Textile and Morocco
Craftsmanship Inspired by Culture
EdVenture National Case Study Competition
Richard Blackwood, Xavier Vavasseur, Kjetil Waggestad
Faculty: Dr. A.
Table of Contents
Overview of Morocco’s culture, economics, and history
Target market profile
Overall Marketing Objective
Marketing tactics and specific media recommendations
Examples of creative execution
We have chosen the textile industry
as our area,
with a special focus on the
. The textile industry has been a foundation for
industrialization for 250 years, and
also an important industry in the newly
veloped countries such as South Korea and Singapore. Furthermore, Morocco
already has a well established
textile sector, and is one of the largest
exporters to the
For a long time the
companies in the textile industry were
focused primarily on
st when c
hoosing where to offshore. This
trend is changing to also consider
is helpful for Morocco, because it cannot compete on low wages alone.
Not only are the new trends diminishing Morocco’s competitive disadvantage, they
t aspects where Morocco has a strong advantage and core competencies.
We strongly believe that Morocco’s current capabilities will fit well with the
evolution of the textile industry and thus lead Morocco to having a comparative
advantage over many of the
countries competing for foreign direct investment in the
Overview of Morocco’s culture, economics, and history
Similar to the many different cultures in the U.S., Moroccan society is a
fascinating melting pot of an array of cultures: Be
rber, Arab, Jewish, Muslim, African
and European. Officially Morocco is a bilingual country, with the official languages being
Arabic and French. Arabic is what "the man in the street" speaks and French is taught in
school, thus making it more common in go
vernment administration, business and
among upper class Moroccans.
Morocco has a strategic geographic location that is unparalleled. It is situated on
the extreme northwest point of Africa that by air it is only three hours from Paris, 12
miles from Spai
n, and a seven hours flight from New York. It serves as a gateway
between Western and Islamic worlds. Furthermore, Morocco is a country that is rich in
resources, offers more competitive labor rates than the U.S. and is ripe with opportunity
for the textil
e industry that cannot be found domestically.
The Moroccan constitution provides for a monarchy with a parliament and an
independent judiciary. The King has ultimate authority, assuming the roles of political
leader and the “Defender of the Faith.” He ho
lds a position of authority over the Council
of Ministers. The King is also responsible for appointing a Prime Minister following
legislative elections in addition to all members of government with the help of the Prime
Minister. The King has the power to
terminate the tenure of any minister, dissolve the
Parliament, suspend the constitution, and call for new elections, or rule by decree.
Similar to the U.S. president being commander in chief of the military, The King of
Morocco serves as leader of their mi
litary. The King also serves as the countries
Under the ruling of King Hassan II, Morocco emerged as an oasis of peace and
stability in the region. He managed to maintain the democratization process in the face
of turbulent regional po
licies during his reign.
Morocco is a middle income country pursuing political, social and economic
modernization. The GDP estimate for 2005 is $4,200 per capita, which is higher than
most African countries
. During 2005, the GDP real growth rate was 1.7
%, which had
increased from 1.2% the previous year. For 2006 the GDP real growth rate is 6%. Other
economic indicators for 2005 estimates include, the unemployment rate of 11%,
population below the poverty line was 19%, inflation rate based on consumer pri
1%, and an exchange rate of Moroccan dirhams per US dollar at 8.865.
King Mohammed VI assumed the throne in July of 1999 when his father King
Hassan II died. He has since shifted the country to a constitutional monarchy,
introduced legislation t
o promote women’s rights, and made fighting poverty among the
most central goals. At the same time, the government has embarked on ambitious
economic reforms to boost the country’s growth rate and spread its benefits more
With a population of abou
t $30 million, Morocco has a fairly diverse economy in
which trade plays an important role. Agriculture is important for the overall economic
performance, with the sector accounting for 15% of GDP and employing about 40% of
the labor force.
About 25% of th
e labor force is
engaged in industry and 35% in
services. Main industrial activities are textile production, mining and phosphates and
food processing, while tourism and commerce dominate services.
The economy is relatively open with exports and import
s accounting for 50% of
GDP. Europe is Morocco’s major trading partner, and exports include textiles,
agriculture and fish products, phosphates and phosphate derivatives. Trade between
Morocco and the European Union nearly doubled in 2002. An Association A
governs relations between Morocco and the EU, and the new partners signed a new
fishing treaty in 2005.
Of particular concern is the outlook for the Moroccan textile industry, which
accounted for 34% of the value of manufactured exports and 42%
employment in 2000. The ending of the international quota system the Multifibre
Arrangement (MFA) in 2004 has put increased competitive pressure on Moroccan
textile producers. Given that women make up more than 70% of the work force in text
and apparel industry, there is a distinct gender dimension to policies regarding this
Morocco has many economic incentives that appeal to U.S. companies. Potential
investors may ask themselves what makes Morocco a better place than the myriad
other countries seeking foreign investment. Morocco has historically proved to be a very
welcoming country and is open to the outside world thanks to its liberal economy and
Morocco and the U.S. signed a comprehensive free trad
e agreement (FTA) in
June of 2004, which took effect in January 2006. Morocco is the second Arab nation
and the first African nation to have a FTA with the U.S. The FTA provides U.S.
exporters with increased access to the Moroccan markets by eliminating ta
riffs on 95%
of currently traded consumer and industrial goods. This in turn will level the playing field
with European competition while protecting U.S. investors. Moroccan officials have
expressed very high hopes that the FTA will serve as a catalyst to
infuse the economic
reform process while foster greater competition and the development of international
partnerships. Key sectors will stand to benefit from this such as banking and insurance,
while liberalizing the tariff structures of the Moroccan texti
le and agricultural industries.
Morocco’s efforts toward globalization and modernization must be commended.
They have streamlined customs services and have created courts in the country for the
first time to govern commercial activity. In addition, simil
ar to the SBA here in the U.S.,
they have developed 16 Regional Investment Centers that cater specifically to
facilitating new business ventures. Regarding the subject matter of labor laws, in 2003,
Morocco passed a labor code that protects both employers
and employees. Morocco
has even gone as far as to adopt U.S. standards in the arena of intellectual property
protection, while calling for a more transparent judicial system and stricter accounting
standards through the provisions of the FTA.
We believe t
hat the opportunity in Morocco is a modern day gold rush on the
global level. There are over 120 American businesses operating in Morocco with
investments exceeding $600 million while creating over 90,000 direct and indirect jobs.
Companies like Dell and
Fruit of the Loom have pioneered the way into Morocco for
other U.S. manufacturers while taking advantage of the 11 million
The world arena of textiles and apparel manufacturing has changed significantly
in the pas
t decade. A major caveat of change was the end of the Multi
Arrangement (MFA) in 2004 and the transition of The Agreement on Textiles and
Clothing (ATC). This has largely
the developing countries of the world as their
on quotas has ended. Quotas no longer dominate the world of
textiles, which has dramatically increased competition worldwide. The threat of
competition from low labor cost countries, especially China and India, has prompted
textile and apparel companies in
the US and Europe to seek outsourcing destinations
that would enable them to cut production costs significantly. Morocco is one such
destination, which manufactures for major apparel companies and designers such as,
The Gap, Navy Blue, Banana Republic, Le
vi Strauss, Marks & Spencer, Christian Dior,
Boss, Hermus, and textile giants such as Italy’s Legler and Spain’s Tavex group’s
Many experts have argued that the threat of China and India may not be as
significant in the long run as
expected. It is predicted that China and India’s continued
growth rates of their middle class will intensify domestic demand for goods such as
apparel, which would decrease their export capabilities. At the same time that domestic
demand increases, wages w
ill rise, which could significantly change their position as a
least cost labor country.
In the long run, global companies may choose outsourcing
locations based on wages and production capabilities other than China or India.
A major determinant for cho
osing an outsourcing destination for the production of
apparel is the cost of labor due to the labor
intensive nature of apparel production.
Another determinant is whether a country has a significant and highly skilled and
trainable workforce as well as a
developed communication and transportation
infrastructure. The production of textiles on the other hand requires a significant amount
of capital investment in manufacturing capabilities; however, many companies tend to
choose outsourcing locations that are
in close proximity to their apparel production in
order to streamline their supply chains.
Global companies would benefit from
Morocco’s low cost and skilled labor pool, its developed infrastructure, as well as its
manufacturing capabilities for mass pro
duction and just
time quality products.
Globalization, liberalization of trade, and innovations in technology has spurred
global competition at rates never seen before. The highly competitive nature of the
world’s textile industry has prompted many c
ompanies to reorganize themselves as
global supply chains in search of outsourcing locations with manufacturing capabilities
for lean production and just
time quality manufacturing. These manufacturing trends
have also been sought out in order to fulfil
l global mass production, a highly diversified
world market, and the ability to respond to consumers’ changing tastes and trends.
Another trend caused by global competition is that many sectors of textiles and apparel
production have reorganized themselve
s as “niche” producers, focusing on quality and
value added products.
Morocco has been following this trend, evidenced by a
significant manufacturing segment that specializes in jeans and sportswear. Morocco
has also invested heavily in their manufacturin
g capabilities, establishing large
sophisticated textile mills that are capable of producing quality goods, while being
flexible and responding to seasonal changes of the world’s fashions.
Morocco’s textile industry is considered by many as a potential
There has been a significant increase of foreign investment in Morocco’s textile industry
In 2004 there was a 30% drop in the textile sector, which most likely can
be attributed to the elimination of quotas of the Multifibre Agre
ement. Morocco’s textile
sector bounced back favorably and experienced considerable growth after the Free
Trade Agreement with the US was concluded.
The recently concluded Free Trade Agreement with the European Union (EU)
has also encouraged a signific
ant amount of manufacturing development in Morocco, as
well as increased trade with the EU.
The EU is Morocco’s largest trading partner and is
Morocco’s primary export market.
Morocco’s major competitors for the EU market
includes Romania, Bulgaria, Tuni
sia, and Turkey. Europe, namely France, Spain, Italy,
Germany, and the UK are Morocco’s largest importers accounting for 56% of total
Morocco has also implemented or is in the process of concluding free trade
agreements with other countries such
as Turkey, Egypt, Tunisia, Jordan, and the United
These agreements will continue to spur investment in Morocco and
increase its export trading, as well as increase US textile companies desire to invest in
Morocco as these agreements would g
ive the companies quota and duty free access to
Europe and the Middle East. The US Free Trade Agreement will also encourage
investment in Morocco due to a “special allowance that allows for the use of cotton
fibers from least
The growth sub
sectors of Morocco’s textile and apparel market are the knitwear,
cotton and fiber, jeans, sportswear, and leatherworking sub
During the first
half of 2006, Morocco’s clothing exports totaled MAD 9.8 billion (USD 1
.11 billion), an
increase of 15.2% from the previous year. During this period there was also a 7.6%
increase in the production of clothing.
The textile industry is composed of nearly 1,700
companies and is the largest employer for Morocco, employing more
than 200,000 full
time positions. A significant portion of their manufacturing output is geared towards the
domestic market. There are many of the large modern companies, or formal economy,
which produce 60% of the country’s textile production; however the
re are even more of
the small companies, or informal economy, which account for approximately 70% of the
textile workforce. The textile industry is the largest employer for Morocco.
minimum wages for the Moroccan textile industry is 9.66 Dhs per hour
The average wages for the country are considered low by European standards. The
Ministry of Industry and Trade and The World Bank conducted a survey in 2002 that
reported Moroccan manufacturing firms average wages were twice as high as China,
and four times as high as India, although productivity was not included in this analysis.
Despite the significant growth and success, the Moroccan textile industry has
recently run into problems. These are caused by a variety of reasons, both on the
o and micro level. On the macro level causes include competition from China and
India, and also other North African and Middle Eastern countries, which is largely due to
the elimination of the Multifibre Arrangement. There has also been a general slow down
in the overall Moroccan economy, which has increased the unemployment and poverty
rates. Another concern is the country’s continued reliance on the agriculture sector. At
the micro level, the textile industry itself, there has not been an increase in prod
gender issues have not currently been effectively resolved, and production processes
have not been standardized sufficiently. The Moroccan government has and is currently
working towards solving problems such as these through economic and politic
reforms, government subsidies, programs, and investment incentives in order to
continue macroeconomic development and growth for the country.
The secondary research can be divided into three parts: About Morocco in
general, the Mo
roccan textile industry and its competitiveness, and the American
market with special focus on garments
Moroccan Free Trade Agreement is one of only seven FTA’s the US has
signed, and the only one with an African country
. This should increase t
of Morocco for foreign investors.
The agreement contains provisions
that the origin of
fabric being used in the production of textiles must adhere from one of the countries, but
also a special allowance that allows fabric from least
These countries are geographically close to Morocco, and the so
called “Franc Zone”
countries of the Sub
Sahara are now the source of approximately 10% of the world’s
cotton exports, and rising.
According to research conducted b
, investors who are
already present in Morocco generally find that repatriation of profits is not a profit and
access to foreign currency is good. There are expressed worries that contraband goods
negatively impact business and that protec
tion of intellectual rights is insufficient.
the decision of investing in Morocco to been a good one, and that
they would both consider further their own investment and recommend other companies
to do the same.
There were, on the other
hand, expressed concerns about the
infrastructure, especially access to and stable service of electricity and
Corruption remains a problem, as witnessed by Morocco’s stable
position on Transparency International’s
index over the last
Morocco has established 16 regional investment centers
to help potential
investors with registering companies and
other business troubleshooting, and the Free
Trade Zone in Tangier should be interesting to US companies, espe
cially since the port
is being expanded and modernized.
Increasing port efficiency is important as improving
from being counted amongst the
to the 75
of the worlds most efficient
reduces transportation costs by more than 12%
e Economist’s country risk unit has placed Morocco as being moderately
, which is at the same level as most other developing countries comparable to
The Moroccan government has launched several incentive programs for
companies operating in
the textile industry
. Measures include a fund for company
restructuring, companies’ need only pay 50% of the social security costs, energy costs
will party be covered by the government, and the Hassan II fund for granting
to land acquisition an
The textile industry can also draw on Morocco’s geographical position. Even
though labor costs in the textile industry is higher than in many other countries, labor
costs is only a part of the complete cost structure. Another importan
t part is
A study from 2000
calculated the cost of shipping a standard
container from Baltimore to be about $190 per extra 1000 kilometers of sea journey and
$1,380 for land. Because most of the countries in the competitive set are l
from the US than Morocco it is possible that the reduction in transportation costs can
outweigh the higher labor costs.
Furthermore, East Asian countries typically ship to the
west coast, but the majority of the US population lives in the ea
stern 1/3 of the country,
and since 2000 the price for land transportation has increased even further as oil prices
According to a study
it is increasingly common for international textile
companies to spread their production to many countrie
s because of several reasons,
not just wage rates. The study finds that wage premium attached to skill increases as
countries open their markets.
same study also describes how foreign
companies which have invested in
Morocco operate. The major part of
the companies use Moroccan labor for cutting and
sowing garments from textiles shipped in from the Far East. These garments belong to
virtually every conceivable niche of
the market, from casual clothes to high fashion.
A second way of operating, which h
as been prevalent among investors from the EU, is
to use Morocco for producing small batches with a quick turn around time. The
garments produced are usually seasonal branded clothes.
A report into the issues of gender and employment in the Moroccan text
found that it
women make up the majority of the workforce in the garment
sector. It was found that it is
generally accepted that women work in factories and that it
is not uncommon for women to move away from their parents, or even around the
country, to work. This implies that labor mobility exists. On the other hand, managers
are mostly male, the management was described as Tyleristic in its style, and women
are treated with a gender bias in factories. Furthermore, there is a problem with hi
labor turnover and unstable employment. The women that were interviewed
complain about being overworked, and that they would purposefully slow down
production to avoid being overworked. Combined with the fact that work is usually paid
by the hou
r suggests that
productivity can be increased.
textile industry has been in a steady decline for quite some while, and
the US government has reduced the amount of protection the sector receives.
textile companies have increasingly moved pro
duction overseas. According to a study
the wage rate and tax system is important
for US textile companies investing abroad,
but also local labor and management skills, the marketing and production capabilities,
the reputation of the country for labor con
ditions, and also relations with the US.
The study also states that when the income level increases, consumers want do
unique and different garments that may be inspired by foreign cultures.
According to a report
, the US apparel imports grew by $5
.9 billion in 2005.
Although China is the source of much of this growth, it also aids many other countries.
Furthermore, Chinese imports will be restricted in 34 garment categories through 2008,
and there is a possibility that the US will find a way to res
trict textile imports even after
about the future of the apparel market in the US concluded with the
probability of a growth in the size and number of niche markets in the US. It also points
out that garment companies will increase their fo
cus on lean production and quick turn
around times. The authors expect that US importers will increase their focus on risk
associated with inventory levels, product diversification, and replenishment and service.
Furthermore, China suffers from heavy hande
d bureaucracy and distance from the US
that may lead apparel companies that produce branded and seasonal goods to
elsewhere for offshoring. An example
that is provided
of this is
the fact that
producing most of the jeans sold in the US. The
production cost is higher than China,
but the lead time is much shorter; US importers value the option of changing production
and replenishing inventories fast, and shy away from facing the risk of having a
warehouse full of out
is supported by a WTO discussion paper
where it is pointed out that
competition has moved away from a narrow minded focus on costs to also include lead
time and flexibility. It is claimed that US retailers have changed heir focus to offer
and lower inventory levels. Furthermore, the study points out that the
quality segment relies on modern technology and well
paid workers, and that
companies in this segment are
usually found in clusters in developed countries. There
an emerging trend towards relocating to lower cost countries.
other hand, producers of very standardized and low
quality products are usually found
in developing and employ mostly unskilled female labor.
The aforementioned stud
by a dissertation
which findings are
that US companies that are still competitive in the textile industry are the ones that show
a high degree of innovation, competent management, strategic core competencies, and
a high product reputation.
There are several countries in the Mediterranean region that are large producers
of textiles. Jordan, Tunisia, and Turkey are direct competitors in the Mediterranean
region as they compete in the many of the same segments as Morocco. The cost
structures of these countries are all fairly similar, but Morocco possesses a better
location. Egypt has long been a source of low cost manufacturing, but is now facing stiff
competition from Asian countries. Italy is a major player in the textile industry
, but not a
direct competitor as the competitive strengths are highly productive and skilled workers
who create a large share of value added.
Brazil and South Korea are direct competitors in the segment Morocco should
compete in, though their locations ar
e not as good and the cost structure is higher.
Pakistan has a very low labor cost, but is located far away from the US.
China, Indonesia, Thailand, Bangladesh, and India have very low labor cost, but
are situated much further away from the US than Morocc
o is. Furthermore, these
countries have much more heavy handed bureaucracy than Morocco has.
Mexico is one of the largest textile exporters to the US, and along with the
Caribbean countries pose major competition to Morocco.
Strong ties to the US
Government incentives program
Economic & political reforms
Capabilities in growing
d relationships with
Middle East/North Africa and the
Lack of o
and natural resources
“Made In” doesn’t matter
Tourism = positive image
Low labor force participation
Low level of education
End of the MFA
North Africa/Middle East
Image of Muslim
Moroccan workforce already possesses skills in working with textiles and
fabric. It is a tradition that women work with textiles from an early age, and this
translates into a need for
training when hired to work in factories.
It is also accepted
women work in factories to earn wages, and with a low workforce participation in
general, and among women in particular, there is a substantial amount of potential
The population of Morocco is very
with the Arab
and 98.7% are Muslims
, which greatly reduces the risk of internal
disruptions. Furthermore, the Moroccan government is secular
and the laws are more
in many other Muslim countries, which should translate into an
antage when presented to US companies
The Moroccan history also speaks to the country’s advantage, as when Moorish
Spain stood out as a beacon of tolerance and prosperity when Christian
violence was at
its worst in the middle ages. T
Friendship being the oldest
friendship treaty in US history, and Morocco became a
NATO ally in early 2004.
Americans have a renewed patriotism, and
Morocco’s ties to the US should reflect positively upon the country.
occan government has
programs for potential
, such as the free trade zone in Tangiers, the Investment Charter Law, and the
Hassan II Fund. After the ascension of Mohammed VI the country has made good
headway on the path to modern
, trying to shake off the memories of the political
unrest and human rights violations in the so called Years of Lead (
les années de plomb)
during the reign of the last King. The political reform
includes more pluralistic
tion parties, less
intervention in the
and the move towards a more open society in general. The economic reforms
include liberalization of the banking sector, investment in infrastructure, reduction and
removal of barriers to trade, a
nd tax incentives to attract foreign
has also proven itself to be fiscally responsible, cutting foreign debt and
These reforms and actions should translate into lower risk and a higher
desirability for foreign inv
Morocco already possesses a workforce skilled in the production of garments
that have a high and/or growing market share, i.e. jeans. As more people move up into
the middle class and discretionary income increases the sale of branded clothes also
ease, which increases the size of the segment
should focus on
Most of the labor in Morocco is organized into labor unions, and the government
is complying with ILO standards ensures safer work environments, more decent wages,
and measures to era
dicate discrimination. This translates into a lower risk faced by
investors to receive negative publicity around working conditions.
has several bilateral and multilateral trade agreements with many
countries. Among the most important, apart from t
he FTA with the US, is the association
agreement with the EU, the Agadir agreement with other North African and Middle
Eastern countries, and membership in the WTO. There is also an ongoing process of
creating a Middle Eastern FTA
This implies that Ameri
can investors could increase
their potential market by using Morocco as a launching pad for
ventures into other
Morocco does not possess oil or any other abundant natural resource. According
countries that are rich in
resources, but have weak
lower economic growth,
suffer under worse
experience more internal conflict than countries that does not have resources.
Morocco focuses its efforts correctly, it can follow in the footsteps
of South Korea and
Ireland and quickly get a handle on corruption and experience sustainable growth.
weakness is that it is largely unknown amongst US
. The lack of awareness might lead to it not being t
aken into consideration
when decisions of where to offshore are being made.
It is evident that Morocco is
already taking steps to alleviate this weakness, as witnessed by this paper.
Another weakness is the level of corruption. It is at the same level as C
somewhat higher than Turkey and Mexico, and much higher than in Jordan and Tunisia.
This may lead to hesitan
cy among US companies to invest because of stringent
an foreign anti
corruption laws, but Morocco’s lack of resources will make it
easier to combat the corruption.
The Moroccan employment level is low, especially amongst women where only
35% participate in the labor force. Furthermore, unemployment is high and the average
education is low. If more of the population can be included in
to the workforce and
unemployment is reduced there is room for significant economic growth without the risk
of inflation. The proven way of doing this is to focus on education.
There is currently a problem of labor unions causing strikes that disrupt
ction and reduces productivity. Furthermore, the unions have caused salary
increases for textile workers that are not reflected in increased p
roduction. If the
not able to negotiate
deals with the labor unions it can lead to large
and a Canadian company has already pulled out because of problems with
There is evidence to suggest that the unions and the government are
able to cooperate as the disputes where unions have been involved have been quickly
co suffers from low productivity in the textile sector as opposed to the US.
There are two aspects that could be alleviated without too much change: the wage
system is outdated, with mostly hourly salaries being paid, and productivity should
increase if vo
lume related salaries are used. The management system should be
Official case text.
updated to more modern methods
, since they now are described as relying mostly on
the principles of Tylerism
Improvements in Moroccan infrastructure are under construction
, but in the shor
term it can prove to be a weakness.
Morocco has a very central location. It is much closer to the US markets than most of
the competitors, with the exception of Mexico and the Caribbean countries.
Furthermore, transportation by sea i
s much cheaper than land transportation, and the
competing countries, with the exception of the Caribbean, are located further away from
the heavily populated eastern seaboard of the US.
The directional balance of trade is also important. It is costly to
containers between countries. Currently the value of imports from and exports to the US
from Morocco is fairly even
and with a focus on evening out the bulk of imports and
exports Morocco can reduce transportation costs. The US remains the lar
of cotton in the world, and also produces many high tech fibers. Morocco has an
opportunity here were it is possible to import fibers and textile from the US and return
According to research
, having the capability of lean man
ufacturing, as well as
geographical proximity to the US, has increased substantially in importance lately. F
some categories, especially highly fashionable and seasonal garments, the textile
industry has attributed labor cost with a low importance. This
is a very important
opportunity for Morocco as it is already known for having the capability of producing
small batches quickly and with a high quality. Furthermore,
system and geographic proximity is better than most of the competit
It is a well known fact that China has a fixed currency that is grossly undervalued
against the dollar, a situation that is not sustainable in the long run. There is also a risk
of the Chinese population rising up against the communist rule. Furtherm
ore, there have
been incidents where textiles from China
have been denied import
. Morocco therefore
has the opportunity to launch itself as a hedge against China because it is further along
the path to democracy, has a floating exchange rate, is less likel
y to be the subject of
, and has a less heavy handed bureaucracy than China
Previous research has shown that the “Made In” label is not important in the
purchasing decision of garments among US final customers
. This increases Morocco
opportunity as decision makers should not care about country of origin, rather on
The many bilateral and multilateral trade agreements Morocco has should also
be levied as an opportunity for investors. Not only are they reaping the
benefits of the
Official case text
Official case text
Morocco FTA, but there is also the possibility of expanding from Morocco into
several other countries without being penalized.
Morocco is a popular tourist destination and is seeking to attract even more
tourists. As tourism increases
the country should be viewed more positively.
The major threat against the Moroccan textile industry was the end of the Multi
Fiber Agreement which protected the textile exports to a large extent. Since Morocco
can not offer very low labor cost
s or very high productivity the textile industry might be
squeezed from both directions. After the agreement ended there has been a surge of
textile exports from China, and the textile sector in Northern Africa as a whole has taken
a severe blow. Because t
he cost of labor cannot be changed, Morocco needs to
alleviate the threat by focusing on increasing productivity and adding more value.
Not only does Morocco face competition from Far Eastern countries with
substantially lower labor costs, but other North
African, e.g. Tunisia and Egypt, and
Middle Eastern, e.g. Jordan and Turkey, countries are trying to attract attention to their
textile industries. Morocco has one advantage against the competition, which is the
proximity to the US.
Morocco is also threate
ned by being somewhat technologically behind
competition. This threat must be addressed by allocating funds to increase the rate and
level of technological adaptation such that it at least does not pose any competitive
The lack of oil an
d other resources, such as cotton, leaves Morocco at the mercy
of unpredictable prices of energy and raw materials. Not much can be done to alleviate
this threat, except concluding long term supply contracts.
Unfortunately, many people have begun associati
ng Muslims in general with
terrorists. Although the problem is highest among uneducated people, it might also
permeate into the level of the decision makers. Morocco has done everything in its
power to distance itself from extremist Islamism, but the possi
bility of terrorist attacks is
a major threat against the country.
Target market profile
The target audience is composed of
are involved in the
manufacturing of branded garments. The
assumption is that these companies are
cerned about costs,
. These companies need to
be involved in the manufacturing (en
d process) for branded clothes or
This segment was
because companies are more like
ly to be concerned with
and quality of products than
. Furthermore, high
designer brands are more
to the fashion capitals,
New York, Milan, Paris, Los
Angeles, London, an
d so forth.
More specifically, the companies need to be willing to invest
amount of money
to create and develop textile
related businesses in Morocco
ready to hire a consequent amount of workers. However
they need to keep in min
that the return on investment will be profitable to this target audience.
indicates that the
perception of Morocco is
important fact is
general awareness of
ther positive nor negative;
t implies that Morocco
itself an identity and place in the minds of the potential investors.
It is recommended
an awareness campaign.
s directed at
the professionals of textile will probably be
sufficient to let them know that “Morocco is much more than Casablanca”
The unfamiliarity with
Morocco might be a
source of wrong or negative
it is important t
the target audience
help in overcoming these barriers to consider investment
The first belief that needs to be changed is
the perception of
as distant from the US
It is importa
nt to convey the message of
Morocco as being closer than many believe
. Indeed, it is only six
days away from the
United States by cont
ainer ship, and only 7
hours by plane from New York.
The second misperception of
Morocco is that it is a poor location
On the contrary,
to Europe makes it an
important market place, and can be
into the European market.
Finally, some companies considering foreign investment may be reluctant to
er Morocco becau
se of the perception of it
as a Middle Eastern country with an
extremist Muslim regime. But the reality is far from it, Morocco is in Northern Africa
and has always been an ally to the United States
fact is that
Morocco was the first country to recognize the
independence of the
States of America.
Official case text
Overall Marketing Objective
brand image and e
The image of Morocco that we are trying to create is one of an exotic country
ch has a tradition of craftsmanship and quality. Furthermore, it is important to
emphasize that Morocco is closer to the US than most believe. We would like to appeal
to the American spirit of taking advantage of new and undiscovered opportunities, and
t investing in Morocco now will provide them with a competitive advantage both now
and into the future. Morocco’s long standing friendly relationship with America should be
used to build an image of investing in Morocco as a patriotic duty in this period o
renewed American patriotism. We want Morocco to be perceived as a modern country
that possesses untapped resources in textile manufacturing.
The investment in building brand equity for the Moroccan textile industr
be composed of a multitude o
es that utilize
channels that are the most viewed by key executive personnel from the industry. The
focus of the advertising campaign is to build brand knowledge, which is composed of
both the brand image and brand aware
ness. The brand equity includes important issues
such as the strategic geographic location and strong ties to the US.
the skill of the workforce and tradition of textile craftsmanship is a
lso part of this brand
equity. Another aspect
important to emphas
ize when building brand equity i
country’s efforts for political and ec
onomic reform, which has
enabled the country to
become a more safe and transparent investment. Morocco’s infrastructure and its textile
ical capabilities must also be incorporated in efforts to build brand
equity. A marketing campaign could also include a testimony of an executive that is
currently investing in Morocco’s textile industry, which would provide anecdotal
evidence of Morocco’s
Any effort that is made toward
building awareness and
a positive image of Morocco and its textile industry will be
Morocco, Craftsmanship inspired by culture
. This message should entice potential
ors that are quality conscious. It also expresses the importance of a long
exotic culture that has been embedded in the craft of textiles.
Morocco, Your lean production partner
. This message is intended to inform the target
audience of the
Moroccan textile industry’s manufacturing capabilities and competitive
advantage. This message should appeal to firms that wish to reduce lead times and
loser than you believe
. Many people are unaware of the accessibility and t
to the U.S. Transporting goods to the U.S. from Morocco
Morocco, The time is now
It is expected that European textile companies will take
advantage of the FTA with the US to launch their o
wn products into the US
it is important to create the impression of foregone opportunity if investment is not
Morocco, Much more than Casablanca
Casablanca is well known and
a positive image,
and it is important to use that fact by
iterating that there is much more to discover about
Morocco than Casablanca.
orocco, Land of opportunity
, which implies that the country is rich in natural and
human resources. This message states simply that it would be worth an investment and
unity for growth and successes, and also appeal to the American
Morocco, A safe investment
It is important to emphasize
that investing in Morocco is no
more risky than investing in other countries.
Morocco, Unique opportunit
This statement is designed to spark interest. The reader
who is interested in taking opportunity such an opportunity must continue reading.
Morocco, Your gateway to the world
. Morocco’s strategic advantage is its geographical
location making it a prim
e investment. Its trade agreements and proximity to Europe and
the Middle East could open markets for U.S. firms that were never realized.
The marketing campaign that is included in this paper is intended to reach the target
ifically potential investors from U.S. textile and apparel firm
multiple media angles. The pull strategy is to keep the
target audience informed and
repeated exposure to
thus increasing the likelihood that
they will seek
information regarding Morocco and its textile industry.
arketing messages should create a “buzz” about Morocco
and create a mental
association of Morocco and our marketing messages
. Each marketing message should
create a feeling of lost o
pportunity if one
in Morocco’s textile industry.
Each media form
focus on developing the brand image and awareness, and inform
the target audience of the accessible information and contacts.
he secondary research we learnt
much about the textile industry and
There was some information we felt that was left out or needed to be updated,
and we therefore created a
We received lists of
es from Hoover.com, JigSaw.com, and E
Rewards.com. From these lists
e contacted over 260 US companies operating in the textile industry by e
phone, and received 40 answers.
We first of all wanted to find out which medium o
important when finding information about potential offshoring locations.
The ranking was
based on a scale from 1 to 5, where 1 was the most important.
portant source of information, with a rank of 2.18 and 50% o
f respondents placing it
as the most important. This was
followed by magazines with a rank of 2.45
trade shows with a rank of 2.47. Other sources were given a rank of 3.19, and sources
cited were internal sources and market studies.
en the lowest rank of 3.5,
and only 12.5% cited it as being most or second most important source of information.
secondary research provided us with general ideas of what country specific
and economic attributes were important when deciding where to
offshore. We asked the
respondents to rank
of each on a scale from 1 to 5. The most
important attribute of choosing which country to offshore to was the location of the host
country with a rank of 2.16. This was followed by economic
and political stability, with
ranks of 2.38 and 2.73. Least important were the political relations with the US and
corruption levels, which received ranks of 3.65 and 3.73.
The most important economic aspect of choosing a host country is the labor cost,
hich was given a rank of 1.79. Transportation cost and lean production capabilities
followed with ranks of 2.66 and 2.87. Government incentives and the presence of a
skilled workforce was ranked as least important with 3.79 and 3.89, respectively.
survey we found that
percent of companies
overseas. The most common region was South America, followed by the Far East,
North Africa and the Middle/Near East.
Somewhat fewer had production in the Western
Hemisphere, and only 1 in
69% of the respondents
had plans for
expanding their production overseas. The
Far East was by far the most prominent region for expansion, with 63% of the
respondents. North Africa and South America followed with 31 and 25 percent.
both received 12.5%, and Eastern Europe
We also wanted to see how desirable different regions and countries were
potential offshoring locations on a scale from 1 to 7. The Far East was by
most desirable region with a value of 1.9. South America and North Africa
followed with 3.48 and 3.55. There was then a drop down to the Western Hemisphere,
the Middle/Near East, and Eastern Europe which received scores of 4.07, 4.64, and
We then moved on to get an idea of how the surveyed companies went about
by asking them to rank how they usually preferred to offshore. Straight buy
was the most favored, with an average rank of 1.9 out of 4, followed by partnership.
ing and direct investments received ranks of 2.81 and 2.85.
Lastly we asked questions about gender, age and position.
Of our respondents,
65% were male and the majority were between 30 and 40. Most were senior managers
or in advisory positions, follow
ed by middle and upper middle management.
and specific media recommendations
Our research has indicated that executives in the textile industry
primarily rely on
internet for information.
Creating a content driven website dedic
ated to accurate and
complete information is the first task.
This should be backed up by buying space among
the sponsored links in search engines.
We have created a mock website with a fictional,
but available, URL:
Important aspects of
the website would be:
First, investment decision makers will be provided with content they cannot read
People will stay longer at our web site to read the original
Second, the website will
provide a vast
online directory of infor
mation that our
visitors can search. The directory will contain information our visitors want.
web pages must
otherwise, visitors will leave fast. Time is
precious, especially for investment decision makers
; they will not
for our site to load.
Fourth, the website will illustrate what is being
offered at the very beginning.
people are confused
about what is being offered they may leave
website must be published professionally because i
Morocco. People will get turned off and leave if they see a lot of spelling and
Next, the site text will be
easy to read. Most people will not
strain their eyes trying
to read text that is too small, light or bright.
urthermore, the website
should have a section called "About
a virtual tour of the many attractive sites in Morocco.
be a link for free consulting
consultations and face to face
be made available.
will allow investors to get to know us and feel more comfortable about investing
, the website
should have headlines and sub
headlines that will catch and
the investment decision
attract them to explore the
web site longer.
Finally, the website must have a link that offers the opportunity to sign up for a
Online based m
) are frequently updated web pages that publish
cles of interest to
visitors. There are several e
zines specific to
the textile industry, such as TextileWorld.com, apparelmag.com, where Morocco can
place banner ads to
increase awareness. Because the visitors to these sites are there
to find information
it can be assumed that advertisements will have a better impact than
if placed on more general news sites.
Since the internet is referred to as one of the
primary sources of information, we believe this would be a natural second choice of
where to advertis
In our primary research
we found that printed magazines were the second most
used source of information for textile executives. We have
identified several trade
magazines that we feel
captivate our target audience.
There are two types of
hat cater to the textile industry
publications and vertical
publications cover everything in the textile industry
vertical publications are segment specific magazines.
extile World is the leader
based publications. The leaders
vertical publications are
“International Fiber Journal” covering the fibers segment, “Nonwovens Industry
Magazine” covering non woven textiles and “Review” covering industrial textiles.
Advertising in magazines should sta
rt concurrently with the e
zines banner ads.
After having run ads for a few months there should be an 4 page insert in the
magazine with an associated CD
. The insert should contain the key marketing
messages and investment information. The CD shoul
d contain short videos about the
Moroccan textile industry, as well as testimonies from executives that have already
invested. Furthermore, the CD should contain extensive documentation that is easily
dvertisement space in an eNewsletter
distributed by Textile
purchased. These eNewsletters are distribu
ted to over 27,000 readers
on a bi
. Textile World will provide information on how many receivers open the newsletter
and click on the link, giving vital informati
on on the impact of this advertisement
strategy. As traffic to the MoroccoTextile.com website is increasing due to
advertisement efforts, an
online newsletter will be sent to those who subscribe
weekly basis. The newsletter should include
pertinent information such as
success stories and general news on the textile industry in Morocco.
After exposing the target audience with advertisements in e
zines and periodical
magazines for two months, we believe the next step would be to acquire a da
key executive personnel in the textile industry. This database would be used to send out
mails with embedded information, so called eFlyers, and a link to the
After three months the database should be used to retri
eve the physical address
of the executive personnel and send them an information package through postage
The information would consist of a brochure that briefly summarizes key selling
points, as well as more detailed information in packets.
A good w
ay of ensuring that
recipients actually read the information that is
is to include a
a first prize of
a round trip with accommodations to Morocco.
As the year progresses there will be several trade shows which Morocco can
tend. Three major ones are IDEA07, IFAI Expo, and Material World. Morocco should
because our primary research shows they are important for finding
information about potential offshoring locations. S
hows provide extensive information
and show o
ff the capabilities of the textile industry. As mentioned before, to create
interest a questionnaire with a first prize of a trip to Morocco should be offered.
Morocco should also become a member of the trade organizations in the textile
ast point is to create a positive image of Morocco through sponsoring
selected events. We do not make any specific recommendations, however, we suggest
events that will create visibility and also be somehow related to Morocco’s image.
suggestion is als
o to have a public relations representative that will engage in speaking
events on Morocco’s behalf. Furthermore, the representative can author articles for
magazines and other publications.
$ 1,849 on
e time fee
$ 1,440 annually
TextileWorld.com Banner Program
Daily for 12 months
eginning January 1, 2007 through December
Leaderboard Size (728 X 90 pixels) = $599.00 net per month X 12 mo
Banner Size (468 X 60 pixels) = $499.00 net per month X 12 months
weekly beginning January 9, 2007 through December 18, 2007
Estimated cost: $400.
00 net each X 25 =
$ 120 one time fee
$ 499 annually
$ 100 one time fee
$ 750 (jigsaw.com) annually
$ 1,050 (textile world blue book and cd) annually
$ 1,480 annually
annually (5000 brochures, design/printed)
Textile World Print Ad
1X 4 Full Page, Color Run
pager in January/February
1 X Full Page, Color Ad in March/April
1X Full Page, Color Ad in September/October
Circulation: 15,000 to 18,000
Textile World Inserts
3X 4 Full Page, Color Inserts in January/February, March/April and
Textile World CD Carriers
3X 4 Full Page, Color Inserts in March/April
Cost of carrier
Cost of bindary
Cost of advertising space
Textile Intelligence Print Ad
1X Full Page, January, February, March, July, August, September
Tradeshow exhibit fees
Booth designed/ equipment
Trade association memberships
Public Relations Rep
eNewsletter campaign 1
eNewsletter campaign 2
Magazine print ads
Magazine CD carriers
Magazine print ads
Examples of creative execution
Example of MoroccoTextile.com website