But the GCC is not a unified market and can be broken down into several very separate markets. Saudi Arabia is renowned for its wealthy population and Bahrain also has a strong demand for such goods, whereas nations such as Kuwait and Qatar are often overlooked when it comes to marketing priorities. Bin Hendi explains: "We target a few countries more directly than others, but things change. In Dubai we have seen tremendous change since the mid-1970s and even over the last 7-8 years. That's when the rat race started and now we have all branded goods represented.
"But it is an ideal market to be in. We are fortunate to have so many visitors in the UAE and people spend more when they travel. Psychologically, they want to shop." In other words, Bin Hendi is banking on a growing influx of tourists.
The question therefore is whether the purely local trade is sufficient to support the luxury retailers and brands or the re-export trade, particularly for gold, and tourists actually are the key segment.
The Diamond Trading Company moved into the Gulf region in 1995 as it witnessed a growth in trade. It was first focusing on the promotion of diamond wedding sets. In the last six years, the Asia-Arabia market has grown to become the world's fifth largest diamond market. Yet, even with such outstanding demand unique to the region, the market is similar in many ways to those in other parts of the world. The global market is characterised by high customer expectations, consumers who purchase a product in the luxury goods segment expect quality of workmanship, superior design and the finest of materials. As Prabhakar says, Middle East consumers, and in Dubai in particular, are no different from those in the major cities of the world in their expectations. It is essential that products in this category are presented in an atmosphere that reinforces the image of the brand.
"In most instances the parent company has invested a significant amount of time and money in developing an appropriate milieu in which to display its products in the best possible manner. Sophisticated research tools are used to measure customer reaction to background music, wall coverings, colour schemes, lighting and attention is paid to minute details such as the temperature of surroundings and height of display cases. When examining the cost-benefit ratio of having non-branded or multi-branded shops in the Gulf, one must consider that residents of this region are well-travelled and that many of the region's visitors are coming from some of the most prominent fashion capitals of the world.
It is even more important here than in other places that the stores in the Gulf mirror those in the rest of the world," Prabhakar says.
But all this presumes that the customer is enticed to the brand or store in the first place. When it comes to brand awareness, more choices have to be made as how best to market the product through advertisements, or other forms of media. And this is an area where the industry seems to differ in opinion product to product.
Even if Piaget's Middle East brand manager, Michel Eckert, swears by luxurious qualitative magazines, he acknowledges that it is the "marketing mix that is the most important." De Clerck concurs: "Word of mouth works well [and] magazines work well too as long as the plan is properly targeted. In magazines nowadays, thanks to the advanced printing technologies, we can achieve excellent quality of visuals and pictures, helping us to really show the product at its best. Newspapers have also improved a lot in the region. Generally speaking, and depending on the brands and the objective we want to obtain, we tend to use magazines and newspapers. Our common goal is to achieve a full marketing mix shared between advertising, PR and others."
In Prabhakar's view, there are also other factors for success: "Some campaigns are better suited for newspapers than magazines, and the opposite also exists. Some campaigns have a stronger message when expressed in the English language rather than in Arabic while the opposite is also true. One must also consider the demographic profile of the target audience, in addition to the intended geographic coverage of the brand, before implementing a comprehensive media plan."
Bin Hendi is currently assessing which media is best suited for his latest product, Graff jewellery. Graff is an example of a real top-end product and its marketing will have to be cleverly devised. Bin Hendi says: "We have tried every kind of media and found that newspapers give the most instant reaction. But for Graff, we want to wait for the right time, it is not the best situation at the moment and we are prepared to wait.
"But we are confident that Graff will do well. Even when watches are priced at around $15-18,000, you will suddenly find that there are people willing and able to spend that amount. If you have the merchandise, people will want it. But buyers are very sensible. As they travel a lot, they can evaluate the prices. But the Gulf region is a very attractive market, where the two factors of price and choice are equally appealing."
As marketing priorities change, so too do the allocated budgets. Prabhakar recognises an upward trend in marketing budgets as a whole. "Divisions in marketing budgets vary from brand to brand and from year to year. For example, if it is a new brand in the market, it is important to focus on building awareness with brand awareness campaigns. On the other hand, if a brand is more mature and at a later stage in its life cycle, it may be more appropriate to concentrate on sponsorship of exclusive events that attract members of the brand's target audience.
Budgets are fluid and in constant need of fine-tuning. Marketing budgets need regular reviews as they are closely linked to numerous factors such as import figures, sales, international trends, to name but a few. In general, however, I think marketing budgets have increased in recent years."
So what else could be improved in the region, to make the marketing of luxury goods more effective? To Bin Hendi, the solution is simple: "We have everything visitors could possibly want: golf, activities, entertainment, shopping, the best hotels. Governments have done a great job in attracting people from all over the world. All we need now is even more visitors."
Others, however, would point to the fact that selling and marketing require different skills and while the region's jewellers and retailers are well endowed with the former, a lot of work still needs to be done on the latter. Creating an Eldorado for luxury brands here by simply making them available may well have worked until now. The increased competition will now require for professionalism to be enhanced too.