Recession and its Impacts on Sales in Saudi Arabia - a proposal
Economic growth in any part of the world is dire need of the state in order to provide better lifestyle to its people. Decline in economic growth affects each and every aspect of human lifestyle. Recessions are also used to affect the lifestyle of the people. Recession is basically decline in the economic activity of the country which can lead towards lower level of GDP for two consecutive or more quarters of the year. Recession increases the unemployment rate in the area. Wage rate becomes stagnant and lower level of sales is one of the characteristics of the recession. Recession stays for shorter period of time and leaves a milder impact on the economic system of the country as compared to the depression. Normally recessions are considered important part of the economy (Business Dictionary.com).
Recession affects the entire economy especially large businesses. Due to recession, profit margin of the corporations gets lowered and as a result they stop hiring new blood for their business. In turn, unemployment rate increases in the country. Corporations cut down the cost of new equipment for their working which means that entire economic cycle gets affected by the recession. Recession persists for two or more quarters of the year so; it can affect the stock’s price of the corporation.
Economic growth and state of the market affect the level of sales in any area. Recession has a direct impact on the employment rate and wages in the area so it affects the sales rate as well. More durable and long lasting goods sales are used to decrease in the case of recession. While in the case of goods of daily use sales are used to remain same and do not get change because of the recession. For instance, when grocery sales rate of the Finland was studied by the researchers it has been found that sales rate dropped at the start but later on sales rate revived again which means that on FMCGs recession used to have less impact (Ahtokari, 2011).#p#分页标题#e#
While some researches shows that recession is used to increase the sales of retail products. Patterns of the sales are used to vary according to the market which is being analyzed. For instance, it has been noted that in United Kingdom retail sales showed positive growth during the period of recession. During recession prices of the products are used to be lowered and flexible labor market helped the buyers to buy more products and bring positive growth rate in the industry. This research also shows the change in the economic system as compared to the patterns of economic downfalls in the past (Anagboso & McLaren, 2009).
Sales of the company are used to get affected by the recession so; marketers are used to devise a strategy which can help them in dealing with such situations. For instance, marketers are likely to increase the advertisement during the recession and maintain their sales rate. When researchers investigated this issue they found a positive correlation between the advertising and sales during recession i.e. “The results suggest that increasing advertising during a recession results in increasing sales. On the other hand, decreasing advertising during a recession seems to result in decreasing sales” (Tellis & Tellis, 2009).
Recession has the impact on the economic system of the state. It has become clear that sales are used to get affected by the patterns of economic growth. Recession affects the sales rate either it is for the very short span of time. In this study impact of the recession on the sales in the Saudi Arabian market will be analyzed.
Research Problem 研究问题
Lack of literature in this area has increased the need of analysis of Saudi Arabian market. Impact of recession on the economic activity will be investigated with special reference to sales rate. This study will analyze that either Saudi Arabian market follows the dominant patterns or there is some change. This study will help in developing a clear picture about the impact of recession on sales of different goods in the Saudi Arabia. A comprehensive account will help in understanding that which market gets more affected by the recession. Study will try to analyze the impact of recession on the sales of FMCGs and long lasting equipment simultaneously. There is very little available literature on the topic so; this study will help the researcher in understanding the patterns of economic activity in the Saudi Arabia. This study will help us in understanding the impact of recession on the sales of different goods.
As mention above recession is considered a normal part of economic system so a better strategy to deal with it is highly demanded. When a comprehensive picture about the trends in Saudi Arabian market will become evident then this study will help the marketers and economists in devising a better strategy so; that they can deal with the issues in the future in a better way.#p#分页标题#e#
This research study has following objectives;
To investigate the economic trends in the Saudi Arabian market.
To investigate the impact of recession in sales rate of FMCGs
Study the effect of recession on the sales of other goods.
To study the patterns of retail sales during the recession.
To compare the results with past findings and give picture about changing trends in the market.
To recommend better suggestion to marketers so that they can sustain their market share even in the period of recession.
Research model helps in understanding and handling the research questions in more efficient and effective manners. Quantitative research model will be employed to investigate the problem of this study. A descriptive questionnaire will be designed and true respondents will be approached to collect the data. Quantitative method will help in quantifying the data and giving more concrete and logical account by the end of this research plan. Quantitative model of the research will help in defining more well defined variables and measuring them in a proper way. According to Neuman in quantitative research one can get a more “clear, rigorous, systematic conceptual definition of an abstract ideas or concept” (Neuman, 2009). This means that quantitative model will be helping in doing the research in systematic manners.
Independent variable 自变量
Independent variable is a variable which has an impact over the other variable (Neuman, 2009). Recession affects the economic activity in the country so; recession is independent variable. Recession affects the sales rate while the trends of sales in different goods used to vary. In this study recession will be taken as independent variable.
Dependent variable 因变量
Variable which are used to be affected by the other variables are known are dependent variables (Neuman, 2009). Sales are used to get affected by the recession because recession has the power to decrease the sales by increasing the unemployment rate and bringing stagnation to the wages of people. These factors reduce the purchasing power of the people which brings downfall in the sales of goods ultimately. In this study sales of goods will be dependent variable which will be affected by the recession. Research Questions
This study will investigate the following research questions;
What is the effect of recession on the overall economy in Saudi Arabia?
What is impact of recession on the sales of different products?
Does recession supports the growth of retail sales in Saudi Arabia?
To what extent the sales of FMCGs are dependent on the recession?#p#分页标题#e#
How good marketing strategy helps in sustaining the market share in the period of recession?
How current trends of sales during the recession period in Saudi Arabia are different from the previous trends?
This study will try to test the following hypothesis in order to get a comprehensive account about the market trends in the Saudi Arabian market during the recession period.
It is assumed that recession is having negative impact on the economy of the country.
It is assumed that recession has negative impact on the sales of long lasting goods.
Recession has no no impact on the sales of FMCGs
Recession is having positive impact on the retail sales.
It is assumed that current patterns of the sales are different from the previous trends during recession.
It has been assumed that better marketing strategy helps in increasing the sales during the recession.
Increased level of advertising helps in increasing the sales during recession.
Variables are the quantities which are keep on changing. When a variable is affecting the other it is considered independent variable and the one which is affected by the independent variable is termed dependent variable. In broader terms recession is independent variable in this study while sales are dependent variable. In order to test each hypothesis all variable will be considered during the research process. In sales different categories i.e. sales of FMCGs, long lasting goods and retail sales will be considered independently and their relationship with the recession will be examined. Economic growth of the country will be considered against the level recession in Saudi Arabia. Marketing strategies and level of advertising and their relationship with the recession will be investigated in this research plan. This means that under the umbrella of two major variables different phenomena will studied.
Operationalization of Variables 基本变量
Operationalization of the variable means that how these variables will be measured. Measuring a variable is very important task because here an abstract concept and idea is defined in a rigorous way. A comprehensive definition of the terms sales and recession will help in defining the aspect which will be measured. For instance, as defined earlier different types of sales will be considered. In order to measure the impact of recession on the sales a descriptive questionnaire will be developed. Close ended questions will be added in the questionnaire about the research problem. Likert scale will be used to measure the variables in an effective manner.
Research Population and Sample 研究种群与样本
Population or earth is all the respondent from which researcher wants to collect the data for his research. Population for this study is big malls and retailers in the Saudi Arabia.
Simple random sample technique will be used to collect the data from the respondents. Simple random sample has the advantage that it give equal opportunity to all respondents to become a respondent. Sample of 100 respondents will be drawn from the population and data will be collected from them.
Data Collection Method
Data will be collected through the survey and email will be the medium. Survey questionnaire will be sent to the respondents and data will be collected through this method. This method will be employed because it is easiest and more cost effective method for the collection of data from the true respondents. This method will take less time as compared to other methods.
Data Analysis Method
SPSS will be used to analyze the collected data. Data will be analyzed through the statistical test i.e. correlation and regression will be employed. Similarly significance of the results will also be considered during the statistical analysis.
Recession is the economic state where country faces the economic downfall. Sales are the major factors which are affected by the recession. This study will try to figure out the impact of recession on the sales of products in the Saudi Arabian market. Similarly how sales of different products i.e. FMCGs and long lasting goods used to get affected by the recession. Previous research in the area will be considered to compare the current results and new patterns in the economic system will be analyzed. Study will also help the marketers in understanding the ways to deal with such situations and sustain their market share.