Executive Summary
Information technology has undoubtedly influenced the world in a tremendous manner. As it currently stands, no sector in the society can survive or thrive without the use of various forms of information and communication tools available in the market. In this regard, Sim Whatley and JC Butler identified a business opportunity in the United Arab Emirates (UAE) and embarked on a successful venture in the field of online social networking by forming the company known as Dubizzle. Dubizzle was founded in 2005 to cater to Dubai’s large expat community’s needs for quick, comprehensive, and easy information about jobs, housing, event listing, and various other needs.
The company started small by effectively utilising the 4Ps of the marketing mix, namely, product, price, promotion, and place, and employed a strategic marketing plan characterised by market segmentation, market positioning, and relied on the word of mouth as a marketing strategy as opposed to media advertising. Hence, a few years down the line, Dubizzle grew into a major player in the market and a brand to reckon with despite deep financial constraints it experienced. Thus, this paper is a comprehensive report of an interview conducted with the founders of Dubizzle on how they impeccably employed an effective marketing mix and strategy to grow their business regardless of any constraints faced in the process.
Background
Dubizzle is an acronym for “Dubai Business, Lifestyle, and Entertainment”, which sums up the kind of information that the website offers (Dubizzle, 2015). The company started as a small website in the United Arab Emirates and gradually grew into a major classified ads website in the Middle East and North Africa having a presence in eleven different countries within the region. Consequently, the monthly number of unique visitors has grown exponentially to about six million (Wigglesworth, 2011).
Two Americans, J.C. Butler and Sim Whatley, started the company when they immigrated to the United Arab Emirates from the United States in search of lucrative jobs in the thriving Middle Eastern country. Butler holds a degree in International Economics and Spanish from the University of California in Los Angeles, while Whatley is a finance graduate from Louisiana State University.
Butler and Whitley did not intend to become entrepreneurs when they first landed in the United Arab Emirates because they were looking for jobs. The problems such as looking for employment, scarce housing, inadequate furniture, and various challenges became a source of inspiration for their business start-up (Dubizzle, 2015). At that time, in 2005, the United Arab Emirates was a booming economic hub, but it lacked a comprehensive website for online-classified advertising (Mendoza, 2007).
Notably, both Butler and Whitley had previously enjoyed the benefits of other social networking websites operating in the United States, and thus, they understood the benefits of such a platform within the Emirati market. Practically, it was very difficult to peruse through the huge classifieds in Gulf News, the local Daily Newspaper, and find accommodation, employment, or friends easily. Hence, Butler and Whitley realised the problem and decided to solve it by creating an online-classified advertising website.
Marketing Mix
Dubizzle utilized the 4Ps as marketing mix strategy of product, price, promotion, and place to grow its business. Singh (2012) defines the marketing mix as a blend of various changeable elements that can be used by a firm to market its goods and services, and influence responses and reactions of the customers. Dubizzle created an impeccable product that was highly needed in the market place. Butler and Whitley insist that successful businesses thrive on solving a problem within the market. An entrepreneur, who starts with an idea, will eventually fail, but the one, who starts a business based on a problem and its subsequent solution will most definitely succeed. Thus, the co-founders, in the quest of their job search in Dubai, realised that there was a market need for a comprehensive online platform for the expatriate market and worked on solving this problem. In the end, they created a brand with the necessary features as needed in the market.
Consequently, Dubizzle offered its product at a very reasonable price by only charging a minimal fee for the placement of an advertisement on the website. On the other hand, visitors are able to view the website at no charge at all. The price is the total sum that the customer is expected to pay and is determined by various elements and factors such as costs, customer perception, and market share (Singh, 2012).
Although there were no real competitors in the market when the company started, Butler and Whitley understood that they needed to set prices that would appeal to the potential clients. Indeed, this was not an easy venture, nevertheless, the company still managed to generate a lot of revenue from advertising. The co-founders started by creating a penetration price that consequently allowed the company to attract many customers and capture a big market share. The company then adjusted the price continuously, according to the growth of the market share and rising demand for the product.
Promotion is another important element for the success of Dubizzle, which is the part of marketing that deals with the advertising and sales. According to Smith and Taylor (2004), the promotion allows people to understand a given product and the purpose that it serves within a certain market. Butler and Whitley employed the word of mouth promotion strategy. Apparently, the co-founders of Dubizzle had financial constraints, and thus, they were unable to afford any kind of media advertising.
Butler (2014) asserts that he and his partner would have made different decisions if they had more money during the start-up of their company. Apparently, this is what culminated in their success. Their meagre resources were directly injected into growing the business, and thus, they had to use extra effort in the promotion process. Within no time, all the expatriates in Dubai were talking about Dubizzle and helping to spread the word around. Undoubtedly, the word of mouth is only effective once customers are happy and satisfied; hence, it means that Dubizzle’s growth was a testament to its impeccable services.
Perhaps the biggest contributor to Dubizzle’s success is the last marketing mix element, place. Singh (2012) explains that place is the channel of distribution that companies use in moving the product to the customer. Dubizzle applied a direct sales strategy by targeting potential clients to place adverts on the website. According to Butler and Whitley, the company had to make tremendous efforts to market and sell its products to the potential clients. However, the tables have now changed with the growth of the company’s popularity to the extent that very little effort is necessary in making sales, as a huge number of clients want to advertise on Dubizzle.
The Marketing Strategy
Butler and Whitley, the co-founders of Dubizzle, highly recognise the importance of the marketing mix. Furthermore, they also attest to the value of the marketing strategy. Butler and Whitley believe that each city requires a comprehensive and integrated online platform that can provide essential information on different topics at the touch of a button. They realised this through their own personal experience as expatriates living in the United Arab Emirates. Therefore, the first marketing strategy that they used was that of market positioning. Market position refers to the creation of a brand within a specified market place to satisfy unmet needs (Lacourbe, Loch & Kavadias, 2009).
Without a doubt, the comfort of living in the United States had not prepared Butler and Whitley for the kind of challenges they would face living in a different country. While it is now practically possible to find services and products online in the United States, Butler and Whitley struggled to sort out their daily lives in the UAE. Thus, this gave them the realisation that there is a need within the market that must be met.
Consequently, they applied a market segmentation strategy. Market segmentation entails disintegration of market into different groups of buyers, who have different needs and characteristics (Zolfagharian & Cortes, 2010). In the beginning, Butler and Whitley created a market segment that comprised of the expatriate community living in the UAE. As expatriates, they understood the needs, characteristics, and behaviours of other foreigners living in the country, and they embarked on creating a product that would target this group (Butler, 2014). Nonetheless, the company has now grown to include various other groups with different needs and characteristics.
Challenges Faced
Indeed, Dubizzle successfully utilised an effective marketing mix and marketing strategy to achieve success. Nonetheless, the company faced various challenges along the way. Butler and Whitley, the company’s co-founders, insist that their biggest challenge was their limited financial resources during the early stages of starting up their business.
Both men arrived in Dubai to search for jobs, but they did not intend to start up any form of business. However, when they realised that they could meet a certain market need, they pulled their resources together and came up with $12,000, as start-up capital. This amount was barely enough to cater for all they had to do; as a result, they had to be innovative in conducting their business. Financial constraints limited their promotion activities because they were unable to afford any form of media promotion, and thus, they had to settle for other promotion methods such as the word of mouth strategy.
How Dubizzle Overcame the Challenges
Luckily, Dubizzle found a way to overcome its challenges and difficulties. Butler and Whitley said that they had to adopt a very humble lifestyle to save enough money for their business. They used their house as an office instead of renting an office space and shared a bunk bed in a friend’s house instead of renting their own apartment. Such a move helped them to save a lot of money considering the high property prices in the UAE. In addition, they survived on meagre resources and avoided various luxuries that would have wasted their money. Whitley attributed the success of the company to their determination and discipline for they were able to invest virtually all their resources and savings in the business. Without a doubt, their sacrifice and hard work were not in vain, as the company grew from zero to a multi-million venture.
Recommendations
The story of Butler and Whitley provides key insights into entrepreneurship, success, and marketing. Without any doubt, the key to business success lies in an effective marketing process. Butler and Whitley clearly portray that successful entrepreneurship is not about having the best idea, but rather having the best solution to a problem. Therefore, anyone intending to start a business must first identify a problem that requires the solution. Indeed, any successful business should not focus on the “what” rather than “why”, for Butler and Whitley could easily justify why their solution was essential, and therefore, their product could sell itself. Another great insight presented by Dubizzle and its co-founders is the importance of an effective marketing strategy, irrespective of the financial capability of a start-up business.
Butler and Whitley were financially constrained, but this did not stop them from creating a near perfect strategy of marketing their products. They did not have a lot of money to invest in the conventional modes of marketing; however, they still exploited other ways of working round their problem and achieving success. Thus, the most vital insight into the story of Dubizzle and its co-founders, Butler and Whitley, is hard work and determination coupled with creative and effective marketing.
References
Butler, J. C. (2014). Dubizzle founder reveals how he did it. Arabian Business. Web.
Dubizzle: About Us. 2015. Web.
Lacourbe, P., Loch, H., & Kavadias, S. (2009). Product positioning in a two-dimensional market space. Production and Operations Management, 18(3), 315-332. Web.
Mendoza, M. (2007). Dubai’s Race to the Top. Management Today. Web.
Singh, M. (2012). Marketing Mix of 4Ps for Competitive Advantage. Journal of Business and Management, 3(6), 40-45. Web.
Smith, R., & Taylor, J. (2004). Marketing Communications: An Integrated Approach. London: Kogan Publishers. Web.
Wigglesworth, R. (2011). The gulf’s most wanted men. Financial Times. Web.
Zolfagharian, A., & Cortes, A. (2010). Linking market orientation to strategy through segmentation complexity. Journal of Business & Economics Research, 8(9), 79-91. Web.