Almarai Company: A Marketing Analysis

This assignment delves into a comprehensive marketing analysis of Almarai Company, a leading food manufacturer in Saudi Arabia. It examines the company's marketing mix (product, price, place, promotion), analyzes its financial performance and market presence, identifies key strengths and weaknesses, and explores potential opportunities and threats. The analysis highlights Almarai's successful strategies in capturing market share and maintaining strong brand recognition.

ALMARAI COMPANY
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EXECUTIVE SUMMARY
To ensure customer satisfaction has become one of the core element taken into consideration
by today’s companies. Successful company’s always makes its marketing strategies in critical
manner that can satisfy its suppliers and customers. This report will analyse marketing
strategy of one such successful company who has a subsidiary in UAE, Almarai, which deals
in food and dairy products. The reason for company’s success is its continuous focus on
customer satisfaction along with maintaining classy farm houses and fine built supply
network amid Gulf countries and central processing units. With high quality products it deals
in and giving satisfactory business to its stockholders, Almarai has become one of the most
important food companies in Gulf regions. The excellent food supply chain which the
company follows from its dairy farm to retail outlets along with its marketing strategy has
been a great example that can be followed while launching any new dairy product. In this
report a detail marketing and situational analysis of Almarai Company will be made that
may assist to launch any new product relating food and dairies.
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Table of Contents
EXECUTIVE SUMMARY........................................................................................................2
INTRODUCTION......................................................................................................................4
STRATEGIC FOCUS AND PLAN...........................................................................................4
SITUATIONAL ANALYSIS....................................................................................................6
EVALUATION OF THE SITUATION...................................................................................10
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................13
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INTRODUCTION
One of the largest integrated dairy products company in the world is Almarai whose
headquarters is situated in Riyadh city in Saudi Arabia. Under the leadership of HH Prince
Sultan Bin Mohammd Bin Saud Al Kabeer, the company was formed in the year 1976. The
Company with its excellence has been able to expand its business in Arabian Peninsula
countries while influencing agriculture, dairy farming and food distribution and
manufacturing plants (Raghu, 2015). To establish a well built unit, the company had to
undergo several restructuring process. The company started with producing dairy related
stuffs, fresh juices, bakery products, horticulture and many non dairy food items like jams,
sauces, etc. The company gains brand recognition in and around GCC and MENA regions
(Alawi, 2012). The company was initially founded to cater potential growth to meet domestic
demand and started to get identified due to constant supply of food products in timely
fashion. The company started exporting its products across GCC regions in 1990’s through
26 distribution warehouses while expanding its portfolio by adding brands like Zabadi
(yogurt), Gishtah (cream) and Labneh. The company made many investments and established
many huge dairy farms which incorporated latest technologies along with handling 10,000
cattle in each farm. Almarai has got many subsidiaries in countries like Argentina, UAE,
Egypt, Jordan, Bahrain, KSA, etc (O, 2017).
STRATEGIC FOCUS AND PLAN
In order to counter challenges, Almarai made strategic acquisitions and formed strategic
alliances along with making joint ventures with other companies to foster its manoeuvre.
Acquisitions and investments in farm industry in and outside home country had made
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arrangements of alternative supplies for raw materials, especially those which require lot of
water at the time of production. The vision of the company is to give preference to those
products which provides utmost nutrition, wellbeing and health in areas of its operations.
Customers also have high expectations with the company for which Almarai tries to progress
each day. The company believes in ‘excellence in execution’ which exceeds company’s
growth ratio along with gaining customers trust that is reflected in company’s increased
revenue as shown in below figure.
Figure: Increased revenue of Almarai
Source: (O, 2017)
The company focuses on its integrated organisational structure where food products are
processed in their own dairy farms till reaching retail stores. Satisfying customer is main
focus of the company and to retain its vision, the company tries to understand its customers
demand while improving its operation by implementing innovations and technology. In Gulf
regions, many diary product companies have been working by using competitive strategies to
sustain in market present there. Almarai has shown its prominence over the time with its
strategic management against all its competitors. The increased market size Almarai has and
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its distributional strength has achieved the company to gain competitive advantage over its
competitors.
SITUATIONAL ANALYSIS
Situational analysis or marketing mix can be defined as a set of accomplishments that
companies uses to promote its product or brand in the marketplace. The 4P’s i.e. Product,
Price, Place and promotion are used profoundly by big companies to include other P’s like
People, Positioning, Packaging and Politics. Marketing division plays an important role in
Almarai who has helped the company in meeting buyers demand more efficiently than
contenders. GCC and MENA regions adores and trusts Almarai due to its notable and driving
brands that leads the company in food market. The brands in which company deals in is
positioned as main brand for shoppers since the company has a reputation as market pioneer
in many countries like Jordon, Egypt and UAE. As shown in the figure below, the 4P’s of the
company will be analysed which can help in evaluating the present situation of Almarai.
Figure: 4P’s in Marketing Mix
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Source: (MBASkool, 2017)
Product: The strategy made for products is the most important part in any company. The
exceptional unification of infrastructure including farms and production departments has
made Almarai successful. The company distributes its products in many countries and cover
more than 110 million kilometres in delivering its products. The food products along with
bakeries, poultry, juices and dairy products are reached to more than 42,000 satisfied
distributors across GCC states. Fresh juices that were introduced by Almarai in the year 1997
complimented the dairy products after which the company expanded its work with acquisition
of Western Bakeries in the year 2007. Poultry was added in 2009 with acquiring HADCO
(Hail Agricultural Development Company).
Company also specialises in baby food products and with joint venture made by International
Paediatric Nutrition Company, the company made a successful position in the market. The
presentation of firm’s brands and products are easily recognisable by customers. The
company has also introduced flavoured milk in its beverage sector which is highly liked by
kids. Company uses best fruits for making juices which is the reason behind balancing great
taste and good health. Snacks in which Almarai deals are tastier than its competitors and
highly liked by consumers. Cheese, creams, yogurts, desserts etc. those are processed in the
farms of the company enriches calcium rich flavours along with 100% natural fresh cow’s
milk. The variety of products Almarai deals in has provided the company opportunities for
growth in newer kinds. According to survey made by researchers, as shown in below figure,
depicts Almarai market position among its customers.
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Figure: Product ranking according to consumers
Source: (O, 2017)
Price: Pricing factors refers to the strategy in which companies decides upon fixing price for
their products. The pricing of Almarai’s products are made according to its competitors along
with maintaining affordable pricing for its consumers. Pricing of products includes
operational costs those are related to distributing costs, promotional costs, designing of
products and its production processes. The pricing strategy is important because if any
pricing is made lower or higher it may directly affect sales of the company. The costing of
products decided by Almarai is done after taking into account the cost of production and its
distribution after which final pricing for products is decided by the management of the
organisation. For example, comparison made between Almarai milk with its close competitor
Nadec, Almarai excels in taste as well as pricing.
Place: Almarai has its strong distribution network which supplies its products to more than
42,000 shops on daily basis. The transportation network from dairy farm to processing units
and finished goods to different sales locations is done with company’s own long haul fleet.
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Proper packing is ensured by factories and delivered under appropriate temperatures to avoid
wastages. The transportation facility provided are such that does not spoil the food flavours
for long time. The finished products are delivered to supermarkets and grocery stores in
which the company follows a pattern of single meeting in a week. Almarai’s chief juice and
dairy facilities are situated in Saudi Arabia. The company owns seven dairy farms and two
central processing plants in SA. Ninety seven warehouses in GCC facilitate storing of
manufactured products (Zawya, 2010).
Figure: Market activity of Almarai
Source: (Almarai, 2017)
The above figure shows places in which the company deals in. Almarai who initially started
its business in Riyadh has successfully expanded its business in other countries like UAE,
Qatar, Bahrain, Kuwait and Lebanon. The marketing in other countries are made under
arrangements made by local distributors and agents. The arrangement made by foreign
countries is done after following governmental regulations while maintaining satisfactory
relationship with the countries Almarai deals in (Prospectus: ALMARAI COMPANY, 2005).
Promotion: Promotional strategies are made by the companies to expand current business in
growth oriented way. Almarai has got diversified portfolio which is highly appreciated by
retailers as all of their requirements are fulfilled from one brand. The distribution
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campaigning which are made by the company to expand its business in new areas influences
company’s sales. Since the company has got strong supply chain networking, all its
customers are satisfied while getting products all around the year. The packaging made by the
company are also done in attractive manner which suites the handling, marketing and
transportation. The packing done for each product is dissimilar from each other that enable
customers to differentiate products while selecting. Advertisements made in local channels
and magazines help company gaining popularity and create product awareness among
customers. Whenever any new product is launched by the company, free samples along with
pamphlets distribution in key areas are done that allows easy market capture. The brand
reputation which the company gains though its high quality products allows the company to
sustain the present market with much ease (Quality You Can Trust: Annual Report 2014,
2014).
EVALUATION OF THE SITUATION
The situational analysis made of Almarai shows that the company has got an organised
consumer and market sector which enables the company to perform its operations with ease.
The import substitution along with favourable demographics gives company a base for future
growth. The hot climate in the areas Almarai deals in creates much demand for beverages and
since the company deals in healthier products, the demand from consumer’s side increases
each day. The country Almarai deals in has got fair economic growth rates and thus
opportunities are also enhanced in company’s favour. The diversified portfolio of Almarai
has enabled the company to expand its business geographically. By introducing new
products in attractive manner, the company has been dominating local markets. The supply
chain system which the company follows also excels as the company has got its own
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transportation vehicles. Thus any hindrance in supply chain is avoided due to outsiders
(Maher, 2015).
From analysis made it is clear that the company has got a well maintained marketing plan
which shows success in future also. If any new product relating to food and dairy is launched
in GCC regions, it has to face challenge with Almarai and to get success; following
marketing strategy of Almarai is recommendable. The control of management in company’s
operation including manufacturing plants, farms, poultries and agriculture is exceptional and
with the dedicated team it has got, the competitive advantage of the company is
predetermined.
CONCLUSION
Almarai’s aim to make one of the lowest costs producing company while giving high quality
products has been fulfilled to a large amount. The centralisation of production system along
with combining all dairy farms centrally to a large farm shows that the company has got
capabilities of ruling the market. Technological aspect is also favoured by the company since
the company takes initiatives in innovation and latest equipments for food manufacturing
(Quality You Can Trust: Annual Report 2014, 2014). By expanding its business
geographically, Almarai has given benefits to its home country by making investors pour in
(Almarai, 2017). From the above marketing and situational analysis made, Almarai seems to
have strong financial status along with great market presence. The only drawback found in
Almarai is that the company deals in food sector only and if any environmental hazard takes
place, the company might have to face severe situations (Miah, 2009). By adding non food
items the company can gain over this problem while adding diversification to its portfolio.
Overall the company seems to have good market capture and on concluding note it can be
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said that companies like Almarai sets great examples for getting knowledge before launching
new product in the market.
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REFERENCES
Alawi, A. (2012). Almarai Company. Retrieved from
http://www.aljaziracapital.com.sa/report_file/company/fun-140.pdf
Almarai. (2017). Members of middle east investor relations association. Retrieved from
https://www.almarai.com/en/investors
Raghu.M. (2015). Marmore Company Reports: Almarai. Retrieved from https://www.e-
marmore.com/MarMore/media/TOCDownloadPDF/Almarai-Group-Executive-
Summary.pdf
Maher, M. (2015). 10 important facts about Saudi Arabia's Almarai. Retrieved from
http://stepfeed.com/10-important-facts-about-saudi-arabia-s-almarai-4287
MBASkool. (2017). 4 Ps of Marketing (Product Mix). Retrieved from
http://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/6778-4-
ps-of-marketing.html
Miah, F. (2009). Almarai Company: Pre-eminence priced in . Retrieved from http://up.m-e-
c.biz/up/Mohcine/Report/ALMARAI_12052009.pdf
O, A. S. (2017). Performance Measurement of Almarai Products and Customer Satisfaction.
Retrieved from http://article.aascit.org/file/html/8030005.html
Prospectus: ALMARAI COMPANY. (2005). Retrieved from
https://cma.org.sa/en/Market/Prospectuses/Documents/Marai_eng.pdf
Quality You Can Trust: Annual Report 2014. (2014). Retrieved from
https://www.almarai.com/wp-content/uploads/2015/03/Al-Marai-Annual-Report-
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2014-English-Version-High-resolution.pdf
Zawya, T. &. (2010). Almarai Company (Almarai). Retrieved from
http://mec.biz/term/uploads/2280_29-03-2010.pdf
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