Term Paper on "Internet Marketing in Saudi Arabia"

Term Paper 28 pages (7754 words) Sources: 5

[EXCERPT] . . . .

Internet Marketing in Saudi Arabia

Today, Saudi Arabia is one of the most affluent nations on earth and enjoys a large percentage of the world's known petroleum reserves. In addition, the number of Internet users and providers continue to increase regularly. In this environment, Internet marketing appears to represent a potential marketplace for virtually any export-minded enterprise anywhere in the world, but there are a number of factors involved in Internet marketing in Saudi Arabia that must be taken into account. The objectives of the study were four-fold and sought to identify current trends and patterns in Internet usage by Saudi consumers; what gender factors must be taken into account by international Internet marketers seeking to establish an online presence in the Kingdom of Saudi Arabia today and in the future; what cross-cultural factors must be taken into account by international Internet marketers seeking to establish an online presence in the Kingdom of Saudi Arabia today and in the future; and what opportunities exist - if any - for Internet marketers in Saudi Arabia today? To this end, a qualitative and quantitative analysis of the relevant peer-reviewed and scholarly literature and government and non-government statistics concerning Internet usage trends in Saudi Arabia was conducted, and a summary of the research together, conclusions and recommendations are provided in the concluding chapter.

Chapter 1: Introduction

Background of the Problem

Objectives of Study

Importance of Study

Scope of Study

Rationale of Study

Overview of Study

Chapter 2: Review of Related Literature

Chapter 3: Methodology

Description of the Study Approach

Data-gathering Method and Database of Study

Chapter 4: Data Analysis and Results

Chapter 5: Summary, Conclusions and Recommendations

Identifying Internet Marketing Opportunities in Saudi Arabia: A Qualitative and Quantitative Analysis

Chapter 1: Introduction

The Age of Information has created a marketplace in which geographic boundaries have become virtually obsolete. The free flow of electronic information across political borders has contributed to the growth of this "Age of Information Age" and the global economy alike. From an international perspective, though, various governments have established Internet restrictions on its use for various reasons, from political to religious to economic (Vitale, 2002). Among the most prominent of these countries is desert kingdom of Saudi Arabia which enjoys a large percentage of the world's known petroleum reserves, but which remains mired in a stagnated state in terms of its economic diversity as well as educational and employment opportunities for women. Indeed, at first blush, the Kingdom of Saudi Arabia would appear to represent a veritable gold mine for Internet marketers, but the literature quickly makes it clear that there is much to be considered in any such initiative and these issues form the basis for this study discussed further below.

Background of the Problem

Today, Saudi Arabia is one of the most affluent nations on earth and the number of Internet users and providers continue to increase regularly. In this setting, Internet marketing would appear to represent a potential marketplace for virtually any export-minded enterprise anywhere in the world, but there is more involved in Internet marketing in Saudi Arabia than many observers might think. For example, although the country enjoys enormous oil revenues, fully 90% of its economy is based solely on this product and much of this wealth does not reach the average Saudi citizen in substantive ways. The Saudi government continues to pursue economic reform and diversification, particularly since Saudi Arabian membership in the World Trade Organization took place in December 2005, and the country's leadership encourages foreign investment in the kingdom; however, a rapidly growing population, aquifer depletion, and an economy largely dependent on petroleum output and prices remain ongoing governmental concerns (Saudi Arabia, 2008). There are also important religious, language and gender-related issues involved in formulating Internet marketing plans for Saudi Arabia that must be taken into account, and these issues relate to the objectives of the study which are discussed further below.

Objectives of Study

The objectives of the study were four-fold and were guided by the following research questions:

What are the current trends and patterns in Internet usage by Saudi consumers?

What gender factors must be taken into account by international Internet marketers seeking to establish an online presence in the Kingdom of Saudi Arabia today? In the future?

What cross-cultural factors must be taken into account by international Internet marketers seeking to establish an online presence in the Kingdom of Saudi Arabia today? In the future?

What opportunities exist - if any - for Internet marketers in Saudi Arabia today?

Importance of Study

Perhaps as no other nation on earth, the importance of the Saudi market to Internet marketers cannot be overstated; nevertheless, there are some profound challenges involved in the use of the Internet by both online marketers as well as many Saudi citizens that will undoubtedly affect how, where and why potential consumers make a purchase decision online rather than in a traditional brick-and-mortar environment. The research will show that there are some specific cultural, religious, linguistic and legal factors that adversely affect the ability of some Internet marketers to communicate freely with potential consumers in Saudi Arabia, and although things are changing, these changes are proceeding at a snail's pace and many constraints remain firmly in place today. Identifying these constraints and any concomitant opportunities that might go hand-in-hand with them therefore represents a timely enterprise and represents the focus of this study.

Scope of Study

Although the study extended its scope to include an examination of how the Internet is being used around the world, there was a specific focus throughout on how the Internet is being used, and regulated, in the Kingdom of Saudi Arabia.

Rationale of Study

Identifying potential Internet marketing opportunities in Saudi Arabia today just makes good business sense. In October 2005, Saudi Arabia gained membership to the World Trade Organization (WTO) following 12 years of lengthy negotiations. This accession to the international trade body represented a milestone that many observers expect to have a dramatic impact on international commerce as it opens the kingdom's long-protected economy to outside competitors (Idris, 2007). The number of Internet users and providers in Saudi Arabia has also increased significantly in recent years, and most educated Saudis now enjoy regular access to modern communications of all sorts (Cordesman, 2003). In this environment, it is reasonable to expect that there are going to be opportunities available for the well informed, and this also represents the rationale of this study.

Overview of Study

This study used a five-chapter format to achieve the above-stated research objectives. In this regard, chapter one introduced the topic under consideration, a statement of the problem, the purpose and importance of the study, as well as its scope and rationale. Chapter two provides a critical review of the relevant and peer-reviewed literature, and chapter three presents the study's methodology, a description of the study approach, the data-gathering method and the database of study consulted. Chapter four is comprised of an analysis of the data developed during the research process and chapter five presents the study's conclusions, a summary of the research and salient recommendations for Internet marketers seeking to do business in Saudi Arabia today.

Chapter 2: Review of Related Literature

Background and Overview.

Just a decade or so ago, the Internet was regarded as a mere curiosity and a luxury at that by many consumers. By sharp contrast, today, the Internet is regarded as "an appliance of everyday life" and is accessible in varying degrees all over the world (Shabas, 1999, p. 27). The introduction of the Internet and various computer-based applications has fundamentally changed the way businesses and governments operate, and many observers now view the Internet as a vehicle by which companies can increase their market share and reach the increasingly globalized marketplace. Indeed, there has been an enormous investment on the part of domestic and foreign companies alike that compete on the Internet to attract potential customers to their Web sites and ensure a level of trust exits once they get there.

Assuming an otherwise-level playing field, almost any type of business can benefit from the Internet in a variety of ways besides marketing, but the trends are clear and an increasing number of consumers are electing to forego the long lines at the counter, high gas prices and brutal traffic to shop online rather than in a brick-and-mortar outlet. Indeed, analysts estimate that around 30% of all commercial transactions were conducted online in 2006 (Halal). The larger multinational firms are also developing increasingly sophisticated Web-based marketing tools and intranets to assist them in managing their global operations, and business-to-business (B2B) has become the standard rather than the exception in recent years because of these innovations in Internet-based technologies. Today, some analysts estimate that worldwide business-to-business e-commerce grew from $145 million in 1999 to $7.29 trillion in 2004 (Orr, 2004).

The results of a study by Martin and Hafer (2002) found that the introduction of the Internet has been especially important for the purchasing function for most businesses today.… READ MORE

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