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Marketers undaunted in Mideast

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Despite the American-led assault on Afghanistan, U.S. technology companies such as Oracle Corp. and Motorola Corp. are not scaling back marketing in the Middle East. Nor are long-term Middle East marketers such as Exxon Mobil Corp. and Bank of America Corp. altering their plans.

Surprisingly, there are signs that business is being conducted as usual in the region. Smaller U.S. b-to-b companies, including Concord Communications Inc., RSoft Inc. and NewFrame Corp., are forging new deals and even evaluating Middle East expansion.

And the burgeoning Middle East technology trade show sector shows no signs of slowing. Gitex, the Middle East’s version of Comdex, is taking place as scheduled this week in Dubai, United Arab Emirates. Exhibitors at Gitex include Microsoft Corp., Compaq Computer Corp. and Oracle.

"Our plans haven’t changed," said Mark Jarvis, Oracle’s senior VP-worldwide marketing. "We are moving ahead with business as before."

Redwood Shores, Calif.-based Oracle operates throughout the Middle East, with customers in Saudi Arabia, Egypt, Kuwait, Lebanon, Qatar, the U.A.E., Yemen and Jordan. Its biggest clients include Kuwait Oil Co. and Qatar Petrochemical Co. Ltd.

Nor has the U.S.-led military action in Afghanistan and widespread unease about the war in many Muslim countries slowed this activity. On Sept. 30, Oracle hosted a b-to-b seminar in Dubai, where Alfonso Dilanni, Oracle’s senior VP-marketing, delivered a keynote address. The attendees included Middle Eastern government officials, and telecom and energy executives. Oracle is also planning 100 seminars at Gitex.

Likewise, Microsoft is keeping previously scheduled plans to attend Gitex, according to Julie Fogerson, a company spokeswoman. The Redmond, Wash.-based software giant has offices in many Middle Eastern cities, including Dubai, Riyadh and Cairo.

Houston-based Compaq is scheduled to be an exhibitor at Gitex, as is Hewlett-Packard, Compaq’s potential merger partner.

Motorola, which has an office in Lahore, Pakistan—a city that has seen anti-U.S. demonstrations—is also keeping to its pre-war Middle Eastern strategy, said Shelagh Lester-Smith, director of corporate communications at the Schaumburg, Ill.-based company.

"I can confirm that our marketing plans in the Middle East have undergone no significant changes," she said. "There is no impact on our business activities. Our businesses report that they are doing fine in that part of the world."

Exxon Mobil, the world’s largest company, and one with a ubiquitous b-to-b presence throughout the Middle East, is also holding steady. "We haven’t altered our investment plans," said Cynthia Langland, spokeswoman for the Irving, Texas-based company. She declined to comment on the company’s Middle East marketing plans.

Bank of America Corp., which does institutional business in the U.A.E., is not scaling back business efforts in the region, said a London-based spokeswoman.

Middle Eastern expansion

Other U.S.-based b-to-b companies, including NewFrame and Concord Communications, have expansion plans under way in the Middle East.

NewFrame, a developer of data-sharing platforms, markets in Israel and is considering expanding to Saudi Arabia and Turkey, said Tsvi Misinai, CEO of the company, which is based in Yehuda, Israel, and Saddlebrook, N.J.

"[U.S. military action] doesn’t affect Turkey and Israel, and to a large extent it doesn’t affect Saudi Arabia," Misinai said. "There is no significant change. The Middle East is used to having wars all the time."

On the other hand, at Richardson Electronics Ltd., a publicly traded developer of wireless and medical imaging software, Middle East business has plummeted in light of recent events.

"Business is down 40% to 50% due to conflicts in the region," said Ed Richardson, CEO of the LaFox, Ill.-based company, which does most of its business in the region in Israel. Even so, Richardson said he is optimistic about his company’s long-term growth prospects in the Middle East. "Once the situation corrects itself, there’s room for major opportunities there," he said.

Others share Richardson’s enthusiasm for long-term prospects in the region, despite the obstacles.

Marlboro, Mass.-based Concord, a publicly traded software developer, recently signed a marketing agreement with Riyadh-based Gulf Stars Technology, a big Middle Eastern reseller. "We’re still marketing in the region," said Josef Blumenfeld, worldwide public relations director. "In fact, for the first time in our history, we’re translating collateral materials into Arabic."

"The Arab businessmen we deal with are middle class. Many have MBA’s from the U.S., and they are interested in American management techniques and technologies," said Richard Holmes, president of the National U.S.-Arab Chamber of Commerce, which links U.S. companies with Middle Eastern businesses.

Still, Holmes said the litany of factors that keep many U.S. companies from expanding in the region—a lack of participation of Middle Eastern countries in international trade organizations, for example— still need to be addressed. "Until that happens, investors will look at the region with a jaundiced eye."

Ghaleb Faidi, executive director of the U.S.-Arab Chamber of Commerce, also acknowledged the uncertainties of marketing in the region, where the situation is changing hour by hour. "It’s a bit early to issue any guidelines or to know what the impact is," Faidi said.

Problems, dangers

For U.S. companies considering marketing activities in the Middle East, a low-key marketing strategy that recognizes the enormous cultural gulf between Arabic and Western cultures is best, said Joseph Braude, senior analyst-Middle East at Boston-based Pyramid Research.

He also suggests U.S. companies maintain a low profile. "There’s a risk for certain companies that have a high profile or are symbols of perceived America hegemony," he said. "These companies are susceptible to boycotts, physical threats or attacks."

For some companies, the risks of doing business overshadow potential advantages. "There are so many factors that could change radically in the next day or two, or in the next week," said Kent Morris, a partner at Morris & Morris, a Los Angeles-based Middle Eastern business consultancy. "The companies I work with are taking a wait-and-see approach."

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