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Housewares Heads East

Should U.S. marketers be focusing more on the eastern Mediterranean region?

Despite uncertain times, it's business as usual in the Eastern Mediterranean region, an area that represents a myriad of opportunities for American marketers.

For U.S. marketers looking to expand their exports, the Eastern Mediterranean region poses both opportunities and challenges. These issues were the focus of a talk given by Trendlines' Managing Director, Todd Dollinger, at the NHMA's Housewares Export Council of North America's (HECNA) annual meeting in Nassau, June 1999.

Opportunities Come in All Sizes

"The Eastern Mediterranean region represents an opportunity for American marketers precisely because it is a smaller and more distant market, with less competition and lower barriers to entry than are found in many larger markets," says Dollinger. "In Israel, the market tends to respond favorably to all things American. Israelis are receptive and interested in hearing about new products from the United States." By the same token, the exposure to European goods and services makes the market selective about the merchandise it does choose. The country's tastes are sophisticated and influenced by European trends. Furthermore, on a very practical level, measurements are metric and sizes differ — the American predilection to make things bigger doesn't necessarily work in other markets. Legal and regulatory issues, such as product labeling, also have to be taken into account for each market.

An important aspect which marketers should bear in mind is Israel's free trade agreement with the United States and the European Union, which means that Israel can act as an efficient bridging country between these markets. Product components may be exported from the United States to Israel, tariff-free, and with appropriate value added can be sold, again tariff-free, to EU countries. Marketers looking to penetrate the region will find some level of assistance from U.S. embassies, commercial representatives of their home states and Chambers of Commerce. Some companies appoint consultants with an in-depth understanding of the market and who are acquainted with key people in the relevant markets. Connections are key in the Arab world: some have referred to the Mediterranean region as a region of tribes. Well-connected agents or local consultants can be a critical part of an exporter's regional efforts.

Jordan, with its centuries of trading tradition, can be properly used as the gateway to the Arab countries. If marketers succeed in entering the Jordanian market, the prospects for penetrating the rest of the region are strong.

Dollinger cautions U.S. businesspeople to be sensitive to the cultural differences of the various countries in the region. "Remember," he says, "'You're not in Kansas anymore,' and adjust your style of doing business to that of the region you are in." Dollinger should know, he lived in Kansas for many years before emigrating to Israel in 1990.

When in Rome...

Workweeks differ from country to country as well. Israeli businesses work Sunday through Thursday, while in the Arab world, six-day workweeks remain the norm with the Moslem weekend consisting of the single day of Friday. Thursday is increasingly being worked as a short day in the Arab world. And just as work days and work habits differ, so do day-to-day business practices and cultural mores.

"If you are dealing with younger people, particularly in Kuwait and Saudi Arabia, they may well be U.S.-educated, but remember we each bring our backgrounds to our everyday actions. In fact, it is a challenge to find the balance between showing personal interest in the lives and families of those with whom you meet, while being careful to neither pry nor boast of your success. "

The tradition of haggling over purchases is well-established throughout the Middle East. When negotiating credit or terms of payment, leave yourself room to negotiate. "Do not make your best offer first. The person you are negotiating with must feel like they have achieved something during the negotiation," says Dollinger, noting that while this may be true for all of us, it is especially true of this region. "While letters of credit are common and well understood, try to give a small line of credit as early as you possibly can, it is a great confidence builder. And always blame all bad news on the credit manager, so you are perceived as the customer's friend and supporter who is fighting for him."

Dollinger notes that a major complaint from customers in the region is the lack of response from potential new suppliers. While Americans might be great at shipping on time, they often neglect the inquiries placed by the smaller customer in the Middle East, in favor of the larger customer elsewhere. "Responsiveness to customers is key," he says. Furthermore, he notes that Americans are often viewed as overly aggressive and inappropriately impatient.

Dollinger believes that if marketers view the region as sufficiently important, they should dedicate the time and resources to do the job well. "Once you have contacts and/or budding relationships that seem to you of reasonable interest, plan to travel. You will never build the sort of relationships that you want without appropriate face-to-face meetings. While relationships are always important in sales, they are even more important in this part of the world. If you're not prepared to dedicate time and energy to the Eastern Mediterranean market, don't do it," he says, concluding that "the opportunity is real for those prepared to invest."