V. MARKETING U.S. PRODUCTS AND SERVICES Distribution and Sales Channels ------------------------------- The United States is Jamaica's primary trading partner. Distribution sales of imported merchandise in Jamaica are done principally through importers, distributors, and agent representatives. In addition, a large share of materials and supplies including machinery and equipment is imported directly by end-user firms. It is essential to maintain close contact with end-users and provide excellent quality, after-sales service, and competitive prices. Use of Agents/Distributors: Finding a Partner --------------------------------------------- There are no specific laws in Jamaica which dictate contract terms doe agent/distributors. The parties involved formulate their own terms and conditions of agreement with or without the assistance of an attorney. However, irrespective of the terms of contract, every agent/distributor is required to observe the Fair Competition Act (FCA). The FCA, passed in September 1993, was designed to have the effect of invalidating contract clauses designed to restrict competition. Once an agreement is reached and signed, it becomes a legally binding document, breaches of which may be contestable in a court of law (generally in the country where the agreement was signed, or as per the contract agreement). Requests for agents/distributors can be made through the district office of the Department of Commerce. To find a business partner, it is advisable to go through the local government investment agency, Jamaica Promotions Corporation (JAMPRO), or the American Chamber of Commerce of Jamaica. Franchising ----------- Franchising ventures have been moderately successful in certain service-oriented sectors such as hotels and fast food. JAMPRO should be the first point of contact for assistance in terms of registration, trademark, and other requirements. Direct Marketing ---------------- Liberalization of exchange controls and further easing of licensing and price controls over the last two years have made the Jamaican market much more approachable for U.S. exporters. However, it should be noted that the market is fairly small, with a population of only 2.4 million, weak purchasing power, and wide income disparity. Market statistics are often not easily available; hence, special surveys must be conducted to obtain information. Personal contacts are very important in the development of a close working relationship between the Jamaican sales representative and the U.S. exporter. Joint Ventures/Licensing ------------------------ Nonresident partners, including corporate partners, are subject to Jamaican tax on their share of the partnership profits that accrue in or are derived from Jamaica. Nonresident foreign corporations pay tax on their share of profits at the same rates as resident corporations. Double taxation relief is available under the Convention for the Avoidance of Double Taxation which entered into force in December 1991. Steps to Establishing an Office ------------------------------- JAMPRO is responsible for facilitating the establishment of businesses in both the productive and service sectors of the Jamaican economy. A potential investor should present the project proposal to JAMPRO for assessment and guidance. The information should include costings, financial projections, and production levels. Registration or incorporation of the business (e.g. sole proprietorship, partnership or company limited by shares) should be made with the Registrar of Companies. JAMPRO will assist with obtaining applications to the income tax department (for an income tax number) and for a business/trade number, to the trade board for import licences, identification of business location (factory space or land), applications for concessions under incentive legislation, applications to the revenue board for a Business Enterprise Number (BENO), work permits for nonresident personnel, and registration under the consumption duty and/or excise duty acts. To form a private limited liability company, there must be at least two and a maximum of twenty shareholders. There are no restrictions regarding the nationality of the subscribers. Two legal documents must be prepared in order to complete incorporation of a company in Jamaica: a memorandum of association and articles of association. Selling Factors/Techniques -------------------------- Setting up local representatives for government purchases of a particular product line could boost business opportunities. Advertising and Trade Promotion ------------------------------- Advertising is primarily done through radio, television, the press and billboards. There are a number of advertising agencies with national coverage. Radio is the most wide- reaching mass communication with seven authorized radio stations. The two local TV networks are the government-owned Jamaica Broadcasting Commission (JBC) and the private Communication Videomax Mediamix (CVM). Jamaica is contemplating the implementation of cable television. Jamaica has two morning dailies and one afternoon tabloid. There are several weekly and bi-weekly periodicals and magazines. Some of the major newspapers and business periodicals are: The Gleaner Newspaper 7 North St. Kingston Tel: (809) 922-3400 The Jamaica Herald Newspaper 29 Molynes Rd. Kingston 10 Tel: (809) 968-7721 The Jamaica Observer Newspaper 2 Fagan Ave. Kingston 8 Tel: (809) 969-6245 The Star Newspaper 7 North St. Kingston Tel: (809) 922-3400 The Money Index Magazine The Chisolm Building 4-6 Caledonia Crescent Kingston 5 Tel: (809) 968-1279 Fax: (809) 929-4467 Investor's Choice Magazine 12 Merrick Ave. Kingston 10 Tel: (809) 929-2993 Trade missions and catalogue shows are excellent means of assisting U.S. suppliers in selling their products. Pricing Product --------------- Prices are freely determined by the market forces of demand and supply for all products and services except domestic kerosene and bus fares. Prices for these items can be changed only after ministerial approval. Sales Service/Customer Support ------------------------------ After-sales service is an important competitive advantage in the Jamaican market. If it is difficult/not feasable for the U.S. firm to set up its own distribution system, a local agent or distributor should be required to maintain a trained service staff with a reasonable stock of spare parts. Alternatively, the supplier could offer the customer quick service from the United States. Selling to the Government ------------------------- Government procurement is generally effected through open tenders, direct advertising, or by invitation to registered suppliers. U.S. firms are eligible to bid. The range of manufactured goods produced locally is relatively small, so instances of foreign goods competing with domestic manufactures are very limited. Companies interested in supplying office supplies to the government must register with the central supply secretariat, a unit of the inspectorate division of the Ministry of Finance. Companies interested in supplying other kinds of equipment or materials should contact: the National Water Commission (water), Jamaica Public Service (electricity), the Jamaica Commodity Trading Company (for the purchase of certain basic food items and fertilizer under concessionary loan programs), and the pharmaceutical division of the Ministry of Health (medicines and medical supplies). Protecting Your Product from IPR Infringement --------------------------------------------- The Jamaican Constitution recognizes property rights. There are laws to protect property rights, including intellectual property. In order to obtain patent rights, the individual will have to apply to the Ministry of Industry, Commerce, and Tourism. Trademark rights are granted by the Registrar of Companies. Copyright is monitored and administered by the Prime Minister's office. Need for a Local Attorney ------------------------- It is advisable to retain professional advice at an early stage of a business venture to ensure smooth start-up and compliance with local laws. The Jamaica Bar Association has a membership of over 550 attorneys. The association is located at 78-80 Harbour St, Kingston (phone: 809-922-2319). A list of members can be obtained from the association.