INTERNATIONAl MARKETING Project Report On

A study of CONSUMER BEHAVIOR of Iran .

Submitted For partial fulfillment of the requirement for the award of Bachelors of business administration IB

GUIDED BY, Mrs. Shalini Gautam

submitted by, Harshita jakhodia

IRAN
Iran is a country located in Central Eurasia, counted amongst the 20 largest countries in the world. The largest as well as the capital city of Iran is Tehran. It is the political, cultural, commercial and industrial center of the country. Iran which boasts of a 4000-year-old-history was a hub of culture, arts and science and played a significant role in Islamic Golden Age. Irans culture so rich that it is emulated by the countries even today. Iran occupies a significant place in terms of international energy security and world economy, a result of its large reserves of petroleum and natural gas. The main religion followed in Iran is Shia Islam. Earlier, Iran had a monarchy, ruled by a shah emperor, and the throne was known as the Peacock Throne. It finally transformed into an Islamic Republic, after the Iranian Revolution in 1979. Iran is also the founding member of UN, NAM, OIC, and OPEC.

EDUCATION

Education is compulsory between the ages of 6 and 11. Roughly fourfifths of men and two-thirds of women are literate. Primary education is followed by a three-year guidance cycle, which assesses students aptitudes and determines whether they will enter an academic, scientific, or vocational program during high school. Policy changes initiated since the revolution eliminated coeducational schools and required all schools and universities to promote Islamic values. The latter is a reaction to the strong current of Western secularism that permeated higher education under the monarchy. Adherence to the prevalent political dogma has

long been an important factor for students and faculty who wish to succeed in Iranian universities. In fact, acceptance to universities in Iran is largely based on a candidates personal piety, either real or perceived.

Consumer Behaviour in Iran Heavily Influenced by Exposure to Western Media via Internet and Satellite Channels Young adults are increasingly being exposed to western media and culture through access to the Internet and satellite channels. The young adult population are finding ways to get around the controlled access to Internet sites. The young demographic of Iran promises a huge consumer market and labour force. This group of young adults will be well-educated and attain middle-class lifestyles with a high potential to influence consumer behaviour in Iran. Consumer expenditure on communications and transport will see the highest growth, of 84.4% and 74.1% respectively, during the forecast period. This age group will drive the main consumption of these product categories. Young consumers and their increasing demand for better and a wider variety of products and services will affect the demand for a wide range of products during the forecast period. Being westernised and following the latest trends from the West are the main factors influencing their choices, especially in terms of fashion, cosmetics, consumer electronics, food, drinks and health and wellness products. Young, newly established families and households will require better quality products and services to cater for their family. Being exposed to Western media through satellite channels and the internet has and will continue to influence consumer behaviour in Iran, creating a demand for products advertised through these media and also creating greater brand awareness among Iranians.

Iran is the most populous country in the Middle East, with a total population of 75.1 million in 2010. During the review period the median age in Iran increased rapidly from 24.5 in 2006 to 26.7 in 2010 and is expected to rise further to 32.3 in 2020. Despite this rapid growth, the country is, and will still be considered a young nation. The population is expected to exceed 80 million by 2016. This will represent a doubling of the population since 1980. By 2020, Iran will have 83.7 million residents, of which the majority will be middleaged. Consumer Lifestyles in Iran With its large population and burgeoning middle class, Iran has traditionally been a buoyant consumer market. But recent economic sanctions, combined with high inflation, a devalued currency and falling levels of disposable income, have significantly affected levels of consumer spending. Regardless, demand for goods remains high and many consumers now rely on the informal market to acquire what they want. Generally, consumers do not anticipate that their situation will improve in the short term. Consumer Lifestyle Reports in Iran provide current and detailed snapshots of the unique behaviours, attitudes and spending patterns of consumers in Iran. In addition to covering important core topics like household disposable income, consumer expenditure, savings and credit and housing and home ownership, this report also contains hard-tofind statistics on more specific consumer-related topics like eating and drinking habits, shopping habits, preferred types of stores and retail venues, clothing and fashion trends and descriptions of how consumers spend their leisure and recreation time. A consumer segmentation section in the report breaks down the Irans consumers by specific age groups, ranging from babies and infants to pensioners; highlighting the factors that influence purchasing decisions and the products in greatest demand for each segment. Use the Consumer Lifestyle in Iran report to answer questions including:

In what types of stores do consumers shop for food and drink? Do commuters drive cars to work or take public transport? How do ethnic groups influence consumer preferences and expenditure trends? How many households own microwave ovens? Personal computers? Refrigerators? On the whole, are the Irans consumers spenders or savers? Where do consumers go on holiday and how much do they spend? How well are consumers served by the Irans healthcare system? Get a quick, clear and comprehensive understanding of consumer trends, attitudes and behaviour in Iran with relevant data conveniently laid out in a single, easy-to-read document Immediately gain hard-to-discern insights from local analysts into the factors that influence daily decision-making processes of Iran consumers as they shop for and buy needed products and services Save research time and effort by quickly identifying unique (or in some cases similar) consumer attributes and characteristics that explain the demand for specific products and services in Iran Quickly grasp the dynamics and direction of Irans retail distribution network in order to understand how manufacturers and distributors get their products to consumers

Buy Consumer Lifestyle reports to:

Household Annual Disposable Income According to the Statistics Centre of Iran, the annual income of an urban household was IRR88.2 million in March 2008-March 2009. The same census reported the annual costs of the same household as IRR94.2 million, showing a deficit of almost IRR6 million. In comparison to the previous calendar year, incomes had increased by 13.1%.

In rural areas, annual reported income was IRR48.4 million which was an 8% increase over the previous year. Annual costs in rural households were reported to average IRR54 million.

Annual incomes were reported to be from official employment, from agricultural and non-agricultural activities and miscellaneous income sources. Miscellaneous income sources often come from renting out a property or providing a service. Sport and Exercise Sports are mandatory at school for Iranians and are part of the curriculum. School sports are mainly some physical exercises and practising volleyball, basket ball, table tennis or badminton. Boys play football as well. Many schools, however, do not have the facilities or space for sport activities and sports hour is usually treated as free-time. At university, passing sport courses are mandatory for graduation.

Personal Grooming Spending on Cosmetics and Toiletries In 2007, Iran was ranked third in the Middle East and seventh globally for consumption of cosmetics and toiletries. The large population of young Iranians help drive these rankings. Iranian girls and women wear make-up on a daily basis.

In 2007, the Ministry of Health and Hygiene announced that more that 50% of colour cosmetics available in Iran were fakes or of poor quality and could lead to ill health and skin diseases. As a result, the government introduced more restrictive legislation on colour cosmetics. This had a major impact on the sector sales, resulting in a reduced supply of colour cosmetics from domestic suppliers. Due to major quality problems related to domestic products, Iranian manufactures reduced their production under the new rules. Korean, Chinese and European colour cosmetic brands are widely available at different price ranges and are affordable for many Iranians. Impact Appearance is very important to Iranian women and the use of cosmetics and beauty products has a long history in Iran. Iranian women, especially in urban areas, use cosmetics and toiletries extensively and tend to compete with each other in keeping up with the latest looks. Iranians are very fond of blond hair and fair skin. Because of the Islamic laws that require women to cover their hair, women, especially the young, pay particular attention to their face and their nails which do not have to be covered in public. Etiquette and Customs in Iran Introductions are generally restricted to members of the same sex since men and women socialize separately. . Greetings tend to be affectionate. Men kiss other men and women kiss other women at social events. If they meet on the street, a handshake is the more common greeting . When Iranians greet each other they take their time and converse about

general things. . The most common greeting is "salaam alaykum" or more simply "salaam" (peace). Gift Giving Etiquette . Iranians give gifts at various social occasions such as returning from a trip or if someone achieves a major success in their personal or business life. . On birthdays, businesspeople bring sweets and cakes to the office and do not expect to receive gifts. . It is common to give monetary gifts to servants or others who have provided services during the year on No Ruz (The Iranian New Year). Money should be new bank notes or gold coins. . If you are invited to an Iranian's house, bring flowers, or pastry to the hosts. When giving a gift, always apologize for its inadequacy. . Gifts should be elegantly wrapped - most shops will wrap them for you. . Gifts are not generally opened when received. In fact, they may be put on a table and not mentioned. Dining Etiquette If you are invited to an Iranian's house: . Check to see if the host is wearing shoes. If not, remove yours at the door. . Dress conservatively. . Try to arrive at the invited time. Punctuality is appreciated. . Show respect for the elders by greeting them first. . Check to see if your spouse is included in the invitation. Conservative Iranians do not entertain mixed-sex groups.

. Expect to be shown into the guests' room. It is usually lavishly furnished with European furniture. . Shake everyone's hand individually. . Accept any offer of food or drink. Remember to do 'taarof'. Table manners: Iranians are rather formal. Although some meals in the home are served on the floor and without eating utensils, it does not indicate a lack of decorum. In more modern homes, meals are served on a dining table with place settings. . Wait to be told where to sit. . Eat only with the right hand. . Try a bit if everything that is served. . Meals are generally served family-style. . Most tables are set with a spoon and fork only. . There is often more food than you can eat. Part of Iranian hospitality is to shower guests with abundance. . Expect to be offered second and even third helpings. Initial refusals will be assumed to be polite gestures (taarof again!) and are not taken seriously. . Leave some food on your plate when you have finished eating. Restaurants generally have two sections - "family" where women and families dine and "men only". Tips of between 10 and 15% are appreciated in hotel restaurants.

Business Etiquette and Protocol in Iran Relationships & Communication . Iranians prefer to do business with those they know and respect,

therefore they expect to spend time cultivating a personal relationship before business is conducted. . Who you know is often more important than what you know, so it is important to network and cultivate a number of contacts. . Expect to be offered tea whenever you meet someone, as this demonstrates hospitality. . Since Iranians judge people on appearances, dress appropriately and stay in a high standard hotel. Business Meeting Etiquette . Appointments are necessary and should be made 4 to 6 weeks in advance. . Confirm the meeting one week in advance and when you arrive in the country. . It is a good idea to avoid scheduling meetings during Ramazan (Ramadan) as the need to fast would preclude your business colleagues from offering you hospitality. . Arrive at meetings on time, since punctuality is seen as a virtue. . The first meeting with an Iranian company is generally not businessfocused. Expect your colleagues to spend time getting to know you as a person over tea and snacks. . Be patient - meetings are frequently interrupted. . Written materials should be available in both Farsi and English. . Do not remove your suit jacket without permission. . Do not look at your watch or try to rush the meeting. If you appear fixated on the amount of time the meeting is taking, you will not be trusted. Business Negotiating

. It takes time for Iranians to become warm towards foreign businesspeople. Until then, they may appear somewhat stiff and formal. . Personal relationships form the basis of business dealings. . Decisions are made slowly. . Iranians are deliberate negotiators who can drive a hard bargain. . Do not use high-pressure tactics. They will work against you. . Iranians may display emotion, or even walk out of the meeting, or threaten to terminate the relationship in an attempt to convince you to change your position. . Iranians often use time as a negotiating tactic, especially if they know that you have a deadline. Be cautious about letting your business colleagues know that you are under time pressure. . Companies are hierarchical. Decisions are made at the top of the company, either by one person or a small council.

Dress Etiquette . Business attire is formal and conservative. . Men should wear dark coloured conservative business suits. . Ties are not worn by Iranians but it would not be seen as negative if you did so. . Dress well to make a good impression. . Women should always dress modestly and cover their hair.

Titles Address your Iranian business associates by their title and their

surname. . The title "doktor" is used for both M.D.s and Ph.D.s. Engineers are called "mohandis". These titles are are preceded by the formal titles listed below and are used with the surname. . The title "agha" (sir) is used when addressing men. It may be used before or after the first name. The phrase "agha-yeh" is put before a surname. . The title "khanoom" (madam) is used when addressing women. It may be used before or after the first name. The phrase "khanom-eh" is used before the surname. . Wait to be invited before moving to first names. Only close friends and family use this informal form of address.

Business card Business cards are only exchanged by senior-level people. . Since rank and position are very important, make sure your business card includes your title. . Have one side of your card translated into Farsi. . Present your card so the Farsi side faces the recipient. Credit cards

Iran is a cash society. Because of the three-decades-old American embargo here, Western credit cards don't work. No ATMs for foreigners means that we have to bring in big wads of cash...and learn to count

carefully. The money comes with lots of zeros. One dollar is equal to 10,000 rial. (If you exchange $100, you are literally a millionaire here.) A "toman" is ten rial, and some prices are listed in rial, others in toman...a tourist rip-off just waiting to happen. I had a shirt laundered at the hotel for "20,000." Is that in rial ($2) or in toman ($20)? Coins are rarely used, and there are no state-issued large bills. Local banks print large bills to help local commerce. To tell if a bill is counterfeit, you rub the number with your finger if it's the real deal, the warmth makes the numbers momentarily disappear. Fast food consumption in Iranian adults BACKGROUND: Although fast food consumption has drastically increased in Iran in recent years; there is a paucity of data in relation to the association between fast food consumption, dietary intake, and cardiovascular risk factors. This study aims to determine fast food consumption status among young and middle-aged Iranian adults, and to assess its impact on dietary intake and cardiovascular disease (CVD) risk factors. METHODS: This cross-sectional population-based study was conducted on 1944 young and middle-aged adults (840 men and 1104 women), who participated in the Tehran Lipid and Glucose Study (2006-2008). We collected dietary data by using a validated 168 item, semi-quantitative food frequency questionnaire. Total fast food consumption was calculated by summing up weekly consumption of the most commonly consumed fast foods in Iran. RESULTS: Mean consumption of fast food was 161g/week (95% CI: 147-175) for young adults and 108 g/week (95% CI: 101-115) for middle-aged adults. Mean dietary intakes of energy, fat, saturated fat, cholesterol, sodium, meat, and soft drinks increased significantly (P < 0.05), while

carbohydrate and refined grain consumption decreased (P < 0.01) across tertiles of fast food in both age groups. In young adults, dietary energy density and protein intake increased significantly (P < 0.01) where as intake of non-starchy vegetables and carotenoids decreased (P < 0.05). In middle-aged adults dietary intakes of fiber, folate, calcium, and fruits significantly decreased across fast food tertiles (P < 0.05). After adjustment for confounders, there was an association between fast food consumption and body mass index (BMI; = 0.104; P < 0.01) and waist circumference (WC; = 0.083; P < 0.01) in young adults, and serum triglycerides ( = 0.072; P < 0.05), high density lipoprotein cholesterol (HDL-C; = -0.051; P < 0.05), and atherogenic index of plasma ( = 0.056; P < 0.05) in middle-aged adults.

CONCLUSION: The results show that increased consumption of fast foods is associated with poor dietary intake and some of the CVD risk factors in Iranian adults. The impact of culture on luxury consumption behaviour among Iranian consumers Purpose Consumer behavior will become more heterogeneous because of cultural differences. This phenomenon makes it increasingly important to understand values of national cultures and their impact on consumer behavior. The purpose of this paper is to review cultural factors with a focus on religious factors that influence the Iranian consumers' behavior during evaluation of luxury value dimensions. Design/methodology/approach Hofstede's model of national culture and research papers pertaining to religious influence on

consumer behavior are applied to understand consumers' behavior toward luxury consumption in Iran as an Islamic country. Findings Findings support the notion that there are cultural differences between consumers in evaluating luxury value dimensions. As the study is about Iranian Muslim consumers, the role of religion in consumer behavior has also been debated. These findings are useful for domestic and international marketers toward a better understanding of Iranian consumers' luxury value perception based on cultural aspects. Practical implications The research outcomes should assist industry and business practitioners to understand the behavior of Iranian consumers and by using the findings formulate strategies that enhance their competitiveness in the market. Similarly, the research should enrich marketing literature by providing empirical evidence on Iranian consumption behavior from the perspective of the Muslim population. Research provides a better understanding of cultural factors that affect Iranian consumer behavior toward luxury value perception. Originality/value This is the first academic study analyzing the dimensions of luxury values, including the consideration of cultural and religious factors that influence Iranian's consumer behavior. The results can be seen as the first step for domestic and international marketers toward a better understanding of Iranian consumers' luxury value evaluation.