International Marketing Strategies in Saudi Arabia - Coursework Example

Lecturer International Marketing Strategies in Saudi Arabia Introduction With the increasing globalization trends, many businesses are now able to freely extend their operation beyond their country’s borders. The rise of international trade has benefited many companies in many ways. For instance, it has enabled them to grow and expand their operations as they plan to emerge as multinationals. However, launching operations in another country might be a very challenging experience for business executives. Since it involves moving to a new country with diverse social, cultural, political, legal and technological climate, it is becomes incumbent upon the top management to come up with viable and well-thought strategies suitable for the new market. However, before making such decisions, the management should ensure that they are in line with the diverse needs of their clients, suppliers, employees and all the other stakeholders. Besides, it should adopt an appropriate approach which can not only enable it to satisfy these needs, but also go ahead to meet the organization’s short and long-term objectives. Once this is done, the company should be in a position of prioritizing and adopting the most suitable marketing strategies. Thus, it will manage to adapt and cope up with the existing competition in the market. This paper discusses about the market factors which can determine the operations of a multinational venturing into Saudi Arabia as a new market. As an Arab dominated society, Saudi Arabia is made up of people who are restricted to a unique set of religious, social and cultural practices which greatly influence business operations in the country (Kotler, 2012). Hence, for a multinational interested in extending its operations to this country, there needs to be a proper consideration on the marketing strategies to adopt in this new market. Marketing Strategies to use in Saudi Arabia Marketing Mix to Use When venturing into this new market, there needs to be the adoption of appropriate marketing strategies in order to enjoy a good share of the market. Therefore, in order to do this, the management of the new firm should adopt a variety of strategies. The first marketing mix to use is the product mix which simply refers to the process of creating uniqueness in the company’s commodities. Since there are other companies which are producing similar, complementary or substitute products, there is a need for the new company to ensure that it provides a brand name for its commodities. This will make it easier for the clients to distinguish it from those of the rival companies. Once such uniqueness is produced in the branding, it should be extended to the quality of commodities. Meaning, upon understanding the needs of its diverse clients, deliberate measures should be taken to ensure that the quality of commodities is improved (Booms & Bitner, 2001). The other marketing mix to use in this new market is pricing. As a new entrant, the company should ensure that it sets prices which will be attractive to the clients and at the same time, enable it to make some good profits. The decision to set pricing policies for the company’s commodities should be made after carrying out a rigorous market research to understand the prevailing conditions in the market. Meaning, since there is a high level of competition in the market, the prices of the competitors should be considered. After knowing their rates, the management should come up with a standard price which is fairly lower than those of its rivals. Hence, it will be much easier to capture the interests of the clients and lure them to consider purchasing from the company. Moreover, upon defining the market in Saudi Arabia and properly segmenting it, the management should come up with strategies to ensure that all the clients are supplied with the commodity. Meaning, it should be distributed to all the places in which the target customers are located. Once this is properly done, it will be possible for the company to access all its potential clients (Neil, 2005). At the same time, while doing this, measures should be taken to ensure that no biasness is witnessed at all. Instead, everyone should be supplied with the commodity in whichever place they are located. Therefore, to effectively enjoy a large share of market, the place mix should not be overlooked. Instead, all the necessary measures should be taken to ensure that stability in supply maintained at all times. A part from winning the confidence of the clients, it will make them to stick with the company since it is the most reliable supplier in the market. Lastly, the company should consider adopting the marketing mix of sales promotion. This is a very good marketing strategy since it instrumental in ensuring that the information about the company’s products reaches the target audience. Since Saudi Arabia is a highly conservative nation, deliberate steps should be taken to ensure that no violation is made. In other words, while placing adverts, the most appropriate media should be used (Neil, 2005). This includes the broadcast, print and online media. Each of these serves a different category of clients which are equally targeted by the company. When the company effectively advertises its services, it will manage to create awareness about the availability of its commodities, its benefits, uses and any improvement in its qualities. Effects of Marketing Conditions on Marketing Strategies in Saudi Arabia As a multinational, extending operations to Saudi Arabia means growth. Therefore, in order to achieve any progress, the top management of the company needs to come up viable marketing strategies. This will enable the company to adapt and fit into this new market. Therefore, while making decisions on the most appropriate marketing strategies to adopt, the top management should conduct a market research and be privy with all the prevailing conditions in the market. It will be part of the situational analysis in which the new company gets to know about the new market it is venturing into. As a matter of fact, each country has unique features which determine business operations in the country. They should be adequately understood because they can greatly impact on the types of marketing strategies to adopt. Hence, for the new company venturing into Saudi Arabia, it should consider the following factors before eventually making the choice of the marketing strategy to adopt: Social Cultural Climate Socio-cultural environment is one of the major factors which determine the nature of business operations in a country. In fact, each and every society has a set of cultural traditions which defines it. On its part, Saudi Arabia is a highly dynamic society. However, even nearly the entire local population is dominantly Muslim; it has a small number of Buddhists, Hindus and Christians which mainly consist of the foreign people. Therefore, while venturing into this market, there is a need to consider this as a very significant factor. For the Muslims, there is a very high level of conservative beliefs which determine interpersonal relations and the nature of business activities (Long, 2005). For instance, according to the Muslims, there is a strict code of dressing which should be adhered to. Therefore, while conducting business there, it is essential to ensure that these norms are not violated because it might negatively impact on the business. Besides, the Islam doctrines are strongly against the charging of interests on loans and other credit facilities people are given. Therefore, it implies that while venturing into this market, deliberate measures should be taken to ensure that no violations are made. Things might be a bit challenging for a new multinational extending its operations especially if it originates in a Western country which is not familiar with Islamic laws. When confronted with such as situation, the management of the company should be in a position of making decisions necessary for spearheading the progress of the company. Any socio-cultural factors which might affect the activities of the business should be put into consideration. Hence, when making decisions about the marketing strategies, the management should ensure that no violations are made. For instance, when there is a need to carry out sales promotions, the company might consider socio-cultural factors such as dressing codes which are accepted by the society. Any violation in dressing styles might be so offensive. Once the target market feels offended, they will not be happy with the new company. Therefore, it means that the company should be ready to conduct a research to have adequate information about the various social, cultural and religious factors which influence business activities in Saudi Arabia. When they are complied with, the company will have higher chances of winning the confidence of the clients and eventually realizing a tremendous success over its competitors. Technological Climate Just like any other country, Saudi Arabia is embracing modern Information Communication Technologies (ICT). This is being used in conducting business activities in nearly all the sectors. Therefore, for a new company planning to venture into this market, it is a necessary requirement that they should be in a position of adopting these technologies in their production process. For this reason therefore, it is a brilliant idea for a company to embrace such technologies since they can help in improving the quality of services delivered to the clients. When a company is not up to date, it might not be in a position of appealing to its clientele (Steedman, 2007). In fact, technology becomes a determining factor for a business when choosing its marketing strategies in this new market. When deciding on the quality of the commodities, the company should ensure that it uses acceptable technologies when producing its commodities. For example, when dealing in food products, modern technologies should be adopted. This is because the Saudis are very much concerned about the hygienic conditions of the food products which they consume. Meaning, any failure to comply with the required standards will mean that the company will be rendered unsuitable and out of place. This is a clear proof that a company planning to venture into this business should ensure that they comply with the required technological standards expected from it. Finally, the other important reason for considering technology as an important factor when deciding on the type of marketing strategy to adopt, is the level of competition in the market. Since every company is committed to excellence, it is paramount for them to ensure that they adopt modern technologies. This should be done in comparison to its competitors. Meaning, when the rival firms are using a certain technology in their production process, the new firm should not be left out. Its management should ensure that the company is at par with its competitors. In fact, it should be ahead of the other companies because this can put it in a better position of emerging as the most progressive and up to date company which produces excellent products to be preferred to those of its competitors. This is a clear indication that technology has a greater influence on the type of marketing strategy to adopt by the company in its newly created market. Legal Environment The other important area to consider while venturing into a new market is legal climate in which it is to operate. In Saudi Arabia, business activities are closely monitored by the government. In fact, it is the government which determines and regulates business activities in the country. It does this by providing policies, rules and imposing taxes on all traders in the country. Therefore, as a multinational, this new company should ensure that it adequately understands everything about the legal requirements of its operations in Saudi Arabia. After acquiring such knowledge, it should do everything within its capacity to comply with them. Otherwise, any violation might put it into troubles. As a foreign firm, the company should be ready to comply with all the local domestic and international laws governing the activities of such a multinational company in the new market. Therefore, whatever it does, it should ensure that the legal stipulations are followed to the latter. Hence, before making final decision about the marketing strategies to adopt, the management should ensure that they are compliant with all the requirements (Kotler, 2012). Any violations are punishable by the law and can adversely affect the company. Thus, when choosing the management strategies, everything should be put into consideration. Hence, it means that the management should be privy with all the legal requirements determining business activities in Saudi Arabia. For example, when handling the issues about employment and staffing, the company should not just act without consulting the law. Instead, any action taken should be legally acceptable. For instance, if the law requires that the company should create job opportunities to the locals, it should not only import expatriates. Instead, the management should set aside some jobs for the locals (Steedman, 2007). Once this is done, the company will have a combination of foreign and local personnel. When they combine their expertise, they will definitely make important contributions towards developing the company. This shows that the legal environment in the new market has a great influence on the type of business and marketing strategies to adopt in Saudi Arabia. As a matter of fact, the law needs to be inevitably complied with by any business organization. Internationalization With the increasing urge for globalization, several businesses are expanding their operations beyond their countries’ borders. Obviously, as the number of multinationals increase, the level of competition in the market also increases. In this regard, it should be upon a company venturing into a foreign market to be adequately prepared on how to counteract the competitions that exist there. Since globalization has made the market to be freely accessible, each and every player interested in venturing a new market is free to give it a trial (McCarthy, 2004). Hence, in this case, when a multinational shows interest in extending its operations to Saudi Arabia, it should ensure that it puts appropriate measures to be too competitive. Otherwise, it might succumb to the stiff competition from its upcoming and fully established competitors. In order to comply with the international standards of operations in its line of business, it should be necessary for the company to put up measures to apply relevant marketing strategies. This will put it in a better position of exercising its dominance in the new market. Therefore, based on the competition degree, the company should incorporate the use of necessary market mix at all times. In the first place, it should adopt sales promotion as one of its marketing strategies (Kotler, 2012). After ascertaining the promotional tools used by its competitors, it should go ahead to apply the same and make them better. If this is done, it will increase its chances of creating awareness about its commodities and rebuilding any reputation which might have been injured as a result of misleading adverts from its competitors. At the same time, the urge for standardized production may make it necessary for the company to apply the marketing mix of product. Meaning, for it to be in a class of its own, it should introduce a new brand and unique commodity which distinguishes it from its competitors. Once this is done, the company will be able to appeal to the clients that it has unique brands which might be incomparable to anyone else (Needham, 2006). A par from creating its unique brands, the company should improve its competitiveness by producing and supplying high quality products to its clients. This will prove to the market that it is so competitive and should be considered as the most technological, reliable and trustworthy company which believes in competition and high quality service delivery. Conclusion It should be the goal of each business organization to expand its operations. Of course, international marketing can be a good idea for every investor who wants to be a multinational. However, it should be noted that it is not an easy task to venture into a new country and enjoy a good share of the market. This is due to the fact that there are lots of factors determining business operations. These include government policies, competition, political climate and the socio-cultural factors. For this reason therefore, an investor who is interested in extending its operations into Saudi Arabia should have the above factors into considerations. They can be of great influence when choosing the kind of marketing strategies to adopt. Bibliography Booms, B.H. & Bitner, M.J. (2001). "Marketing Strategies and Organization Structures for Service Firms". Marketing of Services. American Marketing Association: 47–51. Kotler, Philip (2012). Marketing Management. Pearson Education. McCarthy, J.E. (2004). Basic Marketing. A Managerial Approach. Homewood, IL: Irwin. Lionel W. (2004). "Specialization and Efficiency in World Production". The Review of Economic Studies 21 (3): 165–180 Long, D.E. (2005). Culture and Customs of Saudi Arabia. West Port, Connecticut: Greenwood Publishers. Needham, D. (2006). Business for Higher Awards. Oxford, England: Heinemann. Neil H. (2005). "The Concept of the Marketing Mix" In Schwartz, George. Science in marketing. Wiley marketing series. Wiley. p. 286. Steedman, I. (Ed) (2007) Fundamental Issues in Trade Theory, London: MacMillan. Read More