Many smaller and younger firms have difficulty gaining access to credit; therefore, an outside investor might consider financing options for the local reseller, whether in the area of industrial or consumer goods. Most buyers prefer to pay in monthly installments, even for low-priced goods.
Close and frequent contact with buyers, motivated and trained intermediaries, and aggressive market promotion are additional factors critical to success. Selling to government-owned companies and other state entities still requires cultivating personal relationships.
It is important to provide product literature and manuals in local languages, as well as to use locally available service and maintenance.
Trade Promotion & Advertising
Trade Promotion
Trade shows are a common vehicle for company promotion in BiH. Local and regional firms rely on trade fairs to establish business connections, gain market visibility, and learn about new products. Trade shows are held throughout the country. The most important shows take place in Sarajevo (https://www.skenderija.ba/), Banja Luka, Zenica (https://www.zeps.com/), Mostar https://www.mostar-fair.com/), and Gradacac (https://www.gradacac.ba/naslovna/.
Advertising
Electronic media (television, cable TV, and radio), outdoor advertising, print media, and online media are the leading advertising mediums. The standard means to pursue advertising services is to contact one of the many advertising agencies in BiH. Major advertising agencies in BiH are McCann, Fabrika, Communis, Via Media, Aquarius, and Mita Group.
The broadcasting scene is crowded, with three Public Broadcasting Service (PBS) broadcasters at the state and entity level, 14 local public TV stations, 4 private TV stations, and 144 radio stations. The full list of TV and radio broadcasters is available on the Communications Regulatory Agency’s website.
Among the most popular private TV stations are N1, Nova BH, NTV Hayat, TV Pink, OBN, FaceTV, BNTV, and O Kanal. The three public broadcasters are a state-level TV and radio station (BHT), as well as two entity-level TV and radio stations (FTV and RTRS).
Mareco Index Bosnia, a member of Gallup International, and Ipsos, are leading public opinion, media, and market research companies in BiH, and have operations throughout the country.
Pricing
The price level of goods and services in Bosnia and Herzegovina is relatively low due to the low cost of labor. The market generally determines prices. Since January 1, 2006, BiH has had a single, national 17 percent value-added tax (VAT) rate. This is one of the lowest rates in the region.
Sales Service/Customer Support
Sales service and customer support are relatively undeveloped as marketing tools. As foreign companies come to the market, they and their distributors are developing new standards of customer service. These higher standards of sales service and customer support are slowly being adopted by local firms. When selling capital goods, sales services and customer support are essential, particularly in terms of maintenance and training. A well-trained local distributor can provide a competitive edge in this area.
Local Professional Services
Principal Business Associations
The American Chamber of Commerce in BiH (AmCham BiH) was established in 2001 as a nonprofit, independent association with the role of advancing the interests of U.S. and other foreign businesses in BiH. AmCham BiH plays an important role in improving the business climate in BiH and promoting high standards of business practices. AmCham BiH’s approximately 130 members are primarily U.S. or U.S-linked companies and organizations. The organization’s activities include policy advocacy on members’ behalf to address issues impacting their ability to conduct business in BiH; lobbying for legislation that is in accordance with EU and international standards; programs to increase business integrity and provide promising young employees with leadership training; and organizing regular meetings for members to discuss issues of interest.
The Foreign Investors Council (FIC) was established in 2006 as a non-profit business association, representing the interests of foreign businesses in BiH. FIC has about 70 members from a variety of countries. FIC objectives include the improvement of the investment and business environment in BiH and the promotion of communication and cooperation between the business council and BiH authorities.
Other non-government business associations are focused on specific sectors. The Association of Business Service Leaders in Bosnia and Herzegovina represents the business services sector and includes a number of foreign companies among its 20+ members. BIT Alliance is an association of 40+ IT companies, including U.S. companies, that focuses on developing opportunities in the IT industry and addressing obstacles to the sector such as lack of qualified workers.
There are also numerous local Chambers of Commerce on the state, entity, and canton administrative levels. The Chambers of Commerce represent member companies’ interests with governments including providing advice related to adopting and amending economic laws, regulations, and programs.
Limitations on Selling U.S. Products and Services
The state-level Law on Foreign Direct Investment provides a generic framework for foreign investment and was amended in March 2015. The law accords foreign investors the same rights as domestic investors, including bidding on privatization tenders. The primary exception is the defense industry, where foreign control or ownership is limited to 49 percent. This limit can be waved by entity level governments, but this is rarely done. Foreign investors are also restricted from majority ownership of public television and radio services.