Choose a Saudi business (Almarai Company) and answer the questions:
- Identify the business briefly
- What is the business strategy?
- Describe its products and/or services.
- Identify its customer. (Segmentation, target market)
- Why do you think that customers buy their product and/or service from this company?
- Identify two competitors and describe how this business differentiates itself from them.
- Does the business have a competitive advantage?
- In your opinion, what dangers does this business face in the near-term? Explain your reasoning.
- If this were your business, what would you do differently? Explain your response.
- What the actors in Micro and Macro environment that affect the business.
Marketing principles or the principles of marketing are considered as marketing concepts which companies utilize an operative marketing approach. They are identified as principles upon which companies construct product promotion policies. Business organizations employ the marketing principles for the effective advancement and endorsement of goods, products or services. Marketing is the aspect of business that is highly customer centric as all of the principles of marketing associate with consumer. The principles of marketing pursue logical sequences. Firstly, a target customer of specific product or service must be identified. Considering the ones who uses a specific product or service is indispensable in determining what that customer requires and the way to procure them (Palmatier and Crecelius 2019). However, this is imperative for businesses operating in the free market as success which relies upon distinguishing and retaining consumers to maintain its revenues and guarantee business development. Furthermore, the essentials of marketing are based on the four P’s namely, product, price, place and promotion. According to Morden (2016), by regulating controlling these aspects and developing them into strategies in attaining their goals, businesses can effectively attain importance of their customers. However, for marketing to be effective, businesses require to guarantee that these four fundamentals of the marketing mix function together in agreement. The following paper will analyse the principles of marketing of Almarai Company Food and Beverage manufacturing and distribution. Additionally it will focus on strategies and principles through which Almarai has intended to maintain its competitive edge in the market.
Identification of Almarai business operations and strategy
Almarai Co. is the major dairy business in Saudi Arabia by market assessment, primarily functions dairy farmsteads as well as processes food along with marketing dairy foodstuffs and fruit juices. The name Almarai implies to ‘green pastures’ in Arabic. The company initiated its business operations in 2009 in courageous fashion as it appears to combine its incidence in the Kingdom and successfully increase on global level. Almarai comprises of diary, juice, bakery along with poultry and infant nutrition products for its overall business scenario. As per reports, around 80% of Amlarai’s business is vessels with dairy products, cheese and juice products. However, in the poultry sector Almarai comprises of around 150-180 poultry in their firms in order to estimate the market strategy of developing as a market leader in the sector (Lewnes and Keller 2019). According to reports, the company announced its intention of market entry into a joint undertaking with soft beverages giant PepsiCo in order to invest diary as well as juice mainframes in the Middle East, South East Asia as well as Africa. Identified as an worldwide Dairy and Juice, the undertaking is estimated to be around 52% possessed by PepsiCo and 48% by Almarai. Reports have revealed that the success of Almarai is primarily due to its distinct infrastructure which incorporates farms along with dairy products, non-alcoholic beverages with bakery processing manufacturing plants. The organization constitutes a turnover of around 2.6 billion. The company further has around US $6 billion worth market capitalization (Singh and Hagahmoodi 2017).
Description of Products and Services
Almarai offers wide variety of juice, dairy products along with home snacks products along with culinary products and dairy liquids. In its range of juice products the Almarai uses the best chosen fruits in order to extract juices which is highly preferred by the client. Almarai maintains good balance between good health as well as exceptional taste. Also, its range of snack products has great taste and also offers the most delicious cheese products for the entire family (Almarai.com 2019).
Almarai requires employing STP process (Segment, Targeting as well as Positioning) strategy in order to interpret company’s harvests segmentation for the market. Nonetheless, in majority of the cases, the company intends to understand consumers’ demands from the market investigation. As per reports, Almarai can further aim to try similar policies in order to identify their target audiences. Subsequently, Almarai has a competitive edge over other market players in the local market with the competence of placing its products and services in an effectual approach via the retail outlets of Savola such as ‘Hyper Panda’ (Medarac, Vignali and Vignali 2015). Such an acquisition of Almarai has reinforced the supply chain network and permits the company to allow the business drive the value out of the supply chain by utilizing the production of grains and animal feed for internal production of milk. Packaging as well as presentation of the product is essential for the beleaguered purchaser to be involved towards the Almarai’s product. Providing improved quality and valuable products in brief dated can facilitate the company to acquire steady market from the inexpensive one. The position of the manufactured goods as well as the brand is extremely imperative in business. Almarai requires distinguishing their products whereby they can alter the future marketing approaches and business strategies (Singh and Hagahmoodi 2017).
7Ps Marketing Mix of Almarai
Almarai requires expanding its overall business situation of the marketing by enhancing its product for the targeted audience. Moreover, their primary agenda is to turn into major part of the market by increasing substantial market for their goods and services. Nonetheless, Almarai has aimed to enhance the taste, value, flavour as well as quality of the product in order to intensification of the demand of the take-off in the market. Nevertheless, they will further follow the global and national health standards in order to sustain improved quality of products amongst their potential consumers (Farrag and Raafat 2017).
Since price is highly imperative issue if the product is recently launched in the market. Thus, Almarai must produce better quality fruit juices along with exceptional quality dairy products in reasonable amount. The company through this strategy would upsurge the popularity of the brand in the competitive market. Husain and Alnefaee (2016) have stated that the management will make a market investigation before they can process with any judgement associated with the product price, they can further offer certain offers for the targeted customers to purchase their products. It will facilitate them to gain market in an aggressive method.
Almarai requires endorsing their new products in their markets on a regular basis. The company will utilize marketing strategies such as newspaper, billboards, and advertisements along with event sponsors in lieu of their latest products in the market. It will directly leverage the targeted audience to seek products in the market. As a result, it will be of substantial opportunity for the Almarai to attain targeted audience in brief period. Furthermore, they can also introduce few events and marketing campaigns intended for their targeted audience in order to attain increased number of dedicated customers for their products and services. It will further upsurge their brand excellence in the Gulf nations (Klabi 2019).
The consumer base of any company is identified as its main entity. Nevertheless, in majority the scenarios, Almarai intended to develop their overall marketing strategy in order to contend its clientele. Owing to these factors, the company requires targeting diverse segments of consumers for their products. Alderiny et al. (2019) have claimed that they will further refurbish the quality of their products in terms of price range for varied customers and purchasing technique. However, Cantor, Emel, J. and Neo (2017) have mentioned, if Almarai can offer extensive array of combination for various segments of the profits and revenues then they will attain more consumers in brief time. Devoid of this strategy, Almarai as a thriving Saudi-based conglomerate will not be able to acquire the international market scenario where the competition might intensify.
Selling the appropriate product in suitable market is highly imperative for business firm. Almarai needs to distinguish those places, shopping malls sites along with stores where they can achieve the major proportion of people in regular basis. However, it will highly be advantageous for Almarai to disseminate its marketing strategies to its customers to interpret their product and the impact of their product and services on customers’ perception (Klabi 2019).
As per reports, Almarai has been intending to develop the way raw materials are being processed and the process through which they can serve the product to customers’ end. Such a strategy in the view of Grindle, Siddiqi and Anadon (2015) will enable the organization to attain new avenues for new markets in the Gulf Region. It will further seek some strategies for new type or lines of products for the customers. Such strategy will expand the business operations and will acquire better and improved ways of growing the overall business operations of Almarai. According to reports, global market agreement with PepsiCo can enable the company to seek improved ways of expanding their products in other nations instead of only limiting Gulf region (Cantor, Emel and Neo 2017).
In the view of Husain and Alnefaee (2016), when a company acquires a permanent brand recognition and value amongst its customers, it attains a physical evidence for its brand. As per reports, Almarai is identified as the best-loved food and beverage brand in the GCC region.
Competitors’ Analysis of Almarai
Marmum Dairy Farm LLC and Unikai Foods International are recognized as major competitors of Almarai to have direct competition with Almarai’s market strategies. Similar to Almarai’s market shares, both these companies constitute major market share in the UAE and the global market (Bogami and Hoda 2015). Marmum has established from one product category such as milk and currently has involved in the manufacturing sector and further supplies renowned products for example, fresh dairy products like freshly extracted juices, fresh as well as flavoured milk, fresh and flavoured yoghurt besides proactiv laban also known as buttermilk and laban cool in natural ingredients like fenugreek, cumin in addition to cucumber with mint flavours (Medarac, Vignali and Vignali 2015).
On the other hand, Unikai has currently execute its business operations in around 29 countries across the Middle East and North Africa region and further has increases its footprint further across the UAE and Oman in 2016. Furthermore, Unikai has signed a memorandum of understanding (MoU) with Qatar Foods & Services which is identified as a subdivision of Quality Group International in order to increase its presence in Qatar. By drawing relevance to these factors, Almarai needs to find the avenues with the facilitation of quality management along with product pricing, advertising strategies with promotional activities and targeted market in order to interpret the scope of the business (Farrag and Raafat 2017).
Almarai’s Customer Preference
The success of Almarai does not only rely on its advanced farm houses, but further on its. Moreover, its success is driven by the outcome of sustained focus on customer satisfaction of offering exceptional quality products regularly to its customers and to content its stockholders. Majority of customers in the Gulf region show great inclination towards Almarai’s products as the company has developed as a market leader and attained the value they expect. Reports have claimed that Almarai has attained almost 50% of the fresh milk product with the subsequent highest market rival holding almost 30% of the market dividends (Singh and Hagahmoodi 2017). As, consumer base of Almarai has lied at the core supply chain with the direction of their insights towards the development of the business and further subsidize in the product development progression.
Risks to be encountered by Almarai
Almarai linkage with Qatar tends to remain uncertain whereby products and services of the company are identified as offensive in one of their innovative and major market. As per reports, the Lebanese Prime Minister has put down his paper due to Saudi pressure besides the Saudi government that has resulted in the far-reaching removal of royals and manufacturers under corruption accusations, powering pressures as well as the viewpoint of confrontation (Medarac, Vignali and Vignali 2015).
By drawing relevance to several insights it has been mentioned that Almarai has substantial experience in various manufacturing subdivisions. Nonetheless, Almarai show certain level of weaknesses and are encountering risks due to certain uncertainties in the market. However, they can alter the hazard into significant chance by performing SWOT analysis which will progressively facilitate them to establish improved and effective method of developing the general business.
As per reports, Almarai has acquired around 60% of the market portion in the Gulf Region and undergoes constructive waste management system whereby they decrease their waste production by around 3%. Almarai constitutes own supply chain management system and employs advanced technology such as Q-Pulse in order to show higher efficiency in process and engineering operations. Furthermore, the dairy market in GCC has recently witnessed considerable growth (Farrag and Raafat 2017).
Almarai has limited market dividends in the UAE. Additionally, the company is operating under the single brand name known as “Almarai”. Thus, Almarai as a thriving conglomerate must take into consideration other brand names in order to sell products under the same brand name (Husain and Alnefaee 2016).
According to Klabi (2019), Almarai can attain greater avenues when GCC currency will reduce the cost of different currency exchange. Furthermore, the elevating number of customers can take it as a market opportunity in the Gulf nations for Almarai. Report has revealed that GCC fresh milk market at CAGR of 7% from 2009 to 2016 has attained production volume of over 700 million litres in 2016. For these reasons, Saudi Arabia is likely to develop as the major market for the segment thus estimating majority of the market dividends. Furthermore, Saudi Arabia is likely to develop as sole market in Gulf region which will enable Almarai to measure long-term volume growth possibilities due to the likely growth of population to almost 33 million by 2021 (Alderiny et al. 2019).
On the other hand, the elevating number of pilgrimage tourists staying the Gulf for Hajj and Umrah in order to drive request will upsurge the sales growth of Almarai products. As per Arabian Travel Market (ATM), religious tourism is likely of attracting around 30 million pilgrims by 2030, thus making it one of the major sources of tourism for the Kingdom. Reports have claimed that the influx of pilgrimage tourists will rise to around 11 million, which will eventually increase the sales demand of Almarai products in the dairy sector (Grindle, Siddiqi and Anadon 2015).
The Government of KSA might stop providing financial aids to Almarai to attain great amount of oil revenue. The oil subsidy will tend to pose critical impacts on the overall business unconstructively.
Government regulations can be advantageous for Almarai to attain more revenues for the market and use the situation where they can expand the entire business scenario. Furthermore, it can promote freshly extracted juices as well as dairy products like milk and cheese which can facilitate Almarai to export them in the global market (Haddad 2017).
Business operations of Almarai are primarily based on the combination of fruit juice as well as dairy products. The financial system requires to be expanded and advanced by the government the way Almarai will be able to interpret the current situation of the market. Or else, Almarai will not be able to sustain its business situations.
In Saudi Arabia, majority of Muslim population do not prefer milk or tend to avoid dairy products. However, Almarai requires interpreting their potentiality and having to consume milk for making other products such as ice-cream and milkshake. Furthermore, in majority of cases, they can endorse their products attain greater number of people in short period (Lambert and Hashim 2017).
According to Walse (2016), technology is identified to be highly important part in current market. By drawing relevance to these factors, Almarai requires advancing their technical equipment where they will be able to distinguish the demands of the market as well as they tend to grow their machineries according to requirements. Almarai has introduced the Sopheon system enterprise-wide amongst users in R&D sector with business-line management, marketing and investment. As per reports, Almarai is introduced as the first Saudi Arabian manufacturer to implement the software. Following this deployment, the sale growth has followed Sopheon’s decision in 2009 in order to encompass its business expansion initiatives to the Gulf Region (Yildirim and Milla 2019).
Almarai functioning as a manufacturing sector completely relies on raw equipment and resources, for which the company must understand the importance of distinguishing most effective ways of maintaining the excellence of the product and the grouping of diverse products on a single business procedure. Aligned with the National Vision 2030 of Saudi Arabia, Almarai has lined up with the growth of local leadership. The health, safety regulations introduced in Saudi Arabia with product eminence are essential to be regulated by the know-how. Almarai comprises of an array of other creativities that validate company’s obligation to fund its workers as well as their leadership besides specialized growth. These include the Almarai Future Leadership Program, along with its Graduate Professional Trainee scheme intended for new graduates in addition to the Dairy as well as Food Polytechnic.
Every business enterprises require pursuing the rules and regulations along with legislation system of the government. Complying with Saudi regulation and additional privacy protection laws in lieu of its international work and business associations, Almarai is committed to veneration and safeguard individual privacy privileges in addition to the business’s linkages, organizations, strategies and information. Almarai only practices private facts for genuine determinations and further to uphold appropriate admission regulations (Cantor, Emel and Neo 2017).
VRIO Analysis of Almarai
VRIO Analysis of Almarai illustrates its patents to be important resource since they enable the company to sell its products devoid of competitive intervention. Such an approach results in the greater revenue for Almarai. According to Bosello et al. (2015), these patents tend to offer the company with licensing profits when it authorizations are out to other companies. On the other hand, Almarai’s cost structure is not identified as a valuable resource. It is due to the fact that procedures of production results in greater expenses greater than its competition, thus impacting the general proceeds of the company. Consequently, its cost structure is identified as competitive disadvantage which requires to be improved.
The products of Almarai are not rare as they are easily delivered in the dairy market of Saudi. As per reports, products are easily provided by its market rivals as well. By drawing relevance to this, it can be understood that competitors can use similar products of Almarai and inhibit competitive benefits. As this resource is valuable, Almarai still has the ability to utilize this resource (Grindle, Siddiqi and Anadon 2015).
Almarai’s employee base is identified as a rare resource by the VRIO Analysis due to their exceptional training and skills where it differs from its competitors. The improved compensation and work setting guarantee increased job engagement amongst the staffs.
The local food products of Almarai are not costly for imitation as it can be attained by its rivals, Marmum Dairy Farm LLC and Unikai Foods International if they invest substantial amount in R&D without any consistent experience in the dairy market. Thus, local food products of Almarai offer it with provisional competitive advantage which its market rivals can further acquire in prospective years. Furthermore, distribution network of Almarai show exorbitant imitation by competition as it has expanded gradually in the GCC (Henderson 2019). Consequently, competitors require capitalizing on substantial amount to imitate a comparable distribution system.
VRIO Analysis states that financial resources and distribution network offer a continued competitive benefit. The patents of Almarai are identified as a source of unexploited competitive benefit. There can be seen provisional competitive advantage for workforces along with a competitive equivalence for local food products.
Therefore, from the above discussion, it can be concluded that Almarai requests to utilize STP process (Segment, Targeting and Positioning) approach to appreciate company’s products segmentation for the market. However, in majority of the cases, the corporation proposes to comprehend customers’ difficulties from the market study. Majority of consumers in the Gulf region display pronounced predisposition towards Almarai’s products as the business has developed as a market ground breaker and achieved the value they imagine. Management will make a market investigation before they can process with any judgement associated with the product price, they can further offer certain offers for the targeted customers to purchase their products. It will facilitate them to gain market in an aggressive method. Almarai can offer extensive array of combination for various segments of the profits and revenues then they will attain more consumers in brief time. Devoid of this strategy, Almarai as a thriving Saudi-based conglomerate will not be able to acquire the international market scenario where the competition might intensify. Almarai has aimed to enhance the taste, value, flavour as well as quality of the product in order to increase the demand of the take-off in the market. Nevertheless, they will further follow the global and national health standards in order to sustain improved quality of products amongst their potential consumers. Almarai has introduced the Sopheon system enterprise-wide amongst users in R&D sector with business-line management, marketing and investment.
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