Marketing Environment Analysis for the Clothing Manufacturer

Topics: Saudi Arabia, Economics, Economic growth Pages: 13 (4427 words) Published: April 18, 2013
Marketing Environment Analysis for the Clothing Manufacturer

The purpose of this essay is to create an international market analysis for an Australian clothing manufacture called Rivers, which is designing for fashion man and women apparels and accessories. In modern society, with the trend of globalization, companies are no longer satisfied with only produce goods for their domestic consumers. On this occasion, the Australian company Rivers designed and manufactured its own style clothes. It helps consumers can recognize Rivers’ products easily. Because of Rivers already established a solid foundation in Australian, it starts to expand its business into the international market. Its target market is the Saudi Arabia, which is locating in the Arabian Peninsula. In this essay, economic and financial environment in the Saudi Arabia will be primary analyzed. Then the debate will moves to culture environment in the Saudi Arabia. Thirdly, political and legal environment will also be outlined. At last, conclusion about whether Rivers should enter into Saudi Arabia market would be given based on the previews market research.

Economic and Financial Environment of Saudi Arabia
Saudi Arabia is known as an oil kingdom, and it causes Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 17% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum and plays an essential role in OPEC. From CIA World Factbook, the revenue of the oil sector accounts for 80 percent of budget revenue, 45 percent of gross domestic product and 90 percent of export profit (Kayed & Kabir, 2011). However, because of strong petroleum industry, Saudi Arabia kept a particular economic structure in a long time. Comparing with the petroleum industry, the lack of spending on agriculture and the limited natural conditions of Saudi Arabia lead to its agriculture developed slowly. As the economic system in Saudi Arabia is a mixed, there is no genuine market allocation or command quota system as market system has a command sector which is the government. In order to change the fact of single economic structure, the Saudi Arabia government implemented economic diversification policy, focusing on developing its modern industry and basic industry gradually change the ordinary dependent on oil income situation and establish a diversified system of the national economy. According to Wang’s (2011) report, in the power sector, the Saudi government established 25 years development plan, by 2023, generating capacity will reach 60 million kilowatts, a total investment of 1.155 billion US dollars. In the field of communications, 2001 to 2005, the Saudi Communications Company will invest 10 to 15 billion dollars for the expansion and improvement of the fixed telephone, mobile telephone network. In the desalination of water area, the next 20 years will invest 12.4 dollars, and an average annual investment will reach 620000 million dollars can help to promote its development of agriculture. Furthermore, for attracting foreign investment, Saudi Arabia acceded to the WTO in 2005. Also, the government has established six "economic cities" in different domestic regions to promote foreign investment and plans to spend 373 billion dollars between 2010 and 2014 on social development and infrastructure projects to advance Saudi Arabia's economic development.

Economic environment is the factor that marketers must consider when deciding to market globally. Analysis in the economic environment can help marketers aware of how powerful the target market is and what it is like. In recent decades, the development of international trade is quite rapidly. For a clothing company Rivers, how to catch opportunities from Saudi’s economic advantages and avoid the threat from Saudi’s economic disadvantages are key points to run its business in Saudi Arabia. Czkinkota, Ronkainen,...
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