, GERMANY -- The Central Council of Jews in Germany (recently relocated to Berlin), reports membership of about 50,000 people from 16 Jewish state associations and 40 Jewish congregations. The recent growth in Jewish population in Germany is largely due to the influx of eastern Europeans. Berlin is now the largest Jewish community in Germany with over 10,000 members. These new immigrants are families with small children. Fall 1995, marks the first Jewish elementary school built in Germany since the end of the war and accommodates 360 children. In contrast, in the mid-'80s, a Jewish school was established in Berlin for 25 children. (Source: The Week in Germany 1/96)


    For more information about any of these topics in any foreign market, or if you would like an in-depth market study, contact PANGAEA, International Consultants. With an extensive network of marketing consultants, attorneys, logistics experts and more around the world, PANGAEA is uniquely qualified to offer hands-on, local marketing and management consulting services.

    MORE NEWS ON THE HORIZON...

    Updated 2/29/96

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