Country Notebook: Lebanon OSB Board Jennifer Biskey Jess Engler Carly Gault
Profressor Leininger 4:00 Thursday April 29, 2010 MKT 432 EXECUTIVE SUMMARY
Introduction
MKT 432 Lebanon: OSB Board Page 2 of 34 I. Introduction
II. Relevant History
After World War I, Lebanon became a state. In 1975, Lebanon had a civil war. The main cause for the civil war was the differences between the power of the Christians and the Muslims. The Maronite Christians held power in Lebanon, but the Muslims held the majority of the population. The Taif Accord was signed in October 1989 ending the civil war. Following the war, the Israelis occupied the south; there were 450,000 Palestinian refugees and a strong Syrian military presence (“Lebanon: Country Profile...”).
Syria loosened its power over Lebanon in May 2000 when the Israeli troops withdrew from Lebanon. After the Syrians left, a government election was postponed three years due to a disagreement between the Prime Minister Rafik Hariri and President Emile Lahoud. Hariri was later assassinated in February of 2005. Syria’s last military troops left Lebanon in April 2005.
III. Geographical Setting
A. Location Lebanon is located in the Middle East with Syria bordering Lebanon on the north and east, the south by Palestine, and the west by the Mediterranean Sea (“Profile of Lebanon: Economy”). Lebanon expands for 10,400 sq km with 10,230 sq km being land and the remaining 170 sq km with water. For a size comparison, Lebanon is 0.7 times the size of Connecticut (“CIA - The World Factbook” ).
B. Climate Lebanon enjoys a Mediterranean climate which receives sunshine for 300 days of the year (“Profile of Lebanon: Economy”). Because of the Mediterranean climate, agriculture accounts for 5.1% of Lebanon’s gross domestic product (GDP). Some of the agriculture products produced by Lebanon include citrus, grapes, tomatoes, apples, vegetables, potatoes, olives, tobacco, sheep, and goats. The natural resources available
MKT 432 Lebanon: OSB Board Page 3 of 34 in Lebanon include limestone, iron ore, sale, water-surplus state in a water-deficit region, and arable land (“CIA - The World Factbook” ).
The coastline enjoys mild winters while the set of mountains are snowy in the winter. Summers are hot along the coast and mild in the mountains (“CIA - The World Factbook.”).
C. Topography
Lebanon has two mountain ranges in its country. The mountains are in the Bekaa Valley. The eastern mountains are called the Anti-Lebanon ranges while the western mountains are called Mount Lebanon range (“Lebanon: Country Profile...”).
IV. Social Institutions
A. Family
1.Nuclear Family
Family is very important to the people of Lebanon. The nuclear family is a shared authority of the mother and father (“Culture of Lebanon...”). Family status defines access to education and achieving prominence and wealth. Each member of the family remains loyal to their family and conforms with accepted standards of behavior so not to bring disgrace to the family honor. Among both the Christians and Muslims of Lebanon, family loyalty ranked first in order of importance; followed by religion, nationality, ethnic group, and political party (Ghazi).
2. Extended Family It is not uncommon for a family in Lebanon to have a three-generation extended family. It is considered to be traditional. This three-generation family includes a man, his wife or wives, their unmarried children, their married sons, and the sons’ wives and children.
MKT 432 Lebanon: OSB Board Page 4 of 34 Families extend their loyalty to the family to employment. In 1960, almost 25% of the deputies in the Chamber of Deputies “inherited” their seats in the chamber. Wealthy family members are also expected to share with their families that are not as prosperous (Ghazi).
3. Dynamics of the Family
a. Parental Roles
Even though the husband and wife share authority, the wife usually has more influence over the children and the housework (“Culture of Lebanon...”).
b. Marriage and Courtship Premarital and extramarital sexual relations are a big disgrace for families in Lebanon and highly frowned upon. If improper conduct towards an unmarried woman occurs, it damages her honor to her family and often the father and brothers will seek “redress” which can result in killing the woman and man involved, or driving the man out of the village (Ghazi).
Men may have up to four wives, but most men marry just two wives due to the economic burden to have such a large family. Typically the man has children with the first wife and then the second wife is much younger. It also isn’t uncommon for there to be a marriage between first cousins. Marrying one’s cousin allowed for the property to be kept within the family and the female to continue to be around those whom she was raised around (Ghazi).
Divorce is very easy for Muslims, difficult for Orthodox Christians, and extremely difficult for Maronite communities. Marriage and divorce is decided by religious courts (“Culture of Lebanon...”).
MKT 432 Lebanon: OSB Board Page 5 of 34 4.Female Roles The role of women in Lebanon is starting to change. Traditionally, women were the homemaker and mother in the house. Since the 1970s, women have begun to enter the workforce, have equal civil rights, and attend college. This change in women’s roles is due to the lack of manpower due to heavy migration to Persian Gulf countries (Ghazi).
B. Education
1.The Role of Education in Society
a. Primary Education
Primary education is mandatory and private education is prevalent (“Lebanon Overview...”). Many parents choose to send their children to private schools, which are often expensive and religious, to receive moral guidance. Children are encouraged to learn and be quiet (“Culture of Lebanon...”).
b. Higher Education In 1983, nearly 41% of students attending the American University of Beirut were women (Ghazi). Lebanon has 7 major universities and specialized colleges. Many schools teach in Arabic, French, and English since there are three different main languages spoken in Lebanon. Lebanon wanted to revive the Old Arab traditions. Many of the degrees offered in the universities in Lebanon include law, medicine, arts, and science. More focus is also spent on elementary and secondary schools, both public and private, to lay a foundation for the universities (“Profile of Lebanon: Economy”).
C. Political system
1.Political structure Lebanon is a democratic republic with a parliamentary system of government which includes a President, a Prime Minister, and a cabinet chosen by elections.
MKT 432 Lebanon: OSB Board Page 6 of 34 The government is based on the constitutional principle of separation between the executive, judicial, and legislative branches (“Profile of Lebanon”).
2.Political parties There are three different categories for political parties in Lebanon; 14 March Coalition, Change and Reform Alliance Bloc, and Hizballah and Amal Alliance. Each category has sub-parties with different leaders. 14 March Coalition has seven sub-parties including the Democratic Gathering Bloc, Democratic Left, Democratic Renewal Movement, Future Movement Bloc, Kataeb Party, Lebanese Forces, and Tripoli Independent Bloc. The Change and Reform Alliance Bloc has four sub-parties which are the Free Patriotic Movement, Metn Bloc, Popular Bloc, and Tashnaq. The final category, Hizballah and Amal Alliance, is composed of the following six parties; Development and Resistance Bloc, Hizballah Party, Loyalty to the Resistance, Nasserite Popular Movement, Syrian Ba’th Party, and Syrian Social Nationalist Party (“Global Road Warrior”).
3.Stability of government Lebanon has maintained their independence since November 22, 1943 (“Profile of Lebanon”). However, due to Lebanon’s history of being a place of refuge for many minorities, there is much social unrest. The government does not have full control in all areas of the country (“Global Road Warrior”).
4.Special taxes Consumption tax in Lebanon is a Value Added Tax which is 10% but there are some products which are exempt from the tax. There is no special expatriate tax regime. Corporate income taxes are 15% on income from profits. Other corporate taxes include a municipal tax, professional tax, stamp duty on contracts and bills, forming, propagation or transformation of companies, tax on advertising, and registration tax on real estate (“Country Trading Profiles”). Lebanon has signed double taxation conventions with numerous countries including Algeria, Armenia, Bahrain, Belarus, Bulgaria, Canada, Cuba, Cyprus, Czech Republic, Egypt, France, Gabon, Iran, Italy, Jordan, Kuwait, Malaysia, Malta, Morocco, Pakistan, Poland, Qatar, Romania, Russia, Senegal, Sudan,
MKT 432 Lebanon: OSB Board Page 7 of 34 Sultanate of Oman, Syria, Tunisia, Turkey, United Arab Emirates, Ukraine, and Yemen (“International Agreements”).
5.Role of local government There are eight administrative divisions of the government. The governorates are Aakar, Baalbek-Hermel, Beqaa, Beyrouth, Liban-Nord, Liban-Sud, Mont- Liban, and Nabatiye (“CIA - The World Factbook”).
D. Legal system
1.Organization of the judiciary system The judiciary system of Lebanon is composed of three parts. First is the Four Courts of Cassation, three of which are for civil and commercial cases and the fourth is for criminal cases. Then there is the Constitutional Council which rules in respect to the constitutionality of laws. The final part of the judiciary systems is the Supreme Council which hears cases involving charges against the president or prime minister as they arise. Also, there is no judicial review of legislative acts (“Global Road Warrior”).
2.Code, common, socialist, or Islamic-law country? Lebanon has a legal system that is a conglomerate of four different systems. There is an influence of Ottoman law, canon law, Napoleonic code, and civil law (“Global Road Warrior”).
3.Participation in patents, trademarks, and other conventions There is a national office for the protection of intellectual property rights in Lebanon and the nation is a member of the World Intellectual Property Organization (WIPO) as well as a signatory to the Paris convention for the Protection of Intellectual Property. Patents have a validity of 20 years from the date of payment of the registration fee, trademarks are valid for 15 years and can be renewed indefinitely, designs are valid for 25 years with one renewal period for 25 years, copyrights last up to 50 years after the author’s death, and industrial models last 25 years with one renewal chance for another 25 years (“Country Trading Profiles”).
MKT 432 Lebanon: OSB Board Page 8 of 34 E. Social organizations
1.Group behavior Lebanese culture is very family oriented. Family ties are still strong and relevant in personal, political, financial, and business relationships. Power and leadership in the political field are gained through family support and business practices favor hiring family or working with family relations over outsiders. Trust in all aspects of life is very important, therefore maintaining close family ties for everything helps minimize risk (Ghazi).
2.Social classes While there is no actual structure for social classes, money is the strongest determinant for classes. Wealth and status are often found between different religion and family lines (“Culture of Lebanon...”).
3.Race, ethnicity, and subcultures There are two primary ethnic groups in Lebanon. The Arab population is composes 95% while 4% are Armenian and 1% is composed of other miscellaneous ethnicities. Many Christian Lebanese do not consider themselves to be of Arab descent, instead they refer to themselves as Phoenicians (descendants of the Canaanites) (“Global Road Warrior”).
F. Business customs and practices
1.Business Ethic and Framework The majority of Lebanese business is conducted through the use of personal acquaintances and mutual trust. New businesses can best enter the market by using acquaintances to establish business partners and contacts. Lebanon has a free-market orientation and most Lebanese are seen as skillful entrepreneurs. Many of their multilingual business professionals and academics are seeking new opportunities and business partners (“Global Road Warrior”).
2.Decision Making Overall in Lebanon, most decisions are made very slowly and direct criticism is often avoided with preference to hints or suggestions for changes in order to
MKT 432 Lebanon: OSB Board Page 9 of 34 compromise. Depending on the intensity of personal relationships business decisions may be easier to make or they may be more difficult. Since most businesses are still small family-operated entities, the decisions usually fall upon the owner or manager while in larger enterprises the decisions are made following company structure and operations (“Global Road Warrior”).
3.Meetings Punctuality for meetings varies. Arriving on time, before, or even after a specified meeting time are all existent in Lebanese culture. Outsiders are recommended to arrive on time to be safe, but it is important to realize that relationships and social formalities are more important than timed schedules. All forms of meetings usually being with inquiries into health, family, and other polite, personal, non-business matters. Smoking is acceptable during meetings, and the smoker should be sure to offer a cigarette before taking one themselves. Gifts are often exchanged as a sign of respect, generosity, and courtesy towards the beginning of a meeting. They should always be accepted graciously. Business cards on the other hand are exchanged at the end of a meeting. Another general rule for the Lebanese is to stand upon the arrival of an elder, senior company member, or a woman. Maintain eye contact and make sure feet are kept on the floor or at minimum make sure the bottom of a shoe is not pointed directly at someone which would be considered offensive (“Global Road Warrior”).
4.Women Unlike other Middle Eastern or Persian Gulf Islamic countries, Lebanon has a different perspective when it comes to women in the workplace. Legal rights for women exists making it easier for women to pursue university educations and careers in the fields of law, business, and others professions. Foreign women that hold high ranking positions in business are generally well respected and treated fairly as long as they behave in a highly professional manner (“Global Road Warrior”).
V. Religion and aesthetics
MKT 432 Lebanon: OSB Board Page 10 of 34 A. Religion and other belief systems
1.Relationship with the people Lebanon has a diverse culture; therefore each different religion maintains their own authority over its followers, and tries not to affect others. There are no civil laws determined by religion so personal codes vary from person to person. Marriage is strictly a religious ceremony, and has no legal status (“Global Road Warrior”).
2.Membership of each religion Muslim 59.7% (Shia, Sunni, Druze, Isma’ilite, Alawite or Nusayri), Christian 39% (Maronite Catholic, Greek Orthodox, Melkite Catholic, Armenian Orthodox, Syrian Catholic, Armenian Catholic, Syrian Orthodox, Roman Catholic, Chaldean, Assyrian, Copt, Protestant), other 1.3% (note 17 religious sects recognized) (“CIA - The World Factbook”).
B. Aesthetics
1.Visual arts Painting is a popular form of art, often influenced by French techniques but altered with an oriental touch. Along the coast traditional pottery is still popular and local crafts are still crafted and sold to tourists (“Culture of Lebanon...”).
2.Performing Arts Popular international festivals provide an array of artistic attractions for everyone. Oriental and Western music mix with symphonies, opera, and pop singers. Foreign and local dance troupes perform as well as classical and modern ballets. Many of these festivals are held in open air at historical sites for an ultimate culture experience (“Culture of Lebanon...”).
3.Literature Lebanon has a history of poets and novelists. Many write in Arabic as well as French and occasionally English. Oral literature is still preserved in villages (“Culture of Lebanon...”).
MKT 432 Lebanon: OSB Board Page 11 of 34 VI. Living Conditions
A. Diet & Nutrition
1.Meat & Vegetable Consumption Rates
Meat consumption is 2002 was 63.1 compared to 1961 which was at 22.4. The calories per person per day from vegetables are 2829. Lebanon is ranked 8th in food production.
2.Typical Meals
Lebanese cuisine is Mediterranean: Pita bread, rice is a staple food, hummus, bean dishes, and pasta, salted yogurt, red meat, and chicken
3.Malnutrition Rates
Boys and girls under the age of 5 is under 10% although the boys percentage is larger than the girls.
4.Foods Available
Oranges, apples, other fruits, variety of beans and vegetables, cereal, root crops, pulses (dry harvest: peas, beans, etc.) Meat all kinds
B. Housing
1.Types of Housing Available
Most of Lebanon’s population lives in the main cities of Beirut, Tripoli, and Sidon which are densely populated. Cities in Lebanon suffer from a lack of space. Most people live in apartments.
2.Do most people live in one family dwelling or with other families
Last available info for the 1980-88 total housing units # was 820,000 with 33 per dwelling. Housing needs until 2000 estimated 400,000 units.
C. Clothing
MKT 432 Lebanon: OSB Board Page 12 of 34 1.National Dress
All Christians and Muslims who live in the cities wear European style clothes. In poorer Muslim towns and in some Muslim areas in the main cities, you can still find the Muslim chador (veil for women). In the countryside women sometimes wear traditional color skirts and men wear traditional baggy trousers.
2.Types of clothing worn at work
For men the standard business attire is a suit. Women may wear dresses, skirts or slacks and blouses. Again, while there is no dress code, urban professional Lebanese women dress modestly but well. Formal attire may be required for special events. Some Muslim women will wear very modest clothing and a head covering at work. Bring lightweight clothes for the summer months.
D. Recreation, Sports, and other leisure activities
1.Types available and in demand
The arts, literature (oral and written), traditional pottery, performance arts, football (aka soccer), basketball, weightlifting, skiing, windsurfing, kayaking
E. Social Security
Lebanon does a social insurance system. It’s lump-sum benefits only. It covers employees in industry, commerce, and agriculture. They have certain qualifying conditions. EX: old age benefit, disability benefits, and survivor benefits all followed by specific rules
F. Healthcare
Healthcare is highly developed in Lebanon. Very little belief of traditional medicine remains. Lebanon has more doctors than it actually needs
VII. Language
MKT 432 Lebanon: OSB Board Page 13 of 34 A. Official Languages: Arabic is the official language, followed by French as the second. There are also English, Armenian, and Turkish speakers. Accents are a much higher indicator of social status than they are in the United States.
B. Spoken versus written languages: Classical Arabic-is a written language. Also officially spoken language. Modern Armenian publishing industry, government publication appears in French.
C. Dialects: Changes from region to region, the dialect of the Druzes is regarded as most distinctive.
VIII. Population
A. Total
As estimated in July of 2009, the population of Lebanon was 4,017,095 (“CIA - The World Factbook” ).
1.Growth Rates The population continues to grow at a rate of 1.107% (“CIA - The World Factbook” ).
2.Birthrates Per 1,000 populations, 17.1 births occur (“CIA - The World Factbook”).
B. Distribution of Population
1.Age Of the 4 million people of Lebanon, 25.8% are between the ages of infants and 14 years old; 67.1% between 15 and 64 years old, and the remaining 7.2% of the population are 65 years old and up. For the total population, there is a 0.95 male to female sex ratio for Lebanon (“Profile of Lebanon: Economy”). The average life expectancy for the people of Lebanon is 73.66 years with females outliving males by approximately five years longer “CIA - The World Factbook.” .
2.Sex
MKT 432 Lebanon: OSB Board Page 14 of 34 In 2009, for every 0.95 males, there was one female for the population (“CIA - The World Factbook”).
3.Geographic Areas In 2008, nearly 87% of the total population lives in an urban area. A majority of the population live in the coastal areas in the cities of Beirut, Sidon, and Tyre. Other areas of the country are sparsely populated. Because the majority of the population lives in urban areas, that is where a lot of government spending goes, neglecting the rest of the country (“Lebanon Overview...”)
4.Ethnic Groups The Arab ethnic group holds a vast majority of ethnic groups in Lebanon, making up 95% of the population. Armenian’s make up 4% of the population (“CIA - The World Factbook.) .
IX. Economic Statistics and Activity Lebanon has a liberal economy. Their economy is based on competition and private ownership
A. Gross National Product (GNP) Services and banking areas dominate the economy, raising nearly 70% of the gross national product. Agriculture is also very strong in Lebanon, with 10% of the gross national product. And finally industry fills the remaining 20% of the gross national product (“Profile of Lebanon: Economy”). Lebanon’s gross domestic product (GDP) is growing at a rate of 7% in 2009. The GDP’s purchasing power parity is $47.82 billion (“CIA - The World Factbook” ).
B. Personal Income per Capita The GDP per capita is an estimated $11,500 in 2009 (“CIA - The World Factbook” ).
C. Average Family Income The workforce in Lebanon is approximately 1.481 million people. Lebanon also experiences a 9.2% unemployment rate in 2007 (“CIA - The World Factbook” ).
MKT 432 Lebanon: OSB Board Page 15 of 34 D. Distribution of Wealth In 1999, 28% of Lebanon’s population lives below the poverty line. The inflation rate was 3.4% in 2009 (“CIA - The World Factbook” ).
E. Minerals and Natural Resources
The main resources found in Lebanon include limestone, iron ore, salt, water-surplus state in a water-deficit region, and arable land (“CIA - The World Factbook.”).
F. Surface Transportation Lebanon has seven airports in the country. Five of the seven airports have paved runways. There are 43 kilometers (km) of gas pipelines. Railways extend for 401 km in Lebanon. Roadways measure 6,970 km in Lebanon which include 170 km of expressways. Lebanon has two ports and terminals which are in Beirut and Tripoli. These ports offer ports and terminals for the 33 different kinds of merchant marines (“CIA - The World Factbook”).
G. Communication Systems In Lebanon, approximately 714,000 households use a main line telephone in 2008. Cellular phones are also popular in Lebanon with 1.43 million people using a mobile phone. Individuals using the internet are also popular. Nearly 2.19 million users are online. Information is also broadcast over 15 television stations, 20 AM radio stations, 32 FM stations, and about 12 unlicensed radio stations (“CIA - The World Factbook”).
H. Working Conditions
As stated earlier, Lebanon’s workforce is about 1.481 million workers. Of these 1.481 million workers, roughly 945,000 were foreign workers whom come from Syria, Asia, India, and Africa. They are mostly unskilled and employed in areas such as construction, agriculture, industry, and households. The government supports trade unions. The typical work week is 48 hours. Approximately 15,000 people work in the financial sector and manufacturing employs about 15% of the workforce (“Lebanon Overview...”).
MKT 432 Lebanon: OSB Board Page 16 of 34 Worker rights are out there, but rarely enforced. Wages remain low. There are often strikes, labor actions, slow downs, and protests (“Lebanon Overview...”).
I. Principle Industries
1.What proportion of the GNP does each industry contribute?
Industry contributes 18.7% of Lebanon’s GDP, while agriculture contributes 5.1% and services constitute 72.8% (“CIA - The World Factbook.”).
J. Foreign investment
1. Opportunities?
There are opportunities for foreign investment in Lebanon, especially since it has a free market economy and is fairly open to trade and foreign investment. There is an educated workforce and a good standard of living in an environment with limited restrictions for investments (“Country Trading Profiles”).
2.Which industries?
The industries which are the most opportunistic include the field of reconstruction of basic and productive infrastructures, supermarkets, and general construction (“Country Trading Profiles”).
K. International trade statistics
1.Major exports
The main export commodities include jewelry, base metals, chemicals, miscellaneous consumer goods, fruit and vegetables, tobacco, construction minerals, electric power machinery and switchgear, textile fibers, and paper (“CIA - The World Factbook”).
a. The major exports for 2009 were $3.5 billion (“CIA - The World Factbook”).
b. The main customers of Lebanese exports are the United Arab Emirates, Switzerland, Iraq, Saudi Arabia, and Syria (“CIA - The World Factbook”).
MKT 432 Lebanon: OSB Board Page 17 of 34 2. Major imports
The major import commodities are petroleum products, cars, medicinal products, clothing, meat and live animals, consumer goods, paper, textile fabrics, tobacco, electrical machinery and equipment, and chemicals (“CIA - The World Factbook”).
a. As of 2009 the imports were $16.25 billion (“CIA - The World Factbook”).
b. The majority of imports in Lebanon come from the United States, China, France, Italy, and Germany (“CIA - The World Factbook”).
3.Balance-of-payments situation
a. The trade balance as of 2007 was $-7,850 million in U.S. dollars (“Country Trading Profiles”).
b. Lebanon has received billions of dollars in financial aid due to increased indebtedness in order to try to rebuild internally. Recent aid has been promised based upon the completion of benchmarks set for the five-year economic and social reform programs. Therefore, their balance of payments is still skewed negatively (Bureau of Near Eastern Affairs).
4. Exchange rates
a. The exchange rate for Lebanese pounds (LBP) per U.S. dollar is 1,507.5 (“CIA - The World Factbook”).
b. The exchange rate has been consistent against the U.S. dollar from 2004-2008 (“Country Trading Profiles”).
L. Trade Restrictions
1.Embargoes
MKT 432 Lebanon: OSB Board Page 18 of 34 The only embargo on Lebanon that has been in existence is for arms goods, in order to prevent more social unrest (“Practical advice for business”).
2.Quotas
There are no import quotas for Lebanon.
3.Import taxes
4.Tariffs
5.Licensing
Licenses are required for most agricultural products on a yearly or seasonal basis, pharmaceutical and chemical products, and various industrial products including white cement, gypsum, tar, petroleum, fuels, fuels oils, gas kerosene, silk thread, pyjamas, electrical wire, unprocessed leather, telecom wire, copper wire, and industrial machinery and equipment (“Muslimtrade Network”).
6.Customs duties
M. Extent of economic activity not included in cash income activities
1.Countertrades
The only known countertrading done in Lebanon is through a government monopoly on the trade of cigarettes and tobacco. Lebanese tobacco leaves are traded for cigarettes from the US (“UK Trade & Investment”).
2.Foreign aid received
N. Labor force
1.Size
The labor force is 1.481 million with as many as 1 million additional foreign workers (“CIA- The World Factbook”).
2.Unemployment rate
MKT 432 Lebanon: OSB Board Page 19 of 34 The unemployment rate estimated in 2007 was 9.2% (“CIA- The World Factbook”).
O. Inflation rate
The inflation rate as of 2009 was 3.4% (“CIA- The World Factbook”).
X. Channels of Distribution
A. Retailers
Just over a decade later, Downtown has emerged as Beirut's most fashionable and desirable neighborhood, with gloriously restored French Mandate-era buildings, European and Lebanese cafes, world-class restaurants, luxurious boutiques, and stylish pubs. Maarad Street, with its arabesque arches and sidewalk cafes, is unquestionably the beating heart of Downtown.
ABC is a major superstore in Lebanon. Also is the Dunes Commercial Center Shopping mall on Verdun Street in Beirut. Also contains the Empire Dunes cinemas owned by the Empire chain, a commercial center, residential facilities and the Holiday Inn Hotel.
Hypermarket Bou Khalil first chain of supermarket. There are a lot of other large super centers.
B. Import/Export agents
Imports in 2009 $16.25 billion (such as: cars, clothing, medicine products, meat, live animals, consumer goods) Exports in 2009 $3.5 billion (such as: jewelry, base metals, chemicals, fruits, vegetables, tobacco, textile fibers, paper)
C. Warehousing
Beirut Cargo Center is the first to introduce this service in the market. For this purpose, BCC acquired a very sophisticated warehouse in the suburbs of Beirut. The warehouse is well organized to accommodate the orders placed by local companies, at their
MKT 432 Lebanon: OSB Board Page 20 of 34 convenience and with extreme security. It is eventually fully covered by comprehensive insurance policy, but BCC, and for further security measures, has arranged to cover each shipment by a separate insurance policy in accordance with the value of goods declared by the clients.
XI. Media
A. Availability of media
very good
B. Costs
1.Television
9 national television channels (1.18 million in 1997), ranked 76th
2.Radio:
(2. 85 in 1997) Ranked 78th
3.Other media
Internet hosts 45,352-Users 2.19 million; Cell subscribers per 100 in 2006 30.53
XII. The Product
A. Evaluate the product as an innovation as it is perceived by the intended market
1.Relative advantage
2.Compatibility
3.Complexity
4.Trialability
5.Observability
B. Major problems ad resistances to product acceptance based on the preceding evaluation
MKT 432 Lebanon: OSB Board Page 21 of 34 XIII. The Market
A. Describe the market(s) in which the product is to be sold
The main market our plywood is going to be targeted at is the construction industry and lumber yards. A lot of reconstruction from the civil war is still ongoing and many companies are remodeling to because more “green” and energy efficient. For the first two months of 2010, construction permits have risen 36% (“Construction Permits in Lebanon up 36% in First Two Months of 2010.”).
1.Geographical regions
The main geographical region targeted is going to be in Lebanon’s capital of Beirut. Beirut is locked along the coastline, making it easier for shipping.
2.Forms of transportation and communication available in the region
Beirut offers transportation abilities such as taxis, buses, the airport, and ports along its city line (“StateMaster- Encylopedia: Beirut”).
Communication available in Lebanon, as stated earlier, and Beirut include the telephone, internet, radio, and television.
3.Consumer buying habits
a. Product-use patterns
1. Construction
2. Furniture building
b. Product feature preferences
1. Strength
2. Durability
c. Shopping habits
MKT 432 Lebanon: OSB Board Page 22 of 34 1. Price
4.Distribution of the product
OSB board is typically sold at outlets comparable to lumberyards in the United States (Welcome Yellow Pages).
1. Ajjaj Veneers & Timbers Co
2. Derneika Timber Est
3. General Timbers & Veneers Co
4. International Timber & Veneers
5. Pack Wood Timber
5.Advertising and Promotion
OSB board is not commonly a highly marketed good when it comes to advertising and promotion.
6.Pricing strategy
a. American lumber is priced at a premium as a result of its quality.
b. Lumber from countries in South-East Asia and Russia are lower priced because they lack quality and standards ratings (“US timber a cut above Asian wood, Americans say”).
B. Compare and Contrast your product and the competitions product
1.Competitors product
a. Brand name
Plywood
b. Features
MKT 432 Lebanon: OSB Board Page 23 of 34 Workability, impact resistance, flexibility, dimensional stability, 2 way strength and high panel shear strength and stiffness
c. Package
Minimum order quantity-45 cubic meters, supply ability-5000 cubic meter; pallet or bulk packages also by size, thickness, and grade
d. Competitors Prices
Competitor prices depend on the thickness and type you want, but the is lowest $10.00 and the highest is $50.00.
e. Competitors promotion and advertising
Brochures, mail, magazines, newspaper, radio, television etc.
2.Our Product
Often lumber in Lebanon comes from south-east Asia and Russia. This lumber is not graded or tested against any set of standards. Lumber from the United States is graded and tested against the Lumber Standards of America. Because of the difference in standards, our product is offered in areas with a premium price. (“US timber a cut above Asian wood, Americans say”).
C. Market Size
1.Estimated industry sales for the planning year
In 2000 these firms shipped $3.3 billion worth of goods and spent $2.0 billion on materials, and employed nearly 24,000 workers.
XIV. The Marketing Plan A. Marketing Objectives 1.Target Market Existing Lumber yards
MKT 432 Lebanon: OSB Board Page 24 of 34 Selling our OSB board through existing lumber yards will open us up to a market otherwise hard to enter. Appendix A consists of a list of existing building material companies in Lebanon (“Directory @ Lebanon.com”). 2.Expected Sales and Profit Expectations in 2011 Exact expected sales are not at this time known. Analysis of data will be gathered at each time of sale to compute expected sales and profits in the future. More research needs to go into exact costs of manufacturing, shipping, and price determination for the market. 3.Market Penetration and Coverage To penetrate the market, the price of the OSB board would start low compared to other premium OSB board, combined with other offers such as 10% discounts on bulk orders. After a certain period, review sales data and determine if the discounts were successful and customer satisfaction with the product. B. Product Adaptation or Modification 1.Core Component OSB board 2.Packaging Component No direct packaging is needed. On each pallet of OSB board, the company logo will be painted on. 3.Support Services Component If problems arrive, lumber yards will be able to call a direct phone line to corporate headquarters, speaking to a real person, to address the issue. C. Promotion Mix 1.Advertising a. Objectives To promote our OSB board efficiently. To satisfy the needs of the customers. To promote an image of our company and product. b. Media Mix To place advertisements in various construction and home improvement magazines to market to the target market.
MKT 432 Lebanon: OSB Board Page 25 of 34 Develop and print informational brochures about our product and company to be placed in lumber yards in Lebanon. c. Message Our product is a high-quality product. d. Costs Print materials Postage Display design 2.Sales Promotion a. Objectives To promote our OSB board efficiently. To satisfy the needs of the customers. To promote an image of our company and product. b. Coupons Offer a 10% off discount to customers ordering $200 USD worth of OSB board c. Costs There is no direct cost to the company while offering a discount. 3.Personal Selling Visit individual lumber yards with a sale pitch explaining why they should sell our OSB board. D. Distribution: From origin to destination 1.Port selection a. Origin Port Port of Saginaw or closest to processing facilities. b. Destination Port Port of Beirut (“Country Trading Profiles”). 2.Mode selection a. Railroads Rail transport in Lebanon is not a good option because of the age and decay of their main rail line. However, to ship the product within the
MKT 432 Lebanon: OSB Board Page 26 of 34 United States to a port for sea transport, railways would be an effective choice. b. Air carriers Air carriers will be the most costly of any transport for OSB boards. Although the shipment would be faster, other types of transport would be more beneficial to both importer and exporter. The most frequent and popular choices for air freight cargo carriers are Trans Mediterranean Airways, Lufthansa, and Air France (“Lebanon Opportunities”). c. Ocean carriers The port of Beirut sees around 55% of all Lebanese imports which makes it the most logical and efficient way to get our product into the country (“Lebanon Opportunities”). The product can be loaded onto cargo ships in local Michigan ports or they can be transported to a larger coastal port like New York or Louisiana for shipment. d. Motor carriers There are only two main highways in Lebanon. One of which runs north- south along the coast and another which runs east, which limits the entry ways into the country (“Country Trading Profiles”). 3.Packing a. Marking and labeling regulations There are no labeling requirements to import OSB board into Lebanon. The only requirements are for pharmaceutical and agricultural goods. b. Containerization Containerization will be decided based upon the types of transport used. Most likely will be shipment by pallets in order to minimize packaging. c. Costs Costs cannot be computed until all aspects are known. 4.Freight Forwarding All required documentation will be specified by the freight forwarding company of choice in order to minimize the risk of not meeting all export/import
MKT 432 Lebanon: OSB Board Page 27 of 34 requirements between the United States and Lebanon. The freight forwarding company will also help provide specific information as to where and how shipping would be the most economical. A freight forwarder will be a best option in order to ensure the company’s first international trade goes smoothly (Kayne). XV. Conclusion Based on the information available, gathered, and analyzed, exporting OSB Board to Beirut, Lebanon would be on a trial basis before deciding whether the export is successful or not. Based on the political relations, exporting costs, uncertainty of profit or loss, and market penetration make a trial basis advantages. After two years of exporting, a re-examination of the data, finances, sales, and politics, a clear answer of whether or not to continue exporting our OSB Board to Lebanon can be answered.
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MKT 432 Lebanon: OSB Board Page 32 of 34 APPENDIX A
MKT 432 Lebanon: OSB Board Page 33 of 34 http://www.timberweb.com/Members/CountryResults/106/1.html
MKT 432 Lebanon: OSB Board Page 34 of 34
http://www.timberweb.com/Members/CountryResults/106/1.html