Established more than 25 years ago, Tihama is one of the largest Advertising & Communication Companies in the Middle East and the Gulf. It has vast operating experience in the fields of advertising, public relations, media representation and publishing. Tihama promotional Items (TPI) is part of this large holding, specialised in the production and distribution of BTL promotional items. This company came to be through a serious of joint ventures starting in1999, first between Tihama and Premiums, a promotional items company based in Beirut, then in 2002, between Tihama and Media Power (Dubai), and finally in 2003, with an additional affiliation with Concept Merchandising of Lebanon. These affiliations were formed to expand the holding internationally, develop its service and product offering, and enhance the networks capability and reach. Tihama's distinctive advantages lie in the extensive reach of their network, and in being the only company of its kind to have an affiliate office in the Far East, namely in Hong Kong, enabling them to supervise and guarantee the quality of their products and services. TPI has achieved a great deal in the five years since its establishment, and to highlight its accomplishments, a general meeting between all the managers of the affiliate companies was recently held in Beirut. ArabAd met with Hassane Saleh, CEO for TPI, to discuss the progress and development of Tihama in the region, and the growing importance of BTL products in the region's advertising market.
ArabAd: What can you tell us about Tihama and the reasons for the recently held general meeting?
Hassane Saleh: Our management meeting took place between June 30 and July 1, and it was the first management meeting of Tihama Promotional Items to be held. Tihama is in fact a very big holding, and Tihama Promotional Items is part of this large holding. We started in 1999, with our Jeddah office, and in the same year we opened the Riyadh office. In 2000, we formed an affiliation in Hong Kong with a company called Huge China. Then in 2002, we formed a full joint venture with Media Power in Dubai and in 2003, we made a second acquisition with Concept merchandising. So, from the date of our establishment in 1999, until 2004, we have opened five offices. Some of our esteemed clients are Pepsi, Nestle, McDonald's, P&G, SC Johnson, Halawani, Juraissi, MasterCard, to name a few. Pepsi and Nestl are served by TPI on a regional level; Pepsi from the KSA office, and Nestl from Dubai office. The Dubai office has even succeeded to serve Nestl in Europe, namely Spain and Malta.
This first management meeting was a very good opportunity to chair meetings with the managers of all the offices, Jeddah, Riyadh, Dubai, Hong Kong, and Lebanon, as well as with the general manager of Tihama Holding and the regional financial directors. During this meeting I highlighted the achievements of Tihama Promotional Items over the last five years, having gone from one office to five, from two employees to 35, from one client to more than 40 Blue Chip clients, and from a turnover of two to three million US Dollars to over 15 million US Dollars. I would like to thank Tihama, and mainly Fahed Bakhaidar, general manager of Tihama Holding, for his support throughout the past five years.
AA: Where do you get your products?HS: 99 percent of our importation is from China. The edge that we offer is that we are the only promotional items network covering the whole Middle East. There are very big suppliers in KSA, and there are very big providers in Beirut, but we are the only network in the region to have a full-fledge office in Hong Kong whose main role is to supervise the quality of all our products and services and to provide an excellent follow-up with manufacturers as well as fast reliable delivery to all our clients.
AA: How do you see the role of promotional items affecting the future of advertising?
HS: I worked for 14 years in the advertising industry before I opened my own company Premium, in 1994. As you know, advertising budgets are divided in two parts: BTL and ATL. In 1983, the BTL budgets never exceeded 10 percent of the whole advertising budget. Now it is approximately 60 percent of the total. So, I think the future is for BTL activities, taking into consideration that the role of ATL is very important to create awareness and build an image, which BTL cannot do. ATL is for long term returns while BTL gives immediate returns.
AA: How do you define this situation of short-term versus long-term affects of advertising?
HS: In terms of feedback on the way you use the money you are given in order to gain a market share. ATL creates awareness and eventually a share of the market, but it takes a few years to achieve this, while BTL which includes of course merchandising, shelf taking, sampling and so on, gives an immediate effect. When you make a promotional item and the shelf taking is by far more than 50 percent you will get a great deal of immediate exposure. In today's market, the consumer is becoming more demanding in his purchase choice. A big indication of what I am saying appeared in a large-scale study performed last year on this topic. (This study was done by MCMRB assigned by TPI for KSA two years ago and was published in ArabAd.) The trend is towards BTL. Today in any given big surface supermarket you will see more than 50 promotional items, which shows a huge rise in the focus on and implementation of promotional items.
AA: If more than 50 percent of a budget is being allocated to BTL activities isn't this impacting the strategy of a client to a great degree? And if so, do you think it is because the budgets for promotions that achieve an immediate effect are so much lower than those of ATL, that clients are moving towards BTL? Or is it because they are truly seeing impressive results?
HS: No, it is because ATL is becoming very, very, competitive, and though we want to concentrate on getting a long-term awareness and image building, the end-user that decides on purchases is in the outlets. So, they are concentrating on the final outlets, where it has been shown, that the majority of purchase decisions are being made by women. Let's take merchandising as an example, demonstration, which has become a very popular way with which to impress consumers within a supermarket, getting their attention, and persuading them to at least try the product. Even in this area there is very tough competition inside outlets in trying win over consumers. In the face of all these changes, clients can no longer deny the impact of this form of direct advertising, or promotional strategies, so yes, it is really redefining advertising strategies in order to get an immediate effect, and as I said, they concentrate on the place where the final purchasing decisions take place. This does not create awareness, and the reign of the product cannot last very long, perhaps only as long as the promotion is running, but it does influence choice at that given time.
AA: How much more do you think Tihama can expand its promotional activities in the region?
HS: Our objective is to be the largest network in the region (although we are already the first), and to cover more countries in the region. We are, for example, planning to open in Kuwait as well.
AA: Do you see the same rise in BTL in Europe?HS: This shift is a worldwide trend, with BTL budgets in the US representing up to 80 percent of an advertising budget. So, we are basically following the trend and building on it. Through joint efforts, as we have done so far, we can become the leading company in the Middle East. Our edge, which is one of the most important factors of our success, is that we have offices in China that are capable of maintaining the quality we provide and the capacity to deliver large quantities on time. Many companies perhaps also get their supplies from China, but none have offices based there that are, in fact, part of their network, and can guarantee the quality and reliability that we do. This is fundamental.
OKI: True printing pioneers
There's a Japanese proverb that goes something like:'vision without action is a daydream and action without vision is a nightmare'. OKI founder, Kibataro Oki, had both the foresight and determination to combine these two elements, creating Japan's first telecommunications company. Nurturing a burning passion for innovation, he firmly believed that his country was on the verge of a communication revolution. After 125 years, Kibataro's legacy is thriving, with OKI - the business printer specialists - now challenging Hewlett Packard for the top market share spot.
Far from OKI's heritage implying that the business is 'gathering dust on the shelf', Kibataro Oki's vision remains steadfast - to innovate and create solutions that global businesses need today. Taking a nostalgic glance back over their colourful history, OKI has consistently been at the forefront of technological advancements. Replacing carbon rods with carbon powder in 1882 to create the first Microsound telephone was Kibataro's first inspired creation. Subsequent inventions propelled the OKI phenomenon into exciting new territories.
Events after the Second World War placed OKI as the driver behind many revolutionary developments in the communications field. From the first teletypewriter in 1953, to the launch of the world's first Serial Impact Dot Matrix printer 10 years later, OKI was firmly established as the technology prodigy.
Four decades on OKI remains just as dedicated to increasing business efficiency and print practicality. Bringing to the market a supreme range of fast, high-performance multi-functional printers, their focus today is helping business worldwide retain printing in-house. The result is greater control over the print quality combined with sizeable cost savings.
Recognising OKI's commitment to growth, which has nearly tripled since introducing its portfolio of colour products in 2000, the business recently secured 14 percent market share for the number of units sold according to figures released by analyst firm International Data Corporation. Rising to the combined position of third, placed OKI ahead of Konica-Minolta and Epson in Western Europe, making it the closest challenger to HP. Rapidly closing the gap with the market leader, OKI intends to maintain its growth strategy, delivering affordable colour printing to a wider range of businesses.
John Ross, general manager Middle East and South East Europe attributes the success of OKI today to their latest groundbreaking solutions, including the new C3000 Series, which will complement the C5000, C7000, and C9000 portfolio of products. In a recent interview with ArabAd he commented on this progress saying, "This is encouraging news for our Middle East operation. Through our well-established network of dealers, we remain committed to meeting the printing demands of businesses in the region. Our preliminary figures indicate a period of intense growth in the Middle East during the next five years."
It's nearing a century since creator Kibataro Oki passed away, yet his wisdom, purpose and talent for visualising the future needs of businesses remains embedded throughout the company.
ArabAd: OKI now has a recognised presence in the Middle Eastern market. However, most customers still appear to relate to Epson or HP. Do you believe this is due to them employing a stronger advertising campaign?
John Ross: HP and Epson have a very high profile in the consumer inkjet market, which they leverage into their advertising and promotions into other market segments. At Oki, we see ourselves as the business printed communication specialist therefore we do not sell inkjet products and consequently have a lower recall than some others. This is something that we are addressing but we do not see end user advertising as the most effective route to raising brand awareness.
AA: Why has there been a sudden boost in OKI's advertising after never, previously, having a campaign, and will it appear in the Middle-East?
JR: Various parts of our operations across EMEA have carried out a number of advertisements using all available media. For example, we have an ongoing TV campaign in Spain where we are the clear number one in toner based colour and this has been one of the platforms for that growth. The UK-based operation is currently running a similar campaign on Sky News, which has already shown an increase in demand across several countries. At the moment we will not run this campaign in the Middle East. If we over stimulate the market we will have disappointed customers when we cannot deliver. The campaign has already been more successful than anticipated. Therefore, we need to ensure we can satisfy customer demand.
AA: What is your strategy in the Middle East? Do you offer the complete range of printers to the region?
JR: Our strategy in the Middle East has been to consolidate distribution, build the service and support infrastructure through training and communication, and address the business market with a printer offering. We are now moving into the area of offering print solutions and we are in discussion with a number of Middle East companies to establish alliances with them to address particular market segments with a complete printing solution. We offer our complete range of products in the Middle East with almost all of them having Arabic drivers, pop-up screens, and manuals. As new products are introduced Arabic is built in from day one, making it possible to launch product in the Middle East at the same time as the rest of EMEA.
AA: Five percent of your business in the region is within the desktop graphic market. HP and Epson offer regular seminars directed at these users. Have you any plans to address the specific needs of this market with similar activities?
JR: We are currently developing a number of 'off-the-peg' solutions for the graphics market which we will utilise in the Middle East as and when the appropriate product solution is available. We have also been in discussions with some software and hardware solutions providers in the Middle East who target this market exclusively.
AA: Does OKI create solutions for home-users, or do you solely target businesses?JR: We are seeing, in a number of areas across the globe, the growth of professional individuals who want to have the same level of productivity and efficiency as the large companies and they are looking at all of the printer manufacturers to provide an economic and effective toner-based print solution. An example would be a self-employed corporate management trainer who works from home. He is employed by world leading companies to give motivation and leadership training to senior executives. These people have access to the very best in printing and expect high-quality handouts and documentation from this trainer, however they do not expect all the information and support data, including web links, to be given to them on a CD which is labelled and boxed specifically for them with their company logo, dates of training, and information about the trainer. All of this is printed on an Oki C5000 series using our template manager software and CD label media.
AA: What measures has OKI taken to remain committed to technological progression?
JR: History speaks for itself; we introduced and developed dot matrix technology to where it is today. Oki introduced telecommunications to Japan in 1881. We commercialised the facsimile machine in 1973. We brought to the market the worlds first single pass colour toner-based printer more than six years ago, and we continue to develop and refine printing technology in colour and monochrome. For example, we use solid state digital Light Emitting Diodes as the light source in our page printers rather than a laser diode. What benefit does that give the customer? First of all, it is solid state digital with no moving parts, it consumes less electricity when printing than a laser printer does, it can be pushed faster at high resolutions which cannot be done with a single laser light source, but most importantly it produces a smaller dot size than a laser which means that the print quality out of one of our 1200 x 600 dpi machines actually is better than the print quality out of a rival 1200 x 1200 machine.
We see these technical advances as giving the user a definite advantage if they buy an Oki machine rather than a competitor's product.
AA: What after-sales support is available to customers in the Middle East?JR: We have spent a considerable amount of time, effort and money ensuring that our service partners in each country have been trained, get updated, have access to spare-parts and can provide the service and support that not only we expect but our customers expect.
AA: The presence of dealers in the region enables OKI to remain responsive on a local level, but how do you share information and knowledge without a headquarters in the region?
JR: Currently we communicate directly with the distributors who then pass on this information or training to the dealers. This involves our people travelling extensively and sharing experiences from country to country. Very soon, we will be going live with an intranet system, which will allow our channel partners to access and download information on-line.
AA: What businesses can benefit directly from your solutions? The C3100 appeals to small/medium-sized businesses that need to regularly modify information, such as restaurants, caterers, and retailers. Is this your target market?
JR: We address the needs of many businesses from small micro-businesses like the self-employed trainer to global names with offices worldwide. Research we commissioned three to four years ago showed that the needs of the small to medium enterprise and below were largely being ignored, by us and our competitors. The users wanted the flexibility of in-house colour printing to reduce costs and maintain their competitiveness but their only option was inkjet technology. This is why we introduced the C5100 and C5300 over 18 months ago. These products brought colour and monochrome printing to this market segment for the first time and they embraced it whole-heartedly. We have replaced these products with the C5200 and C5400 and introduced the C3100 for those who do not need a network connection but want the speed, efficiency, throughput and low running costs of a toner based colour machine. For the corporate companies and large offices we have C7000 and C9000 series and for all we have the monochrome range from the B4100 through to the B8300.
AA: Is there any advice you can offer to businesses looking to change their printer solutions in the future?
JR: When someone asks, 'What printer should I buy?' I say: 'What do you want to do with it? In other words what is the application and over the life of the machine is the capital cost a large factor or is running costs the larger factor? What will you be printing next year and the year after?' Once those criteria have been established it is then a series of looking at features and identifying what benefits they offer to you as a user. I then suggest they identify the different types of documents that they want to print and then go to the dealer and get them printed. Nobody buys a new car without taking it for a test drive, why should we expect people to buy printers just on what they read?
AA: What steps has OKI taken to ensure their products are environmentally friendly?
JR: All of Oki's manufacturing sites across the globe are ISO14001 approved. This is the Internationally recognised environmental standard. We box our printers in what looks like boring brown boxes but this is so they can be easily recycled; multi coloured boxes contain many inks which need to be removed before recycling.
Middle East incorporated on Formula one map
The Bahrain International Circuit -- built for the Formula One racing series -- took over 12,000 tons of stone to build, which included 4,000 tons of Welsh granite, specifically chosen for the track surface due to its exceptional adhesive qualities. The circuit's architecture kept the spectator in mind; offering a seating capacity for over 100,000 people, which includes 50,000 grand seats, strategically positioned for all to see the racing cars heading into the external desert area, before coming back into the oasis-styled infield, in this 5.411 km track. Eddy Rizk discusses the success of the event and this exceptional circuit with ArabAd.
ArabAd: How successful is the BIC compared to other circuits in the world?Eddy Rizk: It is difficult to compare Bahrain to well-established circuits around the world. All the other circuits across the world, except for Malaysia, were built 20 to 30 years ago but what makes BIC different is that it has taken into consideration all the positives from all the other circuits and incorporated them into BIC.
AA: Is the BIC used to promote Bahrain and how successful has it been in that respect and in what way?
ER: Bahrain International Circuit Company was set up to be the official management of the circuit, and its first priority is to make the track busy 365 days a year and at the same time promote motor-sports in the region.
However, the grand prix was a successful event, which attracted over 300 million television viewers worldwide, which in turn has definitely given Bahrain more international awareness than before and we can proudly say that the event has put Bahrain on the Formula One world map.
AA: Was the BIC's first year financially rewarding?ER: The government of the Kingdom of Bahrain underwrote the development of the Bahrain International Circuit as it considered the circuit a catalyst for further growth in the economy and the foundation for new skills. The Bahrain Grand Prix represents a public and press relations opportunity that money alone simply cannot buy. The raised international profile the Kingdom has already enjoyed in the lead-up to the event. for example, with more than 15 minutes of reports on the BBC World network in October last year is not available for purchase. The more than 350 million TV viewers worldwide, who watched the race in Sakhir, witnessed a state-of-the-art showcase in the country, as it has never done so before.
By being linked to a sport that prides itself on exacting standards of professionalism, Bahrain has aligned itself with the international community towards excellence, prestige, and power. By linking with such a powerful and sought-after brand, Bahrain will reap the benefits of image. Such massive exposure can only bring in renewed interest in inward investment and tourism.
AA: What will happen next year to the event? Are there new developments planned? New strategies to attract advertisers?
ER: We are aiming to improve on the success of this year's event; we've learned a lot from the first event and there are definitely some areas to improve upon; we will always look for improvement and strive for excellence...
AA: How receptive to the event have the Bahraini public been? Or, is it intended to attract more of a foreign crowd to Bahrain?
ER: The Bahraini turn out to the event was phenomenal. The number of tickets sold to Bahrainis was much more than the projected figures. The people of Bahrain embraced the Grand Prix as a national event and every one wanted to be a part of it.
The event was not targeted for just the local community because its marketing and PR campaign expanded internationally as well as regionally. The event's aim was to bring in tourists that had never envisaged visiting the island before the Formula One event.
AA: How much of an advertising budget did the event raise? Were the advertisers mostly International clients, or was there a fair share of local advertisers? What was the Ratio?
ER: Formula One is an international event series; most of the advertisers have a full year-contract with Formula One to advertise during all the 18 events of the season. In some circuits, local and regional advertisers take advantage of the opportunity and advertise during the Grand Prix but we didn't have many in Bahrain this year, however, we are looking forward to having more in 2005, and the years that follow.
AA: Do you think events like these will help raise the advertising spend in the region (a positive change in attitude towards advertising in the region), or is it too isolated an event per year to have a marked impact?
ER: It will definitely help to raise the advertising expenditure. Two weeks ago, the IAA Bahrain Chapter released the advertising figures of the first quarter in Bahrain and it is already up by 45 percent from last year's expenditure. Most of the local and international companies based in the region, streamlined their advertising budget in association with the event. As you know by now, many companies/sponsors are associated with Formula One and they use the platform to communicate with their target group and to elevate their image.
AA: Do you think there will be another Formula One circuit in the Middle East, or only this one in Bahrain?
ER: Bahrain and China where added to the FIA calendar in 2004. Next year, Turkey will find its name on the same calendar. There are race-tracks being built around the region, mainly in Qatar and Dubai, but not Formula One homologated tracks.
AA: What feedback did you get from the competing pilots and other participants regarding this circuit in Bahrain?
ER: We received phenomenal feedback from teams and drivers; they were all happy to have visited and raced at the first-ever Formula One track in the Middle East. These are quotes by some of the drivers:
'I am convinced that the Bahrain Grand Prix is one of the best-ever, for the drivers and for the public', said Michael Schumacher, the world champion. "This race has set new benchmarks in every respect and the organisers have done an excellent job; they made our lives much easier... This is a new race on a new track and in a different climate and I like visiting new places. We know it will be a hot race in Bahrain and that will be a challenge but I am confident.'
Schumacher continued: 'The circuit looks spectacular with a good layout. For me, the preparation for a new circuit consists simply of finding out where the corners are and noting any points that might be tricky where you could make a mistake. The organisers here seem to have addressed many of the problems we encounter at other tracks, with excellent facilities and good working conditions for the mechanics.'
Asked what had impressed him most in the short space of time he had been in Bahrain, Schumacher replied: 'The people seem very nice and warm-hearted and the organisers have done an incredible job to build this facility in a relatively short space of time.'
Jensson Button, the English driver said of the event: 'The whole team is very positive but it is very difficult to know what to expect from Bahrain.'
Sauber manager, Walter Totschnig, commented: 'We're all very impressed, The people are also very friendly. It's the new dimension to Formula One.'
"It's really good and really nice to drive", added, BAR's third driver, Anthony Davidson. 'The circuit just kept getting faster and faster with each lap we did as more and more rubber went down.'
'I definitely like this track because it's quite challenging and this is how a good circuit must be. Of course, the facilities are amazing, as everyone can see. In addition, the grip is not too bad, in spite of all we have heard so far, and the track has become quicker and quicker throughout the session', Williams' Juan Pablo Montoya told us.Rosie Abdallah
© ArabAd 2004
