It was a bit shocking to see that Saudi Arabia is the third most anxious country among the 13 that JWT has surveyed since February 2009. (See the Trends and Research page for a full listing of reports.) According to JWT’s October 2009 AnxietyIndex survey of 484 Saudi adults, our nation’s anxieties are centered around unemployment and health.
While Saudi Arabia is one of the world’s richest countries, people have been very worked up about the high rate of unemployment—young men aren’t able to find jobs with salaries that keep up with the cost of living and social expectation, and women find it difficult to compete with men for jobs due to social constraints. The Saudi stock market crashed before the global recession, which has affected many companies here; hiring freezes are prevalent.
It was less surprising, however, to see health and disease register as a major driver of anxiety among Saudis. Although health care is free for all Saudi nationals, the system is very slow, and many people go to costly private hospitals. That said, at least we aren’t upset about the price of gas.
To download the entire report, click here.
Looking back on the recession and marketing in Saudi Arabia this year, we’ve seen brands shift from mass generic communication to more targeted advertising. Some brands have been trying to create more value. And for the first time in a while, we’ve seen brands going the extra mile to communicate discounts or value products, which used to be shunned by the cash-laden Saudi.
Two recent examples of this are Wafrah, a brand that has been focusing solely on marketing affordable products (its name translates as “save”), and Petromine, a motor oil brand offering 50 liters of gasoline free with an oil change.
But not enough brands here have directly addressed consumer anxieties, and most remain unconvinced that they need to focus on championing value. In the end, they just keep talking about how premium their product is while ignoring what people are feeling and an opportunity to really connect with their consumers.
In Saudi Arabia, people freak out about their phone bills. Some consumers must choose between going out and paying their phone bill, which is possibly the most complained about financial obligation in the country.
So Saudi Telecom came up with a promotion to help alleviate some of this anxiety: It is offering a month of free calls for post-paid subscribers and anyone who switches to Saudi Telecom. Timed around the religious holiday of Eid, the offer was a holiday gift of sorts for the brand’s customers.
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Ordinarily, a legal struggle within a family business wouldn’t have much impact on consumer confidence in general. But in the case of the Ahmad Hamad Algosaibi & Brothers Company (AHAB)—which is alleging that Maan al-Sanea, the son-in-law of one of AHAB’s founders, “misappropriated” about $10 billion—nothing is ordinary, especially in the current climate.
In various social media forums, people are abuzz about the scandal. One question that keeps popping up is: “If the recession brought out problems in this family, what kinds of problems are lurking elsewhere, including at local banks?”
People’s confidence will continue to decrease, as more questions emerge about transparency in the banking sector and the regulatory Saudi Arabian Monetary Agency (SAMA). How could they not see a huge fraud like this in the making?
Some people seem to think that banks are actually partners in this fraud because they took money from ordinary people during stock market glory days and gave it to hawameer (Arabic for “big bosses”) like Maan al-Sanea.
The net result of all this will be an even more cautious approach when people and companies deal with the banking sector or family-owned businesses.
Brands here are learning to be more in tune with the consumers’ anxieties and responding with offers that motivate them. Recently, Toyota has been grabbing attention by addressing consumers’ price-consciousness and cautious approach to spending.
One ad promotes the “Super Zero” offer: no down payment, Toyota pays the first month’s lease, no administrative fees, no guarantor required, third-party insurance and full repairs. If this doesn’t get people to at least consider a Toyota, nothing will. Another ad uses the headline “When I put my money into a Toyota, I don’t consider it a loss” and emphasizes how easy it is to buy a car through installments. Both ads encourage people to visit the Web site.
I’ve seen the ads posted multiple times on blogs and Facebook; they’ve also cropped up in e-mails and in conversations. Toyota has effectively managed to convey a sense of opportunity not to be missed—these ads are likely to at least get people in the door. And the response has been strong enough that Nissan and Hyundai have responded with similar offers.
Recently, fast food purveyors such as KFC and a local chicken fast food chain called Al-Tazaj (which translates as “fresh”) have been offering budget meals. This is notable because it represents a change in approach; normally, these companies run all-you-can-eat promotions, rather than discounted price offers.
As people seek to reduce their budgets, they are eating a bit less at fast food restaurants, opting instead to eat at home. As the global economic downturn decreases the number of construction projects in Saudi Arabia, there are fewer of the workers who make up a sizable percentage of customers at these low-cost fast food joints.
These promotions may actually be a great development all around: The consumer can have his favorite grilled or fried chicken cheap. And it proves that the brands understand their customers and want to help them enjoy a hot, quick meal. I have already seen anecdotal evidence of people using these offers. On Friday (which is the end of the weekend here in KSA), the cashiers remarked that since the campaign started, they have more traffic than they can handle.
The usual response for banks during a recession is to become tight-fisted and cautious about giving loans, which in turn frustrates customers. The Saudi stock market was hit particularly hard, and banks have been having trouble acquiring loans. So we brainstormed with HSBC (locally known as SABB) to create an ad campaign that targets governmental employees, whose jobs are considered to be the most stable in the country.
The copy basically reads, “Do you work in the health sector? A special personal loan awaits you, for a limited time only. Call 800-124-5557 or visit your nearest branch.”
The campaign targets those who work not only in the health sector, but also telecom, the military, education and the petroleum industry. The goal is to get these reliable prospects inquiring about a loan, and according to SABB, it has already generated enormous traffic.
This simple and straightforward campaign helps enhance the brand essence of SABB understanding its customers, and it gives the perception that the bank has created a special loan for them, while other banks are declining loan applications. —with contribution by Talal Tahan
Economists tell us that the market is all about supply and demand, but marketers know that perception plays a key role as well. And the Web can significantly shape consumer perceptions, influencing demand for a product or brand.
Throughout the Arabic-language Internet, people are protesting the prices charged by foreign brands through a grassroots campaign called “Let it rust.” The movement started with consumers angry that Toyota was purportedly charging prices far higher than those seen online in other markets. Now this Web-based movement has spread to everything from food to cell phones. On Facebook, a Let It Rust group has 1,135 members.
Saudi consumers are very skeptical. While they’re not feeling the pinch of the recession as sharply as Americans, Europeans and Asians, they’re frustrated that prices for major brands remain high even as they’re being forced down elsewhere.
Brands must be transparent in an age where everyone’s a Wiki expert. Explaining why prices are higher—e.g., better service, air conditioning fit for the desert heat, etc.—will go a long way toward alleviating some of this consumer angst.
Supposedly, both the Saudi consumer and economy are shielded from the global recession. We have oil. We are not involved in the subprime mortgage debacle. We are not part of the credit crises.
If all of the above is true … why are stores giving 70-75 percent off out of season?
