Your company’s board of directors is interested in the international marketing plan proposal and has asked you to do a cultural audit. Your audit will explore two main areas: (1) cultural factors related to doing business in this particular country, and (2) a competitive analysis.
Develop a PowerPoint presentation organized as follows:
Slide 1: Briefly describe the country’s history and its relevance to its current cultural state today.
Slide 2: Identify customer demographic trends that are related to business activities in this particular country.
Slide 3/4: Briefly discuss customers and traditions of the country’s citizens and how these can possibly influence business there.
Slide 4/5: Identify and discuss language issues and any other cultural implications of introducing your product in this country.
Slide 6: Provide an assessment of the geographic region and why this is a good fit for your company’s product.
Slide 7/8: Analyze the industry in this particular country. Perform a SWOT analysis. For more on how to conduct a SWOT analysis, see http://articles.mplans.com/how-to-perform-a-swot-analysis/.
Slide 8/9: Based on what you learned in the competitive research, apply the four Ps of marketing to your specific product by outlining the following:
Product (the features and benefits of the product)
Place (one possible outlet to sell the product in this particular country)
Price (one price strategy to consider in this particular market based on your competitive analysis)
Promotion (one promotional strategy to consider in appealing to your new global customers)
Slide 9/10: Conclusion: Based on everything you researched, present a brief analysis of any similarities between the domestic and international markets, any particular challenges and how you will manage those challenges in your selected country.
Considering International Marketing
The United Arab Emirates (UAE) consists of seven emirates that came together to form one strong state. The seven include Dubai, Abu Dhabi, Ras Al-Khaimah, Fujairah, Umm Al-Qaiwain, Ajman, and Sharjah (Al‐Suwaidi, 2011). The seven states united into a federal state in 1971 by adopting a similar constitution. Prior to the emergence of the oil economy in the 1960s, the Emiratis largely depended on two economic activities: one, pearling and sea trading by the Bedouins, and two, small oasis farming in the desert economic context. The different subcultures shared a common culture and social identity, emanating from the interdependence among the political, social, and economic arenas of the people. The discovery of oil in the late 1960s significantly transformed the social and economic life in the region due to the wealth generated (Baynouna et al., 2009). Oil has been the key pillar of the economic success in this region.
Customer Demographic Trends
UAE’s demographic statistics are available from the 1970s when the various states merged to form a federal state. In 1975, the UAE had about 558,000 people. Over a third of this population was the local population. In 1997, the population was estimated at 2,624,000. In 2005, the population had grown to a staggering 4.1 million, with Emirati nationals accounting for a partly 20 percent of the population (Al‐Suwaidi, 2011). The high population increase is the result of the country’s high economic prosperity which attracts migrants from across the world. The forces of mortality and fertility have had little impact on the population increase in the region. In the 1970s, the country did not have skilled labor necessary for oil production. This led to high dependence on expatriate labor. The oil industry current relies majorly on expatriate labor, which is predominantly male. According to Al‐Suwaidi (2011), there were 2.6 million workers by 2005, of which 91.6 percent comprised of foreign nationals.
Related: Walmart marketing research paper
Customers and Traditions
Customers and traditions in the UAE region has significantly impacted business, especially in the area of oil exploration and marketing. Before the rise of Islam in 7th century, there was little social cohesion in the UAE region (Anthony, 1975) . There existed different socio-religious systems that rose and fell with time. The emergence and spread of Islam in the region became a strong bond that held the people in the region together. The emergence of Arab caliphates resulted in strong culture with a unique socio-political identity. Through the caliphate system, the UAE region remained free of non-Islamic influence until the European invasion in the 16th and 17th century (Anthony, 1975). In the 1820s, local leaders entered into treaty with Britain. This offered the region protection from foreign influence. Britain has made significant impacts in the region, especially in the areas of defense, international commerce, oil industry development, and education (Anthony, 1975) . Through British cooperation, the country’s citizens have been able to acquire technical and higher education using English as the language. The adoption of the English language as the commerce language has opened up the region to foreign expatriates from predominantly English-speaking countries.
UAE has two major social categories: the nationals and the foreign immigrants. The nationals have four social classes: the sheikhly families or the ruling class, the merchants, the new middle class comprising of various professionals such as teachers, and the low-income groups comprising of farmers (Anthony, 1975) . The indigenous populations lead varied lives, often depending on the area they live. Those in coastal areas are more exposed and have high levels of education. On the other hand, those in the interior have no skills and are illiterate. There is high rural to urban migration among the nomads and those who practice agriculture in search of better paying jobs and higher standards of living. Currently, there is significant improvement in literacy levels driven by free state education programs aimed at the low-income groups. This has boosted the number of professionals in the region. The increasing number of professionals have bolstered the prospects of the oil industry, which requires a higher level of skilled labor.
Language Issues & other Cultural Implications
Language is critical in trade development in the region. ExxonMobil has partnered with the UAE to expand and develop one of the largest offshore oils fields in the world. Language will play a critical part in the establishment of strong ties between ExxonMobil and UAE. The official language in UAE is Arabic. The immigrant population speaks various dialects including English, Urdu, Farsi, Hindi, and Filipino. UAE has adopted English as the language of commerce. However, Arabic language greatly influences the management ability of expatriate leaders. According to AlMazrouei & Pech (2015), expatriate leaders who have mastery of basic Arabic language are better positioned to manage diverse employees, including locals who have poor mastery of the English language. In addition, awareness of non-verbal communication can also boost the effectiveness of an expatriate leader. For instance, expatriate male leaders should be aware that it is not acceptable to greet local women by shaking hands. According to AlMazrouei & Pech, (2015), UAE has unique cultural characteristics compared to neighbor states such as Oman due to British influence and the influx of expatriates from different parts of the world. For instance, majority of locals have a basic understanding of the English language. However, they have poor command of the written language.
Related: SEAL TIGHT COMPANY ANALYSIS
The United Arab Emirates is the hub of global oil production. The UAE is among the top 10 countries with the largest oil reserves in the world. Currently, UAE has oil reserves totaling to 97.8 billion barrels. In 2012, UAE begun efforts to increase oil production to 3.2 million barrels per day be 2016 (Maimer, 2015). UAE also holds a long term plan to increase oil production to 3.5 million barrels per day by 2021. This will be achieved through various ways including encouraging foreign direct investment. ExxonMobil will take advantage of the efforts by UAE government to increase oil production to invest in the region. The UAE has good rankings on international ranking scales such as Global Competitiveness Ranking (17th position) and World Bank Ease of Doing Business Report (ranked 22nd) (Maimer, 2015). This makes it attractive for investment. The country has improved infrastructure, skilled labor force, and an efficient legislative environment. UAE has a strategic geographical location in light of oil transportation and marketing. UAE is located along Strait of Hormuz, which provides the only sea passage in the Middle East region.
SWOT Analysis of UAE Oil Industry
UAE enjoys a strategic geographical location which gives it access to the Strait of Hormuz for easy exportation of oil and petroleum products. There is high demand for oil/petroleum products across the world, which is projected to rise further (Business Monitor International (BMI), 2011).. The country has high infrastructural development, facilitating oil transportation. There is an efficient legislative environment guiding oil exploration, mining, and revenue sharing. Due to high number of foreign expatriates, there is cheap labor force. A number of weaknesses exist. First. the region lacks a democratic structure of governance. Second, the succession form of governance raises future concerns (BMI, 2011). Third, there is possibility of xenophobia. The opportunities include strong cooperation with GCC states on matters security and economic stability, rising demand for oil and petroleum products across the world, and the large areas of unexplored oil reserves. Threats include environmental pollution, territorial disputes, and exhaustion of oil wells.
4 Ps of Marketing
ExxonMobil will concentrate in the extraction of oil and conversion into petroleum by applying the latest technologies. Application of enhanced oil recovery technology will improve oil production per well. All petroleum products will be unleaded to minimize air pollution.
The petroleum products will be marketed via ExxonMobil outlets across the country.
The appropriate pricing strategy is economy pricing. The aim is to attract both low-cost and high cost consumers by availing petroleum products at the least price. This will help in market penetration.
The promotion method will be advertising on the mass media. This will reach the largest number of consumers in the shortest period.Product
This research indicates that the UAE region provides an attractive haven for oil and gas investments. The region has an abundant supply of oil and gas resources, skilled labor, and efficient legislative regulations guiding firms in the industry. The domestic and international markets share one similarity in that the oil industry prices are demand driven. This means that prices fluctuate basing on global demand and supply levels. The most significant challenge in the oil and gas industry is territorial conflicts, which can significantly impact extraction and marketing. This challenge can be managed by working closely with the national government in solving the territorial disputes.
- Baynouna, L. M., Revel, A. D., Nagelkerke, N. J. D., Jaber, T. M., Omar, A. O., Ahmed, N. M., . . . Abdouni, S. (2009). Secular trend in height in al Ain-United Arab Emirates.Economics and Human Biology, 7(3), 405-406. doi:10.1016/j.ehb.2009.07.004
- Al‐Suwaidi, A. (2011). The United Arab Emirates at 40: A balance sheet.Middle East Policy, 18(4), 44-58. doi:10.1111/j.1475-4967.2011.00509.x
- Anthony, J. D. (1975 ed). The Middle East: oil, politics, and development. Retrieved from https://ncusar.org/publications/Publications/1975-12-01-Impact-of-Oil-on-Political-Socioeconomic-Change-in-UAE.pdf
- AlMazrouei, H., & Pech, R. J. (2015). Working in the UAE: Expatriate management experiences.Journal of Islamic Accounting and Business Research, 6(1), 73-93. doi:10.1108/JIABR-08-2013-0032
- Maimer, W. (2015, Dec. 2015). Tighter times ahead for UAE economy. The Telegraph. Retrieved from http://www.telegraph.co.uk/sponsored/united-arab-emirates/12027193/tighter-times-ahead-for-uae-economy.html
- Business Monitor International (BMI). (2011). United Arab Emirates Oil & Gas Report Q3 2011. Retrieved from http://www.marjanca.ae/files/reports/5-BMI%20United%20Arab%20Emirates%20Oil%20and%20Gas%20Report%20Q3%202011.pdf