Academy of Marketing Conference 2013

The title of the paper:

The Fashion Marketing Scene in Saudi Arabia: Standardisation vs. Adaptation

By

University of Benghazi

Nottingham Trent UniversityUniversity of King Abdulaziz

Izzudin Busnaina

 Mrs. Liz Watson Mrs Baraah Rawas

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Outlines

• Marketing in global arena … why go global?

• Classification of Fashion Markets

• The fastest emerging market … the Arab World!

• International marketing decisions … Standardize or Adapt?

• Research context and methods

• Results; marketers’ point of view

• Results; Arab customers’ point of view

• Conclusions and future research

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Marketing across the World

‘Go Global!’ … Why?

Low costs and economies of scale

(Ryans et al., 2003)

The rich world will continue to suffer from anaemic growth; the emerging world, by contrast, is witnessing a remarkable growth level (Wooldridge, 2010)

No way to play safe even in domestic markets (Kotler, 2008)

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Fashion Marketing

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Fashion Marketing

International fashion markets can be classified into three types (Grail Research, 2009)

Global Fashion Hubs

Growing Fashion Markets

Emerging Fashion Markets

The Fastest … more than 15% growth annually (GAN, 2010)

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The Arab World … ‘Emerging Markets’

22 Countries358,000,000 PeopleMajority are MuslimsArabic (Official Language)

GDP > $2.3 trillion (2011)World’s eighth-largest economyPer Capita Income > $6,700More ½ the population < 25 years

(Mahajan, 2013; Harvard Business Review)

Challenges

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Research Area … Saudi Arabia?

• The 2nd largest Arab countries• Middle Class 65%• Real Growth Rate 6% (2012 est.) • GDP – per capita $25,700 (2012 est.)

(World Bank’s World Development Indicators database, and CIA’s The World Factbook, 2013)

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Research Area … Saudi Arabia?

• Consumers spend > 10% in global fashion• Younger generation has become Westernized

• Highly global fashion brand conscious• Attractive fashion market• Contextual differences between its local regions

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Standardize or Adapt?The Globalization of Markets, 1983

In Homogeneous Markets

In Heterogeneous Markets

Operating Efficiencies and Economies of Scale

Better Satisfy Local Circumstances

Marketing across the World

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Fashion Marketing Decisions

What’s the effect of brand’s image in Fashion Marketing?

‘How to brand a product?’ is a crucial question in marketing (Kotler, 2003)

The brand image is a mirror reflection of the brand personality or product (AMA, 2012)

Purchase intention & choice A determinant variable in advertising designing A major component of brand identity

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BrandPersonality

BrandPersonality B

Perceived Brand Image

Perceived Brand Image

Perceived Brand Image

Perceived Brand Image

A

(Adapted from: Mrugank and Thakor, 1996; Jain, 1989; Kotler, 2003)

Marketing Programme

Degree ofStandardisation/

Adaptation

Degree ofStandardisation/

Adaptation

Foreign Markets

Home Markets

Consumers- Attitudes- Perception

Consumers- Attitudes- Perception

Consumers- Attitudes- Perception

Consumers- Attitudes- Perception

Influencing FactorsInfluencing Factors

Research Framework• The factors of marketing programme decision (i.e., the degree of standardisation/adaptation)

• A brand personality might produce 2 different brand images

• Market influencing factors (i.e., mode-of-entry and competition)

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Research Questions & Aims

Using Saudi Arabia as a proxy of ME fashion markets, we address two questions;

1. To what degree do global fashion companies actually adapt/standardise their brands offerings for Saudi Arabia?

Determine the standardisation/adaptation degree of the fashion global brands offerings in Saudi Arabia.

Explore how Arab customers perceive the fashion global brands’ personality and image.

2. Do Arab consumers perceive the global fashion brands in Arabic countries differently than in brands’ home markets?

Research Objectives

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Research Methods & MeasuresUsing 3 fashion products categories …

Clothing Accessories Jewelry

Structured interviews with 4 brands’ agents in Saudi Arabia

To establish how they had conceptualised the notion of adaptation/standardisation

Their actual marketing practices in Saudi market

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Research Methods & Measures

Consumer’s point of view (≈ 50 customer questionnaires)

1. Recently purchased these brands’ products

2. And have a shopping experience in western markets.

Using the cognitive approach (Thomas & Sekar, 2008) and previous research on branding (e.g., Aaker, 1997; Azevedo & Farhangmehr, 2005; Geuens et al., 2009), we measured …

Consumer’s attitudes toward the fashion brands Brand loyalty and personality Differences in brand image between Arab markets

and brand’s home market

Brands under investigation – managers’ point of view

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Results: Marketing Implementations in Saudi Market

Marketing Activities The key actual practice in Saudi market

Market Research Ready-made information about Arab consumers

Product Decisions

Some adjustments are applied on potential product

Pricing Marginal adjustment level according to Saudi market

Promotion Some changes are made on the advertising copy

SaCo. 1GUESS &

Levi’s

SaCo. 2Burberry

SaCo. 3H&M

Adapted Adapted Adapted

Slightly Adapted Standardized Slightly Adapted

Slightly Adapted Slightly Adapted Slightly Adapted

Adapted Adapted Adapted

The most likely to be standardised

The most likely to be standardised

There are remarkable differences of customer characteristics between Saudi Arabia and the brands’ home countries

There are remarkable differences of customer characteristics between Saudi Arabia and the brands’ home countries

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Results: Arab customers’ responses

General level of similarity from customers’ point of view

00.5

11.5

22.5

33.5

44.5

5

Product (3.36) Pricing (2.58) Promotion (2.57)

Similarity Levels(Mean Values)

1= Different / 5 = Similar 1= Different / 5 = Similar

Marketing Program

The most common features

The most common features

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Preferred fashion brands for Saudi consumers

Results: Arab customers’ responses

37.8% 26.7% 26.6% 8.9%

Factors on loyalty of Saudi customers to fashion brands

Brand’s history/heritage Fashion product’s quality

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Brand C

Results: Customer’s Perception Vs Brand’s Personality

Brand A Brand B

Rotated Component Matrix

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Conclusions and Implications

The 4 global fashion brands implement marketing adaptation in their programmes to Saudi Arabia. However, Arab consumers do not recognize such implementations.

Marketing adaptations produce undesirable influence on consumers in Saudi Arabia, as they perceived different personalities of the global brands to that which these brands promote.

International fashion marketers should implement and design their marketing programme based on a good understanding of buyer behaviour in this region.

Fashion marketers should consider Arab markets’ characteristic before deciding whether they have to create different brand image (e.g., Levi’s in USA and Europe; Roth, 1995) to target Arab markets.

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Limitations• Purposive sampling

• Relatively small number of global fashion brands available for study, as well as small sample of Arab customers

• This paper provides a useful initial insight into global fashion branding in Saudi Arabia and Arab consumers’ perception toward fashion brands.

• And, it’s a point of departure for research to study a large number of international fashion brands across Arab countries.

Thank you

Brand Personality’s characters

Fashion Brands

Burberry a GUESS b H&M c

Loading MeanStd.

Deviation Loading MeanStd.

Deviation Loading MeanStd.

Deviation

Honest .603 3.63 1.09 .946 3.50 1.09 .707 4.17 0.83

Caring about you .735 3.50 0.82 .925 4.00 0.85 .772 4.25 0.97

Exciting .693 3.75 1.00 .925 4.00 0.85 .696 4.17 1.19

Up-to-date .685 3.88 0.72 .614 3.83 0.72 .898 4.33 0.89

Reliable .729 4.06 0.93 .792 3.67 0.78 .696 4.17 1.19

Successful .841 4.13 0.72 .848 4.17 0.94 .950 4.58 0.67

Charming .851 3.88 1.02 .848 4.17 0.94 .890 4.25 0.97

Feminine .905 3.81 0.99 .594 3.83 0.83 .844 4.08 1.16

Active out door style .400 3.88 0.50 .671 3.67 1.07 .679 4.50 0.67

Tough/strong .495 3.75 1.06 .776 3.75 0.87 .678 4.00 1.13

Pioneering .866 3.94 0.85 .693 3.58 0.67 .769 3.83 1.34

Feeling of energy .646 3.38 0.89 .966 3.42 0.79 .927 3.67 1.30

Global .877 4.06 0.77 .636 4.25 0.87 .897 4.33 0.98

Feeling young .833 3.44 0.96 .693 3.92 0.90 .772 4.25 0.97

Sexy .740 3.00 1.10 .549 3.75 0.75 .779 3.92 1.24

Pride .725 3.56 0.90 .594 3.67 0.78 .686 3.83 1.53

Personalized luxury .790 3.69 0.79 .685 3.83 0.83 .847 3.67 1.61

Extraction Method: Principal Component Analysis; Rotation Method: Varimax with Kaiser Normalization.(a) Rotation converged in 6 iterations, (b) Rotation converged in 6 iterations, (c) Rotation converged in 3 iterations