Business in Dubai

1.0 Introduction

The purpose of this report is to provide an inclusive analysis on marketing audit and the preliminary marketing plan for ‘Wedding dreams'. Our company commenced its operations in the year of 2001with the aim of providing Sri Lankan brides to be with stunning, unique and modest designs to add joy and create cherished memories on their big day. As this company had made a continuous success in the domestic market it has decided to expand its business in Dubai (UAE), as there is enough market scope to be profitable. The local (Dubai) company that is going to joint-venture with Wedding Dreams is Arushi Fashion who is well established in Dubai bridal shop industry. The reason for choosing Arushi-Fashion is the fact that they only offer bridal dresses but not attires for the grooms, bride's maids, flower girls, best men and page boys. Since Wedding Dreams is excel at providing these attires at the finest quality, Arushi Fashion is impressed to joint venture with Wedding Dreams to expand its span of target markets and of course its profits.

1.1 Economical

Moreover, In order to identify the suitability of the Dubai consumer market to the exclusive collection of wedding dresses, a marketing audit was proposed to our client. With the aim of making a comprehended report with a detailed socio cultural and economic analysis on Dubai was carried out.

In business, the Dubai government has set up industry-specific free zones throughout the city in order to attract foreign businesses and this has been Dubai's greatest economic achievement. The economy has benefited from new technological advances of information and communication by the introduction of The Dubai Internet City and Media City. Dubai has tempted many established media companies, such as CNN, to base their Middle East operations in the city. In addition it is one of the best known countries of UAE and recognized as a trading and commercial hub of the Middle East. Dubai also showed its true financial supremacy in the 1970's when it was named along with the other emirates as one of the richest countries. This was due largely in part to the visions of Sheikh Zayed bin Sultan Al Nahyan who was president of the UAE at that time.

As per the data issued by the Central Statistics Department, it indicates that the total GDP is amounted to Dh 535.6 Billion in 2008 with a growth rate of 7.4% against 5.2 % in 2007. (UAE Interact, 2009) Although there is an assumption that Dubai's economy is totally driven by oil and gas, that sector only consists of 6% in the GDP. (Economywatch, 2010). According to the report by Dubai Chamber of Commerce and Industry, the five most predominant sectors are the Constructions and real estate, manufacturing, restaurants and hotels, government services and the banking sector. (UAE Interact, 2009)

In addition UAE ranks amongst the top five countries worldwide for consumer purchasing power of luxury clothes and accessories. According to the recent statistics that has been released by Maktoob Business News, the income per capita in the UAE is currently US$ 54,430 and specifically in Dubai it is nearly US$ 24,000. (UAE Interact, 2009) Therefore we can state that there is more money to be spent and marriage is an occasion when one doesn't hold back on spending. This indicates the potential for the wedding industry to grow further which is a great opportunity for Wedding Dreams to start a business in Dubai.

The inflation rate in UAE is considered to be the biggest challenge which grows up to 12% (Gulfnews, 2008). These above mentioned factors are considered to be both positive and negative in the decision of investing in Dubai.

1.2 Socio cultural analysis

Dubai is the second largest among the seven emirates that make up U.A.E. It is filled with diversified culture, and has given freedom of worship. Other than Arabians the rest of the residents are from India, Sri Lanka, and other such Asian countries. The statistics reveal that the population in Dubai is 1,241,000 as in 2006 with 73% of males and 27% of females. (UAEInteract, 2009). The fact that the percentage of females is extremely lower is one threat for Wedding Dreams as its target market is highly comprised of females.

Women all over the Arab region once, as a rule, married in their teens or early on 20s. In recent decades, however, early marriage has declined sharply in parts of the region, most particularly in Kuwait, Libya, and the United Arab Emirates. (Rashad, et al,2005)

In addition, the population consists large no of Arabians including Sunni Muslims & Utah Mormons and as per to the market research conducted in Dubai, was ensuring that UAE respondents buy luxury branded goods and therefore get categorized as high end customers.

2.0 The Product

‘Wedding dreams‘is all about providing the Sri Lankan bride & groom-to-be with beautiful and innovative designs of immaculate quality, coupled with finest service at affordable prices. Wedding dreams offers exclusive collection of wedding gowns & party wear, ranging from simple, clean cut gowns to elaborate, luxuriously hand-beaded gowns too. Further more wedding dream imports its readymade wedding gowns from china and also does mass customization as per to client request. Therefore we as a team had recently decided to extend this service worldwide by initiating exports to Dubai (UAE). Today wedding dreams proposed to provide quality and unique wedding attire to the Middle East men & women. Based on the market research carried out in Dubai, it's evident that there is a growing need for modest yet fashionable wedding dresses and tuxedos. In addition Sunni Muslims and Utah Mormons comprise a large majority of population in Dubai and they have a great interest toward ethnic designs. Therefore our company decided to export its variety of product designs to Dubai (UAE) as it was seen to be profitable and product ranges are as follows. Also as Arabian females dislike body exposing our company has another unique service of beautiful wedding abaya consisting of 2 pieces; a simple abaya made of crepe to be worn under a 2 layered upper abaya made of high quality chiffon. The sleeves are conical shaped with handmade crystal beads. It comes with 2 shaylas one will be white and the other is off-white. (Appendix-1) This will be custom made product as some of the population go for a western style in their wedding.

(2.1)Wedding Dreams as an innovation as it is perceived by the intended market
(2.1.1) Relative advantage

As Dubai is an enormous shopping destination, Dubai has become the central point for both domestic and international buyers. Thus as the bridal industry is among the fastest growing industries in Dubai, one such advantage is the demand is considerably very high. However as the competition is towering up rapidly, the price is fluctuating at an immense manner as a result the price should be closely scrutinized.

Price is the second relative advantage at wedding dreams. As the wedding attire is imported from china, the price is comparatively lower than the local products through low cost labour. This enables us to market wedding gowns and other accessories with a competitive price with a high quality to the lowest price constantly.

Furthermore the high quality and the fine finishing is the other benefit. The products are guaranteed with its superiority for its value. The bridal accessories are produced in material with high quality and high-grade handwork, incorporated with highly experienced workers.

Product variety is massive at wedding dreams. As Dubai is becoming a cultural melting point, the target market rage is high. We provide bridal attire for each segment of the market. Therefore we provide the products with a fine variety to satisfy all segments in the market. Customers are offered with the facility to choose the design and the theme of attire and to make an order that will be made within a minimum time period.

(2.1.2) Compatibility

Product compatibility gives the indication of the product quality and the ability of the sterilization process to achieve the intended results without detrimental effect on the product. The wedding attires of Wedding Dreams are made of the best product in quality, attractive prices and a fabulous that the consumer cannot pick once. That's the combination at Wedding Dreams which brings together the concept of international quality and elegant style.

In a cultural and a demographic perspective, although the native residents in Dubai are Arabs, they have become much more sophisticated and westernized at a dramatic speed with considerable population of multi cultures such as Catholics, Christians, and Utah Mormons who are considered to be the target market. Therefore, the product compatibility of Wedding Dreams is measured to be high. Additionally considering the economic fact that the income level of the target market in Dubai is also high (the statistics say that U.A.E: Dubai Per Capita Income is nearly $25,000 (www.datadubai.com), it is explicit that the target market can afford the product at any given price since the quality matters in such a high - involvement product. Thus it is an opportunity for Wedding Dreams to penetrate the market easily and remain compatible.

(2.1.3) Complexity

In today's society, people tend to celebrate their weddings in a great manner. However the apparel falls under shopping goods, and especially since this is their dream attire on their big day, consumers' involvement in this purchasing decision is towering up. Therefore the complexity is considerably high as people spend a great deal on time and effort.

(2.1.4) Trialability

The degree of a trialabilty of a product or service has a direct correlation with the adoption process of a product or service as the level of trialabilty influences a customer's attitude towards a product or service in terms of risk. In the case of Wedding Dreams, the customer's perceived risk of purchasing a wedding dress will be reduced if they are allowed to try on a dress before making a purchase.

This aspect can be used well by the company to improve the attitude of customers as by default customers are allowed to try on dresses. Wedding Dreams can allow their customers to try on the dresses at a minor fee thus delivering a message of self confidence in their products.

Wedding Dreams can further utilize this aspect by providing personalized trials through customized tailoring if a customer is interested in a particular item. By making a dress fit a customer better, Wedding Dreams can reduce fear and encourage customers to make a purchase by improving attitudes and reducing the level of perceived risk. (Joe's Adblog, n.d).

(2.1.5) Observability

The extent to which a potential consumer can observe, imagine and describe a new products innovation and its positive effects is known as observability. It's conventional that our product will be displayed in the showroom for our customers to gaze the product before actual purchase and will also provide a special catalogue for designer wear outfits and wedding dresses in order to pay more attention individually which in return lead for mass customizing. Wedding dreams products are tangible and low in complexity; therefore, it's concluded that our product has a high degree of observability. In addition this results in customers adopting at a faster rate which is a favourable outcome and an added benefit to our business.
(1.1) Major problems and resistances to product acceptance based on the preceding evaluation

One of the major challenges that Wedding Dreams would have to face is the severe competition in the industry who are already well established locally. This challenge is chiefly related to two main cultural dilemmas i.e. Ethnocentrism and Self-Reference-Criterion. Ethnocentrism can be defined as what goes on their own culture is ‘unnatural' and ‘correct' (Levine, Campbell, 1972). And Self-Reference-Criterion is an unconscious reference to one's own cultural values (Cateora et al., 2009). Therefore the target market residents tend to give the priority for the local products believing that their product is the best and anything that is imported from a developing country such as Sri Lanka is not superior to theirs. As a result, Wedding Dreams products may be neglected over the local products.

(2.0) The Market
(2.1) The market(s) in which Wedding Dreams is to be sold

The geographical areas in which Wedding Dreams intends to operate need to be analysed and selected so that the marketing efforts can be limited and targeted to target customers within set geographical parameters. The United Arab Emirates consists of seven states and a decision has to be made on the degree of market coverage or market scope. It is important to identify the forms of transportation and communication in the selected states or sub regions a they will influence distribution of products and the communication efforts carried out by Wedding Dreams to target customers.

(3.1.1) Geographical region - Jumeirah

The selected region of Jumeirah is situated in the state of Dubai and this region has been selected simply because of the fact that the UAE partner company of Wedding Dreams; “Arushi Fashion” is situated in this city. (Appendix-2)

(3.1.2) Forms of transportation and communication available in Jumeirah

The transportation network of the UAE boasts the highest international standards with developed speedways and well maintained roads and the city of Jumeirah is approximately 28 kilometers from the Dubai International Airport and this is a very quick and easy drive as many modes of transportation are available from taxis to luxury buses and coaches.

The communication network too is on par in terms of standards with the transportation network as the latest developments in Information Communication Technology have been introduced and implemented mainly due the vast amounts of international contacts and interactions. Satellite phones, 3G mobiles with broadband internet, Wi-Fi, and all other new developments are there in the region. (Jumeirah, 2009)

(3.1.3) Consumer buying habits
(3.1.3.1) Product-use patterns

In general, when they purchase wedding attire for the couple, it is a tradition to procure attires for going away parties. In addition, considering the latest wedding trend, they moreover purchase dresses for the parties who are related to the couple i.e. the bride's maids, flower girls, best men and page boys. Therefore, all type of attires will be available under one roof for the buyers to make the purchase quick and easier.

(3.1.3.2) Product feature preferences

Since the product is greatly associated with the ever changing contemporary style trends, all the products will have up-to-date style features. Nevertheless, for the traditional lovers, it will be tailored and given as per their desires. In both the ways of featuring of the products, it will be guaranteed that all the attires will be unique and the best of quality.

(3.1.3.3) Shopping habits

In general, the wedding attires are something that the bride and the groom have always been dreaming about before their marriage. The purchase of the product requires a high involvement as it is purchased once in their life time and extremely embedded with emotions of the consumers. Therefore, some collections of the attires will be pre-designed and displayed in accordance with the most popular preferences. In addition, the product will be stitched and customized as per the customers' wishes.

(3.1.4) Distribution of the product

The distribution will be exclusive as Wedding Dreams joint-ventures with Arushi Fashion. The product will be available only at the outlet of Arushi- Fashion, in Jumeriah state. There will not be any intermediaries in the supply chain. As the nature of the product itself is very exclusive and prestigious, the excess distribution will not be suitable.

(3.1.5) Advertising and promotion
(3.1.5.1) ‘Advertising media' the ladder to reach your target market(s)

Families in Arab world are undergoing major changes in marriage, therefore wedding industry have to be supple as per to the changing need of the brides & grooms. (Rashad, et al,2005). Also primary target market for our wedding dresses is high end Sunni Muslim brides, grooms and Utah Mormon who are in late teens or early twenties (20-29). The secondary target market to our business is the bride's maid, flower girls, best men and page boys added with ladies who go for a party wear. Therefore newspaper, personal selling, word of mouth, brochures & flyers and exclusive magazines are the proposed advertizing tools which are to be used mainly to focus primary and secondary target market (Arabian brides and grooms (Sunni Muslim) and Utah Mormons). When we visited Dubai to study their market, we encountered that the population use Arabic language the most. With that said, many individuals throughout Dubai will converse in English. Farsi and Urdu are also spoken in various regions throughout Dubai; therefore the advertizing campaign has to be carried in Arabic & English language the most. Also its notable that TV advertisement will not be utilized as this product is sold for high end customers and Wedding Dreams have to attract and retain the clients with the aim of building loyalty which is fundamental to provide a positive word of mouth about our products and services. In fact TV ads are mass media and not effective enough to build reliability and it is not suitable method of communication to showcase our product to its target market exclusively. As nature of product decides the promotional mix, radio ad, TV ad, bill boards are inapt to promote our product and incapable to communicate.

(3.1.5.2) Sales promotions customarily used

Sales promotion is an important tool in Integrated Marketing Communication. It provides several distinct benefits in the achievement of company objectives. Under this method, wedding dreams can sell their products at a lower price without incurring a loss. Second, sales promotions can influence trade (Dubai) and customer behaviour. There are different purposes for doing sales promotions. Therefore wedding dreams implement these strategies to increase the number of customers, boost sales, and attract new customers, to compete effectively or reward loyal customers.

Free gifts - Offer free goods along with product being purchased. For instance a branded make up kit including Arabian kohl which is very popular among Arabian females or perfumeries to customers who have gone for purchases exceeding the limit of US$ 6000.

Sales discounts - Full Wedding packages, including wardrobes for all the members in the wedding crew and other packages, excluding Bride's and Groom's attire. These packages will be offered with a 10% discount of the total price. Customers who will purchase in large volume will be offered at 25% discount at Off-seasons. Also separate discounts on small purchases will be given by introducing loyalty cards.

Coupons - Most of trade couponing promotions of wedding dreams consist with point - of - purchase supports in Dubai. Coupons will be offered twice a year to encourage the customers. Besides, each coupon is valid for only 10 days after the offering.

Premiums - As Arabians in Middle East are bounded to cover the body, providing abaya's along with the actual product will motivate the purchase at wedding dreams. This is only given for purchases occur under package.

(3.1.6) Pricing strategy
(3.1.6.1) Customary mark-ups

Due to existing high competition in Dubai Apparel market, the pricing strategy at Arushi's Fashion should be analysed cautiously to maintain a competitive advantage to the organisation. The prime objectives of the pricing strategy in Wedding Dreams is as follows

* To develop a competitive advantage in the Dubai wedding Apparel industry through adopting the right pricing mechanism and attracting the target market

* Remain in the import industry by means of accommodating an effective turn-over.

Besides, emerge of many competitors will increase the current competition. Therefore in the initial stage, Wedding dreams can adopt to a penetrated pricing strategy to flabbergast the target market and gradually reach the premeditated price.

(3.1.6.2) Types of discounts available

To compete in the market Wedding Dreams will offer copious discount in an indirect way. The Discount will be proffered in term of Packages. Full Wedding packages, including wardrobes for all the members in the wedding crew and other packages, excluding Bride's and Groom's attire. These packages will be offered with a 10% discount of the total price. Customers who will purchase in large volume will be offered at 25% discount at Off-seasons. These discounted packages will lend a high turnover to the organisation by means of providing a discount to the customers.
(3.2) Compare and contrast your product and the competition's products

There are no major exporters of wedding wear and accessories to the UAE from Sri Lanka but the market in the UAE is highly competitive with several large competitors already operating in the region. In order to be competitive and first and foremost survive upon entry into the new overseas market, Wedding Dreams needs to identify the product offerings of competitors and also assess the quality in order to set assess their own standards to ensure that they not only are able to remain competitive but also gain a competitive advantage. Four major competitors who are already operating in the UAE have been identified and they are as follows;

(3.2.1) Competitor's products

La Donna Fashion House:

This is one of the more up market and exclusive competitors that offers evening and wedding dresses. They have launched their latest collection by the name of “Oriental Nights” that adopts a customized approach using the Arabic theme using locally found rich and exquisite fabrics together with colourful designs and embroideries. The main difference between the product of La Donna Fashion House and ArushiFashion -Wedding dreams is the fact that it offers all the product variety such as the wedding attire for the couple, going away dresses, dresses for bride's maids and so on while La Donna Fashion House solely offers to the bride alone.

Salma Kahn:

This goes by the name of Salma Kahn's Fashion Studio and houses highly experiences professional tailors and embroiders who specialize in Western, Arabic and Asian dresses and accessories. They believe in personalized attention as they ensure that customized products are offered to customers with different lifestyles and who represent various cultural backgrounds. They not only make the dresses fit their customers but also ensure that the designs, colours, and even the seasonal elements are taken into proper consideration to get the best out of the products for their customers. In, comparing and contrasting the Wedding dreams from Salma Kahn, we can say that the price factor is slightly deviated. Wedding Dreams products are comparatively low and are made of the finest quality.

Rahmanian:

This competitor is a very established company with a truly global presence with its operations in Asia, North America and the Middle East. Through training and development and experienced tailoring and designing, they seek to ensure creativity, innovation and quality that are customized to meet different requirements of customers. They too specialize mainly on evening and bridal wear and possess high capacities to produce and sell through their spread out network of outlets and factory space. In deviating Wedding Dreams products from Rahmanian, Rahamnian is more known locally and globally. Although the venturing company ArushiFashion is also well known but it is not as established as Rahamanian. Nevertheless, the product variety at different price range makes Wedding Dreams competitive.

Ekaterina & Maria Fashion:

This competitor operates in a niche market with packages for VIP clients and has a collection of over 500 designs of bridal wear from the bride to flower girls and accessories that are modern in design and are also very easy and comfortable to wear. This competitor is well known for its designs and quality and thus possesses a healthy brand image. This competitor is solely aiming the VIPs whereas Arushi Fashion -Wedding Dream aims a wide market with variety of price and products.

(3.2.2) Competitor's prices

According to the industry analysis, the competitor's average price is 2% higher than the price of a gown in wedding dreams. The current market leaders and the average price of the main product categories are introduced below;

Wedding Gown

Grooms Attire

Going away gown

Bride's made, Flower girl gown

LaDonna Fashion House

$10000

$9900

$5000

$4775

Salma Kahn

$8800

$7000

$5000

$4700
Rahmanian

$7500

$6600

$4800

$4500

Ekaterina & Maria Fashion

$8000

$7000

$5000

$4800

Apart from the pricing strategies the above competitors follow promotional tools by presenting attractive discounts and offers. However according to analysis, the pricing strategy and other promotional methods at Wedding Dreams will develop a competitive advantage in the market.

(3.2.3) Competitor's promotion and advertising methods

As mentioned above the direct competitors to wedding dreams are La Donna Fashion House, SALMA KHAN, Rahmanian, and Ekaterina & Maria Fashion. These competitors use a lot of advertising and promotional methods to create awareness about their new arrivals among the public and to retain the old customers. When considering their methods of advertising it's seem to be similar to one another as their product ranges, price, target market are identical. Basically these outlets do shopping mall promotion as there are a lot of popular shopping malls in Dubai.

To be candid, these promotions are especially carried out in malls such as, Deira City Centre, Mercato Mall, Mall of the Emirates, Ibn Battuta Mall, Wafi City Mall Dubai, Dubai Festival City, and Emirates Towers Boulevard, as it is known as the top seven malls which are most visited by high end customers and foreigners. First and foremost, the four direct competitors have their cut outs and banners in these malls. La Donna Fashion House distribute brochures and flyers for bridal wear through certain men's shops in those malls to the male customers who tend to visit often those places, as these flyers are taken to the young females in their families. In addition they advertize in magazines which are customized for people who are going to marry in near future. Also advertizing on emirates magazines and advertisements played in the small monitored TV's in the airplane, which are read and viewed by the passenger's during the journey. It is an additional benefit as emirates is a national airline of U.A.E. Generally all the competitors do provide TV advertisements on Dubai channels such Dubai TV, Arabic, EMI, and Fashion and celebrities, in seasonal basis to stimulate the customer demand in off season. Rahmanian have word of mouth campaign to create a positive word of mouth which is being a major strength for their businesses since 1947. In addition all the outlets have personal selling tactics to attract the customers individually by being personally concerned.

(3.2.4) Competitor's distribution channels

Most of the leading competitors have both whole sellers and retailers selling methods. However retail shop purchase bulks from whole selling warehouses where it reduces in-house storage and costs. In this scenario the distribution is commonly offered by whole sellers. Agents are another mode of channel in the wedding industry. Agents from worldwide import goods for their state through whole sellers.

(3.3) Market size
(3.3.1) Estimated industry sales for the planning year

The recent economic recession has dampened the performance of many industries including the wedding and bridal wear industry. Despite the recession researchers forecast a 2% increase in industry wide sales between 2009 and 2010 in the UAE. Research has also shown that the UAE is one of the ten most attractive markets for apparel manufacturers.

Even though no proper information is available on the industry sales statistics, research has also shown that average cost of a wedding in the UAE approximately 80,000 US Dollars or 300,000 UAE Dirhams. And the number of weddings per year in Dubai is estimated to be approximately 50,000 per year. So the total industry sales comes to US$ 4,000,000,000. Research also shows the majority of respondents were willing to spend more than 100,00 UAE Dirhams while an approximate 12% were even willing to spend over 500,000 UAE Dirhams for their weddings.

This provides sound evidence that there is high potential for specialized and designed wedding wear in the UAE and the rise in fashion shows also supplements the evidence as they continue to increase in size attracting more and more exhibitors and visitors each year.

(3.3.2) Estimated sales for Wedding Dreams for the planning year (2011)

The estimated sales for Wedding Dreams for the year 2011 are nearly 41,500,000 which is approximately 0.01% of the total industry sales. (Refer the financial Statement in the financial section). Wedding Dreams hopes to go higher than this amount of sales by more market penetration.

(3.4) Government participation in the marketplace
(3.4.1) Agencies that can help you

The business law for partnerships and joint ventures requires a local company to be involved with a 51% stake in the business while the external company has control of 49% of the business proceedings. In the case of “Wedding Dreams” the most suitable method one of the above methods to enter the UAE as it reduces risk and sole ownership requires businesses to be set up in free trade zones and getting local businesses involved also lowers the capital spending and enables an external company to exploit local knowledge.

Since Wedding Dreams will either go in for a partnership or a joint venture as opposed to solely owned entity, they can be sure to get government support as there will be a local company involved. This will result in tax reductions and even subsidizing to start up business operations.

The ease of raising capital will be greater as the access to sources of finance will be easier with a local partner as local governments and financial institutions will be more willing to provide finance when a local company is involved in a business venture.

The government also helps the industry by encouraging more exhibitions and trade fairs and fashion events as it also benefits by improving tourism.

(3.4.2) Regulation you must follow

As per to the U.A.E government's rules and regulations, licensing any business is a must to carry out trade activities in any part of U.A.E. In fact, it consist three types of licensing such as commercial license which is recommended for all kinds of trading, the second is Industrial license which is suitable for a business which is going to specialize in manufacturing or industrializing. The last option is professional license, which is only issued for professional businesses that has expertise on that relevant field. As we decided to joint venture with Arushi fashion which is located in Dubai Jumeirah Beach Road, it's insignificant to obtain any license to operate the business in that region.

Arushi fashion was founded in 1989, which specializes in making haute couture wedding dresses, henna dresses and evening gowns for the women of the Middle East, including several of the region's royal families. As our goals and Arushi fashion's service, products and marketing goals are similar, wedding dreams decided to joint venture with Arushi Fashion, Dubai. It is an added advantage that, Arushi is functioning in the Dubai industry for more than 20 years and has a good reputation among everyone; therefore it's unambiguous to create a positive word of mouth about our service in a short period of time. As per to the nature of our business and legal laws of U.A.E, Arushi fashion is given 51% of the company, while sharing an equal amount of profit or loss. Although joint venture is not required to license the business, we as a team decided publish the agreement to run the business under the name of Wedding Dreams to showcase our ideas and designs to attract and retain the target market and to be successful internationally with the local name.


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