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Almarai is a large food corporation based in Saudi Arabia and operating internationally. It encompasses a broad variety of brands that include dairy products, poultry, and pastries. Its dairy division, in particular, is responsible for the majority of the company’s profits due to its established nature and continuous development. Almarai is a market leader, particularly with regards to dairy products, and the success of the business is mainly due to effective advertising. The purpose of this report is to analyze the company as well as the market where it operates within Saudi Arabia and to construct a marketing plan for Almarai’s Laban dairy product brand for the year 2020.
Mission and Scope
Almarai is a corporation that has several decades of history behind its success and broad field of interests. According to Profile (n.d.), the company was established in 1977 by HH Prince Sultan bin Mohammed bin Saud Al Kabeer with the goal of meeting the growing demands of the domestic market and consolidating as well as modernizing the traditional dairy industry of Saudi Arabia. The endeavor succeeded, and Almarai centralized its production and expanded the scope by creating new farms. Furthermore, the corporation’s business grew geographically as it entered the markets of the other GCC countries as well as Egypt.
The primary mission of the company is to provide consumers with fresh, high-quality food and beverages on a daily basis. Correspondingly, Almarai envisions itself as the leader and consumers’ choice in the markets which it encompasses. According to Mission, vision & values (n.d.), the corporation values adaptability, sharing, passion and pride, innovation, trust and respect, and excellence. Marketing initiatives should take these qualities and aspirations into account and incorporate them into promotional campaigns to communicate the company’s message to customers and maximize the effect.
Situation Analysis (SWOT)
|Company Analysis||Almarai is a highly successful company in the domestic market, particularly in its primary field of dairy products. The corporation has reported a net profit of 2,159,963 SAR in 2017, which, while not significantly increased over the 2016 value (weakness), displays stability and reliability (strength) (Value through innovation2018). Nevertheless, continued attractiveness to investors requires sustained financial growth, and the unchanging profit statistic indicates potential future stagnation of the corporation’s stock and market opportunities (threat). The situation involves the introduction of aggressive expansion strategies, which include attempts to increase the company’s share in its existing markets and potential future expansion into new fields through mergers or acquisitions (opportunity).|
|Competitor Analysis||Almarai is a strong player in the market, but it has to compete with a variety of other local companies such as Al Ain Farms. Nevertheless, due to the local nature of the drink, most companies that produce it and sell it in the United Arab Emirates are located in the GCC. As Laban is a variety of drinking product, Gulf & Safa, Al Ain Dairy (Laban n.d.), and Al Rawabi can be identified as the primary sources of competition for the brand (threat). Smaller offerings and substitutes, such as homemade or organic laban, drinking yogurt, and soy milk may present a danger to the brand, although the latter two varieties have Almarai options available. |
Gulf & Safa is the biggest competitor in terms of market share, as it claims to possess more than 65% of it in laban (weakness) (Laban up n.d.). The richness of the selection offered by Almarai is a powerful competitive advantage that should be leveraged during marketing (strength). At the same time, the existence of its traditional varieties provides an edge over the selection from Gulf & Safa (Dairy Products n.d.) (opportunity). The designs of all laban products are mostly similar and homogeneous, as they use white plastic packaging and a label with a single dominant color. As demonstrated by Milk and Laban (n.d.), the prices for laban are largely similar, as well, with a 2-liter pack costing approximately 11 AED. Most varieties of laban are usually carried by retail outlets at once, meaning the distribution network is mostly similar. Homemade variants are an exception to this tendency, and their distribution network may afford them a lesser reach to consumers.
|Consumer Analysis||Almarai is well-known among consumers, and the company, along with its associated brands, is present in the daily lives of most UAE citizens (strength). According to Singh and Hagahmoodi (2017), 72% of people in the Emirates use Almarai products daily, and another 24% uses them weekly; furthermore, 80% of respondents believed that Almarai goods and services were superior to the alternatives. The corporation has an excellent reputation with consumers and is prevalent in the daily lives of most of them. As such, while the improvement of the company image is always beneficial to overall and long-term success, it should not be a priority in the current situation. |
Consumers likely see Almarai as a reliable large-scale provider, one that furthermore is often superior to the competition (opportunity). However, laban production has traditionally been an area occupied by other companies in the United Arab Emirates (threat), and it will be necessary for the perception to change if the brand’s popularity is going to continue growing. Persuasion of people who prefer traditional laban and utilize other brands is going to be challenging, as Almarai does not have a significant advantage in that area (weakness). However, some consumers may be interested in the multitude of other options that the company offers. This notion especially applies to the UAE’s sizable immigrant population, which usually does not have more reason to be interested in traditional laban than in other option.
|Market Analysis||The dairy industry in the UAE is a competitive scene, as a variety of companies such as Nadec, Al Safi Danone, and Almarai attempt to attract a limited number of customers by offering various advantages (opportunity). As was mentioned above, the market is saturated, and its growth has recently stalled due to a decline in oil prices and the influence of the trend on the overall economy of the UAE (Augustine 2019) (threat). Almarai has an advantage in the competitive scene due to the popularity of its products (strength), but it may struggle to overtake the current market leaders (weakness).|
|Product Analysis||Almarai’s Laban products come in a broad variety of options (opportunity), but the fundamental nature of the drink remains unchanged. As mentioned above, the price is average for the market, although the premium Baladi brand would naturally be more expensive. The quality of Almarai Laban is difficult to discuss in relation to its competitors, as it is a food product (weakness). The company guarantees the highest standards of safety for its produce (strength), but a customer’s preference for a particular brand of laban is a matter of personal taste (threat). The design is a white container with a green label that depicts a glass of a white liquid that can clearly be identified as a dairy product (Fresh Laban n.d.). The packaging is standard for the industry, and the available sizes range from 180 ml to 2.85 l (Fresh Laban n.d.). In terms of price, quality, or design, Almarai Laban does not possess a decisive advantage over competing brands.|
|Problems and Opportunities||The primary issue facing Laban is the saturation (threat) of the UAE market, which is relatively small compared to others, such as Saudi Arabia or Egypt. Most people who live in the Emirates already consume Almarai products, and either purchase Laban or make the informed choice not to buy it. The opportunities for expansion of the consumer base into new and uninformed consumers are not significant, and most sales increases would come from convincing existing laban consumers to begin using the Almarai brand. Marketing for such purposes will likely be associated with high costs and low returns, as the company’s competitors will be conducting their marketing with the opposite intention (weakness). |
Nevertheless, the advantages Almarai Laban has over its competing brands can serve as an opportunity to attract customers. As many of the company’s offerings do not have alternatives or the other options are spread among multiple companies, marketing can use the fact to promote the product and its diversity that others cannot match (strength). Furthermore, the existence of the premium Baladi variety of Laban, which does not have alternatives among the primary competitors, appeals to the target demographic and promotes the choice of Almarai over others. From a profit perspective, the existence of a premium variety of a product is a significant advantage when the consumer base prioritizes quality over price. Ayran may also secure a number of consumers who prefer its specific flavor and cannot find similar options elsewhere (opportunities).
Target Market Profile
The target market is represented by the people that are expected to be responsible for most of the sales as well as the associated profit. Demographically, this category is most likely middle-aged middle-to-high class Emirati males, who are usually the heads of a family with multiple children and, as such, have to provide for themselves as well as numerous other people. Such consumers will most likely be Arabs, which constitute 10% of the population (United Arab Emirates population 2019 2019), and work either in the state sector or as business owners, an occupation that puts them into the middle to high class. Their salary would allow them and their family to live comfortably, with high disposable income.
The majority of such high-income families would be located in large cities such as Dubai and Abu Dhabi, as the locations concentrate the wealth of the UAE. The target consumers spend a significant portion of their income on food and beverages and can afford the more expensive options (United Arab Emirates: Reaching the consumer 2019). They would probably be concerned with quality over low prices, as they are economically secure and can afford premium products. They would likely have an established set of preferences and value the older varieties of Laban, but the needs of their families may encourage them to buy other types of the product to suit the preferences of their wives or children.
Augustine BD 2019, ‘Oil price to weigh on GCC’s economic prospects’, Gulf News Business. Web.
Dairy Products n.d. Web.
Laban n.d. Web.
Dairy n.d. Web.
Fresh Laban n.d. Web.
Laban Up n.d. Web.
Milk & Laban n.d. Web.
Mission, vision & values n.d. Web.
Profile n.d. Web.
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Singh, A & Hagahmoodi, SO 2017, ‘Performance measurement of Almarai products and customer satisfaction’, International Journal of Management Science, vol. 4, no. 1, pp.1-12.
United Arab Emirates population 2019. 2019. Web.
United Arab Emirates: Reaching the consumer 2019. Web.
Value through innovation 2018. Web.