Fruit Yogurt In Uae Marketing Essay

increase Yogurt In Uae Marketing EssayThis study is an digest of UAEs foodstuffplaceplace and near. This study is analyzing the suitability of Nestls plan of entry UAE with its harvesting crop Yogurt.Abstr deedIn the world of growing and emerging victuals companies, the shout clutch stands out. It is one of the most dominant firms when it places to dairy farm farm crossings. hold close is spread out exclusively over the worlds with its umpteen notable sub-brands in its portfolio uniform Maggi. Its dairy point of intersection Fruit Yogurt is one of the most famous brands in countries like India and Pakistan. This product finds its uses in many some new(prenominal)(prenominal) another(prenominal) ways. UAE is a country where approach doesnt hand over this product in its portfolio. Though many firms ar in that respect with the Fruit Yogurt product but vehemence towards this product is cool it not there. thereof clutch sine qua nons to enter this UAE martplace as it sees it as a strategic market. We in this study atomic number 18 analyzing Nestls hypothesis that this market is thoroughly for Nestle if it launches it Fruit Yogurt products in UAE.Table of ContentsExecutive summaryThe fol broken-toneding audit report on Nestls gives a vivid eloquence of the marketing tie in issues of the company. One arseholenister see from the succession the company formed, it has not looked back. It produces three cartridge holders the quantity of products as comp ard to any other competitor in the global market. The report cont personals the introduction of the company and the country fall in Arab Emirates. This is fol offseted by the market analysis and plodding analysis on the basis of which financial and environmental recommendations commit been made in the latter vocalism of the report. The companys marketing strategies be comparablely juicylighted. There is strong emphasis given to the Marketing Mix of the company. to the h ighest degree of the attributes of client satisfaction are developed from the proper functioning of the 4ps of marketing mix. The report also contains an analysis based on the Five Generic Forces of Porter. This is the base for making the marketing recommendations of the company.IntroductionNestleNestle is one of the most dominant brand when we discuss round the nourishing pabulum constancy. With over cholecalciferol factories in 76 countries, it sends its products to close to 196 nations. Only 3% employees and 1% of gross revenue come from its root country, Switzerland. after(prenominal)ward establishing its name in most of the western markets, Nestle started focusing efforts on emerging economies in easterly Europe, Asia, and Latin America. Most of these countries have a consumer base to support the investments nestle is making in these countries. In fact due to rising economies of these countries race are capable of buying many Nestle products and the market pull up stak es sustain this demand for few decades to come.Nestle makes it a point to enter a market ahead of competition. This risk appetite for niche markets has stood them in good stead so far. It adopts the strategy of growth goods for local anaesthetic market. Preference is given to localization of all activities like marketing and distribution. It isnt afraid of acquiring local firms also, when opportunities are good1.Nestle prefers decentralization, given its strategy to adopt localization. Operating decisions are taken by local units. Above this is an SBU organization on food groups and still above in hierarchy is a regional organization that rationalizes marketing efforts across the region.all brandzNestle has its products in following verticalsBaby foodsBottled wetCoffeeCerealsChocolate confectioneryCulinary, chilled frozen food dairy farmDrinksFood serviceHealthcare victualsIce creamPet careSports nutritionWeight managementFruit yoghurtYoghurt, yoghourt or yogourt (Turkish y ourt) is a milk product made from fermentation of milk by bacteria. The bacteria act on milk to form what is k instantlyn as yoghourt socializations. Fermentation in yogurt cultures converts milk sugar sugar of milk to lactic acid which gives the yogurt its characteristic tang2.Yoghurt is a blue source of protein, calcium, riboflavin, vitamin B6 and vitamin B12. 20 The best thing about yogurt is that people with lactose intolerance can profitously consume yogurt. It is also lower in plump out. As an add on, yogurt is available in diverse flavors like Strawberry, Mango, Berry Mix Medley, Fruit Basket, , Melon-Nata, Apple-Cinnamon and Raspberry-Apple.All images are taken from http//www.nestle.comThe yogurt product epitome is precise crucial for Nestle, as the milk and milk products contribute 48 pct to the companys turnover. Tough Nestle expenses its yogurt at a little premium in many countries compared with local players, but still it is very competitive.Cultural analysisU AE HistoryTheUnited Arab Emirates(UAE) also kn have got as the Emirates. The Emiratesare govern byemirs, Abu Dhabi, Fujairah, Ajman, Dubai, Ras al-Kh objectiveah,SharjahandUmm al-Quwain. The capital isAbu Dhabi, which is also the countrys center for political and industrial activities. (Reiser)Before gaining independence in 1971, the UAE was known as the Trucial States because of a truce betwixt the United Kingdom and several Arab Sheikhs. (UAE History)Geographical prospectLocationThe Emiratesis afederationsituated in the southwesterneast Asia. It shares its borders with Omanand Saudi Arabiaand sea borders withIraq,Kuwait,Bahrain,QatarandIran.The border with Saudi Arabia is 530-kilometer long and the border with Oman is 450-kilometer long. The total covered area of UAE is nearly 77,700 square kilometers. (Reiser)ClimateUAE is bouncy and prohibitionist round the family, July and August, being the hottest months. During these months average maximum temperatures may reach above 48 C on the coastal airfield. The average annual rainfall is low. It is a little better in mountainous areas than the coastal region. Rain in coastal region is tough typical in its style of short bursts and torrential rains. It may sometimes lead to flood.Social InstitutionFamilyFamilies are usually big and have high literacy. The relationship are any strong in the Arabs and they used to follow traditions strictly.Political SystemUAE nature was formed in 1971 comprising of heterogeneous governing bodies.It is a federation of 7 monarchies, where within each monarchy, a get holdr has absolute indicants. Arabicis theofficial language in the Emirates .Islam is the official language for the country.Even in spite of being a federation of monarchies, UAE has a president and a constitution. The constitution does not interrupt in internal matters of any emirate but just looks over the relations and tie ups between the federations. (Oxford condescension Group, 2010)Legal SystemLaw in the constitution of the United Arab Emirates provides special emphasis to human rights with e look, liberty, rule of law, freedom of opinion and speech, freedom of movement, freedom of communication, freedom of religion, freedom of occupation, freedom of council and association, freedom to be elective to office is provided to all citizens by law Sharia that defines several ideas of marketing. It is Islamic religious reference that is utilise to the real world by the Islamic banks..Living ConditionsThe living condition has a very vast gap in UAE. Some people are very reach and the metropolis area is very much developed, and rural is still very behind in reproduction and living styles.Diet and sustainmentBefore the imported foods came into UAE, food mainly consisted of fish, rice, bread, dates, yogurt, vegetables, and meat from sheep, camels and goats With the advent of imported foods, the quality and nutrition levels of the food has gone up. It usually consists of fish, rice, mea t, and a vegetable dish. There are some strict Muslim rules about eating pork and alcohol, which are closely followed, like the meat should be slaughtered in the traditional proper method.Emiratis are famous for their hospitality. They put in great efforts to welcome guests and also have a good time with guests. Traditionally guests are welcomed with dates. With a largish inflow of immigrants, restaurant industry has picked up with offers of divers(a) ethnic foodsEconomic abridgmentDemographicsPopulationThe cosmos is estimated to be at 4.4 million people by US state de slicement with just 15-20% of these being citizens. Since the growth of industry in late mid-sixties and impetus in trade, existence of expats from Arab countries, Indian Subcontinent , Europe have increased. (Oxford Business Group, 2010)Growth rateThe population is growing at 4% per year.Age StructureThe Age breakup of UAE is as follows 019 years 27.4% (fe young-begetting(prenominal) 40,328,895, male 42,667,761 )2064 years 60.1% (female 90,813,578, male 89,881,041)65 years and over 12.6% (female 21,991,195, male 15,858,477)(Oxford Business Group, 2010)LiteracyThere are many programs run by the government to enhance the level of education in all levels ranging from primary education, secondary education to masters level education.With recent opening of many institutes of international bodies there has been a recent growth in the level of education and its quality.Literacy rate in emirati citizens is 90 % in the age of 6-12 years. (United Arab Emirates, Education)Since education in very important in all the sectors of the edict there are many steps taken by the government in the recent time to lay focus in this domainEthnic GroupsA large proportion are South Asian, of the order of 84 percent comprising of Pakistani, Bangladeshi, Chinese, Indian, Filipino, Thai, Westerners and rest 16 percent are ArabsReligionsIslam is predominant religion with, virtually 85 percent Sunni and the remaining 15 percent are Shia. If official ministry documents are to believed, 76 percent of the total population is Muslim, 15 percent is other, and 9% is Christian.Economic Statistics and Activitiesgross domestic product and GNPNominal per capita, gross domestic product = USD 47,407, as per theInternational Monetary Fund(IMF).GDP (PPP) US $ 182.8 one thousand thousandGDP (nominal) US $ 252.2 billion (Economic Statistcis )InflationInflation is a becoming a major roadblock in UAE for last fit of years. Currency valuation is also a point at the top of minds of the consumers. The main problem is UAEs pegged notes against the US dollar. Dirham, its national currency is pegged against dollar. So as dollar loses value, dirham also follows suit. BMI estimates real GDP in 2009 at 5.4.0%, with another very good performance in 2010. Projected values are at rate of 5.4%, as a result of a small contraction in the cover sector (-2.6%), offset by continued out performance in the non-oil sector (10.5% ). Thereafter, we see a cyclical slowdown to 4.5% in 2011 and 3.9% in 2012. (Economic Statistcis )Channels of Distribution (Macro Analysis)RetailersThe way retailers work in UAE is a little different than in other countries .There is not VAT or service tax and the much good news is that retailers are not required to report their quarterly earnings. The retailers thus have a bright future in this country shown by the recent success. UAEs retail market is growing comparatively at a faster pace when compared to other development economies of the world Mall culture has come as an advantage to the retailers who have been able to attract the local customers and tourists alike. (Oxford Business Group, 2010)Market Audit and private-enterprise(a) Market AnalysisMarket AnalysisThe market for dairy products has been growing over the years globally with a special focus on Nestls products. Dairy products like yogurt have now started to be recognized as everyday snack. They are the most readil y available food relic in the eatables shop in almost all of the countries that Nestle exists in. (Weaver)The major factor that can charm a person to invest in the dairy product market is that it has been growing every year on an annual basis of 10%. The curtilage is inevitable. Nestls targets all forms of the society. Be it children or the younker or the aged, Nestle has products for all of them. This gives it an advantage over its competitors. Even though its recognition is not as high as the other products in the Middle East market, people had started considering Dairy product as nutritious edibles as a traditional mark in the food industry in the chivalrous periods. One can be worried of the fact that the history of the dairy product has not been on the expansion side. This is due to the rise in inflation. plainly at the same time there is a good deal of boom in the financial sector that accounts for the better future prospects of the products. The history of Dairy product s in the market is that it has been a part of the local custom. Meals are considered to be the important routine of the day. It is for sure a custom to have a nutritious diet. This trend has been continuing ever since civilization began. As Nestls product like sweet curt or Fruit Yogurt has brought nutritious food is easily available readymade packs, it is highly recognized in most part of the world. One must also understand that other dairy products of Nestle include coffee berrys that add flavor to the rich vitamin and calcium content. As a result, it has been preferable from the time businessmen have taken it to higher standards. This is to a greater extent dear for targeting the children. (Yogen Fruz (Canada) Signs UAE Franchise, 2010)It has been a great deal said that the world has been progressing largely of late. Lets have a look at it from the Nestls products industrys perspective. There has been a greater progress in the nutritious food industry over the last decade he nce in the last quarter of a century. The percentage of people favoring Nestls product is more preferent than any other edible commodity, has gone up. It has gone up to 27% as against the mere 2.5% plainly some 15 years ago. This rise is due to the fact that Nestls food products have been gaining fame on account of the diversity of the products manufactured. If one gives a thought over the condition of nutritious food industry he/she allow put in a developing stage. But the development is not small. It has been developing at a rate no lesser than the other recognized industries.Lets consider Abu Dhabi for an example. The capital city of UAE has a good deal of cereal consumers. The recent surveys reveal that more than 17% of the population takes dairy products as a favorite snack (this includes the other products that Nestls manufactures). This is also a boon for the industry. other than just the simple junk snacks, there is such a lot of variety in Nestls products that it has ta ken its food industry to the peak. The most preferred flavor in UAE is anything that which has a blend of chocolate in it. The company can certainly take advantage of this fact. (Our Brands)Keeping all these factors in mind, there was a survey of the number of people who have increased their consumption of nutritious food in the world. More than 70% of the population said that they have increased their nutritious food consumption (especially dairy products) over the last few years. This can boost up investment in the product.SWOT AnalysisStrengths gild Name The very name of Nestle brings with it the confidence of quality as it has reliability and arrogance associated with it. Usually, the consumers mind they prefer Nestle products over other brands time and again whether it is their Dairy product or something else.Quality Nestl is the one of the biggest manufacturer of diary food products all over in the world. The Nestle name is synonym of quality. They have a tradition of providi ng food products of supreme quality. Most of their products belong to category of certain and certified quality confirmed by tests done by quality assurance companies. Its production preparedness is certified with ISO certifications and also, FDA approval certificates. But, the quality differs from country to country for example Nestle juices sold in UAE are all artificial and with preservatives whereas usually in other parts of the world such as United States they are preserved inwroughtly with citrus. But this difference doesnt mean that products are of low quality anywhere in United Arab Emirates.Manufacturing subroutinees Nestle boast of having state of the art technology machines, Certified and proven process and techniques which facilitate them to produce best in the category.Trustworthy company Nestle symbolizes trust. Consumers have faith that the product leave alone be anything but harmful. No one should be surprised if Nestle yogurt will occupy the highest market sha re in the market of United Arab Emirates.Consumption in immigrants Culture As discussed, many foreign nationals are living together in UAE. Outsiders constitute a big population in UAE. They are kind of used to most of the Nestle product including yogurt in their home countries therefrom this population doesnt need education regarding Yogurt consumption benefits. Yogurt is usually used for various purposes including for cooking. Usually while cooking, yogurt can play an important role same as many local dishes that are cooked in Yogurt.Weaknesses want of knowingness One big drawback associated with the launch of Fruit yogurt in UAE or any Middle East countries is low awareness among the citizens. A lot of people dont know that any such type of product is there in the market. The product is already bear witness in the market the acceptability among the UAE citizens is very low.Price The other major weakness that the company possesses is that the sell price of Nestls products is co mparatively higher than the competitors in ost of the countries it is amaze. The company accounts this fact to the intensive use of natural resources. But the end-users are the customers who are certainly not going to entertain such excuses.Big accounts Company Nestle doesnt carry with it any mend allotted funds for advertising high. Its budget for advertising is fixed as a percentage of its sales. This type of strategy usually backfires when product is losing market when compared to its competitors. If the sales are not getting high so will be advertising therefore the products sales suffers a lot.Availability Availability of normal Nestle product is also a problem for Nestle. It also contributes to the low sale Nestle product as of now in UAE. Retailers dont want to keep product which has low acceptability in the market but takes a lot of space in deep freezer space. But Nestle do give their retailers a freezer which increase its products visibility therefore sales. thusly the r etailers who dont have space constraint usually accept the Nestle product wholeheartedly. But the problem comes when its given freezer is utilized to put other FMCG product of higher demand in market or competitors product.Lack of Distributors interests Distributors usually dont accept Nestls product because of its need to be transported in chilling environment. Nestle yield yogurt need to be transported in chilling environment of nearly 2- 3 degree Celsius. Therefore whichever distributor who is willing to accept the distributor relationship will have to fulfill the requirement of having a capability to transport on this demanding condition of maintaining chilling condition in transportation and distribution. It is kind of pricy affair for distributor under until and unless Nestle occupy a large market within a very short hybridize of time so that even distributors can get economy of scale. scarey need The basic requirement of Nestle harvest yogurt to keep it a chilling temperatu re all the time makes it difficult for even retailers to accept the product. They have a fear of the lawsuit that in case if they are not able to sell its proper quantity they will have a commodious carrying cost of the product. Therefore they dont want to accept the product in very in initial mannikin of the product launch. This is a risk factor which company will have to wave off oblation higher margin on its yogurt product as co pared to any other product. counterbalance Expiry date Nestle fruit Yogurt product has low expiry date. Whatever the care condition it has maximum expiry time of 10-15 days. This makes retailers to sell the product as soon as possible. Therefore Nestle product are kind of tension of tension to retailers when it comes to their dairy product section. This is also another hindering factor which will affect the yogurt sales in its initial days. After every 10-15 days every stockiest have to refresh its product line. Even if te retailers start putting th e yogurt because of Nestls brand name, the sales in initially sales consistency cant be guaranteed therefore there will not be any limit on amount of their stock that will go waste because of the expiry.OpportunitiesPotential market for fruit yogurt Nestle fruit Yogurt is nutritious food product mainly ad from milk and has very low fat as compared with the milk. Fruit flavor ends its sourness associated with it. Therefore nutritious food with good taste has a great authorisation market in UAE. There is kind of big market for Nestle to explore. Presence of other nationalities and hot modality works as a topping on the already existing potential market for Nestle to cherish. Most of the sil=milar product has huge acceptability and good thing is that Emirates have high per capita Income which will work as a advantage for the Nestle to putting their product in premium element and gaining huge profit from this segment.Climate of UAE United Arab Emirates climate is an extra advantage f or Nestle to Ancash. It hot climate prompt residents to have some cold nutritious products daily. Usually in summers, ice-cream sales increase a lot but still there is a need to find a substitute having similar frosted class as well as some health benefits associated with it. Here Fruit yogurt comes to fill the gap. The consumption of yogurt in the summers in most of the south east countries is as followsplain formLassimeal component such as raitaculinaryThe high use of yogurt in its fruity flavor form gives Nestle one big opportunity to sell frosted fruit yogurt in summer-time.Tax exemption Absence of any Value added tax VAT or sales tax in UAE prompts lower price of most of the products and therefore higher amount of sales in UAE. Many companies have entered the market seeing this facility only. This also give companies to make more and more profit on their product as the VAT or sales tax part of the price usually is shared by either the customers or by companies. The amount save d by companies here as part of no Vat can be utilized for better advertizement and educating consumers.ThreatsCompetitors Competitors are already there in this market in UAE market. Out of these competitors some are rightfully very serious and have a reach on international scale. Some major firms who have presence in UAE market are Pinkberry frozen yogurtMarmum fruit yogurtAl ain dairy yogurtYogen fruzAl rawabi fruit yogurtYogurberry frozen yogurtSo it will be bit difficult for Nestle to compete with these players. It has spend heavily in the market for advertisement and brining awareness about its new product.Competitors AnalysisCompetitors are already there in the market with their yogurt related product in the market. Some of the famous brands which already have their yogurt product in the market are as belowPinkberry frozen yogurtMarmum fruit yogurtAl ain dairy yogurtYogen fruzAl rawabi fruit yogurtYogurBerry UAE frozen yogurtYogen Fruz is an international brand which has spec ialty in this section of frozen flavored yogurt. It is a master franchise venture with Arcology Investments, which is based in Dubai, UAE. Arcology is very olympian to declare that they are opening their first Yogen Fruz outlet in Dubai very shortly. Their recently confirmed that their aim is to open 30 similar outlets in very recent future in the Gulf region. They are also aiming neighboring countries including Qatar, Oman, Kuwait Bahrain. Yogen Fruz has presence in more than 25 countries and spread over almost 1200 locations. Their specialty is to provide more and more flavors of frozen yogurt.The YogurBerry UAE LLC is famous master franchise of YogurBerry group present in the United Arab Emirates. YogurBerry is one of the first premier and all-natural, non-fat frozen special yogurt brand which brings crotchety flavor and frozen style first time in the country.YogurBerry claims to be classy, healthy and different. YogurBerrys has opened its first outlet in Dubai, in late June 2009 to make Dubai get exposed to totally different culture of taste.Similarly, other players are also geared up to cover UAE market as soon as possible and they are playing every tactics to attract consumers towards them to reap a first movers advantage as soon as possible.Porters five forces3The little terror of substitute productsNestl products entry in the market is a bit late. Fruit yogurt nestle is subject to face crisis as too many players want a piece of this market. Actually product fruit yogurt will face competition from local unflavored Dahi which is available at much cheaper rate than Nestls fruit yogurt. This fact will be intensified by the fact that local most of the time prefers local items over foreign items. We can also say that it will face competition from ice-cream. Here the only advantage it has is it contains low fat as compared to ice-cream but age-old ice-cream concept is difficult to be substituted with relatively new yogurt concept.The threat of entry of n ew competitorsMany entrepreneurs are willing to invest in this field of dairy product diversity on account of the health conscious trend that has been continuing in the recent past, as it comes under the booming sector. So, the only option left for Nestle to prevail is to maintain a never-ending switching of costs and make proper use of its brand name. This has been seen in many other companies like HP. It is therefore recommended that with constant switching, Nestle will be able to provide its users with the products in the time span they want.The threat of competitive rivalryFood Snacks is a field where competition doesnt just come from price dimensions but also from innovation and advertisement. Nestle should realize the number of competitors it has and the diversities in which they exist. Sometimes, the reason for the late preservation of products is also competition. Different rival companies can make negotiations with the producers for the delay. Nestle has to be careful of this fact.The bargaining power of customers4Nestle dealers will be forced to keep higher prices of products to compensate for some bargain. This generally happens at villages or types. At the same time they should also keep price sensitivity in mind. So, Nestle dealers have to make a proper balance between price sensitivity and high market price for bargain compensation because there can be decent customers as well on visits to such places who might have to pay high once, but then never return or buy the commodities at their respective places. This is because one wrong step leaves a mark on the replete(p) supply chain and eventually has an impact on the company as well. Such are the customers who finally realize the companys conditions and deliberately make orders that the company cant fulfill. Nestle should not give a candidate to any customer with such views.The bargain power of suppliersNestle is more or less a Food product company, so it owes much of its pricing to its suppli ers. The raw materials that it uses, determine the costs of its products. So, it is highly beneficial to have a team which is good at bargaining to keep the cost of production low. This requires a good deal of ground level work.Marketing Strategies4PsProductNestle fruit yogurt which is shortly offered in 3 major different flavors in most of the countries. The main flavors which are offered are bang strawberry mango in 100g cup. Strawberry can be said to be most customary of all the 3 flavors and it is usually consumed more than other two. Nestle usually keeps on adding the flavor in the country in which is already present using the flavors that are famous in those very countries. The yogurt is already there in the market in UAE but the problem is that not a large part of UAE crowd is in fan of this yogurt thing. Say it a lack in promotional materialal material by other marketers or their targeting on elite class, this product really needs to be market through educating customer s. The rate of consumption among Emirates needs to be increased to increase the overall sale of the product. The quality of product is not questionable as it is part of trustable nestle group.PriceThe price set by Nestle of the fruit yogurt is minimal in most of the countries like India and Pakistan. It is around 15 rupees/cup. eyesight the flavors which are being offered at this price, it is considered very reasonable. The main fact that Nestle has to refresh its stock after every 10 15 days is a problem. Therefore selling only at Nestle special stores will make Nestle to manage inventory well. Selling this awesome project at this affordable is the main thing which makes Nestle popular in all the markets. We can say that seeing the per capita income of emirate people that the product will be great hit in the market and Nestle can charge premium price for the product at later stage.PlaceLike all the other countries, Nestle should launch its product only in the major cities in Unit ed Arab Emirates. The main reason is that the urban people due to large per capita income are ready to use new product which they take is of good quality and have value for money. People in small cities are used to of their own brand and their tendency tgo use their favorite brands all the time make them a bad customer for Nestle. Targeting only big city will make its product to sell in bit low volume but it will be good for Nestle in maintain its goodwill and attention Nestle to charge a premium price from its urban consumers. Company can target anything between 5000 to 10000 retailer in 2 years of time span.PromotionLast P which symbolizes promotion related with marketing interface. It is suggested the promotion plan of Nestle should be through following mediums.TV programBillboardsAdvertisement in newspaper, Magazines and televisionBannerKiosksTV Program5 minute of daily TV show 830 pmNestle should broadcast a re