Escolar Documentos
Profissional Documentos
Cultura Documentos
Submitted by:
NASSAR JALALUDDIN
Registration Number: 540796680
Submitted to
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August – 2009
Annexure: B
ACKNOWLEDGEMENT
First and foremost I would like to thank Almighty for His blessings that have been showed
upon me for the success of the project.
I am also thankful to, Centre Manager of Sikkim Manipal University Learning Centre –
Jeddah. I would also like to thank the respondents who rendered their help in responding
to my interview schedule.
Last but not the least I would like to thank Mr. Saleem Ahmed, Business Development
Manager, Al Batool Intl. Trading Company, and my Colleagues for their valuable Support
and help.
“My sincere prayer goes to my Mother (Passed away December 28, 2008), who has always
an inspiration in my life”
NASSAR JALALUDDIN
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Annexure C
Place: Jeddah
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Annexure D
Assistant Professor
GUIDE CERTIFICATE
Place: Jeddah
FORWARDED
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External Examiner
Internal Examiner
COMPANY CERTIFICATE
Will be provided
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INDEX
1 Introduction 10 – 24
2 Methodology 53 – 56
3 Literature Review 69 – 74
APPENDIX 95 - 96
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LIST OF GRAPHS
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LIST OF TABLES
SYNOPSIS
“Importance of Effective Marketing in Retail Fashion Industry with special reference to Kingdom
of Saudi Arabia”
Today no business can survive without having proper marketing. It is become more and more
essential as the competition is heating up, new entries to the existing market, increasing cost of
maintaining the standards…
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The franchise fashion retailing market is crowded with many players. However, the top segment of
the market is controlled by a limited number of major players that has the largest share of the
market either in sales turnover or in the number of international brands they represent.
It should be noted that eight fashion retailing companies hold more than 100 brands in the market,
with each brand being represented by several outlets in the major cities. It is obvious that these are
financially and organizationally strong companies.
The fashion franchise retailing market is currently witnessing great activity in the number of new
entrants into the market. As the competition heating up, all the companies are forced to introduce
new marketing activities/promotions to attract the customers and retaining the positions in the
retail market.
The Objective of this study to explains the different types of Promotional activities adopted by
retail brands to market their product in Saudi Arabia.
• Major Fashion brands and its marketing styles adopted
• Pricing, Different types of Promotions, Service (post & pre transactions)
• Geographical Characteristics, Demographic Variables influencing Marketing strategies
• Different techniques used by international Fashion Brands
This study aims to get an overview of effective marketing performed by international Retail
Fashion brands with special reference to Saudi Arabia.
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CHAPTER - 1
INTRODUCTION
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Research design is the detailed blue print used to guide a research towards its objectives. This is a
part of marketing research. Marketing research is systematic design, collection, analysis and
reporting data and finding relevant to a specific marketing situations facing by the company.
Marketing research is likely to provide a fuller appraisal of the brands strength, brand
ambassadors, promotional factors of the product with character and uniqueness than the brand
owner may possess through his/her own experience and collection of anecdotes. It can certainly
compare and contrast the brand with competitors in an objective way.
The primary focus of the study was to determine the various attributes of advertisements which
influence the customer’s attention and buying behavior. The research design employed for the
purpose of the study was directive in nature and a sample survey was conducted for the purpose of
the generation.
This research is to know the advertisements and promotional activities that essentially form a
powerful communication force, highly visible and one of the most important tools of market
communications that helps to sell products, services, ideas, images etc.
The study conducted to know how effective is the advertisements and the promotional activities
was successful in the Retail Fashion Market. They are seen on the walls, back of the buses, in
playing grounds on the occasion of sports events, road shows also in television, print medias,
magazines, internet and are heard in radio.
The below two points are very helpful for this project
Company practices and methodology helped me to built questionnaire, and the research
helped for further survey.
The real market challenges and implications in promotions were perceived by the study. It
helped in understanding the market share of different brands selling fashion.
Marketing
Marketing is so basic that it cannot be considered as a separate function. Marketing has been
defined in various ways. The definition that serves our purpose best is as follows: “marketing is a
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social and managerial process by which individuals and groups obtain what they need and want
through creating, offering and exchanging products of value with others.”
This definition of marketing rests on the following core concepts, needs, wants& demands,
products, value, cost & satisfaction, exchange and transactions, relationship and networks, markets
and marketers and prospects.
“Marketing management is the process of planning and executing the conception, pricing,
promotion & distribution of ideas, good and services to create exchanges that satisfy individual
and organizational goals.” This definition recognizes that marketing management is a process
involving analysis, planning, implementation and control; that it covers goods, services and ideas;
that it rests on the notion of exchange, and that he goal is to produce satisfaction of the parties
involved.
Marketing management takes place when at least one party to a potential exchange thinks about
the means of achieving the desired responses from the other parties. Marketing management has
the task of influencing the level; timing and composition of demand in a way that will the
organization achieve its objectives. Marketing management is essentially demand management.
Saudi Arabia is definitely on its way to becoming am international hub for the retail fashion
Brands. The Brands are reaffirmed its focus on high volume low value category of fashion stocks.
It has achieved a remarkable success in the Industry and is the toughest competitor of the leader
brands.
Marketing mix is a set of controllable marketing variables that the firm plans to produce the
response it wants in the target market.”
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“Marketing mix is a set of marketing tools that the firm uses to achieve its marketing objectives in
the target market.”
“Marketing mix is the blending of 4 inputs or sub-mixes, which form the core of marketing system.
They are:
• Product
• Price
• Promotion &
• Place.
Marketing Matters
Marketing is a way of managing your business so that every business decision achieves positive
impact on customer relationships. Marketing creates connections between your business (your
products and services) and potential customers. Effective marketing is a continuous process that
involves identifying customers and their needs and promoting, selling and distributing your
products or services.
It is about discovering the needs and wants of your customers and responding with appropriate
products and services. Marketing is not about trying to sell to everyone. It is about understanding
who you can better serve than anyone else.
You will retain the loyalty of your current customers and attract new ones if you:
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• Perform consistently better than anyone else
Economic, competitive and social environments are constantly changing; so are the needs of your
customers. Staying in touch will help you stay current about their needs and wants thus enabling
you to attract and keep customers.
Make marketing part of your regular business activities—connect every business process to
marketing outcomes:
You need to routinely review which markets to pursue and how to reach your customers. Also
routinely monitor the effectiveness of your marketing program. This will help you to stay attuned
to what your customer’s want, note changes that impact your marketing approach, identify
business opportunities and resolve issues.
There are two key components to look at as you identify your market: your customers and your
competitors. To succeed, you need to understand both. This means doing some research about both
customers and competitors as outlined in the information to follow.
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Focus on Your Customers are a group of people with wants and needs, values, expectations,
money to spend and willingness to spend it. To satisfy their needs and wants, customers look for
five key benefits from their selected service provider (you):
• To save time
• To save money
• To gain peace of mind (treated with respect by business with integrity, problem solved)
No business can be all things to all people. The cost of promoting and advertising directed to
everyone is cost prohibitive for small business. Focusing on a manageable number of people who
might want or need your product or service is more reasonable. It is important for you to
understand the Overall Market for your product or service and to choose a Target Market.
The overall market is basically, all people with the ability to buy a product/service like yours. Your
target market is a piece of the overall market that is most likely to buy your product or service.
To identify your potential target market, divide the overall market according to selected
characteristics. This is called market segmentation. Use one or more of the following methods to
determine possible target markets.
Geography
Select based on location (i.e. where the customer lives, works, shops or travels). Within your
overall market area, you can segment the market based on several geographic variables, such as:
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• Size of the neighborhood, city, region, country
Demographics
Divide the market based on population characteristics such as age, gender, education, Income,
occupation, marital status, number and age of children, ethnic or religious Background, etc.
An example of this marketing segment is: households with full-time working parents between the
ages of 25 and 45 with children living at home, who own their own home and are middle to upper
income earners.
Psychographics
This is the use of personalities, lifestyles and attitudes in determining the behaviour profiles of
different customers. Divide the market into segments based on the following:
• Activities and interests (for example: sports, physical fitness, shopping, books)
Customer Benefits
In this approach, divide the market according to the benefits the customer is looking for from your
product or service. Here are some examples of common benefits those customers seek:
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• Product quality: product features, brand name, warranties, durability, ease of use, image, prestige
Now that you have identified specific groups of potential customers, decide which ones are best
matched to your product or service. These can then be your target market. Choose carefully. If you
focus on too narrow a group of segments, you may fail to reach the volume of sales and profits
needed to operate. If you select too broad a group of segments, it may spread your marketing
efforts too thin to be effective.
Use the following criteria to choose the segments you should concentrate your marketing efforts
on:
b). Expected growth— Will this segment grow or decline in the near future?
c). Competitive position— Is there a lot of competition now or is there likely to be in the
future?
d). Cost of reaching the segment— a segment that is hard to market to should not be pursued.
e). Compatibility with your objectives and resources— if a segment requires you to modify
your product or service, it may not be economically feasible to pursue.
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Once you know who your potential customers are, you can plan how to connect with them through
marketing activities. Be strategic in your approach. Remember the four Ps of marketing: product,
place, price and promotions.
1. Product
Does the quality product or service meet the needs of your target market? How does it compare to
that of competitors? How do you package and present your product or service?
2. Place
Is your business location convenient and accessible to customers, suppliers and staff?
Does it suit your company’s image? Is it affordable and does it meet your business’ needs?
Do you have an on-line presence? The location you choose will greatly affect how you distribute
your product or service to your customers.
3. Price
What does it cost to produce your product or service? What is your break-even point (when
revenues equal expenses)? What are your profit goals; what kind of return do you want on your
investment? What prices are your competitors charging? How does the quality of your product or
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service compare with the competition? Is there a high or low demand for your product or service?
For further information about price, see The Business Link’s documents Setting the Right Price
and Pricing for the Costing of a Service.
4. Promotions
This is the way you become visible in the marketplace. How you promote your product or service
to your customers is key to getting and keeping your market share. This includes the appearance of
our business cards, brochures and stationery, as well as advertising campaigns, personal selling and
customer service. These promotions strategies enable you to communicate your message directly
to your target market.
Although all four Ps are important to your marketing plan, this study focuses on brand promotions.
Advertisement:
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Advertising is defined as any paid form of non-personal communication about an organization,
product, service, or idea by an identified sponsor. The paid aspect of this definition reflects the fact
that the space or time for an advertising message generally must be brought. An occasional
exception to this is the public service announcement (PSA), who’s advertising space or time is
donated by the media.
The non-personal component means that advertising involves mass media (e.g., TV, radio,
magazines, newspapers) that can transmit a message to large groups of individuals, often at the
same time. The non-personal nature of advertising means that there is generally no opportunity for
immediate feedback from the message recipient (except in direct-response advertising). Therefore,
before the message is sent, the advertiser must consider how the audience will interpret and
respond to it.
Advertising is the best-known and most widely discussed form of promotion, probably because of
its pervasiveness. It is also very important promotional tool, particularly for companies whose
products and services are targeted at mass consumer markets.
Advertising can be used to create brand images and symbolic appeals for a company or brand, a
very important capability for companies selling products and services that are difficult to
differentiate on functional attributes.
Advertising can be used to create brand images and symbolic appeals for a company or brand, a
very important capability for companies selling products and services that are difficult to
differentiate on functional attributes. The four primary sequential functions of finding the
effectiveness of any advertisements are as follows
• Perception.
• Persuasion.
• Reinforcement.
• Reminder.
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The very important function of advertising is to increase the perceived value of a brand by giving it
a symbolic meaning that makes more valuable to customers. Advertising is the most effective
method of nurturing a brands image in a long run its different functions are summed below.
• Stimulates demand.
• Cost Control.
• Competitive weapon.
Benefits of Advertising:
The important economic function for the advertiser affects for economic decisions of the audience
and is an integral part of the entire national and international economic system. Another advantage
of advertising is its ability to strike a responsive chord with consumers when differentiation across
other elements of the marketing mix is difficult to achieve. Popular advertising campaigns attract
consumers’ attention and can help generate sales. These popular campaigns can also sometimes be
leveraged into successful integrated marketing communications programs.
The nature and purpose of advertising differ from one industry to another and/or across situations.
The targets of an organization’s advertising efforts often vary, as do advertising’s role and function
in the marketing program. One advertiser may seek to generate immediate response or action from
the customer; another may want to develop awareness or a positive image for its product or
services over a longer period.
The following are some of the benefits of advertising.
• Information
• Brand image building
• Innovation
• Growth of the media
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Sales promotion:
Sales Promotions are short-term incentives to encourage purchase or sale of a product or service.
The next variable in the promotional mix is sales promotion, which is generally defined as those
marketing activities that provide extra value or incentives to the sales force, the distributors, or the
ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken into
two major categories: consumer-oriented and trade-oriented activities.
Consumer-oriented sales promotion is targeted to the ultimate user of a product or service and
includes Gift Coupons, sampling, Discounts, contests, sweepstakes, and various point-of-purchase
materials. These promotional tools encourage consumers to make an immediate purchase and thus
can stimulate short-term sales. Trade-oriented sales promotion is targeted toward marketing
intermediaries such as wholesalers, distributors. And retailers, promotional and merchandising
allowances, price deals, sales contests, and trade shows are some of the promotional tools used to
encourage the trade to stock and promote a company’s products.
Promotion and sales promotion are two terms that often create confusion in the advertising and
marketing fields. As noted, promotion is an element of marketing by which firms communicate
with their customers; it includes all the promotional-mix elements we have just discussed.
However, many marketing and advertising practitioners use the term more narrowly to refer to
sales promotion activities to either consumers or the trade (retailers, wholesalers). In this book,
promotion is used in the broader sense to refer to the various marketing communications activities
of an organization.
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Promotional Mix:
The promotional mix constitutes the specific group of marketing activities concerned with the
communications aspect with existing or potential customers, and relevant public. An advantage of
publicity over other forms of promotion is its credibility. Consumers generally tend to be less
skeptical toward favorable information about a product or service when it comes from a source
they perceive as unbiased it involves some important elements there are as follows.
Advertising
Personal selling
Sales promotion
Direct marketing
Promotion and sales promotion are two terms that often create confusion in the advertising and
marketing fields. As noted, promotion is an element of marketing by which firms communicate
with their customers; it includes all the promotional-mix elements we have just discussed.
However, many marketing and advertising practitioners use the term more narrowly to refer to
sales promotion activities to either consumers or the trade (retailers, wholesalers). In this book,
promotion is used in the broader sense to refer to the various marketing communications activities
of an organization.
• Communication:
They gain attention and usually provide information that may lead the customer to the product. The
communication medium works phenomenon in the present market scenario.
• Incentive:
Attractive cash benefits offered to the sales team in the retail outlets. Specific measurable
targets has been set for them. It is one of good method to increase the brand sales.
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• Invention:
They include a distinct invention to encourage in the transaction now. Like bundling
offers,Gift Coupons while buying a specific amount in a single transactions. This encourages the
customers to buy the product without missing the opportunity.
Sales promotion can be done in many forms to enhance the business prospects so its very essential
that the companies focus more on the promotional activities thus the business finds some new
ways of expanding its market share.
The following are some of the promotional activities carried out in the present scenario.
• Price deals
• Quality deals
• Gift Coupons (SR 100, SR 200 free while you shop for SR 400)
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1.1 Industry Profile
Retailing
Retailing is nothing but the shopping means the act or process of buying different individual
products as one of more than one. Most of the times this is done to provide necessities such as food
and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves
window shopping (just looking not buying), bulk purchase different individual products separately,
individually priced services, browsing and does not always result in a purchase.
Definition
Retailing consists of the sale of goods or merchandise for personal or household consumption
either from fixed location such as a department store or kiosk, or from a fixed location and related
subordinated services.
Why?
When individuals or groups left their community and settled elsewhere, some of them missed
foodstuffs and other goods that were only available in their birthplace. They arranged for some of
these goods to be sent to them. Others, in their newly adopted community enjoyed these goods and
demand grew. This soon turned into a regular trade. Although such trading routes expanded mainly
through the growth of traveling salesmen and then wholesalers, there were still instances where
individuals purchased goods at long distance for their own use.
A second reason for the increase in distance selling was WAR. As armies marched through
territories, they laid down communication lines stretching from their home base to the front. As
well as garnering goods from whichever locality they found themselves in, they would have also
taken advantage of the lines of communication to order goods from home.
Etymology
Retail comes from the French word ‘retaillier’ which refers to “cutting off, clip and divide” in
terms of tailoring (1365). It first was recorded as a noun with the meaning of a “salein small
quantities” in 1433(French). Its literal meaning for retail was to “cut off, shared, paring”. Like the
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French, the word retail in both Dutch and German (Detailhandel and Einzelhandel respectively)
also refer to sale of small quantities or items.
Retail Industry
Retail is one of largest industries worldwide. Retailing was established in Hawaii in the early 19th
century but grew somewhat slowly as much of the economy centered on plantations rather than
diversified business and occupations. In the early 20th century, retailing began to diversify along
with economy. Locally operated stores such as Arakawa’s and Star Market emerged in this period.
In the 1930s, Hawaii retailers experienced their first taste of serious mainland competition with
entrance of Kress and Sears department stores.
The post-World War II recovery period was marked by the emergence of the first major shopping
in Hawaii, culminating in the opening of the giant (for its time) Ala Moana shopping Center in
1959. By the late 1950s, retailing had overtaken agriculture’s share of the total jobs. More local
chains, such as Foodland, also emerged in this period, and there were new entrants from the US
mainland including Longs Drugs and F.W Wool Worth.
The US retail clothing industry includes 100,000 stores with combined annual revenue of more
than $150 billion. Large companies include TJX Companies (TJ Maxx, Marshalls); Gap; Limited
Brands; Ross; and Abercrombie & Fitch. The industry is concentrated: the 50 largest companies
account for 65 percent of industry revenue.
The industry generally includes clothing accessory stores, but not shoe stores or jewelry stores.
Personal income and fashion trends drive demand for clothing. The profitability of individual
companies depends heavily on effective merchandising and marketing. Large companies can offer
wide selections of clothing and have advantages in purchasing, distribution, and marketing. Small
stores can compete by offering unique merchandise, targeting a specific demographic, providing
superior customer service, or serving a local market. The industry is labor-intensive: annual
revenue per worker is about $130,000.
Competition includes department stores, mass merchandisers, and Internet and catalog retailers.
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The clothing retail industry includes stores specializing in family clothing (50 percent of industry
sales); women's clothing (25 percent); or men's clothing (6 percent). Stores may also specialize in
children's clothing or accessories. Children's clothing stores include infant wear. Accessory stores
may specialize in hats or caps, costume jewelry, gloves, handbags, ties, wigs, or belts. Within their
specialty, stores typically sell a full range of items including clothing, outerwear, and underwear.
Many clothing stores also sell shoes, accessories, makeup, and perfumes.
The retail sector in the Middle East region is growing rapidly. The increasing household
consumption, affluent population, and booming services industry (tourism, banking and trading
sectors) and the Fashion Industry are propelling growth of the region’s retail industry. Also, the
modern shopping malls anchoring state-of-the-art hypermarkets, international fashion brands and
various shopping events like Dubai Shopping Festival, Jeddah shopping Festival makes the region
a highly profitable destination for retail players.
The research report helps clients to analyze the opportunities and factors critical to the success of
the retail industry in the Middle East.
Middle Eastern countries examined in this report include those of the Gulf Co-operation Council
(GCC), the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Oman and other countries that are
part of the Middle East, like Turkey, Egypt, Jordan and Iran.
Key Findings
Increasing population and growing economy will remain one of the major key drivers for the
growth of retail industry in the Middle East Region.
Per capita consumption of cosmetics and fragrances in the Gulf region is one of the highest in the
world.
Large availability of retail space in the Middle East makes the region all the more attractive for
industry players. Dubai is alone expected to see a growth of over 263% in Gross Leasable Area by
2010 from 2006.
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Various shopping events like Dubai (Dubai Summer Surprises and Dubai Shopping Festival) and
Dubai Duty Free (DDF) is the major contributor in the UAE’s retail industry, with retail sales in
DDF accounting for more than 9% of total retail sales in the UAE.
Preference for international brands among consumers in the Middle East is increasing.
Prevalence of lifestyle-related diseases offers opportunities for dietetic and health foods.
Major Players
This section covers the key facts about players currently operating in the Middle East retail fashion
industry, including Alshaya International Trading Company, Al Hokair Group, Al Sawani Group,
Savola Group, Al Batool Intl. Trading Company, Rubaiyyat, Farouq Jamjoom Establishment, and
Zahid Trading etc.
In a research paper covering the retail sector and the Kingdom's leading fashion retailer Al Hokair
(Fawaz Abdulaziz AlHokair & Co), Global Investment House says the Saudi apparel retail
industry is one of the high-growth markets in the Arab region especially in the women and children
segments.
The apparel business grew rapidly over the last few years as people became more fashion-oriented.
The growth in the sector is attributed to the high young population and increasing purchasing
power in the backdrop of the recent economic boom. Growth of this sector is evidenced by the
growth of fashion retailers.
In fact as per Colliers International, Riyadh has 2.5 million square meters of gross leasable
shopping mall space in the city, compared to 1.1 million in Jeddah and 1.7 million in Dubai as of
2007.
Considering the clothing style in Saudi Arabia, men mostly wear the traditional white thobes along
with the red shemaghs. Women on the other hand, wear the black abayas and tarhas for everyday
use. Despite the fact that all women wear the traditional abaya on top of their clothes, underneath
the abaya, Western dress is most common. Western dress is adopted more by the younger Saudi
generation outside of school. Non-Saudi adults usually wear the Western dress code.
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The market for apparel sales in Saudi Arabia is still made up of varied products not representing
global brands in addition to unbranded items, which are generally imported from Asia. However,
with the maturing of the market, there has been a shift towards branded apparel sold through
international retail chains. Sales of braded apparels are estimated to be around 25% to 30% of total
apparel sales. This share continues to increase as evidenced by the expansion of the number of
outlets and the number of malls specialised in international retail chains, with these modern malls
spreading to smaller cities and towns.
The market share of branded apparel has witnessed a steady increase in the last decade due to
changes in consumer tastes and converging global fashion trends. Saudi consumers have become
increasingly sophisticated, demonstrating brand awareness and brand loyalty, demanding quality
service and value for money and carefully looking out for new product lines from their preferred
brands.
The Saudi Arabian apparel market is heavily reliant on imports especially when it comes to fabric,
cloth, accessories and ready-made Western style clothes. These imports come from all over the
world depending on price range and quality. There is a noticeable distinction and a clear line
between the high-end and low-end types of clothes. European and American clothes are usually
classified as high-end and targeted towards the upper social class, whereas, garments imported
from the Far East especially from China offers much lower prices and quality and is geared
towards the lower social class, which represents the largest section of the pie. Saudi manufacturers,
on the other hand, mainly supply military uniforms and traditional abayas.
Apparel outlets in Saudi Arabia range from exclusive boutiques carrying true haute couture and top
international designer labels to souq stalls. In Saudi Arabia, Riyadh is currently the largest market
for retail apparel in Saudi Arabia accounting for around 40% of total apparel sales, and is followed
by Jeddah (around 30%) and Dammam/Khobar (around 20%).
The growing presence of international branded apparel in these big cities has contributed to growth
in branded apparel sector. Jeddah is larger on the mid-tier segment due to the large number of
pilgrims it receives during the Hajj and Umrah seasons, while Riyadh is more important for the top
end of the market due to the presence of a larger base of wealthier consumers.
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Dammam/Khobar comes in the third place, although it does gain some seasonal importance during
Hajj and Umrah seasons when pilgrims coming from Bahrain and Kuwait stop over for shopping
on their way back form the pilgrimage. Though going forward the smaller cities are expected to
grow at a higher rate, the larger cities like Riyadh, Jeddah and Dammam will continue to
contribute bulk of the sales, according to Global Investment House.
Market segments
The major market segments in retail apparel include womenswear, footwear, childrenswear and
menswear.
Some segments of the market like womenswear are more developed whereas other segments are
yet to catch up. Menswear represents a small segment of the ready-made clothing sector in
comparison to womenswear and childrenswear.
Women and children are the majority shoppers in the apparel market. They are mainly targeted by
providing excellent service, wide variety and quick turnover of products and regular promotional
campaigns to win their loyalty and regular visits. The smaller segments are expected to grow at a
higher rate in the coming years relative to the mature segments due to their lower base. This
growth will stem from the effective targeting of hitherto underdeveloped sectors, namely eyewear
and menswear, while the more mature areas of womenswear and childrenswear will remain the
backbone of the market and continue to experience healthy growth.
Saudi Arabia is a major market for women and children’s clothing. The market is segmented
between the high-end branded sector, the mid-market branded sector and the lower-priced market.
The high-end and mid-market sectors of the apparel market are dominated by imports from Europe
and the United States. The lower end of the market is characterised by imports from the Far East
and South East Asia, some of which are styles copied from European and American brand names.
Womenswear is the largest retail apparel segment in the Saudi market. Womenswear accounts for
around half of the total branded retail sales, and is considered the most mature segment of fashion
retail. In the Womenswear, casual and evening dress accounts for the major share. Womenswear
has been the main driver of growth of branded retail apparel sales over the past few years. The
sector is highly competitive due to the constant flow of new brands and quick stock turnover in
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existing chains. The sector is well-segmented with international brand representation in market
niches such as out size clothes, lingerie, accessories, teens, and maternity.
Footwear is the second largest sector after womenswear, accounting for around one-fifth of apparel
sales. The footwear segment is well segmented with shops covering a range of prices, branded and
unbranded merchandise. For men, while spending on clothing is low due to a continuing
preference for traditional clothing, spending on shoes and accessories is higher.
Sales of childrenswear are high in Saudi Arabia due to the young population and the high birth
rate. Childrenswear account for around 15% to 20% of total sales. The influence of global media
on the young population (representing around half of the total population in Saudi Arabia) is also a
driving factor. This segment is becoming more fashion-oriented and brand-conscious, demanding
the presence of ophisticated international brands to satisfy their changing tastes and styles. In the
childrenswear segment, babywear, newborn, and pre-natal clothing are all relatively under-
penetrated.
Menswear is a minor segment in the Saudi fashion retail market accounting for less than 10% of
total apparel sales. Men still prefer to wear the national traditional clothing at home, at work, and
in public. With the majority of the Saudi population at a young age, a shift in consumer tastes may
be the catalyst for the future growth in this segment.
The Saudi economy has witnessed an economic boom over the past few years thanks to the high
crude oil prices, which have risen from US$25 per barrel in 2003 to exceed US$130 per barrel in
2008. This oil boom led to the increase in government revenue and expenditure, which in turn
boosted the economy. Furthermore, the government is investing revenue surplus in building
infrastructure and growing the manufacturing and services sectors in the long term. This in turn
will help in preserving the country’s economic strength for the upcoming years.
The impact of a healthy economy on clothing spending is notably positive. With higher levels of
disposable income, and consumer confidence, Saudi consumers are spending more money,
particularly on non-necessities such as mass market branded clothing. Continued growth in GDP
for the short to medium term will have a positive affect on the growth of purchasing power for
consumers.
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Government initiatives like Saudization are expected to have a positive impact on retail sector.
Saudization will impact the composition of workforce and therefore will increase income levels for
Saudis nationals. This in turn may increase expenditures on consumer products as a whole and
primarily expenditure on clothes and accessories.
The construction boom of residential, commercial, and leisure projects, which has taken place all
over the kingdom in the last few years, has led to the availability of large retail space. The rise of
the modern shopping malls in Saudi
Arabia has been taking place at a fairly steady rate over the last ten years, with malls becoming
increasingly sophisticated. Openings of numerous shopping malls and the ease and convenience
this has provided shoppers with has contributed to growth in branded apparel sector. This trend is
expected to continue in the near future with the openings of new shopping malls, providing retail
companies with thousands of square meters to do more business in Saudi Arabia. Mall
development is likely to be extremely important to the future of the branded fashion market. Mall
development is expected to spread to smaller cities during the forecast period.
Competitive scenario
The branded retail apparel market is quite competitive in Saudi Arabia. The competition is further
set to as more business families who were quite successful in other retailing areas are actively
seeking to enter this potentially lucrative market.
The big players in this sector focus on acquiring franchise agreements with well-known
international suppliers. Currently there are four large companies dominating the branded apparel
market, each representing a considerable number of international franchises: Al Hokair, MH
Alshaya, Al-Sawani and Nesk Group of Trading Projects (Al Jedaie).
In addition to these, there are a few smaller companies with just less than five international
franchises. Brands offered by Al Hokair include Marks & Spencer, Zara, Promod, Monsoon and
others. Brands offered by Al-Sawani include Guess, Esprit, Levi’s, Fossil, Benetton. Brands
offered by MH Alshaya include BHS, Debenhams, Mothercare, River Island and NEXT. Well-
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known brands of Nesk include Mango, Gerry Weber, OUI, Taifun and Okaidi.
Additionally, an important segment in this market is the small retailers who own one or more
shops. With their low overheads, these retailers are able to offer very competitive pricing on their
products especially in the medium to low category.
The competitiveness of the market is shown in the results of AlHokair for 2007-2008. The gross
margin of the company has come down over the past few years. In the past couple of years, the
gross margin has been impacted due to decline in US Dollar (to which Saudi Riyal is pegged)
against major currencies. With the weakening of US Dollar against major currencies in recent
years, the profit margin of the company has been impacted. This is due to the fact that like the
other major retailers, AlHokair sources a significant amount of merchandise from the countries
whose currencies have gained against US Dollar, notably the Euro.
Strategic locations
One of the most important factors in fashion retail business is location of the stores, and relations
with the mall owners. In Saudi Arabia, there is a high demand for quality retail spaces. AlHokair
has been able to position its stores in prime retail locations on premier commercial streets, and in
upscale shopping centers. This has been helped by the fact that the sister concerns of AlHokair are
engaged in the business of shopping mall development and management. Therefore, AlHokair has
been able to secure a good number of strategic locations in upscale malls.
Fawaz AlHokair Group (which consists of AlHokair and other companies of the group) owns and
operates over 5 million square feet of premium retail real estate across the Kingdom. The malls
owned by Fawaz AlHokair Group include Mall of Dhahran, Salaam Mall, Aziz Mall, Khurais
Plaza, Sahara Plaza, Al Nakheel Plaza and Ibn Khaldoon Plaza.
Mall of Dhahran is one of the largest malls in Saudi Arabia’s Eastern Province with Gross
Leasable Area (GLA) of 150,000 square meters. The upcoming malls of the Group include
the Mall of Arabia, Al Noor Mall, Yanbu Mall and Al Ehsa’ Mall. Mall of Arabia in Jeddah, which
will open in September 2008, has a GLA of 185,000 square meters (including an extension). This
will give a big boost to AlHokair as it plans to open a good number of stores in Mall of Arabia.
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Retailing in Saudi Arabia
The Saudi apparel retail industry is one of the high-growth markets in the Arab region especially in
the women and children segments as the business grew rapidly over the last several years as people
became more fashion-oriented, Kuwait-based Global House Investment said in its report on the
“Saudi Apparel Retail Market.”
The growth in the sector is attributed to high young population and increasing purchasing power in
the backdrop of recent economic boom. Growth of this sector is evidenced by the growth of
fashion retailers.
It said as per Colliers International, Riyadh has 2.5 million square meters of gross leasable
shopping mall space in Riyadh vs. 1.1 million in Jeddah and 1.7 million in Dubai as of 2007.
Considering the clothing style in Saudi Arabia, men mostly wear the traditional white thobes along
with the red shemaghs. Women on the other hand, wear the black abayas and tarhas for everyday
use. Despite the fact that all women wear the traditional abaya on top of their clothes, underneath
the abaya, Western dress is most common. Western dress is adopted more by the younger Saudi
generation outside of school. Non-Saudi adults usually wear the Western dress code.
The market for apparel sales in Saudi Arabia are made up of varied products not representing
global brands in addition to unbranded items, which are generally imported from Asia. However,
with the maturing of the market, there has been a shift towards branded apparel sold through
international retail chains. Sales of braded apparels are estimated to be around 25-30 percent of
total apparel sales. Its share continues to increase as evidenced by the expansion of the number of
outlets and the number of malls specialized in international retail chains.
The market share of branded apparel has witnessed a steady increase in the last decade due to
hangs in consumer tastes and converging global fashion trends.
Saudi consumers have become increasingly sophisticated, demonstrating brand awareness and
brand loyalty, demanding quality service and value for money and carefully looking out for new
product lines from their preferred brands.
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Saudi Arabian Apparel market is heavily reliant on imports especially when it comes to fabric,
cloth, accessories and ready-made Western style clothes. These imports come from all over the
world depending on price range and quality.
There is a noticeable distinction and a clear line between the high-end and low-end types of
clothes.
European and American clothes are usually classified as high-end and targeted towards the upper
social class, whereas, garments imported from the Far East especially from China offers much
lower prices and quality and is geared towards the lower social class, which represents the largest
section of the pie. Saudi manufacturers, on the other hand, mainly supply military uniforms and
traditional abayas.
Apparel outlets in Saudi Arabia range from exclusive boutiques carrying true haute couture and top
international designer labels to souq stalls.
Riyadh is currently the largest market for retail apparel in the Kingdom accounting for around 40
percent of total apparel sales, and is followed by Jeddah (around 30 percent) and Dammam/Al-
Khobar (around 20 percent).
Growing presence of international branded apparel in these big cities has contributed to growth in
branded apparel sector. Jeddah is larger on the mid-tier due to the large number of pilgrims it
receives during the Hajj and Umrah seasons, while Riyadh being more important for the top end of
the market due to the presence of a larger base of wealthier consumers. Dammam/Al-Khobar
comes in the third place, although it does gain some seasonal importance during Hajj and Umrah
seasons when pilgrims coming from Bahrain and Kuwait stop over for shopping on their way back
form the pilgrimage.
Though going forward the smaller cities are expected to grow at a higher rate, the larger cities like
Riyadh, Jeddah and Dammam will continue to contribute bulk of the sales.
The major market segments in retail apparel include womenswear, footwear, childrenswear,
menswear and eyewear.
Some segments of the market like Womenswear are more developed whereas other segments are
yet to catch up. Menswear represents a small segment of the ready-made clothing sector in
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Comparison to womenswear and childrenswear
Women and children are the majority shoppers in the apparel market. They are mainly targeted by
providing excellent service, wide variety and quick turnover of products and regular promotional
campaigns to win their loyalty and regular visits. The smaller segments are expected to grow at a
higher rate in the coming years relative to the mature segments due to their lower base. This
growth will stem from the effective targeting of hitherto underdeveloped sectors, namely eyewear
and menswear, while the more mature areas of womenswear and childrenswear will remain the
backbone of the market and continue to experience healthy growth.
The Kingdom is a major market for women and children’s clothing. The market is segmented
between the high-end branded sector, the mid-market branded sector and the lower-priced market.
The high-end and mid-market sectors of the apparel market are dominated by imports from Europe
and the United States. The lower end of the market is characterized by imports from the Far East
and South East Asia, some of which are styles copied from European and American brand names
37
38
1.2 Company Profile
This section covers the key facts about players currently operating in the Saudi retail fashion
industry, including Alshaya International Trading Company, Al Hokair Group, Al Sawani Group,
Al Batool International Trading Company, Rubaiyyat, Farouq Jamjoom Establishment, Zahid
Trading etc.
Alshaya Retail covers a wide variety of sectors, including the latest and best recognized names in
Fashion, Footwear, Kid's clothing, Health and Beauty, Homestyle, Casual Dining, Prescription
Eyewear, Pharmaceuticals and Sports fashion.
By bringing top Retail concepts to local malls and high streets we ensure the delivery of a truly
unique international shopping experience.
39
Al Shaya Brands
Topman Top
8. Male & Female Fashion
shop
Table 1.1
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Saudi retailer Al Hokair Group
Clothing and accessories retailer Al Hokair plans to float a 30% stake of its capital in the first half
of this year, probably April. With some 550 outlets and an annual turnover of SAR1.0 billion
(US$267 million), the firm is Saudi Arabia's leading fashion retailer.
Al Hokair represents numerous international brand names in the Kingdom, including Marks and
Spencer and fashion store Zara, owned by Spain's Inditex and Massimo Tutti from Italy. The
group's investments also extend to Arabian Centers, a major shopping mall developer in the
Kingdom.
Al Hokair is also the fastest-growing retail landlord in Saudi Arabia with Arabian Centers, the
Property and Real Estate Management Division of the group. To date it has control of seven large-
scale shopping malls opened and in the pipeline, including Dhahran Shopping Center, Khurais
Plaza, and the Mall of Arabia on the gateway to Jeddah from the international airport.
In just over 18 years Fawaz Alhokair Group has transformed the retail landscape of Saudi Arabia
through successfully pioneering international retail franchising. Starting with just 2 menswear
stores in 1990, today we are a well diversified corporation with core businesses in retail and real
estate, as well as investment interests in 6 lines of emerging business.
Our strength lies in not only attracting established global brands to the kingdom but also in
forming long-lasting and mutually beneficial relationships based on trust, expertise and
commitment.
It is through diversification that we see our 07/08 turnover of SAR 8 Bn tripling in the next 5
years. The exponential growth of our business will also reflect in a significant expansion of our
current 12,000 strong human capital base, further enriching our cultural diversity and creating new
job opportunities for Saudi nationals.
Corporate
Fashion Retail
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• Over 750 fashion stores
6. Zara Casual wear, Males & Females, Shoes & leather accessories.
Table 1.2
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Al Sawani Group
Incorporated in Saudi Arabia in 1976, Al Sawani Group is one of the Middle East's foremost
fashion, accessories and home collection goods pioneers with a successful 30 year track record.
Since it's inception, it has expanded into 13 countries, including Saudi Arabia, Kuwait, Bahrain,
Qatar, Iran, United Arab Emirates, Jordan, Lebanon, Syria, Egypt, Sudan and Morocco.
As a marketer and distributor, Al Sawani has exclusive distribution rights to over 30 world-
renowned brand-names. The Group distributes these products through a network of Al Sawani
stand alone stores and shops-in shop, as well as third party retailers.
As a retailer, Al Sawani has carved a retail network encompassing various retail concepts and
incorporating over 450 free standing and department stores in the Middle East to date.
Brands under our group include:
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15. Marella Low priced female wear
Table 1.3
The Savola Group is one of Saudi Arabia's leading industrial companies, with a strong presence in
the Gulf and the Middle East Region, also penetrating North African and Central Asian countries,
with a wide portfolio of businesses including Edible Oils, Sugar, Noodles/Pasta, Packaging, Real
Estate and Franchising.
The company was established in 1979 with an initial SR 40 Million Capital & grew significantly in
subsequent years to SR 5 Billion. Savola's first business was in the edible oil industry in Saudi
Arabia. It is now one of the most successful and fastest growing multinational food groups.
Savola also has a Franchising Unit which has exclusive rights in Saudi Arabia for Six
internationally renowned brands of fashion wears from different countries.
The Franchising Division, which was initiated back in year 2004, has been able to build strong
foundations for the business during the course of the year 2005. This division is a natural extension
to Savola Group’s mega real estate projects. The main responsibilities of this division are to sign
and roll out new retail concepts in the Saudi retail market through signing exclusive franchise
agreements with prominent international brands.
The business also aims to create job opportunities for young Saudis in the growing retail sector and
to fulfill its social corporate responsibility towards the local community
The division has signed several franchise agreements with international brands from Europe, South
Africa and the Far East in various business sectors such as restaurants, footwear, Home
Improvement, Body care and fashion clothing. The division has already opened its first fifty stores
and a total of 200 stores by the end of 2010 in Saudi Arabia.
The division is now embarking on introducing further new franchises during the year 2009 and to
launch several new stores in the cities of Jeddah, Riyadh and Dammam.
Today, the Group has a work force of more than 16,000 employees, around 160,000 shareholders
and is listed in the Top 20 companies in Saudi Arabia.
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Retail Fashion & Footwear Brands
Table 1.4
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Anwal United Trading Company
Anwal United Trading Co. is a professional and dynamic company that was set up in the late
eighties as a partnership company. With aggressive growth and ambitious plans, it was converted
into a Limited Company in 2001. Today it has a commanding presence in the arena of ladies and
children's apparel, and an ever-increasing share of the cosmetics, shoes, accessories and children's
room furniture markets.
The Company has successfully commissioned and operates more than 125 shops all across Saudi
Arabia. On the international front as well, the Company's 12 brands have made a name for
themselves, notching up impressive sales. The strong popularity of the shops is the direct result of
their strategic locations in the biggest and well- known malls. Working closely in tandem with
international companies, Anwal United Trading Co. has gained keen insight of the market and
comprehensive support to expand it. The Company is now poised to take advantage of the growing
demand for ready to wear clothes, by forging new alliances with a wider spectrum of brands and
expanding its present operations.
Brands include,
46
10
Bottega Verde Cosmetic Products
.
Table 1.5
Rubaiyyat
Rubaiyyat was founded in 1986 by the Binzagr family, one of Saudi Arabia’s leading commercial
dynasties, and remains in family ownership to this day.
Developing over the period to its current dominant position with exclusive representation of more
than forty top fashion houses, the company has recently embarked on a new period of expansion
and more than doubled it's size within the last three years with more new brands and store
openings scheduled throughout 2008 and 2009.
The business operates both multi-brand stores offering a range of top fashion names under one
roof, as well as branded boutiques that offer the exclusive selections of our major fashion partners.
We employ over 400 staff of many nationalities who are all trained to the highest international
standards of customer service and act as trusted advisors to our many regular customers.
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10
Yves Saint Lauren Men’s & Ladies Fashion, Accessories, Perfumes
.
Table 1.6
SWOT ANALYSIS
This section provides a SWOT analysis of the franchise Fashion Retailing Market.
Strengths
The area that may be characterized as points of strength in this market include:
1. Large Population:
The Saudi population while may be not the largest in the middle east, remains to be the
strongest in terms of purchasing power and it is definitely the largest in the GCC countries. It is
characterized with a growth rate that is considered to be among the largest in the world.
2. Young Population:
The Saudi population is mostly young in terms of age. This indicates the presence of a
sustained demand on fashion products and accessories.
The Saudi economy is witnessing a boom due to the massive amount of cash that made its way
back into the country and due to the increased oil prices. This growth is expected to be
sustained, though at slower rates depending on changes in oil prices, over the near future. The
implications of this strong economy are higher spending power resulting in more purchase of
various products including fashion and accessories.
4. Shopping Centers:
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The current surge in the number of new and modern shopping centers in main cities in KSA
works to sustain the demand on fashion products by shoppers. However, this at the same time
puts financial pressures on retailers to be present in these new shopping centers.
Saudi Arabia is large in terms of area. However, urbanization is strong is limited number of
cities including: Jeddah, Riyadh, Dammam/Khobar, Makkah and Madinah. This makes it
relatively easier for retailers to reach their target customers and reduces costs associated with
establishing many management regional offices.
Weaknesses
The franchise fashion retailing market is characterized by a low entry barrier. It is relatively
easy for new retailers to obtain the franchise rights for new international brands and establish
retail outlets in the new shopping centers, especially when the new shopping centers tend to
seen new brands in order to attract shoppers to their malls. Mall Of Arabia, RedSea Mall,
Hayat Mall, Granada Center and Dhahran Mall are good examples.
The amount of current capital seeking various investment opportunities in the Saudi market is
huge. We are already witnessing new players coming into the market some of which are new to
the industry. This puts a timely pressure on existing major players in the market to respond and
protect their market positions and market share.
3. A Discriminating Customer:
The market is dealing with spoiled customers who are young, travels a lot, easily bored by old
brands and always seeking new brands and styles. As indicated in the report, brand loyalty is
not as strong in this market as it is in other market, and shoppers can easily switch from one
brand to another. However, we should emphasize that each shopper retains a number of core
brands that satisfies her/his requirements. But this span of loyalty does not usually extend to
more than few years and the shopper starts replacing this list of core brands by another list.
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4. Large Cost of Expansion:
Retail space is generally expensive interms of rent. Coupled with the large investments
required to establish modern and appealing fitting for new shops, retailers are generally faced
with the need for large investment to meet the highly dynamic market and to be able sustain
enough presence to protect their market share.
Opportunities
One of the important growths opportunities in this market is the continuous influx of new
franchise brands. Al Hokair has demonstrated the importance of this factor by growing the
number of international franchise brands it represents to more than 44 brands over a span of
only 9 years.
The SAVOLA franchise divisions has brought 10 international brands within a span of 4 years
and made it success. Al Batool International Trading Company is the franchise division of
SAVOLA GRAOUP.
Zahid Trec;s success with its new “Life styles” brand is worth noting. This brand created
focusing on the young generation. Brand extensions are also being developed including
“Lifestyle Accessories”. It should be noted that the brand is actually an outlet brand that houses
many well known fashion brands.
Depending on the agreement with their master franchisors, local companies may want to
consider offering sub-franchises to other small investors wanting to enter the market based on
geographical locations. This will enable current companies to establish a larger network of
shops at the minimum. The experience of Ice Crème parlors in the Saudi Market is a good
example including “Cone Zone”
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4. Customer Service Programs:
Establishing sophisticated customers service programs and credit facilities for member
customers is a standard way of retaining a core of loyal customers to specific franchises. Major
players holding a large portfolio of franchise brands may want to consider this option as a way
of differentiating themselves in the market. The development of credit facility system with
specific banks is necessary to reduce the risk of bad credit among customers.
Threats
The threats facing players in the franchise fashion market are summarized as follows;
Although consumers research indicated low brand loyalty among customers, there is a threat
that some new franchise brands may not receive the required level of success in the market. A
continuous assessment of the performance of brands is necessary in order to constantly weed
out poor performers and supporting good performing brands. This puts a great deal of financial
pressures on existing and new players alike.
The current surge in the number of new players makes the market open to another potential
success story similar to that of Al Shaya and Al Hokair Companies.
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ORGANIZATIONAL CHART
Vice-president
General Manager
Manager
Area Manager
Store Manager
52
Sales Man
CHAPTER - 2
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RESEARCH METHODOLOGY
Research design is a formal investigation or specification of methods and procedures for acquiring
the information needed to store the problem. A research design is the arrangement of condition for
collection and analysis of data in a manner that aims to combine relevance to the research purpose
with economy in procedures.
Qualitative research is done for the study by adopting survey method for collecting relevant
information to analyze the behavior and attitude of respondents towards international Fashion
Brands. The sampling design followed in the survey is random sampling and convenience
sampling in which each population elements has a known and has equal chance of selection.
Generally customers as a source of primary data collection have been surveyed for the purpose of
obtaining information. For this research work I have considered customers walking into Fashion
54
brands, the sample size of customer’s is 150. Consumers have been surveyed through the
questionnaire in personal.
The purpose of the study is to know and give ideas to develop the promotional activities performed
by international fashion brands. The study helps in improving existing customer’s satisfaction level
and retaining the existing customers.
From the study we expect to know what extent, the study helps in knowing the competitive
advantage of marketing tactics. The study helps in knowing the existing customer’s satisfaction
towards Fashion Brands and new customers wants and services, and company’s services for the
existing customers. The study also helps in improving service provider, aggressive marketing,
more value good services, broad vision to ultimate marketing tactics.
Marketing research is the systematic collection of the information from sources outside the
business or research organization.
Collection of data is the process of enumeration together with proper recording of results. The
success of an enquiry is based upon the proper collection of data. Literature was extracted from
various sources, which includes web sites, company brochures, annual reports and dissertations.
Secondary data are those which are already collected by some one for some purpose and are
available for the present study. For instance, the data collected during census operations are
primary data to the department of census and the same data, if used by a research worker for some
study, are secondary data.
Secondary data are those data which have been already collected and analyzed by some earlier
agency for its own use: and later same data are used by a different agency. A secondary source is a
publication, reporting the data
Which have been gathered by other authorities and for which others are responsible.
55
Sources of secondary data
The various sources of secondary data can be divided into two broad categories:
Published sources
Unpublished sources
Published Sources: Various governmental, international and local agencies publish statistical
data.
Unpublished sources: They are records maintained by various governments and private offices,
the researches carried out by individual research scholars in universities or research institutes.
Various books, magazines are been used to collect the data and to have knowledge on the topic
chosen.
Websites:
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Company brochures:
1. Annual circulars
2. Company reports
The study concentrates on Retail Fashion industry, the Promotional activities performed by
international brands and how to build up a successful brand.
The study also shows the perception and awareness of people towards some brand names, and
which brand they want to deal with most. The study reveals the retail company’s chance of
viability in the market to tap the potential customers and to increase their market share, as well as
its position in the customers’ mind.
The need of the study emphasises on the market research of the brands. The study helps in
analysing the viability of some fashion brands in Saudi Retail Market.
During the study, I tried to find out the potential customers and collect relevant information, as
well as to analyze the information which may help retail companies to formulate their brand
building strategies in accordance with customers’ mind and perception, therefore make
contribution to their market share increase in the future
During the study, besides using my own market researching result, text books, and reference
materials, I also carried out my analysis and interpretation based on unconventional sources of
information like cyber reference materials, e-opinion poll.
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2.2 Objectives of the study
a) Primary objective
The Objective of this study to know whether there is a need of effective Marketing/
Advertisement for promoting retail fashion brands to sell their product in Saudi Arabia.
b) Secondary objective
(b) To compare the competitive and promotional strategies of Retail Fashion Brands
and sales with competing brands.
(c) To know the attributes in advertising and promotional activities as an efficient tool.
(d) To know the influence of Geographical variables affecting the retail market
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2.3 Scope of the Study
The scope of the study in this project relates to find the following.
3. How retail brands competes other players in the Saudi market which determines the
competition in the Retail Sector.
The study helps in improving customer’s satisfaction level and retaining the existing
customers.
The study also helps in improving Customer Service, aggressive marketing, more value
good services, broad approach towards retail market and promotional activities.
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2.4 Method of Data Collection
There are two principal techniques available to researcher who is responding to a research question
or considering what data to collect in order to anticipate future information needs:
The staring of this study was provided by the use of secondary data. The first step was to collect
relevant information for the study to be conducted by referring business books, project reports, and
other articles from news paper, internet. Secondary data provided enough information to resolve
the problem being investigated. Examining available data is a perquisite to collecting primary data.
It helped to define the problem and formulate hypotheses about its solution.
Primary data are those that are collected for the first time and they are original character. The two
basic method of collecting primary data are questioning and observing. Former being reliable and
time saving so in this study questioning method was adopted for that survey was conducted.
Data processing is an intermediary stage of work between data collection and data analysis. Data
processing involves classification and summarization of data in order to make them amenable to
analysis. Data processing consists of a number of closely related operations-
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2. Coding: Coding means assigning numbers or other symbols to the categories or
responses. In the time of tabulation it is necessary. In this study the coding has been
given during tabulation.
3. Tabulation: Tabulation is the process of summarizing raw data and displaying them on
compact statistical tables for further analysis. For this purpose, computer has been
adapted.
Sampling Method
The aggregate of all the units pertaining to a study is called population or the universe. Population
is the largest group to be studied; a member of the population is an element. It is the unit of study,
a part of the population is known as a sample. The process of drawing a sample from a larger
population is called sampling.
It is the process of learning about the population on the basis of Sample drawn from it. Thus in the
sampling technique instead of every unit of the universe only the part of the universe is studied and
the conclusions are drawn on the basis for the entire universe. A sample is a sub-set of the
population units. The sample design is essential and a pre-requisite to data collection and a definite
plan must be determined before any data is actually collected. In this specific study, the researcher
has adopted the random sampling as each and every unit of the population has an equal opportunity
of being selected. The aggregate of all the units pertaining to a study is called population or the
universe.
Population is the largest group to be the list of sampling units from which is taken is called the
sampling frame. For the present study purpose convenience sampling and random sampling
The total number of respondents selected for study is only one hundred fifty customers from small-
scale enterprise. Convenience and random sampling undertook the study.
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Convenience sampling
Convenience sampling is a non –probability sampling. It means selecting sampling units in a just
hit and miss- fashion, example interviewing people whom I happen to meet
Convenience sampling, as the name implies, is based on the convenience of the researcher who is
to select a sample. This type of sampling is also called accidental sampling, as he respondents in
the sample are included in it merely on account of their being available on the spot where the
survey is in progress. Thus, a researcher may stand at a certain prominent point and interview all
those or selected people who pass through that place.
Random sampling
A random sample gives every unit of the population a known and non-zero probability of being
selected. Since random sampling implies equal probability to every unit in the population, it is
necessary that the selection of the sample must be free from human judgment. Random sampling
as each and every unit of the population has an equal opportunity of being selected.
Sampling size
The sampling size of the customer’s chosen for the study is only one hundred fifty customers from
small-scale enterprise. That is 150 respondents were surveyed and interviewed directly, keeping in
mind the time constraints. Convenience and random sampling undertook individuals consisting of
both men and women of the study.
Sampling frame
The target population for the study consists of customers from small-scale enterprises as per the
convenience.
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2.5. Sampling and Sample Size
The purpose of descriptive research is to provide an accurate snapshot of some aspect of marketing
environment, such as consumer perception of the attributes of company’s product, Quality and
important aspects Customer Service. The principal survey options were questionnaires and
personal interviews.
Questionnaire is the main instrument in collecting primary data. It consists of a set of questions
presented to customer for their answers. Questionnaire consists of both open and close ended
questions. Before setting a questionnaire pilot study was conducted.
Sampling Plan:
The basic idea of sampling is that by selecting some of the elements in a population we may draw
conclusions about the entire population. Sampling is useful if the population size is large.
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Population:
Population can be defined as complete sets of people about which we wish to make some
inferences. Population for this study is in Jeddah. This study was restricted to only five major
premium brands of retail fashion.
Sampling Technique:
Since each sample unit is drawn individually from population at large, it is unrestricted sample.
The members of the sample are selected on a probability basis. Simple random sampling was used
in which each population element has a known and equal chance of selection.
Sample Size:
Sample size means the number of sampling units to be selected from the population for the
investigation. Due to time and cost constraints, sample size for this study was taking 100, which is
a proportion of total population.
Sample Description:
Sample unit is the entire population. The respondents are Customers, employee businessman, and
professional Sales men.
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2.6 Tools used for the Study
2. Scientific methods.
1. Arbitrary method:
Arbitrary method of seeking answers to questions consists of imagination, opinion, blind belief or
impression.
2. Scientific methods:
This is a systematic rational approach to seeking facts. It eliminates the drawbacks of the arbitrary
method. It is objects, precise, and arrives at conclusion on the basis of verifiable evidence.
a) Exploratory Research
c) Casual Research
b) Descriptive Research: The main objective of descriptive research is to describe something like
market characteristics, relevant group, unit’s designation, salary limits, dependents etc.
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c) Casual Research: A type of conclusion research where the major objective is to obtain evidence
regarding cause and effect relationship. The study is based on finding the cause of current
situation.
66
2.8 Universe / Population
I have conducted the study in Jeddah region. A sample of 100 customers has been taken from
different category like Customers, Business men, Sales persons.
67
2.9 Limitations of the Study
Limitations are the boundaries wherein the researcher has to work. To make the research
successful a researcher should know his/ her boundaries. Any project done under the proper
guideline comes across les limitations.
This study purely focused in Saudi Arabian Retail Market. All the findings and recommendation
are based on the customers, sales peoples, and business men’s feedback in Jeddah, Saudi Arabia.
The total area of the study covers Jeddah, retail brands sales peoples and top management of the
business firms.
Time Constraint:
As the study was conducted as a part of the curriculum, the time available to procure data
restrained the sample to 100 consumers.
Area of Coverage:
As the study was restricted only to Major Malls of Jeddah region, we couldn’t make our survey in
other regions.
Biased Information:
68
As customers were reluctant and scared to provide actual information, response is likely to be
biased in some cases.
Some customers were unaware of some branded fashions and person who endorses.
CHAPTER – 3
69
REVIEW OF LITERATURE
70
Hail 250,000 Dhahran 105,000
Table 3.1
Geographical Scene
Chart 3.1
71
Arabian develops its people
Three years of development and planning at the leading Saudi retailer and mall developer Arabian
has created one of the most ambitious retail real estate expansion programmes in the Middle East.
To move the portfolio of a business from 500,000 square feet of gross leasable area (GLA) to
4,500,000 square feet in a period of four years requires extensive planning, financial commitment
and an enormous team effort.
Arabian Centers Facilities Management operates widely in the Kingdom, with malls in Riyadh,
including Sahara Plaza and Khurais Plaza, extending to Herra Avenue in the West, Ibn Khaldoun
Plaza and Khobar Corniche in the east. The commercial areas incorporate a range from
60,000 square feet to 600,000 square feet, and a total of six established operating malls.
The company is the real estate arm of the F A Al Hokair Group of Companies, Saudi Arabia's
number one fashion retailer. It is also a seasoned real estate developer, existing for 15 somewhat
trail-blazing years. There are four on-going mall developments throughout the region, and each of
these developments are 800,000 square feet plus, with key flagship projects developing to in
excess of 1,500,000 square feet.
Arabian Centers is seeking to promote its human resource development, which it says will be a
crucial factor the expansion of its business. It also has specific vacancies and individuals who are
successful will need to be industry professionals and wholly committed.
The FA Al Hokair Group of Companies consists of three subsidiaries in the field of fashion retail,
hypermarket, and real-estate development. A significant part of its vast real estate portfolio
includes shopping centre development and operations, the development of entertainment
operations and retail development. Arabian Centers is one of the largest mall developers and
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managers in the Kingdom. But, it is best known for transforming the Eastern, Western, and Central
regions, from virtual desert lands into the premier fashion retail hubs that are visible today.
Its retail licencees include: Marks and Spencer, Zara, Promod, Nike, Aldo, Faces (Chalhoub
Group), Paris Gallery and ELC (Early Learning Centre) among others.
73
local expertise in real estate and mix-used projects in the Kingdom along with MAF Shopping
Malls' regional experience. It will be completed by 2010.
“The joint venture agreement with the Al-Ghazzawi Group marks MAF Shopping Mall’s debut in
Saudi Arabia,” Graham Dreverman, CEO, MAF Shopping Malls, said, adding: “We look forward
to working with our partners to build a world-class shopping mall that will meet the consumers
demand for shopping, leisure and entertainment.”
Providing an overview of the Saudi retails market, he said that in the next ten years, the retail
expenditure in the Kingdom is expected to rise to US$100 billion.
“Through this joint venture, we hope to build many projects in the Kingdom as part of the
company’s aggressive regional expansion plan. Our aim is to capitalise on this retail boom and
expand our footprint in the country by developing many City Centre shopping malls in the
Kingdom,” Dreverman observed.
Speaking on behalf of the Al-Ghazzawi Group, Bilal Talal Al-Ghazzawi, Vice Chairman and
Managing Director said: “The real estate investment sector is growing in the Kingdom. The
Western Province has witnessed a substantial increase in investments for new projects, with Jeddah
being the major beneficiary of this boom. The Al-Ghazzawi Group has drawn up an ambitious
investment plan to implement a number of real estate projects that will contribute to the economic
development of the Western Province.”
Al Faisaliah Group will open an academy in the near future to groom young Saudis for careers in
retail business. Prince Mohammed K A Al-Faisal, CEO and President of the Al Faisaliah Group,
made the announcement on the occasion of the inauguration of the Bernardi showroom by Abdul
Rahman Al-Jeraisy, President of the Riyadh Chamber of Commerce and Industry (BI-ME,
30/11/06). Italian Ambassador Eugenio D'Auria was also present.
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Prince Mohammed said the retail academy would set up training programmes for Saudis to help
them interact with customers. Al Faisaliah Group will also invest SAR500 million in the retail
sector over the next five years to strengthen its presence. This is aside from their decision to open
30 Bernardi department stores in the Kingdom in the next three years, in addition to expanding
outside Saudi Arabia.
Bernardi, a leading Italian department store, has over 167 stores spread across Italy. It is its first
showroom outside Italy and will operate in association with AFG as part of an ambitious plan to
open stores all over the Middle East.
CHAPTER – 4
75
Data Presentation and Analysis
Sales Persons
26%
76
Others 14 14%
Total 100 100%
Table No.4.1
Interpretation: -
The respondents were mostly customers and it was found that the ladies customers (most people)
were reluctant to give any insight of the research.
In All the malls we come across mostly customers and Sales persons. Business men sample taken
through direct interview method
Brand Attributes
Quality, 34%
Quality and
Price, 41%
Quality
Price, 25%
Price
Quality and Price
Chart 4.2
77
Table 4.2
Interpretation: -
Most of the customers were insisting on quality same time they were interested in Price of the
products as well. The response was qualitative
Most of the customer insisting on Quality as well as the price and it is 41%
Brand Awareness
Yes No
94% 6%
Yes No
Chart 4.3
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Yes 94 94%
No 6 6%
Table 4.3
Interpretation: -
Almost 94% of the respondents were aware about the ladies branded Fashions. Thus it’s clear that
the advertisement do makes an adverse affect in the buying behavior of the customers.
Interpretation: -
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It is clear that all the players in the Retail Fashion industry are giving more importance for the
advertisements and promotional activities. Compared to other brands Zara, Mango, Next is making
more product awareness among the customers.
Below graph indicate the percentage of customers recall the brands when we ask to tick the
below mentioned brands,
Jacqueline
10%
Promod
Espirit
Mango
Wallis
Evans
0%
Etam
Next
Zara
Riu
Number of respondents
Chart 4.5
80
Interpretation: -
Table shows the brand names and the number of respondents given their response against each
brands. Loyalty programs really effective in Espirit and in survey most of the customer could recall
immediately the brand.
Promotion awareness
30
Loyalty Programs
45
Gift Coupons
72
Gift With Purchase
90
Buy 1 Get 1 free
95
50 % Discount
0 10 20 30 40 50 60 70 80 90 100
Chart 4.6
Interpretation: -
Almost all the customers are aware of promotions made by these fashion brands especially
Discount offers.
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95% of the customers are aware of the 50% discount promotions made by these fashion brands.
This is because of they are using SMS and E mails to inform the customers about promotions
50
TV Ad
45
40
35
30 Newspapers
25
Banners
20
15
Internet
10
Chart 4.7
45 19 27 9
Table 4.7
Interpretation: -
It shows that TV advertisement has got very good impact on peoples mind. The first priority goes
to TV and then news papers.
Recently internet users have been increased in Saudi Arabia and the survey reflect the number of
customers checking for new fashion product through internet.
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8. Respondents reply on Choosing Only One Brand.
The purpose here is to know the consumer Behaviour (i.e.)Is the consumer Behaviour steady to
one brand or varying regularly .The question also focuses on the different reason for which
consumer changes the brand. The Usage rate is also tabulated.
No
85%
Chart 4.8
Yes No Total
Interpretation: -
From the above chart it is analyzed that majority of the respondent do not stick or are loyal to
particular One Brand. But they are frequently changing their brand.
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64% of responses are not loyal to any brand where as 36% of respondents are loyal and stick to
only 1 brand. Those responses who said yes, out of them their buying frequency is mostly
moderate in a month
N o C u s to m e rs S h o p p in g W e e k ly
14
16%
Yes
76
Y es No 84%
Chart 4.9
Yes No
Number of respondents 76 14
Table 4.9
Interpretation: -
It’s a common phenomenon found that most of the customers visit malls every week.
Other entertainments are not there in Saudi; especially ladies spend their disposable time with
shopping with families and friends.
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10. Customer reply on using branded cloths
C u s to m e rs U s in g B ra n d e d C lo th s
No
2%
Ye s
98%
Chart 4.10
Yes No
Customers Using Branded
98 2
Cloths
Table 4.10
Interpretation: -
The survey indicates that most of the customers are using branded fashion. In most of the malls are
having international fashion brands, so the availability is good enough.
85
98% of the customers are using Branded fashion cloths indicates that there is strong awareness of
brands in Saudi Retail fashion industry.
30
40
18
30 15
20
28
10
0
Price Quality Special Brand Image
Offers
Chart 4.11
Special
Price Quality Brand Image Total
Offers
Table 4.11
Interpretation: -
Most of customers are very specifically looking for some brands which have a very good image in
the retail Market.
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40% of the customers are brand oriented and those customers are not looking at the price. At the
same time branded fashions are giving good quality and this makes customers to go for Branded
fashions.
70
63
60
50
40
30 28
20
10 9
0
Good services Good Quality Reduced Price
Chart 4.12
Good Reduced
Good services Total
Quality Price
Table 4.12
Interpretation: -
Customers are more focused on Service rather than price or even quality. Same time they need
both together. Ie Good Service and Good Quality
87
Majority of the customers are looking for Good Service from the outlet they are shopping
Chart 4.13
Communicating with
customers 9 87 4 100
Table 4.13
Interpretation: -
88
Regarding communication customer doesn’t want to get disturb and they prefer mostly silent
method like SMS.
We can see 87% of the customers replied that they prefer SMS rather than any other mode of
communication.
Influence of Advertisement
Partially
No
3%
8%
Yes
89%
Chart 4.14
Table 4.14
89
Interpretation: -
Most of the customers are shopping in mall influenced by marketing done by companies. These
advertisements are strongly influencing customers while they do shopping
The study shows majority of the customers shopping in malls are influenced by marketing done by
the brands. 89% of the customers are doing shopping are influenced by advertisement.
15. Features making a difference from branded fashion and non-branded fashions in the
respondents point of view.
Feature of Brands
100
90%
80 90% 81%
60
55%
40
20
0
Reliable Quality Durable Service
Features of Brands
Chart 4.15
90
Interpretation: -
Most of customers are interested in service, Durable as well as reliability. They like to have a
combined factor.
90 % of the customer believes that branded fashion will be reliable and durable. Same times they
assessing that they get good customer service also.
CHAPTER – 5
91
Findings
• After undergoing detail study of the market, we found that the advertisement and sales
promotional activities of Brands is having much impact in the present market scenario,
people mainly concentrating on the quality and price of the merchandise, with respect to
the quality of merchandise and some of the people are effectively influenced by the
advertising and marketing activities of companies/ Brands.
• Brands like ZARA, MANGO, NEXT, JACQUELINE RIU, PROMOD has created a lot of
brand awareness in the market and is successfully received the results.
• Branded Fashions have created awareness in youth segments mayoral and geographically
also restricted itself to cities and towns.
• In the Saudi Retail Market Al Hokair, Al Sawani, Savola Group, Al Shaya is having high
market share and good brand image because it is the oldest product in the market.
• Most of the customers were insisting on quality same time they were interested in Price of
the products as well
• It is clear that all the players in the Retail Fashion industry are giving more importance for
the advertisements and promotional activities
• Majority of the respondent do not stick or are loyal to particular One Brand. But they are
frequently changing their brand.
• Almost all the customers are aware of promotions made by these fashion brands especially
Discount offers.
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• It’s a common phenomenon found that most of the customers visit malls every week.
• Customers are more focused on Service rather than price or even quality. Majority of the
customers are looking for Good Service from the outlet they are shopping
Suggestions
• By this study it can be concluded that the Fashion Brands are doing considerably well in
the market and the customers are aware of the branded Fashion merchandise.
• The company should take into consideration the findings and recommendations given in
the project and try to improvise on it and grow in continuing for the market leader and
become the best.
• Retail Brands should focus more on Marketing, Pricing & Customer Service.
• Customers are influenced by marketing done by brands and they need Quality and Good
Service
This project which was undertaken for the study of effective marketing retail women fashion has a
great experience for me. This provided me an opportunity to understand corporate world and the
market in Saudi Arabia. I had an exposure to the external environment, which is very different
from our theoretical prospective and studies.
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Conclusions
• To conclude with, I should say that the project enlightened me with each and every aspect
of the Retail Market details.
• By using this study as a preliminary base, any brand management can review their existing
marketing and brand building activities.
• Brand Marketing, Image building, Product Pricing, Good Customer service should be given
maximum attention.
• Companies should given sufficient focus on Quality of the merchandise they are selling.
• Most of the respondents watch television regularly, so companies can use it as effective
media for brand building.
• I hope that the efforts made by me to formulate the strategies and approaches will surely
benefit the growth of Advertising and promotional activities of Retail Brands with holding
the maximum market share of the international fashion brand users.
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APPENDIX
Questionnaire
I am Nassar Jalaluddin, student of 4th semester MBA, Sikkim Manipal University, Doing a market
Research on “Study On need of effective Marketing strategies performed by Retail Fashion Brands
in Saudi Arabia”.
1. Demography of respondents
Quality □ Price □
3. Mention any advertisement which made a real difference in your Brand preference.
Yes □ No □
Zara, Mango, Next, Promod, Espirit, Etam, Wallis, Evans, Jacqueline Riu
Zara, Mango, Next, Promod, Espirit, Etam, Wallis, Evans, Jacqueline Riu
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50 % Discount, Buy 1 Get 1 free, Gift with Purchase, Gift Coupons, Loyalty Programs
Yes □ No □
Yes □ No □
Yes □ No □
11. What are the reasons for using this particular brand for shopping?
12. If you are a new customer, do tell us your wants and services towards brands?
Yes □ No □
15. Finally, what are the features making a difference from branded fashion and non-branded
fashions?
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Reliable □ Quality □ Durable □ Service □
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SPECIAL CONCEPT
More than 2.8 million square meters in rental space is available in shopping in Saudi Arabia’s two
largest cities, Riyadh and Jeddah, according to a real estate specialist.
“Total investment in the Saudi retail sector are estimated at around SAR 220 billion or about
US$59 billion,” said Ghassan Khalifa, Vice President for Commercial division in Kinan
International for Real Estate Development, in a speech at the Retail City conference in Dubai this
week.
“The real estate development market grew to a new level over the past ten years, and the era of
normal shopping has ended and new designs and ideas have entered,” said Khalifa. “At the same
time, the population of Saudi Arabia increased by 12%, and is expected to reach 27 million by
2010.”
Kinan International for Real Estate Development was participating in the Retail City exhibition on
the sidelines of the conference as platinum sponsor. The annual Retail City conference gathers real
estate retailers for discussions on the latest developments in the sector, such as new investment
opportunities and the challenges facing workers.
Khalifa said tourist arrivals in Saudi Arabia has been increasing by 5% annually and has crossed
the 9 million mark.
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“The projected increase in population and tourists is an indicator of the investment volume in the
commercial sector,” he said, noting that, “the Saudi market is expected to be oversupplied with
commercial centers by the year 2013."
"The total area available for rent in commercial centers in Saudi Arabia is estimated at 2.8 million
square meters in 2006, out of which 57% were in Riyadh and Jeddah,” Khalifa said.
“With the facilities provided by Saudi Arabia for foreign investments, contrary to earlier times,
investments in the Saudi retail sector have witnessed great diversification that led to its maturity,”
he said.
Most investments in the retail market and commercial centers in Saudi Arabia are sited to date in
Jeddah and Riyadh; however there are several other promising and emerging cities in the
Kingdom.
Kinan International For Real Estate Development won the award for the Best Real Estate
Developer for the retail sector in the Middle East in 2005 and 2006. Founded by Savola in 2004,
the company's assets are estimated at SAR3 billion. It owns 11 commercial centers having the most
famous local and international brands, in addition to the group's Hyper Panda hypermarket centers.
One of the company's major ongoing ventures is a mega lifestyle project in Jeddah located at the
intersection of King Abdullah Street with Al-Andalus Street. The multi-purpose project consists of
two towers, one for offices and the other for residential purposes. In addition the project has
hanging gardens and a shopping center.
This is in addition to Al Basateen housing project in Yanbu Alsinaiyah, which consists of 240
housing units, plus a commercial and residential project worth SAR1.5 billion (US$400 million) in
Dammam.
Urban
Rich
Market Segments
A B C D E
Income High Income Upper Middle Mid Level Lower Middle Low Income
Level Income Income Income
In all retail organisations, identifying the right market segment is very important factor. Companies
Sales strategy is must be formulated based on market segmentation.
100
Changing nature of fashion
One of the key risk features in the fashion retail business is its constantly changing nature. The
designs, which are widely accepted in one season, might be outdated in the next season. This
entails close understanding of the fashion sense of people. Due to this changing nature, one of the
biggest challenges faced by the fashion retailers is to sell its products. Redundant stock at planned
levels ties up capital and affects the potential growth of the business. Retailers have to remain
committed over the years to sell merchandise within the season it is purchased.
Another market risk is the launch of a new concept/product, which is generally characterised by
relatively high start-up costs. The success of new products introduced depends on the ability to
anticipate the tastes and habits of consumers and to offer brands that appeal to their preferences.
However, there are possibilities that some brands may not perform up to the expectations or sales
may decline over a number of years, due to competitive activity or lack of partner support. This
poses a significant risk for the franchisee given the fact that they have invested in the brand.
The key success factors in the market include the ability to bring new brands into Saudi Arabia and
to open the stores in strategic locations, and in particular the new upscale malls. Some big brands
like Gap, M&S and banana republic still have a long way to go with growth in the Saudi market,
which should be reflected in performance in the coming years. The local franchise partners also
continue to develop their infrastructure in terms of management, logistics and technology. In view
of the macro-economic trends, we can expect the market to continue to grow rapidly, though with
greater divergence between the placing of the high end and low end brands, and growth in the
middle.
101
102
GLOSSARY
Marketing: “marketing is a social and managerial process by which individuals and groups obtain
what they need and want through creating, offering and exchanging products of value with others.”
Corporate strategy: Approach to future that involves examination of the current and anticipated
factors associated with customers and competitors (external environment) and the firm itself
(internal environment).
SWOT analysis: Situation analysis in which internal strengths and weaknesses of an organization,
and external opportunities and threats faced by it are closely examined to chart a strategy.
Situation analysis: The evaluation of strengths, weaknesses, opportunities, and threats affecting
the organization.
Marketing concept: The concept that by being more effective than competitors in advertising and
delivery of goods, that an increased market share can be obtained.
Marketing strategies: Sets forth specific tasks that will achieve the objectives of the marketing
plan.
Primary sources
103
Secondary sources
· Internal reports
Brand competitor: A competitor who offers similar products to the same customers at similar
prices.
Industry competitor: A competitor who offers products in the same class, regardless of price.
Mass marketing: The mass production, mass distribution, and mass promotion of a product to all
buyers.
Segment marketing: The production, distribution, and promotion of products to groups of buyers
in a market.
Niche marketing: Entails marketing to a narrow field of consumers whose needs are viewed as
unsatisfied.
Local marketing: The selection of a relatively small geographical area to promote and distribute
products and services.
Individual marketing: The one-to-one selling of customized products, tailored to meet the needs
of individuals.
Homogenous preferences: A market segment where all of the consumers share similar references.
Diffused preferences: A market segment characterized by consumers who share few preferences
104
Clustered preferences: A market where groups therein exhibit various homogenous preferences.
1. Survey stage
2. Analysis stage
3. Profiling stage
Geographic: The division of markets into regions, such as nations, states, and cities.
Demographic: The division of markets into groups based upon societal factors.
· Age
· Gender
· Income
· Generation
· Social class
Specialized industry: An industry where competitors face many opportunities, many of which
have potentially significant gains.
105
Features: Characteristics that augment a product’s basic function.
Performance quality: The level at which a product operates in comparison to the competition.
Conformance quality: The degree to which products meet stated qualitative levels of
performance.
Reliability: The measure of probability that a product will not malfunction within a specific time.
Product classes
Durability
· Durable goods: Tangible goods that are designed to survive repeated usage.
Pricing strategy
Promotion: The creation and presentation of advertising designed to make potential customers
aware of products.
Informative advertising: Designed to acquaint a market with a product, particularly a new one.
106
Reminder advertising: Designed to keep mature products in the consumers’ minds.
Sales promotion: A diverse set of short -term incentives to encourage consumers to visit retail
locations and purchase merchandise.
Market differentiation
· Promotion effectiveness
· Product quality
· Corporate image
· Brand awareness
Product/service strategy
Pricing strategy
Location Strategy
107
· Selection of geographic target market
Promotion Strategy
Summary reports: Provide management with averages, totals, key data, and abstracts of
organizational activities.
Random sample: A sampling done in such a way that each element has an equal chance of
selection.
Gross Domestic Product (GDP): The value of all goods and services produced by an economy.
International business: Business with operations that span across national borders.
Franchising: A contractual agreement that allows a foreign company to operate a business under
strict the rules and controls of a franchising entity.
Market screening: A market selection technique that involves assessing environmental factors
and eliminating the less desirable markets.
108
Market indicators: Economic data that is used to make comparative analyses of market strengths
and weaknesses.
Market factors: Economic data that directly correlates with product demand.
1. http://www.google.com
2. http://www.savola.com
3. http://www.alshaya.com
4. http://www.alhokair.com
5. http://www.alsawani.com
6. http://www.anwal.com
7. http://www. arabnews.com
8. http://www.saudigezzette.com
9. http://www. Reportlinker.com
10. http://en.wikipedia.org
11. www.businessdictionary.com
12. http://www.the-saudi.net
13. www.timemagazine.com/us/business
109
Books
e. Kelly Vinal - Fort Bragg, NC. (He teaches management sciences at Campbell
University and at the Central Texas College extension on Fort Bragg.)
110