Consumer Segments of the Middle East – 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.

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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.
  • 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 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.

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