V. MARKETING U.S. PRODUCTS AND SERVICES MARKET STRUCTURE Although some 200 U.S. companies have sales subsidiaries in Norway, the most common way of doing business is through agent/distributors. More than 2,700 American companies are represented by Norwegian agent/distributors with a unique but very practical and necessary sales network. Three quarters of Norway's 4.25 million people reside in southern Norway, and most of the major importers and distributors are headquartered in the Oslo region, some have sub-agents or sales offices established in major Norwegian cities. The rest of the country is made up of widely dispersed, small population centers which are costly to serve due to long distances and high freight expenses. As there are few countrywide, multistore chains and most retailers and distributors are small by American standards, sub-agents and secondary distribution is the standard and workable method of handling Norway's scattered northern markets. With proper market promotion and support, a good local business partner and/or an astute local office, American companies have unusually good prospects in this small but affluent market. Moreover, with the EEA and the possibility of Norway becoming a full EU member, U.S. companies may find some licensing, joint- venture agreements and full Norwegian subsidiaries to be excellent vehicles for tapping upscale markets beyond Norway (e.g. Scandinavia). LANGUAGE Another factor making it easy for Americans to do business in Norway is that most, if not virtually all Norwegians speak excellent English or "American." Moreover, American culture, including movies and T.V. series, is familiar to most Norwegians. ESTABLISHING A SALES SUBSIDARY There are few restrictions in establishing a subsidiary or a branch operation in Norway. A subsidiary may be wholly owned and a branch may conduct full business transactions. A company must have NOK 50,000 as a minimum capital, and at least 50 percent of the board of directors must be Norwegian nationals or have lived in Norway for the last two years. Both companies and branches are subject to income and capital tax. Norway has a highly educated labor force and labor costs are among the highest in the world. In general, labor costs (including social benefits) as a percentage of total production is far more in Norway than those of its foreign competitors. ADVERTISING - RADIO/TV All major types of advertising media are available in Norway. With the exception of the state controlled Norwegian Broadcasting Corporation (NRK)'s TV and radio stations, advertising on radio and television is now been fully developed and a number of nation wide and local commercial radio stations are competing in a growing market. City stations that broadcast during morning and evening commuter times are the best advertising vehicles. Norwegian television audience can now be reached via several commercial TV stations. TV 2 is a relatively new national station with excellent coverage; one Swedish tuned commercial channel, TV3 and Norwegian based TV Norge are additional popular advertising possibilities. A minute of prime time on TV Norge costs about 30.000 NOK. Key Norwegian decision makers can also be reached via CNN which is available in all major population centers. PUBLICATIONS Norway has an extremely high rate of newspaper readership, and circulation figures are audited by the newspaper publishers' association. Extensive demographic information concerning readership is available. Districtions are drawn between the four major metropolitan areas and other, so-called trade districts, which number about 100. Leading Oslo papers include Aftenposten (circ. 250,000), Dagbladet (circ 220,000), and Verdens Gang (circ 410,000). While these papers are available over the entire country, local papers like Bergens Tidende (Bergen), Adresseavisen (Trondheim), Stavanger Aftenblad (Stavanger) dominate their local areas. The business daily Dagens Naeringsliv (circ 60,000) is Norway's fastest growing newspaper and can claim to reach business and professional people nationwide. Advertising costs in newspapers vary. One half page in Aftenposten's business pages costs 92.200 NOK, or about USD 12,667. Major Norwegian business newspapers include: Dagens Naeringsliv Aftenposten Grev Wedels Plass 9 Akersgaten 41 P.O.Box 1182 Sentrum P.O.Box 1178 Sentrum 0107 Oslo, Norway 0107 Oslo, Norway Tel: 011 (47) 22 00 10 00 Tel: 011 (47) 22 86 30 00 Fax: 011 (47) 22 00 10 60 Fax: 011 (47) 22 42 63 25 MARKET RESEARCH There are several Norwegian market research firms serving international clients. Some of the major firms are: Nilsen Norge A/S Markeds & Mediainstituttet (MMI) Kjelsasveien 160 P.O.Box 9143 Gronland 0411 Oslo, Norway 0133 Oslo, Norway Tel: 011 (47) 22 95 09 20 Tel: 011 (47) 22 95 47 00 Fax: 011 (47) 22 95 07 29 Fax: 011 (47) 22 17 12 81 Carelius & Co. A/S Feedback Research Sorkedalsveien 6 Raadhusgaten 7 B 0369 Oslo, Norway 0151 Oslo, Norway Tel: 011 (47) 22 69 32 70 Tel: 011 (47) 22 42 67 00 Fax: 011 (47) 22 60 66 26 Fax: 011 (47) 22 33 61 66 Country Commercial Banks: Two U.S. banks have full service subsidiaries in Norway. They are Chemical Bank and Citibank. The addresses are: Chemical Bank Norge Citibank Karl Johansgate 41 B Tordenskioldsgate 8-10 0162 Oslo, Norway 0116 Oslo, Norway Tel. 011-47-22-941-919 Tel. 011-47-22-426-720 Fax. 011-47-22-425-861 Fax. 011-47-22-436-796 Norwegian international banks all have correspondent relationships with U.S. banks, and the major banks are: Den norske Bank Kreditkassen P.O.Box 1171 Sentrum Middelthunsgate 17 0107 Oslo, Norway 0368 Oslo, Norway Tel: 011 (47) 22 48 10 50 Tel: 011 (47) 22 48 50 00