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BUS 1303 Marketing

GROUP ASSIGNMENT
INSTRUCTOR: Irma Fabular Welch

2014
Almarai

Group name
NAME..1: .
NAME 2:
ID
NAME3:
NAME4..:
ID..
Group work
20-Nov-14

Brand Introduction: ........................................................................................................ 3


Incorporated in UAE: ..................................................................................................... 3
SWOT analysis: ............................................................................................................. 3
Market environment: .................................................................................................. 5
Macro environment factor: ........................................................................................ 5
Micro environment: ................................................................................................... 6
Impacting factor on decision making analysis: .......................................................... 7
Market description: ........................................................................................................ 7
Market for the brands 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: ............................................................ 8
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 companys macro and micro environment analysis. It
helps us to project companys 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 companys 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 companys 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 firms
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

demography,

microenvironment

such

as,

economy,

forces,

technology,

natural

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 brands 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 buffalos milk, milk made pills for tea, chocolate, milk candies etc...

Market expansion grid:

Existing market

Existing product

New product

Increase consumption
habit by launching healthy
diet campaign

Health conscious product

New market

Increasing No. of
expats

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

Mede-milk:

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/wpcontent/uploads/2013/03/am_annualreport_2012_english_lores.pdf
4. http://www.arabnews.com/news/450944