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Modern Bakery in the UAE: Marketing Plan Report

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Updated: Dec 15th, 2020

Executive Summary

Modern Bakery is a leading bakery in the United Arab Emirates with a large customer base. Its current marketing objective is to effectively promote healthy bread with a focus on the introduction of new bread varieties to attract more customers. The company’s leading position in the market and the limited opportunities of competitors to expand their assortments of bread creates an opportunity for Modern Bakery to develop an efficient marketing strategy.

The proposed product will be popular among middle-aged, well-educated men and women belonging to the middle and upper classes in the country. The promotion of healthy bread will rely on emphasizing its effects on consumers’ health in order to support their lifestyles and life goals. As a result, the promotion of Modern Bakery’s healthy bread will be based on spreading the message that this product will allow people not to limit themselves to one type of bread while addressing their fitness objectives.

Modern Bakery in the UAE: A Marketing PlanIntroduction

The introduction of new products is based on the development of an effective marketing plan in order to guarantee that the product to be promoted will be appealing to the target customers. Modern Bakery is one of the largest and most popular bakeries in the United Arab Emirates (UAE) and operates in Abu Dhabi, Dubai, and Al Ain. The bakery was established in 1975 as a family business, and its workforce is now over 1,500 people.

Modern Bakery specialises in producing bread, Arabic sweets, confectionery, pastries, cakes, and muffins (“Company profile,” 2017). The current marketing objective of Modern Bakery is the promotion of different types of healthy bread in order to become a leader in the market and provide customers with the high-quality and healthy products that are currently gaining in popularity with the public. The purpose of this report is to provide a strategic marketing plan for promoting Modern Bakery’s healthy bread with a focus on analysing external and internal factors and the competitive situation and describing the positioning and marketing strategies.

Environmental Context

The environmental context of the bakery market in the UAE should be discussed with reference to demographics as well as sociocultural, political, technological, and environmental factors. The purpose of this analysis is to determine possible opportunities and threats associated with the company’s activities. It is important to note that these opportunities and threats may potentially influence the introduction of healthy bread as a new product and its popularity among the target audience.

Demographic Factors

The UAE is a federation of seven emirates. The population of the UAE is about 9.5 million people counting immigrants, who comprise about 90% of the country’s population. The largest and most populous emirates in the UAE are Abu Dhabi, Dubai, and Sharjah, where about 85% of the country’s overall population lives (“United Arab Emirates population 2018,” 2018). Nationals represent just less than 10% of the people living in the country, and the majority is made up of immigrants.

The number of female and male citizens in the country is unbalanced, and the male-female ratio for the population aged 15-65 years old is 2.75. The population of the country is highly diverse, including 58% from South Asia, 17% from elsewhere in Asia, and 8.5% from Western nations (“United Arab Emirates population 2018,” 2018). In the UAE, people speak Arabic and English, as well as Persian, Urdu, and Hindi.

The median age in the country is around 30 years, while life expectancy is about 77 years (“United Arab Emirates population 2018,” 2018). These data are important for determining the target market for Modern Bakery’s new products.

Sociocultural Factors

In addition to the age and ethnicity of the potential customers, sociocultural factors that influence Modern Bakery’s sales include income, education, occupation, religion, and lifestyle among other important aspects. The majority of the citizens of the UAE belong to the middle and upper middle classes, and this fact influences their preference for high-quality products. More than 90% of the people are literate and well-educated. The people of the UAE prefer a comfortable lifestyle and pay considerable attention to their health and eating habits with reference to their religious beliefs (Singarum & Kumar, 2015). Furthermore, the impact of expatriates on lifestyle is also important, and many Emiratis are currently opting for healthy and high-quality products.

Political and Economic Factors

The emirates are governed separately, which allows for the effective management of political activities in the country. It is important to note that, currently, the UAE has conflicting relations with neighbouring countries, and this situation negatively affects the overall political stability of the state (Singarum & Kumar, 2015). Still, the country’s trade relations and international contacts are wide, which has enabled the country to preserve its political and economic position in the world. The UAE’s economy can be described as stable because of the high GDP per capita ($40,162) and high employment rates (Singarum & Kumar, 2015).

Labour immigration also directly influences the economic environment in the country (“United Arab Emirates population 2018,” 2018). It should be noted that foreign direct investment in the UAE is also high in comparison to other Middle Eastern countries.

Technological Factors

Technological factors influence the UAE because of its middle-aged population’s interest in advanced technologies and devices. Emiratis devote considerable attention to using the most innovative technologies in all spheres of their lives (Singarum & Kumar, 2015). Firms usually have enough resources to use the most advanced equipment in their operations and invest resources in the technological improvement of their production lines.

Environmental Factors

Organisations frequently use oil and gas resources in their operations, causing air pollution that is subject to a high level of government regulation in the emirates. The climate of the country also affects employee productivity and specific details of operations, leading to the active use of air conditioning systems (Singarum & Kumar, 2015). Many resources, including gas, water, and electricity, are used in the bakery industry, and the country’s entrepreneurs are addressing this issue with additional investment and effective waste management.

Threats and Opportunities

The analysis of external factors influencing business operations in the UAE makes it possible to identify various threats and opportunities. Threats are associated with the unstable political situation and uncertain foreign relations caused by regional conflicts in which the UAE is involved, and the costs of operations in the bakery industry because of environmental factors. Demographic, economic, sociocultural, and technological factors provide Modern Bakery with several opportunities: a large middle-aged target audience oriented towards a healthy lifestyle, access to foreign direct investment, and the availability of advanced technologies and innovative equipment.

Organisational Context

It is important to conduct an internal analysis of the company in order to understand what organisational aspects may influence the competitiveness of the firm and its success in promoting new products. A discussion of the company’s strengths will make it possible to identify the aspects that influence Modern Bakery’s marketing success. An analysis of weaknesses will enable the identification of internal resources and processes that need to be improved and taken into account in developing the marketing strategy for healthy bread.

Strengths

Modern Bakery produces about 2,500 types of buns, rolls, and other bakery items. Thus the company is characterised by a high degree of differentiation and diversification. Moreover, about one million rolls and buns are produced by the company each day to meet customers’ needs. To maintain facilities in three different emirates and sell its products in many local and national shops and malls, Modern Bakery has a fleet of 350 vehicles. Modern Bakery’s customer base is large, as it produces a range of nationally recognised bakery items that are present in supermarkets and hypermarkets (“Company profile,” 2017). These strengths will contribute to the further diversification of Modern Bakery’s products in order to attract more customers.

Weaknesses

The weaknesses in the company’s operations include a lack of coverage in Sharjah, one of the largest emirates in the UAE, due to the absence of Modern Bakery’s facilities there. In addition, the current facilities are insufficient to efficiently meet increased customer demand for Modern Bakery’s items. Moreover, expanding the assortment of healthy bread will be associated with changes in the production processes, and more resources and facilities will be required. These weaknesses can be addressed by building new facilities in Sharjah.

The SWOT Analysis Table

Strengths Weaknesses
  • High differentiation and diversification
  • A large customer base
  • Customer satisfaction and loyalty
  • A fleet of 350 vehicles
  • A large supply base
  • Nationally recognised brands
  • Selling in the largest local and national supermarkets and hypermarkets
  • The lack of coverage in Sharjah
  • The absence of Modern Bakery’s facilities in Sharjah
  • The limited capacity of current facilities
  • The lack of resources and facilities for expanding the assortment
Opportunities Threats
  • A large middle-aged target audience
  • Potential customers oriented towards a healthy lifestyle
  • Access to foreign direct investment
  • Advanced technologies and innovative equipment
  • Problematic foreign relations
  • The impact of regional conflicts
  • High operational costs because of environmental factors

Competition in the Market

In the UAE, the competition in the bakery industry can be regarded as moderate. The factors that influence the level of competition include the fact that the country is ranked 66th in the world for the production and consumption of bakery items. Modern Bakery’s competitors in this market include Mondelēz International, Grupo Bimbo, and Kellogg as international actors and Al Jadeed Bakery, Al Cazar Bakery, Al Sorour Bakeries, French Bakery Dubai, Magnolia Bakery, and Hummingbird Bakery as local competitors (“Bakery products,” 2015).

In spite of the fact that the market share of these producers is relatively large, there are some weaknesses in their strategies that should be taken into account. The listed competitors mainly focus on producing various types of rolls, biscuits, pastries, and cakes. As a result, their assortment of bread is not large, although it is a dominant category in the bakery market, and diversification in the bread category will contribute to attracting more customers to Modern Bakery.

Mission Statement

Modern Bakery is oriented towards providing customers a range of high-quality products in order to address their needs and expectations. As a result, the customer base is constantly increasing in the UAE. The leaders of the company have proposed the following vision statement to guide their activities: “Our vision is to provide an increasing portfolio of high quality, speciality products in the market, whilst maintaining excellent customer satisfaction in every interaction” (“Company profile,” 2017, para. 4).

Modern Bakery’s mission statement might be summarized in the following way: The company’s mission is to produce high-quality and unique bakery products while offering customers an exceptional experience in their consumption of healthy bread, pastries, and cakes, among other products, to increase their level of satisfaction.

Marketing Objectives

The introduction and promotion of healthy bread varieties by Modern Bakery is a step toward a stronger market position. Furthermore, promoting healthy bread varieties is also oriented towards increasing the company’s competitive advantage. The following objectives of marketing Modern Bakery’s healthy bread should guide the marketing strategy:

  1. To increase the customer base between January 1, 2019, and December 31, 2019 by 15% in comparison to the data for the previous fiscal year through the promotion of existing types of healthy bread and the introduction of new varieties.
  2. To increase customer satisfaction measured at the end of 2019 by 25% in comparison to the data for the previous fiscal year.
  3. To increase Modern Bakery’s total net sales between January 1, 2019, and December 31, 2019 by 15% compared to net sales in the previous fiscal year through the increased differentiation of healthy bread.

It is important to note that these objectives are established with reference to the company’s wider strategic goals and business priorities. In addition, they are in alignment with the company’s mission and vision, as well as its business strategies. Thus it is possible to expect that the proposed objectives can be accomplished with the help of an effective marketing strategy and plan for the year 2019.

The Target Market

The UAE’s market for healthy and gluten-free bread is rapidly developing in response to global trends and consumers’ expectations. The target market for Modern Bakery’s healthy bread includes females and males from 18 to 65 years old. They are predominantly expatriates of Western origin and nationals interested in a healthy lifestyle. These potential customers belong to the middle and upper classes, and they are ready to give considerable attention to consuming bread of the highest quality.

The targeted consumers of Modern Bakery’s healthy bread include young professionals, both single and married, who are focused on keeping to a diet and therefore choose healthy food. In this context, healthy bread is potentially interesting to single persons who are following a healthy lifestyle as well as individuals with families and children who want to improve and support the well-being of their family members. The potential group of customers also includes tourists who seek both authentic and healthy products.

As a result, the target market for Modern Bakery’s protein bread, chia bread, quinoa bread, diet bread, yeast-free bread, and gluten-free bread is relatively large. The reason for the large potential market is that the UAE’s bakery market is dynamic, and the market for healthy bread is growing, attracting the attention of wealthy expatriates, young individuals, and tourists. In addition, “as Emirati consumers become increasingly aware of health issues, health and wellness (HW) bakery products such as whole wheat, reduced-sugar and gluten-free are expected to become of greater importance and popularity” (“Bakery products,” 2015, p. 3).

Among the products to be introduced and promoted, gluten-free bread may become the most popular sort of bakery item. Thus the evidence and analysis provided here support the conclusion that the identified target market is the most appropriate for Modern Bakery’s healthy bread, and potential consumers will be interested in buying the proposed bakery items because of the global and local popularity of gluten-free bread and other healthy types.

The Positioning Strategy

The different types of healthy bread produced by Modern Bakery should be positioned as high-end and high-quality products associated with the healthy lifestyle of successful people, including nationals, expatriates, and tourists in the UAE. In comparison to its competitors, Modern Bakery will propose the widest range of healthy bread varieties to address the needs and tastes of diverse consumers.

As a result, in spite of being relatively expensive, Modern Bakery’s healthy bread can expect healthy sales because of people associating it with various benefits and their readiness to invest in their health and quality of life. In comparison to buns, rolls, cakes, and muffins produced by Modern Bakery and its competitors, healthy bread will be positioned as a product with unique qualities recommended by the Ministry of Health in Dubai and other emirates. The variety of healthy bread types will attract consumers and persuade them to choose Modern Bakery’s product despite its price.

Marketing Strategies

The marketing strategies required for promoting Modern Bakery’s healthy bread should be discussed as components of the marketing mix, including product, pricing, promotion, and placement strategies. Thus the marketing mix comprises certain tools and techniques that can be used to gain the top market position and address the target customers’ needs and expectations. By developing an effective marketing mix, it is possible to achieve marketing objectives for a certain product.

The Product Strategy

Modern Bakery is focused on marketing healthy bread, and the company’s aim is to promote chia bread, diet bread, protein bread, quinoa bread, yeast-free bread, and gluten-free bread while adding millet bread, whole-grain bread, and herb bread. The company needs to expand the current assortment of bread in order to address current market trends and customers’ needs for healthy products. Therefore healthy bread will be promoted as a product that is baked using original and unique recipes developed by the company’s bakers with a focus on increasing the nutritional value of the product.

Chia bread is appropriate for people with diabetes or requiring omega-3 fatty acids. Diet bread has been developed without salt or sugar for individuals who are trying to control their weight. An additional variety is protein bread, which is useful for people who need to consume more protein or monitor their levels of blood sugar. Quinoa bread is usually selected by people who need to avoid wheat bread or who have allergies because this bread variety is appropriate for people with intolerance to wheat.

In addition, yeast-free bread is recommended for people with digestive problems and diabetes. Gluten-free bread has also been developed for people with gluten sensitivity (“Healthy bread,” 2017). New varieties of millet bread, whole-grain bread, and herb bread will attract consumers interested in decreasing the number of calories or amount of sugar in their food.

The packaging for each type of healthy bread includes information about the calories and nutrients that are typical of different kinds of bread. The additional information about the qualities of each type of bread is provided to inform customers and motivate them to choose bread according to their needs and taste preferences. Furthermore, to attract consumers’ attention and to differentiate healthy bread from other types, the packaging for each variety is designed in natural green, brown, and yellow colours.

The Pricing Strategy

The price for healthy bread will be set at a level higher than the market average in order to accentuate the quality of the components used and the unique taste. A high-cost, low-turnover approach to setting prices is selected in this case. However, it is important to note that the actual turnover will still be high because of the specific characteristics of the industry and the low impact of high prices on consumers’ choices when purchasing bakery items. As a result, the increase in profit will depend on the price and the demand for each product.

The Promotion Strategy

The emphasis in the product promotion should be placed on the originality of the recipes and flavours, the benefits of the product for people who follow various diets, and the absence of adverse effects on people’s health from consuming the product. It is important to attract young people interested in a healthy lifestyle with the help of advertisements and brochures placed in bakeries and stores where this healthy bread is sold.

These advertisements and brochures should contain information on the features and qualities of healthy bread produced by Modern Bakery in order to motivate consumers who buy one type of this bread to try other varieties offered by Modern Bakery because of their unique flavours or health benefits. The message promoted by Modern Bakery is that bread can be healthy and people do not need to limit themselves to one type of healthy bread because of the variety offered by the bakery.

The Placement Strategy

In the company’s bakeries, healthy bread will be placed on separate counters with labels indicating healthy and dietary products. Modern Bakery’s bread will be placed in supermarkets and hypermarkets on counters where other healthy and organic bakery items are offered. It is important to ensure that the products are placed at eye level to attract customers’ attention. Healthy bread will also be distributed in coffee shops and restaurants, and the varieties of bread without animal products will be included in menus with healthy, organic, and vegetarian food.

Conclusion

After having conducted an analysis of environmental and organisational factors that influence Modern Bakery’s marketing and operations, it is important to note that the company will benefit by emphasizing the uniqueness of the proposed healthy bread varieties for the UAE market. The popularity of healthy products in the country is associated with the impact of Western trends and the number of tourists in the emirates.

Therefore, the primary focus should be on emphasising the quality of the product offered, its impact on people’s health, and its association with the comfortable and healthy lifestyle popular among citizens of the UAE. This positioning will allow the company to set relatively high prices for healthy bread in spite of competitors’ pricing strategies. An additional strength of the proposed marketing strategy is highlighting the variety of healthy bread produced by Modern Bakery, as it is currently the only bakery in the UAE with such a wide assortment of this type of bread.

References

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. (2017). Web.

. (2017). Web.

Singarum, S. K. S., & Kumar, V. (2015). Essential Dubai guide. Delhi, India: Educreation Publishing.

. (2018). Web.

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