Turkish Special Marketing, Human Resources and Finance/Accounting Issues
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Turkey, a country with a median age just below 29 years and a substantial population just over 71 million, is a target country for many countries expanding their international business.(1) Marketing in a youthful country can be difficult; that’s why companies need to use mix of time tested approaches along with new age techniques. The benefit of a youthful population is that technology is typically integrated easier than an older population.
Product placement in movies has been around for a long time but was a loose practice until the 1970’s. After its organization “expenditures for the placement are now calculated in the millions of dollars.”(2) As I said, product placement isn’t new, neither are movies but the organization brought new possibilities. In 2004 a movie was released in Turkey named ‘Gora’ with roughly 4,001,711 viewers, it broke box-office records. “The film is the first example in Turkey of a film attempting to place a total of thirteen products (brands) in a marketing strategy.”(2) An instance such as this paves the way for new ideas of marketing in the future, especially in a country with such a youthful median age. If you combine the idea of product placement and technology the next marketing tool is mobile marketing.
In 2006 a company called 12snap set up an office in Istanbul. 12snap, with parent company NeoMedia Mobile, chose Turkey because of its young demographic and growth in the mobile market. This was made prevalent by Martin Copus of NeoMedia when he mentioned “Turkish Telecommunications Authority project some 46 million phones in use – in a total population of 69 million – the end of the year.”(3) Turkey is a great example of how people use their mobile phone to separate and even define themselves, which is why there has been such a great response. Yusuf Azoz, division head of Turkcell Content Services & Partnering has said “Turkey has been one of the leaders of mobile marketing initiatives in the world and customers’ enthusiasm and response to Mobile Marketing campaigns to date have been more than pleasing.”(4) These mobile campaigns can consist of images, text and even video. This method of communication appears to be more direct as TV channels increase and amount of time spent watching TV decreases it becomes more difficult to reach the target audience.
With such a youthful demographic and tech-savvy population, a company looking to expend its international business to Turkey can’t follow the marketing fundamentals that they may see in their own home country. The mobile media is an effective way of reaching the more than 46 million mobile carrying consumers.(3)
Sources:
1. (2007, October 18). Turkey. Retrieved November 1, 2007, from CIA Factbook Web site: https://www.cia.gov/library/publications/the-world-factbook/geos/tu.html
2. Argan, Metin, Velioglu, Meltin Nurtanis, & Argan, Mephare Tokay (2007). Audience Attitudes Towards Product Placement in Movies: A Case from Turkey. Journal of American Academy of Business, Cambridge. 11, 161, 7.
3. (2006, September 22). NeoMedia's 12snap Sets Up Mobile Marketing Subsidiary in Turkey; New Istanbul Office Provides Creative, Consulting and Technical Services, And Strengthens NeoMedia's Position as a Mobile Marketing Leader in Europe. Retrieved October 22, 2007, from http://blog.tmcnet.com/voip-enterprise/tmcnet/neomedias-12snap-sets-up-mobile-marketing-subsidiary-in-turkey-new-i.asp
4. (2006, September 28). Mobile Marketing Association Announces Mobile Marketing Forum In Turkey. Retrieved November 1, 2007, from Mobile Marketing Association Web site: http://mmaglobal.com/modules/article/view.article.php/1064
Accounting Issues – Turkey Income Taxes and Laws
The tax system in Turkey is best described as being progressive. Meaning that the higher an individual’s annual income, the higher the tax rate to their salary. As of January 2006, the individual tax rate varied from fifteen to thirty percent. Creating a difference of twenty percent between the lowest and highest annual incomes in Turkey. Before January 2006, tax rates were significantly higher. Introducing a tax reform, Turkish Parliament changed the national corporate rate, dropping it from thirty percent to twenty percent. The top Marginal income rate was also reduced from forty percent to thirty-five percent. The Chart below taken from (www.WORLDWIDE-TAX.com) shows the new tax rates of individual incomes in YTL (New Turkish Lira).
Tax % The Tax Base (YTL) 15 0-7,000 20 7,001 - 18,000 27 18,001- 40,000 35 40,001 and over
Income Tax for an Individual
An individual in Turkey is liable for tax on their income as an employee and on income as a self-employed person. In the case of an individual who answers the test of a "permanent resident", the tax will be calculated on their income earned in Turkey and overseas. A foreign resident who is employed in Turkey pays tax only on their income in Turkey. To be considered Turkish resident, residence of over six months in Turkey during any calendar tax year must be established. An employer is obligated to deduct, immediately, each month, the amount of tax and national insurance due from a salaried worker. Self-employed individuals are obligated to make advance payments on income tax that will be offset on filing an annual report. In the case of a new business, the advance payments will be calculated according to the estimates of the owner of the business. The advance payments will be made 4 times in each year. The standard rate for payments in advance of income tax in Turkey is 15% of the net profit. Capital gains are usually added to the normal income (Turkey Income Taxes and Tax Laws).
Corporate Taxation
The tax rate for Turkish Corporations has a standard rate of twenty percent. When calculating capital gains, the purchase price of the asset sold is adjusted in line with the rise in the index from the date of purchase to the date of sale. Capital gains tax is calculated only on the real profit. If there is a sale of an asset that is depreciable, capital gains are exempt when it is held for over two years.
The tax year in Turkey ends December 31. It is mandatory for companies to submit their financial statements by April 30. The advance payments are at the rate of twenty five percent of the net profit for the quarter. If statements are not submitted by the deadline date, fines are usually the consequence.
Sources:
"Chapter 12 Accounting Principles and Practices." 18 Oct. 2007 <http://e-fpo.fpo.go.th/e-fiscal/PWGuides/individualguides/DOCS/wcd00003/wcd00342.htm>.
"Turkey." FITA. The Federation of International Trade Associations. 1 Nov. 2007 <http://www.fita.org/countries/turkey.html>.
"Turkey Income Taxes and Tax Laws." Worldwide-Tax.Com. 18 Oct. 2007 <http://www.worldwide-tax.com/turkey/turkey_tax.asp>.
Special Marketing/Banking
In the Turkish market the single most important aspect for the advertiser or marketer is accounting for the Islamic culture and Shari’ah or Islamic law. In Turkey, politics, religion, and culture are all inter-related and must be considered in the development of a marketing plan and marketing collateral.
Advertising in Turkey is both an exercise in modern media development and an exercise in extreme cultural sensitivity and it is difficult to navigate between them. While developing advertising strategies and marketing collateral for a cosmopolitan area like Istanbul is less problematic than other regions of the country, great care must be made to accommodate the cultural factor in the Turkish market. This is especially important in the financial and banking sector in Turkey that not only operates within an Islamic culture but within a legal framework of Shari’ah or Islamic legal restrictions. For advertisers, the single greatest concern is to balance creativity with consideration for the dominant Islamic culture and legal framework.
The banking industry has evolved rapidly in Turkey during the past 10 years. Most recently it has discovered the benefit and profitability of consumer banking. The banking industry in Turkey and in the adjacent Middle-East region in general has several advantages its counterparts in the rest of the developed world do not have: a highly protected industry, little foreign competition, low taxes, and an Islamic prohibition against charging or earning interest, all combine to make positive growth likely for Turkish banks. Membership in the WTO has been a positive force in not only the international perception of Turkey but also for its financial infrastructure.
Advertising researchers have pointed out that persuasive advertising based on rationally oriented formats is often more appropriately related to the financial sector in foreign markets. Such an advertising strategy is perhaps better suited to problematic markets such as Turkey where politics, culture, and religion or so inter-related. Its because of this heightened degree of inter-relation between politics, culture, and religion, Turkish media is somewhat manic in that all three constituents of the market attempt to influence the society through various media outlets.
In regards to advertising and the banking or financial services industry in Turkey, the most appropriate marketing strategy would be to be conservative. Under Shari’ah financial institutions cannot charge interest and thus, if a marketer is a foreign institution it needs to practice great care. The West it is commonplace to advertise one’s high interest rate returns while in Turkey this simply would not be allowed. A conservative marketing approach cleaving to a quality as bland as great customer service would not only be most appropriate but the safest route in the Turkish market.
Uray, N., & Burnaz, S. (2003). An Analysis of the Portrayal of Gender Roles in Turkish Television Advertisements.
Retrieved October 11, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5001913209
Lovatt, D. (Ed.). (2001). Turkey since 1970: Politics, Economics and Society. New York: Palgrave.
Held, C. C., & Held, 2000). Middle East Patterns: Places, Peoples, and Politics. Boulder, CO: Westview Press
