Category Archives: Marketing

Art In Embassies

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… and now for something different – though there is a business angle, of course. For a half century, American Embassies overseas have displayed works by U.S. artists to the cognoscenti – and art buyers – of the world. The result of brainstorming at the Museum of Modern Art beginning in 1953, it took a decade to sell the idea to the State Department. An early example of a public/private partnership, the Art In Embassies (AIE) program was officially inaugurated by President Kennedy in 1963. The basic idea was to take the often drab spaces in American embassies and ambassadors’ residences that are seen by the foreign public and turn them into showcases for American artists. It seemed a good idea to use art as a “soft” form of U.S. diplomacy, proving to the world that there is a bit more to American culture than hamburgers and popular music. Simply displaying art soon expanded to arranging for traveling exhibitions of American art around the world.

Today, AIE is a public-private partnership engaging over 20,000 participants globally, including artists, museums, galleries, universities, and private collectors, and encompasses over 200 venues in 189 countries. Professional curators and registrars create and ship about 60 exhibitions per year, and since 2003, over 58 permanent collections have been installed in … diplomatic facilities throughout the world.

The Propitious Garden of Plane Image, First Version (2000-2005) by Bruce Marden, shown at the Tate Gallery, London, through the Art In Embassies program

Though the formal program had not yet been established, a trial exhibition was organized in 1953 in the ambassador’s residence in Oslo by the Museum of Modern Art. By 1959, MoMA was regularly loaning works to the Department of State and momentum for a formal program was growing, led by the likes of Jacqueline Kennedy, Douglas Dillon and William Fulbright. By 1960, MoMA had dragooned more than fifty other U.S. museums into the program and formal art exhibitions were organized in sixteen world capitols. The first was in Bonn and featured works by Jackson Pollack, Edward Hopper and Alexander Calder. The program has proven incredibly popular for U.S. artists and museums, and by the foreign viewing public. It has expanded to a continuing series of exhibitions, commissions for artists to decorate embassies and consulates, even travel abroad for more than 100 U.S. artists. The program has branched out to organize exhibitions of American art at foreign art museums.

Displaying art in American embassies is not just about showing off U.S. culture, or making embassies more pleasant places to work, though it accomplishes both those things. It is also about bringing U.S. artists to the attention of potential buyers who can afford good art, expanding the possible markets for U.S. artists. Yes, artists can sell through galleries – and there are even art trade shows (the European Fine Arts Fair in Maastricht come to mind), but the fact that a foreign buyer has seen an artist’s work in the diningroom of the American ambassador brings that artist forcibly to mind. The embassies do not sell their art, but they provide some very classy advertising for U.S. artists. As a commercial officer, I well recall conversations about American art and artists with Austrian industrialists or with the prime minister of Singapore occasioned by an artist’s display at a diplomatic function. This may be “soft diplomacy”, but it is also “soft marketing”. They work well together.

Best Ways To Find U.S. Suppliers

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I posted yesterday about how businesspeople overseas can find good suppliers from the United States. This comes from a webinar I recently did, in which other presenters covered finding suppliers at trade shows or using Commercial News USA. I love trade shows and definitely include them among my favorite ways to find American business partners.

Today, I look at using American Chambers of Commerce and American Embassies to find U.S. partners. American Chambers (colloquially known as AmChams) are found in more than 100 countries. Many people assume, because this is the way it works in their countries, that AmChams are somehow connected with the U.S. Government. No way! AmChams are private sector, non-profit organizations loosely affiliated with the U.S. Chamber of Commerce. The U.S. Chamber is located in Washington, DC so that it can lobby the U.S. Government, the White House and the Congress. That means the U.S. Chamber often disagrees with the U.S. Government, so don’t assume that an AmCham is a shill for U.S. policy.

At the same time, don’t assume that every AmCham overseas is going to help you find U.S. suppliers of the goods or services you are looking for. Some AmChams are well financed with professional staff, others are small – dependent on volunteers who have day jobs they get paid for. If an AmCham has a member who has the product you seek, they will probably direct you to that member. AmChams exist to help their members, so they may not help you find a company that competes with a member. They may be eager to help you if they think that could lead to winning a new member. The bottom line is that you should talk to your local AmCham. They may help or they may not. They are different everywhere.

American embassies or consulates can be your most powerful ally if you are looking for U.S. suppliers. After all, part of their mission is to do whatever they can to boost American exports, so you might as well take advantage of that. When you contact a U.S. embassy or consulate, ask for the commercial section. Or ask for the agricultural section if you are looking for agricultural or food products. Most U.S. embassies have one or both of these sections. They also have an economics section that may be able to help you in the absence of a commercial or agricultural section.

Friendly commercial section in Singapore

Commercial sections are staffed by specialists, both American and from the host country, who know how to locate U.S. suppliers. Same for the agricultural sections. They don’t charge you anything for their help, and it can impress a marketing manager back in America if they hear from an American embassy about their product. In larger embassies, there may even be somebody who specializes in your industry and knows the U.S. companies personally. They may well know when visitors from these companies are coming to your country, or which firms will exhibit at an upcoming trade show. They can help you if you decide to travel to the United States to visit a trade show or see a company. While they cannot issue you a U.S. visa themselves, they may be helpful if you need to talk to the consular section about a visa.

If the commercial section can’t find a quick answer for you, they are in touch with a network of 109 offices in the United States and can alert them that you are looking for a particular product. Those offices, like the commercial section, are part of the U.S. Department of Commerce and they have incredible contacts in their communities. If you only use one method to find American suppliers, my strong advice is to use the commercial or agricultural sections at your American embassy.

Finding U.S. Suppliers

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Having a ball at trade shows

I made a webinar presentation a couple weeks back in which I spoke about how to find good U.S. suppliers if you are outside the United States. The speakers before me addressed publications like Commercial News USA and also using trade shows, both international and in the United States, so I avoided going over the same ground. For the record, I think CNUSA is great because you know that these are companies that are actively interested in finding overseas customers, agents or distributors – so they are very likely to respond if you get in touch with them. And I love trade shows, which are fantastic sources for finding suppliers, seeing what your competition is up to, getting new ideas, and meeting new business partners.

So I talked about other ways to find U.S. suppliers, starting with the sources I like least and saving the best for last. I don’t know about you, but when I am looking for information, the first thing I usually do is google it. (Nothing against other search engines, but there is a reason Google has become a verb.) Two problems with Google. Everything depends on how you structure your search. If you ask for the right thing, you get good results. If you don’t, you don’t. This can be compounded if you have to search in English and American English isn’t your native tongue. And then there is the quality of the results. How do you tell which ones are really good? If you are looking for a generic product to represent, you may find less-than-desirable middlemen who have paid to get their sites near the top of the search findings. Things are easier if you want a specific brand; just go to the website for that brand. So, use Google and its competitors, but be conscious of their limitations.

Then there are the portals and the B2B websites. Remember when we had high hopes for this sort of site? Maybe my experience is unusual, but I have never seen real business done through one of these sites. When you let people know you have product, suddenly everybody wants to represent you. If you let word spread that you are looking for a product, suddenly everybody claims to have it at the best price. I went on one of these sites recently and found people trying to sell me an iron ore mine in Brazil or a titanium mine in Peru. Another wanted agents in Spain, Brazil, the UK and Russia, but never said what for. Sometimes, things just don’t smell right. Your mileage may vary, but be careful out there, folks.

A recent phenomenon is the rise of “Buy U.S.A.” websites. These are sites aimed at American consumers who, for their own reasons, want to confine their purchases as much as possible to American products. You can easily recognize the sites because they usually have U.S. flags, bald eagles and U.S. maps prominently displayed. They seem to pop up in the aftermath of a recession when people are in a protectionist mood, and they are exacerbated because this is an election year. You might get some ideas for products, but I would go directly to the manufacture to talk business.

Now we get to what I regard as serious tools for finding U.S. suppliers. The old standby is the venerable Thomas Register, first published in 1898. The modern version is www.thomasnet.com. You can find just about any industrial product made in the United States through Thomas. You may not find all the consumer goods you want. Nor will you find agricultural and food products. But you will, for instance, find everything that a farmer or a food product manufacturer needs to do their business. The downside of Thomas is that you don’t know if the companies are interested in exporting, so you still have to make the cold call and find out. That said, I love the Thomas Register.

Industry associations and the specialized trade press should not be overlooked. There are many association directories online and I can’t recommend one above the others. There are more associations than you can imagine and each one works differently. The one thing they are likely to have in common is that they all want to help their members make sales. So, if you are looking for popcorn, there may not be a better source than the American Popcorn Board. There is probably an industry association or trade publication in any industry you can imagine.

Come back tomorrow when I’ll get to two of my favorites for finding U.S. suppliers.

Hawaii’s Asian Markets For Tourism

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Hawaii has a great brand in Japan and ranks #3 for Japanese leisure travelers, eclipsing a whole bunch of Asian destinations that are a lot closer and lot less expensive. Japan remains a great market for Hawaii tourism, but it is a mature market. The Hawaii Tourism Authority (HTA) and others in the visitor industry will point to a rebound from Japan’s disasters of a year ago and say that all is well. The fact remains that Hawaii’s visitor count from Japan has been stagnant or even down a little since 2007, at roughly 1.2 million visitors a year. Nothing to sniff at – and not a market to ignore – but it isn’t going to grow a whole lot. The Japanese population is aging, less likely to look for active vacations with every year that passes.

This, of course, is not what HTA’s Japan contractor told his audience at the spring market meeting in Honolulu last week. Tourism marketing people are professional optimists after all. Hawaii is a wonderful brand in Japan and, with good marketing, this is a cow that can be milked for years to come. But, like an aging cow, there is likely to be less milk as the years go by. It’s a good thing that Korea and China seemed lined up right behind.

The Japan presentation at the HTA meeting did hold some interesting datapoints. One that caught my eye is the growth in independent travelers. 21.6% of our Japanese visitors are doing the trip on their own, rather than as part of a tour. This reflects both a maturing travel market and the huge number of repeat visitors who are more confident about their ability to navigate Hawaii and know what they want when they are here. It also reflects an increasing tendency by Japanese visitors to visit the neighbor islands, not just the beaches and shops of Waikiki.

HTA is gearing up its operations in China and South Korea, responding to nascent demand and to improving visa availability. Korea, of course, saw a surge of travelers headed for Hawaii’s beaches after the country was granted U.S. visa waiver status. That surge is still running, prompting a 90% increase in seating capacity from Seoul to Honolulu in 2011. Korean visitors to Hawaii nearly doubled between 2009 and 2011, growing to nearly 101,000 last year. Both Hawaiian Airlines and Asiana entered the direct flight market early in 2011. Typical for a new and developing market, Korean visitors focused on Oahu with more than 92% bound for Waikiki. That said, Koreans are showing more independence than our early Japanese visitors; nearly 30% also visited Maui. Not surprisingly, roughly 82% are first-time visitors.

Will they get visas?

The advent of charter flights by China Eastern Airlines, more expeditious handling of tourist visas by the American consulate in Shanghai and cooperation from major Chinese booking partners led to a 29.4% increase in the number of Chinese visitors in 2011. That made the total slightly less than 80,000, but the trend is good and growth to Hawaii exceeded the percentage growth in China’s total outbound travel. Like Korea, the Chinese traveler is heavily skewed towards first-timers (83%). They are also Hawaii’s big spenders, taking an average of $382/day out of their purses and wallets during the few days they are here. I am encouraged that HTA is doing a nine-city road show to eastern Chinese cities that they haven’t covered before. As positive as things look, however, there are difficulties.

HTA’s presenters mentioned that visa availability in China has improved, though it was curious that they heap all the praise on President Obama’s January 2012 speech at Disneyworld. My contacts say that the improvement (shorter waiting times, 90% approval rate) was well underway due to ideas from the American consulate in Shanghai that were already being copied by other U.S. consulates in China. I guess we have to give the credit to our local boy, but I can assure you it wasn’t Presidential pressure that did the trick.

Big news about Taiwan. Taiwan is eligible for the U.S. visa waiver program and is likely to win waiver status before the year is out. When that happens, HTA says, China Airlines plans to re-establish non-stop flights between Taipei and Honolulu. That’s great, not only for the tourism business, but because it opens more options for anybody moving between Hawaii and S.E. Asia.

Otherwise, HTA plans to have a stand at a travel show in the Philippines. And that’s it for Asia. Nothing in Singapore, Malaysia, the Russian Far East (where they are lining up to go to Guam), India, Brunei, the Persian Gulf region, or any of the others.

Selling Travel To Hawaii

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No aloha shirts! (Official White House Photo by Pete Souza)

I spent Wednesday at the Hawaii Tourism Authority’s spring market review. HTA pulls in its marketing contractors from “around the world” to tell the Hawaii visitor industry what is being done for them. I used quotes because HTA doesn’t market Hawaii globally. Hawaii’s official tourism marketing is restricted to the United States, Canada, Japan, China, South Korea, a little bit in Taiwan, Australia, a bit in New Zealand and a pittance in Germany and the United Kingdom. This is largely due to mythology that tourists won’t come unless they have direct flights.

While I am concerned about where Hawaii isn’t represented, the contract marketing people appear to be doing a pretty good job with the funding they have. Some have plenty (United States, Japan, China) while others bear up under the “do more with less” syndrome that afflicts governments everywhere. All in all, it’s a pretty creative bunch that ably cashes in on the “brand” that is Hawaii worldwide. I tweeted interesting tidbits during the event (@OldPaddler), but here are some more detailed notes about Hawaii’s international tourism efforts.

HTA’s message was upbeat. Yes, the recession hurt the tourism industry, but travel to Hawaii is rebounding and airline capacity to Hawaii is showing serious growth. The gaudy headline from 2011 is a 90% increase in capacity between Seoul and Honolulu, admittedly from a low base. Hawaiian Airlines added seats from Japan and Australia. Charter flights were launched from Shanghai, with continuing rumors of more to come. Hawaiian is starting non-stop flights to New York in 2012, which will give better connections to travelers from Europe. And, this May, little Mokulele Airlines will try a Honolulu-Chicago non-stop that will continue on to London Stansted. Talk about ambitious! Listening to David Uchiyama, HTA’s vice president for brand management, though, I came away with the read that it is the pre-existence of direct flights that governs where HTA spends its marketing dollars. While Uchiyama paid lip service to developing new markets, it was clear that if you can’t get to Hawaii without changing planes, he isn’t very interested. I have railed against that attitude for years because I have seen plenty of well-heeled, adventurous travelers who find hard-to-reach destinations among the most attractive. And they tend to spend a lot and stay a longer time.

Hawaii’s meetings market got a tremendous boost in 2011 when Honolulu hosted 21 heads-of-state and thousands of others for APEC in November. All those news broadcasts showing APEC delegates in tropical surroundings were gold for the tourism industry – and especially for the meetings industry. Hawaii has long been attractive for incentive travel, but has big problems when it comes to large meetings, conferences and trade shows. A major international trade show is a no-go in Hawaii simply because of shipping logistics. It takes a lot of time and even more money to move large, heavy exhibit materials and products to Hawaii – a disadvantage to being a paradise in the middle of an ocean.

Hawaii has done better with conferences and regularly attracts big groups in the medical and scientific fields. Cardiologists and dentists find us especially attractive. Honolulu has hosted the Pacific Telecommunications Council annually for many years, and there is a new annual green energy conference that shows considerable promise. But these big conferences aren’t as easy to come by as you might imagine. Randall Tanaka, assistant general manager of the Hawaii Convention Center in Honolulu, pointed out that a convention organizer has to really want to place an event in Hawaii because he is going to take a hit on attendance. Any Hawaii meeting or convention is going to be called a boondoggle by somebody, plus the industry still suffers from “AIG syndrome”, a backlash against seemingly exorbitant corporate travel. That, says Tanaka, gives destinations such as San Diego or San Francisco a strong advantage over Honolulu. He cited the example of the American Dental Association, which often comes to Hawaii despite the knowledge that they can draw twice the number of dentists if they meet in Las Vegas. Here’s the presentation on MICE travel. It’s big, takes a while to load.

One lesson from APEC that Tanaka and others can’t mention in public is that the travel cost and distance to Hawaii can minimize potential protestors if your meeting is at all sensitive. We saw this in spades with APEC. The November 2011 meetings were in the heyday of the “Occupy” movements and some predicted a tropical “Battle of Seattle”. Never happened. See my post on the “bikini protests“.

A similar point is that meetings can be held in Hawaii with relative anonymity. Working closely with the consul general for Japan, it took me years to convince the guys with green eye shades in Tokyo and Washington to use Hawaii as a site for bilateral trade negotiations. Our arguments were that neither negotiating team had to travel as far or get as jet-lagged as going to one of the capitols, that Honolulu cost less than either Washington or Tokyo, and that we could stage meetings that the press would never hear about unless we wanted the coverage. That is still largely true. We began holding bilateral trade talks in Hawaii in the mid-1980s, added more countries to the mix and, so far as I know, they still happen here. But nobody knows.

We’ll get into more country-specific tourism talk in upcoming posts.

Playing Hardball In Canada

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In an eery parallel to debates in Washington about the future of the U.S. Commercial Service, the Trade Commissioner Service up in Canada is going through the same sorts of hoops. In hearings in the House of Commons last week, Canada’s politicians were told that small and medium-sized Canadian exporters are in danger of losing sales in emerging markets unless the TCS is quickly enlarged. The TCS has some 150 overseas offices, but more are needed to properly support the export ambitions of Canadian companies.

Canada's lentils

“They are the eyes and ears out there in the world,” said Murad al-Katib, president & CEO of Alliance Grain Traders in Saskatchewan. Alliance deals in grains, lentils, peas and beans – and ran into a problem in Algeria. Algerian customs officials seized a cargo of lentils and held it for thirteen months before the company thought to take their problem to the Canadian Embassy. “Within 13 days, not 13 months, our containers were released, our problem was solved and we were able to continue with our business,” said Al-Katib. Good thing dried lentils have a long shelf life.

iPolitics columnist Peter Clark, falling for the trade as zero-sum game fallacy, sees a threat from Washington’s attempt to double U.S. exports: “Those export increases are going to come out of somebody else’s hide and we’re the closest available hide.” Clark sees the new U.S.-South Korea free trade agreement and the negotiations for an expanded Trans Pacific Partnership as blows to Canadian sales in the Pacific region, forecasting damage to Canada’s pork and beef exporters. Clark also said that Washington is beefing up its Foreign Commercial Service and has a “vast” Foreign Agricultural Service to bolster U.S. exports. [Clearly, he hasn't heard about the CS's post closures - including the office in Vancouver.] Referring to the Americans, Clark gave us a compliment when he said “…and they play hardball.” Good to hear it, but is anyone in Congress listening?

Clark argues that TCS needs to be expanded in Russia, China, the ASEAN markets, South Korea, Brazil, India and the United States.

This post is based on an article on Canada’s iPolitics. Unfortunately, you can’t read it without a subscription.

Jobs Diplomacy

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Hmm...whose conference is it?

Folks have asked what’s up with the U.S. Department of State’s newfound infatuation with trade promotion. Actually, it isn’t new. The fascination has been there ever since State lost its commercial officers to Commerce in the Trade Act of 1979 and Commerce’s U.S. Commercial Service was established. Every few years it occurs to somebody in Foggy Bottom that this is a major area of foreign affairs that State does not control, so noises are made either to regain the responsibility or to appear as if State is the driver behind helping American companies. We seem to be going through another “driver” phase, though the motivations may be complex.

The latest event in the rivalry partnership between State and Commerce is Secretary Clinton’s February 21-22 Global Business Conference. It doesn’t matter that Commerce Secretary John Bryson spoke at the conference, or that all the other major Washington players were there. The impression created for the public was that the Department of State is leading the expansion of U.S. exports. Few outside the cognoscenti know or care that multiple agencies are involved in trade promotion, even in American embassies. The popular conception is that everyone who works in an embassy must belong to the State Department, so State gets the credit and blame for what they do or don’t do. Never mind that State employees are only a plurality of most embassy populations and that the lion’s share of trade promotion is done by either the U.S. Commercial Service or the Foreign Agricultural Service – neither of which belong to the State Department.

It really doesn’t matter what was said at the Global Business Conference, because it is perception that counts in Washington. The perception is that Hillary Clinton’s State Department is out in front fighting for U.S. exports and American jobs. I see several possible reasons for why this perception is being created. One is that Foggy Bottom feels that exports are sexy again. Export sales are one of the things that may lead the United States away from recession and we have a president who has established a national goal of doubling America’s exports.

Another is Commerce’s present weakness. The Commercial Service continues to get stiffed on budget, though the perpetrators vary, leading to withdrawal from numerous overseas posts. This creates a tempting opening for State, which is – in any event – left to handle commercial inquiries in those embassies and consulates that Commerce has abandoned.

A third is to position State to take advantage of any progress made on the President’s proposal to create a new trade ministry out of the international parts of Commerce, SBA, EximBank, OPIC, USTR and other agencies. State has not been mentioned publicly in the reorg proposals even though it is State’s economics officers who do the heavy lifting in embassies where Commerce has no staff. There may be concern at State that they need to protect their econ staff so that they are NOT caught up in the reorganization.

But one has to wonder if the positioning and perception-making may be for Hillary Clinton rather than for the State Department. Perish the thought that politics may have occurred to anyone in Washington, but President Obama’s running mate for 2012 has not been announced – nor has a Clinton run for the White House in 2016 been entirely eliminated. Both ideas may be totally off base, but the announced theme for the Global Business Conference and for State’s business support work is “Jobs Diplomacy”, a theme not likely to backfire on Secretary Clinton. Such thoughts during election season must be considered heresy, though I note that the conference was billed as “the Secretary’s” Global Business Conference – not the State Department’s conference.

All that said, I recommend you take a look at State’s “Jobs Diplomacy” fact sheet. It is filled with stuff that State personnel overseas have done for years, or should have been doing according to their instructions, but the new emphasis on jobs rather than exports is remarkable. Politically astute, as it were.