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INTERNATIONAL MARKETING COUNCIL

STRATEGIC PLAN

KEY FOCUS FOR FISCAL YEAR 2005

Our key priorities in 2005 and beyond are as follows: -

Shift focus towards increasing brand presence, visibility and share of voice on the global stage.

Direct our limited resources at the global business community

"Fish where the fish are biting" but also positioning ourselves favourably "where the fish are going to be."

On the domestic front, our priorities are: -

Mobilize other stakeholders who will help increase brand visibility and share of voice globally.

To continue to reinforce patriotism, pride and optimism amongst the general public via mass-media communication, using fewer resources. It is important to maintain a national pride building presence at home. Specifically, the plan is to generate free exposure via co-operative advertising programmes and leverage activities so we can free up resources for the global market.

In terms of measurement our priorities are as follows: -

Globally front we plan to progress through a global brand equity tracking study. This will track how well South Africa fares relative to our competitive set on each one of the key brand attributes. This will be conducted annually, beginning with a baseline study in 2005.

Domestically, we plan to conduct a national perceptions’ audit at least once a year. This will give us an indication regarding levels of pride, optimism and patriotism amongst the general public. In addition, we also plan to continue doing stakeholder perceptions audits to gauge what our stakeholders think about the work we do.

THE LOGIC BEHIND THE CHOICES WE HAVE MADE

The logic behind the recommended path is as follows; firstly, according to UNCTAD’s World Investment report, South Africa has consistently performed below its potential in terms of foreign direct investment flows. This is despite a reported rise in South Africa’s foreign direct investment profile as reported in the AT Kearny FDI Index 2004.

On the global foreign direct investment flows side, all current indications (according to World Investment Report 2004, Surveys of Trans-national corporations and Investment Promotion Agencies) are that the global foreign direct investment flows are already on the road to recovery, and expected to increase in the next few years.

Some of the indications reported include global economic growth, increased revenues and net average profits for the top 500 companies in the United States of America and the 1000 largest Asian trans-national corporations, as well liberalization of regulatory regimes amongst competing nations and intensification of FDI promotion activities. It is against this background that we believe we should help beef up our visibility amongst the global business community so we can put South Africa on the agenda of potential investors.

"FISH WHERE THE FISH ARE BITING"

According to the World Investment Report, 2004, the FDI "fish" are in the United States of America, Luxembourg, France, United Kingdom, Netherlands and Japan (see table below). Having said this however, according to UNCTAD’s World Investment Report for 2004, it appears as though trans-national corporations in the developing world are increasingly becoming important sources of foreign direct investment for other developing nations.

Although their FDI outflows are relatively small compared to traditional sources of FDI, reports suggest that annual FDI outflows from developing countries have grown faster over the past 15 years than those from developed countries.

THE BIG SOURCES OF FOREIGN DIRECT INVESTMENT – ($billion)

Country	85– 95*	1999	2000	2001	2002	2003
USA	42.5	209	142	124	115	151
Luxembourg	-	-	-	-	126	95
France	18	126	177	86	49	57
UK	25	201	233	58	35	55
Netherlands	11	57	75	47	34	36
Belgium	-	-	-	-	12	36
Japan	24	22	31	38	32	28
Canada	6	17	44	36	26	21
Sweden	6	21	40	6	10	17
Australia	3	-0.6	0.8	12	7	15
Switzerland	6	33	44	18	7	10
Italy	4	6	12	21	17	9
Germany	17	108	56	36	8	2.5

Source: UNCTAD, World Investment Report 2004; www.unctad.org/fdistatistics

The most interesting source countries for FDI within this group (apart from South Africa) are China and India. According to the WER, the government of China and some provincial administrators encourage Chinese firms to invest abroad.

The encouragement comes in the form of (amongst other things) financial support and corporate income tax incentives. On the other hand, it is reported that the most important destination for Indian FDI has been the United States of America.

It is reported that 55% of Indian outward FDI is in manufacturing, and that FDI in IT has begun to grow rapidly. Brazil is reported to have the largest outward FDI stock in the region, but it appears that a large share of this is in financial services or tax havens.

With a few exceptions, it appears as though there is an overlap in our big export markets, source countries for tourism and foreign direct investments.

Specifically, countries that appear to be right in the middle of trade, tourism and exports intersection are United States of America, China, Japan, India, United Kingdom, Netherlands, Italy and Australia (see table below). Other countries such as Canada, Switzerland and Germany (for example) are at the intersection of two of the three categories.

SOURCE COUNTRIES FOR FDI, OUTWARD TRADE AND TOURISM

FDI sources	Tourism*	Export markets**
USA	Japan	USA
Luxembourg	China	Japan
UK	Australia	UK
France	India	Germany
Belgium	UK	Netherlands
Netherlands	France	China
Japan	Italy	Switzerland
Canada	Germany	Australia
Sweden	Netherlands	Belgium
Australia	USA	Italy
Switzerland	Brazil
Italy	Canada
China	Kenya, Nigeria, SADC Air
India

*Source: Global Competitiveness 2005; a tourism handbook

**Source: Trade & Industry Monitor, March 2004, Volume 29

Our recommendation is that in the long terms we concentrate our limited resources towards beefing up our presence and visibility in the United States of America, United Kingdom, China, India, Japan, Netherlands, France, Germany and Brazil. The first five countries are at the intersection of all three sectors. Germany is at the intersection of both tourism and trade/exports, whilst France straddles both FDI and tourism. We recommend France because we believe she provides a launch-pad into French speaking countries all over the world, and Brazil because of her strategic position in Latin America.

Germany has been on downward spiral (in terms of FDI) for some time, but we believe that we should also include her for two key reasons firstly, 2006 Soccer World Cup in Germany and secondly, Germany ranked within the top three export markets for South Africa in the fourth quarter of 2003.

2. PROGRAMS AND ACTIVITIES

2.1 GLOBAL MARKETING AND MOBILIZATION

Mass media advertising and publicity: Our first prize in terms of mass media advertising and publicity is to create continuous and sustained presence and visibility in a few priority countries. In terms of media selection we plan to continue using business print as a core medium (especially because of its ability to provide depth of messaging), and to support it with airport advertising, on-line advertising/e – marketing, outdoor and vignettes on appropriate TV channels. Our placement strategy is to concentrate on a few titles per country and dominate them all year round.

To provide more depth of messaging, we will (where possible) complement our advertisements with editorials and surveys. We also plan to enhance the stickiness of our communication. To this end, we will produce insight driven communication and ensure that all our communication is held together by a compelling big idea. For fiscal year 2005, we can deliver continuous and sustained presence in two key markets whilst building tactical presence in the remainder.

E-marketing: Our goal to increase visibility and accessibility of the web portal. Specifically, the key objective is to get www.southafrica.info to be amongst the top 5 websites that get called up each time one types South Africa on major search engines globally (Google, Yahoo, Msn and AOL) and domestically. We plan to achieve this by maximising visibility on major search engines, on-line promotion of site, creating more links with other websites. Funds permitting, we would also like to inject the brand persona in the web portal, and also to translate key sections of the web into languages spoken in the key countries we are targeting.

Outbound branding and outreach missions: After the successful branding mission to the United States of America last year, we plan to embark on the second branding mission to Germany and England by the end of the first quarter in fiscal year 2005. The object of the mission is to get South Africans businessmen to share the South African story (from their own perspective) with their German and English counterparts. The plan is also to get them to help contextualize some of the perceived brand outages that may exist. In addition to the branding mission, we also plan to test the feasibility and effectiveness of investment panel discussions as a marketing tool. The idea is to test this at one of the World Economic Forum Summits before the end of the fiscal year.

Support and empower our diplomatic missions abroad: To create brand presence and visibility in countries where their 120 offices are located. We aim to achieve this in three ways; firstly we plan to develop a brand building DIY workshop module for our foreign missions. Secondly we plan to run the DIY workshops with all regional desks representing our missions abroad and clusters of missions in different corners of the world. Lastly, we will provide our missions with marketing material and information.

Provide marketing tools and collateral We plan to produce a brand book, video, South African Story 2^nd version, visual reference guide to be used by all key stakeholders to help create brand presence.

Research: The plan is to conduct brand equity tracking study globally, national perception audit, to track levels of patriotism, pride and optimism domestically. Funds permitting, we would also want to track global media coverage and to purchase data and insights relating to foreign direct investment and trade.

DOMESTIC MARKETING AND MOBILIZATION

Domestically, the priorities are firstly to reinforce patriotism, pride and optimism and secondly to mobilize our key stakeholders forge common ground and develop brand expressions. The plan is to reinforce patriotism, pride and optimism by touching more hearts and tell more stories more often with fewer resources through the following activities: -

Continue mass media advertising (TV and radio), leveraging on moments of pride that are in line with the brand and are also meaningful for each of our target audiences.

Stretch proven advertising campaigns into other promotional environments.

Mobilize unpaid for exposure via organisations internal communications channels.

Generate co-operative advertising with different stakeholders.

MOBILIZE AND FORGE COMMON BRAND VISION AND CONSENSUS

Brand Conversion: The goal is to help ensure South Africans reinforce the desired brand impressions (in thought, word and deed) at key points of contact. To this end, we aim to convert 4000 individuals in key organisations into brand ambassadors.

Brand briefings and road shows The goal is to forge common vision and consensus amongst key role players who are involved (in one way or the other) in the marketing of South Africa to the world re how to increase brand visibility and brand-pulling power. We are primarily targeting stakeholders with potential to create medium to high impact in terms of brand presence and visibility amongst the global business community.

We firmly believe that provinces as well as key stakeholders within the 10 priority sectors of the economy (such as agro-processing, chemicals, cultural industries just to name a few) should be our first priority. We believe that most (if not all) have high potential to add value to the desired end goal. Our plan is to kick-start a national road show and stakeholder mobilization around "One brand, different expressions, many voices and stories to bring the brand to life theme." The end goal is to develop as many brand expressions as possible with as many stakeholders and plans to bring these to life globally.

3. DELIVERABLES FOR FISCAL YEAR 2005

GLOBAL MARKETING AND MOBILIZATION

ACTIVITY	DELIVERABLE	TIMING	COST IMPLICATION
Mass media communication	Continuous and sustained presence in at least two markets and tactical presence in the rest.	Start first quarter of FY 2005 up to the end of the year.	R16million
E-marketing	www.southafrica.info to be amongst the top 5 websites that get called up each time one types South Africa on major search engines globally (Google, Yahoo, MSN and AOL).	By end of fiscal year 2005	R4 million
Outbound Branding and outreach missions	At least one branding mission to Europe. Test investment breakfast panel at Davos or one of WEF summits.	By end of first half of 2005	R3million
Foreign Mission support	Develop a Branding DIY workshop module and run in our foreign missions. Provide marketing materials.	By end of 2005	R0.5million
Collateral and tools	Brand book, SA Story 2, SA audio visual presentation.	By end of first quarter of FY 2005	R3million
Research	Brand–tracking study National perceptions audit, FDI insights	Once a year	R3million
Global Support	Mobilize key people. Improve media coverage. Engage expatriates. Manage key issues.	On a yearly basis	R2.5million

DOMESTIC MARKETING AND MOBILIZATION DELIVERABLES

Activity	Key Deliverable	Timing	Cost Implication
Mass media communication
Advertising	Radio and TV advertising reaching 63% of the adult population at least 3 times per burst.	Start April 2005	R10 million
Co-operative Advertising	Generate at least R10million’s worth of co-operative and free advertising.	By the end of FY 2005	R2 million
Leverage proven TV advertising concepts.	Stretch Today I woke up into at least two different promotional environments	By end of FY 2005	R2million
Mobilization
Brand Conversion	4000 brand ambassadors across all spheres.	By end of FY 2005	R 3.5 million
Stakeholder consensus and buy in.	Brand expressions with at least two provinces and least two economic sectors*. At least two media briefings per quarter.	By the end of 2005	R 0.5 million

* The plan is to interface with at least 6 provinces and 6 economic sectors. We assume a conversion ratio of 33.3%, i.e. 33.3% of our stakeholder interfaces will result in customised brand expressions.

4. SPENDING PLAN

Programme	Activities	Timing	Service Delivery Indicator	Responsible person	Cost implication
Global Marketing and Mobilisation	Mass Media Advertising	Start in 1^st quarter of 05	Number of advertisements bought and people reached and the times they were reached. Outtakes and outcomes	Marketing Director	R16 million
	E - Marketing		The number of links with other websites Where (in the pecking order) the web portal appears when one searches for SA on-line.	Marketing Director	R4 million
	Collateral Tools	By end of 1^st quarter 05	Quality of collateral produced and the uptake from stakeholders	Marketing Director	R3 million
	Branding Mission	By end of 1^st quarter 05	Quality as measured in terms of who we reached out to, quality of communication and impact on the mission’s audience	Stakeholder Relation	R3 million
	Missions Support	End of 1^st quarter	Branding DIY workshop module, number of workshops, quality and outcome.	Marketing Director	R500K
	Global Support	Ongoing	Media coverage, number of relations forged with key people and expatriates.	Country Managers	R2,5 million
	Research	Start 1^st quarter 05	Quality of the research, and actions we are able to take resulting from the research.	Marketing Director	R3million
	SUB-TOTAL (A)				R32 million
Programme	Activities	Timing	Service Delivery Indicator	Responsible person	Cost implication
Domestic Marketing and Mobilisation	Mass Media Advertising	Start first quarter 05	The number of people reached versus the level of resources used.	Marketing Director	R10 million
	Partnerships	Start 1^st quarter 05	The number and value of co-operative deals.	Chief Executive Officer/ Stakeholder Relations Director	R2 million
	Amplification	Start 2^nd quarter 05	The number and value of promotional deals	Stakeholder Relations Director/Marketing Director	R2 million
	Mobilisation	Start 1^st quarter 05	The number of brand ambassadors, and institutional stakeholders we convert and the number of brand expressions that result	Stakeholder Relations Director/Marketing Director	R4 million
	SUB-TOTAL (B)				R18 million


Programme	Cost Drivers	Timing	Service Delivery Indicator	Responsible person	Cost implication

Support	Personnel	Monthly	Employees activities aligned the IMC mandate	CEO	R10 172 147
	Administration	Monthly	Adequate administrative support is provided to achieve IMC’s goals.	CFO	R4 788 859
	Office Equipment	Monthly	Adequate equipment and furniture is procured to achieve IMC’s mandate	CFO	R865 000
	Professional Fees	Monthly	Support serves are procured to achieve IMC’s mandate	CFO	R3 373 994
	SUB-TOTAL (C )				R19 200 000
	GRAND TOTAL: (A) + (B) + (C)				R69 200 000