Factors Leading Companies to Visit Their Loyal Customers in France and the Middle East – Africa

Project Aims

The project will seek to determine why companies are giving a lot of their attention to customers in the France, and the Middle East – Africa region (Cervellon, & Shammas, 2013; Bisson, Kirkland & Stephenson, 2010). This is in response to various luxury companies heading east either on explorative trips or for business (Prior Sanz, & De Lima, 2013; Oberthur, 2014). The paper seeks to determine what the main reasons for heading east are. It will determine if the reasons are motivated by business intentions or by other factors. The main concerns for this project are areas in the Middle East and Africa as well as France

Various articles have cited a wider market in these areas for the new developments. France according to some sources is the biggest market for luxury goods (Ministère des affaires Etrangères, 2014). On the other hand, the MEA region is mainly made up of emerging economies (Bisson, Kirkland & Stephenson, 2010). The countries have a high capacity of growth especially after the recent stagnation of the Chinese economy.

Research Question

Recent studies have shown major luxury companies worldwide turn their attention to the MEA and France (Oberthur, 2014). What are the likely reasons as to why the companies are moving to these countries? Have there been any new developments in the MEA or in France that could have encouraged the development of the MEA and France? What policies in the two markets are in favor of the luxury businesses?

Importance of project

The importance of this project is to highlight the new developments in the MEA and France. The project will seek to determine if the new developments are likely to be exploited for other industries rather than the luxury industry. With the report of this project, many business companies will be able to learn what actions they should take in regard to France and the MEA (Ryals, 2005; The Impact of Ageing Populations 2010; Chesters, 2013). The project will strive to be exhaustive with regard to its achieving an understanding of the two markets. This will enable future exploration into both the industry and the market much easier.

Academically, this project will allow the reader of the project report to learn about these two regions. Matters with regard to the economic development of the regions and the economic capacity will be made understood. The project will also make analysis of any region easier for the reader. Any reader with access to this report will be able to lay bare the economy of any other region and its suitability to do business. The report will also read into previous reports with regard to the matters that are important to this report. These include the way the luxury industry operates and what factors are likely to improve the growth of the industry.

Literature basis

Literature shows mass entry into the region. Companies that have entered MEA the region include the Ford Motor Company, Zegna, Hugo, Hermes international, Kate Spade and Michael Kors Holdings (Ford Motor, 2014; Barron, 2011; The Impact of Ageing Populations 2010). France on the other hand continues to grow in terms of consumption of luxury goods. In fact, France is the largest consumer of luxury goods. Companies like LVMH, Hermes, Chanel and PPR Luxury Group have made a strong presence in the country (Oberthur, 2014; Deloitte SA, 2014). The growth of the French market has been evident for many years. Current growth is mainly on men’s design and is dependent on men’s need to look better

The MEA region has also shown an insatiable demand for luxury goods (Market Watch 2012). Studies have shown that many people from the region have often made trips to South Africa in search of luxury brands (Business Wire 2014). According to studies, while South Africa’s demand for luxury goods still remains, the country no longer holds the top position. Furthermore, the country’s economy has slowed down in the near past.

The project will also provide information on the nature of growth of the economies over a period of 10 years. With this information, it will be easy for one to make inferences regarding the rate of growth of the luxury industry and projections for the increase in sales (AnchorFree 2014; Cervellon, & Shammas, 2013; Doran, 2014). Along with the luxury industry, other industries are likely to rise. This project will provide information regarding the general direction of other markets and determine which markets are likely to grow together with the luxury industry.

Methodology

To achieve the objectives of this report, several tools will be utilized. To analyze the economy, various websites and online databases will be used. A good example is the World Bank database which contains reliable information about the economy economies of various countries and regions. The study of various luxury companies will be done on similar website and databases. Specific databases include the Yahoo Finance website and the Bloomsberg website. These websites provide current information about various companies that are listed in various stock exchanges. For this reason, only companies that are listed will be studied.

Further information will be obtained by conducting surveys to the luxury companies that have dominated the regions. The survey questionnaires will be mailed or faxed to them. Clear instructions will be mailed together with the request information. The request will be followed up with a call to ensure that the mail had been received and is being taken care of. This way, the project will be bound to shed some light to the developments.

Project plan

The first part of the report is to select the countries of study. While there is a general knowledge as to the regions to be studied, not entire regions can be studied. While the information will be sought for as many countries as possible, only some countries have their economy information available on the website. The companies that operate in these areas will then be selected and checked up on the Yahoo Finance website. This will be done before October 15^th, 2014.

Next, the information will be gathered from the websites and databases mentioned. This will take place by October 22^nd, 2014.

Further information will be collected from the companies themselves. The companies will also be informed about the information already available and requested to confirm. This will be done by October 25, 2014.

Follow-up on unreturned questionnaires will be done on October 30^th, 2014. Appreciation letters will also be posted on the same day.

A complete list of companies that will have returned questionnaires will be populated on November 7^th, 2014. This is the list of companies that will eventually be studied.

References

AnchorFree. (2014). AnchorFree Extends Hotspot Shield to Nokia X Customers in the Middle East and Africa. Business Wire (English).

Barron, J. (2011). Business among friends: lessons on customer relationships from turmoil in the Middle East and Africa. Business Credit, (4). 40.

Bisson, P., Kirkland, R., & Stephenson, E. (2010). The great rebalancing. Mckinsey Quarterly, 1–7.

Cervellon, M., & Shammas, L. (2013). The Value of Sustainable Luxury in Mature Markets. Journal Of Corporate Citizenship, (52), 90-101.

Chesters, L. (2013). Middle East and Africa join luxury brands markets. The Independent. Retrieved 26 September 2014, from http://www.independent.co.uk/news/business/news/middle-east-and-africa-join-luxury-brands-markets-8623456.html

De Barnier, V., Roux, E., Bacellar, F., & Tingting, M. (2013). Negative emotions toward luxury consumption: a cross-cultural comparison of rich consumers in emerging markets. AMA Winter Educators’ Conference Proceedings, 24333.

Deloitte SA,. (2014). Luxury brands turn to Africa as the next growth frontier. Retrieved 26 September 2014, from http://www2.deloitte.com/za/en/pages/consumer-business/articles/luxury-brands-powers-of-luxury.html

Doran, S. (2014). Inside France’s €16.8 Billion Luxury Goods Market – Luxury Society – Postcard from…. Luxurysociety.com. Retrieved 27 September 2014, from http://luxurysociety.com/articles/2014/02/inside-frances-168-billion-luxury-goods-market

Ford Motor (2014). Ford Launches Product Acceleration in Middle East & Africa, Bringing at Least 25 New Vehicles by 2016. Business Wire (English).

Market Watch (2012) .Middle East and Africa wealth markets are dwarfed by Europe or Asia but will grow three times faster. MarketWatch: Financial Services, 12(3), 8-9.

Ministère des affaires Etrangères,. (2014). France: World leader in luxury goods – Consulat Général de France à Los Angeles. Consulfrance-losangeles.org. Retrieved 27 September 2014, from http://www.consulfrance-losangeles.org/spip.php?article2177

Oberthur, T. (2014). OT and Network International Announce Strategic Partnership on Banking Business Wire (2014) Cards and Personalisation & Celebrate the Inauguration of OT’s Largest Service Centre in the MEA Region. Business Wire (English).

Prior Sanz, F., & De Lima, P. (2013). The uptake of mobile financial services in the Middle East and North Africa region. Enterprise Development & Microfinance, 24(4), 295-310. doi:10.3362/1755-1986.2013.028

Ryals, L. (2005). Making Customer Relationship Management Work: The Measurement and Profitable Management of Customer Relationships. Journal Of Marketing, 69(4), 252-261. doi:10.1509/jmkg.2005.69.4.252

The Impact of Ageing Populations. (2010). Black Book – European Luxury Goods: Long-Term Attractiveness & Structural Demand Drivers, 71-83.