V. MARKETING U.S. PRODUCTS AND SERVICES DISTRIBUTION AND SALES CHANNELS THE CAPITAL CITY DAKAR IS THE HUB OF ECONOMIC ACTIVITY AND THE LARGEST CONSUMER MARKET IN SENEGAL. ABOUT 38 PCT OF THE POPULATION LIVES IN URBAN AREAS AND 25 PCT IS CONCENTRATED IN DAKAR. DISTRIBUTION OCCURS BOTH BY MODERN AND BY TRADITIONAL SYSTEMS. THE MODERN SECTOR IS DOMINATED BY A FEW LARGE FRENCH-OWNED IMPORT-EXPORT FIRMS (MAISONS DE COMMERCE) THAT COVER ALL ASPECTS OF TRADE FROM IMPORTING TO RETAILING, BUT THEIR NUMBER IS DECREASING. EXISTING ALONGSIDE THESE COMPANIES ARE EXTREMELY COMPETITIVE SMALL-SCALE TRADERS SPECIALIZING IN THE WHOLESALE AND RETAIL DISTRIBUTION OF FABRICS AND CONSUMER GOODS. IN THE PAST, LEBANESE MERCHANTS WERE THE INTERFACE BETWEEN FRENCH TRADING COMPANIES AND THE LOCAL POPULATION. NOW, THEY ARE GRADUALLY BEING REPLACED BY SENEGALESE MERCHANTS SELLING POPULAR CONSUMER GOODS SUCH AS TEXTILES AND ELECTRONICS. A LIMITED NUMBER OF LARGER RETAIL STORES SUCH AS SUPERMARKETS DEAL IN MOSTLY IMPORTED GOODS, BUT THE EFFECTS OF DEVALUATION AND DECLINING PURCHASING POWER ARE THREATENING THEIR EXISTENCE. THE TRADITIONAL OR INFORMAL SECTOR IS IN VIBRANT EXPANSION IN SENEGAL. IT INCLUDES AROUND 30,000 SMALL BUSINESSES EMPLOYING 57,000 PERSONS. A SIZEABLE PORTION OF THE DOMESTIC TRADE IS CARRIED OUT BY INFORMAL TRADERS IN MUNICIPAL AND STREET MARKETS. SANDAGA, A SPRAWLING UNREGULATED MARKET IN THE HEART OF DAKAR, IS THE CAPITAL'S PRINCIPAL DISTRIBUTION CENTER FOR MANUFACTURED GOODS RANGING FROM TEXTILES, FOOTWEAR, AND COSMETICS TO HIGH-TECH STEREO EQUIPMENT. INFORMAL STREET VENDORS MAKE UP A DYNAMIC, IF SOMEWHAT MARGINALIZED, SUB-COMPONENT OF THE INFORMAL SECTOR. THE GOVERNMENT OF SENEGAL PLAYS AN IMPORTANT ROLE IN THE REGULATION OF THE MARKET BY CONTROLLING THE DISTRIBUTION CHANNELS FOR "STRATEGIC" COMMODITIES SUCH AS EDIBLE PEANUT OIL, IMPORTED VEGETABLE OIL, SUGAR AND RICE. THE PARASTATAL SENEGALESE COMPANY FOR SUPPLY AND DISTRIBUTION (SONADIS), CREATED IN 1965, IS THE LARGEST SINGLE RETAIL DISTRIBUTOR OF CONSUMER GOODS IN THE RURAL AREAS, WITH ABOUT 130 STORES THROUGHOUT THE COUNTRY. IT IS INEFFICIENT, IN FINANCIAL TROUBLE, AND CARRIES ONLY A LIMITED RANGE OF INVENTORY. AGENTS AND DISTRIBUTORS THE SPECIFIC TYPE OF REPRESENTATION THAT A U.S. FIRM SHOULD ESTABLISH IN SENEGAL MUST BE TAILORED TO FIT THE INDIVIDUAL REQUIREMENTS OF THE PRODUCT AND ITS POTENTIAL MARKET. U.S. FIRMS MAY EMPLOY THE SERVICES OF AN AGENT, APPOINT A DISTRIBUTOR OR DEALER, AND/OR ESTABLISH A DIRECT SALES BRANCH OR SUBSIDIARY. EACH OF THESE APPROACHES HAS BEEN USED IN SENEGAL BY U.S. FIRMS. U.S. BUSINESSMEN MAY APPROACH THE U.S. EMBASSY IN DAKAR THROUGH THE DEPARTMENT OF COMMERCE AND ITS DISTRICT OFFICES IN THE UNITED STATES TO REQUEST AN AGENT/DISTRIBUTOR SEARCH. FRANCHISING FRANCHISING DOES NOT EXIST IN SENEGAL. DIRECT MARKETING A SMALL NUMBER OF LOCAL FIRMS AND INDIVIDUALS CARRY OUT DIRECT MARKETING (DOOR TO DOOR), BUT THEY ARE GENERALLY SELLING LOW-VALUE CONSUMER PRODUCTS ON LONG-TERM LOANS. THE INCOME PROFILE OF THE POPULATION MAKES TELEPHONE DIRECT MARKETING LARGELY IMPRACTICAL. STEPS TO ESTABLISHING AN OFFICE SENEGALESE BUSINESS LAW PROVIDES FOR SEVERAL KINDS OF COMPANIES: GENERAL PARTNERSHIP, LIMITED LIABILITY COMPANY (LLC), PUBLIC LIMITED COMPANY (PLC) AND JOINT VENTURE. ONCE THE DECISION TO OPEN AN OFFICE IN SENEGAL IS MADE, THE U.S. BUSINESSMAN WILL REQUIRE LEGAL COUNSEL AND A "NOTAIRE" (A NOTARY -- IN FRENCH PRACTICE, A PROFESSION WHICH IS MUCH MORE INFLUENTIAL THAN IN THE UNITED STATES) FOR ALL THE LEGAL FORMALITIES THAT LEAD TO THE CREATION OF THE COMPANY. WELL-QUALIFIED REPRESENTATIVES OF MAJOR U.S. AND INTERNATIONAL AUDITING AND BUSINESS CONSULTING FIRMS ARE LOCATED IN SENEGAL. ADVERTISING AND TRADE PROMOTION ADVERTISING IS AVAILABLE IN SENEGAL IN ALMOST ANY MEDIUM - VIA NEWSPAPERS, MAGAZINES, BILLBOARDS, RADIO AND TELEVISION. SPONSORING A SPORTS TEAM, LOCAL BANDS OR MUSIC STARS IS ANOTHER EFFECTIVE TACTIC. THE ADVICE OF LOCAL MARKET RESEARCH ORGANIZATIONS SHOULD BE SOUGHT BEFORE EMBARKING ON A PUBLICITY CAMPAIGN. ADVERTISING COSTS ON TELEVISION AND ON RADIO ARE RELATIVELY MODEST: A SIXTY-SECOND SPOT ON TELEVISION DURING PEAK HOURS (7:30 PM-9:30 PM) COSTS CFAF 498,000 (APPROX USD 860). THERE ARE HALF A DOZEN NEWSPAPERS PUBLISHED REGULARLY IN SENEGAL, BUT THE READING PUBLIC IS RELATIVELY LIMITED AND CONFINED TO DAKAR. THE QUASI-OFFICIAL LE SOLEIL (50,000 CIRCULATION) IS A DAILY. THE MAJOR POPULAR INDEPENDENT NEWSPAPERS INCLUDE SUD QUOTIDIEN (20,000 TO 40,000 DAILY CIRCULATION), WALF FADJRI (15,000 DAILY), THE SATIRICAL CAFARD LIBERE (12,000 WEEKLY) AND LE TEMOIN (7,000 WEEKLY). VARIOUS TRADE ORGANIZATIONS PUBLISH BULLETINS AND NEWSLETTERS SUCH AS THAT OF THE DAKAR CHAMBER OF COMMERCE, "CICES-INFO" FROM THE SENEGALESE TRADE CENTER AND THE PERIODICAL "ENTREPRENDRE" ISSUED BY THE NATIONAL COUNCIL OF BUSINESS LEADERS. SEVERAL EUROPE-BASED MAGAZINES ENJOY A WIDE CIRCULATION, INCLUDING JEUNE AFRIQUE, PARIS MATCH, L'EXPRESS, LE POINT, L'EVENEMENT DU JEUDI, AS WELL AS THE EUROPEAN EDITIONS OF TIME MAGAZINE AND NEWSWEEK. NATIONAL NEWSPAPERS ARE IN FRENCH WITH A WEEKLY INSERT IN ETHNIC LANGUAGES. ADDITIONAL INFORMATION ABOUT NEWSPAPERS IN CIRCULATION CAN BE OBTAINED FROM: SYNDICAT DES PROFESSIONNELS DE L'INFORMATION ET DE LA COMMUNICATION 20, RUE MOHAMED V BP 21722 DAKAR FAX: (221) 22-17-61 PRICING THERE ARE THREE TYPES OF PRICES IN SENEGAL: ADMINISTERED, AUTHORIZED AND FREE. IN GENERAL, THE GOVERNMENT ESTABLISHES "ADMINISTERED" PRICES BY DECREE. THEY APPLY TO GOODS OF PRIMARY INTEREST TO THE AGRICULTURAL SECTOR AND TO GOODS PRODUCED BY LICENSED MONOPOLIES OR NEAR MONOPOLIES. THE CURRENT LIST INCLUDES RICE, VEGETABLE OIL, TOMATO PASTE AND SUGAR. "AUTHORIZED PRICES" (PRIX HOMOLOGUES) ARE REQUIRED FOR OTHER COMMON COMMODITIES AND PRODUCTS WHICH ARE IMPORTANT IN HOUSEHOLD BUDGETS (SUCH AS BREAD AND MILK). INDUSTRIAL PRODUCERS MUST JUSTIFY THEIR PRICING TO THE GOVERNMENT BASED UPON THEIR COST STRUCTURE FOR THESE PRODUCTS. OTHER PRICES ARE FREE, DETERMINED ACCORDING TO SUPPLY AND DEMAND. GOVERNMENT PROCUREMENT GOVERNMENT PURCHASING IS A SIGNIFICANT FACTOR IN SENEGAL. NEARLY ALL SUCH PURCHASING IS DONE THROUGH COMPETITIVE BIDDING. THIS INCLUDES MAJOR INFRASTRUCTURE PROJECTS FINANCED BY INTERNATIONAL LENDING ORGANIZATIONS SUCH AS THE WORLD BANK AND THE AFRICAN DEVELOPMENT BANK (ADB). PROSPECTIVE BIDDERS MAY LEARN OF UPCOMING WORLD BANK PROJECTS BY SUBSCRIBING TO THE WORLD BANK'S MONTHLY OPERATIONAL SUMMARY. DESCRIPTIONS OF NEWLY APPROVED ADB PROJECTS IS ALSO AVAILABLE ON A SUBSCRIPTION BASIS. FOR FURTHER INFORMATION ON ADB PROJECTS, U.S. COMPANIES MAY CONTACT MS. BARBARA WHITE, PROJECT MANAGER AFDB, OFFICE OF FINANCE, U.S. DEPARTMENT OF COMMERCE, ROOM H-2015B, WASHINGTON, D.C. 20230. PARASTATALS ARE ALSO GREAT PURCHASERS OF EQUIPMENT AND SUPPLIES. REQUESTS FOR BIDS ARE PUBLISHED IN THE LOCAL NEWSPAPERS. THE U.S. EMBASSY IN DAKAR MONITORS REQUESTS FOR TENDER AND REPORTS TO THE U.S. DEPARTMENT OF COMMERCE THOSE WHICH MAY BE OF INTEREST TO U.S. SUPPLIERS. THE BID SPECIFICATIONS ARE IN FRENCH AND BIDDERS ARE REQUIRED TO SUBMIT PROPOSALS IN FRENCH. U.S. FIRMS CAN BID WITH THE ASSISTANCE OF A LOCAL AGENT IN ORDER TO COMPLY WITH THE RULES AND PROCEDURES ANNOUNCED BY PARASTATALS. THE OFFICIAL TENDERS COMMISSION ("COMMISSION DES MARCHES") IS AN INTERMINISTERIAL WATCHDOG FOR ALL GOVERNMENT AND PARASTATAL INVITATIONS TO BID.