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Posts Tagged ‘Saudi consumer behavior’

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One or two days to the Eid; hope you all have a happy holiday. And now be honest, how many times have you been out shopping for Eid?

There is something I am not quite getting about the retail markets in Saudi. Most of the countries around the world have organized sales seasons. You most probably heard about the US’s Black Friday and such. The concept behind such seasons is strictly simple; as holidays are getting nearer and people wants new stuff to own and to gift, prices are slashed to attract customers and drive sales. Simple, right!

Now when it comes to Saudi, it is a bit strange. Sales are coming on and off all the year long without prior notice. That’s till shopping season really starts which is mainly before Eid Al Fiter. Once started, prices hike almost exponentially!!! (if you want another point of view on the sales and shopping experience in Saudi, Jeddah in particular,  you may want to check out this audio blog from That Jeddah Podcast.)

Not only that, there is another tactics usually used by most retailers in the market. Just before Ramadan and during its first days, the flashy signs of ‘sales up to 50%, 60%, 70%, etc’ start to pop up everywhere. Now, if you ever shopped during this period, you will know that it is a mess. You cannot find all the things you want. It’s old merchandise, few pieces, and out of stock sizes! And just few days before Eid, all the new lines of merchandise are offered and prices more than doubled.

The strange thing is that customers are adapting and getting along with these tactics or how can you explain the crowded malls just two days before Eid!!??

So when most countries choose sales seasons based on holidays, retailers around here choose to charge more … and more!

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[picapp align=”left” wrap=”true” link=”term=grocery+shopping&iid=5210525″ src=”http://view1.picapp.com/pictures.photo/image/5210525/products-shelves/products-shelves.jpg?size=500&imageId=5210525″ width=”234″ height=”311″ /]Few days to Ramadan and the consumerism carnival has already started. Consumers, retailers, and the Ministry of Commerce and its monitoring bodies are the usual triangle sides of the price hiking struggle and debate; who did what to whom!!

One of the strangest analyses that popped out this year came from ‘an official’ at Jeddah Chamber of Commerce and Industry (JCCI) according to Arab News (here) The manager of the Corporate Social Responsibility at the JCCI is saying that the consumers themselves are the problem of any prices hikes because, those bad consumers, have brand loyalty!!!! He is also adding that there is no need for any prices monitoring systems, and assures us all that the Saudi market is one of the most open markets in the world, even more open than the West!!

I am not sure how Mr. Official understands the concepts of brand loyalty, consumer protection, and open markets but here are some comments:

  • When consumers trust a brand and develop some kind of attachment to it, then it should be their own choice to continue with it or not if the brand owner decided to increase the price for any reasons (e.g. manufacturing costs, new features, raw materials cost, etc). But when the prices increase not because of the brand owner but because of other factors in the local supply or distribution chains, then whose responsibility is this? And even more, what if the brand owner is a local who takes advantages of different seasons to increase prices without any reasonable justifications, whose responsibility is this?
  • There are no contradictions whatsoever between free markets and consumer protection activities. Not only that, I can take it a step further and argue that, consumer protection groups are major signs of a truly free market!
  • Prices monitoring is one of many responsibilities of consumer protection groups. Quality checks, fighting monopolies, be the channel of communication between the customers and other governmental bodies are all examples of such activities. Again, how all these activities contradicts free and open markets??

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For those not familiar with Saudi Arabia; It is unfortunate to say YES, Saudis are still debating the idea of allowing women to drive!

Anyway, this is not what this post is about, but I felt it was a mandatory introduction!

Now, let’s assume that the decision popped up and women are suddenly allowed to drive. From business and marketing points of view, what kind of change or new opportunities that could come up as a result of the new situation? Here are some points I thought of:

  • Automobiles Selling Tactics: Car dealers should really change, or at least introduce new selling tactics and marketing campaigns targeting women. Many researchers have argued that the way men and women approach the final purchasing decision is remarkably different. For that, ways to target segments divided based on gender should be different as well. And believe it or not, such studies have already started to take place in Saudi Arabia once the driving debate started to heat up few years ago, at least this is what a marketing manager in one of a prominent Saudi car dealer told me.
  • Car Accessories Shops: Women, at least of a younger age, will be definitely looking to have distinguished cars; exactly like their counterparts males. So I won’t be surprised to see car accessories shops opening whole sections specifically for ladies. Or even better, complete new accessories shops for ladies only, operated by ladies only!
  • Pimp-her-Ride: This could be related to the pervious point, but with those who have some extra cash to spoil themselves, and their cars!!
  • Segregated Car Service: Whether we are talking mechanic shops, car cleaning, oil change, etc, There is a huge opportunity to create women-only shops. If someone would argue here that allowing women to drive will ease the segregation between men and women we are currently seeing in the society, I would respond by saying yes but still. At least at the beginning, such women-only shops could flourish because it would give women a sense of freedom freedom they are enjoying in their closed communities. You know, taking off their Abbayas and enjoying chit-chat with friends in a closed area while their car is serviced. That will definitely be much better than waiting in line in most-of-the-time dirty oil change shops! So it could turn out to be a good idea after all! Even further, the existence of such shops could be a factor of helping some conservative families to make the decision of allowing their wives and daughters to drive. They will be dealing with women most of the time, right!

It does not matter how strange, funny, or shocking, these ideas might sound to some of you, because such a decision will definitely takes its toll on the society. New challenges, new obstacles, and new opportunities usually come out as results of change. Taking all that and blend it with the Saudi market status and the Saudi consumer behavior, I am sure interesting outcomes will be generated.

what do you think?

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Today I am bringing you a guest post from my friend Omar Bamahdi in which he will be talking to us about the Blackberry … or what he likes to call, the Crackberry!! Mr. Omar, to say the least, is a multitalented gentleman. He does not have a blog yet; but let’s hope he will start one soon. Along with opening a blog wish, I really hope he will go back and finish his PhD degree that he was about to finish few years ago … I told you he is multitalented!

As we are continuing to monitor the power game between RIM (the blackberry manufacturer) and the Saudi CITC in regulating the service; the consumer behavior toward these addictive devices should not be out of the picture. After reading this post, many questions descended to my mind and they might interest you as well. Are these devices really taking us out of the reality and throwing us in the virtual world? Should we be concerned about that? Who should take an action against the addictive nature of such devices? Is it part of the companies’ social responsibility to educate its users about the potential addictive nature of such devices? And … what is the reason that makes a 7 years old kid asks for a blackberry? … Read Omar post …

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[picapp align=”left” wrap=”true” link=”term=Blackberry+phone&iid=3469769″ src=”6/3/3/b/12.jpg?adImageId=12728431&imageId=3469769″ width=”234″ height=”355″ /]Ever had your head in a sack for the past few years, then all the sudden you realize how the next generations are abusing or misusing, literally speaking, almost any new technology!  As stunning as it may sound, Saudi youngsters are getting exposed to many technologies supposedly without any parental or whatsoever kind of supervision.

Forget about old days fooling around with Bluetooth technology, exchanging photos, broadcasting phone numbers, etc…  Two weeks ago, I had to visit the clinic with my family, and once I entered the waiting room, almost five youngsters were posing in concentration with their head glued into the screen and fingers searching for the little buttons of their CrackBerry.  It is true without exaggeration; for God’s sake they were on crack with a lil berry on their palm!  They didn’t even notice that someone has entered the waiting room.

Nowadays, this mobile device, so-called BlackBerry, is a must-buy tool that all youngsters MUST have!  I can see them almost everywhere in the malls, cars, coffee shops, hospitals, grocery stores; not to mention my sister’s house keeper had one, too! Moreover and like is it not enough to pay 1200 SAR for this device, devices with VIP BB numbers are sold for 2000 SAR plus its original prices.  I am sadden with a pity toward our society for having such ridiculous mentality.

It is a triggering phenomenon, believe it or not even my seven years old daughter asked me once … to buy her a blackberry when she pass second grade!  Such hype must be discussed in our schools to enlighten the youngsters, specially, children about the necessity of this device and its original use for business needs rather than a toy for joy.

What do you think? Take a second to express your point of view and how should we educate our children on dealing with new technologies productively!

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[picapp align=”right” wrap=”true” link=”term=court+room&iid=265118″ src=”0261/b960e01d-7cca-4160-a309-31efc1681f53.jpg?adImageId=12026066&imageId=265118″ width=”234″ height=”331″ /]A Saudi businessman is suing Saudi Airlines after purchasing an ill-equipped aircraft (Arabnews). I thought at first that he was suing the Airlines because of a missed important meeting or over a lost investment opportunity caused by their well known off-time scheduling. But hey, everyone has his own reasons!!

The point is that this piece of news made me wonder about the whole idea of suing service companies; will it make any difference in Saudi? It is not unusual in Saudi Arabia to be faced by poor services provided by a number of major players in the market. Saudi Airlines just happens to be leading the list!!

Although I do not have hard numbers to support my claim, I can comfortably argue that Saudi consumers in regard to poor business performances have always been known to be … what should I say … loud-but-with-no-action kind of people. That means they could initiate a scene and get loud whenever faced by a poor service, but that’s it!!! No further steps.

Now, let me rephrase my question above; Do you think companies’ fear of being sued by customers who understand their rights would eventually push them to provide high quality services? So no Airlines would manipulate its schedules because they were poor planners since the start by having central reservation servers in one city with no back ups elsewhere? No telecom company will fool you with you nice advertisements about the huge X Mbps Internet connectivity you could get upon subscription and when you do, you find out that you can only get 20% of that because of technical reasons! No contractors will leave the street in front of your house full of holes or improperly asphalted and force you to take your car to mechanics every 15 days! No hospital would prefer low waged so called doctors without much of background check ups, and just out of the sudden you would read about one of them causing a medical mistake related death?

Just a note before leaving you here; I said in my question above “sued by customers who understand their rights,” so may be the right question should be: “Do Saudi customers understand their rights?”

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If someone asks me what is the business project that you would like to see in Saudi Arabia before you die! Although I have some projects in mind, I would say that I would like to see and use a metro or underground system in our cities! (If, by any chance, there is someone reading this post from London, Paris, or even Cairo, please stop laughing :()

Today, it has been announced that the constructions of ‘Riyadh metro’ has just begun. A 36 stations light transit railway project is on the way as reported by Arab News. Although some specific details about the project have been provided in this press release (e.g. distances between stations, stations number on each route, passenger capacity, etc …), there is no mentioning whatsoever about the project time plan (no comment!!)

Anyway, if this project is really coming (God only knows when??) I would not really brag about it a lot because it is coming too, and I mean tooooooo, late. Our main cities (Jeddah and Riyadh in particular) are suffocating for many years now under huge car traffic and lack of organized public transportation in its simplest forms (bus system, or even controlled taxi cars.) I always wonder how is it possible for our cities to reach this miserable level of public transportation given that they have been constructed, as modren cities, in the last 40 years or so.  Just put in your mind that the first underground system has been built in London in 1863 (yes, you read right, it is 1863!!)

Moreover, I always find it intriguing to the mind to imagine what will happen if we finally got ourselves a metro? How Saudis will react to this entirely new concept in their lives (again, London, Paris, and Cairo people; stop laughing once and for all!!) Will Saudis abandon their cars in exchange for public transportation system?  I know a lot of Saudis who do not use underground systems when visiting big cities in Europe or America and they still prefer to rent a car or use expensive taxies instead.

I believe this issue would be a very interesting marketing case to study. We, Saudis, tend to developed a certain mix of specialties about the way we look at our society and the way we evaluate new products and services entering our country. We have a mental association between public transportation and low class workers. We do not pay much respect to time in our daily lives, so how are we going to deal with a system entirely based on timing and accuracy. The car in Saudi Arabia is not only a mean of transportation, it is more of a mirror to our social ranking (this is a global view to cars but it is certainly more emphasized in Saudi.) In addition to that, the social barriers will start to come into play; shall we have separate trains for women? May be separate stations? If not, how are we going to sit in these trains? You are not suggesting my daughter will be standing next to a strange teenager in there now, are you? What about our VIPs, can we have VIP metro trains as well? Will the trains be operating during the pray time?

Now all these are normal and expected barriers; normal in the sense that the cultural background of a market is always the most difficult barrier to address in marketing. The solution will lay in the strategy used by the government to promote such public transportation project and how it will brand it. Anyway, this could be a future post when we really have such a system.

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If you are living in Saudi, you must have heard people talking about their BB’s, or you must have already faced the question ‘do you have a BB?’

BB is definitely the talk of the country at the moment … so welcome to the Blackberry hype!

The blackberry has always been perceived as a business kind of a device. Something beyond receiving calls, sending SMS’s, and checking emails. It is a BUSINESS smart phone with all the images coming to mind with that (usually executives in expensive suits riding in the backseats of Mercedes or BMWs checking their calendars for the next meeting!!). This situation is certainly shifting and youngsters are taking over the stage with more fun and dynamics backgrounds.

For the brand, this was a well planned shift. Research in Motion Limited (RIM), the Canadian manufacturer of Blackberry, chose to include the youth segment in its targeting strategies. That was the reason behind the rolling out of different Blackberry models with more slim designs, enhanced music and video capabilities, and friendlier application to Internet browsing and social networking. This well crafted mixture of market penetration and product development has proven to be successful, and I am not only talking about the Saudi market but even back there in US (according to this report, Blackberry topped sales in the smart phone market in the 1st Q of 2009 beating even the iconic iPhone)

Now Back to Saudi, the BB is everywhere. In coffee shops, malls, and even in offices you would notice young gentlemen and ladies totally absorbed in their BB’s tiny screens typing messages and browsing the net. 

The addictive habits of being always online or hooked up on messenger all the time or checking emails in the bathroom (!) are all becoming a reality for a lot of Saudis. Moreover, as Apple products’ believers have always been considered to form some kind of a cult, the users of BB are also developing their own cult named crackberries (You may want to read this Arab News article).

Such stories give a lot of indications about the nature of the Saudi consumer market. It seems that developing a fashion in here is not that hard (which might be interpreted as a good thing by many marketers). Nevertheless, these fashions tend to be very short cycled. That implies an unstable market where brands cannot build relations with customers; in other words, brands cannot nurture a long term loyal customers (although some customers develop addictive behavior using a BB or iPhone as just mentioned above, switching from one to another does not seem to be a problem for a lot of users; this could emphasis that the addiction is more on the idea of being connected rather than on the brand or the device itself)  

Furthermore, It is very obvious that we have a considerable disposable income (these smart phones are not cheap!). And from the BB popularity among high school and college students, it seems that families are willing to satisfy their boy/daughter starvation to be fashionable (I can think of many marketing campaigns based on this point alone!!).

So … do you have a BB??

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