STAGE ONE: Country Facts and Statistics

Geographic:

Country Name: Kenya
Climate/Weather Conditions:
> Varies from region to region
- along the coast: tropical, humid
- along inland: dry heat
- plateau and mountains: cool
> Mean temperature in Nairobi: 19ºC

Demographic:

Population of Kenya: 39, 002, 772
Population of Canada: 33, 850, 066
*Growth Rate (Kenya): 2.7%

Life Expectancy:
Male: 57.5 years
Female: 58.24 years

Literacy Rate:
Total Population: 85.1%
Males: 90.6%
Females: 79.7%

Ethnic Groups:
Kikuyu: 22%, Luhya: 14%, Luo: 13%, Kalenjin: 12%, Kambia: 11%, Kisii: 6%,
Meru: 6%, Other African: 15%, Non-African (e.g. Asian, European, Arab): 1%

Religious Groups:
Protestant: 45%, Roman Catholic: 33%, Muslim: 10%, Indigenous Beliefs: 10%,
Other: 2%

Languages Spoken:
Official: English, Kiswahili (also known as Swahili)
(many local languages spoken)

Economic:

Currency: Kenyan shillings (KES)
(1 Canadian dollar = 69.8 Kenyan shillings)
GDP per capita: $1600
Unemployment Rate: 40%
Average Wage: $400/year

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STAGE TWO: Political Profile

Government:

Government Type: Democratic republic
Head of state:
(elected December 27, 2007)
President: Mwai Kibaki
Vice-President: Kalonzo Musyoka
Prime Minister: Raila Odinga
Date of next national election: At the end of 2012

Country’s views on trade:
> Exports: Agriculture
> Imports: Capital goods
> Commercial Services Exports: $2520 million US
> Commercial Services Imports: $1663 million US
> Number One Trading Partner (importing and exporting): European Union

Tariffs, quotas, embargoes:
> Has eliminated its quantitative restrictions and price controls
> Recently rationalized tariff structure with varying rates (except for timber and fish)

Political issues:

Since independence, Kenya has maintained stability despite changes in its political system and crises in neighboring countries. Particularly since the re-emergence of a multiparty democracy, Kenyans have enjoyed an increased degree of freedom.

Corruption:
> Ranked 147 out of 180 countries for corruption on the Corruption Perceptions Index (2008) where 180 is the most corrupt
> Long history of government corruption

Military role:
> Army, navy, air force
> Main mission: to defend the country’s borders in some of the more unstable regions
> Regularly deployed in peace keeping missions around the world (praised for its professionalism)

Political issues affecting business climate:
> Poor leadership due to corruption

Human Rights:

>Better than that in most of Africa
> Reduced the use of the legal system to harass government critics

Child Labour:
> Many children who work on coffee plantations and on the streets
> The Solidarity Center (in partnership with the Kenya Plantations and Agricultural Workers Union)
- Work to return child labourers to school
- Raise money to assist families with school fees

Gender Issues:
> Male-dominant country
> Some members of parliament are women
> 40% of the urban workforce is women
> Women are generally confined to low paying/low status jobs

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STAGE THREE: Company/ Product – Current Status

Name: IMAX Corporation
Headquarters: New York and Mississauga
Locations:
> Currently over 400 IMAX theatres in 44 countries around the world (e.g. India, China, Spain, Bulgaria, Philippines, France)
> Approx. one billion people world wide have experienced IMAX

Corporate Structure:
> Board of Directors
> Management team
> Shares in Toronto and Nasdaq Stock Exchanges

Product Lines:
> Specialize in motion picture technology
> Innovators of large screens and 3-D imaging
> Used for both commercial and educational purposes

Export Experience:
> June 2009 - successful partnership with one of China’s largest privately owned media group to release mainstream Chinese films in IMAX theatres to increase IMAX’s Chinese market

STAGE FOUR: Marketing Your Product in Your Country

Culture Analysis:
Kenya’s strong support for the arts is an advantage for IMAX Corp. to open a new theatre in Nairobi. Since it is mostly the upper class who lives in Nairobi and who have adapted a more western lifestyle, they will be more receptive to a high-tech business, as well as be able to afford to see the movies.

Language:

> One of the official languages in Kenya is English
(reducing language barriers when expanding IMAX Corp.)
> Almost all of the Kenyan market can speak English and Kiswahili therefore almost entire market can understand the films

Communication:

> Must be very polite and try to avoid embarrassing the other person
> Metaphors, analogies, and stories are often used to make a point since blunt statements are not accepted easily
> The use of the left hand is usually frowned upon (all exchange must be done using both hands or just the right hand)
> The polite nature of the society creates a better environment for opening a service business in the country

Gift Giving Etiquette:

> Practical gifts are often preferred over luxury items
- should be nicely wrapped
- must be presented with right or both hands
> Traditional to give a small gift to servants, trades people, and service workers around Christmas time as a token of appreciation

Dining Etiquette:

> Very formal
> Honoured guest is usually served first, followed by men, children, and women
> Eating does not begin until the eldest male has started their meal
> Beverages are uncommon during a meal
- considered impolite to eat and drink at the same time
- usually served afterwards

Business Customs:

Greeting:
> Hand shake upon meeting and departing
> Polite to ask about health and family of the other person upon meeting
> Address people with their academic, professional, or honourable title before their name
> Offering of food or tea upon entrance (rude to decline these offers)
> Natural touch is often done and accepted

Attire:
> Conservative (more so along coast where majority of population are Muslim)
> Inappropriate attire is not discussed (Kenyans are too polite to confront someone about it)
> Men: Shirt with long pants, often worn with a blazer or sweater
> Women: Shirt with long pants or skirts below the knee

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STAGE FIVE: International Marketing Plan

Fulfilling needs and wants:

> Increase standard of living due to increase in luxury services
> Better screening technology
> Imports western culture
> A new form of art, culture, and entertainment
> Provides new jobs (for the building, operation, and maintenance of the theatre)

Purchases in response to geography:

> Will be opened in an urban setting, like Nairobi
> Only 22% of Kenya is urbanized
> Individuals living in cities are:
- upper class (can afford the tickets)
- more willing to adapt to western culture
> Still trying to expand and improve city infrastructure

IMAX & Kenyan traditions, habits, and beliefs:

> Regulations in Kenya allow for the government to ban screening of films that do not coincide with the country’s moral values
> Theatre and storytelling is commonly used as a form of social education
- Film will be a new medium to use to convey these messages
> Very conservative country
- Smaller selection of films that will be accepted and screened

What makes IMAX unique to the Kenyan market:

> Innovators of imaging technology
> No other theatres of this degree

Competitors:

> Some other theatres in the urban areas of Kenya
- Most are in Nairobi and Mombasa
- They also play mainstream American movies

Competitive advantages:

> Most immersive cinematic experience
- other companies would find it too financially demanding to replicate
- cannot be replicated at home
> Globally well respected
> Constantly innovating their technology
> Regular movie viewing or three dimensional films
> Helps increase revenue for movies because of high-quality experience

Pricing:

Can consumers afford the product:
> High unemployment rates, low GDP per capita, low annual income means that consumers are less inclined to purchase expensive luxury items (like tickets to an IMAX show)
- instead will use that money for necessities or purchase tickets to regular movies

Factors for setting prices:
> What the competitors’ prices are
- IMAX films are generally more expensive than regular films, however, cannot be priced too much higher than a regular movie ticket
> What will be the projected sales and expenses
- pricing should be based upon how much revenue is needed to maintain a net income

Are sales sensitive to price changes:
> The higher the prices, the fewer people who will purchase a ticket to see and IMAX theatre
- this is a specialty, luxury service, therefore, is not necessary during the daily routines however, it is unique and may only earn revenue once in a while (similar to specialty shoes)

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STAGE SIX: Recommendations and Conclusions

Based on the collective research about Kenyan culture and society and the corporate identity of IMAX, it is suggested that IMAX theatres should not export their product and services to the country of Kenya. Though the venture may achieve short term success, the cultural and political barriers make sustaining an IMAX theatre in Kenya more difficult.

Making the Deal:
The language barrier, usually existing during international business negotiations, is reduced when doing business in Kenya because majority of the population speak English. Therefore, an Anglophone IMAX representative can easily communicate with Kenyan entrepreneurs to settle a deal without an intermediary (i.e. a translator) and the risk of translation miscommunications. However, the polite nature of Kenya, though appearing to be a positive business environment, makes it hard for agreements between Kenya and IMAX, a non-conservative corporation. Finally, the corruption in business leaders and governments in Kenya will require more efforts to ensure that profits return to IMAX Corp. instead of personal accounts.

Introduction and Marketing:
The high literacy rate and common language in Kenya works as an advantage when selecting films to be played in the IMAX theatre in Kenya because majority of the target market will be able to understand the films. This increases the possible consumer market in Kenya, an important factor to maximize profits since only twenty-two percent of the country is urbanized. The introduction of an IMAX theatre to the country would attract many customers because it is a new form of entertainment and an innovation upon film media. IMAX has the competitive advantage in Kenya due to its capital and quality. The lure of a high-tech industry in a society open to adapting western culture would increase the overall profits of IMAX Corp., thus increasing its stock value. However, as time progresses, customers will be hard to sustain. IMAX films require better technology which increases operational costs, therefore, like in all other countries, the price of one IMAX ticket is greater than that of a regular movie. After the initial experience of an IMAX screening, few customers will be willing and able to pay extra to repeatedly attend shows and market share will go to IMAX’s competitors in Kenya.

In conclusion, it is not recommended that IMAX Corp. expands into Kenya because the country’s cash flow is not evenly distributed therefore the target market does not have a high discretionary income to dispose of on a luxury service such as IMAX. Perhaps in the future, as the infrastructure and society develops in Kenya, an emerging economy, IMAX will be able to reevaluate expanding to this country.

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