Paula's Country Notebook

Running head: COUNTRY NOTEBOOK-EGYPT 1

Global Marketing – Country Notebook Egypt

Paula Smallwood

New England College of Business

April 17, 2016

COUNTRY NOTEBOOK-EGYPT 2

Paula’s Country Notebook – Egypt

This notebook represents four separate guidelines for collection and analysis of market data and preparation of my country Egypt.

The four separate guidelines for my country notebook are:

Cultural Analysis – provides cultural information

Economic Analysis – provides country’s economics, channel distribution, transportation, communication, and media available

Market Audit and Competitive Analysis – developing final action plans to sell

Preliminary Marketing Plan – budgets, profit & loss, SWOT analysis, various fees

Each guideline provides specific points for adapting my product to the country of Egypt.


Cultural Analysis

In conclusion, my executive summary discusses the cultural analysis and outlines the critical

points. I provided SRC information to determine the best approach to sell and transport crafts in

the country of Egypt. My self-reference criterion (SRC) are my own cultural values, experiences,

and knowledge based for my decisions. The ethnocentrism my company’s own culture and

values and the best thing to do. Both my SRC and my company’s ethnocentrism are important

attempting to sell crafts in Egypt. Egypt is usually dry, except in the winter months they have

usual amounts of rain. Egypt is family oriented, therefore, selling crafts will be extremely fun.

Egypt legal system, political system, and religion system will allow crafts to be sold. There is a

10% tax on imports to Egypt. Designing crafts for pre-school age, school age, and adults are

educational and are emotional healthy. To adapt my product one point I would need to change is

the language directions to make these crafts.


Cultural AnalysisI. Introduction

A. Rainbow Fabrics and Crafts is a company specializing in fabrics, notions, and crafts. Our vision is to be a leading craft seller in Africa changing people’s perspective of sewing. The mission is to attempt to be the best Fabric and Craft store, changing individual’s outlooks. Our values are to keep customers update, friendly customer service, deliver professional appearance, and deliver quality craft products. The product to export is various craft projects. I am thinking about exporting/trading the products to the Continent of Africa, and the specific country is Egypt.

II. Brief discussion of Egypt. Egypt is one of the most popular countries in North Africa and the Arab nations. The people live near the banks of the Nile river.

III. Geographical setting of Egypt is that it’s World’s 30th largest country.A. The location of Egypt is the country borders Libby to the west, Sudan to the

south, and to the east the country borders Gaza Strip and Israel.B. Egypt’s climate usually rains during the winter months October through March.C. Egypt Topography is a dessert surface. The shape reminds you of Arizona

desserts. IV. Social institution

A. Egyptian Family1. The nuclear family is the immediate family2. The extended family lives with the nuclear family if they have room. If not

enough room, then they will live with other extended family members. 3. Dynamics of the family

a. Parental roles are involved in courtship, they get an agreement signed by the fiancé and his parents. The agreement includes Mahr (money) & Shabka (jewelry) depending on family level in society.

b. The courtship entails the appointment for the engagement party once the agreement is signed. All the family and friends are invited. The Marriage is an Islamic wedding.

4. The role of male and female are still similar to ancient times. The women are the bore the children and raise them. Men are the provider and strength of the house.

B. Education1. The role of education in society

a. Primary education is the basic level of educations beginning at age 6, includes 3 years primary school and 3 preporatory school

b. Secondary education is a technical school with 3 years of advanced schooling and graduate school with results on final exam.

c. Higher education is uncommon, but depends on final exam.


2. Literacy rates are highest with the older generation 60 year of age an older is usuallay 64.9% and ages 15-24 years old the literacy rate is 8.6%. This is a big difference.

C. Political System1. Political Structure of Egypt in ancient times was resolved around the

pharoh, in modern day Egypt follows rules, regulations and practices by the constitution that was implemented in 1971as a democratic system

2. Political parties consist of National Demographic Party, Egyptian Current Party, Egyption Arab Union Party, Justice Party, Egyptian Youth Party, and Conservative Party

3. Stability of Government is fragile at this time, they are facing terrorist challenges.

4. Special Taxes in Egypt are consist of personal taxes, taxes on offices, and overseas trade taxes. Personal taxes are charged for produce, merchandise, and property. Taxes on offices are taxed on income through their office. Overseas taxes on trade for imported goods is 10%.

5. Role of Local Government is like a public administration, they allocate governing organizations between the states.


D. Legal System 1. Organization of judiciary system has 3 branches of government: Head of the

State of Egypt, the Legislative branch-Parliament and the people assembly, and Judicial branch-common law, Islamic law, and Napoleonic code system.

3. The legal system is based on Islamic-law and civil law (mostly Napoleonic codes)

4. Egypt does not have any trademarks, but they have patent for copyrights to the Book of the Law on Protection.

E. Social Organizations1. Group behavior is muslium faith. They follow strict rules, high level of unfair

power and wealth2. Social classes are like a pyramid, Pharoah the ruler on top, next is the noble

officials or priest help in the government, next is the Scribes they wrote and craftpeople they produced goods, and the bottom of the pyrmid are the farmers, whom most Egyptian worked, and under them are the servants and slaves of Egypt.

3. Clubs and other organizations in Egypt are Egyptian American Organizations describes Egypt’s rich culture to American people, Football Association, Rotary International, and Secret Society.

4. Race, ethnicity, and subcultures are of Arabic. Ancient Egyptians were black Africans, through the century’s people began movements in different portions of Egypt their race developed into Macedonian, Romans, and Arabs. Also, ancient Egyptians lead to modern Europe.

F. Business customs and practices are important. Appointments are necessary for meetings. Call the week before your meeting to confirm and re-call 1-2 days before to reconfirm meeting and information. Meeting are made available to every, because Egyptians have an open door policy. Business cards are used, but have one side of the card Egyptian Arabic. Society is slow in getting information together, usually take several visits to complete a simple issue. Government officials follow the Western business practices for private meetings without interruptions. Social side of business is very important. Personal relationships are required. Business is like a rank in the military, the highest ranking person makes the decision.

V. Religion and AestheticsA. Religion and other belief systems

1. The churches use 2 doctrines one is Orthodox doctrines and the other is St Mark doctrines (similar to Catholic doctrines). The doctrine structures are Islamic, which means to submit to Allah’s will. Allah is the God of all the prophets we pray about. The religion guides you to a maximum freedom. They believe in God consistently, pray consistently, and give enormously.

2. Individual relationship with the people they worship god for their own purpose of praying. Most Egyptians emphasized the survival of their souls.


3. The prominent religions in Egypt are Islam, Christianity, Judaism. The Jerusalem Center for Public Affairs estimate about 2 million Egyptians are in the minority religion of Shi’a

4. Membership of each religion is limited and controlled by the law. They are limited to the 3 different religions of Islam, Christianity, or Judaism, as stated in the Constitution of Egypt.

5. Two powerful or influential cults are Osiris and Ra. Osiris is important for kings and judges of the dead. He was murdered by his brother and he was set with his wife Isis. Also, they identify the waters of the Nile. The revenge begins with his son Hours, whom selected good over evil in his callings. Ra the great sun of God his fate of the royal house, the pyramid is an important symbol. Ra is a direct ancestor of the kings of Egypt. The symbol of the pyramid was put in stone on the Egyptian Kings tomb.

B. Aesthetics1. Visual arts (fine arts, plastics, graphics, public art, colors, etc.) represented by

the artists in Egypt are inspired by their pharaonic heritage through painting, architecture, and sculptures. Pyramids are the main symbols representing Egyptians strong heritage. Painting of the Nile represent Egyptian cultural beliefs too. The legendary stories of the bible are centered from ancient Egypt.

2. Music plays an important role for the public to participate politically. The temples and tombs music is played while praying and visiting. Arab music emphasized melody and rhythm, compared to harmony.

3. Drama, ballet, and other performing arts, the performer/artists performed in front of audiences, body and voice movements expressing ancient culture themes.

4. Folklore and relevant symbols of ancient Egypt: are the Gods of Osiris; most popular stores are Isis & Osiris and the store of Re; the most popular symbols are scarab (is a beetle, usually warn in jewelry), color (iwen stability), and eye of Horus (designed in blue or green to represent the sun of Isis and Osiris).

VI. Living conditionsA. Diet and nutrition

1. Meat and vegetable consumption rates were eaten daily. Beef was more expensive, so they ate this once a week.

2. Typical meals start in the afternoon. Food is prepared banquet style. Beer and bread always available at meals.

3. Malnutrition rates not available, they ate very healthy.4. Foods available in Egypt lettuce, peas, dates, grapes, melon, cucumber, nuts,

chicken, poultry, fish, and etc.B. Housing

1. Four type of housing available three room house, courtyard house, tripartite house (lower status), tripartite house (higher status)

2. Most Egyptians own their homes. Rental housing is available for poorer Egyptians.


3. Most people live with other families. People live in a nuclear setting or extended family.

C. Clothing1. National Dress code for men and women. Men, today where long robes and

linen pants with a long sleeve shirt. Women wear long dresses and robe covering the arms and scarfs to cover the head and neck areas.

2. Types of clothing worn at work has been men wearing formal conservative dark colored and light weight suits. Women wear skirts or dress belong the knee. Women also wore scarves around the head and neck areas.

D. Recreation, sports, and other leisure activities1. Soccer is a popular sport. Fishing is considered a recreational and work

activity. 2. Twenty-five percentage of income is spent on such activities.

E. Egyptians pay Social Security taxes of 14%. Employers pay 25% for Social Security Taxes. Social Security rate are important, because help pays for welfare, health care, and other benefits.

F. Healthcare in Egypt is divided into two categories Ministry of Health (MoH) and Health Insurance Organizations (HIO). The HIO has an umbrella plan only allowing government employees and school age children the option of insurance.

VII. LanguageA. Official language in Egypt is Arabic.B. Arabic is the most spoken and written language. English is the most common

foreign language.C. Dialects means proper usage and pronunciation. Arabic language is similar to

Afro-Asiatic, which is still considered an official Egypt language. They emphasis consonants and a few vowel sounds.

VIII. A Briefing on Negotiation Style (ours and theirs) for both Egypt and the United States are similar. Egyptian law requires selecting a representative to meet and reduce the cultural and communications cracks. Negotiations can be conducted by an individual or a team, providing a strong emphasis on the rule in cultural business. A company within the United States reviews internal polices first, to verify we stay within compliance before making a final decision out of the country.

IX. Executive Summary Cultural analysis, I researched information at various websites. This summary points out how I provided SRC information to determine the best approach to sell and transport craft in the country of Egypt.


X. Sources of Information

BIBLIOGRAPHY Cateora, P., Gilly, M., & Graham, J. (2013). International Marketing 16th ed. New York, NY: McGraw-Hill.

Katz, L. (2008). Negotiating International Business - Egypt. International Business, 1-5.

Shamshad, I. (2015). Egypt Business Etiquette and Culture. Retrieved from Cyborlink: www.cyborlink.com

EHS (2013). Egyptian Healthcare System. Retrieved from Just landid: www.justlanded.com

Staff. (2015). Egypt-Lanuage, Culture, Customs, and Ettiquette. Retrieved from Kwintessential: www.kwintessential.co.uk

XI. Appendixes

Ancient Egypt and present day Egypt are considered part of Northeastern Africa.


Economic AnalysisIn conclusion, my executive summary discusses economic analysis and outlines the critical

points. Egypt population and economic statistic helped determine the various age groups to sell.

The statistics includes Egypt gross, national product, wealth distribution, resources in the GDP,

transportation, communications, working conditions, international trade, restrictions, technology,

channels of distribution, media, and advertising. Using the data gathered I determine the best

process to sell in Egypt are online at my personal webpage and in person as a business owner in

Egypt. Egypt has an open door policy to selling. Restrictions are not made on crafts, so I would

set up a small business in the mall in Cairo. I would have taxes to pay on my business, import

taxes, and personal taxes. Online order I would have import taxes, which include service fees,

duty taxes, and sales taxes. The best age group to sell crafts are preschoolers and their parents.


Economic AnalysisI. Introduction-The United State has a relationship with Egypt based on stability and

strengthening trade relations. They promote regional security in the region including peace in the Middle East and Terrorist in the Country.

II. Population is 88,487,396 million people in EgyptA. Total

1. Growth rate is 1.79% using the 2015 statistics.2. Number of live births in Egypt is 10003. Birthrates is 22.9% based on 2015 statics from the U.S Department of State in

Diplomacy.B. Distribution of Population are similar to a population pyramid

1. Ages groups range from 0-14 with a 31.89% growth, age 15-24 with a 17.64% growth, age 25-54 with a 38.45% growth, 55-64 with a 6.86% growth, and age 65 and older has a 5.16% increase.

2. Sex population distribution in millions 00-14 male 14,430,312, female 13,791,448 15-24 male 07,985,589, female 07,620,404 25-54 male 17,307,230, female 16,715,153 54-64 male 02,971,475, female 03,100,747 64-up male 02,058,911, female 02,507,127

3. Geographic areas (urban 43.1%, suburban 23.6%, rural density 31.2%, and concentration 2.1%)

4. Migration rates for Egypt is a net -0.19% or approximately 1000 individuals of the populations live as refugees or other immigrants. The pattern of migration has decreased over the past three years.

5. Ethnic groups consist of 96% Egyptian and other 4%, which is Nubean and Bedovin Arab

III. Economic statistics and activityA. Gross national Product (real GNP or GDP)

1. Total GDP is 943.1 billion, which is the purchasing power parity (PPP)2. Real GNP rate of growth (real GNP or GDP) is 4.2%.

B. Personal income per capita is $11,500 in billionsC. Average family income in urban areas is $35,000 and other areas is $24,350D. Distribution of wealth

1. Income classes are higher and lower incomes. The higher income of 35,500 is allotted to the government offices. The lower income of $24,500 is allotted to the farmers. In addition, there are unemployment income and poverty income The amounts may vary a little.

2. Proportion of the population in each class consist of 12% unemployed, 25.2% poverty level, lower income is 28.87%, and higher income is 33.13%

3. Is the distribution distorted? The amounts may be slightly distorted, because poverty level is 25.2%, while lower income labor force is 28.87%. The result


could say half of the workers in Egypt are not able to pay bill with this little amount of income.

E. Minerals and resources in the GDP composition by sector are 14.3% agriculture, 39.6% industry, and 46.1% services. Agriculture consists of cotton, rice, corn, wheat, beans, fruit, vegetables, cattle, water buffalo, sheep, and goat. Industries consists of textile, food processing, tourism, chemicals, pharmaceuticals, hydrocarbons, construction, cement, metals, and light manufactures. Services consist of:

Electricity- production, consumption, export, import, installed, from fossil fuel, from nuclear fuel, from hydroelectric plants

Crude Oil – production, exports, imports, proved reserves Refined Petroleum – product production, consumption, exports, imports Natural Gas – production, consumption, exports, imports, proved reserves Carbon Dioxide – emissions from consumption of energy

F. Surface transportation1. Modes are airports with and without paved runways, heliports, pipelines,

railways, roadways paved and unpaved, waterways, merchant marine.2. Availability for transportations using airport, heliports, and railways are usually

out of Cairo, Egypt. Times varies throughout the day.3. Usage rates for transportation over the past five years has been 90% using

airports, heliports, railways, water ways, and merchant marine. The other 10% is roadways.

4. Several Ports and terminals are located in Egypt. The major seaports are Mediterranean Sea, Alexandria, Damietta, El Dekheila, and Port Said: Gulf of Suez. The oil terminals are Ain Sukhna and Sidi Kerir. Container Ports (TEUs-Treaty on European Unions) are Alexandria, Port Said West, and Port Said East.

G. Communication Systems1. Types of communications systems are telephone line fixed and mobile cellular,

domestic cellular network, international network connecting global calls, broadcasting media via satellite, radio broadcast (usually the government), and internet usage.

2. Availability for all communication is immediate. The phone lines do not go out of the country immediately, they have a networking link connecting lines, so there is a slight delay. Radio broadcasting availability is for government official.

3. Usage rates for the internet is 48%, telephone is 6.2 million individuals, and cellular phones is 93.5 million individuals.

H. Working conditions1. Employer-employee relations in Egypt are good, because of the Labor Law

Announced by law in 2003. The Labor law set guidelines for employers.2. Employee participation in the workforce is 28.87 million people. They work in

agriculture, industry, or service.3. Salaries and benefits for the Egyptian employees are similar the United States.

New employee has a probationary period of 90 days. Other benefits include


mandated raises, equal opportunity to apply for other positions, 2 weeks’ vacation, 5 work days of 8 hours, maternity leave, etc.

I. Principal Industries1. The principle industry in Egypt is textile, food processing, tourism, chemicals,

pharmaceuticals, hydrocarbons, construction, cement, metals, and light manufactures. The GNP industry portion is approximately 39.6% and has a total increase each year of about 3.3%.

2. The ratio of private to publicly owned industries is approximately 60/40% and has increased due to improving clarity to install privatizations enterprises and fulfill the economic legal code designed to adopt private sectors for economy growth and competitiveness in Egypt.

J. Foreign investment1. The biggest opportunities are in natural resource services.2. Natural resources include crude oil production, petroleum, natural gas,

phosphates, and iron ore exporting and importing to industries. K. International trade statistics

1. Major exports are natural gases and crude oil productiona. Dollar value is around $3 million dollars per yearb. Trends to sell within the country and out of the country is to regulate UN

peace keeping mission2. Major imports are agricultural products especially wheat and rice

a. Dollar value is around $2 million per yearb. Trends are an important role in making Middle East peace to buy within the

country and out of the country.3. Balance-of-payments situation

a. Deficit in Egypt is -12.2% of GDF in 2015b. Recent trends are due to Egypt’s deficit balance, they borrowed from the

surpluses, spending is more than the income receiving.4. Exchange rate

a. Multiple exchange rates one for imports of goods essential for the economy and one for imports of goods non-essential or luxury to transactions, but capital transactions can use a floating exchange rate.

b. Current rate of exchange is 7.72 pounds (EGP) per US dollarc. Trends to ensure stability Central Bank reserves money and monitors the

exchange rate.L. Trade restrictions Egypt and all other countries use the World Trade Organization

(WTO) to help with rules and regulations with foreign trade1. Embargoes are not within Egypt’s restrictions. There are no trade restrictions

agriculture. Services Egypt does have a restriction which is consumed through the government. Agreements are still made to export or import agriculture and industries. Sometimes there are clothing restrictions which puts a restriction on quotas.


2. Quotas restriction are place on some clothing, Egypt wants to produce certain items.

3. Import taxes (duty taxes) are due when coming into the country. They are the shipping values for the CIF (Cost, Insurance, Freight) a method of valuating. In addition, the imports are subject to sales taxes, inspection fees, and service fees.

4. Tariffs taxes has been lowered due to strengthening the economy, a new taxation law has been placed on imports called sales taxes and this raises prices to be more competitive.

5. Licensing are free import products such as cigarettes, cigars, tobacco, alcohol, and perfumes for personal use.

6. Customs duties taxes are for revenue mostly, but are for protection for imports. Invoices are usually under invoiced because customs add 10%-30% to make the value the same. Imports are not restricted, except for clothing and this protects local merchants and manufactures positions. Most custom tariffs range from 30%-40%, food tariffs range from 1% and 50%, textile tariffs range from 40%-50%, service fees on imports assessed are 2%-4%, and sales taxes range from 5%-25% to finalize the custom value imported.

M. Extent of economic activity not included in cash income activities1. Countertrades

a. Products generally offered for countertrading from Egypt are natural gas, agriculture, textile, oil, and fertilizer.

b. Types of countertrades requested (barter, counter purchase, etc.) from Egypt are wheat, corn, steel, machinery, aircrafts, and iron.

2. Foreign aid received from the US is about $2 million per year. Obama may cut back on the funds due to Egypt is able to provide for themselves

N. Labor force 1. Size is 28.87 million people2. Unemployment rates is approximately 13.2%

O. Inflation rate is 10.4% (CPI) consumer price increaseIV. Developments in science and technology

A. Current technology available (computers, machinery, tools, etc.) computer, laptops, tablets, cellphone, cable, satellite, pipelines, drilling equipment, forklifts, gardening tools, electric tools, etc.

B. Percentage rate is 0.2% of GNP in research and development for technicians, scientists, and engineers per million of people

C. Technological skills of the labor and general population has expanded to Ministry of Communications and Technology. People are trained and skilled as engineers, support e-commerce, e-government, and IT awareness.

V. Channels of distribution (macro analysis) for marketing in Egypt include facebook, twitter, internet usage and cellphone usage per the CIA.

This section reports data on all channel middlemen available within the market. Later you will select a specific channel as part of your distribution strategy.


A. Retailers1. Number of retailers are over a 1000 located in the country of Egypt2. Typical size of retail outlets is approximately 600 x 900 square ft.3. Customary markup for various classes of goods are the smaller store not operating

in a mall.4. Methods of operation is cash and credit card and checks in some locations5. Scale of operation is small to large. The malls the outlets are large and elegant.

Country side stores are smaller and less elegant, and a higher price.6. Role of chain stores are include shoes, western stores, and jewelry. department

stores are similar to ours in the United States, and specialty shops include specific food products, vitamins, and craft stores.

B. Wholesale middlemen1. Several middlemen store are available for buying and selling within the country or

out of the country. The size varies.2. Customary markup for various classes of goods are marked up since they are the

middle man getting certain products.3. Method of operation (cash/credit) usually no checks

C. Import/export agents or representative are available due to compliance issues and agreements made with WTO

D. Warehousing are located throughout Egypt for retailers to store productsE. Penetration of urban and rural markets are separated from various malls. Urban and

rural areas are smaller and countryside setting. Some smaller store have locations in larger areas like Cairo, Egypt.

VI. MediaThis section reports data on all media available within the country or market. Later, you will select specific media as part of the promotional mix and strategy. A. Availability of media to advertise is available at a cost.B. Costs

1. Television advertising is about $800 US dollar per week for five 1 minute segments.

2. Radio advertising is less expensive $200 US dollar for one 5 minute broadcast3. Print advertising is expensive using ink and copy paper tout prepare different ads

to distribute.4. Internet advertising is the most convenient and prices varies. They set up their

own webpage for online order can run around $100.00 per month.5. Other media (cinema, outdoor, etc.)

C. Advertising Agency assistance with a minimum cost of $10,000.00 covers advertising, media, and internet

D. Coverage of various media are flyers mailed, business cards, and books. E. Percentage of population reached by each medium is about 90% for internet usage,

40% print, 30% radio, and 75% television advertising.


VII. Executive Summary Economic analysis, I researched information at various websites. This summary points out some major areas for crafts regarding the economic stability and channels to distribute and determining the best approach to import and/or open a business in the country of Egypt.

VIII. Sources of Information

BBC. (1979). 1979: Israel & Egypt Shake Hands on Peace Deal. Retrieved from BBC.co.uk: http://www.nationsencyclopedia.com

CIA. (2016, March). Egypt. Retrieved from World Fact Book: www.cia.gov

Economics. (2001). Egypt. Retrieved from 2001 Country Report on Economics Policy & Trade Practices: http://www.state.gov

Embassy. (2012). Egypt. Retrieved from U.S. Department of State: Diplomacy in Action: www.state.gov

Embassy. (2014, May 20). U.S. Relations with Egypt. Retrieved from U.S. Department of State: Diplomacy in Action: http://www.state.gov/r/pa/ei/bgn/5309.htm

Encyclopedia. (2013). Egypt Customes and Duties. Retrieved from National Encyclopedia: http://www.nationsencyclopedia.com

HCCS. (2006). Global Trade Issues. Retrieved from HCCS Edu: http://swc2.hccs.edu

Heakal, R. (2003). Dual and Multiple Exchange Rates. Retrieved from Investopedia: http://www.investopedia.com

Heganzy. (2003). Egyptian Labor Law. Retrieved from Legal Resources: http://www.hg.org

PitneyBowes. (2015). Egypts Duty Calculator Country Guide. Retrieved from Pitney Bowes Global Trade Solutions: http://www.dutycalculator.com/country-guides/Import-duty-taxes-when-importing-into-Egypt/

Stewart, L. (2016). How are Tariffs, Quotas, Embargo Barriers to Trade. Retrieved from Weebly.com: http://stewartlaney.weebly.com

VisaHQ. (2015). Egypt Customs. Retrieved from Visa HQ: https://egypt.visahq.com/customs/

WallStreet. (2016). Egypt. Retrieved from 2016 Index of Economic Freedom: www.heritage.org

Zewail, A. (2008). Technology in Egypt. Retrieved from Egypt Travel Search: http://egypttravelsearch.com


Market Audit and Competitive Market Analysis

In conclusion, my executive summary discusses market audit and competitive market analysis

and outlines the critical points. I feel comfortable selling crafts in Egypt online and opening a

small business in the mall. Knowing the customer purchasing habits allows me the opportunity

package craft with an attractive appearance. Family opinion is important for the consumer. The

market is growing and is estimating higher sales in the community. I will have no restrictions

selling, but several taxes and fees for selling in the country.


Market Audit and Competitive Market AnalysisI. Introduction to my Market Audit, launching my product to develop a strategy plan

and enter a new market in Egypt.II. The Product

A. Evaluate the product as an innovation as it is perceived by the intended market using the 5 steps to determine the products originality and rate of adaption1. Relative advantage for my product communicating my product is available to

sell and use a creditable source to verify my products effectiveness.2. Compatibility for my product is ease of integrating crafts into the customer’s

lifestyle.3. Complexity for my product is how quickly I adapt the craft to customer’s

lifestyle with the question “Family Matter?”4. Trialability for my product is how fast the product adapts by demonstrating to

preschoolers and parent’s family fun.5. Observability for my product a presentation of my webpage business for

preschoolers and parents watch crafts made using my facebook, twitter, and on my webpage.

B. The adaption of crafts in Egypt using the above steps to determine the adaption rate no major problems or resistances to my product being acceptance based on this evaluation

III. The MarketA. Describe the Market(s) in which the product is to be sold.

1. Geographical region is located in Africa, and the country of Egypt. Egypt border Libby to the west, Sudan to the south, and to the east the country borders Gaza Strip and Israel. Egypt’s climate is usually warm and in the winter October through March month’s lots of rain fall. The topography of Egypt is like a desert like Arizona.

2. Forms of transportation in the region of Egypt are airports, heliports, railways, roadways, waterways, merchant marines, and ports. Communications available in the region of Egypt are telephone lines, mobile cellular, domestic cellular networks, international network connecting global calls, broadcasting media via satellites, radio broadcast (usually the government), and internet usage.

3. Consumer buying habitsa. Product-use patterns, Egyptians plan for purchase and include quality,

selection, and value. They also look at the aesthetics of the store meaning the creativity of store front.

b. Egyptians look at the appearance and other features of the product being purchase.

c. Shopping habits of Egyptians, 93 % shop with family and friends and 40% of the time ask family members opinion about a purchase.

4. Distribution of the product


a. Selling to typical retail outlets I can sell in quantity or bulkb. Product sales by other middlemen are located in the United States and

already have agreement to sale in Egypt.5. Advertising and promotion

a. Advertising media usually used to reach your target markets are my internet webpages, facebook, and magazines.

b. Sales promotions customarily used (sampling, coupons, etc.) print from webpage

6. Pricing Strategya. Customary Markups to allow for import taxes and other taxesb. Discounts available are online spend over $30.00 get $5.00 off or purchase

as wholesaler or retailer buy in bulk order of $300.00 receive $75.00 off.B. Compare and contrast your product and the competition’s product(s)

1. Competitors’ product(s)a. Inspiral and Evergreenb. Features directions in Egyptian and Englishc. Package is clear like a baggie

2. Competitors’ prices are slightly lower each kit is $3.003. Competitors’ promotion and advertising methods are the same as mine online

and as a business owner in Egypt. Promotions online are spend $25.00 receive $5.00 off. In store purchases everyday value of $2.00 per craft kit.

4. Competitors’ distribution channels go through television media, online webpage, and mailer.

C. Market size1. Estimated industry sales for the planning year is $2 billion2. Estimated sales for my company for the planning year is $200 thousand

D. Government participation in the marketplace1. Agencies that can help you Algomons in the United States and Degrinea in

Egypt.2. Regulations you must follow are agreements made with WTO for exports and

tariffs.IV. Executive Summary

The Market Audit and Competitive Market Analysis, I researched the information at various websites. This summary points out some major areas to succeed in marketing my product and advertising.

V. Sources of Information

Danilowi, C. (2013, January 29). Egyptian Buying Habits. Retrieved from Word press: https://carolyndanilowicz.wordpress.com

Dunford, A. (2010, February 9). 5 Considerations When Marketing to Early Adaption. Retrieved from Rocket Watcher: http://www.rocketwatcher.com


Preliminary Marketing PlanIn conclusion, my executive summary discusses the preliminary marketing plan and outlines the

critical points. My SRC information helps me determine the best approach for my marketing

plan over the next 5 years. My marketing objectives focuses on my target market of Egypt,

SWOT analysis, advertising, and distributions from origin to destination. I also, focused on cost

to sell crafts in Egypt. The costs include and are not limited to transportation documents fees,

distribution channels, price determinations, term of sales, payment options, and pro forma

budgets and profit/loss statements.


Preliminary Marketing PlanI. The marketing plan

A. Marketing objectives is increasing my product awareness in Egypt, mostly Cairo and online by 30% my first year.1.Target market(s) geographical region is located in Africa, and the country of Egypt. Egypt borders Libby to the west, Sudan to the south, and to the east Egypt borders Gaza Strip and Israel. Egypt’s climate is usually warm and in the winter months October through March lots of rainfall. The topography of Egypt is like the desert of Arizona.2. Sales forecast years 1-5

1 year is to make $200,000.00 2 years is to make $300,000.00 3 – 5 year is to make sells over 600,000.00 each year to cover set-up

charges when began selling online and store opened up in Cairo, Egypt.3. Profit forecast years 1-5

1-year profit hopefully will be 30% of my $200,000.00 Sales 2-year profit will be 40% of my $300,000.00 Sales 3-year profit will be 50% of my $600,000.00 Sales, usually the 1-3-year

company’s don’t have much of a profit or money back for starting up a business or expanding until after the 4th or 5th years.

4 & 5-year profit hoping will be 50% of my $600,000.00 Sales4. Market penetration and coverage

Goals to improve profits is to penetrate to urban and rural markets other than the malls. Urban and rural areas are smaller and a country setting. Some smaller store in these areas close to the schools. Expand online using more websites.

B. SWOT Analysis1. Strengths that are helpful - internal are legislation, social cultural, and 4 p’s

(price, product, promotion, place)2. Weaknesses that are harmful distraction (the area) and 4 p’s (price, product,

promotion, place)3. Opportunities that are helpful - external are technical, manufacturing4. Threats that are harmful – external are competition, finances

C. Product adaptation or modification – Using the product component model as your guide, indicate how your product can be adapted for the market1. Core component are the craft products. The craft products are Egyptians wear

now and in Ancient Egypt; jewelry, beads, string, felt sold in kits for all ages, but aimed at preschoolers and parents.

2. Packaging component will be in a clear Ziploc baggie 7 x 7 ¾ filled with one piece of jewelry or craft (hand puppet, peace beads, beads necklace, and etc.) to make


3. Support services component an 800 number, email, or chat will be provided in each package for assistance with making the product, damaged product, return product, or any questions in general.

D. Promotion mix1. Advertising

a. Objectives is to demonstrate the effectiveness of customer’s lifestyle and Egyptian crafts to say, “Family Matters.”

b. Media mix helps my customers understand the process of making each craft and the idea to have fun with your family; a time to relax and be together.

c. Message is to combine crafts and the customer’s lifestyle to demonstrate “Family Fun.”

d. Cost for advertising approximately $5,000.00 per year.2. Sales promotions

a. Objective is to increase customers appeal for crafts and encourage and improve selling to challenge the demands availability of products.b. Coupons are available; you go to Rainbow Fabric and Craft (my company name I made up in high school) webpage print a coupon or get online promotional code.c. Premiums are offered for crafts. Purchase any craft item and receive a free craft ring or bracelet.d. Costs for sales promotions if $5,000.00 per year.

3. Personal Selling I will inform the public where my store is located and websites 4. Other promotional methods presentation pages sent out to various merchants

E. Distribution: From origin to destination 1. Port selection

a. Origin port will be United States Postal Service, Ups, or Federal Express to drop off package for online order. Then, the package gets transported to one

one of the international airports to transport to Egypt. b. Destination port will be Mediterranean Sea terminal or Port Said West 2. Mode selection: Advantages/disadvantages of each mode a. Railroads

Advantages: bulk, speed, and safest Disadvantages: cost of construction and maintence

b. Air carriers Advantages: easy access, no physical barriers, natural route Disadvantages: cost, risky-items stolen, unreliable-weather

c. Ocean carriers Advantages: cost efficiency Disadvantages: time to destination, pirate attacksd.Motor carriers Advantages: cost efficiency, flexible Disadvantages: time, limited to places delivered

3. Packing


a. Marking and labeling regulations per FDA: Name and place of business - Distribution statement – distribution by Rainbow Fabrics and Crafts Material facts – directions for safe use -beads, string, felt, ribbon,

plastic zip bag, and etc. Warning statement – be cautious do not let small children or anyone put

items near mouth Ingredients – craft kits – specify each item in kits - similar to material

facts b. Containerization how my craft can be packaged to ship. Whether packing 1 kit or 100 craft kits to a merchant, the container still needs to be labeled with the contents, the same process as labeling regulations. c. Costs for labeling contents will cost about $6.00 each craft kit. 4. Documentation required a. Bill of lading is needed and issued by the carrier to me the shipper provides written evidence that the goods are received and the condition received. Shows the port destination to the merchant or individual receiving the Crafts through online orders U.S. Customs and Border Protection (CBP) regulated the data using (CBP) Form 1302 in accordance with 19cfr Part 4 as part of customs regulations on shipments. b. Dock receipt will be used in addition to bill of lading, verifies shipmen arrived at port location for online orders. (similar to a receipt at store) c. Air bill is requiring for orders shipped via air carriers. The bill is issued by an International airliner as evidence of receiving the goods and the agreement to transport the goods out of country. Several codes and forms are required by US Customs as a per caution even for crafts.

d. Commercial invoice I will need for international ground transportation once product arrives at the port. The invoice should include my tax ID #, the country of manufacturer or distribution, number of packages, unit value, and signature of receiver or buyer.All these shipping requirements are standard for International packages.

e. Pro forma invoice is processed when ordered includes the date, shipper Address, receiver address, quantity, description of merchandise, and cost.

f. Shipper’s export declaration is used for 2 reasons: one for data statistic for U.S. exports; and two designation appears on a form serving as a regulatory document. I do not do anything for shipper’s export declaration, something done automatically for export out of the United States.

g. Statement of origin is a certificate of origin for goods manufactured place. Can obtain a certificate by going to www.eCertify.com

g. Special documentation required, but not limited to are merchandise Passport, inspection certificate, insurance certificate, pre-shipment certificate, radiation certificate, weight certificate, import licenses, and shippers letter of instructions.

4. Insurance claims I purchases insurance with AIG Egypt Insurance Company (S.A.) they are located in Giza.

5. Freight forwarder. My company does have a transportation department,


But no management department. I can transport goods to carrier service. I may use freight forwarder service sometimes for advance on freight cost,

Port charges, consular fees, cost of special documents, insurance costs, freight Handling costs. Distinct advantages and disadvantages to hiring one saves on regulations and Cost.

F. Channels of distribution (micro analysis). This section presents details about the specific types of distribution in your marketing plan.

1. Retailers Number of retailers are over a 1000 located in the country of Egypt Typical size of retail outlets is approximately 600 x 900 square ft. Customary markup for various classes of goods are the smaller store not operating

in a mall. Methods of operation is cash and credit card and checks in some locations Scale of operation is small to large. The malls the outlets are large and elegant.

Country side stores are smaller and less elegant, and a higher price. Role of chain stores are including shoes, western stores, and jewelry. department

stores are similar to ours in the United States, and specialty shops include specific food products, vitamins, and craft stores.

2. Wholesale middlemen Several middlemen store are available for buying and selling within the country or

out of the country to ensure distribution of crafts to customer. The size varies. I intend to use a middleman for some purchases.

Customary markup for various classes of goods are marked up since they are the middle man getting certain fee for ensuring products are sold.

Method of operation (cash/credit) usually no checks3. Import/export agents or representative are available due to compliance issues

and agreements made with WTO4. Warehousing

Type is distribution center and storage. 2 locations one in the United States (Cincinnati), the other in Africa

(Egypt)

G. Price determination 1. Cost of the shipment of goods will range from $6.00 to $20.00 per craft 2. Transportation costs will range from $500.00 to $2,000.00 per craft/craft bulk 3. Handling expenses a. Pier charges

$200.00 pass fee per month the cheapest Pier charges similar to port charges – pays for international security

b. Wharf age fees $50.00 container charged by the port authority for port usage

4. Insurance costs - $10.00 includes insurance transit & tariff insurance cost 5. Customs duties $15.00 tariff and taxes payable on export and import of orders 6. Import taxes and value-added tax - $1.50 min due for goods purchases


Coming into the country as import taxes and value-added taxes (indirect mdse) 7. Wholesale and retail markups and discounts are usually $1.00 more per craft kit If sold to a retailer. Other coupons and promotions available as a discount For families working together to have fun 8. Company’s gross margins are $125,000 Total sales $265,000 -cost of goods sold $140,000 = gross margin $125,000 9. Retail price for a craft kit is $4.00 H. Terms of sale 1. EX works is the original quotation for sale of goods without cost I incur risk of Goods to final destination-

FOB free on board shipping I pay cost to destination FAS free alongside ship I pay cost and export fees C&F cost & freight price on invoice plus shipping does not include

insurance CIF cost, insurance & freight – insurance has to be 110% of goods

value and cover transit to destination3. Advantages/disadvantages of each

Advantage customer does not pay for shipping unless included in invoice Disadvantage is the cost to ship from location to destination and other

fees. I. Methods of Payment

1. Cash in advance using a pay-pal card (a new form of payment entered the market for Egypt) online orders or cash in the store

2. Open accounts not using or accepting at this time//only cash3. Consignment sales will not be accepting to purchase items4. Sight, time, or date drafts no drafts from other countries with a check or

money order5. Letters of credit not accepted, even if bank say will distribute money

II. Pro forma financial statements and budgets I am not including the balance statement,

income statement, or a statement of cash flow. I am only providing estimates of expenses to sell craft products.A. Marketing budgets

1. Selling expense $5,000.002. Advertising/promotion expense $5,000.003. Distribution expense $10,000.004. Product cost $60,000.005. Other costs $200,000.00

B. Pro forma annual profit and loss statement (first year through fifth year) Dates January 2015 through December 2016 1st and 2nd year a loss

Gross Margin 56%Return on Sales -20%

Sales Revenue $10,000.00Total Sales Revenue $10,000.00


Cost of Sales $15,000.00Product/Service $ 8,000.00Total Cost of Sales $23,000.00

Gross Profit/Loss $13,000.00

Dates January 2017 through December 2019 3rd and 5th year a profit Gross Margin 38% Return on Sales 12% Sales Revenue $295,000.00 Total Sales Revenue $295,000.00 Cost of Sales $45,000.00 Product/Service $24,000.00 Total Cost of Sales $69,000.00 Gross Profit/Loss $113,000.00

III. Resource requirements to succeed in selling crafts in Egypt. To succeed with a global e-commerce, I already have a strong home base company. I already have product awareness to help expand my brand of crafts and a distribution center. And the most important to expand globally is a long-term commitment, which involves:A. Finances – investments, plenty of assets, equity, and some liabilities for

expansion. And the investments and funds to carry the company expenses about three years to get a payback from my investments.

B. Personnel – team to organize and take charge and complete each craft kit efficiently.

C. Production capacity I used a set of goals/strategies to enhance competition and increases the demand for crafts. I set money aside plenty of investment for cash flow, obtain new customers, production/assembly line, and used a responsible team to increase & influence customers demand for craft kits globally.

IV. Executive SummaryThe Preliminary marketing plan, I researched the information at various websites. This summary points out some major areas for a successful marketing plan.


V. Sources of Information

Cargo. (2016). Transportation charges. Retrieved from Cargo World: www.ecargoworld.com

Customs. (2015). Bill of lading document. Retrieved from U.S Customs and Border Patrol: www.help.cbp.gov

Export. (2015). What is a shipping export declaration (SED)? Retrieved from Export.gov: www.export.gov

FDA. (2015). Labeling Regulations. Retrieved from U.S. Food and Drug Administration: http://www.fda.gov/Cosmetics/Labeling/Regulations/default.htm

FedEx. (2015). Commercial Invoice. Retrieved from International Shipping Services : www.fedex.com

Mehta, V. (n.d.). What are the Advantages and Disadvantages of Variou Transportation. Retrieved from Publish Your Article: http://www.publishyourarticles.net

VI. AppendixesThe details of international operations and the complexity of the environment within which the international marketer must operate creates an extraordinary demand for information. When operating in foreign markets, the need for thorough information as a substitute for uniformed opinion is equally important as it is in domestic marketing.


References

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Paula's Country Notebook

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