Steve Callis Carlos-David Islas-Labastida Renee Werner
April 25, 2006 Georgia State University
Table of Contents Topic Part One: United Arab Emirates Country Notebook I. Introduction II. Geography III. Economic Environment IV. Cultural Environment V. Business Customs and Practices VI. Political Environment VII. Legal Environment VIII. Marketing Research IX. Other Statistics X. Competitive Environment Part Two: Four Seasons Marketing Plan I. Target Market II. Product Adaptation/Modification III. Market Entry Strategy: Foreign Direct Investment IV. Pricing Strategy V. Promotion Mix VI. Conclusion 16 17 17 18 20 20 3 3 3 5 9 11 11 11 13 14 Page Number
Part One – United Arab Emirates Country Notebook I. Introduction The United Arab Emirates (UAE) is a promising location for U.S. marketers to do business for many reasons – among them: high and steadily increasing GDP, pro-business orientation of the country’s government, the stability of the country’s political and legal systems, and well-developed infrastructure. Also, the country has been actively pursuing ways to diversify its economy, which has historically been very dependent on oil. The Four Seasons is a premium 5-star hotel chain known for its elegance and pristine customer service. The hotel has many international locations, but currently has no presence in the UAE. However, there are many other luxury hotels in the country both of domestic and foreign origin, such as the Ritz-Carlton. The hotels in the country, particularly those in Dubai, do a very brisk business with both business and leisure travelers, as evidenced by the fact that this market has a hotel occupancy rate even higher than New York City. The sections that follow contain an overview of the important aspects of the United Arab Emirates, and the proposed marketing plan for the entry of the Four Seasons Hotel into this new market. II. Geography UAE is located in the Middle East between Oman and Saudi Arabia. The country also borders the Persian Gulf and the Gulf of Oman. Although most of the country is flat, the eastern side is quite mountainous. The climate is desert with very little rainfall, but it gets very hot and humid along the coast during the summer. Most of the land is flat and barren, and less than 1% is arable.1 III. A. Economic Environment GDP The economy of UAE is certainly thriving, and shows no signs of faltering in the future. The country’s GDP is $74.5 billion, and GDP per capita is $29,100. The GDP growth rate is 6.7%, almost 3
twice the rate of the United States.2 The wealth of this country is certainly attractive for marketers of almost any type of product, from basic necessities to luxury goods. In our case, this presents an excellent opportunity as a location for the Four Seasons, as a premium upscale 5-star hotel. Although the country has a rich economy, it’s difficult to place them in a definitive economic group. The wealth of the UAE economy comes primarily from oil production. Countries whose economies flourish almost solely because of oil aren’t generally counted among “developed” countries such as the United States and Japan.3 However, these rich countries don’t seem to fit in the Less Developed Country (LDC) category either, because of their high GDP per capita. As a result, they seem to fit best in the Newly Industrialized Country (NIC) category, which falls between LDC and More Developed Country (MDC). It’s notable that the country is taking steps to diversify its economy to decrease reliance on oil production. For example, Dubai has become a leading tourist destination with 5 million tourists per year. Their goal is to attract 15 million per year by 2010. Dubai actually has a 30year strategic plan that specifically states that they plan to become a “developed” economy by 2010 by diversifying into areas of tourism, trade and commerce.4 This is another plus for the luxury hotel business,...