Internal and external marketing
This marketing project is all about preparing a marketing plan for a chosen consumer good “Jeans” in UAE and Gulf Countries. This project will be in 2 sections. One will showcase the product and its market. Another section will present before you the promotional plan of this product. The basic motive of marketing is to convince the customers by the services delivered by a particular organization. No matter what field it might be, marketing is important to attract customers towards oneself. This includes internal and external marketing. In internal marketing, the management team should be able to use the techniques effectively, to make a maximum from it. When a particular service is new to the market, external marketing becomes an area of major concern. This is because it has to establish itself in the market. In other words, marketing is a technique that is used to form a strong relationship between the promoter and the consumer. It is the basis of the USP that an organization can make for itself. The reasons are that today, the world looks for an integrated approach. The consumers are more likely to visit a place where the chances of making multiple benefits are plenty. There is a certain demand of luxury along with optimum cost. (Journal of Marketing Theory and Practice, 2006) So there has to be proper correlation between the price and product style. When it comes to consumer goods people will prefer to consume goods that serve them with best quality and quantity. In case of Jeans, it's the style, color, fabric and price.
The consumer good that has been chosen is “jeans” that comes under the category of casual wear. It is generally made up of denim fabric material which, 100% cotton, weighing about 10 oz. The design and coloring can be of any taste. The brand name of the product taken here would be Kz jeans. This consumer product will become a stylish brand that will serve people what they desire, will match their taste of fashion and can be bought at genuine prices. We will also introduce simultaneously denim three-fourths that are an emerging trend nowadays. Comfort level is what the premium need of a customer and Kz jeans will give them the best fit ever. Both male and female collection will be produced and sold to the retailer. The designs will not only be new but they will definitely rule the fashion hubs and will allure the crowd towards it. Kz jeans will entertain only youth and elder generation. The age group or say the target market will be the people of age starting from 15-60 yrs. All waist sizes will be available.
The company will open its outlets in Abu Dhabi, Ajman, Al Ain, Dubai, Fujairah, Khorfakkam, Muscat, Nizwa, Ras Al Khaimah, Sharjah, Umm Al Quwain
Target Market And segmentation
As we can see from the table, the per capita GDP of the country is exceptionally high. This is the reason that the country can afford the most luxurious casual wear also. Other than this, the other thing that can be noticed in the table above is that there are almost 74.6% who come under our target market. Hence the market size is massive and provides an immense opportunity to progress with fewer efforts. There is versatility in all that we come across. But this also means that not everyone prefers the same thing. Considering the criteria for segmentation, the marketers must promote the products differently for different utilities. The marketers of Kz will segment the country as a whole for the promotion of the product as tools to fashion prevailing, consumer's purchasing power, consumer's taste, seasonal changes, color preference. This includes a demographic, psychological and geographic segmentation. (G. Day, 1980)
The age group of 15-60 constitutes approximately 70% the population. The segments are made like in the chart shown below.
Youth has a different taste towards fashion. They want funky designs, elegant and attractive colors, pocket designs, low-waists designs, and unbuttoned models. On the other side, mid-aged persons, they want much simpler designs, sophisticated casual wear with not so much funky designs but at the same time elegance should not be lost. People in age group of 35-60 are generally business class people or service class people and Kz has to focus more on a sophisticated look for them which should match their personality. Same applies for both man's and woman's casual jeans wear. The fabric material changes with the change in season. Dubai and other gulf countries experiences high temperature weather in summers and thus pure cotton fabric will be used in winters denim fabric comes into play. This can very well vary with the consumer's preference and market behavior. Whatever comes into fashion, Kz will adapt it soon and will try to provide its customers with that. Different segments have different propensities towards buying prices of the jeans. Emirate Youth, especially kids, go for style and color and because they aren't earning they merely know about the money value so they are least bothered about the prices and urge their patients to buy them what they need. Emirates from 25-35 yrs of age group have a propensity to save and thus they are the most particular about the prices. Old age people prefer sophistication above all economic factors and decent and sophisticated jeans has to come at low price.
Levi Strauss and Company, Calvin Klein and Guess have introduced stylish jeans at that time for the customers under age group 15 -24. According business analysts, young generation customers prefer style all of them provide. Tommy Hilfiger, Polo has also introduced stylish jeans based on market demand. Other competitors like The Gap, Old Navy, J.C. Penney and Sears has introduced some reasonable priced private label products. In addition, its competitor GAP, its market value increased from $7 billion to over $40 billion. Competitors will always be a threat to Kz, Tommy Hilfiger, Gap, and Calvin Klein etc. They have targeted the young generation from 15-24 ages and have launched substitute products of to capture the market. To survive in this competitive business environment, Kz has to surely think of a strategy to make its position prominent and distinctive. The only way this can be done is through a perfect branding of the product. The company would have to follow a differentiation strategy just as these competitors to make a name in the highly prosperous market of UAE.
The basic factors that need to be considered here are that the company has to follow the trade laws that come under the GCC. The reason for the same is that the laws governing the corporate world are extremely strict with respect to following the principles of Islam. Other than this, the company has to maintain a cordial relationship with the regional Governments of all the seven Emirates as well for an effective outcome. If the company goes international after surpassing fierce from competitors from the pioneers in the market like Levis', they would have to maintain the international policies in the respective countries. Under the circumstances, the relationship of UAE with the west would also matter.
It must be mentioned at this point in time that Kz jeans must follow the best of ethical means while selling its jeans in the country. This can be seen from two perspectives. The first one is that with respect to female wear. As the religion of the country is highly disciplined with respect to the attire sense of the females, the fitting of Kz jeans should not violate such laws. The other ethical behavior is required from the financial auditing sense. If the country shows increased profits to attract investors for benefits in the short run, it might have problems in the long run when they get caught. And lastly, the general behavior of the management and the company employees needs to be highly ethical so as to make a place in the hearts of the customers and make grounds for further penetration in the market.
This relates to the working hours of the employees in the company. As far as the restrictions in UAE are concerned, they are much different from what happens in the west. So, even if Kz wishes to compete with companies like Levis', it would have to follow the stricter rules of Islam rather than having the freedom to extent working hours as against permitted in UAE. Interest payment is also considered to be a crime in UAE. So, if the company has too many intermediaries in the distribution channel, selling products on credit, interest payment is not recommended. The reason is that only if the company imitates the Government in its business policies, it would find support, or else it would become extremely difficult.
The technological factors related to the outfits planned by Kz jeans comes from the application of Globalization to a large degree. The reason is that whatever the innovations in the west are; they need to be realized by the manufacturers in UAE. As the world is moving towards westernization, the technology, Kz jeans needs to follow western technology to earn best prospects. Not only this, the packaging and promotion of the company are also highly dependent on the technology used. The reason again is that customers are attracted with the latest technology that they see in these promotional measures. One must remember that he can't afford to maintain the idea of ‘Make and Sell'. It has to be through ‘Sense and Produce'. This can be fulfilled by keeping the latent demands of the market in mind which are dependent on the technological factors.
As far as the economic factors with respect to Kz jeans are concerned, the management of the company needs to keep the per capita GDP of the country in mind in order to support its pricing strategy. At the moment, the country is progressing at a tremendous rate even after the onset of recession in the region. So, the company can follow a differentiation strategy and maintain a branding so as to make unique products no matter what the price of the jeans might be. The economy of the country supports quality over price to a large degree. This can be taken into consideration before following any strategy.
This last factor of the PESTEL analysis also has extreme importance in the business followed by Kz jeans. As for example, the company does not have any power to interfere with the copyrights and patents of other companies running on similar business backgrounds. Even the land used for maintaining the infrastructural requirements of the company needs to highly authentic with respect to legal papers. There should be no issue with respect to the same or else the Government would take strict actions to serve a remedy. Even the appeals of the customers with respect to defective pieces or any other complains, needs to be entertained or be followed as per as the local jurisdiction. The company must remember that any illegal activity that it does, would have adverse effects on the customers in the latter stages of the business.
Portion of Market
The segmentation of the market has been discussed in details. Cloth is one of the three necessities that a man needs to survive on earth and in gulf countries Kz is targeting 70% of the total population. Kz won't be manufacturing jeans for kids and for very old people. Its portion of market is people of the age group of 15-60 years. This age group comprises of youth, middle-aged people and people who have just stepped into old age category. Different age groups have different demands and Kz has to manufacture jeans accordingly. The market provides great opportunity to Kz to expand its business across the country. This business comes under non-oil sector of UAE which contributes to 25% of the total business activities in the country; rest 75% of business is solely conducted within oil-sector. Now the position of this industry in the market of UAE is very clear. Kz has to adopt powerful marketing strategies so as to compete effectively in this 25% non-oil sector with other companies of the same industry. As Kz will be new in the casual wear market, so to survive and make his presence in the market it has to really focus on quality, price and marketing tactics. Generally, the brands of jeans like Levis Strauss, GAP, Tommy Hilfiger, Polo, Old Navy, J.C. Penney and Sears, Calvin Klein etc are all foreign brands and mostly found in malls and are very expensive. Kz will be a local brand providing people of UAE what they desire, at nominal prices and a company which does not overexploit the fact that GDP per capita of UAE is very high.
No. of outlets in Dubai will be 5
No. of outlets in Abu Dhabi will be 7
No. of outlets in Fujairah will be 4
No. of outlets in Muscat will be 3
No. of outlets in Sharjah will be 3
No. of outlets in Ajman will be 4
In rest of the cities, company till now have decided to open 2 outlets in each. These numbers have been decided by doing market surveys, by studying demand curve in respective cities, by studying consumer behavior, purchasing power of the consumers, fixed costs and variable costs at particular cities (not that much influencing).
Positioning of the Product
Kz is not the first company to enter the casual jeans wears market instead it's the most recent so there is a great need to position its product in front of its target market. Positioning is synchronizing properly our marketing messages with our wants, expectations, mission and vision. We need to strongly convince our customers that we are the ones who can satisfy their desires. Regarding jeans wear, customer wants quality within optimum price. We also carried out surveys in malls to ask people about existing brands of jeans wear in the country and asked them about their satisfaction level with the products sold by those outlets. They responded well but were in favor to have some more, some new features in jeans wear with variety in colors and shades. Fitting emerged out to be a main problem for all. For that Kz has decided to provide free alteration and to avoid that also it has planned to provide belts with the jeans. Prices of those belts will be inclusive and will be in the name of the company. These belts are available in all colors and customer will get benefit of choosing any of the available ones.
There are certain pick up lines that will definitely differentiate our product of Kz from the international Brands.
- “Hook up with Kz and groom your style” for the youth
- “Censored Unbuttoned Collection” again for the youth
- “X-Factor with Kz” primarily for men.
- “Wear Kz and tear hearts apart” primarily for the collection of Kz for Girls.
- “Sophistication is what we deliver” for the jeans wear for people of age from 35 onwards.
These pick up lines or taglines will convey our message to our target market and our position in this competitive environment will become consolidated as time will progress. We also have planned to launch our new and novel jeans wear that will be a combination of unbutton feature and elastic feature. This product will target all those who find difficulty with the waist sizes.
Price of our Product
Prices of our products won't be static. It has to vary according to the style, elegance, color combinations, extra accessories but there won't be any compromises on quality no matter you buy the cheapest or the expensive one. Price varies as your choice varies.
1. The cost of the denim fabric includes:
- Construction: 6SB + 10 + 16 x 16 + 70D
- Density: 90 x 47
- Width: 50/52 4)
- Weight: 10oz. I
- Inner packing: PE bag
- Outer packing: PP bag
2. Cost of labour and machinery
3. Cost of tags
4. Cost of buttons
5. Cost of belt
6. Cost of washing and patches
7. Variable costs and Fixed Costs
8. Extra accessories
The company wants to achieve a break even point in a span of 3-4 years with ultimate brand recognition. Plus it wants to serve its customers with superior quality and optimum cost.
Different product has different range of prices. When products of different brands were compared, like when prices (not of sales season) of brands like Levi's Strauss, GAP, J.C. Penney and Sears, Calvin Klein are compared, we developed our pricing strategy
Man's denim: Starts from Dh 114.5 to Dh 200.0
Woman's Denim: Starts from Dh 125.0 to Dh 220.0
Woman's three-fourth: Dh 115.0 to Dh 190.0
Man's three-fourth: Dh 100 to Dh 180
The company will foresee the demand from the customers and accordingly will decide its pricing strategies. Kz wants to penetrate into market with differential marketing strategy.
Value based pricing model is used by the Kz company in which the price is based on the effective value to the consumer comparative to alternative goods. Managers will look at the demand curve to set their pricing strategies and “discount rate period” accordingly. Discounts will be according to age, sex and the fashion that has become outdated.
- http://www.uoguelph.ca/consumerstudies/documents/BADM1040.pdf by G Armstrong, P Kotler - New Jersey,
- Hunger, J. David & Wheelen, Thomas L. (2003), Essentials of Strategic Management; Published by Pearson Education Inc.
- Wright, Jeremy (2005), Blog Marketing: The Revolutionary New Way to Increase Sales, Build Your Brand, and Get Exceptional Results; Published by McGraw-Hill, ISBN 0072262516
- Pride, William M. (2007), Marketing, 2008; Published by South-Western College Publishers ISBN 0618799702
- Kotler, Philip & Armstrong Gary (2007), Principles of Marketing; Published by Prentice Hall Publishers
Culture in UAE mainly and other Gulf Countries
The first and foremost aspect before promoting a product is to get acquainted with the culture of UAE and other Gulf Countries.
- The establishment1 of United Arab Emirates announces that the administrator belief of UAE will be Islam. The Muslim Population of the nation constitutes 96% of the whole inhabitants. The authority of Islam is replicated in each bubble of life in all the seven emirates of the nation. Islamic faith in UAE is synchronized by a Central federal regulatory influence.
- Urdu is commonly used by emirates. People of UAE are emotionally attached to the Arabic language. If a leader fails to understand the needs of the community because of the communication problem then the leader will be recognized as unimportant and useless.
- UAE is predominantly an Islamic country. The total population of the country is around 4.4 million with an annual growth of 4%. In this figure, 20% are citizens while other are form developing and underdeveloped countries like India, Bangladesh, Pakistan and Philippines. Only 20% of UAE's population is UAE citizens, rest are migrants from other countries
- UAE symbolizes religion in every aspect of life. In spite of the modern outlook that UAE is progressing under, it has maintained a symbol of its religion.
- In Muslim culture males are dominant and thus decision is more influenced by the family heads. Family size in urban areas is small and generally nuclear families exist in these areas but rural areas because they lack in education, family size is bigger, and joint families are favored. Women have to bear responsibilities of upbringing her children, taking care of her family members and thus she is being objected by many men to go for work.
- Aesthetics and Religion
- Material Culture
- Attitudes and Beliefs
- Political Structure
- Societal Organizations
- Legal Characteristics
Key Learning Points
- UAE emphasizes on Muslim culture
- Urdu is the language what they prefer while communicating.
- Men are the dominating social animal.
- GDP is high and people goes for quality purchasing mainly in cloths.
- Women are not allowed to wear trendy cloths in Muslim culture but the foreigners are allowed.
- There is huge difference between the demand of cloths and type of cloths required between the original resident and the foreigners in the country.
- Price can be placed high provided that the quality offered by the company is fine enough.
- Television is a good way of promotion along with SMS service and internet.
After knowing all the cultural trends prevailing in UAE and other Gulf countries, Kz has decided to adopt different promotion plans in different countries. Its first and foremost focus is on UAE Dubai, Abu Dhabi, Muscat, Sharjah; Ajman etc are on its target list. These are much developed cities than others. List of mediums that the company uses here to promote its brand is:
Advertisements on Television and Radio: Television and Radio nowadays can be seen in every home. Not if the television, but radio will be surely a medium of entertainment in their homes. These are means of mass communication and are very effective. Advertisements of the brand can be telecasted on televisions and can be aired on radio. Nearly all families will come to know about our fabulous brand. All the company offers, discount periods and rates, off season sales and all other messages can very well reach into the eyes and ears of our target customers.
Newspapers: Khaleej times, UAE Interact etc. are some of the newspapers, distributed all over the country. Catchy advertisements, alluring pick up lines, colorful advertisements are going to catch attention of the public. Newspaper also comes into the category of mass communication and thus will particularly help to aware people of our brand. All the company offers, discount periods and rates, off season sales and all other messages can very well reach our target customers.
Internet: In the cities which are at main focus, this means of communication will work tremendously. Kz will sign agreements with Amazon and Google to show its advertisements. There will be a working web-portal of the company in the name of the company itself. This will contain a catalogue feature featuring all our collection of designs, upcoming designs and stupendous collection. Customer will get a customize option to order a jeans of its own choice. But for that he has to register first and company will make money out of it. The site will also contain other features like contacts, customer service, sponsorships, services, information on our working procedure and other needed ones. Kz will enter into deals with certain websites to show its promotional advertisements on those sites.
Pamphlets: Pamphlets will become a crucial means of promotion when the outlets will be opened in the cities for the first time. They can be distributed to each and every home in the city by the means of newspapers. Pamphlets, if attractive, can be very efficient in attracting a good lot of people to our outlets.
Mobile Messages: Why Kz should not make use of the SMS facility that is available? Kz will make a good promotion with the help of these mobile messages. Almost 95 % of the population uses mobile technology and it can be a crucial medium to target our customers. People can tear apart pamphlets, can overlook newspaper advertisements but they will surely read mobile message in an anxiety to know who the sender is. With the help of the messages, Kz will acquaint his target customers about the arrival of any new stocks in the market, seasonal sales, discount offers, special offers etc.
Hoardings: Hoardings at tourists' places, malls, at top of certain buildings, fly-over, amusement parks etc will catch the attention of the people crossing by. This will make them know about the location of the outlets, our products and our fame.
Brand Ambassador: Kz will enter into a deal with a big personality to act as a brand ambassador for the jeans in UAE. Generally, this personality will be the one who is the most popular amongst the youth generation. This will help a lot in promotion of the jeans.
Voice mail services:Voice mail can be a very efficient source of the information about the product to the general public. If the people are interested in taking the product, they will definitely want to have all the information that is the correct information about the product. There could a very good option for it that is the voice mail system. There should be voice mail which will be telling all the necessary information about the product which will include the net rates and all the exciting features and offers with the product.
Press Releases:Send press releases to all your local and regional magazines and newspapers. Press releases are very easy to write and there are numerous resources available on the web for help.
Telemarketing: We will make the use of the use of telephone operators to attract new customers, to contact existing customers to ascertain satisfaction levels, or to take orders i.e., Telesales.
Direct Mail: We will use Direct-mail marketing involving sending an offer, announcement, reminder, or other item to our customers at a particular address. Using highly selective mailing lists, we will send out a huge number of mail pieces each yearóletters, flyers, foldouts, and other “salespeople with wings”. We will also use mail audiotapes, videotapes, CDs, and computer diskettes for our marketing.
Catalog Marketing: Catalog containing attractive features will be created. Customer will be reached by online and printed catalogs. These also work a major promotion media and this has much reach inside the homes., By putting their catalogs on the Internet company can have better access to global consumers than ever before.
Incorporated Advertising Communications
Integrated market communication stands for communicating rather making stakeholders believe that product is really reliable and will lead for a better profit for these stakeholders too. There is a difficulty in getting stakeholders in an easier way if there is large competition in the market for the same product. Hence it is necessary for our company to gain the stakeholders before launching the product make them believe that our product will give them the best and this belief should carry on because presently there is very less competition in the market of the cloth dryer made up of natural gas but when there competition will increase it should be made sure that the stake holders that are taken by our company should not go to the other ones which means it would be necessary for us to remain our liability in the market. Market communication stands for several promotion techniques and the personal relation with the stake holders.
Customer Response - Re launch of the product
The marketing strategy states that there has to have some changes in the market because the customer becomes bored of purchasing same item for a long time. Thus there can be several techniques by which the company can get the renovation in the product and re launch the product in the market. Ways in which the product can be re launched are as follows:
- An entirely new product in the market.
- Some changes that is improvisation in the existing product
- Some addition in the existing product
- Reduction in the cost
- New market segment can be targeted.
The re-launch of the product will entirely depend upon the response from the customers. If responses from the customers are good then it is almost necessary to launch the product and give it a new style with new more exciting features that will increase the sale of the product. According to marketing strategy, the resale of the product after re-launch of it largely depends upon the frequency of the product to be sold. Before re-launch of the product, estimation of net profit is also a necessary part. If company is getting a high profit, then it becomes obvious for the company to re-launch the same product with new look and some new exciting features.
Promotions particular to Age groups
For the youth of age between 15-30 years, Kz will use mostly Television and Radio to promote its casual wear. Internet is mostly used by this generation, so in advanced cities like Abu Dhabi, Dubai, Sharjah, Ajman, Muscat Internet promotion will be useful. Kz will also take initiatives to sponsor events at various colleges to target youth, it will also sponsor games like cricket, water sports and adventurous sports which are the favorite of the youth. Also mobile messages will be an efficient promoting tool to be used.
For targeting our customers of age group 30 years and above television, radio, Internet, Newspapers and Pamphlets can be used.
Promoting tools that won't be used
Pamphlet distribution, as I mentioned will be one of the tools that Kz will choose in the beginning but afterwards it will avoid using it for promotion because people hardly reads the pamphlet and secondly we have to make use of technology as much as we can. Distribution of pamphlets at home by individuals requires a lot of efforts and money.
The normally quoted price to end users is known as the list price. This price usually is discounted for distribution channel members and some end users. The company will be following the listed types of discount in its early periods of introduction.
- Quantity discount.
- Cumulative quantity discount
- Seasonal discount
- Cash discount
- Trade discount
- Promotional discount
Head Marketing department,
Sub: A proposal to approve the proposed promotional plan of the company.
The marketing plan as projected by the company's marketers reveals a consistent benefit over cost. As a result of our research, we propose an advance and new promotional plan for the jeans. The promotional plan is based on the research of areas like UAE Dubai, Abu Dhabi, Muscat, Sharjah and Ajman. The suggested means of promotion for the product are as follows:
- Advertisements on Television and Radio
- Newspapers: Khaleej times, UAE Interact etc. can be used.
- Internet: In the cities which are at main focus, this means of communication will work tremendously. Kz can sign agreements with Amazon and Google to show its advertisements
- Pamphlets: Pamphlets will become a crucial means of promotion when the outlets will be opened in the cities for the first time
- SMS: Almost 95 % of the population uses mobile technology and it can be a crucial medium to target our customers.
- Hoardings: Hoardings at tourists' places, malls, at top of certain buildings, fly-over, amusement parks etc will catch the attention of the people crossing by.
- Brand Ambassador: Kz will enter into a deal with a big personality to act as a brand ambassador for the jeans in UAE
- Press Releases: Send press releases to all your local and regional magazines and newspapers
- For the youth of age between 15-30 years, Kz will use mostly Television and Radio and internet. Kz will also take initiatives to sponsor events at various colleges to target youth, it will also sponsor games like cricket, water sports and adventurous sports which are the favorite of the youth. Also mobile messages will be an efficient promoting tool to be used. The company will keep on shifting between different promotional schemes like Quantity discount, Cumulative quantity discount, Seasonal discount, Cash discount, Trade discount, Promotional discount depending upon time and occasions.
For targeting our customers of age group 30 years and above television, radio, Internet, Newspapers and Pamphlets can be used.
Regarding the return on investment, with only 40% investment on products and rest on promotion and employees, the company ought to make a profit 1.5 times as of now. This is because of the concern over social and environmental conditions of the world. There is also a plea for a change in management. The company certainly requires a new chief executive to communicate its ideologies and lead the functioning. We hope for your best concern in this matter.
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