MGMT313 Strategic Operations Management

Write an essay answering the following questions on Markstrat:

1) Try to illustrate the Markstrat world using the example of a real electronic consumer good market in the Middle East!
a) Define the established market (like Sonite)!
b) What are the products?
c) What are the customer segments?
d) What could be the innovative new market (like Vodite) and what could be the innovative products?
2) What information does the perceptual map and the brand map provide? What is the key difference between the two maps? Which map supports which decision?
3) What are the process steps of analyzing the current situation and to come to the decision for the following Markstrat round? 4) How would you allocate responsibilities and tasks in the team to prepare and take the decisions in Markstrat?

As far as the Consumer Goods market is concerned, it can be argued that Saudi Arabia enjoys an outstanding exposure in the consumer goods market. According to the government report, it can be ascribed that the country is witnessing a growth of 30% in the consumer goods industry during the fourth quarter of 2017. As a result of that, the Saudi Arabian electronic goods market also faces promising development. In fact, the revenue in the consumer electronics segment amounts US$1,266 million in 2018 with an annual growth rate of 11.2%. Therefore, the expected growth of the Saudi Arabia market volume of US$ 1,939 million by 2022. In this context, it can be argued that there are high possibilities and government association facilitate electronic consumer goods products in Saudi Arabia. The 2012 report stated that US$ 6.4 billion computer devices, mobile handsets and video and gaming products are purchased by the Saudi Arabian consumers (1). However, the market expanded in a robust manner with an increase of US$ 8.2 billion by 2016. It can be stated that there are a series of products from the growing popularity of the flat screen TV sets to the smartphones and computers drive the consumers to purchase a variety of products.

 Based on this understanding, it can be argued that the report is going to discuss the importance and dynamics of the consumer electronic products market in Saudi Arabia. In course of the discussion, the report puts emphasis on the deep insights of the electronic goods products in Saudi Arabia and analyses different aspects of the organisation. In addition to this, the report also encompasses a great deal of perception regarding brand mapping and the perceptual mapping in order to make a better framework for the topic of the report.

As far as the electronic consumer goods market of Saudi Arabia is concerned, it can be argued that the consumer electronic segments amounted revenue of US$ 1,266 million in 2018. Moreover, the promising progress in the growth of the market is calculated up to 11.2% within 2022. It means the consumer electronics market of Saudi Arabia will touch a market volume of US$ 1,939 million within 2022. In addition to this, it can be argued that the average revenue per user (ARPU) is calculated to US$ 125.41. The economic reform, as well as the internal and external factors such as the changes in the oil price, lead to the development of the economic boom in Saudi Arabia. It can be argued that most of the renowned electronic goods manufacturing companies are established in Saudi Arabia with the hope to procure more profit from this growing economy. Big companies like Toshiba, Sharp, Samsung, LG and Sony extensively capitalise the Saudi Market (2). As a matter of fact, the Saudi government also encourages the local and indigenous electronic consumer goods companies like the Jumbo electronics, Eros Group and Axiom Telecom (3). In addition to this, the government also puts a deep concern about the start-up electronic consumer goods manufacturing companies and encourages them to expand their business extensively.

It can be argued that there are several numbers of statistical data that implicates the strength of the consumers in Saudi Arabia and their ability to purchase a product so that a better and healthy market will be developed. As far as the digitisation is concerned, it can be stated that the Saudi consumers are extensively moved by technological advancement. According to the report provided by Khalil (2014) 86% of the Saudi consumers are going online every day and the number of the online shoppers is increasing in a rapid manner so that in 2017 the online shoppers strength was 12.5 million in Saudi Arabia that is expected to reach its culmination up to 17.1 million by 2020 (4). It can be seen that the estimated online consumer strength is accounted 71.9% of the total population (5). Moreover, there is 83.6% of the total population lives in the urban areas and almost half of the population in terms of 47.4% belong to the age from 25 to 69 (6). Henceforth, it is sure to derive from the statistics that almost half of the population is considered to be capable of purchasing goods. Furthermore, the annual consumption expenditure is growing steadfastly in course of time. It figures out that the household expenses were 226,527 that were increased in 2017 up to 235,957 million USD (7).

The consumer electronics market in Saudi Arabia is dynamic and full of subcategories with a number of electronic products. For instance, there are mobile devices, wearable, TV and cognate devices, Laptops and computers and home appliances (8). It can be argued that there are a number of products in Saudi Arabia that are associated with electronic products and very popular as the daily uses.

As far as the mobile devices are concerned, there are a number of renowned and popular mobile phone companies that are started penetrating in the Saudi electronics market. Most of these mobile phones are used for both professional and personal purposes. As a matter of fact, the online consumer trend has become a common feature among Saudi customers and they are likely to use mobile devices intensely (9). Smart sensing solutions, compact and user friendly, high performances, energy efficient and easy to portable features are common that the Saudi Consumers primarily desire.

 There are several kinds of wearable electronic products that the Saudi customers are primarily fond of. Among these products, the smartwatches with a fitness tracker and connected with the mobile devices are playing a significant part among the electronic gadgets (10). In addition to this, there are other fitness clothing and jewellery that are important to make a market penetration for certain target customers who are very much interested in the hi-tech products. Furthermore, there are headphones and I-pads of various companies indigenous and foreign manufacturer like Sony, Sennheiser, Philips and Bose (11).

It can be stated that there are innumerable companies both local and multi-national committed to manufacturing TV and set top box maintaining huge quality. Most of those products have multimedia consumptions with the LED display that is quite advanced and attractive for the consumers. Moreover, the manufacturing companies are putting more emphasis on the design and user friendly shapes of the products so that they used some cutting edge technologies to go with the customer demands (12). Moreover, it can be argued that there are world class electrostatic protection and touch screen facilities that make the electronic products more lucrative and attractive.

 The home appliances are comprised of a number of household electronic items such as the washing machine, vacuum cleaners, Microwave oven, refrigerator and mixer grinder. In addition to this, there are lots of brands and quality products that are responsible for delivering home appliances as per the customers' demands and budget (13).

There is a wide range of consumers that can be seen in Saudi Arabia. Those consumers can be segmented in two aspects in terms of age and social customs and traditions.

 As far as government reports are concerned, it can be advocated that there are 55.3% men and 42.9% of women in Saudi Arabia. Moreover, only 16.4% are live in rural provinces (14). From that point of view, it can be estimated that the potential customers are available in Saudi Arabia who creates a better opportunity for the consumer electronics goods. In addition to this, the natural increase of population rate is identified as 2.03% that reflects an optimistic possibility for the growth of the consumer electronics market. In this regard, it can be stated that there are a number of potential customers who can purchase electronic products extensively. According to Alotaibi and Bach (2014), the dynamic customer market leads to the development of market segmentation for the business organisations to get a clear vision regarding potential customers (15). As a matter of fact, in his study Alqahtani, Alroobaea and Mayhew (2014) have argued that the consumer segmentation in the highly volatile market provides the business organisations with the strategic advantages to set their planning and market strategies (16). Henceforth, it seemed a strategic measure for the organisations to deal with the consumer segmentation more effectively in Saudi Arabia to encapsulate the market more intensely. The government report showed that the population strength of the population of the age from 25 to 69 is estimated at 47.4% which is very optimistic to set as the primary target market (17).

 The Saudi Arabian population is comprised of mostly the Arabs. According to the government report, there are 90% of the Saudi people sharing the ethnic Arab culture. Therefore, the main target customers are considered to be the Arab citizens. However, 10% of the population is identified as the Afro-Asian by origin. Therefore, they are also identified as potential customers (18).

Moreover, it can be stated that the age segmentation is the primary market segmentation factor that covers up the potential customers of the age from 25 to 69 (19). It means the adult people are the principle target customers of the electronics market in Saudi Arabia. Moreover, it can be stated that the cultural paradigm plays a significant part but the primary segmentation is based on age and teenagers and the adults are considered to be the main attractions in this regard.

 In this context, the Saudi consumer electronics goods market witnesses a number of innovations both in terms of marketing and product development. The high competition and the volatile interests of the consumers push the electronic goods manufacturing companies to implement more effective marketing strategies (20). On the other hand, introducing cutting edge technologies in the development of the products is also initiated by the electronics goods manufacturing companies in Saudi Arabia. The purpose of using new technologies is to create more innovative products so that it can maximise the customers. Implementing Artificial intelligence is identified as a strategic measure that the electronics goods manufacturer organisations are trying to incorporate in their operation strategy.

The perceptual map is a market research technique that encapsulates the brands of the products on which the consumers share their reviews. This is portrayed as a chart which includes the performance, size, quality and packaging of the product. The result of the map indicates the improvement of the product and developing a new one (21).

On the other hand, the brand mapping is a process or a technique through which the position of a brand or the existing brands of a market can be identified. In the brand mapping, there are large numbers of attributes that show on the axis and the brands are placed on the basis of the attributes (22).

It can be asserted that there is no such hard and fast difference between the brand mapping and perceptual mapping. Both are dedicated to deal with various attributes of the products. However, it can be argued that the brand mapping is a gross concept and encapsulates a number of factors related to the specific brand (23). Moreover, it can be stated that the role of the brand mapping is to create a comparison between different brands and the attributes are identified as the key determinants of the brands.

 On the contrary, the perceptual mapping is referred to as a technique through which a number of brands in an existing market can be analysed. This technique far relies on the performance, size, price, quality and packaging of a product. The purpose of the perceptual mapping is to identify the strategic position of the brand in a competitive market and facilitate the essential recommendation that can remedy the problem.

 As far as the brand map is concerned, it can be stated that it implies a better understanding regarding the whole scenario of the market. As a matter of fact, the decision that derives from the brand mapping is associated with the general understanding regarding the position of the brand. In this regard, the associated brands are also included in the discussion to understand the strengths and weaknesses related to the specific brand. Moreover, it is important to get a clear perception regarding the strategic position of the particular brand. Furthermore, the basic attributes of the brands are also highlighted due to the help of brand mapping and foster a better strategic measure to generate effective planning (24). In this context, the decision making process of the brand map is related to the role of the brand and its strategic position in the existing market.

On the other hand, the perceptual map is slightly different from the brand map. It can be stated that the role of the perceptual map is to clarify the brand or product position in order to establish a better business environment so that the brand can develop its market capitalisation handsomely. As a matter of fact, the perceptual map connotes the comparison between two or more than two brands in order to understand the exact market situation and the behaviour of the customers. It is associated with the size, quality, specification and the innovation so that a lot of elements are played simultaneously in case of analysing the market situation. Therefore, the decision making process in the perceptual map is complex and it requires in-depth understanding related to the positioning of the specific brand and figures out the possible strength and weaknesses of the product so that it can compete with other existing products quiet effectively.  

As far as the current situation of Saudi Arabia is concerned, it can be stated that there is a number of opportunities and drawbacks the country have possessed in order to develop the consumer electronics market rigorously. The opportunities can be identified in terms of the steady growth of the consumer electronics market and the increase in the GDP of Saudi Arabia. As a result of that, a number of foreign companies are taking interests to invest in this market. Nevertheless, there are some drawbacks that obstruct the progress of the consumer electronics market. The decreasing rate of purchasing power parity plays a crucial role in this regard. Moreover, the political instability halted the steady growth of the consumer electronics goods market in Saudi Arabia. Based on this, it can be stated that both the perceptual mapping and the brand mapping techniques and concepts can be implemented in terms of understanding the insights of the market. The perceptual mapping is entitled to develop a specific assessment of the market. On the other hand, the role of brand mapping is to formulate an overall assessment of the consumer electronics goods market in Saudi Arabia so that it will help to deliver better strategic planning.

In this regard, it is important for the business organisation to set a team dedicated to develop the understanding of the market ups and downs and procure proper steps to deal with the competitiveness. It can be argued that the Saudi Arabian consumer electronics goods market is highly volatile and intensely relies on the behaviour of the customers. Therefore, it can be ascribed that the customers primarily control the Saudi Arabian market. As a result of that, it requires an in-depth understanding of the market and having deep insights regarding customer behaviour will lead towards market success in the market.

 Therefore, there will be two teams responsible for the analysis and decision making process regarding the Markstrat. Team 1 deals with the analysis, evaluation and collection of data collected from the market assessment. It includes external factors like consumer behaviour, the purchasing power of customers and government responsibilities. Based on this report Team 2 will generate a marketing strategy that can be relevant and effective in order to make efficient enough to penetrate the Saudi customers.

Henceforth, the report deals with the entire scenario of the consumer electronic products in Saudi Arabia. There are plenty of opportunities that the country can exploit in order to develop its consumer electronics product market to further extent. Moreover, it can be ascribed that the never ending competitiveness inside the market pushes the electronics product manufacturer companies to set their policies inclined towards the demand and requirements of the customers. In fact, the marketing strategies are also developed as per the needs of the customers. In addition to this, the primary customer segmentation is circled around the two elements age and culture. The Saudi adults are the primary consumers with an age limit from 25 to 69. Moreover, the cultural underpinnings are also played a significant role by influencing the policies of the electronic products manufacturing companies both domestic and international. As a matter of fact, the dynamic volume of electronic products and using the cutting edge technologies make the Saudi Arabian market more authentic and realistic. As a matter of fact, it can be stated that the Saudi Arabian consumer electronics goods market is highly volatile and intensely dependent on the demands and requirements of the consumers. As a result of that, it is obvious for the business organisations to look for advanced technology in order to retain their business in the competitive market. Therefore, it can be argued that it requires the intervention of perceptual and brand mapping techniques in order to understand the market more extensively. It is also essential to develop a mechanism or team to deal with the high competitiveness in the Saudi Arabian market. From the above discussion, it can be concluded that the report rightly points out the probable pros and cons in the Saudi Arabian electronics goods market and in this regard, the report is very much contextual and authentic.

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