III.

Market Audit and Competitive Market Analysis

Guideline I. Introduction

Regenerated yarns industry started in Europe specially Italy & Spain then moved to Turkey & Egypt at the same time also moved to Far East China & Indonesia according to the high labor & power cost. Regenerated Yarns simply considered the cheapest Yarns as there is no comparison between the cotton price & the cotton waste price. II. The product

Chief value cotton regenerated yarn mixed with different percentages of polyester and acrylic in white and colours Acrylic regenerated yarn in white & colours. Yarn Counts From Ne 3 (Nm 5) to Ne 12 (Nm 20.3) in single & twisted.

*. Evaluate the product as an innovation as it is perceived by the intended market The usage of the regenerated yarns provide the blending flexibility & the yarns cost controlling 1. Relative advantage The advantage of regenerated yarns is that it match the global trend of environmental approach as the regenerated yarns deducting the usage of dying chemicals with the respect of the buyer quality needs. 2. Compatibility The product match the green industry concept providing the same level of quality . 3. Complexity No special skills needed to use the product much more its more simple than using the normal cotton yarns . 4. Trial ability To produce the company we could offer an industrial trails . 5. Observability 1

Most of end consumers appreciate the recycled products but if the final product will be exported outside euorpe maybe we should do some educatinal actions if this concept is not a cultural accepted.

III.

The market

Our customers are the knitting & weaving producers, the strength we have & we could build a good marketing plan on it that our yarns is cheap with the worldwide quality standards ,the main constrains we could face is the European competitors prices thats mean we have to make the balance of the lower price with the respect of the quality , as the European competitors quality is much better than ours but we could compete with them with our prices . A. Describe the market(s) in which the product is to be sold

Our customers devided to two main categiories : a- Knitting Manfacturers ( producers of sport socks and Knitting Fabrics T-shirts ). b- Weaving Manfacturers ( producers of Heavy fabrics used for tents , Furneture Fabrics) 1. Geographical region(s) Location: metropolitan France: Western Europe, bordering the Bay of Biscay and English Channel, between Belgium and Spain, southeast of the UK; bordering the Mediterranean Sea, between Italy and Spain French Guiana: Northern South America, bordering the North Atlantic Ocean, between Brazil and Suriname Guadeloupe: Caribbean, islands between the Caribbean Sea and the North Atlantic Ocean, southeast of Puerto Rico Martinique: Caribbean, island between the Caribbean Sea and North Atlantic Ocean, north of Trinidad and Tobago Mayotte: Southern Indian Ocean, island in the Mozambique Channel, about half way between northern Madagascar and northern Mozambique Reunion: Southern Africa, island in the Indian Ocean, east of Madagascar

Geographic coordinates: metropolitan France: 46 00 N, 2 00 E French Guiana: 4 00 N, 53 00 W Guadeloupe: 16 15 N, 61 35 W Martinique: 14 40 N, 61 00 W Mayotte: 12 50 S, 45 10 E Reunion: 21 06 S, 55 36 E Map references: metropolitan France: Europe French Guiana: South America Guadeloupe: Central America and the Caribbean Martinique: Central America and the Caribbean Mayotte: Africa Reunion: World Area: total: 643,801 sq km; 551,500 sq km (metropolitan France) country comparison to the world: 43 land: 640,427 sq km; 549,970 sq km (metropolitan France) water: 3,374 sq km; 1,530 sq km (metropolitan France) note:the first numbers include the overseas regions of French Guiana, Guadeloupe, Martinique, Mayotte, and Reunion Area - comparative: slightly less than the size of Texas Land boundaries: metropolitan France - total: 2,889 km border countries: Andorra 56.6 km, Belgium 620 km, Germany 451 km, Italy 488 km, Luxembourg 73 km, Monaco 4.4 km, Spain 623 km, Switzerland 573 km

French Guiana - total: 1,183 km border countries: Brazil 673 km, Suriname 510 km Coastline: total: 4,853 km metropolitan France: 3,427 km Maritime claims: territorial sea: 12 nm contiguous zone: 24 nm exclusive economic zone: 200 nm (does not apply to the Mediterranean) continental shelf: 200 m depth or to the depth of exploitation Climate: metropolitan France: generally cool winters and mild summers, but mild winters and hot summers along the Mediterranean; occasional strong, cold, dry, north-to-northwesterly wind known as mistral French Guiana: tropical; hot, humid; little seasonal temperature variation Guadeloupe and Martinique: subtropical tempered by trade winds; moderately high humidity; rainy season (June to October); vulnerable to devastating cyclones (hurricanes) every eight years on average Mayotte: tropical; marine; hot, humid, rainy season during northeastern monsoon (November to May); dry season is cooler (May to November) Reunion: tropical, but temperature moderates with elevation; cool and dry (May to November), hot and rainy (November to April) Terrain: metropolitan France: mostly flat plains or gently rolling hills in north and west; remainder is mountainous, especially Pyrenees in south, Alps in east French Guiana: low-lying coastal plains rising to hills and small mountains Guadeloupe: Basse-Terre is volcanic in origin with interior mountains; Grande-Terre is low limestone formation; most of the seven other islands are volcanic in origin Martinique: mountainous with indented coastline; dormant volcano

Mayotte: generally undulating, with deep ravines and ancient volcanic peaks Reunion: mostly rugged and mountainous; fertile lowlands along coast Elevation extremes: lowest point: Rhone River delta -2 m highest point: Mont Blanc 4,807 m note:in order to assess the possible effects of climate change on the ice and snow cap of Mont Blanc, its surface and peak have been extensively measured in recent years; these new peak measurements have exceeded the traditional height of 4,807 m and have varied between 4,808 m and 4,811 m; the actual rock summit is 4,792 m and is 40 m away from the ice-covered summit Natural resources: metropolitan France: coal, iron ore, bauxite, zinc, uranium, antimony, arsenic, potash, feldspar, fluorspar, gypsum, timber, fish French Guiana: gold deposits, petroleum, kaolin, niobium, tantalum, clay Land use: arable land: 33.46% permanent crops: 2.03% other: 64.51% note:French Guiana - arable land 0.13%, permanent crops 0.04%, other 99.83% (90% forest, 10% other); Guadeloupe - arable land 11.70%, permanent crops 2.92%, other 85.38%; Martinique - arable land 9.09%, permanent crops 10.0%, other 80.91%; Reunion - arable land 13.94%, permanent crops 1.59%, other 84.47% (2005) Irrigated land: total: 26,950 sq km; metropolitan France: 26,700 sq km (2008) Total renewable water resources: 189 cu km (2005)

Freshwater withdrawal (domestic/industrial/agricultural): total: 33.16 cu km/yr (16%/74%/10%) per capita: 548 cu m/yr (2000) Natural hazards: metropolitan France: flooding; avalanches; midwinter windstorms; drought; forest fires in south near the Mediterranean overseas departments: hurricanes (cyclones); flooding; volcanic activity (Guadeloupe, Martinique, Reunion) Environment - current issues: some forest damage from acid rain; air pollution from industrial and vehicle emissions; water pollution from urban wastes, agricultural runoff Environment - international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air PollutionPersistent Organic Pollutants, Air Pollution-Sulfur 85, Air PollutionSulfur 94, Air Pollution-Volatile Organic Compounds, AntarcticEnvironmental Protocol, Antarctic-Marine Living Resources, Antarctic Seals, Antarctic Treaty, Biodiversity, Climate Change, Climate ChangeKyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: none of the selected agreements Geography - note: largest West European nation

https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html 2. Forms of transportation and communication available in that (those) region(s)

Airports - with paved runways: 6

total: 297 over 3,047 m: 14 2,438 to 3,047 m: 27 1,524 to 2,437 m: 98 914 to 1,523 m: 83 under 914 m: 76 (2010) Airports - with unpaved runways: total: 177 914 to 1,523 m: 69 under 914 m: 108 (2010) Heliports: 1 (2010) Pipelines: gas 15,276 km; oil 2,939 km; refined products 5,084 km (2010) Railways: total: 29,640 km country comparison to the world: 9 standard gauge: 29,473 km 1.435-m gauge (15,361 km electrified) narrow gauge: 167 km 1.000-m gauge (63 km electrified) (2009) Roadways: total: 951,200 km (metropolitan France; includes 11,100 km of expressways) country comparison to the world: 8 note:there are another 5,100 km of roadways in overseas departments (2008) Waterways: metropolitan France: 8,501 km (1,621 km accessible to craft of 3,000 metric tons) (2010)

country comparison to the world: 16 Merchant marine: total: 167 country comparison to the world: 38 by type: bulk carrier 2, cargo 8, chemical tanker 36, container 25, liquefied gas 12, passenger 11, passenger/cargo 44, petroleum tanker 17, refrigerated cargo 1, roll on/roll off 11 foreign-owned: 57 (Belgium 7, China 5, Denmark 12, French Polynesia 12, Germany 1, New Caledonia 3, Norway 1, NZ 1, Singapore 3, Spain 1, Sweden 6, Switzerland 5) registered in other countries: 146 (Bahamas 19, Belgium 5, Bermuda 1, Canada 1, Cyprus 16, Egypt 1, Hong Kong 3, Indonesia 1, Italy 2, Luxembourg 16, Malta 13, Morocco 4, Netherlands 2, Norway 4, Panama 13, Saint Vincent and the Grenadines 2, Singapore 3, South Korea 1, Taiwan 1, UK 33, US 4, unknown 1) (2010) Ports and terminals: Calais, Dunkerque, Le Havre, Marseille, Nantes, Paris, Rouen https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html 3. Consumer buying habits We have two main segments in our market : 1- The industrial (factories). 2- The traders. Buying habits The consumer buying habits depend on his production plans so usually its a long term contracts with huge quantities 4. Distribution of the product Traditional distribution channels recommended . . Product sales by other middlemen Traders or middlemen will be useful in market penetration 5.Advertising and promotion Only the sampling could be useful 6. Pricing strategy We will use our normal strategy as there is no need for change. 8 . Sales promotions customarily used (sampling)

B. Compare and contrast your product and the competitions product(s) The competition could be divided into two main groups: 1- The quality. Our product is in the second category of quality after the European product & after it the Turkish on the 3rd grade then finally the Asian 2- The price. Our product & the Turkish are in the second category after the Asian products 1. Competitors product The following description of competitors products (European ,Turkish & Asian ) a. Brand name No sounded names in the yarn industry. b. Features Regenerated color yarns From Ne. 3/1 to Ne. 12/1 , cotton / Polyester Blends from 70/30 to 50/50 c. Package Wooden Pallets / Plastic Bags. 2. Competitors prices European products 20% higher. $3.00 to $2.50 Turkish products same price. $2.50 to $2.50 Asian products 20% less .$ 2.00 to $2.50 3. Competitors promotion and advertising methods Exhibitions are the Basic advertising methods & promotions only could happened in sampling 4. Competitors distribution channels Direct B2B sales + trading agents. C. Market size According to personal invistgations with our european agents we found that france is a good potential for our product & there is a good chance to penetrate this market. *. Estimated sales for your company for the planning year 720 Tons of Yarns D. Government participation in the marketplace * . Agencies that can help you The French chamber of commerce

IV. Preliminary Marketing Plan

Guideline I. The marketing plan

Our plan to penetrate this market is to contact customer direct through our Marketing team + finding out 2 agents , also we should increase our presence in the European textile exhibitions A. Marketing objectives 1. Expected sales 2012 720 Tons. 2. Profit expectations 2012 $ 712,000 3. Market penetration and coverage Market Coverage is impossible but penetration is possible B. Promotion mix A. Promotions Only sampling B. Advertising Only Through exhibitions D. Distribution: From origin to destination 1. Port selection Final selection depends on customer preferences. a. Origin port Alexandria b. Destination port Marseille& Paris 2. Mode selection: Advantages/disadvantages of each mode A. Ocean carriers Most of the European ports have The Same shipping cost B. Motor carriers Truck available with the same prices we have in the European area 3. Packing 10

Wooden Pallets covered with stretch a. Marking and labeling regulations The standard required labeling for the global trade. b. Containerization Goods must be loaded carefully in a way which insure that the discharging of the container will go without any problems with mechanical equipments . c. Costs The normal cost will be enough & no need to add any additional costs. 4. Documentation required a. Bill of lading b. Commercial invoice c. Pro forma invoice d. Shippers export declaration e. Statement of origin f. Euro 1 certificate

E. Channels of distribution (micro analysis) Only agents are the available & required distribution channel. 1. Import/export agents Agents useful for business introducing as they already have customers with previous business relations & it will be easier to convince new buyers to try our products. Good agent could distribute at least 100 tons monthly . F. Price determination To penetrate this market we dont have to change prices what we have to do is sending industrial samples free of charge to the customers. 1. Cost of the shipment of goods From $ .10 to $.11 per Kg. 2. Insurance costs About .005 % from the goods value. 3. Customs duties Duty Free 4. Companys gross margins $ 720,000 for the first year. 11

G.Terms of sale Always the term of sales negotiable & we have to 1. EX works, FOB, C&F, CIF 2. Advantages/disadvantages of each All the same For our product H. Methods of payment In markets penetrations & new business LCs is the most preferred method of payment. 1. Cash in advance Not applicable 2. Open accounts Not applicable. 3. Sight, time, or date drafts Not applicable. 4. Letters of credit Required & comfortable for all parties.

II.

Pro forma financial statements and budgets A. Marketing budget

Total needed budget $ 10,000 1. Advertising/promotion expense Around $3,000 as a sampling cost. 2. Distribution expense 3% commission from the total sales B. Pro forma annual profit and loss statement (first year and fifth year)

12

This data is confidential. III. Resource requirements

A. Finances No finance needed. b. Production capacity 11 tons daily. IV. Executive summary

From reviewing the country data we found that its a good potential market , we could compete & penetrate this market for the following reasons : 1- We have the (Euro - 1) Agreement, thats mean that our product will be much cheaper than other countries by 19.6% which is the VAT rate. 2- We have the chance to convince a lot of buyer using the environmental approach as our product is recycled & there is a strong demand on these products in Europe. 3- The quality we will offer will be in the European acceptance zone. 4- The faster delivery than the Asian competitors will give advantage to satisfy the customers. 5- Also the distance gives us another advantage in the ocean freight rates. 6- We have the same packing criteria as the European producers. 7- Understanding the cultural background could give us the credibility needed to penetrate this market. 8- We dont have to change our pricing policy or make any modifications in our product . 9- The profit margins we will achieve from penetrating this market is reasonable comparing with the cost of this penetration. 10- As France considered from the biggest fashion & textile countries its a big gain to put our business position with French companies in our company profile.

13

III. Market Audit and Competitive Market Analysis Guideline I. Introduction Regenerated yarns industry started in Europe specially Italy & Spain then moved to Turkey & Egypt at the same time also moved to Far East China & Indonesia according to the high labor & power cost. Regenerated Yarns simply considered the cheapest Yarns as there is no comparison between the cotton price & the cotton waste price. II. The product

Chief value cotton regenerated yarn mixed with different percentages of polyester and acrylic in white and colours Acrylic regenerated yarn in white & colours. Yarn Counts From Ne 3 (Nm 5) to Ne 12 (Nm 20.3) in single & twisted. *. Evaluate the product as an innovation as it is perceived by the intended market The usage of the regenerated yarns provide the blending flexibility & the yarns cost controlling Relative advantage The advantage of regenerated yarns is that it match the global trend of environmental approach as the regenerated yarns deducting the usage of dying chemicals with the respect of the buyer quality needs. 2. Compatibility The product match the green industry concept providing the same level of quality . 3. Complexity

No special skills needed to use the product much more its more simple than using the normal cotton yarns . 4. Trial ability To produce the company we could offer an industrial trails . 5. Observability Most of end consumers appreciate the recycled products but if the final product will be exported outside euorpe maybe we should do some educatinal actions if this concept is not a cultural accepted.

III.

The market 14

Our customers are the knitting & weaving producers, the strength we have & we could build a good marketing plan on it that our yarns is cheap with the worldwide quality standards ,the main constrains we could face is the European competitors prices thats mean we have to make the balance of the lower price with the respect of the quality , as the European competitors quality is much better than ours but we could compete with them with our prices . A. Describe the market(s) in which the product is to be sold

Our customers devided to two main categiories : Knitting Manfacturers ( producers of sport socks and Knitting Fabrics T-shirts ). b- Weaving Manfacturers ( producers of Heavy fabrics used for tents , Furneture Fabrics) 1. Geographical region(s)

Location: metropolitan France: Western Europe, bordering the Bay of Biscay and English Channel, between Belgium and Spain, southeast of the UK; bordering the Mediterranean Sea, between Italy and Spain French Guiana: Northern South America, bordering the North Atlantic Ocean, between Brazil and Suriname Guadeloupe: Caribbean, islands between the Caribbean Sea and the North Atlantic Ocean, southeast of Puerto Rico Martinique: Caribbean, island between the Caribbean Sea and North Atlantic Ocean, north of Trinidad and Tobago Mayotte: Southern Indian Ocean, island in the Mozambique Channel, about half way between northern Madagascar and northern Mozambique Reunion: Southern Africa, island in the Indian Ocean, east of Madagascar Geographic coordinates: metropolitan France: 46 00 N, 2 00 E French Guiana: 4 00 N, 53 00 W Guadeloupe: 16 15 N, 61 35 W Martinique: 14 40 N, 61 00 W Mayotte: 12 50 S, 45 10 E Reunion: 21 06 S, 55 36 E Map references: metropolitan France: Europe French Guiana: South America Guadeloupe: Central America and the Caribbean Martinique: Central America and the Caribbean Mayotte: Africa Reunion: World Area: total: 643,801 sq km; 551,500 sq km (metropolitan France) 15

country comparison to the world: 43 land: 640,427 sq km; 549,970 sq km (metropolitan France) water: 3,374 sq km; 1,530 sq km (metropolitan France) note:the first numbers include the overseas regions of French Guiana, Guadeloupe, Martinique, Mayotte, and Reunion Area - comparative: slightly less than the size of Texas Land boundaries: metropolitan France - total: 2,889 km border countries: Andorra 56.6 km, Belgium 620 km, Germany 451 km, Italy 488 km, Luxembourg 73 km, Monaco 4.4 km, Spain 623 km, Switzerland 573 km French Guiana - total: 1,183 km border countries: Brazil 673 km, Suriname 510 km Coastline: total: 4,853 km metropolitan France: 3,427 km Maritime claims: territorial sea: 12 nm contiguous zone: 24 nm exclusive economic zone: 200 nm (does not apply to the Mediterranean) continental shelf: 200 m depth or to the depth of exploitation Climate: metropolitan France: generally cool winters and mild summers, but mild winters and hot summers along the Mediterranean; occasional strong, cold, dry, north-to-northwesterly wind known as mistral French Guiana: tropical; hot, humid; little seasonal temperature variation Guadeloupe and Martinique: subtropical tempered by trade winds; moderately high humidity; rainy season (June to October); vulnerable to devastating cyclones (hurricanes) every eight years on average Mayotte: tropical; marine; hot, humid, rainy season during northeastern monsoon (November to May); dry season is cooler (May to November) Reunion: tropical, but temperature moderates with elevation; cool and dry (May to November), hot and rainy (November to April) Terrain: metropolitan France: mostly flat plains or gently rolling hills in north and west; remainder is mountainous, especially Pyrenees in south, Alps in east French Guiana: low-lying coastal plains rising to hills and small mountains Guadeloupe: Basse-Terre is volcanic in origin with interior mountains; Grande-Terre is low limestone formation; most of the seven other islands are volcanic in origin Martinique: mountainous with indented coastline; dormant volcano Mayotte: generally undulating, with deep ravines and ancient volcanic peaks Reunion: mostly rugged and mountainous; fertile lowlands along coast 16

Elevation extremes: lowest point: Rhone River delta -2 m highest point: Mont Blanc 4,807 m note:in order to assess the possible effects of climate change on the ice and snow cap of Mont Blanc, its surface and peak have been extensively measured in recent years; these new peak measurements have exceeded the traditional height of 4,807 m and have varied between 4,808 m and 4,811 m; the actual rock summit is 4,792 m and is 40 m away from the ice-covered summit Natural resources: metropolitan France: coal, iron ore, bauxite, zinc, uranium, antimony, arsenic, potash, feldspar, fluorspar, gypsum, timber, fish French Guiana: gold deposits, petroleum, kaolin, niobium, tantalum, clay Land use: arable land: 33.46% permanent crops: 2.03% other: 64.51% note:French Guiana - arable land 0.13%, permanent crops 0.04%, other 99.83% (90% forest, 10% other); Guadeloupe - arable land 11.70%, permanent crops 2.92%, other 85.38%; Martinique - arable land 9.09%, permanent crops 10.0%, other 80.91%; Reunion - arable land 13.94%, permanent crops 1.59%, other 84.47% (2005) Irrigated land: total: 26,950 sq km; metropolitan France: 26,700 sq km (2008) Total renewable water resources: 189 cu km (2005) Freshwater withdrawal (domestic/industrial/agricultural): total: 33.16 cu km/yr (16%/74%/10%) per capita: 548 cu m/yr (2000) Natural hazards: metropolitan France: flooding; avalanches; midwinter windstorms; drought; forest fires in south near the Mediterranean overseas departments: hurricanes (cyclones); flooding; volcanic activity (Guadeloupe, Martinique, Reunion) Environment - current issues: some forest damage from acid rain; air pollution from industrial and vehicle emissions; water pollution from urban wastes, agricultural runoff Environment - international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic-Marine Living Resources, Antarctic Seals, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, 17

Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: none of the selected agreements Geography - note: largest West European nation https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html 2. Forms of transportation and communication available in that (those) region(s) Airports - with paved runways: total: 297 over 3,047 m: 14 2,438 to 3,047 m: 27 1,524 to 2,437 m: 98 914 to 1,523 m: 83 under 914 m: 76 (2010) Airports - with unpaved runways: total: 177 914 to 1,523 m: 69 under 914 m: 108 (2010) Heliports: 1 (2010) Pipelines: gas 15,276 km; oil 2,939 km; refined products 5,084 km (2010) Railways: total: 29,640 km country comparison to the world: 9 standard gauge: 29,473 km 1.435-m gauge (15,361 km electrified) narrow gauge: 167 km 1.000-m gauge (63 km electrified) (2009) Roadways: total: 951,200 km (metropolitan France; includes 11,100 km of expressways) country comparison to the world: 8 note:there are another 5,100 km of roadways in overseas departments (2008) Waterways: metropolitan France: 8,501 km (1,621 km accessible to craft of 3,000 metric tons) (2010) country comparison to the world: 16 Merchant marine: total: 167 18

country comparison to the world: 38 by type: bulk carrier 2, cargo 8, chemical tanker 36, container 25, liquefied gas 12, passenger 11, passenger/cargo 44, petroleum tanker 17, refrigerated cargo 1, roll on/roll off 11 foreign-owned: 57 (Belgium 7, China 5, Denmark 12, French Polynesia 12, Germany 1, New Caledonia 3, Norway 1, NZ 1, Singapore 3, Spain 1, Sweden 6, Switzerland 5) registered in other countries: 146 (Bahamas 19, Belgium 5, Bermuda 1, Canada 1, Cyprus 16, Egypt 1, Hong Kong 3, Indonesia 1, Italy 2, Luxembourg 16, Malta 13, Morocco 4, Netherlands 2, Norway 4, Panama 13, Saint Vincent and the Grenadines 2, Singapore 3, South Korea 1, Taiwan 1, UK 33, US 4, unknown 1) (2010) Ports and terminals: Calais, Dunkerque, Le Havre, Marseille, Nantes, Paris, Rouen https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html 3. Consumer buying habits We have two main segments in our market : The industrial (factories). The traders. Buying habits The consumer buying habits depend on his production plans so usually its a long term contracts with huge quantities 4. Distribution of the product Traditional distribution channels recommended . . Product sales by other middlemen Traders or middlemen will be useful in market penetration 5.Advertising and promotion . Sales promotions customarily used (sampling) Only the sampling could be useful 6. Pricing strategy We will use our normal strategy as there is no need for change. Compare and contrast your product and the competitions product(s) The competition could be divided into two main groups: The quality. Our product is in the second category of quality after the European product & after it the Turkish on the 3rd grade then finally the Asian The price. Our product & the Turkish are in the second category after the Asian products 1. Competitors product The following description of competitors products (European ,Turkish & Asian ) a. Brand name No sounded names in the yarn industry. b. Features Regenerated color yarns From Ne. 3/1 to Ne. 12/1 , cotton / Polyester Blends from 70/30 to 50/50 c. Package 19

Wooden Pallets / Plastic Bags. 2. Competitors prices European products 20% higher. $3.00 to $2.50 Turkish products same price. $2.50 to $2.50 Asian products 20% less .$ 2.00 to $2.50 3. Competitors promotion and advertising methods Exhibitions are the Basic advertising methods & promotions only could happened in sampling 4. Competitors distribution channels Direct B2B sales + trading agents. C. Market size According to personal invistgations with our european agents we found that france is a good potential for our product & there is a good chance to penetrate this market. *. Estimated sales for your company for the planning year 720 Tons of Yarns D. Government participation in the marketplace *. Agencies that can help you The French chamber of commerce

IV. Preliminary Marketing Plan Guideline The marketing plan Our plan to penetrate this market is to contact customer direct through our Marketing team + finding out 2 agents , also we should increase our presence in the European textile exhibitions A. Marketing objectives 1. Expected sales 2012 720 Tons. 2. Profit expectations 2012 $ 712,000 3. Market penetration and coverage Market Coverage is impossible but penetration is possible B. Promotion mix Promotions Only sampling Advertising Only Through exhibitions D. Distribution: From origin to destination 1. Port selection Final selection depends on customer preferences. a. Origin port Alexandria 20

b. Destination port Marseille& Paris 2. Mode selection: Advantages/disadvantages of each mode A. Ocean carriers Most of the European ports have The Same shipping cost B. Motor carriers Truck available with the same prices we have in the European area 3. Packing Wooden Pallets covered with stretch a. Marking and labeling regulations The standard required labeling for the global trade. b. Containerization Goods must be loaded carefully in a way which insure that the discharging of the container will go without any problems with mechanical equipments . c. Costs The normal cost will be enough & no need to add any additional costs. 4. Documentation required a. Bill of lading b. Commercial invoice c. Pro forma invoice d. Shippers export declaration e. Statement of origin f. Euro 1 certificate

E.

Channels of distribution (micro analysis)

Only agents are the available & required distribution channel. 1. Import/export agents Agents useful for business introducing as they already have customers with previous business relations & it will be easier to convince new buyers to try our products. Good agent could distribute at least 100 tons monthly . F. Price determination To penetrate this market we dont have to change prices what we have to do is sending industrial samples free of charge to the customers. 1. Cost of the shipment of goods From $ .10 to $.11 per Kg. 2. Insurance costs About .005 % from the goods value. 3. Customs duties Duty Free 4. Companys gross margins 21

$ 720,000 for the first year. G.Terms of sale Always the term of sales negotiable & we have to 1. EX works, FOB, C&F, CIF 2. Advantages/disadvantages of each All the same For our product H. Methods of payment In markets penetrations & new business LCs is the most preferred method of payment. 1. Cash in advance Not applicable 2. Open accounts Not applicable. 3. Sight, time, or date drafts Not applicable. 4. Letters of credit Required & comfortable for all parties.

II.

Pro forma financial statements and budgets A. Marketing budget

Total needed budget $ 10,000 1. Advertising/promotion expense Around $3,000 as a sampling cost. 2. Distribution expense

3% commission from the total sales B. Pro forma annual profit and loss statement (first year and fifth year)

This data is confidential. III. Resource requirements

A. Finances No finance needed. b. Production capacity 11 tons daily.

22

IV.

Executive summary

From reviewing the country data we found that its a good potential market , we could compete & penetrate this market for the following reasons : We have the (Euro - 1) Agreement, thats mean that our product will be much cheaper than other countries by 19.6% which is the VAT rate. We have the chance to convince a lot of buyer using the environmental approach as our product is recycled & there is a strong demand on these products in Europe. The quality we will offer will be in the European acceptance zone. The faster delivery than the Asian competitors will give advantage to satisfy the customers. Also the distance gives us another advantage in the ocean freight rates. We have the same packing criteria as the European producers. Understanding the cultural background could give us the credibility needed to penetrate this market. We dont have to change our pricing policy or make any modifications in our product . The profit margins we will achieve from penetrating this market is reasonable comparing with the cost of this penetration. As France considered from the biggest fashion & textile countries its a big gain to put our business position with French companies in our company profile.

23