Comparative Analysis of Marketing Between the West and the Middle East
A comparative analysis is an indispensable part of modern marketing. A tendency for globalization obliges companies to work with foreign partners, which demands thorough knowledge of the peculiarities of local markets. Clark Kerr in his work “Industrialism and Industrial Man” wrote that comparativism helps to determine “universal, related and unique” items in marketing systems of different countries (1963.) This approach of studying marketing can be applied in several ways:
– it is possible to compare two different states (for example, the United States and Japan);
– two different sectors of economy (for example, oil and perfume production);
– two different periods of time (for example, marketing during the Tokugawa shogunate and modern Japan).
In this work the marketing systems of the West and the Middle East will be compared and analyzed. The topic of the research is urgent because of the rapid growth of the Middle East market and its attractiveness to investors. In addition, the marketing systems of these two regions are not usually compared due to the numerous differences in social, political and cultural background. According to Bartels (1963), comparative analysis of marketing should consider the issues like society, nation, economy, market and the agencies that have control over it. J. Boddewyn (1965) describes it by the following metaphor: “While comparative studies are somewhat precariously balanced between marketing itself and its environment, one must be careful not to throw out the marketing “baby” with the environmental “bath,” or smother it in a “blanket” of social context.”
No need to say that exterior factors like environment, national context and traditional worldview of the Middle Eastern and Western countries vary considerably. Traditionally, the following countries are defined as the Middle East: Bahrain, Cyprus, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, State of Palestine, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates and Yemen. The European countries and the United States of America traditionally belong to the West.
Kaynak and Jallat (2005) in their book “Marketing Issues in Western Europe: Changes and Developments” emphasize that the major variety of consumers’ desires is within the European countries, but not on the international level. They write:
For marketers, this continued expansion of the EU makes the challenge of marketing goods and services in Europe more interesting! This is hardly surprising when one considers that the EU is comprised of currently 25 member countries, over 450 million people, and over 20 different languages (not counting regional dialects). Five main religions are represented, and there are significant variations in the social, economic and political systems.
Sciglimpaglia and Saghafi in the article “Marketing Consequences of European Internet Market Unification: An Executive Perspective” write that European marketing strategy undergoes thorough integration and unification. It also concerns business performance and orientation. (Kaynak, Jallat, 2005) There is no evident difference between rich and poor countries in the European Union that is why standardization of marketing approaches can be successfully applied in these circumstances. However, despite the economical homogeneity of European society, consumer habits and tastes differ greatly from country to country. The national character is also important in making conclusions about European market. For example, an advertisement where the advantages of the product are listed will be popular in Germany. In comparison, Spaniards and Italians do not pay much attention to the facts in commercials, preferring emotional ones.
It is also crucial to note that all European countries are in the Euro-zone, except Denmark, the United Kingdom and Sweden. The same currency in all the countries of the region is another step towards unification of the marketing system. However, the unified monetary system created slight differences in the level of life between the countries of the European Union. This fact led to working immigration from the new members of the Union to their neighbors with a more developed economy.
The market of the European Union is growing and developing rapidly. The differences in infrastructural environment, culture and economical situation are still evident in the EU. However, political, economical and geographical frontiers in Europe are slowly disappearing because of the mixing of lifestyles and consumer tastes.
Economical heterogeneity is one of the key characteristics that can be applied to the Middle East, in a contrary to homogeneous European Union. The level of life in these countries ranges from extremely poor to prosperous. For example, Saudi Arabia, Israel, Turkey, Qatar, Kuwait and the United Arab Emirates are rich countries with stable economical and political systems, while Cyprus, Egypt, Iraq and the State of Palestine and have problems in these questions. From 1945, the mass production of oil started in the countries like Iraq, Kuwait, the United Arab Emirates and Saudi Arabia, which led to formation of OPEC (the international oil cartel) and further wellbeing of the countries with natural resources. So, it is possible to say that that the keystone of the success of some countries in the region is the presence of natural resources. Comparing to the European Union, the Middle East marketing system relies more on the nature than on employees and big companies have monopoly in the market of natural resources. Europe, in its turn, relies more on small business and middle class workers.
The political situation in the countries of the Middle East has been extremely difficult in the 20th and the 21st centuries. Local wars, conflicts and ideological confrontation of the two big countries, the Soviet Union and the United States of America, created a deteriorating environment for the development of market. Despite revolutions and wars in Iraq, Syria, Egypt, Lebanon and other countries, the economical situation in the Middle East is actively growing. For example, Turkey is considered to be one of the most rapidly growing markets in the region. International companies like IBM, Coca-Cola and Nestlé attack Turkish market actively. Warc.com writes:
An Ernst & Young attractiveness survey, based on the tracking of actual foreign direct investment (FDI) projects as well as interviews with 201 international decision makers, established that Turkey’s position at the crossroads of Europe, Asia and the Middle East was a major attraction for many businesses.
Over half of respondents to the survey were considering establishing or developing additional activities in Turkey over the next year. And 44% of respondents expected Turkey to become a regional and global business hub in the next 10 years. (2013)
No need to say that the Western market is half that attractive for investors like the markets of Turkey or the United Arab Emirates. The Middle Eat offers big international companies great opportunities to increase the number of their consumers and to low the costs for production. The fact that there are many poor countries in the region leads to the decrease of average hourly payments for the workers, because many people immigrate to more developed countries to earn money there.
There is another important aspect that has to be mentioned in describing the Middle East. In comparison to the European Union, where people of all religions live nearby and do not fight because of these questions, the Middle East does not have such religious diversity. The majority of people there are Muslims and in some states the spiritual leader has even more power and authority then the President. For example, the Grand Ayatollah was the one who advised the nation who will be the best head of the state during the elections in Iran in 2013. In addition, the followers of two different trends in Islam, Shi’a and Suni, start armed conflicts because of religious questions. Muslim tradition is strict towards women, which also leads to economical stagnation in some countries of the Middle East and make the market of the region quite specific for foreign investments. In comparison to this, Europe offers a stable environment that is free from unnecessary risks like revolutions and civil wars.
Johnson R. A. (1963) tried to unite the traditional issues he mentioned in his work into one concept of social system. He also introduced the concepts of environment, function, structure, process and actors, which helped the analysts to create a more detailed picture of local marketing system. Bartels defined these terms in the following manner:
“The function” of an organism is the part it plays, the service it renders or the contribution it makes; its structure is the set of relationships between the organism’s actors. “Process” concerns the activities (including mere persistence) that bring the organism’s actors into interaction, and mediate the relations of the organism to its environment; process can also be conceived as the operation of the structure. “Actors” applies to the organism’s participants; while environment refers to what is outside an organism, and is neither directly controlling it nor directly controlled by it.
In the contemporary Western market, the function can be referred to the consumer, to the startup as a small economic unit and to the entire society. Different activities like advertising the production, selling and buying it in the end create the network of relations that form the structure of the market. Businessmen, consumers, managers and other people are the actors of the marketing system. The environment consists of numerous aspects, among which are cultural, social, economical, and political. All these functions of the marketing structure interact with each other in indirect and direct ways. In the case of the Middle Eastern market, the function refers mostly to the state and big company that works with nature resources. The wellbeing of the entire society is determined by the overall state of economics in the country. As a result, the marketing system that can be applied to the Middle East region is shorter than the one, applied to Europe. The number of managers, businessmen and consumers falls in some states that are not on a high level of development. The cultural environment is very important in case of the Middle East, as it was mentioned in the paper. Even though all the differences and similarities that were found in the compared marketing systems need to be explained in the context of the environment, it is crucial to remember that the marketing analysis is distinguished from environmental studies.
In this research several methods were used. The first method that was applied is the functional one. This approach describes the results of the research so that they can be compared afterwards. Homer B Vanderblue determines marketing functions as “the tools for analysis of marketing problems as developed in this discussion, may now be listed”. He writes:
They are ten: assembling, buying, financing, standardizing, transporting, storing, assorting, risking, selling, dispersing. These ten functions do not appear in every marketing transaction; nor are they necessarily performed in any particular order. The “pure” broker merely buys or sells; the factor frequently finances; the jobber may perform all, in some instances even carrying the full risk burden, in others delegating the risk to the insurance agency. Some are frequently performed by a consumer, when sale is made to that last link in the marketing chain.
The main method is the comparative one. Though, it is possible to say that every investigation is comparative by its nature. The qualitative data analysis approach was used to describe the differences and the similarities of the marketing systems of the West and the Middle East. Qualitative analysis of the information is an indispensable part of searching for information for thematic descriptions and overview.
The collected data was also fractures and contextualized to make the process of understanding and making conclusions. Categorical strategies were used to divide the collected information about the marketing systems of the two regions into subcategories. A framework for analysis proposed by Boddewyn J. (1965) was used to compare marketing of the Middle East and the West by using inductive approach. The scientist emphasizes the next elements that are important in creating relations within marketing system:
1) Who are the marketers? This question covers the characteristics of the actors like their location, density (physical); income, level of education, wealth (economical); social; role perceptions, values, religion, attitudes (cultural). Duddy E. A. and Revzan D. A. (1947) described the common types of marketers (actors) in the study “Marketing: An Institutional Approach”.
2) What do marketers do? This question covered the activities of actors, their initiatives and techniques, the way the resources are used in the analyzed market. The interactions of the actors were studied by Vaile R. S., Gretherand E. T. and Cox R. in “Marketing in the American Economy”. (1952)
3) How are marketers related to each other? This issue analyses the nature of relations in marketing (hierarchical-egalitarian, egotistic-altruistic, rational-traditional dichotomies). Alderson W. gives information about this problem in “Marketing Behavior and Executive Action”. (1965)
4) What do marketers contribute? This characteristic implies the economic, cultural, social and political nature of the actors. Cox R. gives an example analyzing marketing system as a function in “Distribution in a High-level Economy”. (1965)
5) How are marketers affected by their environment? This question supposes the discussion of the interdependence level of marketing actors and their environment. The detailed information was given by Bartels R. in “Comparative Marketing”. (1970)
The marketing systems of the Middle East and the West are different in various aspects. The cultural, political and social environments create unique characteristics of the local markets. Even though the West is more homogeneous in economical sphere (one currency in the European Union), in religious questions (the confessions co-live peacefully) and the overall political situation is predictable (there are no local civil wars and revolutions), the Middle East market is more desirable for some investors. It is growing rapidly, there is no lack of workforce, and the average salary is lower, than in the Western countries. Despite all evident differences in marketing systems of the two regions, there are several common issues. For example, there are differences in the level of life in certain countries of the regions, which leads to work immigration to more developed states.
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