Carnot Sylvestre, MS
As foreign direct investors, exporters and multinational marketing professionals wind down 2010, we hope that everyone had a thriving and prosperous year and wish all our friends, partners, and clients much success in 2011.
Sunday, December 19, 2010
Friday, November 26, 2010
Should The Financial Crisis In Europe Worry US Exporters?
Carnot Sylvestre, MS
Much has been reported lately about the financial collapse of Ireland where the government is under pressure from the European Union to take urgent austerity measures to reduce spending and balance its budget. Rising unemployment and the inability of the country to meet its debt obligations are causing investors to stay away from the Irish bond market.
Prior to this latest crisis in Europe, the dollar was considerably weak in comparison to the euro; two months ago the exchange rate for 1 euro was about $1.40. The weaker dollar meant that US goods were affordable to European Union consumers and American exporters were benefiting from the opportunity. The current financial turmoil in Europe is putting a downward pressure on the euro which is now trading at $1.33; this means that US goods are now more expensive and if the trend continues, American exporters will have good reasons to worry.
The silver lining is that the EU leadership recognizes the urgency of the problem; members like Germany and France are working diligently with Brussels to find sustainable solutions to the crisis. Already, an 85 billion euro bailout package for Ireland is set to be approved this Sunday by the European parliament, and similar solutions are in the works to help Spain, Portugal, and other weaker euro zone economies. German chancellor Angela Merkel and French president Nicholas Sarkozy have this week made statements to boost confidence in the euro and EU financial markets as well to reassure investors that the current financial crisis will soon be under control. Chancellor Merkel stated in a speech in Berlin this past Thursday that " The European Union will come out of the current turmoil much stronger".
Greece was able to reorganize its chaotic financial situation thanks to the adoption of austerity measures and a comprehensive financial help package from the European Union. EU members like Ireland, Spain, England, and Portugal among others will also get the help they need and survive the current crisis they are experiencing. The economies in Europe will soon stabilize, making it possible for the euro to regain any lost ground against other major foreign currencies and for US exporters to continue to find welcoming markets in the old continent. However, US exporters should not be complacent and place their hope in penetrating European markets solely on the weakness of the dollar; they should boost their R&D , increase and improve the quality of the products in their pipelines so they can become more competitive and better able to sustain future turmoil in European or any other foreign markets.
Tuesday, October 26, 2010
Penetration Pricing Strategy In Foreign Markets
Carnot Sylvestre, MS
When first entering a foreign market, many companies choose to use a penetration strategy for their products. The objective of using this strategy which involves the setting of very low price points for products is to help a company rapidly gain market share.
In certain instances, even companies that are already established in a foreign market choose to use the strategy of penetration pricing as a way to gain early adoption for a newly introduced product, attract sales for other products in their portfolio with higher mark-ups by using loss-leaders, and/or to counter competitors with similar products.
A penetration pricing strategy tends to lead to large sales volumes and lower costs per unit and allow companies to benefit from economies of scale. However, it is successful mostly in markets where demand for a product is highly elastic. In those markets, consumers respond rapidly to fluctuations in prices. If prices are low, new and existing buyers rush to purchase a product; when prices are high, those consumers stay away from the product and/or seek alternatives that are more affordable.
Companies must be careful when using penetration pricing strategy as it can present many pitfalls. Very often some companies don’t have the production and distribution capabilities to meet anticipated increase in demand, while others find that their competitors follow suit by reducing prices on their products, thereby nullifying any advantage that a penetration pricing strategy might have provided.
Companies wishing to use penetration pricing strategy as a way to gain quick product adoption in a foreign market should be aware that it may not work in certain markets because of consumer expectations and/or local regulations.
For instance, the current trend in Germany, France, Denmark, Sweden, Norway, Austria and other European countries is that consumers tend to stay away from products made by companies that do not have a reputation of good corporate responsibility, particularly when it comes to issues of child labor, treatment of employees or environmental policies. A Chinese cigarette lighter manufacturer found out recently that its products would not be allowed to be sold in Germany because of the amount of carbon monoxide emitted with each use. More and more, consumers in Western European markets want to know the distance and method of transportation used to carry a product to market and the amount of recyclable it contains.
Other factors that would keep consumers from buying a product also include country of origin effect; some consumers will stay away from products made in countries where human rights are not respected or where corruption and international agreement violations prevail. Also, consumers are more likely to purchase a product if they perceive it to be of good quality.
German consumers are very careful spenders, but they would not mind paying a higher premium for a good quality product while they would bypass one of low quality even if the price was vey low.
The lesson for companies is that they must exercise due diligence and adequately research their prospective markets so they can gain a total understanding of the demographics and psychographics that characterize their potential consumers. As tempting as it might be to use a low-cost strategy as a way to quickly penetrate a market, companies should be aware that this strategy might create an unintended expectation on the part of the consumers that prices will always be low. At a certain point, when a company wants to charge a reasonably higher, albeit competitive price for a product, consumers may suspect price gouging and stay away.
Penetration pricing strategy can be used effectively for a company with a diversified line of products. A particular product can be priced at a certain low level to give consumers a taste of what the company has to offer, but the overall marketing strategy of the company should be first and foremost to convince consumers that they are getting quality products that will meet or surpass their expectations, products that are better than what the competition has to offer, and are manufactured with the highest quality standards of human working and environmental conditions.
Companies engaged in multinational commerce should never lose sight that they are in business to make a profit. They will achieve success only if they understand their consumers and endeavor to serve their needs better than the competition can. Low prices may get a company to quickly move certain products and meet a given sales quota, but they can never be a sustainable strategy for success.
When first entering a foreign market, many companies choose to use a penetration strategy for their products. The objective of using this strategy which involves the setting of very low price points for products is to help a company rapidly gain market share.
In certain instances, even companies that are already established in a foreign market choose to use the strategy of penetration pricing as a way to gain early adoption for a newly introduced product, attract sales for other products in their portfolio with higher mark-ups by using loss-leaders, and/or to counter competitors with similar products.
A penetration pricing strategy tends to lead to large sales volumes and lower costs per unit and allow companies to benefit from economies of scale. However, it is successful mostly in markets where demand for a product is highly elastic. In those markets, consumers respond rapidly to fluctuations in prices. If prices are low, new and existing buyers rush to purchase a product; when prices are high, those consumers stay away from the product and/or seek alternatives that are more affordable.
Companies must be careful when using penetration pricing strategy as it can present many pitfalls. Very often some companies don’t have the production and distribution capabilities to meet anticipated increase in demand, while others find that their competitors follow suit by reducing prices on their products, thereby nullifying any advantage that a penetration pricing strategy might have provided.
Companies wishing to use penetration pricing strategy as a way to gain quick product adoption in a foreign market should be aware that it may not work in certain markets because of consumer expectations and/or local regulations.
For instance, the current trend in Germany, France, Denmark, Sweden, Norway, Austria and other European countries is that consumers tend to stay away from products made by companies that do not have a reputation of good corporate responsibility, particularly when it comes to issues of child labor, treatment of employees or environmental policies. A Chinese cigarette lighter manufacturer found out recently that its products would not be allowed to be sold in Germany because of the amount of carbon monoxide emitted with each use. More and more, consumers in Western European markets want to know the distance and method of transportation used to carry a product to market and the amount of recyclable it contains.
Other factors that would keep consumers from buying a product also include country of origin effect; some consumers will stay away from products made in countries where human rights are not respected or where corruption and international agreement violations prevail. Also, consumers are more likely to purchase a product if they perceive it to be of good quality.
German consumers are very careful spenders, but they would not mind paying a higher premium for a good quality product while they would bypass one of low quality even if the price was vey low.
The lesson for companies is that they must exercise due diligence and adequately research their prospective markets so they can gain a total understanding of the demographics and psychographics that characterize their potential consumers. As tempting as it might be to use a low-cost strategy as a way to quickly penetrate a market, companies should be aware that this strategy might create an unintended expectation on the part of the consumers that prices will always be low. At a certain point, when a company wants to charge a reasonably higher, albeit competitive price for a product, consumers may suspect price gouging and stay away.
Penetration pricing strategy can be used effectively for a company with a diversified line of products. A particular product can be priced at a certain low level to give consumers a taste of what the company has to offer, but the overall marketing strategy of the company should be first and foremost to convince consumers that they are getting quality products that will meet or surpass their expectations, products that are better than what the competition has to offer, and are manufactured with the highest quality standards of human working and environmental conditions.
Companies engaged in multinational commerce should never lose sight that they are in business to make a profit. They will achieve success only if they understand their consumers and endeavor to serve their needs better than the competition can. Low prices may get a company to quickly move certain products and meet a given sales quota, but they can never be a sustainable strategy for success.
Tuesday, September 28, 2010
The Hofstede Model Of Cultural Dimensions: A Valuable Tool In Multinational Marketing
Carnot Sylvestre, MS
It is imperative that companies seeking opportunities in foreign markets be well prepared to adapt to the particular characteristics found in the culture of each country in which they intend to do business. Too often companies, at great costs or peril, engage in ethnocentrism and make the mistake of thinking that they can make decisions for their foreign operations based on how things are done in their home country.
Adequate market research and cross-cultural analysis will go along way in helping companies plan and execute effective and successful entries in foreign markets.
For over three decades, international marketing practitioners have been using the Hofstede model of cultural differences to make recommendations to companies interested in making foreign direct investments. The model has provided multinational companies with great insights into other cultures that prepare them to achieve success in foreign mergers and acquisitions, train expatriate employees on how to interact with their counterparts in host countries, and adequately plan to gain rapid acceptance for their brands from consumers abroad.
At the core of the model are the five dimensions of culture that Dr. Geert Hofstede had identified in his study of national work related values in a number of countries. A score from 1 to 100 is assigned to each country for each dimension based on findings from the study. A former head researcher at IBM and University professor, Dr. Hofstede has written several articles and books on the subject.
The Dimensions
• Small vs. large power distance relates to how much the less powerful members of institutions and organizations expect and accept that power is distributed unequally. In cultures with small power distance, people expect and accept power relations that are more consultative or democratic. In cultures with large power distance, the less powerful accept power relations that are autocratic or paternalistic.
• Individualism vs. collectivism relates to how much members of the culture define themselves apart from their group memberships. In individualist cultures, people are expected to develop and display their individual personalities and to choose their own affiliations. In collectivist cultures, people are defined and act mostly as a member of a long-term group, such as the family, a religious group, an age cohort, a town, or a profession, among others.
• Masculinity vs. femininity is the value placed on traditionally male or female values. In masculine cultures, people value competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions. In feminine cultures, people value relationships and quality of life.
• Weak vs. strong uncertainty avoidance relates to how much members of a society are anxious about the unknown, and as a consequence, attempt to cope with anxiety by minimizing uncertainty. In cultures with strong uncertainty avoidance, people prefer explicit rules and formally structured activities, and employees tend to remain longer with their present employer. In cultures with weak uncertainty avoidance, people prefer implicit or flexible rules or guidelines and informal activities. Employees tend to change employers more frequently.
• Long vs. short term orientation has to do with a society's "time horizon," or the importance attached to the future versus the past and present. In long term oriented societies, people value actions and attitudes that affect the future: persistence/perseverance, thrift, and shame. In short term oriented societies, people value actions and attitudes that are affected by the past or the present: normative statements, immediate stability, protecting one's own face, respect for tradition, and reciprocation of greetings, favors, and gifts.
In the 2010 edition of his book, Cultures and Organizations: Software of the Mind which is based on World Values Survey data analysis for 93 countries, Dr. Hofstede introduced a sixth dimension:
• Indulgence vs. restraint. Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.
The Hofstede model is indeed a great tool that companies have at their disposal but it should not be viewed as a static and absolute set of guidelines that must be followed blindly. Although replication studies in surveyed countries have yielded similar studies across time, users of the model should be mindful that cultures are very dynamic and tend to evolve. There is no such thing as a uniform culture; groups of people within a country, depending on their geographical locations or socio-economic conditions, can have different attitudes and beliefs that will lead them to exhibit different behaviors toward certain products, services, activities, events, or people from different cultures.
It is wise for companies to dedicate time and resources to extensively research every country in which they wish to make a direct investment so they can effectively adjust their marketing stategy to accommodate and meet the cultural realities and expectations in different societies. Using the Hofstede model and the findings of their own research, companies will be prepared to segment each market within the foreign country, identify the right target for their products, and position themselves to gain acceptance and experience lasting success within a culture.
It is imperative that companies seeking opportunities in foreign markets be well prepared to adapt to the particular characteristics found in the culture of each country in which they intend to do business. Too often companies, at great costs or peril, engage in ethnocentrism and make the mistake of thinking that they can make decisions for their foreign operations based on how things are done in their home country.
Adequate market research and cross-cultural analysis will go along way in helping companies plan and execute effective and successful entries in foreign markets.
For over three decades, international marketing practitioners have been using the Hofstede model of cultural differences to make recommendations to companies interested in making foreign direct investments. The model has provided multinational companies with great insights into other cultures that prepare them to achieve success in foreign mergers and acquisitions, train expatriate employees on how to interact with their counterparts in host countries, and adequately plan to gain rapid acceptance for their brands from consumers abroad.
At the core of the model are the five dimensions of culture that Dr. Geert Hofstede had identified in his study of national work related values in a number of countries. A score from 1 to 100 is assigned to each country for each dimension based on findings from the study. A former head researcher at IBM and University professor, Dr. Hofstede has written several articles and books on the subject.
The Dimensions
• Small vs. large power distance relates to how much the less powerful members of institutions and organizations expect and accept that power is distributed unequally. In cultures with small power distance, people expect and accept power relations that are more consultative or democratic. In cultures with large power distance, the less powerful accept power relations that are autocratic or paternalistic.
• Individualism vs. collectivism relates to how much members of the culture define themselves apart from their group memberships. In individualist cultures, people are expected to develop and display their individual personalities and to choose their own affiliations. In collectivist cultures, people are defined and act mostly as a member of a long-term group, such as the family, a religious group, an age cohort, a town, or a profession, among others.
• Masculinity vs. femininity is the value placed on traditionally male or female values. In masculine cultures, people value competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions. In feminine cultures, people value relationships and quality of life.
• Weak vs. strong uncertainty avoidance relates to how much members of a society are anxious about the unknown, and as a consequence, attempt to cope with anxiety by minimizing uncertainty. In cultures with strong uncertainty avoidance, people prefer explicit rules and formally structured activities, and employees tend to remain longer with their present employer. In cultures with weak uncertainty avoidance, people prefer implicit or flexible rules or guidelines and informal activities. Employees tend to change employers more frequently.
• Long vs. short term orientation has to do with a society's "time horizon," or the importance attached to the future versus the past and present. In long term oriented societies, people value actions and attitudes that affect the future: persistence/perseverance, thrift, and shame. In short term oriented societies, people value actions and attitudes that are affected by the past or the present: normative statements, immediate stability, protecting one's own face, respect for tradition, and reciprocation of greetings, favors, and gifts.
In the 2010 edition of his book, Cultures and Organizations: Software of the Mind which is based on World Values Survey data analysis for 93 countries, Dr. Hofstede introduced a sixth dimension:
• Indulgence vs. restraint. Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.
The Hofstede model is indeed a great tool that companies have at their disposal but it should not be viewed as a static and absolute set of guidelines that must be followed blindly. Although replication studies in surveyed countries have yielded similar studies across time, users of the model should be mindful that cultures are very dynamic and tend to evolve. There is no such thing as a uniform culture; groups of people within a country, depending on their geographical locations or socio-economic conditions, can have different attitudes and beliefs that will lead them to exhibit different behaviors toward certain products, services, activities, events, or people from different cultures.
It is wise for companies to dedicate time and resources to extensively research every country in which they wish to make a direct investment so they can effectively adjust their marketing stategy to accommodate and meet the cultural realities and expectations in different societies. Using the Hofstede model and the findings of their own research, companies will be prepared to segment each market within the foreign country, identify the right target for their products, and position themselves to gain acceptance and experience lasting success within a culture.
Monday, August 30, 2010
CONSUMER ACTIVISM ON THE WEB
Carnot Sylvestre, MS
Consumers take control of relationship with businesses
There has been an increasing shift within the past 10 years in the way consumers view their relationships with businesses. No longer willing to submit themselves to the whims and caprices of companies when they are not pleased with a product or how poorly they are being treated, consumers are resorting to documenting their complaints and sharing them over the internet.
The digital era has created an “Internet Culture”
The pervasive and instant nature of the internet makes it an ideal medium for consumers to make their voices heard and let companies know that they are no longer willing to be taken for granted and that their loyalty must be earned and cherished. Recent online consumer campaigns against Bank of America, JetBlue, Google, amongst others, had negative effects on the bottom line and proved to be real PR nightmares for those companies.
A consumer’s posted complaint can go “Viral” in seconds
Consumers are using a variety of tools such as YouTube, blogs, emails, Twitter, Facebook, chat rooms, user forums, etc. to share their complaints with other internet or mobile device users. According to InformiTV, 13 hours of videos are uploaded by private individuals to YouTube every minute. A search on YouTube will reveal tens of thousands of video complaints. Technorati states that there are over 113 million blogs on the internet. A happy customer tells 5 friends, an unhappy customer can tell 100s or 1000s with the strike of a key.
Economic climate, competitive marketplace affect how consumers think
These days, consumers pay real attention on how they spend their money. They want to be equal partners in the consumer-vendor relationship. They not only want real value for their money, they also want to feel appreciated by companies whose products and services they purchase. Consumers are aware of the competitive nature of the marketplace; they know they have choices; this empowers them to demand quality products or services at attractive prices from vendors who are also expected to work hard to earn their loyalty.
IMPLICATIONS AND RECOMMENDATIONS FOR MARKETERS AND ADVERTISERS
Consumer-centric Positioning. Marketers and advertisers must understand that it is not enough to base a marketing strategy on psychographics or demographics analysis; their positioning must truly be consumer-centric. Their paramount objective must always be to stay close and be responsive to consumers, and endeavor to meet or exceed their expectations.
Always deliver on promises made to consumers. Account planners should view this shift in consumer’s attitude as an opportunity for marketers and advertisers to better align their products and services with the unique needs of each consumer group. They must advocate for constant communication with consumers to get their feedback. They must represent to marketers and advertisers that consumers will not buy products only because of their quality and prices; they also expect enjoyable and memorable experiences before, during and after a purchase.
Reputation Management should be proactive and daily routine. Marketers and advertisers should always monitor and quickly respond to what is being said about them online. They should be aware of all social media activities around their brands. They have to find creative ways to interact with consumers on or offline. They should promptly recognize, address and apologize for any problem. They must deliver a better experience to consumers next time.
Consumers take control of relationship with businesses
There has been an increasing shift within the past 10 years in the way consumers view their relationships with businesses. No longer willing to submit themselves to the whims and caprices of companies when they are not pleased with a product or how poorly they are being treated, consumers are resorting to documenting their complaints and sharing them over the internet.
The digital era has created an “Internet Culture”
The pervasive and instant nature of the internet makes it an ideal medium for consumers to make their voices heard and let companies know that they are no longer willing to be taken for granted and that their loyalty must be earned and cherished. Recent online consumer campaigns against Bank of America, JetBlue, Google, amongst others, had negative effects on the bottom line and proved to be real PR nightmares for those companies.
A consumer’s posted complaint can go “Viral” in seconds
Consumers are using a variety of tools such as YouTube, blogs, emails, Twitter, Facebook, chat rooms, user forums, etc. to share their complaints with other internet or mobile device users. According to InformiTV, 13 hours of videos are uploaded by private individuals to YouTube every minute. A search on YouTube will reveal tens of thousands of video complaints. Technorati states that there are over 113 million blogs on the internet. A happy customer tells 5 friends, an unhappy customer can tell 100s or 1000s with the strike of a key.
Economic climate, competitive marketplace affect how consumers think
These days, consumers pay real attention on how they spend their money. They want to be equal partners in the consumer-vendor relationship. They not only want real value for their money, they also want to feel appreciated by companies whose products and services they purchase. Consumers are aware of the competitive nature of the marketplace; they know they have choices; this empowers them to demand quality products or services at attractive prices from vendors who are also expected to work hard to earn their loyalty.
IMPLICATIONS AND RECOMMENDATIONS FOR MARKETERS AND ADVERTISERS
Consumer-centric Positioning. Marketers and advertisers must understand that it is not enough to base a marketing strategy on psychographics or demographics analysis; their positioning must truly be consumer-centric. Their paramount objective must always be to stay close and be responsive to consumers, and endeavor to meet or exceed their expectations.
Always deliver on promises made to consumers. Account planners should view this shift in consumer’s attitude as an opportunity for marketers and advertisers to better align their products and services with the unique needs of each consumer group. They must advocate for constant communication with consumers to get their feedback. They must represent to marketers and advertisers that consumers will not buy products only because of their quality and prices; they also expect enjoyable and memorable experiences before, during and after a purchase.
Reputation Management should be proactive and daily routine. Marketers and advertisers should always monitor and quickly respond to what is being said about them online. They should be aware of all social media activities around their brands. They have to find creative ways to interact with consumers on or offline. They should promptly recognize, address and apologize for any problem. They must deliver a better experience to consumers next time.
Monday, July 19, 2010
Strategies For Entering Foreign Markets: Waterfall And Sprinkler
Carnot Sylvestre, MS
After conducting adequate market research and appropriate cross-cultural analysis, managers can choose between two strategies to implement a company’s entry into foreign markets: waterfall and sprinkler.
Waterfall strategy is used by a company to introduce a product sequentially in different markets. The company first enters one market, then another and then another, etc…
Sprinkler strategy is used when a company chooses to introduce a product simultaneously in multiple markets. The sprinkler strategy works particularly well for a company that wants to be a first mover or one that wants to preempt moves by competitors. The problem with this approach is that it requires vast resources that managers at the home headquarters may be hesitant to provide; additionally companies may miss the opportunity to fully understand a market, thereby neglecting to take adequate steps to assure success.
Waterfall strategy is preferable because it allows the company to take time to understand a market and make appropriate adjustment to its marketing mix in order to satisfy the specific needs of each market. Managers can maximize the use of available resources; they can leverage their experience from the first market and make necessary improvements or changes to enter the next market. The waterfall strategy allows a company to transfer managerial and technological skills from one market to another.
For the waterfall strategy to be successful, ideally the first market should be one that presents characteristics closely similar to those found in the company’s home market. Other factors such as geographic proximity, a nation’s attitude toward foreign goods, tariff and currency policies that will affect commercial transactions must be given serious consideration because they will directly affect a company’s operations and the outcome of its foreign ventures.
After conducting adequate market research and appropriate cross-cultural analysis, managers can choose between two strategies to implement a company’s entry into foreign markets: waterfall and sprinkler.
Waterfall strategy is used by a company to introduce a product sequentially in different markets. The company first enters one market, then another and then another, etc…
Sprinkler strategy is used when a company chooses to introduce a product simultaneously in multiple markets. The sprinkler strategy works particularly well for a company that wants to be a first mover or one that wants to preempt moves by competitors. The problem with this approach is that it requires vast resources that managers at the home headquarters may be hesitant to provide; additionally companies may miss the opportunity to fully understand a market, thereby neglecting to take adequate steps to assure success.
Waterfall strategy is preferable because it allows the company to take time to understand a market and make appropriate adjustment to its marketing mix in order to satisfy the specific needs of each market. Managers can maximize the use of available resources; they can leverage their experience from the first market and make necessary improvements or changes to enter the next market. The waterfall strategy allows a company to transfer managerial and technological skills from one market to another.
For the waterfall strategy to be successful, ideally the first market should be one that presents characteristics closely similar to those found in the company’s home market. Other factors such as geographic proximity, a nation’s attitude toward foreign goods, tariff and currency policies that will affect commercial transactions must be given serious consideration because they will directly affect a company’s operations and the outcome of its foreign ventures.
Tuesday, June 22, 2010
How Can US Companies Get Ready For Foreign Markets? Part III
Carnot Sylvestre, MS
In addition to the domestic and foreign uncontrollable elements, a company willing to enter foreign markets must be ready to make considerable adjustments to its marketing mix. Managers must also consider such critical issues as self-reference criterion and ethnocentrism, standardization versus adaptation, global orientation versus international orientation as well as segmentation, targeting and positioning.
PRODUCT
Homologation. All products distributed in the foreign market must be in compliance with local regulations.
Adaptation. The company must adapt the packaging, labeling, marketing and advertising of its products in a manner and language easily understood across the foreign market.
Brand Name. It must be made easy for consumers in the foreign market to identify the company’s brand name and relate to it in their individual activities.
Features. The features of each product offered must be clearly described on the packaging and accompanying instructions so consumers can understand precisely what the company is offering. Consumers must fully understand the benefits they get from using the company’s products.
Packaging. All packaging must be esthetically and functionally designed to allow the consumers to easily use the products. All labeling must be written in a language and font size that can easily be read by consumers.
PRICE
Penetration pricing. To facilitate the quick diffusion of its products and make it possible for them to reach take-off points in a short time, the company must set a highly competitive MSRP for each product.
PROMOTION
Advertising. A local advertising agency familiar with the cultural, social, economical, and political characteristics and nuances within each market should be hired to handle all integrated marketing communications.
Personal Selling & Relationship Management. The company must have a trained sales force that will be tasked to generate and cultivate long term relationships with retailers and wholesalers as well as to service their accounts.
Media. The company’s products must be advertised and promoted through media readily accessible by target consumers within each market.
DISTRIBUTION
Logistics. The company must take steps to locate warehouse and distribution centers near target markets. It is preferable to have local experts handle fulfillment and distribution operations.
Channels. The company must partner with carefully selected local wholesalers and retailers to make sure that its products are properly and satisfactorily delivered to consumers on a constant and reliable basis.
Self-reference criterion and Ethnocentrism
In addition to being able to effectively assess the impact of the uncontrollable elements on its marketing strategy, the company must also be ready to make necessary cultural adjustments and establish an appropriate frame of reference for each foreign market it wishes to enter. Managers must use the right cultural filters to interpret the foreign uncontrollable elements and avoid the temptation of measuring and assessing foreign markets based on assumptions made according to American culture. Every effort should also be made to avoid the assumption that the company’s home culture is better or that its employees know how to do things better than their counterparts in the foreign country.
Standardization versus Adaptation
While the company must ensure the standardization of product formulations, it must also adopt a degree of adaptation by packaging, labeling and marketing its products to comply with local requirements and facilitate quick adoption by local consumers.
Global orientation versus International Orientation
US companies that are trying to get a foothold in foreign markets should consider an international orientation instead of a global orientation. With an international orientation, the company can much easier adapt its marketing mix to meet the particular characteristics of a particular market and satisfy the needs of target consumers.
Segmentation
The company must make an effort to divide the intended foreign market into segments that include clearly identifiable elements with common and compatible interests. This will help managers target the right kind of consumers with the right products.
Targeting
Once the company is able to adequately segment the foreign market, its managers will be in a better position to target the right kind of consumers with the right products.
Positioning
The company must position itself as provider of superior quality and environmentally friendly products that are designed according to the highest standards and delivered to consumers at prices commensurate to the benefits they expect to receive from them. Every effort should be made to cultivate a good image for the brand and keep it top-of-mind with consumers.
In addition to the domestic and foreign uncontrollable elements, a company willing to enter foreign markets must be ready to make considerable adjustments to its marketing mix. Managers must also consider such critical issues as self-reference criterion and ethnocentrism, standardization versus adaptation, global orientation versus international orientation as well as segmentation, targeting and positioning.
PRODUCT
Homologation. All products distributed in the foreign market must be in compliance with local regulations.
Adaptation. The company must adapt the packaging, labeling, marketing and advertising of its products in a manner and language easily understood across the foreign market.
Brand Name. It must be made easy for consumers in the foreign market to identify the company’s brand name and relate to it in their individual activities.
Features. The features of each product offered must be clearly described on the packaging and accompanying instructions so consumers can understand precisely what the company is offering. Consumers must fully understand the benefits they get from using the company’s products.
Packaging. All packaging must be esthetically and functionally designed to allow the consumers to easily use the products. All labeling must be written in a language and font size that can easily be read by consumers.
PRICE
Penetration pricing. To facilitate the quick diffusion of its products and make it possible for them to reach take-off points in a short time, the company must set a highly competitive MSRP for each product.
PROMOTION
Advertising. A local advertising agency familiar with the cultural, social, economical, and political characteristics and nuances within each market should be hired to handle all integrated marketing communications.
Personal Selling & Relationship Management. The company must have a trained sales force that will be tasked to generate and cultivate long term relationships with retailers and wholesalers as well as to service their accounts.
Media. The company’s products must be advertised and promoted through media readily accessible by target consumers within each market.
DISTRIBUTION
Logistics. The company must take steps to locate warehouse and distribution centers near target markets. It is preferable to have local experts handle fulfillment and distribution operations.
Channels. The company must partner with carefully selected local wholesalers and retailers to make sure that its products are properly and satisfactorily delivered to consumers on a constant and reliable basis.
Self-reference criterion and Ethnocentrism
In addition to being able to effectively assess the impact of the uncontrollable elements on its marketing strategy, the company must also be ready to make necessary cultural adjustments and establish an appropriate frame of reference for each foreign market it wishes to enter. Managers must use the right cultural filters to interpret the foreign uncontrollable elements and avoid the temptation of measuring and assessing foreign markets based on assumptions made according to American culture. Every effort should also be made to avoid the assumption that the company’s home culture is better or that its employees know how to do things better than their counterparts in the foreign country.
Standardization versus Adaptation
While the company must ensure the standardization of product formulations, it must also adopt a degree of adaptation by packaging, labeling and marketing its products to comply with local requirements and facilitate quick adoption by local consumers.
Global orientation versus International Orientation
US companies that are trying to get a foothold in foreign markets should consider an international orientation instead of a global orientation. With an international orientation, the company can much easier adapt its marketing mix to meet the particular characteristics of a particular market and satisfy the needs of target consumers.
Segmentation
The company must make an effort to divide the intended foreign market into segments that include clearly identifiable elements with common and compatible interests. This will help managers target the right kind of consumers with the right products.
Targeting
Once the company is able to adequately segment the foreign market, its managers will be in a better position to target the right kind of consumers with the right products.
Positioning
The company must position itself as provider of superior quality and environmentally friendly products that are designed according to the highest standards and delivered to consumers at prices commensurate to the benefits they expect to receive from them. Every effort should be made to cultivate a good image for the brand and keep it top-of-mind with consumers.
Friday, May 14, 2010
How Can US Companies Get Ready For Foreign Markets? Part II
Carnot Sylvestre, MS
Foreign uncontrollable elements
Once a company’s managers are satisfied that the marketing uncontrollable elements in the home country are favorable to a foreign venture, they must conduct a thorough market research that includes a cross-cultural analysis for each country they are willing to enter. This will help them identify and address the following foreign uncontrollable issues: political/legal forces, economic forces, competitive forces, level of technology, structure of distribution, geography and infrastructure, cultural forces.
Political/legal forces. Is there political stability in the foreign country being considered? Are trade laws in the foreign country transparent enough or are they ambiguous when it comes to foreign investments? Are commercial contracts binding or are they open to the interpretation of different local authorities? Will the company have an “alien status” and be viewed as an exploiting outsider and receive prejudiced or unfair treatment at the hands of politicians and legal authorities?
Economic forces. What is the foreign country’s per capita income or the average expenditure of its average citizen on products similar to the ones offered by the company? Where is most of the population located? What is the attitude of the citizens of the foreign country toward the company’s product category? Is there room for the company’s products in the foreign market? Are there qualified companies with whom the company can enter into partnerships or joint ventures or will it have to go solo from the start? How stable is the currency in the foreign country? Are the rules of free market economy being observed?
Competitive forces. Which competitors are already established in the country? What are their individual shares of the market? How long have they been established in the market? What is their positioning? What competitive advantages does the company have in regard to the competition?
Level of technology. Are there vast differences in the level of technology between the company’s home country and the foreign market? Does adequate technical expertise exist in the foreign market for product support? Will the company have to train technicians or provide product support on its own?
Structure of distribution. Will the company have to handle its own distribution or will it use an intermediary? Do adequate logistical capacities such as warehouses, control systems, means of transportation exist?
Geography and infrastructure. What is the climate in the foreign country the company wants to penetrate? What kind of raw materials are available? How big is the population and how is it distributed across the country? What is the population growth? What is the level of education? What is the level of unemployment? How strategically is the country located in terms of international trade routes? Are roads and telecommunication systems adequate and accessible?
Cultural forces. Are there unique cultural aspects that directly influence business practices and consumer preferences in the foreign country that are different from those found in the home country’s culture? Are there specific connotations relative to the foreign culture such as history, language, shapes, colors, numbers, and religion that the company must pay special attention to? Will the local environment force the company to significantly or completely alter its products?
In Part III of “How Can US Companies Get Ready For Foreign Markets?” it will be explained how a company willing to enter foreign markets must be ready to adjust its marketing mix to meet the requirements of each foreign market and why it is important for managers to also consider such critical issues as self-reference criterion and ethnocentrism, standardization versus adaptation, global orientation versus international orientation as well as segmentation, targeting and positioning.
Foreign uncontrollable elements
Once a company’s managers are satisfied that the marketing uncontrollable elements in the home country are favorable to a foreign venture, they must conduct a thorough market research that includes a cross-cultural analysis for each country they are willing to enter. This will help them identify and address the following foreign uncontrollable issues: political/legal forces, economic forces, competitive forces, level of technology, structure of distribution, geography and infrastructure, cultural forces.
Political/legal forces. Is there political stability in the foreign country being considered? Are trade laws in the foreign country transparent enough or are they ambiguous when it comes to foreign investments? Are commercial contracts binding or are they open to the interpretation of different local authorities? Will the company have an “alien status” and be viewed as an exploiting outsider and receive prejudiced or unfair treatment at the hands of politicians and legal authorities?
Economic forces. What is the foreign country’s per capita income or the average expenditure of its average citizen on products similar to the ones offered by the company? Where is most of the population located? What is the attitude of the citizens of the foreign country toward the company’s product category? Is there room for the company’s products in the foreign market? Are there qualified companies with whom the company can enter into partnerships or joint ventures or will it have to go solo from the start? How stable is the currency in the foreign country? Are the rules of free market economy being observed?
Competitive forces. Which competitors are already established in the country? What are their individual shares of the market? How long have they been established in the market? What is their positioning? What competitive advantages does the company have in regard to the competition?
Level of technology. Are there vast differences in the level of technology between the company’s home country and the foreign market? Does adequate technical expertise exist in the foreign market for product support? Will the company have to train technicians or provide product support on its own?
Structure of distribution. Will the company have to handle its own distribution or will it use an intermediary? Do adequate logistical capacities such as warehouses, control systems, means of transportation exist?
Geography and infrastructure. What is the climate in the foreign country the company wants to penetrate? What kind of raw materials are available? How big is the population and how is it distributed across the country? What is the population growth? What is the level of education? What is the level of unemployment? How strategically is the country located in terms of international trade routes? Are roads and telecommunication systems adequate and accessible?
Cultural forces. Are there unique cultural aspects that directly influence business practices and consumer preferences in the foreign country that are different from those found in the home country’s culture? Are there specific connotations relative to the foreign culture such as history, language, shapes, colors, numbers, and religion that the company must pay special attention to? Will the local environment force the company to significantly or completely alter its products?
In Part III of “How Can US Companies Get Ready For Foreign Markets?” it will be explained how a company willing to enter foreign markets must be ready to adjust its marketing mix to meet the requirements of each foreign market and why it is important for managers to also consider such critical issues as self-reference criterion and ethnocentrism, standardization versus adaptation, global orientation versus international orientation as well as segmentation, targeting and positioning.
Thursday, April 15, 2010
How Can US Companies Get Ready For Foreign Markets?
Carnot Sylvestre, MS
Before venturing into foreign markets with their products or services, there are some critical issues that US companies must first address. Indeed company executives and managers must take into consideration certain uncontrollable elements in the domestic as well as in each foreign environment in which their companies wish to operate.
Domestic uncontrollable elements
Once a company decides to actively enter foreign markets with its products, it will quickly find that it is not enough to blend its price, product, promotion, channels-of-distribution, and R&D activities to capitalize on anticipated demand and adjust to changing market conditions, consumer tastes, or corporate objectives. The company must also consider certain home-country elements_ political and legal forces, economic climate, competition_ that can directly impact its foreign venture.
Political and legal forces. The company must be ready to comply with any US foreign policy decision such as trade restrictions, embargoes, tariffs, quotas, etc., which can affect its operations in any specific foreign market. The US State Department, the Department of Commerce and the Treasury Department among other sources provide information on laws and regulations concerning trade and commerce between US companies and foreign firms or specific countries.
Economic climate. Management must determine whether the economic climate in the USA is stable enough to be favorable to foreign investment. Any direct foreign investment requires a huge initial capital outlay; managers must make sure that prevailing economic conditions in the USA are strong enough to help the company maintain domestic sales growth, satisfy its obligations toward stakeholders and provide adequate financial resources to support the foreign venture.
Competition. Managers must also assess whether the state of the competition at home is conducive to investment in foreign markets; they must be satisfied that the company’s base in the US is lucrative enough to warrant an adequate and strong international marketing programs. Obviously, no companies would want to abandon profitable domestic markets to their competitors while they pursue foreign ventures.
Foreign uncontrollable elements
Proper market research will help the company’s managers identify and address the following foreign uncontrollable issues prior to making a definitive commitment to enter non-domestic markets: political/legal forces, economic forces, competitive forces, level of technology, structure of distribution, geography and infrastructure, cultural forces.
These foreign uncontrollable elements of multinational marketing will be described extensively and posted as Part II of “How Can Companies Get Ready For Foreign Markets?”
In addition to the domestic and foreign uncontrollable elements, a company willing to enter foreign markets must be ready to adjust its marketing mix to meet the requirements of each foreign market; its managers must also consider such critical issues as self-reference criterion and ethnocentrism, standardization versus adaptation, global orientation versus international orientation as well as segmentation, targeting and positioning.
These critical issues will be explained and posted as Part III of “How Can Companies Get Ready For Foreign Markets?”
Before venturing into foreign markets with their products or services, there are some critical issues that US companies must first address. Indeed company executives and managers must take into consideration certain uncontrollable elements in the domestic as well as in each foreign environment in which their companies wish to operate.
Domestic uncontrollable elements
Once a company decides to actively enter foreign markets with its products, it will quickly find that it is not enough to blend its price, product, promotion, channels-of-distribution, and R&D activities to capitalize on anticipated demand and adjust to changing market conditions, consumer tastes, or corporate objectives. The company must also consider certain home-country elements_ political and legal forces, economic climate, competition_ that can directly impact its foreign venture.
Political and legal forces. The company must be ready to comply with any US foreign policy decision such as trade restrictions, embargoes, tariffs, quotas, etc., which can affect its operations in any specific foreign market. The US State Department, the Department of Commerce and the Treasury Department among other sources provide information on laws and regulations concerning trade and commerce between US companies and foreign firms or specific countries.
Economic climate. Management must determine whether the economic climate in the USA is stable enough to be favorable to foreign investment. Any direct foreign investment requires a huge initial capital outlay; managers must make sure that prevailing economic conditions in the USA are strong enough to help the company maintain domestic sales growth, satisfy its obligations toward stakeholders and provide adequate financial resources to support the foreign venture.
Competition. Managers must also assess whether the state of the competition at home is conducive to investment in foreign markets; they must be satisfied that the company’s base in the US is lucrative enough to warrant an adequate and strong international marketing programs. Obviously, no companies would want to abandon profitable domestic markets to their competitors while they pursue foreign ventures.
Foreign uncontrollable elements
Proper market research will help the company’s managers identify and address the following foreign uncontrollable issues prior to making a definitive commitment to enter non-domestic markets: political/legal forces, economic forces, competitive forces, level of technology, structure of distribution, geography and infrastructure, cultural forces.
These foreign uncontrollable elements of multinational marketing will be described extensively and posted as Part II of “How Can Companies Get Ready For Foreign Markets?”
In addition to the domestic and foreign uncontrollable elements, a company willing to enter foreign markets must be ready to adjust its marketing mix to meet the requirements of each foreign market; its managers must also consider such critical issues as self-reference criterion and ethnocentrism, standardization versus adaptation, global orientation versus international orientation as well as segmentation, targeting and positioning.
These critical issues will be explained and posted as Part III of “How Can Companies Get Ready For Foreign Markets?”
Friday, March 5, 2010
Senate Jobs Bill Should Require Businesses To Increase Domestic Production And Boost Exports
Carnot Sylvestre, MS
For decades, US politicians have bought into the idea that the best way to create jobs is to grant tax cuts to businesses. This approach obviously does not work since unemployment has been on the rise in spite of various subsidies and tax cuts US companies have received in recent years.
The $15 billion jobs bill that was approved by the Senate on February 24th 2010 contains, among other things, a $13 billion program aiming to give companies Social Security tax breaks on new employees and a $1000 tax credit if those employees remain on their payroll for at least a year. The bill will surely help millions of Americans retain or acquire jobs but it does not go far enough in terms of requiring companies benefiting from the program to create and maintain long-term jobs right here in the United States.
The current business model of US companies generally aims to achieve maximum returns on investments in the shortest term. This model calls for companies to strategically locate manufacturing and distribution points near regional markets in order to take advantage of economies of scale. Therefore, American companies have found it more profitable to abandon US-based plants and to outsource production or set up manufacturing facilities in foreign countries like China, India, Malaysia, Vietnam, etc. where labor is much cheaper.
No one can blame US companies for desiring to increase profitability and returns to shareholders, but they must be held accountable when they lobby Washington and readily accept tax cuts as incentives to create jobs here and fail or do not make an effort to deliver. Sustainable and meaningful job creation will never be achieved and the trade deficit will never be eliminated as long as US companies keep exporting manufacturing, engineering, research and development and even technical and customer service abroad.
While the importance of strategic outsourcing cannot be ignored, American companies must endeavor to increase production here in the US not only to satisfy domestic needs but also to increase exports. This is what will create jobs here in the United States of America and significantly reduce unemployment in the long term.
Before the Jobs Bill goes into effect, lawmakers should make sure it also includes provisions requiring that tax cuts be granted to businesses based on the number of sustainable jobs they create on US soil. Further, the bill should also give preferential tax treatment to companies as incentives to increase export of US made goods and equipment to foreign markets. These key measures will go a long way in keeping unemployment low and reducing the trade deficit.
For decades, US politicians have bought into the idea that the best way to create jobs is to grant tax cuts to businesses. This approach obviously does not work since unemployment has been on the rise in spite of various subsidies and tax cuts US companies have received in recent years.
The $15 billion jobs bill that was approved by the Senate on February 24th 2010 contains, among other things, a $13 billion program aiming to give companies Social Security tax breaks on new employees and a $1000 tax credit if those employees remain on their payroll for at least a year. The bill will surely help millions of Americans retain or acquire jobs but it does not go far enough in terms of requiring companies benefiting from the program to create and maintain long-term jobs right here in the United States.
The current business model of US companies generally aims to achieve maximum returns on investments in the shortest term. This model calls for companies to strategically locate manufacturing and distribution points near regional markets in order to take advantage of economies of scale. Therefore, American companies have found it more profitable to abandon US-based plants and to outsource production or set up manufacturing facilities in foreign countries like China, India, Malaysia, Vietnam, etc. where labor is much cheaper.
No one can blame US companies for desiring to increase profitability and returns to shareholders, but they must be held accountable when they lobby Washington and readily accept tax cuts as incentives to create jobs here and fail or do not make an effort to deliver. Sustainable and meaningful job creation will never be achieved and the trade deficit will never be eliminated as long as US companies keep exporting manufacturing, engineering, research and development and even technical and customer service abroad.
While the importance of strategic outsourcing cannot be ignored, American companies must endeavor to increase production here in the US not only to satisfy domestic needs but also to increase exports. This is what will create jobs here in the United States of America and significantly reduce unemployment in the long term.
Before the Jobs Bill goes into effect, lawmakers should make sure it also includes provisions requiring that tax cuts be granted to businesses based on the number of sustainable jobs they create on US soil. Further, the bill should also give preferential tax treatment to companies as incentives to increase export of US made goods and equipment to foreign markets. These key measures will go a long way in keeping unemployment low and reducing the trade deficit.
Thursday, February 4, 2010
The Whole World Has A Stake In Haiti’s Reconstruction
Carnot Sylvestre, MS
It has been over three weeks since an earthquake devastated Haiti’s capital of Port-au-Prince and other major cities in the country. Key edifices have crumbled; the national cathedral, the presidential palace, and most government buildings are in ruins; the majority of schools, churches and other institutions have been shattered.
Over 200,000 deaths have been reported, hundreds of thousands of Haitians sustained severe injuries and close to 70% of homes in Port-au-Prince and surrounding towns have been destroyed, forcing millions of Haitians to live in makeshift tents set up in open fields, not knowing how or when a permanent solution will be found.
Prior to the earthquake of January 12th, Haiti was already an impoverished country that lacked basic infrastructures to support the needs of its 9 million citizens who live in congested areas with virtually no access to electricity, potable water, adequate means of transportation or medical care. In months and years to come, there will be various opinions as to why Haitians, who take so much pride in being the first black independent nation in the new world, have allowed their country to deteriorate so badly.
What is certain now is that Haiti must be rebuilt. The reconstruction process will be long and costly but it must start immediately. Strict engineering and safety codes must require that all future buildings, roads and other infrastructures be designed and built to withstand a certain degree of natural shocks or calamities. Since Haiti sits on two seismic fault lines and in a hurricane corridor, it is reasonable to assume that the country might experience some kind of natural disasters in the future.
Soon after the earthquake of January 12th, the international community has responded in force to help in the rescue efforts and bring medical aid as well as food and water to the victims of the disaster. The Haitian government which had been remarkably invisible in the rescue phase simply lacks the financial and technological resources to rebuild the country. The international community must therefore take the responsibility to adequately plan, finance and execute the reconstruction of Haiti.
Country donors such as the United States, Canada, France, Germany, and others can seize this opportunity to transform Haiti into a “green country”, with relatively self-sufficient towns built in less congested areas across the country. Each town should be built according to the most environment-friendly standards. For instance, solar panels can be integrated into new construction projects to take advantage of the abundance of energy that the sun provides Haiti all year long; wind farms can be installed in carefully selected locations using wind turbines to convert wind energy into electricity; rain water can be recycled and used for drinking, sanitation or even irrigation. In using their latest “green materials and technology” to rebuild Haiti, the donor countries would have an ideal opportunity to showcase and put to work their latest “environment-friendly” construction and technological innovations. They would transform Haiti into a model of sustainable environmental success that can be transferred to other countries in the developing world.
In addition to helping in the reconstruction, the donor countries can take concrete steps to help Haiti attain a certain degree of self-sufficiency. For a determined length of time, they can remove trade barriers and establish preferential tariff treatment for goods imported from Haiti and give tax incentives to companies that make a direct foreign investment in the Caribbean country. These measures would give a major boost to the Haitian economy, facilitate an increase in farming activities, develop a manufacturing base, generate jobs and help create significant tax revenues that the government can use to honor foreign debts, pay employees, invest in education, healthcare, roads, bridges, telecommunications, and other infrastructure projects.
Haitians must certainly do their part. They must remove the obstacles that have for so long hindered their country’s progress. They must commit themselves to make necessary social, political and economical changes that hold officials accountable for the way they run public affairs and bring about respect of human rights. These changes should also lead to the decentralization of government power, elimination of cronyism and corruption in government positions, free and fair elections, adoption of free market economy, establishment of a fair and progressive tax system, and adequate access to education and employment.
The end result will be that Haiti would gradually become less dependent on foreign aid for its most basic needs. With the cycle of utter poverty they find themselves finally coming to an end, Haitians would opt to stay and work in their country and participate in its prosperity. They would no longer think that their only shot at a decent life would be to leave for some foreign countries.
Rebuilding Haiti will be a difficult and expensive task that will take a serious and dedicated effort on the part of the international community. Not helping Haitians adequately rebuild their country and society may prove to be much costlier financially and in terms of casualties when the next major natural disaster strikes.
Carnot Sylvestre MS, is CEO/founder of Tonrac Communications, an international marketing and public relations agency with offices in Sharon, Massachusetts and Ansbach, Germany.
It has been over three weeks since an earthquake devastated Haiti’s capital of Port-au-Prince and other major cities in the country. Key edifices have crumbled; the national cathedral, the presidential palace, and most government buildings are in ruins; the majority of schools, churches and other institutions have been shattered.
Over 200,000 deaths have been reported, hundreds of thousands of Haitians sustained severe injuries and close to 70% of homes in Port-au-Prince and surrounding towns have been destroyed, forcing millions of Haitians to live in makeshift tents set up in open fields, not knowing how or when a permanent solution will be found.
Prior to the earthquake of January 12th, Haiti was already an impoverished country that lacked basic infrastructures to support the needs of its 9 million citizens who live in congested areas with virtually no access to electricity, potable water, adequate means of transportation or medical care. In months and years to come, there will be various opinions as to why Haitians, who take so much pride in being the first black independent nation in the new world, have allowed their country to deteriorate so badly.
What is certain now is that Haiti must be rebuilt. The reconstruction process will be long and costly but it must start immediately. Strict engineering and safety codes must require that all future buildings, roads and other infrastructures be designed and built to withstand a certain degree of natural shocks or calamities. Since Haiti sits on two seismic fault lines and in a hurricane corridor, it is reasonable to assume that the country might experience some kind of natural disasters in the future.
Soon after the earthquake of January 12th, the international community has responded in force to help in the rescue efforts and bring medical aid as well as food and water to the victims of the disaster. The Haitian government which had been remarkably invisible in the rescue phase simply lacks the financial and technological resources to rebuild the country. The international community must therefore take the responsibility to adequately plan, finance and execute the reconstruction of Haiti.
Country donors such as the United States, Canada, France, Germany, and others can seize this opportunity to transform Haiti into a “green country”, with relatively self-sufficient towns built in less congested areas across the country. Each town should be built according to the most environment-friendly standards. For instance, solar panels can be integrated into new construction projects to take advantage of the abundance of energy that the sun provides Haiti all year long; wind farms can be installed in carefully selected locations using wind turbines to convert wind energy into electricity; rain water can be recycled and used for drinking, sanitation or even irrigation. In using their latest “green materials and technology” to rebuild Haiti, the donor countries would have an ideal opportunity to showcase and put to work their latest “environment-friendly” construction and technological innovations. They would transform Haiti into a model of sustainable environmental success that can be transferred to other countries in the developing world.
In addition to helping in the reconstruction, the donor countries can take concrete steps to help Haiti attain a certain degree of self-sufficiency. For a determined length of time, they can remove trade barriers and establish preferential tariff treatment for goods imported from Haiti and give tax incentives to companies that make a direct foreign investment in the Caribbean country. These measures would give a major boost to the Haitian economy, facilitate an increase in farming activities, develop a manufacturing base, generate jobs and help create significant tax revenues that the government can use to honor foreign debts, pay employees, invest in education, healthcare, roads, bridges, telecommunications, and other infrastructure projects.
Haitians must certainly do their part. They must remove the obstacles that have for so long hindered their country’s progress. They must commit themselves to make necessary social, political and economical changes that hold officials accountable for the way they run public affairs and bring about respect of human rights. These changes should also lead to the decentralization of government power, elimination of cronyism and corruption in government positions, free and fair elections, adoption of free market economy, establishment of a fair and progressive tax system, and adequate access to education and employment.
The end result will be that Haiti would gradually become less dependent on foreign aid for its most basic needs. With the cycle of utter poverty they find themselves finally coming to an end, Haitians would opt to stay and work in their country and participate in its prosperity. They would no longer think that their only shot at a decent life would be to leave for some foreign countries.
Rebuilding Haiti will be a difficult and expensive task that will take a serious and dedicated effort on the part of the international community. Not helping Haitians adequately rebuild their country and society may prove to be much costlier financially and in terms of casualties when the next major natural disaster strikes.
Carnot Sylvestre MS, is CEO/founder of Tonrac Communications, an international marketing and public relations agency with offices in Sharon, Massachusetts and Ansbach, Germany.
Sunday, January 31, 2010
Let's have a dialogue
Hello everyone. I am Carnot Sylvestre and I welcome you to my new blog.
My objective is to start a conversation with the business community and marketing professionals about key issues related to all aspects of marketing activities and particularly multinational marketing.
I hope to be able to offer my readers a forum in which we can respectfully exchange ideas and discuss all kinds of marketing issues. In this age of globalization, I invite readers from across the globe to actively participate in this forum and share their opinions or concerns with me and my readers.
Initially, I am planning to publish a new post once a month but I intend to immediately communicate with readers whenever there are major developments that can directly affect domestic and international business operations.
Will you join me?
Carnot Sylvestre, MS
My objective is to start a conversation with the business community and marketing professionals about key issues related to all aspects of marketing activities and particularly multinational marketing.
I hope to be able to offer my readers a forum in which we can respectfully exchange ideas and discuss all kinds of marketing issues. In this age of globalization, I invite readers from across the globe to actively participate in this forum and share their opinions or concerns with me and my readers.
Initially, I am planning to publish a new post once a month but I intend to immediately communicate with readers whenever there are major developments that can directly affect domestic and international business operations.
Will you join me?
Carnot Sylvestre, MS
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