Demographic Environment
Population in United Arab Emirates is one of the fastest growing populations in the world. Population increased from 1.0 million in 1980 to 8.4 million in 2010 (United Nations 2012). Projections made by United Nations shows that population will increase further to reach 15.5 million by the year 2050. This population increase will create demand for flip-flops. In terms of sex, male population exceeded female gender in United Arab Emirates in 2010. More male flip-flops will be supplied in the market to match with the demographics. In response to open constitutional framework, women have gained more employment opportunities.
Their contribution to national income as a result increased to 33.4 per cent in 2007 up from 9.6 per cent in 1986. Now, women in United Arab Emirates accounts for a bigger percentage in workforce. Income levels are tiered with a small percentage at the top and the remaining at the bottom. Ten percent of the populations are indigenous while the bigger proportion is foreign who have made substantial contribution towards economic development of UAE. By researching on demographic profile of the nation, a marketer would be able to understand how a product meets needs of the population.
Economic Environment
UAE is amongst the leading oil producers in the world. Bearing this in mind, the recent rise in oil price has increased government spending. An increase in government expenditure implies that there is more money in circulation and people can afford to buy flip-flops. By combining the increase in government expenditure with a vibrant tourism, transport, and trade, the outcome is a favourable environment to conduct marketing. For 12 months to May 2013, inflation rose by an average of 0.7% (Emirates, 2013). It is expected that exchange rate will remain stable and so the need to introduce flip-flops this early.
Cultural Environment
Heritage and culture is valued by UAE and that is why the emirate has taken steps to establish the Saadiyat Island, which paints Abu Dhabi as the centre of art. United Arab Emirates further comes out as a diverse, multi-ethnic, and multicultural society, which makes it a perfect destination for flip-flops (UAEinteract, 2013). Considering that Islam is the main religion in UAE, flip-flops will register a success. The nature of Islamic religion requires Islam to attend prayers without shoes. This is why flip-flops will fit well in the region.
High rates of obesity and diabetes in UAE means that demand for flat shoes for exercise purposes is on the increase. Besides Urdu, Arabic, English, and Hindi are spoken in UAE. This makes it easier to tailor marketing language. Aware that UAE is moving towards becoming a developed economy, status in society is becoming a vital factor. Any product introduced into the society must therefore respond to nature of the society.
Political Environment
United Arab Emirate faces a stable political environment under a federal government. ADFCA rules on labelling were introduced in UAE with a view of protecting the population. Consumables and drugs must therefore adhere to this rule. Flip-flops will not be affected by such rules because it is not a drug or a consumable. The fact that UAE is an open economy with minimum controls i.e. exchange controls, quotas and other forms of trade barriers makes the nation an excellent destination for Flip-Flop (DIFC, 2013).
According to Chiozza (2010), anti-American sentiments were the least in UAE. The hatred towards American culture, policies, values, and beliefs is therefore low and flip-flops will receive positive responses from people of UAE. The Australian and UAE free trade agreement came in handy to strengthen ties with emirates. Tariff liberalization is particularly good for flip-flops because it will reduce cost to the customer. As a result, more sales from flip-flops can be projected.
Technological Environment
Social media such as twitter and facebook are currently the most utilized platforms and can be exploited positively to reach more customers. Advent of computer scanners at retail checkout counters means that the supply of flip-flops should be accompanied with barcodes. This will not only control loses but also give an accurate record of sales and projections.
Natural Environment
UAE suffers from extreme heat that extends for a long period. This means that customers will demand flip-flops because such shoes do not enclose a lot of heat and are comfortable to wear especially under hot sunny condition and in sandy coastal regions.
Competitor Analysis
Direct and indirect competitors
The direct competitors include Sporty Water Shoes, Havaianas, and Crocs. Indirectly, flip-flops are competing with closed-flat shoes, and open-toed closed shoes. They are light, cheap and come in variety of colours, shapes, and sizes. Besides being durable, sporty water shoes are often used for boating and along the shores. They may not serve the purpose of long distance travels because of their rubber design.
Competitor analysis Table.
Competitive Positions
Considering that UAE is an Islam nation, it is critical to appreciate that Flip-flop and other similar shoes are often sold within mosques where target customer can easily sport the shoes. Secondly, flip-flops can be positioned competitively in supermarkets such as Woolworth and Walmart with other variety of shoes. Dedicated outlets such as BATA, KWANZA, JADES, concentrate on shoes thus can easily sell flip-flops.
Competitive Objectives
Leather footwear makes up 50 per cent of the market share while the rest is concentrated with textile, plastics, and rubber. Leather shoes occupy the biggest market share mainly because they can be used for long distance, durability, good to protect feet, and can serve both formal and informal purposes. Increased consumer spending in addition to shopping conducted by tourism contributed to the opening up of more dedicated footwear stores. Most of the shoes that are often imported into the country are re-exported because of demand.
Competitive Strategy
A competitive strategy applicable to marketing flip-Flop in UAE is to concentrate on leather and open up a dedicated store to sell the footwear. Areas around mosques are strategic location to market flip-flops.
References
Chiozza, G. (2010). Anti-Americanism and the American World Order. Baltimore: JHU Press.
Crocs Retail Inc: Crocs. (2014). Web.
DIFC: Dubai for Business. (2013). Web.
Emirates: About United Arab Emirates. (2013). Web.
UAEinteract: The Economy. (2013). Web.
United Nations: World Population Prospects: The 2012 Revision. (2012). Web.
Zappos Retail Inc: Havaianas. (2014). Web.