• Marketing Opportunities in India
  • Marketing In Color Cross-Culturally
  • Take the Marketing Insights POLL
  • North Korea -- A World of Contradictions
  • Global Strategic Alliances for the '90s and Beyond
  • Work Benefits Cut in Germany
  • Record Low Inflation in Europe
  • check back for more news this month!
  • .....check back for more news this month!
  • INDIA -- The second largest country in the world with a market of nearly 1 billion people, a booming GDP, a well-established democratic and judicial system and increasingly sophisticated consumers and marketing channels make India an attractive consumer market. (See related market statistics.) Yet its heterogeneous population is so culturally diverse -- from religion to language to caste systems to eating habits and dress, literacy, education, etc. -- that doing business in India can be a challenge for multinational companies doing business there. Other obstacles include infrastructure problems, power outages, inadequate transportation and telephone systems. Trade duties and taxes on imports have raised significant barriers for global marketing companies as well.

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    Marketing Opportunities in India

    To overcome some of these obstacles, foreign companies have developed alliances with local firms, hired local nationals who were educated abroad to run facilities in India or merged with existing manufacturing and distribution channels to gain first-hand understanding of business practices, local consumer habits and market dynamics -- to help bridge the cultural gaps between foreign expectations and local realities. For the past three years, a US-based company, Telebrands Corp., has invested financial and managerial resources in India to develop the market for its products. And through these efforts, they have introduced electronic shopping and marketing to India. Telebrands installed its own manufacturing facilities in India, maintains warehouses, telemarketing and distribution operations in Bombay. They have also developed close relationships with the local post and customs to assure speedy delivery of their customers' products to the local market. Telebrands is paving the way to bring US-based infomercial and other direct marketers to India and maintains local media buying and management teams to this end. While the challenges can often be frustrating, for some companies, overcoming these obstacles are well worth the investment.
    (Source: YOUR LINK HERE)

    WORLD -- Some say that human beings tend to respond to particular colors in uniform ways, such as gray (overcast days -- dull, lethargic) vs. bright, yellow (sunny days -- excitement, happy). Yet, certain colors convey different meanings, not only across cultures, but also within a single culture (i.e. black clothing in the USA for funerals is traditional; but black is also considered a trendy, "cool" clothing color for urbanites in certain markets).

    Have you noticed a shift in new car colors this year? Purple hues, mossy greens, earthy mineral tones in subtle sand and silt colors are all the rage in the USA. Consumers appear to be attracted to some of the more subtle earth tone colors in their selection of cars this year -- or at least that's what car-makers are counting on. It is interesting to note this color shift, in a high-priced market, where the cost of introducing an unpopular color -- one that may be too risky or perceived as a fad -- can have tremendous cost implications in 3 - 5 years when the cars are resold.

    Color changes have always been highly visible and expected in the clothing and cosmetics industries -- where manufacturers follow and create seasonal and annual shifts from sharp blacks to pastels and bright orange. Color is "in" again -- at least in the USA. In foods, the recent introduction of light/low-fat/healthier products have borrowed from the environmentally-friendly durables -- now packaged in green. In lower risk categories, such as food, clothing and cosmetics, consumers can afford to purchase new items more regularly -- each week, each season or each year. And for the fashion-conscious consumer, they can't afford not to.

    The implications of color are very important since they elicit a variety of consumer emotions and responses. For example, certain packaging colors convey prestige (such as the use of gold on soup can labels in Hong Kong); others represent no-frills (like the black on white packaging of store brand/generic goods in the USA). Consider the misperception of red, black or white in the US, Japan and Brazil -- from funerals to weddings. In Moslem Middle East cultures, for example, it is unacceptable for products to be black because black is closely associated with the modesty of women. In Germany, however, black is the standard color for all senior management furniture. In the Ivory Coast, pagne prints are named after presidents and politicians, animals or flowers that adorn the cloth. Others are named for events and holidays. Some even carry the faces of celebrities like Michael Jordan or the ubiquitous red-and-black Marlboro label. Colors and patterns reflect different meanings, moods, emotions, status, occasions and more.

    It is important to be aware of and test the implications of color from one country to the next, because the image conveyed, however subtle, can have tremendous impact on a product's success.

    Share your insights about the meaning of colors in different cultures in the Bulletin Board area.

    And if you have a minute, please participate in our exclusive Marketing Insights POLL. We will share the findings.
    (Source: YOUR LINK HERE)

    PYONGYANG, N. Korea -- To attract foreign investors, N. Korea has set up a secluded trade zone called Rajin-Sonbong. They have made attempts at opening their market to foreigners to salvage their economy which has slipped 30% in the last 6 years. Trade volume declined 57% since the beginning of the decade and half of N. Korea's GNP is foreign debt. The infrastructure is poor, industrial development is stagnated (fuel shortages, spare parts, etc.) and natural disasters (severe drought and floods) have stolen N. Korea's last hope for self-sufficiency or juche, enduring hardship for the sake of the nation. Just to get through this coming winter, the UN estimates that N. Korea will need US$43.6 million in rice and other supplies. Meanwhile, threats of starving refugees fleeing to S. Korea, China and Russia, a fear of attack against S. Korea, a downward spiraling economy and resulting infrastructure, an unstable political and economic environment and lack of hard currency prevent foreign investors from acting quickly on N. Korea's meager economic reforms. S. Korea fears unification until the North is economically viable; Japan fears stronger Korean competition; and China is unlikely to want to foster a stronger N. Korea for fear of its reunification with the South -- right on its border. The US government has indicated its likelihood to ease their 46-year-old trade embargo with N. Korea. And while some US giants have explored the market opportunities, several factors have prevented them from moving forward, such as lack of hard currency and trade sanctions. To date, N. Korea claims to have won foreign investor contracts worth US$840 million. Among them is a US$210 deal with the Emperor Group of Hong Kong, a company with a questionable reputation. They have pledged to build hotel/casino facilities that cater to Chinese gamblers. It is estimated that North Korea would require between US$500 - 750 over the next 20-25 years to raise its per capita income to just two-thirds that of South Korea.
    (Source: YOUR LINK HERE)


    WORLD -- Downsizing, outsourcing, globalization, cultural awareness are all growing trends in the '90s. For businesses to compete successfully in this increasingly global marketplace, more are relying on the strength of global strategic alliances. Strategic alliances afford companies the benefits of local market expertise, reduced corporate overhead, in-market industry flexibility and strength, among others. Given the dynamic nature of global business, companies are utilizing this form of "partnering" to:

    • remain fluid and flexible
    • meet specific demands (i.e. to source raw materials, reduce manufacturing costs, expand distribution channels)
    • quickly gain market insights and understanding (from attorneys, research companies, logistics experts)
    • enter or grow in a market with strength (by leveraging the networking channels of local affiliates)

    The business environment of the coming decade is changing. And technology will further accelerate this pace. Please share examples of how global strategic alliances have changed your business.

    BONN, Germany -- The federal government in Germany recently approved the "savings package" which essentially reduces extended sick pay benefits for German employees from 100% to 80% of regular wages. These changes have been enforced to reduce the cost of doing business in Germany and to make them more competitive in the global marketplace. As an economic leader in Europe, the reactions to these cuts will be watched closely by neighboring countries. As the continent approaches economic unity, business and political leaders in Europe continue to propose new laws designed to strengthen their businesses and help them compete worldwide more effectively -- to reduce absenteeism, cut labor costs, increase productivity. Germans currently receive one of the most generous employee benefits programs in the world, including extended sick leave pay, up to 6 weeks of vacation each year and holiday and vacation bonuses.

    EUROPE -- August inflation rates marked a record low in the European Union, with an annual rate of 2.3%,according to Eurostat, the EU statistical office. Of the 15 countries, nine recorded inflation rates lower than 2.0%. Highest inflation was registered by Greece, at 8.5%, followed by Spain and Portugal (3.7% and 3.6%, respectively). Both Sweden and Finland had the lowest price increases -- at less than 1.0%. See TABLE
    (Source: YOUR LINK HERE)

    Although many of Germany's biggest corporations will cut employee benefits as permitted by this new law, retail unions in North Rhine Westphalia, Hessen and Bremen have decided to maintain benefits as before, at least through 1997 or 1998, when labor contracts expire.

    Newsflash: (Oct. 1) Reuters reports more than 100,000 people affected by this new law have walked off their jobs from firms such as Daimler-Benz and General Motors.
    (Source: YOUR LINK HERE)

    .....check back for more news this month!

    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.

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    Updated 11/4/96