Question

Outcomes:

1. Demonstrate a solid understanding of overall marketing concepts, goals and strategies within the context of organizations goals and strategies (Lo 1.1).

2. Explain issues pertaining to marketing environment both internally and externally (Lo 1.2)

CRITICAL WRITING

The founder of Almarai is HH Prince Sultan Bin Mohammed Bin Saudi Al Kabeer who recognized the potential to transform the traditional dairy farming in Saudi Arabia in order to meet the needs of a growing domestic market. Numerous agricultural projects were developed under his guidance to achieve the objective of the company. Almarai stepped into the market with the processing of fresh milk and laban into the modern dairy farms.

The Company has invested heavily in technologically advanced production facilities and recruiting the right person for the right job. Almarai is considered to be the second and the larger Central Processing Plant with a new cheese plant along with it. On a daily basis, Almarai is capable of serving high quality and hygienic products to more than 43,500 customers within the GCC countries. In 2007, Almarai entered the bakery products market by acquiring Jeddah-based Western Bakeries. Two years later, Almarai started the construction of a new bakery facility in Al Kharj. In the same year, Almarai established a joint venture with Chipita and Olayan Finance Company under the name of the Modern Company Industries to launch 7DAYS brand.

In 2009, Almarai added poultry products to its portfolio through the acquisition of Hail Agricultural Development Company (HADCO). After investing in an excellent production facility, Almarai launched the new premium poultry brand – Alyoum. During the same year, Almarai made acquisition with Mead Johnson Nutrition to form a 50-50 joint venture known as the International Pediatric Nutrition Company (IPNC).

In 2010, Almarai entered the infant nutrition market with the construction of the region’s first infant nutrition plant at Al-Kharj. Recognizing that the best way forward involves working with acknowledged experts in this field, Almarai formed the International Pediatric Nutrition Company (IPNC), Almarai has recently acquired the entire project and now offers its products under the brands Nura.

The success of Almarai is because of its unique infrastructure, which includes farms, dairy, juice and bakery processing plants and also determined by the marketing and distribution expertise, all of which are working towards delivering a quality product to the consumer.

Product / Services Details

1. Juices: Almarai always uses the best fruit to make the juices that the customers love. It maintains good balance between good health and great taste. Mixed Fruit, Strawberry, Alphonso Mango, Orange with Pulp, Orange, Orange and Carrot, Apple, Mango, Mango Mixed Fruit, Fruit Cocktail, Mixed Berry, lemon with Mint, Guava with Pulp.

2. Home Snacks: Snacks products are the tastier and the simple one which would give relishing taste. Tinned Cheese, Butter, Ghee, Mozzarella Cheese, Feta Cheese, Whipping Cream, Tomato Paste.

3. Yoghurts and Desserts: Pure and calcium-rich favorites for the entire family. Desserts are made from 100% natural, fresh cow’s milk. Yoghurt, Fresh Cream, Labneh, Layered fruit Yoghurt, Stirred Fruit Yoghurt, Sterilized Cream, Desserts.

4. Culinary Products: Almarai provides the tastiest cheeses, and richest creams which makes mother’s work easy in the kitchen. Cream Jar Mix, Cheddar Jar Cheese, Sliced Cheese, Square Cheese Portions, Block Cheddar, Halloumi Cheese.

5. Dairy Liquids: There is a complete range of delicious laban and milk based dairy products for the entire family. Fresh laban, Fresh Milk, Flavored Fresh Milk, UHT Milk, Evaporated Milk, Advanced Nutrition.

6. Kids Products: Kids products prove to be a fun and a healthy bunch for kids. Triangled Cheese, UHT Flavored Milk, Zady Drinking Yoghurt, Zady Flavored Yoghurt, Zady Jelly Custard, Zady Fruit Dairy Snack.

Almarai ensures that all its products are properly packed and refrigerated in proper temperatures so that the products maintain its fresh nature and quality. Liquid products are transported in those transports which has refrigerator facility so that it does not get spoiled by over time. Almarai mainly emphasis on quality. Packaging is done in a very clear and uncluttered way so that it is easily recognizable. The company distributes its products annually which covers more than 110 million kilometers in delivering dairy, juice, bakery and poultry products reaching up to 43,500 customers across six GCC states.

Almarai has long-haul fleet which transports raw milk from dairy farms to the Central Processing Plants and then it transports the finished goods from the production site to different designated sales locations. Almarai reaches to more than 42,000 shops within the GCC countries on daily basis. It ensures that the products are properly packed with appropriate temperatures for different products. The transports are specially designed so that the products are not spoiled and last for longer time.

Almarai transports the finished to small grocery stores and supermarkets. Almarai enjoys increasing incomes and demands that come from supermarkets where one shop for one’s weekly requirement in a single visit.

Critical Questions.

1. Conduct a SWOT analysis for Almarai based on the information given.

2. Examine the 4 P’s of Almarai based on the information given.

3. Use the porter’s five forces model to critically analyze the competitive structure of the organization.

4. Critically evaluate the product portfolio of Almarai with the help of BCG Matrix.

Answer 1

1. SWOT analysis for Almarai:

              Strengths:

• The almarai is considered to be a market leader in diary market in GCC.
• Their products are considered to be of superior quality.
• They have a strong distribution network.
• Hot climatic condititions those are conducive for beverages market.

           Weakness:

• They have high operating costs.
• They are over dependent on diary & juices segment.
• Major dependency for import of raw materials.

          Opportunities:

• They have good opportunities for growth of milk market in gulf cooperation council (GCC).
• Diversification of products.
• They seem to get good demand from increasing number of tourists who are visiting Saudi for haj & umrah

         Threats:

• The major threat is political situation that prevails in the gulf countries.
• Supply disruption of feedstock can increase the costs to the company.

4P’s :

• Promotion: to increase demand for products they use which can come through:

• Television advertising: the focus has shifted from product oriented to emotion oriented television commercials. Children are mainly targeted through animations. Advertisements are showcased on television by citing a mother child relationship to connect with the customers
• They are also identified through sponsorship they do for various reputed events.
• Social media: they have a dedicated facebook page for their members, online gaming initiative etc.
• Integrated brand promotion like western bakery company limited, international diary & Juice Company etc.

Product:

• Juices: they always use the best fruits to make juices to focus on both taste & health.
• Home snacks: they prepare snack products which are not only simple but also give a relishing taste.
• Yogurts & deserts: which are calcium rich favorites for the entire family prepared out of pure cow milk.
• Culinary products: food like tasty & healthy cheeses that makes the mother’s job easy in the kitchen.
• Kids products that are both fun & healthy for the kids.

Price: they generally decide on the price based on the competition. Where some products are considered to be very cheap like milk, bread etc. they also keep reviewing the prices of their products.

Place: they transport the finished products both small stores & large supermarkets. They also enjoy increasing income. The products are nicely packed on different temperatures depending on their nature. They also have good transport facilities to transport the products without getting spoiled.

Porter five forces model:

• Existing rivalry: rivalry occurs because of government limiting the competition, large industry size & also relatively few competitors.
• Bargaining power of suppliers: this includes diverse distribution channels, volume is critical to the suppliers & there seems to be high competition among the suppliers.
• Threat of substitutes occurs because of limited number of substitutes.
• Bargaining power of customers: this occurs because of low buyer price sensitivity, customers consider product very important, large number of customers exist & limited buyer choice.
• Threat of new competitors: requirement of strong distribution network, high capital requirements, strong brand names, usage of advanced technologies, loyalty of customers towards the brand etc. are required.