Beruflich Dokumente
Kultur Dokumente
Razzouk, California State University, San Bernardino Victoria Seitz, California State University, San Bernardino Rashed Abdulaziz Al-Shamsi, California State University, San Bernardino
ABSTRACT Psychographic instruments and the Vals System developed in the US have been used extensively in the United States and Western Europe. However, their use in other countries and cultures has not been known as tools for developing marketing communications programs, particularly in the Middle East. Hence, the purpose of the study was to investigate the use of market segmentation in the United Arab Emirates. Interviews were conducted among 85 business executives in the U.A.E. Findings revealed that segmentation is used extensively and that it relies heavily on market research to be successful. INTRODUCTION
The growing widespread use of the Internet has made the world a smaller place. Globalization and standardization have gained ground in the past decade as more appropriate strategies for multinationals; however, many countries are still inhabited by culturally distinct peoples with different languages, ideologies and value systems. These differences affect marketing practices to the extent that, in the case of advertising, adaptation rather than globalization strategies are more often considered by multinational corporations. Traditionally, insufficient attention to cultural differences has resulted in such marketing blunders such as the failure of the Nova in Mexico, or the slogan Nothing sucks like an Electrolux in the American market. Undifferentiated marketing communication strategies have often resulted in failure. In the United States and much of Western Europe the use of segmentation tools, such as psychographics and VALS, has been extensive. Segmentation provides marketers focus for subsequent strategies and tactics. Hence, the purpose of the study was to determine whether businesses in the United Arab Emirates use psychographics and VALS in market segmentation, and to what extent. Further, the study sought to determine how Islamic traditions influence business practices and consumers purchasing behavior. Given that the United Arab Emirates (UAE) has become the marketing center of the Middle East, the research focused on this country.
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2. 3.
More specifically, psychographics is a quantitative research procedure that is indicated when demographic, socio-economic and user/nonuser analyses are not sufficient to explain and predict consumer behavior, and Most specifically, psychographics seeks to describe the human characteristics of consumers that may have bearing on their response to products, packaging, advertising, and public relations efforts. Such variables may span a spectrum from self-concept and lifestyle to attitudes, interests and opinions, as well as perceptions of product attributes.
VALS and VALS2, developed by SRI International, based their profiles on the foundation that humans strive to improve themselves during their lifetime, hence influencing their values, lifestyles and the decisions they make everyday. The approach was holistic, drawing on insights from a number of perspectives and different types of data to develop a comprehensive framework of characterizing the lives of the American people. The VALS typology is hierarchical and defines four basic categories of consumer values and lifestyles with nine distinct segments (Mitchel, 1983; Reynolds and Martin, 1974). There are three premises that the segments are based on 1) Need Driven, 2) Inner-Direct, and 3) Outer-Directed. Some of the segments identified by VALS include Sustainers, Achievers, I-am-too, Experimental and Societal-Consciousness. VALS2 simplifies the profiling process and bases eight distinct segments on three basic profiles: 1) ActionOriented, 2) Principle-Oriented, and 3) Status-Oriented. Companies that have employed VALS and VALS2 have included Timex, Dr. Pepper, and Mercedes-Benz.
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Institute, 1971). This all fits in with Joseph Schumpeters theme of the perennial gale of destruction as a motive for change for its own sake and the basis for effective economic progress and growth (Schumpeter, 1934). While the Quran acknowledges social stratification, numerous passages in the Quran and Al Hadith warn against such practices as cheating, swindling, deception, beguilement, and monopoly. These practices are prohibited in Islam because they have the potential to disadvantage certain groups and thus inflict harm on the community at large. Prophetic guidance on these issues has a cumulative effect of maintaining balance, distributive justice and equality of opportunities (Hafizah, 2001). While these issues may impact pricing, and even distribution strategies, they do not seem to impact marketing communication and segmentation strategies. The primary difference between capitalism and an Islamic economy is that in secular capitalism, profit motives or private ownership are given unbridled power to make economic decisions. Liberty is not controlled by any divine injunctions. However, from the Islamic perspective the adversity emanating from this attitude can never cease unless humanity submits to a divine authority and obeys it commands by accepting them as absolute truth (Ali, 1983). The essence of market segmentation is seen as a positive tool in the Islamic economic system and in the Arab tribal custom, where Muslim jurists generally accept the concept of different needs for different people. By nature, people are divided according to social and economic status. This does not contradict Islam rules. In fact, providing for the needs and comforts of all people and groups/segments is in harmony with Islamic religious principles (Hafizah, 2001). As a complete religion, the teachings of Islam encompass the essence of peace, economic well-being and development of the individual Muslim as part of a family, an ethnic/social group, and an entire nation. Thus, marketers must be able to categorize potential consumers according to definable characteristics and to tailor the products/services to the needs of each category. Notwithstanding, it is important to note that the role and value of the individual consumer in an Islamic culture are very different from those in the Western world. The main social and economic unit in the Middle East has been, and still is, the family, as a consumption unit, property owner, employment exchange, social security, and financial broker, compared to the depersonalization and individualization of the Western system. Thus, Islam may encourage the use of socio-economic factors such as income and family social status as segmentation tools but, one may argue that Life-style segmentation or Psychographics may not be relevant given the uncompromising Islamic philosophy regarding the pattern of life as a whole (Abdeen and Shook, 1984). Gender and Ethnicity are two obvious traditional forms of segmentation in Islamic markets. According to Patai, (1973), The traditional Arab world is divided into two hemispheres, that of the men and that of the women, which meet only in the privacy of the home, p.192. Therefore, it is only natural to expect that businesses utilize different marketing communication vehicles to reach women, and potentially different marketing and sales strategies all together. Ethnicity is another logical segmentation tool in the Islamic world. In the United Arab Emirates as in many of the Islamic Arab states, a large number of non-nationals live in these countries, often as servants or hired hands. Of the 2.4 Million residents of the UAE, only 20% are nationals, while the remaining 80% are expatriates. Ethnically, the UAE market is indeed a market of two segments: The minority of nationals who consume over Eighty percent of the goods and services, and the majority of expatriates who save their money to send to their families, but consume temporary and sustaining products and services while at the UAE. Given that the UAE is open to marketing and views segmentation as a positive contributor to the benefit of its inhabitants, it is important to determine 1) whether psychographic and VALS segmentation are used, and to what extent and, 2) to determine if western characteristics in these tools are applicable to consumer purchasing behavior in this country.
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METHODOLOGY
To assess how businesses in the UAE achieve their market segmentation goals, a sample of One Hundred Fifty (N= 150) Marketing Managers of businesses in the UAE were surveyed. Participants were e-mailed a short selfadministered questionnaire. Follow up telephone interviews were then conducted to enhance the response rate. A total of 85 completed responses were obtained.
RESULTS
Eighty percent of participants reported living in Dubai, the remaining lived in Abu Dhabi and Fujairah. Sixty-one percent of the respondents indicated operating away from their company CEOs, which seems to slow down the decision making process. All managers were married with an average income of $85,000 dollars. Seventy-nine percent were between the ages of 40-45 while the remaining 21% reported being below 30 years of age. Regarding the trends in consumer markets in the UAE, most participants (87%) indicated trends similar to the US. Particularly in business-to-consumer companies, managers indicated that consumers are becoming increasingly demanding and a lot more westernized. Moreover, the Internet and the growing manifestations of global marketing communication in the UAE, were noted by 74% of the respondents as having exposed people to Western products and services and broadened the demand for such imports. . As to the market segmentation tools used most frequently, the majority (80%) managers were not specific to which tools were used most often but most of them (67%) indicated using extensive market research to identify market segments and define target markets. EthnicityNationals vs. expatriates (63%), Gender (57%), Age (55%), were reported being used as basis for consumer segmentation. One segmentation tool that was identified by 43% of the respondents was the Burks-Sinclair formula for establishing relative proportions of the different nationalities/demographics groups for the purpose of sampling and post weighting. Other tools such as family life cycle, purchase frequency, and patronization behavior were noted much less frequently. Forty percent of the respondents thoroughly explained the role of segmentation in development of their marketing communication strategies and defined three steps. First, segmentation variables were identified, markets were segmented and profiles were developed for each segment. Then consumers were categorized according to different characteristics, such as purchase habits, ethnicity, and locality. The second step involved the evaluation of each segment according to attractiveness to company resources and assets, resulting in selection of target segments. And finally, the last step, involved identifying and selecting possible communication themes and promotional concepts for each target segment - essentially, positioning the product, service or brand appropriately for the targeted segment and independent from competitors.
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Obvious from the research is that westernized attributes used in the United States and Western Europe are being integrated into market segmentation research due to the commonalities shared by consumers in all these countries. However, a main difference as reflected in the steps identified in the participants approaches to segmentation is that ethnicity is a major segmentation characteristic in the consumer market. While no significant use of psychographics and VALS analysis was apparent in this research, a number of respondents indicated using patronizing behavior or purchase frequency as segmentation tools. Given the growing implementation of CRM software in the Arab Gulf region, one would expect a greater utilization of consumer data banks. Purchase frequency and patronization behavior could then be combined with other segmentation criteria such as ethnicity and gender to identify relevant consumer typologies. In business-to-consumer companies, marketing managers might first evaluate current customers buying habits, such as how recent were their last purchases, how often they buy and how much they spend on average. Direct marketers refer to this as the RFM model, standing for Recency, Frequency and Monetary model. Other factors that marketers could examine are what they bought and if there was a promotion that prompted the purchase. From there, marketers can conduct research on these various segments and complete their customer profile with psychographic and values data. This will further assist them in tailoring their message to meet the objectives of the communications plan and identify with the target market. Moreover, marketers in the UAE can use tested instruments developed in the west and adapt them for reliability and validity of their research. After Wells developed the AIO instrument, many researchers developed their own, resulting in low reliability and validity scores. It was apparent from the participants responses that in the UAE, where Islam is the dominant religion, that market segmentation is not deemed a negative business practice. Hence, marketers might consider using tested instruments modified for research findings that truly reflect the market segments that exist.
FUTURE RESEARCH
This study was limited to the 85 managers that participated. Future research should conduct similar studies with larger samples and in other Middle Eastern countries. Although the UAE is an Islam nation, the laws that govern provide an open and free society; however, in other countries, such as Saudi Arabia and Qatar, this is not so. Moreover, research needs to be conducted on consumers regarding their purchase behavior. As Maslow (1954) noted, all people have basic desires, needs and wants. This caveat was also expressed by the marketing managers in the study. Hence, research of this nature would aid marketers in developing reliable market segments and effective communication plans to meet marketing objectives.
REFERENCES
Abdeen, M. Adnan, and Dale N. Shook (1984) The Saudi Financial System, New York, John Wiley & Sons. Ali, S. (1983). Islam Economy & State, Cairo: Dar Alama Inc. Demby, D. (1974), Integrated Marketing Communications. Chicago: NTC Business Books. Hafizah, S. (2001). The World Of Islamic Finance, Investment, Information: Monopoly In The Eyes Of Islam from the World Wide Web: http://www. Islamiq.com Maslow, D (1954), Developing and Testing a Model of Psychographic Market Segmentation. New York: acMillan, 184-94. Middle East Institute ( 1971) , People, Power and Political Systems: Prospects in the Middle East. Washington DC., 30-43. Mitchel, A. (1983), The Nine American Lifestyles, New York: MacMillan. Reynolds, T. and Martin, B. (1974). On Comparing Alternative Segmentation Schemes: The List of Values (LOV) and Values and Life Styles (VALS). Journal of Consumer Research, 17, 105-109. Schumpeter, Joseph A. ( 1934) The Theory of Economic Development, Cambridge, Harvard University Press. Wells & Tiget (1971), Changing Lifestyles ad Psychographics The Challenges Current Facing Research. London: International Business Communication, Ltd, 10-11.
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