2. Consumer Segments of The Middle East I The Expat Community
Market segmentation is a relatively common practice, executed over and over by
most leading companies around the world, conducted in order to understand the
needs of different segments and target them effectively. Yet, only a handful
manage to put the findings at the heart of their business model and use it in
devising effective strategies and developing targeted products and services.
In this series, we discuss the most common market segments sought after in the
Middle East market, their needs and key strategies and examples of actions tied
to their most significant expectations.
Our first market segment is the expatriates, including both the white and blue
collar, together which create the substantial customer base in some Middle
Eastern countries, such as the UAE and Qatar.
Acquiring the Segment
Compared to rest of the market segments, this community is relatively easy to
get access to, as its members are usually clustered throughout their lifecycle,
giving opportunities to market to in masses. A couple of practical tactics for
tapping into such opportunities are:
Before Arrival: Most expatriates review blogs and web sites discussing the
work opportunities and lifestyles in their home-to-be. Banners on these web
sites about offerings for expatriates, especially when complemented with value
added information about the country, can be an effective means for early
awareness and acquisition. An example is the HSBC ads published on
www.expatriates.com.
Arrival: Air travel creates an ideal medium for gaining access to hundreds of
potential customers arriving to a new country at once. By targeting flights based
on whether they are low cost or premium airlines and their departure countries,
companies can get direct access to the expatriate segments. Via partnerships
with airlines, airport taxis, and limousines, or, by simply opening booths at
airports, it is possible to reach out to this segment as soon as they arrive. An
example is in-flight NTT Communications SIM Card sales on Japanese airlines
flights.
Government Activities: Recently arrived expatriates go through a number of
government departments to get their residence visas processed, their newly-
bought apartment registered, and complete their relocation. As this guarantees
that the expatriates physically visit certain destinations, it provides an
opportunity to use billboards, brochure distributions, and similar location-
specific marketing activities for direct and early access to them.
At Work: Although the expatriate community blends in with the local
community in terms of where they work, there still exist certain business
environments where the blue and white collar expatriates are more likely to
work at. For example, construction companies and temporary staffing firms can
provide easy access to their blue collar expatriates, whereas the investors and
managers in free zones would most likely be the white collar expatriates, who
are nicely clustered physically.
3. At Home: Similar to the working environments, expatriates are usually nicely
clustered at certain compounds, freehold properties or ethnic districts, which
make it effective to use door-to-door sales and billboard advertisement for
acquisition. Based on the rental prices in targeted area, it is also possible to
identify whether the occupants are white or blue collar expatriates.
During Entertainment: Due to language and cultural differences, the media
viewed, read, or listened to by different expatriate communities are easily
distinguishable. Companies can use this to their advantage across various media,
such as having commercials in movie theatres during certain foreign movies, or
advertisements in newspapers publishing foreign news. Similarly, certain events
target specific expatriate communities, such as those arranged by the embassies
during national holidays, or certain community gatherings and club events, which
also give vast opportunities to reach out to the right targets in masses via
sponsorships and traditional marketing tools.
Serving the Segment
The needs and expectations of the white and blue collar expats are quite
different, as is their affordability and motivations for using different products
and services. Yet, both segments start their lifecycle in their new country with
the same need – need for information and support in settling into their new
homes. Companies can and should start serving the segment from this moment,
as Citibank in India does. In order to provide a value add to potential customers
on their first day in the country, Citibank provides support in registration
activities, in helping to find a new house, and in helping their children get
admitted into schools, in addition to providing orientation sessions through
cross-culture training and networking events.
After the settlement phase of a potential or new customer, companies should
serve each of the expatriate community sub-segments based on their
differentiating needs:
Blue Collar
The traditionally main reason for relocation of this segment is to earn wages
higher than that which they find in their home country. As a consequence, any
promotion or price discounts are attractive for this segment. Yet, to keep the
segment profitable, companies need to only provide such benefits in return for
long-term loyalty, possibly attached to commitments. For banking this could
translate into lowered account charges for a guarantee to keep the account open
for at least a year, and for telecommunications, this could mean an annual
mobile plan commitment.
Most customers in this segment have limited monthly budgets and face
difficulties in making bulk upfront payments. This makes installment based
payment plans and small packaging more preferred by this segment. An
example, offered by du in the UAE is monthly installments, replacing the one-
time joining and renewal fees. Propositions of small packages include Airtel
recharge cards for 50 Rs with 3 days validity, and 10 SAR recharge cards by STC
with the same validity period.
Many individuals in this segment have considerable language barriers, in
terms of both English and the local language, especially when they first arrive to
4. the country. This necessitates the preparation of marketing communications and
product / service information materials and forms in the sub-segment’s mother
tongue as well. Touch-point employees’ ability to communicate with such sub-
segments is also critical, which requires multilingual call center agents as well as
other frontline personnel.
Most of these customers live away from their family and try to support them
from overseas. This especially makes international communications and financial
services a key priority in their needs. As these customers need to communicate
with their families overseas and have relatively smaller social networks in their
new country, mobile plans which have preferential rates, possibly during off-off-
peak hours and charging by the second are attractive offers to serve their needs.
In finance, any offer that would make it more convenient and cheaper to get
their savings to overseas would be effective, such as the remittance debit card
offered by Wachovia, which is delivered to family members overseas for
withdrawing money.
White Collar
The main reason for relocation of individuals in this segment is to further
increase the quality of life for themselves and their families. Hence, the entire
family, and in particular, the children can be targeted here, as the potential value
extends beyond the one individual. Family calling plans in telecommunications,
such as the T-Mobile Family Time plans, and children’s bank accounts, such as
the Kumbara account by Isbank, are attractive means to address the family as a
whole.
Most of these customers have their extended families and friends overseas.
Hence they still need to communicate and transact with individuals and entities
abroad from time to time. And, with the relatively higher affordability level, this
segment is likely to travel overseas during national holidays and their vacations.
These facts make specific services such as mobile roaming and international
credit cards attractive offerings for this segment. Other services such as toll-free
international dialing from certain countries can be considered here as well.
The average time spent by this segment in the new country, when compared
to the blue collar expatriates, is relatively shorter. As a consequence, although
the short to medium term loyalty is important for this segment, investments in
their longer term loyalty can prove to be futile. Packages with shorter term
commitments, and shorter contract terms, such as the expat package offered by
Singtel, are effective offerings for the segment.
The blue collar expatriates, with their size in numbers, and the white collar
expatriates, with their value per customer, are two of the attractive segments in
the Middle East market. Companies should have specific value offerings that
differentiate themselves from the competitors for both of these segments. Those
listed in this article are just a few examples to begin with.
5. About Forte Consultancy Group
Forte Consultancy Group delivers fact-based solutions, balancing short and long term
impact as well as benefits for stakeholders. Forte Consultancy Group provides a variety
of service offerings for numerous sectors, approached in three general phases -
intelligence, design, and implementation.
For more information, please contact
info@forteconsultancy.com
Forte Consultancy Group | Istanbul Office
www.forteconsultancy.com
