Global Economics. Cultural Sensitivity of the UAE Market

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Table of Contents

Cultural Sensitivity Analysis
Marketing Strategies
Ethical Considerations
Reference

Cultural Sensitivity Analysis

The X Development Company, which has its headquarters in Baltimore, Maryland, is a major player in the hospitality and tourism industry. The company specializes in a broad range of products including heritage racing, holiday resorts, hotels, and restaurant ventures. The company has been quite successful locally; within the past two decades, the company has established 8 tourist resorts and 15 well-known hotel brands spread all over the East Coast and employed well over 5,000 employees. The company is planning an expansion to a foreign market. The company’s management appointed a committee to explore opportunities for expansion into the Middle East market ahead of the company’s planned expansion. The committee’s report recommended the United Arab Emirates city of Dubai as a potential investment destination for the company.

The culture of the UAE differs from that of America in many ways. Due to these cultural and economic differences, the company must design a marketing strategy for entering this market. Among the cultural differences to be considered include; language differences, socioeconomic differences, and religious differences..

Language Differences

Just like in other Middle East nations, Arabic is the major spoken language in UAE. UAE citizens use Arabic as an official language in the workplace, in religious learning, and in business communication (Dubai Tourism Still on the Rise, 2009). Thus, for company X, whose main clientele comprises English-speaking people, a strategy to overcome the language barrier should involve hiring interpreters and Arabic-speaking customer care personnel to promote communication with the locals.

Socioeconomic Differences

There are vast socioeconomic differences between UAE and America. The growth of UAE’s cities including Dubai is largely attributed to oil discovery. The gift of oil also transformed the Dubai society from a traditional and conservative to modern and innovative society. Dubai has many multinational corporations due to UAE’s favorable investment conditions, low taxation, and strategic geographical location (Dubai Tourism Still on the Rise, 2009). The tourism industry is well-developed with 255 hotels including a 7-star hotel. Thus, the company will need to design a strong competitive strategy in terms of pricing and offer a range of products.

Religious differences

While Christianity is the most dominant religion in America, Islam is the dominant religion in UAE. Most of the UAE’s citizens are Muslims with about 78% of them being Sunni Muslims (Dubai Tourism Still on the Rise, 2009). Besides religion, Muslims have various religious events in their annual calendar including Ramadan celebrations. Also, UAE, unlike America, is a collectivist society with regard to ownership of property. In the UAE society, because of religion, women have limited rights with regard to ownership of property.

Marketing Strategies

From the analysis, it is evident that the UAE and America have opposite cultures. The marketing strategy including the product mix (4Ps) must reflect these differences. The following is a proposed product mix for company X for entering the UAE market.

The company should focus on the horse racing industry, which is not well-developed in the UAE. A partnership with a Dubai-based construction company to establish a state-of-the-art horse track will be a good way to start. Dubai boasts of the most expensive races in the world, including the $1 million Godolphin Mile race. America’s Baltimore’s Preakness Stakes, which is organized by Pamlico Race Course generates millions of dollars in revenues. Company X can partner with Pamlico to set up a joint venture in Dubai. This can be priced appropriately to target the high-end clientele. While the Preakness Stakes ticket prices range between $275 and $695, tickets for Dubai races sell at $1295 on average. A thoroughbred horse is very costly in Dubai; it sells at an average of $40,000 compared to $20,000 in the US. The Dubai World Cup is estimated to be worth $10 million, with an average ticket price of $1000. Tickets for similar competitions in the US like the Kentucky derby sell at $440 on average. Clearly, horse racing is a lucrative sport in Dubai and the company stands to benefit from this investment.

The company’s promotional strategy should involve the use of Arabic language to ensure that the messages reach many people. Advertising of tickets, seeking sponsorships, and television rights should involve traditional media, social media, and key personalities like Sheikh Mohammed who is an influential leader with a great passion for horse racing. In the US, racing events enjoy wide media coverage including radio and all-day television broadcasts in Maryland. Additionally, racing events and fixtures are advertised through prime-time TV to reach a wider audience. Also, tickets are sold online, racing data is made available online and gambling and online poker are allowed as a way of promoting horse racing. Additionally, social media communities involve sportsmen participating in horse racing as a way of promoting the sport among students.

Dubai would be a good location for this venture given the city’s thriving hospitality industry. The Dubai world cup attracts the best thoroughbreds from different parts of the world. In the US, the infamous Triple Crown consisting of the Kentucky Derby, the Belmont Stakes, and the Preakness stakes in Maryland are popular annual sporting events. Each Stakes event attracts over 100,000 fans with a record 185,000 fans attending the 2012 Kentucky Derby.

Ethical Considerations

The main ethical considerations to this venture would relate to advertisements and employment laws. In the US, discrimination of people based on gender or race during employee recruitment is illegal. In contrast, Dubai’s hiring employees from a particular racial or ethnic background, e.g. Lebanese, is a common practice. Most importantly, salaries paid to expatriate workers raise ethical issues; often expatriate workers from the West are paid well than expatriates from Asia or Africa. This would be unethical and illegal in the US.

Reference

Dubai Tourism Still on the Rise. (2009). Web.

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