Summary
Indoor farming in the UAE is an alternative method to growing crops on a vertical platform. This method is ditching the traditional ways of farming on the land. UAE lacks the most important component of farming, i.e., water; vertical indoor farming has been a blessing for the Middle East (Ghonima, 2021). The process is season less, but vertical farming is the most expensive form of agriculture. The process costs six to ten times more than the greenhouse farming method. Indoor farming requires appropriate light settings and proper fertilizers for healthy growth. Millennials are growing up to be health freaks; promotional activities like social media promotion and influencer marketing can be an important promotion component. Indoor farming is an excellent way to bring in fresh and healthy food in areas where growing conditions are unsuitable. But, it is very important to generate profit in the sector to continue the operations.
Market Segmentation
Services and products offered by local leaves might be attractive for groups of clients who have specific needs. First, these include young people looking for innovative solutions and products associated with them. Indoor farming is a technological method that might be attractive to a new generation because of its unique nature. The second segment is comprised of customers interested in fresh, healthy, and locally produced products that might be delivered in comparatively short terms. For this reason, Local Leaves should focus its promotional efforts on these market segments. It can also use various types of delivery, such as on-demand delivery (60% of industry sales), which can be performed by using the app, scheduled (20%), also made by using the application, and self-pickup (20%), or visiting local supermarkets (Neiva, Deggau & Andrade Guerra, 2020). Focusing on these segments and delivery models, it is possible to attain success and ensure a stable level of sales and income, which is vital for the development of the company.
Promotional activities
Local Leaves needs to be promoted through online mediums as it enables mass communication. Buzz marketing schemes can be developed in order to create buzz about the technique and its growing presence. Social media platforms like Instagram, snap chat, Facebook, Twitter, YouTube and TikTok as well can increase awareness of the importance of indoor farming in the UAE (Weidner et al., 2022). As indoor farming is expensive, most of the capital will go into the farming process; thus, low-cost promotional activities are the most suitable forms to promote indoor farming in the UAE. Some low-cost promotional activities include social media advertisements, public relations, influencer marketing, collaborations, word of mouth marketing and email marketing.
- Social Media Platforms: Local Leaves can be promoted by running small advertisements on YouTube videos and focusing on pay per click advertisements. Adding to that, the delivery service, health benefits, and availability of Local Leaves products can be advertised on all social media platforms to help the company get the recognition it needs in a short period of time. Instagram and Facebook advertisements enable companies to add more insight on what they aim to achieve from this promotion. Thus, helping companies reach their target customers faster.
- Collaborations and sponsorship: A beneficial and low-cost promotional method could involve collaborating with universities and schools in Sharjah. Through this collaboration, students will be given a field trip to the farms in order to better understand the process behind vertical farming and its assistance to our health and planet. As students learn closely about the company, they will be more eager to talk to their parents about it or, in the case of university students, have them to switch buying vegetables, fruits, and herbs from markets outside and focus on Local Leaves. Adding to that, the company may also use sponsorship opportunities to reach a wider audience. That is to say, offer sponsorship to different environmental groups and events within the Emirates and most specifically Sharjah. An example of that would be having Local Leaves sponsor Friday Markets and on-campus environmental friendly events. It’s on campus event can be held in collaboration with the sustainability club, where Local Leaves will be sponsoring the event through supplying the club with organic produce for the event. It is important to note that not all sponsorships have to be of a high expense, as some would include an exchange of “promotional benefits” or products.
- Public relation: PR plays a critical role in creating a brand. It is essential to communicate about the brand and show its positive effect on the people and the environment. Showing the products and services in a positive light can attract potential customers to the market.
- Influencer marketing: Social media has proved to be an effective tool of promotion in today’s world, where everyone has a social life and spends hours on social media platforms. Local Leaves can be successfully advertised through bloggers and influencers. Paid and barter campaigns can be run to ensure maximum reach. PR packages such as packs of fruit and vegetables can be delivered to a large-scale of influencers and celebrities within the Emirates who have a large influence on the public.
- Word of mouth marketing: Word of mouth can prove to be the most inexpensive and the most effective tool in product promotion.
- Email marketing: commercial messages can be sent to potential customers who may be interested in the business but are not aware of the brand.
Annual Marketing budget
A marketing budget can only be created based on the company’s revenue. Local Leaves allocates approximately six to twelve percent of their revenue to the marketing activities annually. A marketing budget includes the cost of paid advertisements, employing new marketing staff, and making software for marketing automation. A marketing budget helps the company align its marketing expenses with the business goals. It helps identify the spending money on campaigns that guarantee the largest return.
Local Leaves has selected the low-cost promotions of their products and services.
The annual marketing budget can be designed based on its chosen marketing tools.
The company can spend over 36,000 AED on influencer marketing, including 4-5 large scale influencers. Instagram and TikTok marketing for 360,000+ views each, the company has to invest an amount of 60,000 AED. Pay per click marketing and advertisement on YouTube will cost 16,000 AED for 20,000+ clicks. Word of mouth marketing is free. Indoor farming in the UAE can spend around 136,000 AED on marketing annually.
Distribution and sales
The distribution and sales of indoor farming highly depend on on-time delivery. Transportation plays a vital role in the distribution and delivery of items. An external distribution channel can be used in order to deliver the products. It can do both B2B and B2C businesses. The company can tie up with different supermarkets and retail stores and make their products available there; this will enhance the brand awareness and let the consumer compare and choose between the different products already available in the market.
The company can also develop its application for the delivery of the products and can tie-up with different grocery and vegetable delivery apps to make it available to the consumer. Availability on a variety of platforms can enhance sales and bring in revenue. It will also help in building products and brand awareness.
Sales Strategy and Related Issues
Target market selection
Indoor marketing in the UAE can target both the B2B and B2C industry segments. Both male and female millennials are into healthy and sustainable products and services. They prefer to eat something safe and environmentally friendly (Al Ali & Ahmad, 2020). The business can target Young adults as their consumers. The industry analysis proves that millennials based in the UAE have higher incomes and are also interested in the consumption of healthy food. According to the survey, around 83% of the adults in the UAE are ready to pay a relatively higher price for healthy food. (Neiva, Deggau & Andrade Guerra, 2020).
The company’s marketing strategy is mainly based on the use of the internet. Young adults tend to spend time online and order their food online to avoid the hassle. Around 78% of people aged 25 to 35 tend to shop online. A healthy lifestyle plays a vital role in the well-being of an individual. Health awareness programs such as the ” Nutrition Labeling Policy” that aims to increase the consumer’s awareness can help promote the brand more effectively and attract the consumers to a better and sustainable future.
Industry Analysis
At the moment, the agricultural sector in the UAE continues to evolve. The country imports a significant number of products, making it one of the most promising agriculture markets in the Gulf reason (“Agriculture and animal wealth,” n.d.). The constantly growing demand for different high-quality products introduces numerous opportunities for other companies to evolve. Furthermore, the state focuses on promoting organic farming incentives. It has 34 farms supplying its products to different cities. For this reason, the current industry’s state is beneficial for the development of projects such as Local Leaves. At the same time, several sustainable programs and incentives would support the company. These include Green Economy for Sustainable Development incentive, focusing on creating long-term development and state’s evolution (“UAE sustainability initiatives,” 2021). In such a way, the current situation in the country and its economy is favorable for the brand and can support its fast evolution.
Reference List
Agriculture and animal wealth. (n.d.). U.AE. Web.
Al Ali, H., & Ahmad, S. Z. (2020). A tough decision for equestrian business: the case of Mandara equestrian club.Emerald Emerging Markets Case Studies. Web.
Ghonima, O. (2021). Mitigating Imported Vegetable Dependency in the United Arab Emirates through Indoor Farms: The Financial and Environmental Impact (Doctoral dissertation, Harvard University). Web.
Neiva, S. D. S., Deggau, A. B., & de Andrade Guerra, J. B. S. O. (2020). Urbanization for the Promotion of Sustainable Development.Zero Hunger, 942-952. Web.
Weidner, T., Yang, A., Forster, F., & Hamm, M. W. (2022). Regional conditions shape the food–energy–land nexus of low-carbon indoor farming. Nature Food, 3(3), 206-216. Web.
UAE sustainability initiatives. (2021). Emirates GBC. Web.