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Men's Grooming Products in the UAE - Research Paper Example

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The paper "Men's Grooming Products in the UAE" states that beauty and body grooming has typically been associated with females. However, in recent times. Smart talk and a sophisticated personality are no longer the only tools men would like to use to differentiate themselves from the crowd…
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Mens Grooming Products in the UAE
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? Developing a Marketing Plan - men’s grooming products in the UAE ID number: Number: Executive Summary For ages, beauty and body grooming has typically been associated with females. However, in recent times, males are increasingly opening up to the concept that beauty is skin-deep. Smart talk and a sophisticated personality are no longer the only tools men would like to use to differentiate themselves from the crowd. In a 2007 survey conducted by Nielsen on both the sexes in EMEA (Europe, Middle East and Africa), 74% of the people are into buying grooming products; 75% of the people feel that the social pressure to look good in their lives is greater than their parents’ generation; and 70% of the people belonging to the age group of 25 to 29 years stated that they buy grooming products not because of their partners, but the motivation to make themselves better comes from within themselves. UAE hold a population that is among the top earners and top spenders on grooming in the world. It has the largest cosmetics and grooming market among the Gulf countries and men’s grooming has transformed from a niche market to an unavoidable business segment in the past 10 years and holds further growth in the next 5 years. While the prime driver of men’s grooming market is shaving products, research suggests that skin care and hair care for men are expect to grow big in the near future. The male grooming products market of the UAE is currently a $56.16 million (208 million UAE Dirhams) business, which is expected to grow to $84 million by 2018. As per the official 2010 estimate, the UAE male population of 6,161,820 outnumbers the female population of 2,102,250 by almost 3:1. Among the male population, 92% consists of expatriates, mostly young people from emerging countries like India, Sri Lanka, Pakistan and Bangladesh, who today are no longer stereotyped as blue-collared workers. In fact, Asian expatriates make up 44.6% of the total number of entrepreneurs in the UAE and of late, the pay rate differences between Asian and western expatriates are reportedly diminishing. In fact, Asian expatriates contribute about 63% of total consumer expenditure of the UAE The lucrative men’s grooming market is currently dominated by large multinationals such as L’Oreal, Nivea and Unilever. However, the market has so far gone largely untapped as these organisations operate by importing and selling their products through regional branches. Evidently, even in its current status, there is a huge business potential in men’s grooming in UAE. This report discusses the marketing plan of Arome de l'Emir, a proposed business that wishes to provide world-class hair care, skin care, shaving kits and fragrance products primarily to the young Asian male expatriates of the UAE. The goal of Arome de l'Emir is to be a pioneer business in the men’s grooming and lifestyle products market that enjoys high customer loyalty and brand recognition and delivers high value. However, the report highlights the many advantages, disadvantages, challenges and threats that Arome de l'Emir would face on its path to achieve its goals. Table of Contents Executive Summary 2 Table of Contents 4 Business Strategy 5 Business Goals 5 Mission statement 6 Internal and External environments 6 Market needs and opportunities 9 Marketing Strategy 11 Segmentation / target market 11 Intended Positioning 12 Product Analysis 13 Place (distribution network) analysis 14 Integrated communications analysis 15 Pricing analysis 16 Ethical Issues and Social Responsibilities 16 Conclusion 17 References 18 Business Strategy Business Goals Arome de l'Emir is a proposed business that wishes to have presence in men’s grooming. It will provide world-class hair care, skin care, shaving kits and fragrance products for the young male expatriates and citizens of the United Arab Emirates. It strives to bank in on the huge untapped male health and beauty market and be a market leader in the UAE in this business. Arome de l'Emir is aimed primarily at UAE’s expatriates, who form the majority of the country’s population. The majority of the expatriates are Asians who hail from emerging countries like India and China, where beauty is given utmost importance and where style-conscious urban male youngsters are increasingly spending more on grooming products. Thus, a key focus of Arome de l'Emir is the Asian population in the UAE. The goal of Arome de l'Emir is to be a pioneer business in the men’s grooming and lifestyle products market that enjoys high customer loyalty and brand recognition and delivers high value. Since large multinationals like L’Oreal, Nivea and Unilever have presence in the market only through regional offices (L’Oreal, n.d.; Nivea, 2013; Unilever, 2013a; GLOBE360, 2000) Arome de l'Emir would like to put an offensive business strategy and offer a full line of high quality grooming products that would not only meet the needs of the style conscious males, but also make them feel good by just using its products. Arome de l'Emir wishes to be instantly recognisable as a brand that offers products that available at affordable prices but do not compromise on quality. Lastly, Arome de l'Emir would like to be a business that is driven by honesty, prioritises customer service and customer satisfaction, is sensitive towards the local business ethics and culture of the UAE and cares for the environment. Mission statement To offer the best quality, high performance grooming and lifestyle products developed specially for the urban male population of the UAE who feel perfect only if they look perfect and do not compromise on their style quotient amidst the daily chores of life. Arome de l'Emir is for the men who think that behind every successful man is lots of hard work and a fine personality. It wishes to complement the personality and add sophistication to the lifestyle of young urban men with its hair care, skin care, shaving and fragrance products that take care of them from the unforgiving desert heat and a busy life. The complete range of grooming and lifestyle products aim at making men feel as good at the end of the day as they did at the beginning. Internal and External environments To understand the potential challenges and risks associated with the business, it is extremely important to assess the internal and external environments. The components of the internal environment are individually assessed and discussed below Customers. At the outset, Arome de l'Emir seeks to serve the urban Asian male expatriates who have the maximum population among all segments of the male population of the UAE. Gradually, Arome de l'Emir would reach to all other segments of the urban population and then into the rural market. The challenge here would be to connect with the diverse Asian cultures at the same time. Arome de l'Emir aims to tackle this issue by promoting “Asianism” so that the entire target segment would connect not on a cultural level, but on a regional level. For promotional campaigns, Arome de l'Emir would feature models from all major Asian cultures in the campaigns, yet focus more on the problems faced by men and the solutions offered. Penetrating the target segment and justifying the expenditure would be relatively easier due to the Asian community’s readiness to use grooming products. Suppliers. Since the men’s grooming market in the UAE consists of products imported by cosmetics giants through their regional offices, a world-class vendors market is unavailable, even though local cosmetics contract manufacturers exist (Nazih Group, n.d.; Gulf Business, 2013; Emicos, n.d.). Thus, Arome de l'Emir faces the task of educating local cosmetics vendors to improve quality and standards, which would require investments. However, if multiple vendor partners are established, Arome de l'Emir would enjoy the bargaining power as there would be many suppliers, but one buyer. Competitors. Arome de l'Emir faces the risk of multinationals like L’Oreal, Nivea and Unilever who are already present in the market. This has to be tackled by executing high quality products, sleek promotions and a smart supply chain of international standards so that multinationals are not perceived to be better. Research and Development. As grooming products are imported in the UAE and not manufactured, research and development in the UAE is absent (L’Oreal, n.d.; Nivea, 2013; Unilever, 2013b). Significant investments would thus be required to procure experts from other nations and establish a research and development unit. Alternatively, a research facility outside the UAE like others may turn out to be cheaper. Human Resource. Since 92% of the UAE male population consists of expatriates, there is a well-established pool of talented personnel. However, challenge would be to manage a multilingual, multinational workforce. Training programs would also need to be in Arabic and English to have maximum coverage. Organisational Culture. Since the workforce would be from diverse backgrounds, it would be a challenge to build a common organisational culture based on the goals of the organisation along with local values and ethics as expatriates to some extent also follow traditional values of the country like the nationals. It would also be necessary to make sure racial discrimination does not develop in the organisation. Management style. The UAE follows a bureaucratic style of management, where the roles of managers and their subordinates are clearly divided. Thus, it will be a challenge to hire the right people as managers since their actions would direct the momentum of the business. Decentralisation would not work in the UAE (World Business Culture, 2013). The components of the external environment are individually assessed and discussed below Political. The political environment of the UAE is relatively stable, thanks to the monarchies of the 7 emirates. There are minimum chances of political turmoil, opposition to the government and organisations enjoy substantial freedom in doing business. The Federal Supreme Council consisting of the 7 Emirs that elects the Prime Minister, who, upon consultation with the Councul, elects the President and other ministers. Each of the constituent emirates also have their local governments. Due to the presence of emirs in the government, political influence plays a big part sometimes (Emirates.org, 2010; The Heritage Foundation, 2013a). Economic. The economy is considered “mostly free”, as the UAE has an economic freedom score of 71.1, which is the 28th best in the world, 3rd best in the Middle East and much higher than the average world score of 59.6. The overall environment is favourable with open-market policies of the government (The Heritage Foundation, 2013a; The Heritage Foundation, 2013b). Social. UAE has a multicultural population, out of which 83% were expatriates in 2009 (Sambidge, 2009). However, local values and customs are given top priority. Literacy rate in UAE is 90% and Arabic is the official language with English being widely in use. Friday and Saturday are considered as weekends Government businesses operate for 8 hours with a 30 minute to 1 hour lunch break. Private businesses operate for 11 hours with 3 to 4 hour breaks. Since 96% of the population is Muslim, pork and alcohol are taboos and short prayer breaks are expected 5 times a day (CENTRAL INTELLIGENCE AGENCY, n.d.). Men do not socialise coercively with women and formal attire covering the full body is deemed acceptable. It is impolite to address people by first names. Rather, honorific titles are used (US-UAE Business Council, 2013; Embassy of the United Arab Emirates, 2009). Technological. Being at the forefront of the fastest developing economies of Asia, the technological change in the UAE has been rapid and today modern technology is widely used throughout the country. Increasing focus is being put on waste management and recycling. Automation is increasingly being adopted, leading example being Dubai Metro (Roads and Transport Authority, 2013). However, in the grooming products market, research and development as well as manufacturing have traditionally been outsourced by multinationals. Also, since the Arab Spring of 2010, the government has imposed strict internet restrictions aimed at preventing protests and revolts (BBC, 2013). Market needs and opportunities For ages, beauty and body grooming has typically been associated with females only. However, in recent times, males are increasingly opening up to the concept that beauty is skin-deep. Smart talk and a sophisticated personality are no longer the only tools men would like to use to differentiate themselves from the crowd (Zahorsky, 2013). The primary drivers of the male grooming market are the urban population and the Indian film industry, which plays a huge part in transforming culture and lifestyle all over western Asia. In a 2007 survey conducted by Nielsen on both the sexes in EMEA (Europe, Middle East and Africa), 74% of the people are into buying grooming products; 75% of the people feel that the social pressure to look good in their lives is greater than their parents’ generation; and 70% of the people belonging to the age group of 25 to 29 years stated that they buy grooming products not because of their partners, but the motivation to make themselves better comes from within themselves (Neilsen, 2007). The study shows that the market has already matured enough to accept male grooming products, but is still deprived from what it needs. While the prime driver of men’s grooming market is shaving products, research suggests that skin care and hair care for men are expect to grow big in the near future. While currently the male grooming products market of the UAE is a $56.16 million (208 million UAE Dirhams) business, it is expected to grow to $84 million by 2018 (Reuters, 2013; Hamid, 2013). UAE hold a population that is among the top earners and top spenders on grooming in the world. It has the largest cosmetics and grooming market among the Gulf countries and men’s grooming has transformed from a niche market to an unavoidable business segment in the past 10 years and holds further growth in the next 5 years (TechSci Research, 2011). The lucrative market is currently dominated by large multinationals such as L’Oreal, Nivea and Unilever. However, the market has so far gone largely untapped as these organisations operate by importing and selling their products through regional branches. Evidently, even in its current status, there is a huge business potential in men’s grooming in UAE and Arome de l'Emir plans to enter the market with an aggressive strategy to tackle the multinational competitors. Marketing Strategy Segmentation / target market As per the official 2010 estimate, the UAE male population of 6,161,820 outnumbers the female population of 2,102,250 by almost 3:1. Among the male population, 92% consists of expatriates, mostly young people from emerging countries like India, Sri Lanka, Pakistan and Bangladesh, who today are no longer stereotyped as blue-collared workers. In fact, Asian expatriates make up 44.6% of the total number of entrepreneurs in the UAE and of late, the pay rate differences between Asian and western expatriates are reportedly diminishing (United Arab Emirates National Bureau Of Statistics, 2011; Tong, McCrohan and Erogul, 2012; Kapur, 2013). In fact, Asian expatriates contribute about 63% of total consumer expenditure of the UAE (Balakrishnan, 2009). The focus on the Asian expatriates is primarily because Asia has the largest population, the highest population growth rate and the largest proportion of expatriates to the UAE in the world, due to which the trends in Asia directly influence the trends in the UAE. There are several emerging economies in Asia where the younger citizens are earning more and spending more. They are more concerned about their style quotient than their predecessors and even the males do not shy away from seeking out grooming products. Moreover, throughout Asia, lighter, hairless skin has traditionally been associated with beauty and sophistication even though majority of the population has darker and hairy skin, possibly due to the climate and environment (Neilsen, 2007).. Thus, there is a huge market for male grooming products such as fairness creams, hair care products, shaving accessories and perfumes among the Asian population of UAE. The customers of Arome de l'Emir would thus be young Asian expatriate males who have the maximum population as well as the capability and willingness to spend on grooming products among all segments of the male population of the UAE. Intended Positioning The positioning strategy of Arome de l'Emir would be to create an image in the minds of young urban males of the UAE that it is a brand with a distinct Emirati identity, yet provides high quality grooming products of international standards to its consumers. It wishes to differentiate itself from competitors by being a brand that men of the UAE can better relate to. While the competitors import their products to UAE and sell them through regional outlets, besides airing commercials shot abroad with other customer segments in mind, Arome de l'Emir would stress on the fact that its range of men’s grooming products are all made for UAE in the UAE, because of which it understands the needs of UAE’s men better and is more capable of meeting these needs. It would also use Asian male models from all major Asian cultures so that the entire Asian population can connect to the brand on the same level. Although the brand would use the many faces of different Asian cultures, it would focus on common problems like the aspiration to have a fairer skin, protection from the extreme temperatures of UAE, etc. As opposed to other brands associating their products with sophistication, Arome de l'Emir would associate its products with style and substance. It would portray its products being for urban young males that have a busy life, the desire to look good at all times and demand for high quality and high performance products. Through its extensive product line and intense promotions, Arome de l'Emir would like to enter the minds of the consumers as a brand that offers end-to-end solutions in male grooming that is within everyone’s reach. The packaging of its products would be bold and stylish that would stand out from competitors even on crowded shelves. They would sport youthful colours and attractive containers that are easy to handle and use. Lastly, Arome de l'Emir would like to separate itself from competitors by being a socially, environmentally and ethically responsible organisation that manufactures its products in the UAE, generates employment in the society and works towards the betterment of the environment by using eco-friendly materials. Product Analysis Since multinational players are already present in the market and since the market is set to grow by 1.5 times in just 5 years, there is not much time to gradually grab a market share and grow big enough to fight the competitors. Together with a wide range of products, high visibility in the market and extensive promotional campaigns, Arome de l'Emir can quickly become a leading player in the market before the multinationals become more dominant. The products that Arome de l'Emir would start its business with are hair gel and hair cream; shaving kits; fairness cream, facial creams and scrubs; face wash and perfume and deodorants. There are a number of competitive advantages and disadvantages of launching these products in the market. While competitors focus on small sections of the grooming market by offering a handful of products, the primary advantage to Arome de l'Emir would be gaining the reach to a wider consumer base by providing complete grooming solutions that meet all their needs. Cost would be another advantage over competitors as it would manufacture its products locally instead of importing its products. However, since Arome de l'Emir would have to develop its own vendors eco-system, initial operating costs would be on the higher side, but once a vendors eco-system is created, operating costs would automatically come due to the bargaining power Arome de l'Emir would have by being the only UAE-based manufacturer. Another cost advantage can be derived if the products are sold in nearby Gulf countries since the products would be UAE-made and would benefit from the local trade agreements between the Gulf countries. Since multinationals only import and sell their products in the UAE, it means that their UAE divisions are part of a different regional operation and would not have separate funds for marketing and promotion in the UAE. Thus, being the first UAE-based serious entrant into the men’s grooming market, Arome de l'Emir would also have the first-mover’s advantage and through extensive marketing and promotional campaigns, it can create higher brand visibility among consumers. The main disadvantage is that being a new brand, Arome de l'Emir is going to fight against time-tested multinational giants like L’Oreal and Nivea and risks falling back without being able to make an impact. The multinationals not only have a presence in UAE earlier than Arome de l'Emir, but also have the ability to make huge investments into the market and later considering it a failed strategy without any major setback. Arome de l'Emir, on the other hand, with limited resources, bears huge risks in case of a failed strategy. Besides the risk of fighting industry giants, Arome de l'Emir also bears risks over the high initial investments that it would need to make in creating vendors eco-system and research and development centre. Lastly the high brand recognition the multinationals hold in the minds of the people as opposed to the unknown brand called Arome de l'Emir is another major disadvantage. Place (distribution network) analysis The primary competitive advantage Arome de l'Emir would have over competitors would be eliminating several layers of the distribution network by manufacturing and selling the products in the same country. It would have a long-term advantage of being a priority partner of the distribution network by involving components supplier, ancillary associates, logistics providers, warehouses and distribution offices. However, the chief threat that Arome de l'Emir would face would be the initial inhibitions of the retail and wholesale partners to stock products of a new brand among reputed competitors. Arome de l'Emir would tackle part of the problem by offering online availability of its products besides physical stores. Integrated communications analysis Integrated communications refers to engaging the various marketing mediums such as advertisements, sales promotions and public relations activities. For its marketing and promotional purposes, Arome de l'Emir would use online promotion, television advertisements, radio advertisements, newspaper advertisements and tie-up with a local men’s grooming magazine. The primary competitive advantage Arome de l'Emir would have would be the ability to connect better with the target customers through its local brand identity and promotional campaigns involving models from the various Asian cultures, which consist of its target market. Through its television, radio and newspaper promotions, it would also be able to reach a wider audience as most of the target customers would have the time to either watch the television, or listen to the radio on the move or read the newspapers due to their busy lives. Through the tie-up with a men’ grooming magazine, Arome de l'Emir would be able to associate men’s grooming in UAE exclusively with its own products. However, the chief threat that Arome de l'Emir would face would be the cost of using various marketing mediums at the same time. Obtaining exclusive rights to promote itself in a grooming magazine, or advertisement slots during prime time or on major pages of a newspaper would also be challenging. Lastly, choosing English as a medium of advertisement would not only alienate Arabic-speaking potential customers, but also limit the options of television channels and newspapers as UAE media content is broadcasted majorly in Arabic. Pricing analysis Arome de l'Emir would launch its products at lower prices compared to the multinational competitors. However, since initial set-up costs would be high, it would be challenging to absorb the impact instead of passing it on to the consumers. In the long run, as operational costs go down and Arome de l'Emir becomes a recognisable brand among consumers, lower prices compared to competitors would actually be profitable as well as an advantage due to local manufacturing and sales. Ethical Issues and Social Responsibilities The ethical issues that all organisations face are honest business practices, financial transparency, high commitment to customers, efficient management of multicultural workforce, preventing racism, maintaining consistent quality of products and complying with all legal regulations. Social responsibilities are utmost priority in most of the world today, and the UAE is not an exception. Corporate Social Responsibility (CSR) not only helps an organisation to show its commitment towards taking care of the society, but also serves as a great tool to gain customer satisfaction. Social responsibility is going beyond the usual business operations of an organisation and taking initiatives that benefit the society somehow or the other, such as conservation of the environment, helping the poor financially promoting local culture and caring for the senior citizens of the society. Through its constant commitment to value the people and the environment of the UAE, Arome de l'Emir wants to work through honest business practices, foster a work culture perfectly complementing the customs and ethics of the UAE and emerge as a well-revered business with a distinct local Arab identity that people of the UAE can relate to. It also wishes to serve the environment by using eco-friendly materials in its products and recycled components in its plants. Reducing environmental pollution and carbon footprint is also a top agenda for Arome de l'Emir. It wishes to achieve these by strictly complying with national and international environment-friendly initiatives. However, it would be a challenge for Arome de l'Emir to maintain fair treatment of employees amidst a bureaucratic management system and to bring its vendors on the same level of social and environmental commitment as itself. Conclusion The market for men’s grooming products in the UAE holds tremendous potential for now as well as for the future and has gone largely untapped so far. However, with multinational players realising the potential it holds, it would require an aggressive business strategy for a new venture to quickly gain market share and the trust of consumers. Without an immediate and prompt action plan, a new organisation in this market would barely exist until the multinationals start showing serious interest. However, in order to be aggressive, the organisation must have substantial financial backing, which most new organisations lack. Thus, considering the constraints on its financial resources and the little time left to make an impact, Arome de l'Emir would have to strike a balance between its objectives and its commitments. References Balakrishnan, M.S. (2009). Approaches to enter emerging markets: A UAE case study. Retrieved from http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1030&context=dubaipapers. BBC. (2013). United Arab Emirates profile. Retrieved from http://www.bbc.co.uk/news/world-middle-east-14703998. CENTRAL INTELLIGENCE AGENCY. (No Date). MIDDLE EAST :: UNITED ARAB EMIRATES. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html. Embassy of the United Arab Emirates. (2009). General Information and Cultural Norms. Retrieved from http://www.uae-embassy.org/business-trade/general-cultural-norms. Emicos. (No Date). ABOUT US. 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Population Estimates 2006-2010. Retrieved from http://www.uaestatistics.gov.ae/ReportPDF/Population%20Estimates%202006%20-%202010.pdf. US-UAE Business Council. (2013). Business Etiquette in the U.A.E. Retrieved from http://usuaebusiness.org/about-the-uae/business-etiquette-in-the-uae/. World Business Culture. (2013). Arab Business Structures. Retrieved from http://www.worldbusinessculture.com/Arab-Business-Structures.html. Zahorsky D. (2013). Business Opportunity: Male Insecurity Builds Men's Grooming Market. Retrieved from http://sbinformation.about.com/od/startingabusiness/a/bizopgrooming.htm. Read More
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Market SituationThe market of the hotel and hospitality industry in the uae is expected to improve by more than 10% in three years to come (Jones par 1).... Openings by chained hoteliers and local players, as well as, internationally respected brands have been witnessed in the uae (Euromonitor International Par 2).... Environmental ForcesHarsh climatic conditions are prevalent in the uae.... As much as, people tend to emulate other cultures, Islam is the predominant religion and Arabic is the national language in the uae (International Markets Bureau)....
11 Pages (2750 words) Essay

Internationalisation Efforts Lead to Increased Market Share

Today, the firm maintains retail stores in the United Arab Emirates (uae), Hong Kong, Ireland and Saudi Arabia, allowing the firm to establish the Company X brand name in global luxury consumer markets.... Company X, from an internal perspective, is considered to be on the UK's foremost retailers of upscale clothing and associated home merchandise, with the majority of their products targeted at the upscale, high-end consumer.... In order to maintain this high-end image, the firm directs none of its marketing efforts at the middle-class or working-class consumer as purchasing lower-end merchandise will erode the firm's reputation for providing luxury lifestyle products....
12 Pages (3000 words) Essay

The Islamic Banking in the United Arab Emirates

ain bodyBanking is one of the fastest growing industries in the uae, especially in Dubai.... The main reason for this is that the uae is a destination for people from all over the world.... The major features of the uae Banking sector are as follows.... his essay deals with the Islamic Banking sector in the United Arab Emirates (uae).... uae is one of the fastest growing financial capitals in the world.... uae has emerged as a financial hub in the world within a very limited time....
11 Pages (2750 words) Term Paper
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