Marketing Management of Al-Mazunah Free Zone

Subject: Marketing
Pages: 21
Words: 11723
Reading time:
41 min
Study level: Undergraduate

Introduction

Free economic zones are a group of special geographic territories that provide designated economic trade opportunities for businesses with very light taxation or not at all to encourage the development of prosperous economic activity. Depending on the country where the free zone is located, the taxation rules are determined differently. The conditions and benefits of free zones are controlled by the principles of the World Trade Organization, which also promotes the use of free ports favored through the adoptable customs regulation procedure.

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Current research project evaluates the benefits of Al-Mazunah Free Zone, the investment site located in Oman 4 kilometers away from the Yemen border, overall covering 3 million square meters. The free zone includes numerous facilities such as shopping and service centers, hotels, showrooms, livestock and multipurpose shopping areas, mosque, as well as both parking and green areas. The free zone also has necessary infrastructural items such as communication channels, roads with integrated traffic controls, bridges, and sustainable mobile communication. The investment opportunity envisioned for this zone is the proximity to Yemen, which allows recruiting its workforce without excessive visas and paperwork procedures. However, it is also considered that a bulk of potential workforce could be attracted from the Horn of Africa considering the future Al-Mazunah metropolitan development.

The reviewed free zone presents an attractive opportunity for the foreign investors because of the Oman government support. It was declared that all investors will receive an exemption from the income tax for 30 years without filling in the tax income return form, as well as eased procedure for handling foreign currency operations and capital input. Furthermore, the government capitalizes on the guarantees related to the exemptions from the Commercial Agency Act, the import tax legislation, and equity ownership relief. Additionally, a residence permit in Oman is guaranteed through the simplified procedure, which is particularly beneficial for the Yemeni citizens. Considerably, the Al-Mazunah provides a fruitful opportunity to develop international business and trade within the scope of current governmental commitments.

While it is reasonable to consider Yemen as an opportunity to wholesale consumer goods, the Horn of Africa is a perfect source of accommodating agricultural supplies, which in a combination provides a perfect opportunity to develop the supply framework for managing trade partnerships and generating higher sales revenues in a free trade zone. Furthermore, considering that Oman pursues a relaxed policy regarding the employment of Yemeni workforce in a free zone, it is essential to consider innovative investment opportunities to promote Omani market as a trading platform. Hence, the overarching research question for the current project could be formulated as follows:

Which factors influence the investors’ decisions to establish a company in Al-Mazunah Free Zone? Furthermore, the management question is also formulated as follows: What particular new marketing choices should be applied by Al-Mazunah Free Zone company to attract $ 5 million in investment from Yemen and $ 10 million in investment from Djibouti, Eritrea, Ethiopia, and Somalia in 2021?

The sub-questions considered for the research are formulated as follows:

  1. What does previous research say about management and marketing factors critical to optimizing the ways of attracting investors in Free Zones?
  2. Who are the competitors and what channels do they use to attract investors?
  3. Which marketing tactics and strategies are used by Al-Mazyunah Free Zone to attract investors?
  4. What is the persona of current investors of Al-Mazyunah Free Zone?
  5. What is the customer journey of Al-Mazyunah free Zone Investors?

Research design

The research is performed using a combination of primary and secondary research designs. For the primary research, the qualitative approach of using semi-structured interviews have been utilized. The initial purpose was to investigate respondents’ opinions related to the viability of making certain investments in the Al-Mazunah Free Zone based on the specific trade channels such as car showrooms, stores, small scale industries, oil and gas zone, factories and workshops, and miscellaneous and common services. The secondary purpose was to analyze whether the investors from the Horn of Africa are capable of making investments into the chosen area based on the anticipated financial capabilities. For the secondary research, the literature review related to the investment activities in the Middle East, as well as a brief analysis of partnership arrangements between the countries of Oman, Yemen, and the Horn of Africa was explored. The summary of methods applied to the specific sub-questions is shown in the table below:

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Primary Research Secondary Research
Sub Question 1 *
Sub Question 2 *
Sub Question 3 * *
Sub Question 4 *
Sub Question 5 * *

Sub-Question 1

The first sub-question relates to the analysis of the previous literature about management and marketing factors related to the process optimization of attracting investors to free zones. It will be empirically addressed through the use of secondary analysis and therefore focus on the past literature reviews conducted with respect to the academic papers published within the previous 5 years and related to the Middle East and African marketing strategies associated with the free zone trading activity. Additionally, the focus is made on the agricultural principles persistent to the specific cultural norms.

Sub-Question 2

The second sub-question relates to the analysis of competitive landscape and therefore will be realized through the use of secondary research based on the publications that describe the activity of foreign investments currently undertaken for the free zones and Omani market in particular. The idea behind is to construct the framework that allows evaluating how Al-Mazyunah Free Zone can benefit from the foreign investments, while also considering the risks of competition from the other free zones that are currently developing and might benefit from cross-sectional engagement and the application of the most appropriate trade policies.

Sub-Question 3

The third sub-question relates to the current use of marketing tactics executed by Al-Mazyunah Free Zone to attract investors. Considering that there is a limited information about the nature of such guerilla marketing activities, a combination of both primary and secondary research will be considered to fulfil the research objectives. From the primary perspective, it relates to conducting interviews with local executives. From the secondary perspective, it goes in line with previous approaches of researching the website information and related publication on the Omani web portals.

Sub-Question 4

The fourth sub-question requires analyzing the persona of potential investors, and therefore is best utilized through the application of primary research. It is best constructed through the semi-structured interviews, where individuals are asked to describe themselves from the demographic perspectives, indicate their anticipated strength and weaknesses on both personal and corporate level, as well as to explain perceived investment interests. However, additional information might be required to investigate real investment intentions and the ways to communicate with Omani government.

Sub-Question 5

The fifth sub-question relates to the analysis of the customer journey and therefore could be analyzed both through the primary and secondary investigation. The primary approach assumes that direct interviews are conducted to explore real investment experience and methods used to communicate with investors. The secondary approach could be introduced as the approach of feedback or testimonial analysis, where previous experiences are described or reflected on. However, it might require developing a separate survey that is distributed among previous investors, and, therefore, there is a risk of non-responding or providing mostly negative information if the investment opportunity was not successful.

Method Choice and In-Depth Interviews

As previously specified, the research method chosen for the subject is qualitative; it was realized through the semi-structured interviews. The method is quite common for qualitative research due to the fact that it provides significant insights, which were required to respond to the research questions of this project (Walle, 2015). The purpose of the interviews was twofold and specifically aimed to explore how investors perceive the idea of engaging with Al-Mazyunah Free Zone on the one hand, as well as how investments might help with diversifying the inflow of resources from Yemen and the Horn of Africa. Quantitative methods such as electronic surveys were rejected because they could not provide the type of responses that were required for the specified qualitative research questions. An additional complication associated with using quantitative research was the overall number of respondents required to ensure that quantitative inquiry is statistically valid; the present project could not engage too many people due to time and resource issues. Thus, the main reason why the project is qualitative is related to the research questions, but some additional positive features were important for this choice as well. Moreover, face-to-face communication was chosen due to considering the complications of distributing the questionnaires among investors who are likely to be busy to respond unless contacted personally.

The Assumption Persona

Through the notion of the assumption persona, it is considered that certain investors would consider the free zone as the opportunity to leverage on financial strengths to build on the opportunity to collaborate with the certain government structures in terms of developing a healthy and competitive market. It is also considered that the assumption persona is well educated about the market talent availability, which in this case predisposes the use of Yemeni employees as the source of trust and productivity on the labor front. Finally, the assumption persona suggests that the Horn of Africa would be interested in pursuing the productivity principles associated with the Free Zone rules as those that mandate the competitive market principles.

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Differences from the Initial Proposal

The initial research proposal was aimed to focus on conducting interviews with the investors geographically located in the Horn of Africa. Seven distinct areas have been chosen for exploring the investment opportunities, while overall it was able to collect qualitative evidence from the areas of car showrooms, stores, small scale industries, and factory and workshops only. Eventually, it could be explained by the limitations emerged by the COVID-19 restrictions, while the factors of developing industry specifications might be also considered.

Reliability and Validity

The reliability and validity aspects, which can also be called rigor and vigor in qualitative research (Cypress, 2017), were practiced through the methods of transcribing interview data as shown in the appendices, as well as offering the interview protocols, which would be beneficial for replicating the research. Similarly, through an extensive description of the methodology, the replication ability of the project was enhanced. All interviews were recorded according to the limitations of consent form presented to participants and further explained during the interview process. Furthermore, the validity process was enhanced through the use of follow-up techniques to clarify additional details related to the discussion content and probable interpretation requirements and guarantee that the interpretations were in line with the participants’ responses. The ethical nature of the project was ensured through the use of consent forms, which contain all the information about the project; the participants could refuse to participate or withdraw their consent at any time, although none of them utilized that opportunity.

Literature and Contexts

Like any business entity aimed at strategic development, Al-Mazyunah has its vision and mission. The zone’s vision statement is a “free commercial zone participating in increasing the regional competition of Oman concerning attracting and developing the local and international investment” (The City of Free Trade, n.d., p. 5). Its mission is to build and equip a free commercial zone that is a center of national and foreign investments (The City of Free Trade, n.d.). Al-Mazyunah aims at attracting investments by providing the best services, effectively managing its operations, and partnering with authorities at local and international levels.

Ways of Attracting Investors to Free Zones

The purpose of the present study is to develop an understanding of how Al-Mazunah Free Zone can attract foreign investments from Yemen and 4 countries of the Horn of Africa – Djibouti, Eritrea, Ethiopia, and Somalia – to foster its economic development. To answer this research question, it is necessary to review the extant literature on marketing and management factors that are critical to optimizing ways of attracting investors in free zones. This section will explore marketing approaches used for attracting investors to free zones, as well as government factors and the company’s management and leadership factors influencing investors’ decisions.

Marketing Approaches to Attracting Investors to Free Zones

Investment promotion in free zones requires the use of specific marketing methods. According to Van Den Berghe (2020), since free zones are part of a country, they depend on the competitiveness of their country. It means that investors may be aware of the country but may not know that the country has a free zone with valuable investment opportunities. For this reason, one best marketing strategy to attract investors is to make sure that stakeholders involved in the country promotion are aware of the free zone and include it in their marketing plans (Van Den Berghe, 2020). Collaborating with investment promotion agencies (IPAs) to raise awareness about free zones and encouraging organizations to share information about the prospects whose projects are suitable for free zones are examples of implementing this strategy (Van Den Berghe, 2020). In addition, free zones are often positioned as distinct from the country in which they are located, which helps them to successfully compete with other free zones within the country and emphasize better infrastructure than that available in the rest of the country (Papadopoulos et al., 2016). In their promotional activities, free zones tend to state the benefits of their location, including their potential to provide connections to neighboring economies (Papadopoulos et al., 2016).

Investors should clearly understand the offer of a free zone seeking their investments. To communicate their offer to investors, free zones use a variety of marketing approaches and channels. Van Den Berghe (2020) emphasizes the need for free zones to establish a distinctive brand, which should include a logo and other attributes. Loewendahl (2018) stresses the importance of choosing the right marketing channels for sharing information about investment opportunities. The leading sources of information for investors appear to be a dialogue with industry peers, business travel, newspaper and magazine articles, and meetings with IPAs (Loewendahl, 2018). Although the first two sources can hardly be influenced by marketers, the other two sources should be effectively used in investment promotion activities.

Table 1 also shows marketing techniques that turned out to be the most effective in attracting investors. The Internet is the most effective marketing technique because it allows for information sharing with investors without any time and space constraints (Khairil, 2017). However, for the Internet to be truly effective in marketing, it should align with the entire marketing strategy, and the information on free zones’ websites should be continuously updated to show there is progress in the industry (Khairil, 2017).

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Most effective marketing techniques in investment attraction.
Table 4.1. Most effective marketing techniques in investment attraction. Source: Development Counsellors International “Winning Strategies” (as cited in Loewendahl, 2018).

The way free zones formulate their marketing messages also has significance. According to Khairil (2017), marketing messages should be focused not only on regional excellence but also on the infrastructure capacity, human resources capacity, and technological advances to provide more value to investors. In print advertising, such features as the sentence and word structure, colors, font, layout design, and paper type can have an additional influence on investors’ decisions (Khairil, 2017). Furthermore, when a free zone uses marketing techniques involving a speaker, the personality of a speaker plays a critical role. Khairil (2017) argues that a speaker with excellent appearance and rhetoric but without an influential government position will not be perceived by investors as credible. Therefore, in public relations, free zones should use speakers who have an influential position in the government.

Raising brand awareness and building a strong brand image is important for investment promotion in free zones. However, it is also critical how rapidly the information about investment opportunities in free zones is communicated. IPAs, which are usually responsible for dealing with investors, should handle investors’ queries within 1-2 days (Loewendahl, 2018). This is the period of processing queries accepted in the private sector, so investors interested in investing in free zones expect the necessary information to be provided to them within this period.

Marketing approaches to attracting investors to free zones have to respond to changes caused by rapidly developing technologies. In this regard, Van Den Berghe (2020) suggests seven winning strategies that are supposed to help free zones cope with emerging challenges.

The first strategy is focused on leadership and training

which are essential components of any successful business. Van Den Berghe (2020) argues that it is critical for free zones to conduct self-assessment to identify the most necessary skills, then prioritize five of them, and invite experts possessing these skills. In addition, free zones should provide their staff with access to training programs by partnering with various educational institutions (Van Den Berghe, 2020). These measures will ensure that the free zone is adapting to the new industrial environment. Zona Franca Santander in Colombia has adopted this approach, and now it has a large pool of talented and professional workers to offer to its investors (Van Den Berghe, 2020).

The second strategy – is research and advocacy

Is aimed at finding out more about potential investors and their motives for investing in free zones. Van Den Berghe (2020) argues that financial incentives are not the main determinant of investors’ decisions, so free zones should research investors’ needs and tailor targeted offerings. For example, Dubai Multi Commodities Center has used this strategy by transitioning to paperless online services, thus facilitating the process of running a business in the free zone, which has become its additional competitive advantage (Van Den Berghe, 2020).

The third strategy is the future FZ strategy

Means that free zones should be future-oriented in their activities. Van Den Berghe (2020) suggests that free zones should analyze trends in innovation and sustainability and follow them in their strategy. Identifying top technologies with the potential of influencing the free zone’s industry is an important step while implementing this strategy.

The fourth strategy is related to awareness marketing, and promotion

According to Van Den Berghe (2020), free zones should raise awareness about available investment opportunities among various stakeholders and make sure that all agencies involved in investment promotion use a unified marketing and promotion strategy.

The fifth strategy refers to stakeholder engagement

Which is important because an increasing number of free zones has made attracting investors a difficult task requiring coordinated teamwork. Van Den Berghe (2020) suggests that the marketing strategy of the free zone should be integrated into the economic strategy of the whole country. Therefore, the involvement of multiple stakeholders is necessary to achieve the strategy’s effectiveness.

The sixth strategy is knowledge management and aftercare

Free zones should not regard their investors as mere tenants; instead, they should provide investors with aftercare services to foster their growth and development because investors’ success contributes to the success of the free zone. Aftercare services may include rapid service delivery, automation of services, and other activities that improve investors’ experiences.

Finally, the seventh strategy is business intelligence and performance

According to Van Den Berghe (2020), one of the primary investors’ motivations to invest in free zones is the ease of starting a business. Therefore, establishing one-stop-shop services to facilitate the process of investment is an essential measure for attracting investors. Additionally, free zones should measure their performance each month or quarter and define metrics that have the most influence on their success.

Government Factors Critical to Attracting Investors to Free Zones

Since the government is responsible for creating free zones, it has the authority to provide various incentives to investors to influence their investment decisions. According to Condron (n.d.), the government factors critical to attracting investors to free zones include political stability, government support, and legal protection. Government support may include facilitating the process of licensing, adopting incentive policies, and imposing penalties on infringers (Khairil, 2017). Furthermore, the availability of a skilled labor force, suitable infrastructure, and linkages with different industries and educational institutions are also essential (Condron, n.d.). Finally, investors expect to get assistance from IPAs or equivalent organizations in their day-to-day activities (Condron, n.d.). It is a good practice for IPAs to provide “one-stop-shop” services, accompanying investors at every step of their investor journey, from the decision-making to the after-care stage (Loewendahl, 2018; Van Den Berghe, 2020). Thus, the extent to which the government is willing to support investors is a crucial factor influencing investors’ decisions.

Particular attention should be given to various financial incentives provided to investors in free zones. According to the Organisation for Economic Co-operation and Development (OECD; 2017), such incentives are commonly used in developing countries. The reason for this is that it is easier to decrease costs for investors rather than makes structural changes, such as improving infrastructure or increasing the number of the skilled labor force (OECD, 2017). One way the government promotes investment in free zones is by offering tax incentives to investors. Jasiniak and Koziński (2017) found out that tax incentives are important for attracting investors; however, their importance depended on the area, company size, and tax incentive types. Researchers discovered that in less economically developed locations, considerable tax incentives were very significant for investors because they compensated for the challenging business environment (Jasiniak and Koziński, 2017). In addition, small companies considering investment opportunities pay more attention to tax incentives than large companies because they are less resistant to challenges (Jasiniak and Koziński, 2017). Overall, investors are attracted to locations that offer lower costs of conducting business.

While financial incentives are a common way of attracting investors, OECD (2017) argues that they may benefit the investing country more than the host country. According to OECD (2017), evidence shows that such government measures as improving infrastructure, removing regulatory barriers, developing human capital, and releasing public information about investment opportunities are more effective in attracting investors to free zones. Governments should make information easily available to investors because if the information is hard to find, investors rely on private sources when making investment decisions.

The influence of the company’s management and Leadership on investors’ decisions

The management and leadership of organizations of free zones also play a vital role in investment promotion. To increase the chance of attracting investors, organizational management should incorporate efficiency, inclusivity, and sustainability (Condron, n.d.). Efficiency means that organizations in free zones should use the best practices, adapting them to their environment (Condron, n.d.). Inclusivity implies partnering with primary and secondary stakeholders, such as industry partners, investors, sponsoring government agencies, IPAs, free zones board, etc. (Condron, n.d.). While partnerships with stakeholders are important, organizational management should avoid including all stakeholders in the board. Instead, it should maintain the board’s efficiency by appointing a limited number of directors having skills and expertise in the appropriate field (Condron, n.d.). Finally, sustainability in organizational management refers to using information and communication technology in commercial activities, possessing strong functional skills, such as financial and asset management, and having robust funding sources (Condron, n.d.). Thus, to attract investors, the management of organizations in free zones should be qualified to conduct the business in the selected field, apply best practices, and have a strong financial basis.

While management factors are concerned with organizational and financial factors of companies in free zones, leadership factors are more related to the development of human resources. According to Van Den Berghe (2020), effective leadership includes continuous assessment of the organization to identify skills that are most needed for organizational development at a particular moment. Further, these skills should be incorporated into the organization’s staff through training, education programs, and sharing experience with experts possessing these skills (Van Den Berghe, 2020). One best practice for effective leadership is partnering with educational institutions to make sure that employees have an opportunity for professional development (Van Den Berghe, 2020). Leadership directed toward the development of the skilled labor force attracts investors to free zones because it ensures that organizations will be capable of providing investors with the growth potential.

Interim Conclusion

The success in attracting investors to free zones is determined by marketing approaches, government support, and management and leadership factors. In terms of marketing, free zones should integrate their marketing strategy into the country’s economic strategy and collaborate with various stakeholders to raise awareness about the available investment opportunities. The use of the Internet and influential public figures in promotion is also welcome. The government plays an important role in attracting investors because it can offer different financial incentives and make efforts toward improving the infrastructure and labor force and facilitating the business set up process. Finally, management and leadership factors crucial to attracting investors include the use of best management practices, strong financial position, appropriate qualifications, and the willingness to develop human resources.

Competitors and Their Ways of Attracting Investors

This chapter aims at answering sub-question 2: “Who is the competition, and what channels do they use to attract investors?” First, the major internal and international competitors of Al-Mazyunah will be described and compared. Second, this chapter will discuss marketing channels used by competitors to promote their investment opportunities. Finally, the benefits stated in the competitors’ online marketing materials will be reviewed to find out how the competing free zones attract investors.

The Current Competitors of Al-Mazyunah Free Zone

Interviews with the members of the management staff of Al-Mazyunah Free Zone and the search through relevant sources revealed that the free zone has both internal and international competitors. Within the country, Al-Mazyunah competes with Salalah Free Zone, Sohar Free Zone, and Duqm Special Economic Zone. Its major international competitor is Jebel Ali Free Zone (Jafza), located in Dubai. Each of the competing free zones has distinctive features that are attractive to investors.

Salalah Free Zone is located close to Yemen and is adjacent to the Port of Salalah. It is well-placed to serve African, Asian, European, and US markets (Crowe, 2020). Due to its proximity to the port, the free zone provides international ships with fuel and serves as an entry and exit point for cargoes. Among available facilities, Salalah has office space for rent and business incubators and provides access to an international airport and a deep-sea port. Salalah’s investors are offered a 30-year tax holiday, 100% foreign ownership, and competitive labor cost (Crowe, 2020). There are no customs duties, no minimum capital requirements, and non-restricted repatriation of invested capital (Crowe, 2020). Companies investing in Salalah Free Zone are involved in industrial and commercial activities, logistic services, real estate business, and tourism. For example, the list of current investors of Salalah includes such companies as Octal Petrochemicals, Sapphire Marine, Dunes Oman, and PGC Textile Corporation (Crowe, 2020). The infrastructure consists of electricity, water systems, telecommunications, parking facilities, warehouses, road infrastructure, and 24-hour security.

Sohar Free Zone is situated near Sohar Industrial Port, which is an integral part of the free zone. The location of Sohar is 220 km northwest of Muscat, the capital of Oman, and 180 km away from Dubai, UAE (Crowe, 2020). Sohar provides its investors with access to the Indian sub-continent and East African Coast, and its port can handle the world’s largest ships (Crowe, 2020). The benefits of Sohar include 100% foreign ownership for companies with at least two shareholders and a 10-year tax holiday, which can be extended to 25 years (Crowe, 2020). Like Salalah, Sohar requires no minimum capital and no customs duties. The companies investing in the free zone are involved in logistics and trade, food, metals and steel, petrochemicals, light manufacturing and assembly, minerals, and education and services. The existing investors of Sohar include such Omani companies as Oman Petrochemical Industries Company LLC, Oman Methanol Company LLC, and an Indian company Larsen & Toubro (Crowe, 2020). Sohar Free Zone also has a one-stop shop that serves as a single window in which its investors can obtain all the necessary help with establishing a company.

The location of the Duqm Special Economic Zone (SEZ) is Central Eastern Oman. It is 450 km away from Muscat and 400 km from Salalah (Crowe, 2020). The Duqm SEZ occupies 1,777 sq. km and has 80 km of coastline (Crowe, 2020). The proximity of the zone to the Al Duqm International Airport and the Port of Duqm makes it an attractive investment location suitable for logistic services and international trade. The zone offers the benefits of 100% foreign ownership, a 30-year tax holiday, no customs duty and minimum capital requirements, and no restrictions on capital repatriation. At Duqm SEZ, investors can establish industrial estates, tourist resorts, warehouses and logistic villages, and office, commercial, and residential complexes.

Jafza is a large free zone located in Dubai, in close proximity to Al Maktoum International Airport and Jebel Ali Port. Set up in 1985 with 19 firms, Jafza has grown into a zone hosting more than 7,000 companies (Jafza, 2018). The free zone tries to make the business set up as easy as possible by providing one-stop-shop services, partnering with various service providers, and giving its investors access to e-portal and mobile app. The benefits offered by Jafza include 100% foreign ownership, 50-year tax holidays, and the ability to mortgage premises to a finance company or a bank (Jafza, 2018). The zone imposes no restrictions on foreign employees, capital repatriation, and currency. The industries available at Jafza include warehousing, showrooms, retailing, office and residential complexes, and customized development solutions (Jafza, 2018). It also offers investors plots of land to build facilities for specific purposes. Table 5.1 summarizes the features of the reviewed free zones and compares them to Al-Mazyunah.

Table 5.1. Comparison of Al-Mazyunah with its competitors.

Salalah Sohar Duqm Jafza Al-Mazyunah
Location Close to Yemen; near Salalah port. Near Sohar Industrial Port; 180 km away from Dubai Central Eastern Oman; close to the Al Duqm International Airport Far western end of Dubai, UAE; close to Jebel Ali Port and Al Maktoum International Airport 4 km from the border with Yemen
Commercial Activities Industrial;
manufacturing;
R&D; logistics
Steel
Manufacturing;
trade and
logistics;
oil and gas;
petrochemicals
Industrial
estates;
logistics;
tourism;
mixed-use
development
Warehousing; showrooms; industrial; trade and logistics; banking; petrochemicals Warehousing;
food
processing;
industrial
Proximity of seaport 5 km 10 km 9 km 10 km 260 km
Proximity of airport 18 km 25 km 20 km 23 km 260 km
Omanisation/
emiratisation requirement
10% 15% (first 10 years) 25% No restrictions on foreign employees 10%
Foreign ownership 100% 100% 100% 100% 100%
Corporate taxation 30-year tax holiday 25-year tax holiday 30-year tax holiday 50-year tax holiday 30-year tax holiday
Customs duty 0% 0% 0% 0% 0%

Note. Data for the proximity of seaport and proximity of airport from Healy Consultants Group Plc (n.d.), for commercial activities, omanisation/emiratisation requirement, foreign ownership, corporate taxation, and customs duty from Sultanate of Oman (2016). Data for Jafza from Jafza (2018).

Competitors’ Marketing Channels for Investment Promotion

The competitors of Al-Mazyunah use various online and offline marketing channels. Salalah Free Zone promotes its investment opportunities through its website, on which the major benefits are listed, and the zone’s contact information is provided. Salalah also has a media center that issues press releases to the online and print media and publishes news and information important for investors. Another way in which Salalah promotes its investment opportunities is by attending major industry forums, events, and exhibitions. At these meetings, the free zone has an opportunity to inform investors about its benefits via face-to-face communication. There are also social media accounts of Salalah Free Zone on Twitter, Facebook, Instagram, and YouTube, the links to which are provided on the zone’s website.

Sohar Free Zone promotes investment on its official website by publishing relevant information and providing contact details. Investors can also subscribe to the free zone’s newsletters. In addition, the website has links to Sohar’s social media accounts on Twitter, YouTube, and LinkedIn. The free zone issues its annual magazine, SOHAR Magazine, in which it informs investors about existing investment opportunities and the progress achieved by the free zone. Furthermore, Sohar published news and photos, as well as issues whitepapers that are focused on the zone’s focus on sustainability. The free zone also takes part in various industrial events to promote its investment opportunities and arranges its ceremonies, for example, to celebrate its anniversaries.

Like Sohar, the Duqm SEZ has an official website that describes the zone’s advantages and contact details and offers an opportunity to subscribe to newsletters. The website has links to the zone’s social media profiles on Facebook, Twitter, LinkedIn, and YouTube. The Duqm SEZ publishes news and videos with investment promotions. The zone’s website has brochures in different languages, including Japanese and Korean, which implies that it specifically targets Asian investors. The Duqm SEZ also issues its magazine, SEZAD Quarterly Magazine, to inform investors about the existing opportunities and the zone’s achievements. Along with the website, the zone has a mobile app that contains information important for investors. Industrial events and forums are also used to encourage investors to set up businesses in the zone.

The website of Jafza is available in English, Arabic, and Chinese, and each version provides extensive information about the zone, its advantages, and the business set up procedure. Jafza has an extensive social media presence, with accounts on Twitter, Facebook, Instagram, YouTube, and LinkedIn. The free zone frequently publishes high-quality photos, posts, and videos. The media center of Jafza issues news on the zone’s website and partners with various media agencies to spread the zone’s latest achievements and information about investment opportunities. Furthermore, Jafza has its print magazine, The Zone, which has also been launched as a digital interactive publication. Additionally, Jafza has its corporate blog where it publishes posts with information useful for investors, for example, about the peculiarities of setting up the business in Dubai. The representatives of the free zone also attend various events and conferences, such as Arab Health and Gulfood, where they promote their investment opportunities directly to investors. Moreover, Jafza hosts multiple special events for its customers, such as its annual Jafza Associates Forum.

Table 5.2. Comparison of marketing channels used by Al-Mazyunah and its competitors.

Salalah Sohar Duqm Jafza Al-Mazyunah
Official website Yes Yes Yes Yes Yes
E-mail newsletters No Yes Yes Yes Yes
Social media Twitter, Facebook, Instagram, YouTube Twitter, YouTube, LinkedIn Twitter, Facebook, LinkedIn, YouTube Twitter, Facebook, Instagram, YouTube,
LinkedIn
No separate social media accounts
Participation in industrial forums and events Yes Yes Yes Yes Yes
Media Relations/ Publicity Yes Yes Yes Yes Yes
Advertising Digital, print, broadcast Digital, print, broadcast, outdoor Digital, print, broadcast, outdoor Digital, print, broadcast, outdoor Digital, print
Company magazine No Yes Yes Yes No

Overall, the competitors of Al-Mazyunah use multiple marketing channels to attract investors. All the free zones competing with Al-Mazyunah utilize social media, especially Twitter and YouTube, as part of their online marketing strategy. Sohar Free Zone, the Duqm SEZ, and Jafza seem to pay much attention to their marketing, which is evidenced by the quality of their websites, the variety of advertising, and the publication of their corporate magazines.

An Analysis of Competitors’ Online Promotional Materials

To distinguish themselves from competitors, free zones develop their unique value propositions and state them in their promotional materials. According to Loewendahl (2018), the Internet, especially the corporate website, is the most effective marketing technique for investment promotion. It implies that the information presented on free zones’ websites and in online marketing materials may have the most influence on investors’ choice of investment location. Therefore, this section will explore what benefits the competitors of Al-Mazyunah mention in their online promotional materials.

To persuade investors to set up a business within its area, Salalah Free Zone focuses mainly on its location advantages and the ease of establishing a company. The free zone emphasizes that it is strategically located on the Equatorial Trade Route, allowing manufacturing companies to have direct access to major exporters of raw materials (Salalah Free Zone, n.d.). The zone is also located at the center of the world trade, which gives it advantages regarding shipping cost and the time of delivery (Salalah Free Zone, n.d.). Another stated benefit is cost competitiveness in terms of labor, infrastructure, and utilities, which can increase manufacturers’ cost efficiency when combined with the mentioned location advantage (Salalah Free Zone, n.d.). Salalah also states that it has a unique benefit of access to Free Trade Agreements, which allows investing companies to reduce costs by obtaining duties exemptions (Salalah Free Zone, n.d.). The zone places much emphasis on its location in Oman due to the country’s economic stability and available government support, such as tax exemptions and the establishment of the one-stop shop.

On its website, Sohar Free Zone attaches much importance to the zone’s proximity to Oman’s largest port and the availability of one-stop-shop services. It also lists such incentives as 100% foreign ownership, 10-year corporate tax holiday, 0% import and re-export duties, 0% personal income tax, and low capital requirements (Sohar Port and Free Zone, n.d.). The zone also mentions the opportunity to extend tax exemptions up to 25 years if the investing company manages to achieve the required omanisation rate (Sohar Port and Free Zone, n.d.). Free Trade Agreements of Oman with the US and Singapore are also included in incentives. Sohar also refers to itself as “the center of Oman’s logistics strategy” and emphasizes its focus on sustainability and innovation (Sohar Port and Free Zone, 2020, p. 14). Thus, like Salalah, Sohar mentions its location in Oman as a significant advantage. However, it distinguishes itself from its Omani competitors by stressing its role in Omani logistics and international trade.

The Duqm SEZ mentions several benefits on its website, such as location, area, accessibility, business-friendly ethos, and clustered development. The zone is strategically located to provide investors with access to markets in South Asia, the Middle East, and East Africa. The occupied area of about 2,000 sq. km is also mentioned as an advantage (Special Economic Zone Authority at Duqm [SEZAD], 2020). Like Salalah and Sohar, the Duqm SEZ promotes investment based on its location in Oman, which entails political stability, tax exemptions, 100% foreign ownership, and no customs duties. There are also unique benefits, such as the issue of permits for foreign employees within five days and 2-year exemption from rental fees (SEZAD, 2020). The zone also mentions the ease of setting up a business with a one-stop shop and a variety of industries available for investment.

Although Jafza also mentions in its online promotional materials that its location in Dubai is a significant advantage, the emphasis in its marketing efforts is put on the zone’s achievements and expertise. Jafza (2018) states that it carefully planned its development, which turned it from an area with only 19 businesses in 1985 into a large entity hosting more than 7,000 firms. One significant advantage is the zone’s logistics platform that includes Jebel Ali Port, Al Maktoum International Airport, Etihad rail, and a highly developed highway network (Jafza, 2018). One-stop-shop services, 100% foreign ownership, the availability of mortgage, and the absence of minimal capital requirements and customs duties are also mentioned as benefits. Furthermore, the free zone attracts investors by showing its wide portfolio, which consists of plots of land, showrooms, warehouses, offices, retail outlets, business park, on-site residence, and customized development solutions (Jafza, 2018). Only a little attention is given to the zone’s location in Dubai, “the business capital of the Middle East” (Jafza, 2018, p. 27). Thus, while the Omani competitors of Al-Mazyunah mainly focus on their location in Oman and the advantages resulting from this, Jafza puts more emphasis on its achievements.

Interim Conclusion

Al-Mazyunah’s main local competitors are Salalah Free Zone, Sohar Free Zone, and the Duqm SEZ. Its major international competitor is Jafza, located in Dubai, UAE. The common characteristic of Al-Mazyunah’s competitors is that they are located in close proximity to seaports, which is also reflected in their online promotional materials. The competing free zones use varied marketing channels, such as official websites, social media, participation in industry events, media relations, and advertising. Sohar, the Duqm SEZ, and Jafza also promote their investment opportunities in their magazines. As for the benefits stated in the competitors’ online promotional materials, Al-Mazyunah’s local competitors emphasize their Omani location, while Jafza mentions its location in Dubai but focuses mainly on its expertise.

Marketing Tactics and Strategies Used by Al-Mazyunah

As was discussed in the previous chapter, the competitors of Al-Mazyunah use a variety of marketing channels to attract investors. The stated benefits of the competing free zones, which helped them distinguish themselves from other investment locations, were also reviewed. This chapter will describe what marketing strategies are used by Al-Mazyunah, what benefits this free zone emphasizes in its promotional activities, and what marketing channels appear to be the most effective.

The Stated Benefits of Investment in Al-Mazyunah Free Zone

Similar to its local competitors, Al-Mazyunah mentions benefits associated with its Omani location in its promotional materials. These incentives include 100% foreign ownership, the ability to operate without the income tax for 30 years, exemption from customs duties, no minimum capital requirements, and no restrictions on the use of currencies (The City of Free Trade, n.d.). Apart from a favorable legislative environment, Al-Mazyunah notes Oman’s stable political situation and advantageous geographic location. Under “advantageous geographic location” the zone implies that Oman is an appropriate destination for tourism due to its varied sceneries and 1,700 km of coastline (The City of Free Trade, n.d.). Unlike its local competitors, Al-Mazyunah does not mention Oman’s strategic location for reaching the markets of the GCC, East Africa, and the Indian subcontinent. It may be related to a lack of a port in the zone.

The major benefit that Al-Mazyunah highlights in its promotional materials is its proximity to Yemen. The zone is located 4 km away from the border with Yemen and 14 km from Shahn City (The City of Free Trade, n.d.). In addition, Yemenis are allowed to work in Al-Mazyunah without entry visas or permanent residence permit. The reduced omanisation rate of 10% compared to the rest of the country is also a stated benefit (The City of Free Trade, n.d.). These two advantages are supposed to give investors more freedom in hiring the workforce and the ability to employ Yemeni workers easily.

Al-Mazyunah also provides explanations of why easy access to Yemen may be important for investors. The reason for this is that Yemen, with its total population reaching 28 million, is a large market with a purchasing power of about 55.4 billion dollars (The City of Free Trade, n.d.). In addition, Yemen is presented as a country with growing GDP and large exports (The City of Free Trade, n.d.). In Al-Mazyunah’s promotional materials, no information about the civil war in Yemen and its effects on the country’s trade and labor force was mentioned. One possible reason for this is that the zone does not want to discourage investors by mentioning any sources of political instability in the region. Thus, Al-Mazyunah positions itself as a free zone for investors willing to trade with Yemen or have more freedom in the choice of the labor force.

Finally, Al-Mazyunah promotes its investment opportunities by describing the facilities available to investors in the free zone and the industries in which they can invest. Al-Mazyunah lists such essential facilities as the administrative center, showrooms, clinics, a mosque, secondary service center, car dealing stores, commercial stores, warehouses, a hotel, a multi-purpose area, and others (The City of Free Trade, n.d.). The industries that constitute investment opportunities are divided into commercial, industrial, and service sectors (Madayn, n.d.). Investors are offered to set up businesses dealing with import, storage, and re-export of goods; food trade; machinery and equipment trade; sorting and packaging plants; various manufacturing factories, and services such as catering or transportation (Madayn, n.d.). The interview with Madayn’s Director of Marketing and Promotion also revealed that the zone informs investors about the infrastructure that includes road networks, telecommunications, sewage, electricity, and water. In addition, Madayn assures investors that the zone is constantly developing to meet their needs better.

Al-Mazyunah’s Online and Offline Marketing Strategies

As was found during the interviews with the manager of the investment department of Al-Mazyounah Free Zone and the marketing director of Madayn, the promotion of the zone’s investment opportunities is done by Madayn. It is a public establishment that manages and operates not only Al-Mazyunah but also the Knowledge Oasis Muscat and seven industrial cities. Madayn promotes all entities under its control and tries to give a general overview of investment opportunities existing in Oman. As a result, Al-Mazyunah often may not receive special attention in Madayn’s promotional activities. Consequently, Al-Mazyunah is assumed to have difficulties distinguishing itself from local competitors, such as Salalah, Sohar, and the Duqm SEZ, each of which makes efforts to promote itself in addition to the government marketing activities. One possible reason for this is that Salalah, Sohar, and the Duqm SEZ are operated by separate companies. Salalah is managed and operated by Salalah Free Zone Company (Crowe, 2020). Sohar is managed by Sohar Industrial Port Company and operated by its subsidiary, Sohar Free Zone Company (Crowe, 2020). The Duqm SEZ is managed and operated by the Special Economic Zone Authority Duqm (Crowe, 2020). In contrast, Al-Mazunah is managed and operated by Madayn, which also controls industrial cities.

Madayn extensively uses offline marketing to promote investment opportunities in Oman, including those existing in Al-Mazyunah. Madayn’s offline marketing involves participation in various trade events, conferences, and industry forums. For example, it was found during the interview with the Director of Investment Department of Al-Mazyunah that Madayn took part in Gulfood 2020, a large annual food and hospitality event in Dubai, and an industry forum in Marocco. Such events present an excellent opportunity for Madayn to communicate Omani investment opportunities directly to investors. The interview with Madayn’s Director of Marketing and Promotion also revealed that, due to COVID-19 restrictions, some meetings with investors were transferred to the digital domain. For example, Madayn held an online seminar with Indian investors in 2020 to inform them about investment incentives in Oman. Although Madayn’s goal is to attract investment to any of the territories under its control, sometimes, during industry events and meetings with investors, it tells investors in detail about the advantages of investing in Al-Mazyunah. An interview with the marketing director of Madayn revealed that common Al-Mazyunah’s investment benefits that Madayn mentions in its investment promotion activities include the zone’s constant improvement, a 30-year tax holiday, customs exemptions, 10% omanisation rate, the ease of hiring Yemenis, and the ease of getting entry visas and residency permits for non-GCC investors.

Al-Mazyunah has a website located at www.almazunah.com and designed to introduce the free zone and its benefits to investors. The website is available in English, Arabic, Chinese, and Turkish. It contains information about the zone’s goals, investment opportunities and benefits, the geographic advantages of Oman, and contact details. Yet, the information is presented in a way that is not easily readable because of a lack of proper formatting. The website also allows visitors to subscribe to the zone’s newsletters. There is the news section, but the latest news was published in 2013, which implies that the website has not been updated for a long time. It also has icons of social media networks, such as Facebook, Twitter, and Google+. However, these links do not lead to the zone’s social media accounts. In addition, Google+ has not been available since April 2019, which is another indication that the website has been neglected.

Apart from the described website, the information about investment opportunities in Al-Mazyunah is presented on Madayn’s website. Madayn allows investors to explore the map of Al-Mazyunah Free Zone and find out the details about the incentives, industries available for investments, e-services, legislation, and companies operating in the zone. Furthermore, Madayn has accounts on social media platforms such as Twitter, Facebook, YouTube, Instagram, and LinkedIn. As was found in the interview with the Director of the Investment Department of Al-Mazyunah, Madayn uses social media to provide investors with the latest news and advertise Omani investment opportunities. Madayn’s social media profiles were reviewed, and it was discovered that Madayn gave more attention to its industrial cities, while Al-Mazyunah was rarely mentioned.

Within its promotional activities, Madayn also emphasizes media relations and publicity. In particular, the news about Al-Mazyunah Free Zone is covered by such media as Oman News Center, Construction Week Online, and Oman Observer. Al-Mazyunah’s press releases often appear in ZAWYA, a trusted source of business news from the Middle East and North Africa regions. In addition, in November 2020, Madayn launched its publication, Madayn eMagazine. This magazine is published once a month, so, as this paper is being prepared, there are only two issues of Madayn eMagazine. Although Madayn mentions Al-Mazyunah in this publication, it does not provide details about investment opportunities available there. The first issue of Madayn eMagazine contains only one mention of Al-Mazunah, and the second issue has two mentions, none of which expands on the zone’s investment opportunities.

The Effectiveness of Marketing Channels in Attracting Investors

This section aims at answering the sub-question, “Which marketing channel attracted current investors to Al-Mazyunah Free Zone?” The effectiveness of marketing channels in attracting investments was assessed in the interviews with current investors. Table 6.1. summarizes investors’ responses related to Al-Mazyunah’s marketing channels.

Table 6.1. Marketing channels that brought the interviewed investors to Al-Mazyunah.

Respondent 1 2 3 4 5 6 7
How did you find out about Al-Mazunah Free Zone and its investment opportunities? Dialogue with industry peers Industry event Dialogue with industry peers Dialogue with industry peers The Internet/ Website Dialogue with industry peers The Internet/ Website
What was your user experience when visiting Al-Mazunah’s website? Website is not well organized and designed poorly Website is helpful, but it lacks essential content Website lacks crucial information about entry specifications Website information was sufficient Missing details No unnecessary information. More advertising materials and contacts could be placed Website helped to obtain all the necessary information
Have you tried to find social media accounts of Al-Mazunah? Yes Yes Yes Yes Yes Yes No
Would Al-Mazunah’s social media accounts be important for you? Yes Yes Yes No Yes Yes No

As is seen from the table, the leading source of information for Al-Mazyunah’s investors was dialogue with industry peers. These findings are consistent with the data presented by Loewendahl (2018), who found that dialogue with industry peers was the most frequent way of learning about the investment climate. Although dialogue with industry peers is not managed directly, it may be influenced by the company’s marketing efforts. So, one may assume that Al-Mazyunah’s promotional activities, such as participation in trade events, positively affected investors’ information sharing.

The second leading source of information for investors was the Internet and, in particular, the zone’s official website. In contrast to dialogue with industry peers, this marketing channel can be directly managed by the company. These findings are also consistent with Loewendahl (2018), according to whom the Internet and the website are the most effective marketing technique for investment attraction.

Another finding from the interviews was that, although the zone’s official website was an important source of information for most investors, the interviewees noted its shortcomings. They stated that Al-Mazyunah’s official website was poorly designed and organized, and it lacked comprehensive information about the business in the zone and entry specifications. In addition, investors mentioned that they or their subordinates tried to search for the zone’s social media accounts and were disappointed about not finding any. The table also shows that, for most investors, Al-Mazyunah’s social media accounts would be important.

To sum up, most Al-Mazyunah’s investors learn about the free zone from their industry peers or the Internet and the zone’s website. Investors find the zone’s website generally informative, but it could be improved by a more convenient design and more comprehensive information about investment opportunities. Finally, a lack of social media accounts is a gap in the zone’s marketing strategy.

Interim Conclusion

Al-Mazyunah’s benefits stated in promotional activities include tax and customs exemptions, stable political situation in Oman, geographic location suitable for tourism, closeness to Yemen, and the ease of hiring the Yemeni workforce. The zone’s online and offline marketing strategies are developed and implemented by Madayn. Since this establishment also oversees seven industrial cities and the Knowledge Oasis Muscat, Al-Mazyunah gets little individual attention in Madayn’s promotional activities. Al-Mazyunah’s online marketing includes the website, e-mail newsletters, and relations with online media. Madayn’s social media accounts can also be considered part of Al-Mazyunah’s online marketing, but they contain little information about Al-Mazyunah. The Zone does not have its social media accounts. Al-Mazyunah’s offline marketing strategy includes participation in industry forums and events and media relations and publicity. Al-Mazyunah’s most effective marketing channels are dialogue with industry peers and the website because most investors learn about the free zone from these channels. Investors find the zone’s website generally informative, but it could be improved by a more convenient design and more comprehensive information about investment opportunities. Finally, a lack of social media accounts is a gap in the zone’s marketing strategy.

The persona of Current investors

The Image of the Current Investor: A Resulting Matrix

Investing requires assessing existing market trends comprehensively, which, in turn, affects the image of investors and their business behavior. Operating in Al-Mazunah Free Zone as a region with rich opportunities and active market participants is dynamic. Based on the interviews with seven respondents, a matrix will be compiled and presented in Table 1 to provide views on what an investor in this zone looks like.

Table 1. The image of the current investor.

Respondent 1 Respondent 2 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Respondent 7
What does the current investor of Al-Mazunah Free Zone look like? An entrepreneur with clear goals and the desire to increase capital through timely investments. An investor in this zone is an experienced entrepreneur who knows what methods of achieving the tasks set can contribute to business success. An investor needs to be experienced because working in such a dynamic market requires knowledge of various business aspects. An investor who understands different aspects, for example, tax reporting or legal regulation, and can apply this knowledge in an active environment. A person who is ready for long business cooperation; sufficient capital; experience in investing to work in this region An ambitious market participant with long-term development goals. Active participation; open-minded investors.

As can be seen from this matrix, the respondents assume that the current investment environment in Al-Mazunah Free Zone is active and dynamic, and participants need to have appropriate skills. Experience and ambitions are the qualities that are cited often and mentioned as optimal for working in the area. The awareness of related financial issues, for example, tax regulation, is also an aspect to take into account.

The Time to Invest: A Resulting Matrix

Different investment businesses require distinctive approaches to market assessment and conventions that influence specific decisions. Individual investors are guided by the criterion of seasonality, while other entrepreneurs seek to enter the market at a favorable time when changes in the investment environment can contribute to capital growth. In Table 2, the opinions of the respondents are presented on when entrepreneurs invest in Al-Mazunah Free Zone.

Table 2. The time to invest.

Respondent 1 Respondent 2 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Respondent 7
When do investors invest in Al-Mazunah Free Zone? The aspect of location; food products are delivered fast due to a convenient geographical location. The aspect of seasonality is important. An opinion about upcoming changes in the investment environment. An opportunity to trade with many partners; the aspect of seasonality is not critical. Looking for safe and perspective channels to develop the business; is a beneficial opportunity for entrepreneurs due to the government’s protection. Options for promotions or changes in the investor environment when the conditions for entering the market are optimal. The trend in the investor environment without a focus on seasonality. Expanding business opportunities and establishing beneficial partnerships; the aspect of seasonality is not critical.

While taking into account the respondents’ answers, one can note that only one of them mentioned the importance of the seasonality aspect for investment. For most others, this criterion was not critical and might be ignored without any problems. Changes in the investment environment were assessed as crucial drivers that could stimulate the decision to become a participant in Al-Mazunah Free Zone and build productive partnerships.

Reasons for Investment: A Resulting Matrix

One of the main factors that can be highlighted through the analysis of the interviews performed is the reason that prompted the respondents to invest in Al-Mazunah Free Zone. Investors can pursue a variety of goals, including capital growth, building credibility, acquiring valuable partnerships, and other prospects. In Table 3, the respondents’ answers to this question are presented according to their vision of business perspectives.

Table 3. Reasons for investment.

Respondent 1 Respondent 2 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Respondent 7
Why do investors of Al-Mazunah Free Zone invest in this free zone? The location is one of the main drivers; tax discounts are a good incentive; the rental price is relatively low. The zone’s location; the conditions for entrepreneurship are loyal, and the tax legislation is not too demanding and harsh. The aspect of the border location is valuable; an opportunity to trade in several countries expands the potential sphere of influence. The geographical location; marketing opportunities. The geographical location; a sufficient number of clients. A safe and potentially profitable region; a loyal tax system. A profitable market with loyal tax conditions.

The analysis of the respondents’ answers makes it possible to find out the common factors explaining the reasons for investing and the favorable conditions that Al-Mazunah Free Zone offers in contrast to competitors. Firstly, almost all respondents noted the factor of geographical location as one of the main criteria that prompted them to pay attention to this zone. Secondly, the majority of the respondents mentioned a loyal tax policy as one of the advantages. Thirdly, the safety factor was also highlighted as crucial, and government control over Al-Mazunah Free Zone was perceived positively.

The Customer Journey of Al- Mazyunah Free Zone Current Investors

The Awareness Stage

In addition to the reasons to pay attention to Al-Mazunah Free Zone, the sources of information about this zone can be cited as important resources to stimulate the interest of the target audience to cooperate. Searching for the data about this region on the Internet, discussing with colleagues, and other channels for obtaining the necessary information are also included in the list of sources. In Table 4, the respondents’ answers are collected about how they learned about Al-Mazunah Free Zone and its features.

Table 4. The sources of information about the zone.

Respondent 1 Respondent 2 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Respondent 7
How do investors learn about investment opportunities in free zones at the awareness phase of their customer journey? Advice and recommendations from colleagues. the Omani Chamber of Commerce has organized a meeting for Yemeni business members in Salalah. Colleagues from the food industry told about this investment region. Colleagues informed about investment perspectives. Browsing the Internet and searching for optimal free zones; the information was obtained from the official website. The manager of the company contacted partners who spoke about the possibility of investing in this region. Browsing the Internet and searching for optimal free zones; the information was obtained from the official website.

The analysis of the respondents’ answers demonstrates that there were two main ways to learn about Al-Mazunah Free Zone. They learned about it due to recommendations from colleagues and partners and by searching for information on the Internet about potentially successful free zones. None of them mentioned social media because the zone has no accounts on them. At the same time, on the official website, the basic data is presented, which allows contacting and discussing the terms of cooperation.

The Engagement Stage

Engaging investors in Al-Mazunah Free Zone is an aspect that largely determines the value of the zone’s marketing channels and its recognition among customers. The ability to establish productive interaction with the target audience is a valuable factor that can increase the credibility of the region among competitors. In Table 5, the information from the interviewed investors is compiled concerning how they are engaged in the Al-Mazunah Free Zone.

Table 5. Ways of engagement.

Respondent 1 Respondent 2 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Respondent 7
How do investors engage with Al-Mazunah Free Zone during the engagement phase? Contacting by e-mails or by phone, which is preferable option. A sustainable and sufficiently convenient mechanism to involve interested parties by e-mails. Contacting by e-mails is the easiest and the most convenient way to communicate. Communicating with partners by phone or e-mails. Contacting with potential partners via e-mails. The subsequent communication took place by phone. All the contacts were on the websites, and the communication took place by phone. The website provides e-mails and telephone contacts, and the communication was remote.

Without exception, all the respondents confirmed that the engagement process took place in the format of remote communication via e-mails and by phone. On the official website of Al-Mazunah Free Zone, the required information is offered. At the same time, the zone does not have official social media accounts, which is perceived by all the respondents as an omission. The engagement phase could be more convenient and advanced if interaction through popular online platforms took place.

The Evaluation Stage

As a rule, when deciding where to allocate available funds, investors assess business opportunities and explore the prospects for operating in a specific market environment. While analyzing the specifics of Al-Mazunah Free Zone, the respondents of the interviews answered the questions about what characteristics of investment opportunities they compared. In Table 6, their responses are compiled, and each interested party presented a personal vision of these perspectives.

Table 6. Features of investment opportunities.

Respondent 1 Respondent 2 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Respondent 7
What features of investment opportunities do investors compare when evaluating choices of investment in free zones? The location is one of the main drivers. The geographical location and the current tax policy. The aspect of the potential profit; the geographical location and the number of participants are positive factors for trade. Constant access to companies’ resources is important, including its facilities and documentation; the geographical location. The interest in the location is due to an opportunity to expand the business abroad. Expanding the business and cooperating with other companies in the Middle East; business promotion due to a convenient geographical location on the border. Chances to expand business opportunities and establish beneficial partnerships.

The geographical location was still one of the key factors that the investors took into account when evaluating their business growth opportunities. As additional characteristics, they mentioned expanding partnerships, free access to the necessary resources, as well as favorable terms of the current tax policy. None of them expressed doubts about business perspectives, which indicates their confidence in the investment potential of Al-Mazunah Free Zone.

The Purchase Stage

The choice of Al-Mazunah Free Zone as a region for investment in favor of other competitive zones is an important aspect to review based on the interviews conducted. The respondents provided their opinions on why they chose this zone and selected it as a place to develop their businesses and increase capital. In Table 7, their responses are presented in accordance with the given criterion.

Table 7. The choice in a competitive environment.

Respondent 1 Respondent 2 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Respondent 7
What factors make investors of Al-Mazunah Free Zone decide to invest in this free zone rather than those of competitors? A large number of active participants and the geographical location; poor infrastructure is mentioned as a gap. A good rental price and the geographical location; poor infrastructure is mentioned as a gap. A potentially large number of interested parties; poor infrastructure is mentioned as a gap. Convenient tax and legal regulations; poor infrastructure are mentioned as a gap. Optimal conditions for investing; the geographical location; poor infrastructure is mentioned as a gap. Free entrance opportunities; safe legal liability; poor infrastructure is mentioned as a gap. Constant customer flows due to the geographical location; poor infrastructure is mentioned as a gap.

All the respondents expressed confidence that the geographical location of Al-Mazunah Free Zone was one of the main factors that prompted them to opt for this region. Some of them mentioned loyal tax and legal regulations as valuable criteria. At the same time, all, without exception, expressed concern about the current poor infrastructure as a significant gap, which explains the need for the control boards to pay attention to this omission.

Conclusion

The current study focused on the research question of which factors influenced the investors’ decision to establish a company in Al-Mazyunah Free Zone. The purpose of answering this research question was to understand the investment attraction in the Middle East economic zones and suggest marketing strategies to help Al-Mazyunah attract investors from Yemen and the Horn of Africa. The findings of this research indicate that investors deciding to invest in Al-Mazyunah are influenced by government and marketing factors. The most important government factors include a favorable legislative environment, especially tax regulations, political stability, and the ease of setting up a business in the free zone. Geographic location was also a crucial factor, especially for those investors, whose businesses were focused on trade. In addition, good infrastructure was found to be significant for investors, and a lack of it was usually compensated by significant financial incentives. Important marketing factors included the ease of finding the information about the free zone and its investment opportunities and the availability of information on the Internet.

The answers to the research sub-questions provide more detailed explanation of factors influencing investors’ decision to invest in Al-Mazyunah. The first sub-question was to discover marketing, government, and management and leadership factors influencing investors’ decisions. It was found out that the marketing efforts of free zones should be directed toward raising investors’ awareness of the existence of free zones within a particular country and investment opportunities available there. The Internet appears to be the most effective marketing technique for investment promotion. However, free zones’ websites should be consistent with their overall marketing strategies and contain up-to-date information. The information layout may have an additional impact on investors’ decisions. Furthermore, promotional materials should focus not only on the advantages of the location but also on other benefits, such as infrastructure or a highly-skilled labor force. The amount of government support is also crucial for investors’ choice of investment location. Political stability, legal protection, the ease of establishing a business, financial incentives, and structural changes, such as improving infrastructure, are important government factors affecting investors’ decisions. Finally, crucial management and leadership factors include qualified organizational management, a strong financial basis, application of best practices, and the focus on developing human resources.

The second sub-question was related to Al-Mazyunah’s competitors, the marketing channels they used, and their stated benefits. The findings showed that Al-Mazyunah competes with Salalah, Sohar, and the Duqm SEZ locally and Jafza internationally. While Al-Mazyunah’s Omani competitors emphasized their strategic location and the proximity of ports in their marketing materials, Jafza focused on its expertise and highly-developed infrastructure. The competing free zones used a variety of marketing channels, such as official websites, relations with different media, hosting and participation in industry events, advertising, and social media. Sohar, the Duqm SEZ, and Jafza also have their magazines designed to inform investors about the latest news and promote investment opportunities.

The third sub-question was focused on marketing tactics and strategies used by Al-Mazyunah. The main drawback of Al-Mazyunah’s marketing strategy was that the zone was promoted by Madayn, the public establishment that has seven industrial cities and Knowledge Oasis Muscat under its control, in addition to Al-Mazyunah. This is a shortcoming because Madayn promotes investment opportunities in all entities under its control. As a consequence, Al-Mazyunah often does not receive particular attention in Madayn’s promotional activities. Furthermore, Al-Mazyunah does not have its separate accounts on social media platforms, which is considered a marketing gap by its current investors, especially given the fact that all its competitors are present on social media. Furthermore, it has been found that the Al-Mazyunah website, which is an important source of information for investors, is not organized properly and has not been updated since 2013. In its promotional activities, Al-Mazyunah emphasizes its proximity to Yemen and government incentives, such as tax and customs exemptions and benefits that allow for hiring the Yemeni workforce easily. It was also found out that Al-Mazyunah does not specifically target investors from the Horn of Africa in its promotional activities.

The fourth sub-question was to investigate the persona of the current investor of Al-Mazyunah according to Ferrell’s 6W model, with special attention given to the who, the when, and the why. The findings indicate that the investor of Al-Mazyunah is an experienced entrepreneur who can operate in a dynamic environment. In addition, the investor’s persona is characterized by ambitiousness and awareness of various issues that one can face when setting up a business in the region. Regarding the timing of investments, most of Al-Mazyunah’s investors do not depend on seasonality, but they are driven by changes in the investment environment and invest when the conditions are optimal. Finally, the main reasons for investing in Al-Mazyunah were the zone’s advantageous geographic location, favorable tax policies, and safety ensured by government control.

The fifth sub-question was aimed at investigating the customer journey of Al-Mazyunah’s investors. At the awareness stage, investors learned about Al-Mazyunah Free Zone through word of mouth and via the Internet. The engagement phase was characterized by the use of e-mails and phone calls to contact the administration of the zone. At the same time, investors mentioned a lack of Al-Mazyunah’s presence on social media platforms that could serve as an additional way of engagement. When analyzing the evaluation stage of the customer journey, it was found that investors compared the geographic location of Al-Mazyunah and its competitors, partnerships, access to the necessary resources, and tax policies. At the purchase phase, investors decided to invest in Al-Mazyunah because of its advantageous location and favorable tax regulations. It was also discovered that most investors were not satisfied with the quality of infrastructure in Al-Mazyunah.

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