Zain Company’s Electronic Marketing in Saudi Arabia

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Abstract

Zain Group is a mobile telecommunication company that was established in 1983 under the name Mobile Telecommunication Company (MTC). It later changed its name to Zain in 2007. The company has established itself in different countries across the world including Saudi Arabia. Zain Saudi Arabia is the third among companies that deal in mobile networking in the country. Zain Company has a website in English language. The website helps the company in communicating its products to target customers. It gives them a general overview of the company, products and services it offers. Based on the manner in which information is organized in the website, visitors to the site are easily lured to using the company products. Increase in need for internationalization of different business organizations has resulted in them looking for the most effective methods of reaching their diverse consumers. To be able to communicate and get feedback from consumers, business organizations have started using internet as their means of communication as well as selling channel. This is because internet is accessible globally. This method has brought to an end the issue of geographical barrier where consumers could not make purchases unless they have physical access to the business premise offering the products or services they require. Zain Saudi currently, use internet in its marketing mix. It is possible for consumers to contact Zain customer care staffs in case they have a problem in using its products and services. However, the company has not provided for online sales. To overcome competition, there are numerous improvements that need to be done on the company’s website.

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Electronic Marketing for Zain Company in Saudi Arabia

Background information

Zain Group is a mobile telecommunication company that was established in 1983 under the name Mobile Telecommunication Company (MTC). It later changed its name to Zain in 2007. The company has established itself in different countries across the world including Saudi Arabia. Zain Saudi Arabia is the third among companies that deal in mobile networking in the country. It got its license to operate in the country in 2008. Immediately it was started, Zain Group gained a lot of subscribers and within a period of four months, the company had managed to enrol approximately two million customers. Despite the company being able to gain a massive number of subscribers after it was established in the country, it has not been able to operate effectively. One of the latest incidences is the failure by the company to repay its creditors debts to the tune of $2.5 billion. This has resulted in its shares depreciating in value by approximately 1.47 percent (Afuah & Tucci 2004, p. 42)

SWOT Analysis of Zain Saudi Arabia

As a way of increasing its market share, the company has cooperated with other companies in lending its services in the country. One of the latest cooperation involves Zain Saudi Arabia and Nokia Siemens in providing 2G and 3G mobile network. Under this cooperation, the company has been able to provide Mobile broadband services to various customers. This has helped the company offer efficient services to its subscribers at a low cost. As Zain Company has established itself well in the Middle East, Zain Saudi will get technical and financial support from the mother company situated in Kuwait. This means that the company has the potential of rolling out different services in the country based on results gotten from other countries that the company offers its services.

As the company established itself recently in the country, it has not gained experience on the communication trend in the country. Its rival companies such as Mobily, Saudi Telecom Company (STC) and Bravo have been in the market for a long time. They are conversant with market forces that affect the communication industry in the country. This makes them run their operations at less cost. Poor financial planning within the company is another problem that has seen Zain Saudi not being able to clear its debts. This can hinder the ability of the company to offer quality services due to huge investment required for it attain this.

As the population in Saudi Arabia continues to increase with almost every household currently owning a mobile phone, the company is assured of an increase in demand for its broadband services with time. The company has the potential of increasing its market share in the country as well as extending its services to other countries. Lack of its management to come up with a viable financial plan is likely to significantly affect the prices of its shares. Depreciation in their value will shy potential investors away making it had for the company to get enough fund to support its expansion.

Competitor analysis

The high demand for mobile network services in Saudi Arabia has led to the emergence of competition in the market. Some of the competitors to Zain Saudi are STC, Mobily and Bravo. STC has already established itself in the market offering different communication services to its customers. The company offers individualized services such as mobile telephone services and value added services as well as home services and data solution. This has made the company vary popular in the country. One of the major problems that have rocked the company is inability to offer quality services to its customers and poor bill distribution. Lack of flexibility in its broadband services makes it unfavourable for most youths. Mobily is the second telecommunication company in Saudi Arabia. The company has rapidly developed due to its ability to establish a solid expansion strategy. It enjoys the availability of ambitious sales team, branded outlets and massive dealers scattered all over Saudi Arabia. This has helped it reach all the population in the country. Mobily has come up with a push-to-talk services which has led to it gaining popularity in the country. Failure to offer flexible broadband services which are in high demand currently has been one of the weaknesses of the company (Rowley 2005, pp. 217-226).

Zain Saudi’s Internet business model

Zain Company has a website in the English language. The website helps the company in communicating its products to target customers. It gives them a general overview of the company and the products and services it offers. Based on the manner in which information is organized in the website, visitors to the site are easily lured to using the company products. The value proposition for Zain Company is the high demand for network and mobile communication services in the country. The fact that the company is able to update it customers on the emerging issues in communication industry as well as on how to use its products through the website makes it possible for most of the people in the country make use of its products. Consumer value of Zain’s website is that through it different customers learn how to use communication services they offer. The company does not offer direct sale through the internet. From the website, customers can only be directed to places where they can make their purchase as well as being taught on how to use some of the products offered by the company. Thus there are no direct revenue streams for the company through the website.

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Zain’s internet marketing strategy

Based on the way its website is organized, Zain is aimed at using it to inform its customers and other organizations about its position, products and services it offers. The company use its website to communicate to youths about the benefits of their mobile broadband. This is because youths are fond of following sports and they enjoy listening to music. The flexibility of the service makes it more favourable to youths. This is because they are allowed to access information based on the amount of money they pay. Its charges are low thus making it affordable to youths. The company offers different packages thus making it more attractive to youths. The table below shows various packages offered by the company.

Zain broadband packages
Zain broadband packages

Compared to other broadband services offered by companies such as STC, Zain’s services appear more affordable for their target consumers who are not regular income earners. STC’s packages and charges are not flexible making it expensive for youths to make use of them. The table below represents packages and charges offered by STC in its Sawa broadband.

Packages Size in Megabytes Price Validity period Activation code
Internet 1GB 1000 100 SR 30 days 21000
Internet 5GB 5000 200 SR 30 days 25000
Internet unlimited unlimited 350 SR 30 days 29999

Mobily broadband services charges are also not flexible making it hard for youths to use the services. The table below shows some of the broadband packages and charges offered by Mobily Company.

1 Month 3 Months 6 Months 12 Months
Wireless modem “with WIFI” 400 SR 300 SR 200 SR Free
Subscription fee 299 SR 850 SR 1600 SR 3000 SR
Total payment 699 SR 1150 SR 1800 SR 3000 SR

Evaluation of internet marketing strategy

According to Merwe (2003, p. 330), all customers go through four stages before making the decision on whether to purchase any product. These are: recognizing that he or she needs the product, collecting information on where to get the product, evaluating the information obtained and coming up with the decision on whether to purchase the product. It is in this respect that Zain Company has ensured that it has clearly outlined the various charges available for their broadband services. This helps the youths make informed decision on the package to use based on their income. The fact that its website is well organized help youths access information they require effectively. One of the best features of the website is that it has provided information on how to easily locate shops where they can make purchase of the package they want. This saves them time which would scare them from making use of the company’s products.

Conclusion

Most of business organizations are currently using internet as a tool to boost their sales (Richardson 2002, p. 421). Since most people of the people search for information through internet, it becomes easy for organizations that have websites to communicate their products and services to potential and existing customers. Zain Saudi has come up with a website to inform its customers on the services and products it offers in the market. It also uses the website to inform customers about its performance in the market. As the company has not provided for online purchase of its products, it informs its customers on where to get its products through out the country. As most of its competitors have already established themselves in the market, Zain Company ought to use internet as the tool for its expansion. Apart from informing customers on where they can get its products, the company need to provide online sales services. This would help it increase its market share and overcome competition. Based on the stages followed by customers before making the decision on whether to purchase the product, Zain requires organizing its information in the website in a way that it lures customers to purchasing the product. Making it possible for customers to easily access information from the website would lead to the company increasing its market share. This is because more customers will be aware of its products and services.

Expanded marketing Mix for online Marketing

Introduction

Increase in need for internationalization of different business organizations has resulted in them looking for the most effective methods of reaching their diverse consumers (Rao, Goldsby & Iyengar 2009, pp. 106-130). To be able to communicate and get feedback from consumers, business organizations have started using internet as their means of communication as well as selling channel. This is because internet is accessible globally. This method has brought to an end the issue of geographical barrier where consumers could not make purchases unless they have physical access to the business premise offering the products or services they require. Currently, consumers can purchase their goods by visiting websites of organizations that offer the products they require. Through internet, organizations are able to employ a marketing mix. The expanded marketing mix comprise of product, price, place, promotion, people, process and physical evidence.

Selected marketing mix

For many years, there was a common perception among the people that a good product always sells itself (Rafiq & Ahmed 1995, pp. 4-15). However, this perception has gradually declined as producers strive to produce good products to overcome competition in the market. There have also been established laws that allow consumers to return products they find to be of poor quality after purchasing. This coupled with need for organizations to improve their brand name has resulted to organizations producing quality products. Organizations have ensured that they have always produced products that best met the needs of their consumers. Products are categorised as either tangible or intangible. For the case of communication companies, they offer both tangible and intangible products. Some of the tangible products include phones and modems while intangible products comprise of broadband services, entertainment services and other services such as sending and receiving money.

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To ensure that the product offered by your business is readily acceptable in the market, producers have to ensure that they have addressed various issues when developing their products. These include identifying the various needs that their customers have. This will help them come up with products that satisfy all their customers’ needs. A product that meets part of consumer needs will not be attractive to customers. As consumers wish to limit their expenses, they will be willing to buy a product that comprehensively addresses their needs. This calls for producers to ensure that they have included all features that will help in addressing consumer needs for their products to perform well in the market. Some of the features may be too costly for consumers to use (Peterson 1997, p. 147). To ensure that products are not too expensive for consumers to cope with, business organizations have to ensure that they have included features that are not too expensive for consumers. Product design is another feature that greatly determines whether the product will be accepted. In communication industry, consumers would like to have portable and well designed products. For instance, youths would like to use small entertainment gargets that are well designed. Based on level of competition in the market, business organizations alter their product designs so as to look different from those offered by their competitors. This makes the product appear unique thus attracting market.

For consumers to effectively use a product, they have to be aware of the places they can get the product (Park & Lennon 2009, pp. 32-45). It is imperative for business organizations to effectively communicate to consumers on places where their products are found. This will save consumers from having to travel around looking for the product. Based on products offered by a company, business operators come up with the best method of distributing their products. Most operators consider the methods use by their competitors to ensure that they have made their products more accessible to their customers. For organizations with online selling technique, the issue of place is significantly altered from the old method of market mix. His is because consumers can make their purchase without having to travel to the business.

Nothing scares consumers from using a product than its price. Most consumers compare the price of a product with its functionalities as well as price of other substitute products offered by competitors (Otlacan 2009, para. 2-7). A consumer may be willing to buy a product at a high price if and only if he or she is assured that he or she will greatly benefit from the product. At times the government may influence pricing mechanisms for organizations. This limits organizations from increasing their prices. This is mostly when a business enjoys monopoly. To avoid it from exploiting its consumers, government regulates it pricing mechanisms. In some instances customers, may be price sensitive. Increasing price of a product by a small margin may scare away such customers from using the product. This calls for business operators to conduct consumer analysis before embarking on product pricing. To overcome competition in communication industries, companies may decide to offer discounts to their consumers by offering them services at low charges in various days; especially public holidays. This ensures that consumers are loyal to the company thus helping it gain market share.

Promotion is one of the most important aspects in the market mix. It is the method through which consumers get to know of products offered by any business organization (Murphy & Scharl 2007, pp. 297-312). Before any business make any sales, consumers have to be aware of the products. Most business organizations use different promotional methods which include advertisement on radios, televisions or billboards. Others use sales personnel to directly communicate to consumers. Promotional giveaways are another method where consumers are given an opportunity to use company products for free before they decide on buying them. All these promotion methods facilitates in increasing business sales volume. Today, every person has access to internet. The number of people visiting different websites in the internet increase day-by-day. As a result, business organizations have introduced websites as one of the promotion tools in their marketing mix. Currently, business organizations are capable of reaching a wide range of market through internet which could not be reached by other methods of promotion. Since people continue opening e-mails, organizations have found it as the best method of communicating and getting feedback from consumers. This method has been productive since most consumers use their e-mails more than other internet tools. It is also cheap (Zeff & Brad 1999, p. 364).

Apart from the four Ps that were being used in traditional marketing mix, people, process and physical evidence are other elements that have been incorporated to come up with an expanded market mix. People refer to all persons that directly or indirectly use organization products (Merwe 2003, pp. 332-341). Employees and consumers contribute significantly to the performance of a product or service in the market. One of the most important components in a service providing company is use of competent personnel. Employing competent personnel in service providing businesses helps in gaining competitive advantage. As service delivery methods change with time, it is imperative for business organizations to conduct regular employee training. This ensures that they are always conversant with the latest service delivery methods. Consumers like dealing with business organizations that offer quality and efficient services. Consumers judge organization’s method of service delivery based on the way its employees conduct themselves when executing their duties. Having courage in service delivery makes consumers trust in the services provided. Employees in service delivering organizations need to have good interpersonal skills. This is because they require interacting with customers as they offer the services and answer questions coming from customers. To improve on service delivery methods, organizations need to get feedback from their consumers. Good interpersonal skills among employees would help in gathering information from consumers (Taylor & England 2006, pp. 77-85).

Process refers to activities that take place when offering services to consumers (Mayer, Bowen & Moulton 2003, pp. 621-639). Every consumer would like to deal with business organization that offers its services and products efficiently. For instance, business organizations that use internet as their marketing strategy, offers their services efficiently. One is able to automatically get whatever him or her request. Ensuring that your service delivery does not take long process helps in boosting consumer loyalty to the organization. Consumers also get confidence with the company. Physical evidence stands for the ability of the organization to offer its services effectively and the environment in which services are offered (Mathiesen 1997, p. 327). The physical infrastructure and experience from employees that helps in effectively delivery of services to consumers make up the physical evidence. Through these infrastructure and employee competence, consumers are able to make judgement of the organization. Every consumer visits a business organization with varied expectation. If he or she happens to find these expectations, he becomes attracted to the organization thus becoming loyal to it.

Discussion of the issue

As communication technology has developed rapidly, most of the consumers are conversant with products and services offered by Zain Saudi. This is an advantage to the company since it does not have to take time educating its consumers on the products it offer (Lii & Lee 2005, pp. 101-112). To effectively attract customers, competing companies in telecommunication industry of Saudi Arabia offer different charges for their products and services to consumers. This becomes a major problem to the company in setting its online prices. Charges for various services offered in communication industry keeps on varying with time. This makes it hard for Zain Company to set its prices. As it is hard for the company to deliver its products to every consumer, the company need to ensure that its have availed its website on most of the frequently visited sites such as facebook, twitter, yahoo and Google for it to catch more consumers. Its website provides for an option where interested consumers can get to know the nearest place where they can get its products. This will save consumers from having to travel looking for the products after they have become aware of them. Providing for a section where customers can check their billing system will help customers in deciding the services to subscribe to and those to leave based on their income.

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As most consumers wish to work with business organizations that are able to offer efficient services, Zain need to provide for online purchase of its products such as the modems (Madhi 2003, pp. 70-77). Unlike calling charges where the company offer both pre-paid and post-paid services, it is hard for consumers to do online purchase of Zain products. By using smart cards, the company will help consumers do online purchase thus saving them time. The company communicates its performance in the market to customers through its website. This helps consumers determine its viability thus making decision on whether to purchase its shares. By regularly updating consumers on its new products, the company can is capable of increasing its sales. It also has a section where consumers can contact its customer care staffs in case they have a problem with using its products. This will boost customers’ confidence in using Zain products and services.

Varying the marketing mix for online marketing

Introduction

To improve on their sales, various business organizations use different marketing strategies. This is done based on their consumer preference and level of education of their customers (Kolter & Keller 2008, p. 237). There are firms that use all elements of marketing mix while others integrate some of them in their marketing strategy. Since sales in Zain Company is done off line, its website is generally used in product promotion and informing customers on how to use and where to get the products. It also informs customers on its performance in the market as well as the price of its shares.

Identification of internet marketing mix strategies

Marketing mix assists business operators in gathering information on how they can enhance the quality of their products as well as on effective methods of delivering their products and services to target customers (Koksal & Ozgul 2007, pp. 326-342). There are various ways in which business organizations can use internet in improving their marketing mix. For Zain Company, through its website, it can be able to get feedback from its consumers on features that they need include in their products as well as those that need to be improved. Through this, the company can be able to modify its products so as to meet the needs of its consumers. This can save the company time it could spend organizing for field study to interview its consumers on their views about its products (Huang, Li & Gandha 2006, pp. 523-539). With Zain Company facing stiff competition from other companies that offer similar products and services, the company need to use its internet in collecting information from its customers on areas that need improvement. It can also access information on feature that its competing firms have incorporated in their services and products thus being able to improve on its products and services to overcome competition. Apart from getting feedback from its consumers, the company can use internet to communicate its products to consumers (Hofacker 2008, pp. 129-143). Providing clear information about a product would ensure that customers are well aware of the usage of the product they intend to purchase.

To attract more customers, Zain Company needs to customize buying process for customers who regular buy from them. It can also offer supplementary products together with the main purchase (Gurley & Ballou 2005, pp. 30-40). The products and services can also be customized based on customers needs. To enhance its products and services thus increase their usage, the company need to have an effective mechanism of getting feedback from the consumers. A part from providing a section in their website where consumers can contact their customer care agents, Zain Company ought to provide online questionnaires where consumers can be able to respond to various questions aimed at improving their services and products. Using blogs to interact with customers can help the company understand how its customers perceive its services and products (Dixon & Marston 2005, pp. 97-109). Here they can allow customers to send their questions which they can then respond to making it possible for more consumers to be aware of how to use their products. Technological revolution is leading to emergence of new products and services every now and then. This calls for communication companies to regularly update their customers with the latest services and products introduced in the market (Dallas 1997, p. 42).

Promotion is a vital tool in increasing sales volume of any business organization. An effective promotion will assist consumers on how to order goods and services online (Chaffey Ellis-Chadwick, Johnston & Mayer 2009, p. 231). For Zain Company, it is possible for customers to get information on how the company is performing in the market as well as new ventures that it makes in communication industry. However, for customers who would like to get information on how to use its products from customer care, they have to do it by sending their e-mail numbers to the customer care who then send them information regarding product usage. The company need to establish a voice on internet protocol (VOIP) technology where customers can be able to communicate direct with its customer care staffs without having go through the process of sending e-mails. These overheads are some of the factors that lead to consumers not using its products and services (Bengtsson & Marell 2006, pp. 20-31).

For online shopping, consumers would like to be supplies with prices for various products offered by the company. It is from here that they make decision on whether to buy the product. Apart from providing for a place where customers can enquire on their bills, Zain Company does not offer a list of prices for its various services and products.

Evaluating the effectiveness of Zain’s Internet marketing mix

The main aim of coming up with a marketing mix in a company is to help in its communication with customers thus increasing its sales. An effective internet marketing mix need to have a mechanism of collecting feedback from consumers as well as responding to consumer queries. For Zain Company, its website provides for a section where customers can contact its customer care staffs. However, this requires them to go through a long process of having to send their e-mail to customer care staffs (Bandyopadhyay 2001, pp. 16-24). The method is not effective in enhancing communication as most of the consumers may not have enough time to fill the required sections before getting permission to communicate with customer care staffs. The website also does not offer a service where customers can make online purchase. After understanding some of the products and services offered by the company, the have to travel to the nearest Zain shop so as to make their purchase. Despite the website not effectively meeting the objectives of internet marketing mix, it has effectively been able to provide for sections where the company advertise its products online. This keeps consumers updated with products offered by the company as well as the position of the company in communication sector.

Conclusion and Recommendations

Competition in communication industry in Saudi Arabia calls for Zain Company to make effective use of internet in accessing its incumbent and potential customers (Balmer & Greyser 2006, pp. 730-741). To effectively communicate with its consumers, Zain Company ought to come up with an easier way of getting consumer feedback and responding to their questions. The current method of contacting its customer care staffs discourages most of consumers from using its products. Inclusion of features such as blogs and VOIP in its website will facilitate in improving its relation with customers. Consequently, the company will manage to get feedback from its consumers on where to improve on its service provision as well as products. It is one of the most effective strategy that will help the company overcome competition it experience from companies such as Mobily and Saudi Telecom Company. Introducing online purchasing through its website would help the company in increasing its market share in the country. There are many potential customers who may be willing to use its services but they fear as they have to travel to Zain shops so as to get the product. As online purchase would save time such customers will be willing to use its products. Customers make use of products due to them being aware of the existence of such product or service. There are various channels that business organizations use to inform customers about their products. Currently, there are many people make use of internet. Zain Company requires making sure that it has availed its website on most of the social networks. From here, the company will be able to reach a wide group of consumers thus increasing its competitive advantage in the country (Armstrong 2001, p. 83).

The company has failed to focus on marketing mix elements that deal with services offered by the company such as people, process and physical evidence. Its website does not offer information regarding its employees and process taken when delivering its services. This makes it hard for customers to determine the credibility of the company. In most cases, consumers judge organizations based on its employees’ competence. As customers are not aware of Zain’s employee competence, they may fear to use its products. The company need to give brief information regarding its employees and their experience so as to boost customers’ confidence in using its products and services.

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