BUS 1303 Marketing

GROUP ASSIGNMENTINSTRUCTOR: Irma Fabular Welch

Group nameNAME..1……………: …………….NAME 2……………: ID………NAME3………………: ……………NAME4…………..: ID………..

Group work20-Nov-14

2014Almarai

Brand Introduction:........................................................................................................2

Incorporated in UAE:.....................................................................................................3

SWOT analysis:.............................................................................................................3

Market environment:..................................................................................................4

Macro environment factor:.........................................................................................5

Micro environment:....................................................................................................6

Impacting factor on decision making analysis:..........................................................7

Market description:........................................................................................................7

Market for the brand’s product line/item in UAE:.....................................................7

Define market:............................................................................................................7

Future size of the market:...........................................................................................7

Customer current need and want:...............................................................................7

Potential change to customer need and want:............................................................7

Market segment:.............................................................................................................8

Existing market segment:...........................................................................................8

Existing Target market:..............................................................................................9

Potential change:........................................................................................................9

Market opportunities:.................................................................................................9

Market expansion grid:............................................................................................10

Target market and product line:...................................................................................10

References:...................................................................................................................11

Brand Introduction:

Almarai Company it was established in Saudi Arabia by sovereign Sultan Bin

Mohammed Alkbeer, in 1977. The organization began with pastry shop items. Later

on, they moved to poultry item. The product offerings of the organization these days

incorporate dairy fluids, yoghurts and treats, sustenance, juices, bread shop, poultry

and newborn child sustenance.

Here we will focus mainly on company’s macro and micro environment analysis. It

helps us to project company’s future decision and market insight. We will analysis

here one product line which is milk. Almarai milk comes in different flavours and

sizes and it is sold in different prices. Milk products includes fresh milk, fresh

flavoured milk, milkshake, ling life milk, evaporated milk, vital milk, lacto free and

flavoured long-life milk.

Incorporated in UAE:Almarai incorporated business in the UAE in 1986 through an executor named

"Bustan Alkhaleej". "Bustan Alkhaleej" is a wholesaler. It used to import Almarai

items from Saudi Arabia and disperse then in the UAE. At that point, the organization

created a joint wander with Pepsico in the year 2005. The conclusion was another

organization in the UAE called "International dairy and juice limited ". The last step

was the foundation of new organization that is whily claimed by Almarai. This

organization is called "Almarai constrained UAE". It is a distribution organization in

charge of Almarai operations in the UAE.

SWOT analysis:

Strength:

Highest brand awareness

Quality product perception

Strong relationship with store

Easy access shelf displays

A market share of %60 in 2013

Effective of chilled distribution network.

Distribution standards: The Company applies excellent distribution standards

in order to satisfy the needs of UAE customers. They distribute daily in order

to make sure that the products delivered to the UAE customers are fresh.

Weakness:

Long distance from production point to sale point

Across the border production farms

Long and complex distribution channel

High cost of distribution channel than other competitors

High ratio of transit damages

Short product life

Strong and increasing share of AL Rawabi

The company is dependent on a single brand name “Almarai”. Therefore, in

the case of any incident, the company cannot fall back upon alternative brand

to keep selling its products.

Opportunities:

In future, the union of the GCC currency will eliminate the cost of currency

exchange.

Expansion opportunities of diversification

In future, the export and import duties will be reduced or eliminated which

affects the company’s’ revenues positively.

The increasing population in the gulf country will affect the sales of the

company in the future.

Almarai has new introduced products which gives it an opportunity to

continue growing in revenues. 

Increased awareness of the health from consumers increase the consumption

of laban, milk, and fruit juices.

Low interest rates increase investments in the company’s business lines.

Threats:

The subsidies of oil may affect the market of Almarai.

The government funding of Almarai may stop at anytime due to the

dependence on the unpredictable on its oil revenue.

Expansion of Almarai may affect it indirectly by the risks of the operations,

treasury risk including currency and borrowing risks, procurement, insurance

and litigation.

Fresh dairy products have a limited life of six days. Any disruption of the.

Market environment:

The market environment is a marketing term and

refers to factors and forces that affect a firm’s

ability to build and maintain successful

relationships with customers. Three levels of the

environment are

Micro (internal) environment: small forces within

the company that affect its ability to serve its

customers such as, suppliers, marketing

intermediaries, customer markets and public.

Macro environment: larger societal forces that

affect the microenvironment such as,

demography, economy, natural forces, technology, politics, and culture.

Macro environment factor:

Culture:

In UAE market, there is no trend to use raw dairy product, like open milk and dairy

products directly from formers. UAE culture does not support such consumption.

Economy system of UAE is not in the support of such consumption.

Demographic:

Mostly population OF UAE based on expats. 80% population is working in different

sectors. Milk and dairy products are much demanding in UAE products. Dairy

products are easy and healthy way to fill the appetite and thirst. Demographic trends

do not affect Almarai milk products. All people in the UAE regardless of their ages,

family structure, geography, education or nationality buy Almarai milk products.

Therefore, the market of the product is very wide.

Economy:

UAE economy is consumption economy. UAE economy is tax free economy. People

have highest disposable income in UAE. Tea, yogurt and laban are the major

consumption in food.

Technology:

Farming industry is becoming hi-tech industry. Profit margin of farming industry is

related with the use of latest technology tools. Technology is stable in industry. There

is no rapid change in technology. Industry mainly use of chiller like chiller vehicle to

transfer product and chiller in sale point.

Political:

UAE has strong political system, well resonated with economic system. UAE systems

both political and economic strongly encourage initiating business in the region.

Suppliers:

Almarai has well planned integrated business. Companies all operations are integrated

under one umbrella. Largely raw material of diary product is supplied from KSA,

where they have own farms and supply management systems. In UAE they have their

own distribution system, team and management.

Competitors:

AlRawabi, Musafi and alAien are the major competitors for Almarai. Almarai is

grabbing more than 60% share of the dairy product. AlRawabi is rising add in dairy

industry, it is becoming the threat for the Almarai. AlAien company has the major

edge on other competitors , their all operations are inside the boarders.

Geographical:

Geographically UAE is considered as trade and business hub. Population is increasing

with pace since Dubai win the bid of expo 2020. Expats are increasing. This is quite

favourable for the company. They are potential consumer for the Almarai.

Micro environment:Company is operated from Saudi Arabia. The top management of the company is in

Saudi Arabia. The company has strong financially back up. As a corporation Almarai

has many financial sources. Prince Sultan AlKbeer has 28.6% of the shares, Omran

company has 5.7% of the total shares. Saffola Gold has 29.9%. The rest of the shares

are for the public.

The company carries out ongoing research and development in order to produce high

quality products that satisfy the needs of customers. The company has control on all

raw materials.

They have farms in Saudi Arabia. They have the best type of cows. The company has

operations in almost all countries in the gulf area. It also has operation in some

countries in the Arab world such as Jordan and Egypt. In terms of production, it is

done in Saudi Arabia and the UAE. Skimmed and low fat milk are produced in the

UAE. Other milk products are produced in Saudi Arabia.

The second micro environment factor is customer markets. Almarai milk products are

for all customers in the UAE locals and expatriates. The market segments are varied.

All market segment regardless of their ages, nationalities, gender and race use

Almarai products.

Impacting factor on decision making analysis:

Market description:

Market for the brand’s product line/item in UAE:

Define market:Almarai dairy products have wide range of customer and consumer. They have sales

alliance with major retailer like, LULU, CAREFOUR, grocery store, MADINA

MARKETS, SPINYES. , All people in the UAE regardless of their ages, family

structure, geography, education or nationality buy Almarai milk products. Therefore,

the market of the product is very wide.

Future size of the market:UAE is considered as trade and business hub. Population is increasing with pace since

Dubai win the bid of expo 2020. Expats are increasing. In future it is expected that

500,000 people will come to live across the UAE. Now almost 5000 people are daily

visiting UAE. This is quite favourable for the company. They are potential consumer

for the Almarai.

Customer current need and want: Diary product is necessities of life. Almarai product is basic need for the consumer.

Currently demanded products are like fresh milk, pastries milk, flavoured milk, milk

shake, yogurt, laban. They already introduce low and full cream products for

consumer according to market requirement. According to most recent data available

in research it is narrated that Almarai covering 60 to 70% need of the market. Rest

30% is covering by other competitors like Alrawab and Alaien.

Potential change to customer need and want:

Potentially As the population is increasing in the region likewise demand of Almarai

product is increasing. Since Dubai win the bid of expo 2020. Expats are increasing. In

future it is expected that 500,000 people will come to live across the UAE. Now

almost 5000 people are daily visiting UAE. This is quite favourable for the company.

It is forecasted according to people habit that in future customer will demand

conscious product likes,

Active milk: it will keep u active and fresh

Smart laban: will help to reduce weight

Glow yogurt: it will help to glow skin tone and color

Compliment milk shake: it help to maintain balance diet

These products can work with proper market plan. It is time to play with consumer

psyche.

They are potential consumer for the Almarai. Looking at Almarai's recent financial

results, the company has enjoyed rising sales and profits for each of the last five

years.

Market segment:

Existing market segment: UAE market can be divided mainly on the following

1. Local: Male and female Infants Teenage Young Married couple Parents Grannies Student Professional Businessmen Retired

2. Expats: Asian GCC Arabian Western Professional Labor class Visitors Businessman Shoppers Tourist Families Individuals

Existing Target market:Dairy products are considered as basic necessities of life. Basic necessities of life are

consumed by every living human. So for all people living in the UAE are customer

and consumer of Almarai products, regardless of their ages, family structure,

geography, education or nationality, local or expats. Almarai has large and wide

portfolio of customer. Therefore, the market of the product is very wide.

Potential change: Expats ratio will increase in future. There will be increase in expats as the following ratio

Asian 25% GCC 3% Arabian 2% Western 3% Professional 4% Labor class 20 % Visitors 35 % Businessman 5% Shoppers 4% Tourist 30%

Almarai is catering in large of dairy products, like fresh milk, pastries milk, flavoured

milk, milk shake, yogurt, laban. They already introduce low and full cream products

for consumer according to market requirement.

Market opportunities: Health conscious people: fatness and baldness is major problem for the expats in

UAE. It is big opportunity for the company to target this market, by introducing such

dairy product. For this company have to lunch a heavy market campaign to educate

the market about the product attributes, that how these products are helpful to increase

health lsevel like,

Active milk: it will keep u active and fresh

Smart laban: will help to reduce weight

Glow yogurt: it will help to glow skin tone and color

Compliment milk shake: it help to maintain balance diet

Mede-milk: stop the weakness of head skin to control hair fall

Hindu community:Hindu community has major share in UAE population. Hindu religiously does not

drink and eat dairy products, especially those products which are made of cow milk.

The reason is that Hindu worship cow. Almarai can introduce product for Hindu like

dry milk of buffalo’s milk, milk made pills for tea, chocolate, milk candies etc...

Market expansion grid:

Existing product New product

Existing market Increase consumption habit by launching healthy diet campaign

Health conscious product

Active milk: Smart laban: Glow yogurt: Compliment milk shake

Mede-milk:

New market Increasing No. of expats

Targeting Hindu community Buffalo dry milk

powder Tea milk pills Candies

Target market and product line:We already briefly explain above the current products are perfectly catering the need

of existing customer. But there are some gray areas which can be cater like,

Active milk: it will keep u active and fresh

Smart laban: will help to reduce weight

Glow yogurt: it will help to glow skin tone and color

Compliment milk shake: it help to maintain balance diet

Mede-milk: stop the weakness of head skin to control hair fall

Targeting Hindu community Buffalo dry milk powder Tea milk pills Candies

References:1. Clark son Centre for Business Ethics ,2000

2. 2. Kamel Mellahi, Kevin Morrell and Geoffrey Wood (2nd Edition.). (2010).

“The Ethical Business”

. GB: Palgrave McMillan Hamshire

3. http://www.almarai.com/wp-content/uploads/2013/03/am_annualreport_2012_english_lo-res.pdf

4. http://www.arabnews.com/news/450944