The Great Depression triggered by a liquidity shortfall in the United States banking system. It has resulted in the collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market has also suffered, resulting in numerous evictions, foreclosures and prolonged vacancies.
The GFC began in 2007 in USA and affected all the sectors: oil industry, automotive industry, food industry and others sectors. This kind of global financial crisis not only affects the economy of a country but above all the consumers of an economy, because they have to face day-to-day challenges related to financial and material safety. Thus, affecting the consumption rate.
In September 2009, Global Financial Crisis hit Dubai. This was the time when people believed that there country is in recession and thus the consumption behavior started adjusting accordingly and also fall in the value of purchasing power. In Dubai people are in a state of luxury and comfortable life but this crisis affected them adversely, where they started cutting down on their needs and aspiration.
Now came the point that how many people in the country are aware of the fact that their country is adversely affected by the crisis and what are its affect on their consumption.
IMPORTANCE OF STUDY:
The current study tries to investigate the impact of Global Financial Crisis on the Consumer Behavior on Dubai.
SCOPE OF STUDY:
Detailed analysis documenting Dubai consumers recessionary mindset and how this influences perceptions about current and future prospects
- Insights highlighting how the economic downturn has affected perceived quality of life, emotional wellbeing and financial security in Dubai
- In-depth analysis of Dubai shoppers changing price sensitivity, value consciousness and attitudes towards private label across 4 major FMCG sectors
- Countries and categories covered: Dubai; food and non-alcoholic beverages, alcoholic beverages, personal care and household care
STUDY METHODOLOGY:
The population of the study composed of all the Dubai province, randomly selected, the researchers developed questionnaire consisting of various items, these were send to reviewer for validation, and verification of the questionnnaire, and it was approved.
They distributed hundreds of these and the respondent rate was 78%, ie these many people filled in th equestionnaire with their reviews.
RESULTS OF THE ANALYSIS:
After the survey from the randomly selected population of Dubai, the following was the analysis; 585 of the people agreed that they were aware of the recession in the country and 62% accepted that this has affected their consumption levels. It was highly appreciated that almost every person out of the survey could understand the impact of recession on their country's economy and also the reason of rising inflation rate due to the global financial crisis.
The result of simple survey shows that there is a statistical significant and a considerable difference of GFC on the Dubai's consumer behavior, of shifting from buying expensive goods to inexpensive substitutes goods.
Also there is statistical considerable and large difference of GFC effect on the Dubai's consumer behavior, in terms of shifting from buying huge quantities of goods to buy small quantities goods equal to 78.08%.
If moving on shifting from consumption to savings, there is no statistical significant difference of GFC effect consumer's behavior in Dubai.
CONCLUSION AND RECOMMENDATION:
The study concluded that the consumers in Dubai are aware of GFC and its impact on the Dubai economy, also on consumption as well as on the consumer behavior. In United Arab Emirate (UAE) the consumers has realized the financial crisis and they have tailored and modified their behavior, so they turned to inexpensive substitute goods and change over to buying small quantities of goods rather than buying huge quantities thus cutting down in their consumption patterns. The study recommend to support the Consumer Protection Society, for increasing consumer awareness, and to follow the rational consumer behavior to achieve greatest
The governments must ease credit at a rapid rate, recapitalize the banks and take measures like reducing job losses rate (even it means bailing out General Motors on one hand and small companies on other hand) to avoid the economies going into recession. Possible benefit of using the disposable income. Also, steps like guaranteeing debt, higher government intervention when required; co-ordinate effort is what is required. The governments need to act fast, they are slow - if they do not act fast enough and in a co-ordinate manner - the odds that the developed world will slip into recession will become a certainty.
This article not only deals with the customer understanding and behavior and where the economy stand after the recession but it also helps one to understand about the marketing strategies to be followed when an economy is recession, if the customers are reducing their consumption so the firms should take out strategies to increase the demand so that the firms could stand recession. The following gives an explanation to how to withstand recession.
Marketing is all about satisfying customer wants and needs and in the course of doing so facilitating the achievement of organizational objectives. By paying attention to customers needs and aspirations, organizations are more likely to achieve there objectives in marketplace. Of, course organizations have to compete with each other and so also have to satisfy customer at least as well as their competitors. In the times of recession the firms have to act very smart because if the consumers are cutting down on their consumption and their purchasing habits then it would be very difficult for firms to survive the recession. Because the demand for product will fall as we have seen in the survey as well that the consumers after knowing the recession in the country have moved from luxury items to inexpensive substitutes and also from bulk purchasing to buying in small quantities.
Thus to keep up the demand the firms have to follow strategic marketing that is to increase the demand without facing losses and sail through the recession. This is done by producing goods and offering services at reduced prices and working on the costs of production that is while producing the goods they should reduce the costs of production. This would help in advancement of organizational effectiveness in UAE; there are many ways to measure the effectiveness of an organization that is productivity, profits, growth, turnover, stability and cohesion. Different theoretical perspectives can account for the diversity in usage of effectiveness measurements.
Rational perspectives emphasize goal attainment and focus on output variables such as quality, productivity, and efficiency. Natural system perspectives focus on the support goals of the organization such as participant satisfaction, morale, interpersonal skills, etc. Open system perspectives focus on the exchanges with the environment -- this includes information processing, profitability, flexibility, and adaptability.
Thus the measures need to me taken up for organizational effectiveness because it means how effective an organization is in achieving the outcomes the organization intends to produce.
But the information given about the strategic marketing is very less, article contribute less to wider body of knowledge area in Strategic Marketing. As it have not given any explanation about the strategic marketing but have just given a survey which could help firm to opt for better marketing prospects. The problem lies where, the article does not mention any remedies for the firms, manufacturers or the suppliers so that they can face the recession, and this could harm the competitiveness of the markets in Dubai. The article only mentions about the consumer behavior when there is crisis in the country and not the suppliers behavior at the time of financial crisis and these suppliers of the firms are the one's who provide consumers goods and services to satisfy their needs, wants and aspirations. If firms are not given proper ways and steps to endure, bear up or resist the recession time then these could not have been possible and the economy could fall badly in terms of finances. These findings although are not known by anyone because these are being held through questionnaires but we cannot say that these are a waste, as this survey helps firms to know consumer behavior, if they are not given remedies at least they are given such a survey from which they can read their consumers mind and then produce accordingly.
The analysis that is being done have been possible due to the wide information and because the literature have been widely addressed. Since, its gives a detailed analysis of the effect of the recession on the country and it has tried to give maximum information about the consumer behavior which is the most important aspect while studying about any country's economy. The tables and comparisons provided were really helpful to reach the conclusion and as well to give better recommendations to face the crisis without being afraid of any loss.
The information provided is up-to-date as well since it has given the information that is being updated according to the Dubai recession. And helps to have a thorough and in depth study of the effect of crisis on common man in Dubai and of course their decisions to withstand it without any fear and to behave like responsible citizens of the country.
The article was a strong explanation for the global financial crisis and it has been presented in an understandable style, which can be understood by any person. The methodology of the study was appreciable to some extent but the methodology could have been better because in the study the researchers have emphasized on only a small group of citizens of Dubai, knowing the fact that Dubai is big country and there are people from all countries who are staying as citizens or are on a work permit and earning their livings, thus each person have a different viewpoint, the survey could have been at a larger scale, with the help of the government then the analysis could have been from the point of view of the whole country. But if we talk about the originality of the article, then the article completely primary and unique because the survey is done practically is not being taken up from any other sources of the data. The analysis is sufficient since it's perfectly comparable and it gives an equivalent analysis.
As we know if there are advantages of a thing, there lie limitations as well, in the article there are very less remedies to deal with the problem and the reference used very limited, there could have been more magazines, newspapers and websites which could have nullify the limitations. But overall it is overall an understandable article.
The most important advantage about the article is that it can be easily read by anyone of any age group, since the language used is very basic and the vocabulary can be understandable by anyone and the surveys used are very simple and logical.
The difficulty level is average since it's easy to comprehend, grasp and figure out things that is the consumer behavior after the Global Financial Crisis in Dubai.
The article benefits academically as well as to practitioners in the following ways:
TO THE ACADEMICS:
easy for students to understand
can make good notes out of the surveys of the articles
awareness about the financial crisis
global financial crisis is one of the biggest mishap in the history of a country's economy, so it helps students to gain good knowledge about the crisis and its effects on the their country's economy, thus helping them in higher studies and if they plan to take up economics as their main subject or history as their main subject, then this event need to be memorized from heart because this impact on consumer behavior will become a part of the examinations.
It increases the knowledge.
Not just from the exam point of view but for various entrances in life this should be known.
TO THE PRACTITIONERS:
People who study law or practice law, this one of the most important part to understand.
This kind of article can be kept in records for the future use as for the comparisons that how much a country has grown after the recession.
Thus would like to conclude that such articles help to understand the economy of a country completely if worked out on the limitations. The recession in Dubai is although the one which have caused a great fall in the economy but the remedies would help to see a new sky of achievements and would give stairs to climb up again to the peak of success, with a boosted economy.
