By Aaron Parke LLB Govind Seepersad Ph.D A-Z Information Jamaica Limited November 12, 2013

1. Perspectives on the French Caribbean Outermost Regions (FCORS) – Lessons Learnt By Aaron Parke LLB GovindSeepersadPh.D A-Z Information Jamaica Limited November 12, 2013

2. Structure of the Presentation • Promotion-Related Issues • Competitive Forces • Regulatory Forces • Political Forces • Economic Forces

3. Structure of the Presentation • Promotion-Related Issues • Competitive Forces • Regulatory Forces • Political Forces • Economic Forces

4. Promotion-Related Issues • Promotion material such as brochures showing company profiles, product specifications, company websites should be developed before leaving for the trade mission. • Note: Buyers will research you and your business.

5. Promotion-Related Issues • Disruption of the Status Quo: In a relatively small market as obtains in the FCORs, the preferred business relationship is for a single distributor in each country rather than a situation in which there are several distributors for the same product. • distributors are likely to request exclusive rights.

6. Retaining Rights over your Products • Ideally exporters may wish to ensure that there is a provision in their distribution contracts which allows them to go to another buyer if the distributor has not progressed adequately within a four (4) month period.

7. Choosing a Commercial Agent or a Distributor: • Cultural norms suggest that it may be better to work through a Commercial Agent. • Often times, Distributors and Commercial Agents will negotiate together. • The main reason is that the Commercial Agent usually has a warehouse and transportation to move the products to outlets in the market place.

8. Who is Responsible for Advertisement? • Private label - the Distributor is responsible for advertisement. • Individual brands - Exporter. • The cost of promotion may also be shared • Due to cost differentials between FCORs and Trinidad and Tobago it is advisable to prepare (in TT) an advertisement to run on television (in French) as well as in-store promotional material.

9. Distribution Margins: • Margins for supermarkets and distributors usually range between 20-30 %. • If an Agent is used, the Agent’s margin is negotiable. • The distributor may request an additional % of the annual turnover to support promotion of the product. • The Distributor may also request a rebate, payable in cash at the rate of 3-6% on the gross sales of the product for the year.

10. Leave your options open • Persistence is required. • One Company made many cold calls before finding two major interests which required the company putting arrangements in place in a short space of time.

11. Education of users • Depending on the type of product, market penetration strategy may require educating users at the school and university levels while others may require providing samples at supermarkets and other retail outlets.

12. Promotion Strategy: • Some types of products do not need promotion but rather direct selling. • For example, the market positioning strategy for school desks will be different from that for garbage bags and other consumer products.

13. Detailed preparation is never wasted: • Prepare for meetings and presentations. • Even if the questions were never raised, the effort wasn’t wasted. • A good website, high quality brochures; videos or plant operations, online company profile all help to establish credibility. • Give the business meaningful impact because they will research you on the internet.

14. Market your product • Word of mouth is still very powerful.

15. Structure of the Presentation • Promotion-Related Issues √ • √Competitive Forces • Regulatory Forces • Political Forces • Economic Forces

16. Competitive Forces(assessments of innovations)

17. Physical presence is invaluable • Going on a trade mission allowed for further assessment of the market and competition. • By visiting the country, it afforded assessments of innovations that exist in the marketplace and provided an opportunity for the seller to also introduce new innovations.

18. Physical presence is invaluable • For instance, TAP recognized the need for differentiation in the linear tile and surface coverings market and designed new cuts / shapes and sidings to respond to changes in architectural designs. • From the visit to the market, TAP was able to do an evaluation of competitors’ products as well as gauge buyers’ interests in the new designs.

19. Hang in there, be patient • It can take 6 – 9 months from declaring intent to get your first order.

20. Market intelligence • Ideally the exporters should appoint an agent in each market for sustainability of ongoing trade facilitation and market intelligence. • options include: • a collaboration with a Business School • private sector business trade facilitation experts • Business Organizations, Chambers of Commerce and other organizations, etc

21. Factor Competitiveness: • Reliability, length of time to delivery and freight cost are very important. • Competition includes Italy, South Africa, for metal components and Brazil and Guyana for lumber. • Therefore given the comparative advantages of these countries in supplying these products, other competitiveness factors are also critical.

22. Show and Retain Interest: • Demonstrate a level of seriousness during the visits to the country • Follow up with aggressive follow-up of interests - telephone calls and emails and the fact that the decision makers are able to visit in person. • For them, it is an indication of the calibre of the companies and how they conduct business. • On the return visit to the market, the companies were definitely taken more seriously.

23. Follow up visits: • Timing of the visits to the market must be strategic and take into account holidays and the business agenda of the FCORs. • Follow up visits should be made periodically to maintain confidence and to show persistent interest in penetrating the markets as a reliable supplier.

24. Personal Agent: • Having a Personal Agent in FCORs can be a major part of the export company’s success. • Having an agent on spot is very important as buyers want someone to relate to on a regular basis. • It allows the exporter to understand exactly what the buyer wants.

25. The Value of Market Experience: • Persistence is important. • Even if exporters do not get orders and interest during the first attempts, they should not give up on the market if there is real potential for trade. • The experience of working with the French firms can eventually translate into additional advantages to the firm in the future.

26. Nothing happens overnight • It takes time to penetrate new markets. • It takes time to understand new markets: It is tempting to believe that the FCOR has a common language; the approaches to everything will be similar. That is not true. Get to know each market, spend time understanding the diversity in culture and aesthetics and get used to other ways of doing business.

27. Know what it’s going to cost when you get there: • Have an accurate understanding of the related costs to get your products into the market

28. Teamwork: • Going alone may get you there fast but going together as a team will get you further. • Pick up leads and share with team partners as synergy will bring economies of scope and greater overall success. • Have a shared vision.

29. Structure of the Presentation • Promotion-Related Issues √ • Competitive Forces √ • √Regulatory Forces • Political Forces • Economic Forces

30. Regulatory Forces

31. Certification for Entry: • Product Certification should be obtained well in advance of the visit. • Also, being present in other European countries shows that the product can readily access the FCORs.

32. Responsibility for Certification: • In order to do business, companies will need to have their products certified. • The importer will need to ensure the products are certified before importing the product and the onus is on same to ensure that the standards are observed.

33. Labels: • Labels should be in French and the labels should be vetted. • Either the Commercial Agent or Distributor can assist with the vetting of labels. • In the FCORs, eight (8) or 13 character Bar Codes may be used.

34. Shipping Information: • Companies should be well prepared with freight information: • cost one way or return of container, • freight cost, • days of shipping, • port handling cost, • bunkering surcharge, • Terminal handling charge (THC), • Terminal Handling Charge Origin (THCO), • Ocean Carrier-International Ship & Port Facility Security (OCISPFS), • Export Declaration Surcharge (EDS); • routing and transshipment. • Freight from Spain is € 3,500 one way. Buyers are required to pay for return of container to Spain at € 3,500. Can you use this to your advantage?

35. Standards and Market share: • The market is highly competitive as there are growing numbers of Competitors seeking to supply the market. • For this reason exporters should be alert to market dynamics. • Maintenance of high standards is important to retain market share.

36. Understanding Trade Regulations: • Regulations are sometimes written in a language that is subject to multiple interpretations. • It may be argued that the certification and preparedness process is the responsibility of the Companies and the respective importers.

37. Company Readiness is more than brochures and websites: • Companies should be open to visits to their production facilities. It is therefore advisable that manufacturing operations be kept in good condition to accommodate buyers who may want to visit your plant. • Sanitation, safe and humane work environment, international standards and compliance, quality assurance, export department, protocols for visits and hosting of visitors are all important.

38. Norms, Values and Private Standards: • French norms may be more rigid than the rest of the EU norms. • Exporters will need to provide proof / certification that products can meet French standards. • Buyers may also wish to visit the factory to certify quality and potential for supplying an order

39. Border Control measures: • The Customs Department will need to ensure the goods are certified before allowing entry of the goods into the market. • Customs will destroy the goods that fail to meet the standards. • Trying to enter the market without certification can mean breaking the law and the importer can be charged.

40. Structure of the Presentation • Promotion-Related Issues √ • Competitive Forces √ • Regulatory Forces √ • √Political Forces • Economic Forces

41. Political Forces • Cultural Nuances: Culturally, dealing with the British and American businesses is different from the French. • Sole distributorship is important, moreso, in small markets. • Personal trust is extremely important.

42. Who should go on Trade Missions: • It is best to include Senior Managers on Trade Missions for the simple reason that they can make decisions on the spot which may be pivotal in striking deals. • Senior Managers will be meeting company CEO’s and Presidents and should be capable of communicating decisions in person rather than sending decisions via emails or telephone conversations.

43. Business Conduct and Power: • In the FCORs, some parts of the economy are controlled by the public authorities while others are managed by the private sector. • The Chambers of Commerce are important entities in the regulation of businesses and commerce. • For example, the Mayor of a Province has responsibility for schools while the Chamber of Commerce in French Guyana formerly managed the ports. • All Businesses must be registered with the Chamber of Commerce.

44. Ground Rules in approaching business in the FCOR • Rules and regulations, certification —exporters must be compliant with EU standards • Exporters must demonstrate capacity to produce. • Psychology – The French Businesses want to deal with the owner rather than a sales representative. They wish to make decisions on the spot and prefer face to face discussion. The CEO can make decisions, share ideas and thus prefer to deal with his counterpart.

45. Ground Rules in approaching business in the FCOR • Body language is important – this is the tropics and they dress for the tropics, therefore the mode of dress is important. • Be open to learning. • Surround yourself with mentors and experts in various fields. • Be humble enough to ask for help; it’s a good way to learn.

46. Foreign challenges • It is important to be aware of local sensitivities, local pride and patriotism.

47. Build relationships: • Long-standing client relationships are also critical. • Buyer will not just abandon a traditional supplier in lieu of a cheaper product.

48. Loyalty: • Nothing is ever certain. • All you may end up with is relationships and how you do business. • However, with good relationships in times of economic downturns, people will be willing to support your business if you had a healthy relationship.

49. Structure of the Presentation • Promotion-Related Issues √ • Competitive Forces √ • Regulatory Forces √ • Political Forces √ • √Economic Forces

50. Economic Forces