Indian’s consisting of 28 percent of the
total population of the UAE, the total number of Indian people in the country
is 2.6 million. (http://www.abudhabi2.com/uae-population-by-nationality/,2016) Experiencing
significant growth in Dubai’s market overall has mirrored similar effect on its
car sales industry as well. The country is also ranked as the second-best city for the driving experience. As there is a huge demand for the automotive sector, the auto workshop’s demand is also relatively
high. But currently, there isn’t any
platform available for the users to check which auto workshops they can take
their vehicle, the suggested idea of creating a digital platform will help
motorist to choose best auto workshop according to service standards and
expertise provided. These workshops would
be categorized according to their service type provided such as engine work, bodywork, AC repair etc. In case of accidents, the user could check the service standards
provided by the workshop as the auto insurance firms would be linked to them.
On the other hand, the small-scale workshops
could use this platform to generate more business opportunity, as it would
provide them more visibility.
Market in UAE
Arabia is the largest automotive market followed by UAE in the second position
among the GCC countries. In 2012 number
of vehicles sold was 268,900 units but it
was 263,100 units in 2013. From 2012 to 2013 there has been a decline in sales
of 2.2%y/y, but H1 2014 shows a growth of more than 6.5%y/y. (Emirates NBD
(Emirates NBD 2014)
UAE’s used car market is dominated by Japanese
cars with the most favorite brand being Toyota.( https://carswitch.com/#/sell,
2017). Among Japanese cars, brands such as Toyota and Nissan holds a market
share of 11 percent and 10 percent respectively.(Haine, Alice. 2017).
implementation on Automobile industry
Currently, the automobile industry is under Sevier pressure
due to the implementation of VAT by the next year 2018. Most of the local suppliers hold a large
volume of stocks with the demand relatively low for cars in UAE currently.
Firstly prices would be affected by a long-term as new car sales would include VAT charges
as well. Whereas in the short term demand might shoot up as a consumer would take the opportunity to get the best price before VAT is introduced. For second- hand sales these regulations might
have an impact with an oversupply of pre-owned vehicles coming to the market. (Akbar, M.S.2017)
power of UAE
(Ministry of Economy,2016)
purchasing power parity term UAE’s GDP ( gross domestic product) is still in
the highest category. Even then UAE’s per capita GDP ranked 95th
percentile all over the world in 2015. (John, Issac, 2016). Families and
individuals are limiting their spending and rationalizing the use of incomes,
as result, there is been a decline from
633.2 billion to 613.5 billion dirhams between
2014-2015 in private spending sector. As shown above,
the ratio between the real GDP to final consumption
also reduced in these years. (Ministry of Economy, 2016)
As the proposed idea heavily relies on the automotive market,
the growth in the segment creates more business opportunity for vehicle service
segment as well. Henceforth the suggested idea would make business sense in reference
to the market overview provided above.
Imports to the United Arab Emirates
entire MENA region, UAE is considered as a regional hub not only for cars but
also for vehicle components and parts because of being one of the largest
importers of used cars. Hence, the country plays an important role among the
GCC region positioning themselves as a major re-export center. (Emirates NBD, 2014)
(Emirates NBD, 2014)
Arab Emirates Consumer Confidence
United Arab Emirates, the second quarter
of 2017 showed slight growth in consumer confidence from 108 in the fourth
quarter of 2016 to 110 currently. The highest recorded consumer confidence was
in the first quarter of 2015 whereas the
lowest was in 2010 fourth quarter with 115 and 97 respectively. The average
consumer confidence in the UAE is 108.03 for the years between 2010 to 2017. In
the coming 12 months timeline, the
consumer confidence stands at 107.00. According
to the forecast, the consumer confidence
towards is estimated to be around 109.00 by 2020.(United Arab Emirates Consumer Confidence, 2017)
(United Arab Emirates Consumer Confidence,
idea and first to implement
user interface with real-time updates
and feedback system
of updated database on auto workshops in the region
of criteria for monitoring the workshops
Increase in the number of registered vehicles.
· The total value of UAE’s used car market of
billion in business.
on new vehicle issuance to be implemented
public transportation network
· Innovative and sustainable transport
facilities like Hyperloop and Tesla taxis.
explanation on the topic please refer Appendix 1.
five force Analysis
power of buyers:-
a recent survey conducted it states that a large
number of population in UAE considered price as the major factor for
purchasing of any product. It was found that price and quality are the major
driving factors for any purchase decision. Considering Expect, Females and Students
between the age group of 18-30 are more prices
sensitive than other demographic groups. (Pujari .V 2012) In
2008 when citywide bus service was introduced in the Capital an estimate of
50,000 people used the bus services,
these numbers increased dramatically even
after the fares were increased to Dh1 for free. But after two years when the
charges were increased to Dh2, the number of users dropped.
(The National 2014)
The above graph shows the demand for retail value dropped due to various factors.
a flat economical year in 2016, which caused an effect
on various sectors such as lack of new securities
followed by consolidation and salary reduction had pushed the consumers to be more price cautious. (Cooper.F 2017). All these factors are a strong indicator
of how price sensitive is a major point for most of the country’s population.
Threat of Substitute
The primary threat would
be the evolving public transportation
sector here in Dubai. The government has taken up various projects to enhance
the use of public transportation sector by introducing a new innovative way to commute.
part of Dubai government’s initiative of
building a healthy society, the Roads and
Transport Authority has undertaken the project of constructing cycling tracks
that pass through residential areas like
Jumeirah Beach, Downtown, Oud Metha and many more. The agreed plan is to build
a total cycling length of 500km in Dubai by 2021. (Cerna, Fatima D.L., 2017)
The implementation of
Metro and trams was a great success to commute across the city for the
residents. Due to its huge demand, the
government has agreed on the refurbishing of five main metro stations like Burj
Khalifa, Dubai Internet City, Mall of Emirates, Emirates Exchange, and DAMAC. Currently, the entire metro system transports more than 650,000
passengers daily. (Priest,
UAE bus system help around 30million people to commute on a daily basis with
more than 193 routes provided on weekdays. The system has unique routes of
about 59 of which also helps people to travel without any hassle. However, the bus network is mainly used by the low-income group and there isn’t much done to
attract high-income groups and therefore
the major problem still remains to be the traffic congestion. (Vinod, Robin, 2015)
of new entrants
line with the vision of Dubai 2030, the
transportation sector’s 25% would be driverless and smart. This would benefit an economy
with an annual saving of more than Dh22 billion.
(Gulf News, 2016)
(Gulf News, 2016)
part of Vision 2030 Dubai’s Road and Transport Authority(RTA) along with
Hyperloop One is going to implement a high-speed
revolutionary transportation project. This project is a part of the vision of
owning world’s leading infrastructure and
also in the region.(Salem, Sara.A.A,2017)
power of Supplier
due to lack of parts manufacturing industries local authorized suppliers are
sometimes falling shorts of car part. Targeting this opportunity there has been
a lot of small-scale
car part suppliers in the market especially in the Northern Emirates. As per theory, the bargaining power is always higher
when the suppliers are less in the market but in this case, the gap is overcome by other third party players. Therefore
the bargaining power of the supplier is relatively low when compared with other
elements from Porter’s five force model.
is having a diverse population, its income statue can also be classified.
According to a recent study most people
under the social class of D which is the second lowest income class as shown below with the largest population.
The report suggests that people in social class A and E
had the highest expansion rates between the years of 2011- 2016.
The forecast for the years
between 2017-2030 suggests that social
classes A and E will still be fastest growing classes in the country as due to
income inequality. And therefore by 2030,
the dominant category would be social class E. Henceforth the proposed product
should cater to this segment due to its high future potentials. (Country Report, 2017)
the primary use of the proposed product would be to find ideal auto workshop
according to the user. The statistics report of traffic accidents in UAE had
been taken to find the real target audience. As the report suggests most drivers in this region are of
male genders mainly from Indian nationality causing most accidents who are in
the age group of 40 plus. (Khaleej Times, 2017)
In accordance with this
statistical report, the narrowed down target community would be male Indian
nationality audience who are in the age group of 35-45.
proposed product would be positioned as a one-stop
solution for vehicle user’s service
headache. It would be an online guide for an auto
workshop in the region, where there is a transparency about the service
that the end consumer is going to get. The image perceived in the end
consumer’s mind will be ‘value discovery experience’ whereas for the
suppliers(i.e. auto workshops) it would be a platform to generate more business
opportunity and to get more visibility.
Key Positioning points:-
· Value Discovery Experience
· Platform to generate business opportunity
‘The marketing strategy is the way in which the marketing
function organizes its activities to achieve a profitable growth in sales at a
marketing mix level’.(Kotler, Philip, 2014)
Proposed Market Approach
The aim is to provide the consumers with a high-end user experience such as high-speed data transfer compatibility.
Currently push notification is one of the ways to
communicate with the users, but this facility would be able to convey individually tailored content
according to users behavior on the platform.
through the Platform
Consumers must be able to communicate to the
auto workshops directly through the platform and will be able to book various
services depending on their needs.
To ensure customer loyalty on a long-term the platform would generate content
suggestions based on the behavior pattern of the user on the platform.
When a user downloads the app, that
particular user is entitled to a free
oil change/car health check from a suggested auto workshops.
Every workshop who would want to partner with
the proposed product would need to be on a contract with the proposed
organization for nominal service charges.
In order to achieve a market monopoly in this sector
periodic updates should be conducted
based on the traffic usage, buyers persona profile and google analytics.
Seasonal based ad campaigns would be
recommended across all advertising platforms available.
aim to carefully coordinate and combine the proposed product along with
available channels to convey a compelling, subsist and fair message. Keeping in
mind the targeted audience sector these are the curated campaigns proposed.
Since the business models revolve around existing auto workshops, it
would be ideal to use them as the communication pillars. Most of this enterprise do have a customer base,
therefore the proposed product’s knowledge and awareness could be conveyed by the workshop staff to the
customer personally. Due to the personal interaction,
the probability of market penetration is high. The proposed organization would provide materials which can be handed out to
the consumer by the workshop to boost up the purpose as well.
Seeing that the targeted
industry is automobile the action plan suggested would be at two specific areas
where most vehicles meet. These would be the petrol station precisely ENOC
petrol station followed by parking spaces in malls. The reason to choose ENOC is
due to its high footfall of over 85million people across Dubai and the Northern Emirates in 2015. (Arabian Business,
2016). The selected location for the second outdoor campaign would be BurJuman
mall’s car parking space. Being ideally located in a residential area and also
being one of the top shopping location according to Forbes Lifestyle Magazine.
(Bishop, Jordan, 2017).
to target the above-mentioned nationality
group, transit mediums such as taxis and buses would be highly recommended. The
proposed location would be Bur Dubai. This location is one of the oldest city in Dubai is mainly populated by Asian community people and the campaign would
be catered to this specific residential location.(mybayut, 2017).
strong media platform in UAE, being able to reach large expats of 3.2million people the use of radio campaign is
crucial. The campaign should run mainly during the morning shows as it reaches
to 62 percent of listeners. (Lakhpatwal,
Zaria, 2016). The aim will be to create a brand
enlightenment among the listeners. The suggested
campaign would play across 22 Asian radio station available in the
country.(Radio channels of Dubai,
attract Arabic speaking community, it would be ideal to advertise in the
country’s only Arabic language automotive magazine. It is considered to be a
portal for Middle East car enthusiasts. The UAE ranked top position in global
penetration of smartphones at 73.8 percent. (Nelson, Chris, 2016). Henceforth to increase the market share and to have a
digital presence the suggested strategy is vital.
of achieving brand visibility in the international market, sponsoring an
international event helps the brand to achieve its objectives. Being the
largest automotive event in the North
Africa and the Middle East The Dubai
International Motor Show would be the ideal event for sponsorship. Last year the show attracted more than 108,000
visitors from more than 70 countries. It also attracted more than 1000 plus
global media to the event. (https://www.dubaimotorshow.com/plan-your-trip/about-dims,2017). To create a strong brand image, participating in
motorsport is also ideal.
Tourist Destination Advertising
a prime tourist destination, advertising in these destinations will help the
proposed product to get more potential
customers outside the targeted audience. In 2016, Abu Dhabi saw an average of
4.4 million hotel guest visiting the emirate. (Sahoo, Sananda,
2017). The recommended location for the proposed product adverting would be
Ferrari World Abu Dhabi and Yas Mall. Currently,
the theme park receives over 1 million people and Yas Mall attracts about 20
million visitors yearly. The forecast for
this location is to attract 48 million
visitors by 2021.(Scott, Andrew, 2017).
to the report findings, the proposed
product idea would be beneficial because it’s a unique idea. Also due to UAE’s
strong automotive market with vehicle servicing as a major requirement. As found in the report, the country is one of
the largest users of a smartphone with the target population as the majority
in the country. Comparing all these factors such as high reach possibility
followed by growing target population and resolving the primary need of vehicle
service along with business generation for auto workshops
, the proposed product would be a successful business opportunity.