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Country Commercial Guides for FY 2000: Cameroon Report prepared by U.S. Embassy Yaounde, released July 1999

CHAPER IV:   MARKETING U.S. PRODUCTS AND SERVICES

A.   DISTRIBUTION AND SALES CHANNELS

Cameroon has a population estimated at 14.6 million, of which about 47 percent lives in urban areas. Douala is Cameroon's main port and industrial center. Cameroon's capital city Yaounde is the political and diplomatic center of the country. Yaounde (population approximately 1,177,000) and Douala (population approximately 1,450,000) together contain about 60 percent of Cameroon's urban population and 20 percent of its total population. Europeans, Lebanese and the indigenous Bamileke of Western Province dominate large trading firms in Cameroon. Most have developed efficient distribution systems, and several have established stores and supermarkets for retail sales. In smaller towns, mainly local or Nigerian traders control retailing. Vendors who sell their wares from rented stalls at the main markets of cities occupy about 35 percent of the retail market in Cameroon. Due to Cameroon's economic crisis, hawkers are rapidly increasing their share of retailing activities. They generally sell on a commission basis for established storeowners, but some are independent and buy directly from wholesalers.

B.   INFORMATION ON TYPICAL PRODUCT PRICING STRUCTURES

With the exception of "strategic" goods and services such as electricity, water, public transportation (road/rail), telecommunications, cooking gas, pharmaceuticals, school books, and port-side activities (stevedoring, etc.), the GRC has lifted all price fixation practices on commodities marketed within its national territory as of 1994.

Pricing practices generally use the prevailing price of the imported good as the reference price for future production. As for imported products, the profit margins is not fixed, though the importer generally tries to recover his costs plus the highest mark-up which will still leave the product competitive in the market. Tariff practices at the National Port Authority are also determined by the GRC.

C.   USE OF AGENTS AND DISTRIBUTORS; FINDING A PARTNER

Several dozen U.S. companies are represented in Cameroon, either directly or through agents and distributors. U.S. businesses planning to enter the Cameroonian market are best advised to secure the services of a local agent, as they sell directly to wholesalers and can help new firms obtain market knowledge at a relatively low cost. For products requiring after-sales service and spare parts, the appointment of a distributor is recommended. Agents and distributors must register with the Government, and their contracts must be notarized and published in the local press.

D.   FRANCHISING

Franchising is rare in Cameroon. While large international oil companies retail petroleum products, and international car rental companies operate through franchise dealers, there are few, if any, other franchise operations in Cameroon.

E.   DIRECT MARKETING

Direct marketing is used in Cameroon, though it is not a common practice.

F.   JOINT VENTURES/LICENSING

Seeking professional assistance in negotiating agreements, selecting partners and controlling resources is a strongly recommended first step in establishing a presence in the Cameroonian market. Caution is required for joint ventures and licensing arrangements, as the investment climate presents high risk factors. Foreign and local investors also often complain of undue influence from entrenched French interests. Few internationally known American products other than oil and gas are produced in Cameroon under licensing agreements.

G.   STEPS TO ESTABLISHING AN OFFICE

The Investment Code Management Unit (ICMU) was established in 1991 to assist foreign and domestic investors in starting businesses in Cameroon. It provides investment authorization and a variety of other services through a network of official correspondents in all relevant Ministries. Contact Ms. Marthe Angeline Minja, Director, ICMU, P.O. Box 15438, Douala, Tel: 237-42-59-46/43-31-11, Fax: 237-43-30-07.

H.   SELLING FACTORS/TECHNIQUES

Seller's credit, such as lay-away plans, is not yet practiced in Cameroon. Commercial banks offer consumer loans for large individual purchases.

I.   ADVERTISING AND TRADE PROMOTION

Advertising is available in Cameroon through a wide variety of media including newspapers, magazines, billboards, theatres, radio and television, many of whom are listed in Appendix E. Newspaper and magazine advertising may be placed at reasonable rates with the government-owned daily, Cameroon Tribune, or with a growing number (over 20) of private publications. Major newspapers and magazines include:

Cameroon Post (English-language comes out three times a week: P.O. Box 8301 Yaounde, Cameroon, Tel: 237-23.90.43 Fax: 237-23.04.29 Cameroon Tribune (government bilingual daily: P.O. Box 1218, Yaounde, Cameroon, Tel: 237-30-26-40 or 30-36-89 Fax: 237-30-43-62); La Nouvelle Expression (French-language three times a week: P.O. Box 15333, Douala, Cameroon, Tel: 237-42-22-27 Fax: 237-43-26-69); The Herald (English-language three times a week P.O. Box 3659, Messa Yaounde, Cameroon, Tel/Fax: 237-31-84-97); Le Messager (French-language three times a week P.O. Box 5925, Douala, Cameroon, Tel: 237-42-02-39 or 42-04-39 Fax: 237-42-02-14); La Sentinelle (French-language monthly is the only economic magazine published in Central Africa: P.O. Box 24079, Douala, Cameroon, Tel: 237-39-16-27 Fax: 237-39-11-63).

Billboards and signs are no longer a monopoly of Cameroon Publi-Expansion (CPE), a government-owned publicity parastatal. Private advertising firms may be contacted for publicity assistance. A monthly information guide for Douala (Night & Day) published by Synergie is distributed free. Advertising via slides and short films in theatres can be effective, especially in Yaounde, Douala and Bafoussam, which have large film-going publics. Radio and television advertising at reasonable rates is available through the government-owned Cameroon Radio Television (CRTV) which broadcasts in French and English. Radio advertising may also be placed through "Africa Number One," which broadcasts from Gabon between 5:00 am and 11:00 pm.

The only regularly scheduled trade fairs in Cameroon are the Bafoussam fair in February and "Promo," a general trade fair organized at the end of each year in Yaounde by the Cameroon Chamber of Commerce. Details on "Promo" are in Appendix G. Individual companies sometimes also organize expositions in Douala and Yaounde.

J.   PRICING PRODUCT

If U.S. exporters can price in French francs, especially for deliveries over a six to 12 month period. Costs should be computed on a Cost, Insurance, and Freight (C.I.F.) basis. The major factors in penetrating the Cameroonian market may be price and credits.

K.   SALES SERVICE/CUSTOMER SUPPORT

After sales service and customer support is weak or non-existent in Cameroon's bazaar-like market distribution system. It has been a principal reason for limited U.S. marketing success in Cameroon, especially in the high-tech or heavy industrial equipment areas where sales service is critical. French language service manuals, frequent personnel training and reasonable inventory of spare parts are also crucial.

L.   SELLING TO THE GOVERNMENT

Government procurement is made by the "Direction Générale des Grands Travaux" (DGTC), or the Public Works Directorate which is under the direct supervision of the Presidency of the Republic. Cameroonian companies are granted preferential price margins and other preferential treatment for bids on all government procurement and development projects. DGTC's calls for tenders, especially when they are financed by the International Financial Institutions, are mailed to the American Embassy in Yaounde which sends them to the U.S. Department of Commerce for dissemination to the American business community. Restricted calls for tenders are also directed to U.S. bidding candidates by the Embassy. The GRC has been improving upon its low credit rating since the signing of the ESAF in 1997, and an increasing number of U.S. financing programs have been opening for both the private and public sector. The Government's direct purchases are often made through domestic middlemen who require cash up front on behalf of their foreign correspondents.

M.   PROTECTING YOUR PRODUCT FROM IPR INFRINGEMENT

Cameroon is a founding member of the African Intellectual Property Organization (OAPI) with headquarters located in Cameroon's capital city. Registration of patents with OAPI would, in theory, provide protection from product patent infringements in Cameroon. In practice, companies may not always be able to defend themselves against product patent infringements through Cameroon's judicial system.

N.   NEED FOR A LOCAL ATTORNEY

Incoming American investors should seek the services of a local attorney to deal with Cameroon's slow moving, complex and sometimes corrupt legal system. A list of local attorneys can be obtained from the U.S. Embassy in Yaounde.

O.   PERFORMING DUE DILIGENCE/CHECKING BONA FIDES OF BANKS/ AGENTS/CUSTOMERS

Investors looking to do business in Cameroon should seek professional assistance in negotiating agreements, in the selection of partners, and in the control of resources. Businesses are advised to select their Cameroonian partners carefully by pre-consulting with the Embassy or through professional assistance from one of the Country Market Research Firms listed in Chapter XII below. The U.S. Embassy offers a variety of services for American businesses looking at the Cameroonian market, and these services are described in Appendix E.