Fashion and food
1. Executive summary
The clothing and the foot ware market in Saudi Arabia performs quite well due to the thriving economy and the high levels of the disposable incomes in the country. The unemployment rates are quite low, a fact which has contributed to the growth of the fashion and food markets. Available information at the end of 2015 indicates that the leading fashion brands in the country increased the number of the fashion brands in their portfolio as the customers raised to demand quality and more luxurious brands. As a result, the retailers have expanded the outlets across the major urban areas in the country. Therefore, the market of the fashion industry is quite lucrative and offers a real opportunity for growth in the coming years. The existence of the country's young population has a lot of influence on the advancement of the fashion market. The young groups are fashion savvy and therefore aware of the global development of the fashion industry informed mainly by the social media and the internet. The factors have been influential in boosting the development of the growth of the fashion market .The food and the fashion industries are some of the most vibrant sectors in Saudi Arabia, due to the high levels of the disposable incomes. The fashion and the food industry cannot be fully discussed without mentioning some of the realities of the country.
Saudi Arabia is a modern emerging economy with Islam as the dominant culture. Figures indicate that the country has a GDP of $ 750 billion, making one of the twenty largest economies in the world (AlGhamdi, Drew & Alhussain, 2012). The country's economy is hugely reliant on the oil revenue, and is the world's biggest exporter of the commodity in the last several decades. Privatization of the government organizations and the growth of the service industries such as banking and insurance industry have been a major emphasis. However, the country is keen to diversify due to the dwindling oil prices, which explain the emphasis on the marketing of food and fashion products. As such, this is profoundly shaped by the existence of the highly informed growing population of the youths in the country (Al-Ghaith, Sanzogni, & Sandhu, 2010). The advancement of the technology has also been a factor in opening up the country to the international trends in the fashion and the food sectors. As a result, the consumers are demanding quality fashion products as well as healthier food products as they are more conscious than before of the importance of the healthy eating habits. The fashion and the food sectors in the country are quite robust with the local and the international companies making aggressive efforts to acquire and win the segments of the lucrative industries (Al-Mustafa & Al-Ghamdi, 2000). With the majority of the country's workforce consisting of the foreign workers the implication is that both the indigenous populations and the working foreigners have disposable incomes to spend on the fashion and the food products.
The primary food products in demand in Saudi Arabia include fish, dairy products, cereals such as wheat and oat, beef, poultry and other meat products. The major international fashion brands such as Zara, Marks and Spencer and Gap have unrivaled popularity in the major urban centers such as Riyadh and Jeddah. The internet retailing is still a small proportion of the food and the fashion market and hence provides an opportunity for exploitation by the investors. The existence of the major international brands could have played a role in the low penetration of the Internet retailing in the country (Hertog, 2011). The customers are also attached to the physical evaluation to ascertain the size and the quality of the products. The high rate of expansion of the food and fashion stores explains the reality. Latest forecasts indicate that the food industry in Saudi present huge potential for the investors as the sectors are not yet advanced as those in the countries with similar economies regarding size. The advancing construction industry coupled with increasing numbers of the shopping centers offers positive prospects for growth of the fashion and the food industries.
Food and fashion are essential elements in an economy with significant contributions to trade, investments, trade, and employment. Although technological advancements are decreasing the employment opportunities in the manufacturing and processing sectors, most of the operations in these industries cannot be automated thus retaining high-intensive labor. In fashion, the sector has continued to increase employment opportunities ranging machine operation, custom tailoring, computer-aided design to laundry and dry cleaning. On the other hand, the food industry revitalizes the entire value chain. It contains different components that improve the sustainability of products. The main lucrative areas include agricultural activities, food processing, and research and development. Hence, fashion and food play pivotal role in the economy. The duo is driven by factors such as wealth distribution, population levels, health awareness, and the different forms of lifestyles. The connection between the two is so strong that it can even see them share similar platforms. For example, we have witnessed events in which a website promotes both fine food and designer clothing.
2.2 General Description
The fashion industry involves a wide array of garments. It is categorized in male and female clothing. It also includes the apparel industry and exploits the textile sector accordingly. That is why fashion greatly contributes to the manufacturing aspect. It represents a significant fraction of the manufacturing workforce. The food industry, on the other end, support lives. It is explored in terms of growing, processing and transportation with the aim of ensuring health and safety. The sector is one of the intricate economic aspects. It houses the interplay of supply, consumption and catering products and services. It employs both skilled and unskilled workers in massive numbers. The industry continues to hold a solid share of the economy despite discounting subsistence farming. However, the food and fashion appear to complement each other. More so, they are factors of trends, especially in an era where westernization is influencing the world.
3. Situational Analysis
3.1. Macro Environment
The cultural and the spiritual aspects of the Saudi population is an important consideration as it affects their style of fashion and the kind of food they consume. The behavior of the population is paramount as it influences the style of the consumers (Abdel-Mawgood, et al 2010). For example, the majority of the Saudi population is the youths who have more information on the dressing styles and therefore demand specific products of fashion (Brown, 2011). They area loss keen on watching out the qualities of food they consume which in turn affect the market. The fashion and the food markets have specific products in nature because they are designed with particular segments of the population in mind (Al Othaimeen, Al Nozha & Osman, 2007). The products are assigned specific values to enable the consumers a chance to identify with fashion and the food products (Eid, 2011). The issue of brands is significant as the consumers, especially in the way, practice brand loyalty in their purchases making some brands to be better positioned than others in coping with the various aspects of the market (Al-Aali, 1995).
The fashion and the food market in the country have a tremendous potential due to the expanding income levels in the country. The fashion and the food environments are therefore well positioned for growth and investments for other local and the international investors (Tawfik, 2009). The old segments of the market also present a huge market for the fashion and the food products although they are not as conscious in comparison with the younger sections of the population (Rice, 2004). The cultural aspects in the country are crucial to the Islamic culture has a lot of influence on the dressing styles and the food products consumed in the country (AlGhamdi, Drew & Alhussain, 2012). The culture of the Saudi population also has a lot of impact on the spending patterns of the consumers. The cereals and the dairy products are highly associated with the Islamic culture. Drinks such as coffee have a significant relevance with the Islamic cultures, and therefore the market in the areas offers great opportunities to the investors.
The people in this Middle East country practice communism. Despite the presence of eminent social class division, the country swiftly adheres to equality. A great rift only exists between immigrants and local citizens (Husain & Alnefaee, 2016). Hence, this way of life helps them to promote their local industries. That is why a good number of Saudi Arabians would prefer purchasing from local firms to international ones.
The economy of Saudi Arabia is robust. People continue to make high disposable incomes even in the presence of war and terrorist acts. Research has it that even the future economic projections are no different. Saudi Arabia has a long-standing economy. Only an insignificant fraction of poverty persists. That way, with efficient marketing, the fashion and food industries are bound to improve and reap more revenues.
As stated earlier, the country hosts many young people. As a result, the consumer base of fashion and foods trends is substantially comprised of young people. The sector of fast food, in particular, has experienced excellent consumption mostly due to their affordability, quick access and wide menu options (Randheer & Al-Aali, 2015). The apparel industry is also improving, especially due to high Internet penetration which offers insights on most fashionable trends.
The customers are trendy and are keen to be associated with the changing trends in the fashion and food trends around the world. The high rates of the technology imply that the consumers have the necessary information on the nature of the food and the fashion products that they would be willing to purchase. The fashion and food market remains high due to the unique factors for investments in the country (Musaiger, 1993). The government employs several incentives such as tax holidays as a measure to attract foreign and the local investors in a move aimed at spurring growth and therefore provide the employment opportunities for the growing numbers of the educated youths. The segmentation of the fashion and the food market is significant as it informs the businesses on the nature of products they should avail in the market. The segmentation ensures that companies identify the various aspects of the demographics such as age, gender, and other attributes as a way to determine the nature fashion and the food products they should provide. The geographic factors are also important as urban residents have different senses of style in comparison to the populations in the countryside
One of the major characteristics of the customers of the Saudi Arabian fashion and the food market is the strict Islamic culture (Ahmad, 2012). In fact, Islam is the state religion which implies that the entire ways of the lives of the people must be in tandem with the Islamic teachings. The religion and religious practices indicate that some investors find it hard to work with such regulations, which makes them avoid such markets. Furthermore sale of some of the fashion products is almost impossible as the dressing code is determined by the Islamic reaching with the citizens advised to observe the practices as draconian laws especially on the dressing of women still apply (Al-Ghaith, Sanzogni & Sandhu, 2010). The practices hinder some of the international companies in the developed world to venture into the Saudi Arabian market.
The opportunities are immense as the fashion the food sectors are not as developed as countries that enjoy same levels of economic development. The customers are used to fashion and food products from the major companies within the Middle East. The reality is informed by the fact that the businesses in the region deal with similar products and therefore have a better understanding of the fashion and the food market (Al-Maghrabi & Dennis, 2011).The strict adherence to the Islamic could discourage investors, especially in the fashion industry. Related to the issue is that the female fashions are highly affected as the women appearing in public must adhere to the Islamic dressing code. The food industry is also affected as drinks with alcoholic contents are not allowed for distribution and consumption in the country.
As a way to penetrate the markets in the fashion and the food sectors, it is critical that the companies develop a good relationship with the customers who are very sensitive to the fashion and food products. The firms in the fashion and the food industry need to employ more than one strategies of marketing to ensure benefit from the strategies that work for the different demographics. In commercialization of the fashion and the food products it would be necessary to develop clear paths of communications with the customers. Such a move would ensure continuous engagements in the promotion of the company brands. The clients’ feedbacks also guide the businesses on the expectations regarding the prices and the quality of the products. Such effort would be a psychological boost and hence enable the companies to penetrate the fashion and the food market.
The customers are well-informed. Given that most of them are tech savvy, they are knowledgeable about the products in the market. Since money is not the major problem, they opt for the best and the trendiest. However, the case is different in the markets of ordinary food. Here, traders ignore price regulations. They set higher prices irrespective of the global prices thus taking advantage of the customer’s economic situation (Burton, 2016).
Online platforms are instrumental for the customers. They are the type of people who seek information about a product or service in advance. Shopping or purchases are not made haphazardly. After acquiring sufficient information, they then hit the stores for purchases. In other words, their purchase decision-making is based on awareness. To this end, marketing using online platforms, particularly social media, is promising.
In this case, it boils down to the economic strength of an individual. A person with a low disposable income tends to be price sensitive, specifically given the dwindling oil prices. Unlike the rich who may not change their swanky lifestyles, these individuals may focus more on affordability than quality. Again, some strictly observe their norms and customs thus appear to resist modernization. The group mostly involves the less educated (The Economist, 2015).
The impression of quality is the most important psychological factor the customer will observe. Quality foods and fashions tend to attract more customers. Usually, quality is translated in terms of issues the modern world highlights. For instance, Nike apparels can fetch more customers due to its top-notch material which absorbs sweat and reduces friction. Factors like odd pricing do not attract customers in equal measures.
5. Target Country
The paper will broach on the food and fashion situations in Saudi Arabia. The two are among the top performing sectors in the country. They have managed to thrive because of the rising economy of Saudi Arabia. Even in the face of falling oil prices, the economy continues to grow with the employees receiving high disposable incomes. As expected, this drives the supply and demand for fashion and foods. The case is especially so since the country boasts few entertainment joints (Food Retail Industry, 2015). A good portion of the income thus goes to food and fashion. Again, young people comprise the greatest fraction of Saudi Arabia’s population. This has positively dictated the growth of the industries. The young population keeps up with the latest food and fashion trends, particularly those that align with the west culture. It is not easy to track the buzzing trends thanks to the power of the Internet and social media.
Consequently, the trends in foods and fashion have experienced an intense growth. For instances, the fast food restaurants and apparel and footwear brands have registered impressive revenues. In spite the markets being highly fragmented, corporation continues to prosper due to consumer demand (Choi, 2016). Coupling the high disposable income with the increased knowledge of international brands, more young people are leading a lavish lifestyle in relation to fashion and trends. This is not to mention that most young people are increasingly travelling abroad thus acquiring the trends following the first-hand experience.
The fierce competition in the industries arises from international companies. Only a few local firms are catching up with the trendiest fashion or foods. For instance, local fast food restaurants such as Hamburgini and Burgeronomy were established after McDonald’s entrance and success. The fashion sector hosts even fewer local firms. Therefore, a well-established corporation can easily have an edge over the local firms.
The microenvironment is competitive with major fashion and food brands having a presence in the major cities across Saudi Arabia. Some of the major food companies with a presence in the Saudi Arabia market include Hervey food services Company which is one of the largest fast-food chains in the Middle East and has 92 restaurants within the country. Almaraz is a powerhouse in the country and has its headquarters in Riyadh. The company process dairy products such milk powder, cheese, yogurt, butter ghee and fruit juices and I some of the major operators in the food industry. Other major companies in the food industry include Saleh Nas Abdul-Aziz Abahsain Co Ltd, which has interests in the food as well as related products (Eid, 2011). The Saudi fisheries company is a major distributor and the processes or of seafood with several processing units and the retail stores. The sweeping changes taking place in the world have also impacted on the Saudi Arabia consumers such that they have better fashion and food preferences than in the past.
The fashion and the food markets require modern strategies that the enlightened segments of the population can relate to (Abdulrahman Alsaleh, 2007). The high rate of the technological penetrations ensures that the customers have several platforms to exchange information on the fashion and the food products. As a result, the players in the markets cannot afford to take customers for granted. The investors must continuously engage the consumers as a way to identify their preference and hence adjust the qualities and the prices of the fashion and the food products to suit the demand of the market (Bronson, 2006). The high rates of the flow of information imply that the customers know exactly what they want and therefore it is upon the manufacturers, retailers, and the entire supply supplier chain to ensure that they respond to the needs of the market. The fashion and the food markets are well position due to the high purchasing power in the country.
7. SWOT Analysis
-Presence of a robust economy
-An online Presence
-Specialization in marketing expertise
-Adoption of modern food and fashion
-Location of the business
-Poor distribution channels
-Poor brand recognition
-Advancement in technology
-Changes in consumer choice
8. Key Issues
-A thriving economy which promotes growth of a company
-The young population driving the demand high
-International brands experiencing intense popularity
-Monopolistic prices in the food industry
9. Goals and Objectives
-To foster brand recognition through online platforms
-To successful attract the different target segments
-To stay in touch with the trendiest foods and fashion
-To cope up with the existing competition, especially from international firms
11. Marketing Strategy
The paramount components to focus on will be age, income and education. The marketing strategies will correspond with the young population. This will help in embracing the modern food and fashion that has swept away the young generation. To accommodate income, the company will create an array of options from basic to standard products. Lastly, education will help in attracting people who are free of the traditional customs and norms. It would also be significant for focus on the other age groups such as the middle –aged and the elderly, and create food and fashion products that meet their specifications.
The customers in this counties frequent stores, specifically those located in business and shopping centers (Apparel Retail Industry, 2015). The company will establish stores and restaurants in busy cities. These stores and restaurants will house most standard products and few basic ones. If the business receives a recommendable reception, this company will establish stores and restaurants in suburban areas. The rationale behind the move would be to capture customers within all income brackets and therefore widen the revenue base. The move would also imply creating products that address the concerns of the various social economic groups and there offer an opportunity for the organization to expand.
Given that the lifestyle of an individual will determine his/her interests or attitude to products, the company will design products to serve different values and personality. This will be especially so in the case of fashion. In the food sector, the company will develop fast food restaurants as most customers pursue them for leisure activities since there are few entertainment joints (Burton, 2016).
Here, the company will influence the thinking, using or purchasing of a product by dividing the market into domains of knowledge, uses and responses. The different customers have distinguished behavior. Knowledge will help in creating awareness thus attracting more customers. Responses will see the company adjusts its products to cater for customer’s concerns. Going by research, the responses are mostly based on clothing material and amount of fats in the fashion and food industries respectively (Randheer & Al-Aali, 2015).
The company will invest in the young population since they drive the buying power. The geographic, demographic and psychographic aspects will account for the youth. Identifying and aiming the young population as the main set of customers will influence the recognition and success of the firm’s products. The company can strive at reaching connecting with the young population through programs in order to draw them closer. The designing of programs that target the youth would be crucial. The entire advertising and marketing should target the young sections of the populations as they crucial in driving sales which in turn promote the brand image the use of the social media in that endeavor is paramount as the youths are very active in the application of technological interactions.
The firm will make its products stand out. In doing so, it can collaborate with various programs subsidized by the government. In efforts to promote entrepreneurship, Saudi Arabia government is sponsoring programs that help the youth in gaining skills. In the fashion sector, the government introduced a craftsmanship program, Kisaa (The Economist, 2015). Hence, the firm can exploit the skills from the locals by employing them. That way, it is easier to craft modern designs with a touch of Saudi Arabia culture.
The firm will endear to take over the mind of the customers by extensive advertisement and promotional activities on social media. Concrete engagement online will boost the products given that customers in this country are Internet-oriented. The online pages should specifically address the distinct sections of the market to promote interactions and also encourage customer feedback.
12 Marketing Tactics
The firm will develop quality products. In relation to food, it will adhere to the health and safety regulations. The goal is to ensure that the customers are buying value in terms of quality, features, design, packaging and even brand name. It would be a representation of what even the company would want to purchase.
The price will leverage the existing economic situations. It will account for the acquisition, using and disposal costs. The company will also ensure the presence of a price list, payment period, allowance, discounts and even credit terms.
The purchase process will be as convenient as possible. The company will establish online stores since most customers are used to the physical ones. Even better, the online stores will have free deliveries. Therefore, the main areas of focus include coverage, assortments, locations, transportation, inventory, and logistics.
12.4 Integrated Marketing Communication
The firm will establish a two-way communication with the intended audiences. It will highlight the features and benefits of the product in a persuasive way. The objectives will be to spur public relations, advertising, personal selling and sales promotion
Apparently, the company can readily operate in Saudi Arabia. The situation of food and fashion industries is improving. Most factors in the country work in favor of these sectors. Therefore, with efficient marketing strategies, one can crack this market and secure success. The industries have few local companies despite the economic strength of this state. Important is to keep track of the modern and trendiest foods and fashion. Moreover, one should create a reliable online presence in tandem with breadth and depth. The customers are tech-savvy, and most of them pursue quality products and services.
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