It is worth noting that at present, the global fragrance market is highly competitive and the rivalry between different brands is indeed severe. Moreover, it is saturated with the products of mass consumption as well as niche or luxury goods (Gillespie & Hennessey, 2015). Also, the majority of manufacturing companies depend on the correctness of the chosen distribution channels and sales forms. In this regard, the perfume companies place greater importance on where and how they could sell their products more effectively. The purpose of this paper is to review and analyze the market setting in the perfume industry and to evaluate the tendencies companies follow to sustain competitiveness.
Micro and Macro Environment
The micro and macro environment in the Arabic perfume market is rather complex. For instance, the political issues (local regulations, interest rates, restrictions set by the government) might threaten the company’s performance (Gillespie & Hennessey, 2015). The country requires that producers are environmentally-friendly and might even ban the use of some ingredients in the production of perfumes, which might result in increased costs for manufacturers (Matherly, Nandialath, & Richards, 2013). Further, companies must meet the standards promoted by the UAE. At present, the global market experiences currency fluctuations, which inevitably affects the productivity and sales (Gillespie & Hennessey, 2015). Apart from that, the microenvironment is changing as a shift in the segmentation is evident. The youth with its particular needs, tastes, and requirements is the fastest growing market segment at which the fragrance market should start targeting.
Local Fragrances
As discussed in the case study, international companies tend to position themselves as companies with local knowledge. It implies that their fragrances meet the needs of the customers and comply with the guidelines promoted by the countries. They reflect on the cultural taste changes, which enables them to address the regional customer needs (Gillespie & Hennessey, 2015). The social contemplations empower companies to develop their goods in such a way so that they respond to particular local needs. For instance, the major fragrance companies have introduced oud or amber scents in the Arabic market instead of softer fragrances preferred in the USA (Matherly et al., 2013). This strategy reveals that a brand has local consumer understanding, which, in turn, increases sales in the targeted market. Catering to a diverse customer base allows adapting commodities to the local markets; thus, reaching scalability and flexibility.
Middle East Market
It should be mentioned that according to researchers, fragrances and perfumes are the two categories that are sold the best in the UAE and the demand for luxurious scents is rapidly growing (Gillespie & Hennessey, 2015). Moreover, the per capita consumption of fragrances is the highest in the Middle East (Matherly et al., 2013). Consequently, an international perfume manufacturer would aim at the Middle East market to nurture its sales.
Growing Market Segment
According to Matherly et al. (2013), the main growing market segment that the producers aim to target is the young people aged 25-34 who make the 46% of the consumers as per the survey conducted among Facebook users. Moreover, as researchers put it, young people make the largest population group in the UAE. That is to say, they represent approximately 60% of all the potential customers (Gillespie & Hennessey, 2015). It is essential to stress out that this customer segment is particularly demanding in terms of the environment; therefore, perfume companies should be consistent with the environmental requirements and cultural concerns imposed by this growing market segment. To be more precise, this population group requires the liability of producers as well as socially responsible actions. By placing emphasis on social responsibility and employing specific youth-oriented strategies companies will be able to build on customer loyalty.
Basic Categories
When evaluating the basic categories of marketing strategies, it is crucial to state that manufacturers should devise such techniques that would allow targeting the youth. Notably, this population group is represented by active Internet users with a high online presence. Therefore, website sales and social networking are the two basic digital marketing categories to consider. Apart from that, companies make active use of online selling platforms, which enables their customers to make purchases notwithstanding their geographical position (Gillespie & Hennessey, 2015). Further on, online advertising is another strategy to be employed. This approach would allow reaching the targeted segment with the new product faster while reducing expenditures. Moreover, the majority of fragrance companies have switched their marketing channels to tailor the current customer needs. In particular, they sell their perfumes in duty-free shops and mass retailers (Matherly et al., 2013).
Conclusion
Thus, it can be concluded that orientation at new rapidly growing segments requires new and innovative forms and approaches to trading. The development of new sales channels is inevitable due to the changing conditions and needs of consumers. Therefore, the competitiveness of companies in the market is directly dependent on the way they use the distribution channels, as well as types of strategies they use to meet the consumer requirements.
References
Gillespie, K., & Hennessey, H. (2015). Global marketing. Abingdon, UK: Routledge.
Matherly, L. L., Nandialath, A., & Richards, C. (2013). Arabic perfumes and the global fragrance market. Harvard Business Review, 1-11.