Strategic Marketing in UAE Business Environment

Introduction

The United Arab Emirates business environment is one of the most robust in the world with a very effective financial services sector, transport and communication infrastructures, and a very attractive production atmosphere for foreign direct investments. However, the above qualities present a very competitive environment that requires businesses to have strong strategic marketing approaches that will ensure that they can gain a significant market share to remain relevant and viable.

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A good strategic marketing plan or strategy is derived from thorough marketing research and consideration of product mix to guarantee maximum profits and sustainability of the business. Each market and business sector has its unique dynamics. Businesses in the UAE have to tailor their strategic marketing approaches with the view of maintaining competitiveness and sustainability in the country’s business environment.

Definition of strategic marketing

Strategic marketing has several definitions from different authors. The term has been defined and redefined several over the years. For instance, strategic marketing can be defined as the consistent, feasible, and appropriate set of principles through which a business wishes to attain its long-term profit objectives in a specific competitive business environment (Mullins, Walker, & Boyd, 2012). Peter and Donnelly (2011) define strategic marketing as the process by which a company decides a promotion strategy based on specific objectives, positioning, target market segments, and policies.

According to Wilson and Gilligan (2012), the main role of strategic marketing or marketing strategy is to effectively allocate promotion activities and resources to achieve a company’s goals within a specific product segment of the market. Further, Mullins et al. (2012) present another definition where strategic marketing refers to the practice of planning and executing the marketing, pricing, promotion, and distribution of goods, services, and ideas to create transactions or exchanges that satisfy the individual and organizational goals.

While the above definitions show the complexity of defining strategic marketing, there are key concepts that are universal in the process of putting a marketing strategy in place. Firstly, a firm must have a clear understanding of its strengths and weaknesses in its current strategy and thus redefining it to suit the current business environment (Peter & Donnelly, 2011). Secondly, it is important for a company to clearly understand its current business sector and dynamics. Lastly, it must have its products suited to the best of the consumer’s expectations and perceptions. When the above factors are put into consideration, a company is in a better position to compete in its current market segment.

Marketing trends in the UAE/Dubai

The United Arab Emirates enjoys a relatively young population. This situation presents a unique and dynamic market with major trends driven by this population among others. For instance, technology is an important marketing trend. Many young people in the country are interested in new technology, especially the mobile phone technology and social media. Thus, businesses have to adjust accordingly by suiting their marketing strategies to tap into this market segment (Hamilton & Webster, 2015). As such, the use of social media marketing is an important trend that is growing rapidly in the United Arab Emirates.

On the other hand, the tightening oil prices in the country means that the government is limited in its injection of finances into the financial system and that businesses have to contend with less liquidity in the market. Businesses in the UAE have to regulate their marketing strategies to suit the changing and more difficult financial sector in the country. Another important trend in the country is the increased reputation of the UAE as a major transit hub and tourist destination (Hamilton & Webster, 2015).

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With the population comprising majorly expatriates, businesses must find a balance between marketing to the local and the expatriate population. Lastly, the market is very competitive. It is characterized by major multinational companies, which are trying to set up their bases in the country (Hamilton & Webster, 2015). As such, competition is very high. Consequently, marketing strategies must not just be targeting local but international competition. Further, the multinational companies have an enormous financial strength to undertake major marketing campaigns, as well as implementing other strategies that present a complex competition environment in the United Arab Emirates.

Importance of knowing consumers’ changing needs

The customer is the target of all marketing strategies and hence a very critical part of any business. Businesses in the world survive by appealing to the customers’ needs. Therefore, businesses need to ensure that they always understand the needs of the customer to remain relevant by selling products that the customers seek to serve their needs (Peter & Donnelly, 2011). However, the needs of customers are not static. Instead, they are dynamic. Therefore, organizations must respond and adjust to customers’ demands. Without serving the needs of the customers, a business cannot survive.

It is critical for a business to discern the shifting requirements of consumers to remain relevant at all times and most importantly, to survive the competition. The process of identifying customers’ needs involves three major processes, namely, market segmentation, customer and purchasing characteristics, and the determination of all unmet needs (Mullins et al., 2012).

In the market segmentation, the major aim is the identification of potential market segments that a company can serve the needs of consumers. On the other hand, a company must ensure that it understands the characteristics of the customers and their purchasing habits. Each customer segment has unique needs and hence the importance of appreciating those that are specific to various targeted customers in the country (Wilson & Gilligan, 2012).

The last approach involves serving any unmet needs of consumers by offering new concepts of products relative to what is currently available in the market. However, these factors must be accompanied by the ability of the businesses to adjust accordingly to meet consumers’ changing needs (Wilson & Gilligan, 2012). As potential consumers adjust to the new trends, technologies, and other changes in the product or service preferences, the businesses must transform accordingly or else risk becoming obsolete.

Knowing the shifting needs of the clients allows a business to target its scarce resources to the market segments that reflect customers’ desires, thus ensuring more success for the firm. Also, the ability to know the shifting needs allows a business to beat easily other competitors who are slow in predicting and adjusting their marketing strategies (Peter & Donnelly, 2011). On the other hand, it is important to know customers’ evolving needs since such appreciation ensures that a business can adjust the latest technologies to the production of products while at the same time putting in place the relevant marketing strategies to drive its products to its target market.

Factors that influence our needs

Consumers’ needs are affected by various factors in the market environment. For instance, the pricing, government policies, consumer income, and market offering are all important factors that determine consumer needs. In this case, the major influences on consumers can be grouped into macro, micro, and competition among other factors.

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Macro (PEST analysis)

The political, economic, social, and technological factors present the macro elements that determine consumers’ needs in a country. A PEST analysis allows an organization or a firm to identify the political, financial, societal, and technological factors that can influence their businesses positively and negatively, thus adjusting the marketing strategy accordingly (Hamilton & Webster, 2015). For example, the social factors of a population such as age or income are all important considerations when putting in place strategic marketing approaches.

Each country or jurisdiction has unique political, economic, social, and technological factors that a business must always put into consideration when setting base in the market. For instance, in the UAE, the country has unique PEST factors that are represented in the table below:

PEST analysis for the UAE
Political factors Economic factors
  • The United Arab Emirates has seven (7) emirates, each with its governmental institutions and business laws
  • The laws present an important influence on the needs and preferences across the country
  • The UAE has healthy interactions and trade relations with other countries across the world, hence allowing easier foreign investments and consequently high competition from multinationals that set base in the country
  • Not all cross-border legislation on trade is favorable. Some business sectors are difficult to operate in due to strict government laws
  • Other government policies may change anytime, thus exposing a business to new risks or advantages
  • Regulatory bodies and other processes targeting individual business segments also influence the kind of products and specifications offered, thus influencing consumer needs
  • The UAE has one of the highest GDPs and income in the world. It has a high disposable income among consumers, implying a ready market for products and services that meet consumer needs
  • The country has a very low rate of unemployment, a situation that predisposes most consumers to have the ability to buy services and goods favorably
  • The country attracts high amounts of foreign direct investments to ensure that consumers are exposed to numerous products and services to choose from
Social factors Technological factors
  • As an Arab-speaking country, the UAE presents unique challenges to foreign companies entering the market However, English is slowly becoming a commonly used language, especially due to the high population of expatriates, thus making it easier for foreign companies to do business in the country
  • Demographic elements such as the young population are also a major factor of influence on the needs of consumers
  • Consumer attitudes are also common, especially in the 1-to-5 year membership groups
  • Religion is an important factor that influences the needs of the people in the country
  • Globalization is slowly leading to a mixed culture, which is expanding the needs of the consumers beyond the local product offerings
  • There is a high penetration of technology in the country. This situation influences consumers to demand high-quality and diverse products because of their exposure to the internet and hence global products and brands
  • The wealth of the country allows it to adopt new and expensive technologies, thus increasing the quality of the products and services, which also influence the needs of the consumers

Micro (The 4Ps)

The micro factors that determine the needs of consumers in a market can be summarized as the 4Ps of the marketing mix, which are the price, product, place, and promotion. The marketing mix seeks to identify and implement various strategies on the four Ps, which help to position a company’s services and products to achieve competitiveness (Mullins et al., 2012). However, as the company’s determine and implement the 4Ps, consumers have no choice but to adjust accordingly to ensure that the products offered in various locations serve their needs at fair prices. The table below represents the 4Ps in the case of the UAE market:

Pricing Product
  • The pricing is determined by many factors such as taxes, government policies, target consumer incomes, and competition
  • Some of the factors above are beyond the consumers. Hence, they have to adjust accordingly and buy products at the prices that are in place. This situation influences their needs
  • The products offered by a firm must meet the needs and the demands of the consumers.
  • However, sometimes, consumers do not have options. They have to buy the products that the market offers
Place Promotion
  • Companies have to determine the places or locations where they will sell their products and services. However, while such a strategy is a factor of the location of the consumers, other factors such as government policies, social factors, among others also influence their business operations
  • In the case above, consumers have to tailor their needs to be addressed by the products and services that are available in their locations
  • Promotion strategies used by firms influence consumer needs and decisions directly and indirectly
  • In the UAE, the young generation is technology perceptive and hence exposed to numerous promotions on social media, a situation that affects the kind of needs that they have

Competition

Competition in the UAE is very high due to the favorable market and ease of doing business in the country. However, as more companies enter the market, competition becomes cutthroat (Mullins et al., 2012). Such competition is healthy since it pushes firms to put in place marketing strategies that can ensure that they remain relevant in the market. Some of these strategies include increased quality of products, offering lower prices, and promotions that allow customers to have a wider scope of choices to make from the market (Wilson & Gilligan, 2012). Many products and services on offer can meet consumers’ needs. Also, consumers can seek to satisfy higher needs since the market can offer the solutions they demand.

Other factors

Other factors that influence the needs of the consumers include religion, exposure to international products and services, interactions with expatriate communities, travel experiences, age, gender, health, the available goods/services, and events among others (Mullins et al., 2012). For instance, due to the robust foreign direct investments, consumers are exposed to more products and services. Sometimes, such products trigger needs that the consumers previously did not think existed. While some religions dictate what should be deemed fit for consumption, other worship centers allow their followers to choose for themselves what they prefer to consume. However, many religions, including Islam, dictate the dressing style that people should adopt when attending places of worship.

Maslow’s hierarchy of needs

The desire to buy a product or service by consumers is motivated by the desire to meet specific needs. These needs can be grouped into different categories as guided by Maslow’s theory of the Hierarchy of Needs proposed by Abraham Maslow. According to the theory, human needs can be grouped into five categories, namely, biological and psychological needs, safety needs, belonging needs, esteem, and self-actualization.

Description of Maslow’s law of hierarchy of needs

The first category of humans’ needs according to Maslow’s hierarchy is comprised of biological and physiological needs. The category consists of the basic human needs, which help in the survival and maintenance of the human body. The needs include air, food, drinking, sleep, warmth, and clothing among others (Mullins et al., 2012). According to Maslow, these needs need to be met before humans can start to think of other higher requirements.

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The second level comprises safety needs, which include protection from destructive elements, law and order, job security, limits, health, stability, and security among others. These needs keep people safe from harm. Unless a person is protected, all the higher needs become secondary (Wilson & Gilligan, 2012). While these needs are also essential for continued existence, they are less significant compared to the physiological requirements.

The third level comprises belonging or social needs. These needs advance human’s tribal nature. They include love, affection, belonging, relationships with family and friends, and companionship (Peter & Donnelly, 2011). The needs are sought once the biological and security needs have been met. The next level, according to Maslow’s hierarchy, constitutes the esteem needs. Once the lower-level needs of security and belonging have been met, an individual can seek to develop feelings of self-worth and self-respect. The needs ensure that individuals can foster pride in their work and themselves (Mullins et al., 2012). These needs can be categorized as respect, sense of worth, confidence, recognition, accomplishment, status, and achievement among others.

The highest level of Maslow’s hierarchy involves the self-actualizing needs, which relate to the realization of a person’s full potential and goals in life. The notion “what a man can be, he must be” guides the need for self-actualization (Wilson & Gilligan, 2012). Such needs include, but not limited to, realizing personal potential, pursue talent, self-fulfillment, peak experiences, creativity, and personal growth among others. The above discussion can be represented as a diagram as follows:

Maslow’s Hierarchy of Needs.
Figure: Maslow’s Hierarchy of Needs.

A table of my needs 15 years ago, how they have changed, what has caused the change.

Needs 15 years ago How they have Changed Cause
I used to wear a dress I wear Abaya and Hijab now Culture: Dubai Emirati women should wear Abaya and Hijab
I used to drink orange juice I drink alcohol now since I am above the age of 21 years Friends introduced me to drinking
I used to depend on television for news and information I can now access all the information that I need from the internet Technology

How Maslow’s hierarchy of needs affects my needs above

The hierarchy of needs as explained by Maslow’s depicts itself even in normal living on a personal level. For instance, when a person moves to a new location or a nation, the first instinct is to seek food and sleep before anything else (Mullins et al., 2012). However, since this need is almost guaranteed in my case, the next major one is the need to seek a secure house. This desire appeals to the need for security before any other higher requirements can be achieved. For instance, when I moved to a new country and locality (Canada) to pursue my education, I ensured that I knew the secure neighborhoods that I would not only get shelter but also a place where security from burglaries, mugging, and racism was offered.

Once the biological and security needs have been met, an individual seeks to meet the needs of belonging. As such, in my case above, once I obtained a secure place to stay, the next step was to seek other people to know them and create relationships within both the institution of learning and other places. Through the process, I made new friends who gave me a sense of belonging and affection. The next level involves the esteem needs, which include the process of developing self-worth. In my case, I ensured that I appeared gorgeous in the eyes of other people. I also participated in activities that upheld my worth and purpose. Lastly, I participated in activities such as sports or adventure to attain self-actualization.

How marketers/advertisements can catch my attention, and monitor my needs and wants better shortly

For marketers to catch my attention, there is a need to appeal to my needs. Firstly, they should go with the trends while utilizing modern technologies such as mobile phone advertising to reach me. Further, they should contact thorough research to ensure that the quality, packaging, and pricing meet the needs of a young person who is not yet earning much to afford some expensive luxuries. Through the above strategies, it will be possible for marketers to predict and respond to my needs and wants better shortly.

Conclusion

The ability of companies to meet the needs of the consumers is an important tenet of marketing strategy. As such, it is essential to ensure that firms understand and consider both the macro and micro factors that influence consumers’ needs at all times. In this case, for businesses to appreciate the macro and micro factors of human needs in a market, PEST and the 4Ps analyses must be undertaken. The human requirements are well summarized by Maslow’s hierarchy of needs. Thus, firms must ensure that they serve the respective consumers according to their (consumers) demands. If the lower-level needs are not met, it is futile to market products and services that satisfy higher needs. Lastly, to reach my needs and desires, consumers must ensure that they use modern technologies for me to access their promotions and offers while at the same time reflecting the current trends.

Reference List

Hamilton, L., & Webster, P. (2015). The international business environment. Boston, MA: Oxford University Press.

Mullins, J., Walker, O. C., & Boyd, W. (2012). Marketing management: A strategic decision-making approach. New York, NY: McGraw-Hill Higher Education.

Peter, J. P., & Donnelly, J. H. (2011). Marketing management: knowledge and skills: text, analysis, cases, plans. New York, NY: Sage

Wilson, R. M., & Gilligan, C. (2012). Strategic marketing management. New York, NY: Routledge.

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