Masafi Marketing Plan Analysis - Report Example

Masafi Marketing Plan Table of Contents Introduction 3 Critical Issues 3 Product Strategy 4 Product Life Cycle (PLC) 5 Competitive Advantages 5 BrandExtension Strategy 6 Pricing Strategy 7 Cost Based Pricing 8 Market Penetration 8 Recommendations 9 Conclusion 10 References 12 Appendix 14 Introduction Masafi is one of the leading mineral water producers in the Gulf region headquartered in Dubai. The organization was established in the year 1976. It is one of the leading brands in United Arab Emirates. Since last 30 years the organization is dominating the market place. Masafi not only supplies natural mineral water, but also offers different ranges of products in several regions. The mineral water which is being offered to people by Masafi is available from the mountains (Sell123, 2011, p.1). The organization was able to penetrate the domestic market with an approximate start-up capital of 5.5 million US dollar. In the year 2007 the organization was able to earn revenue of 40.2 million US dollar. Masafi Juice is the most popular juice brand that competes in the market of UAE. In order to achieve the objective of the study the report highlights the issues related with the organization. Then the study will be continued by product strategy, brand strategy and pricing strategy. Finally the report will address some recommendation plans in order to overcome the issues and challenges. Finally the study ends with a conclusion. Critical Issues Masafi, being an innovative leader within mineral water industry of UAE had to face some critical challenges. The issues are highlighted below. Masafi may find it difficult to acquire new customers in global market due to its premium pricing strategy of products. Usage of poly ethylene for the purpose of packaging may affect the business operation of Masafi as the government of every country is focusing on clean and pollution free environment. Product Strategy Masafi is known as the producer of high quality FMCG goods in UAE. They are the producer of natural mineral water, facial tissues, premium basmati rice, and fruit juice and other food products like potato chips. In last 30 years the organization has constantly extended their product line (Wef, 2012, p.1). A success story of products depends upon the quality, features, packaging and the logo on the packages. Masafi product management team has effective designed the logo keeping in the view of mineral water. It effectively simplifies the quality of a product. The mineral water is 100% germ free and effectively tested in laboratory. Usage of hot-fill technology enables to maintain strength of various flavours in the mineral water. Attractive packaging of a product increases the product popularity and identity. Mineral water bottles of each flavour have a particular coloured cap which has created the benchmark within the industry. Constant introduction of several products is a good product extension strategy, but it is recommended that the R & D team and the product management need to monitor the quality factors of every product. In an addition Masafi should desperately target the global market is they had always implemented unique marketing strategies in their business practices. Resources and Recommendation Product strategy consists of planning and execution. These two are key resources for product strategy. The planning and execution of product strategy takes place in a complex competitive market. Masafi has implanted these resources in the strategy effectively. They have effectively planned and execute the product diversification strategy. It is highly recommended that the product strategy process must be assessable. Moreover they should involve all the stakeholders in this strategy process and should have definable checkpoints. Product Life Cycle (PLC) Product life cycle is an important tool in order to determine the life cycle of a newly developed product. Masafi offers Natural Mineral water, Potato chips, Basmati rice, Fruit juice and Facial tissues. These products have a short life cycle. As day by day the market place is getting more competitive and the taste and preferences of people are being changed along with time. Therefore every organization needs to do brand extension, introduce variety products in order to achieve maximum market share. Since last 30 years Masafi has introduced mineral water bottles of several flavours. Moreover, they did brand extension such as introduction of Premium Basmati rice, fruit juice and facial tissues due to the short life cycle of the particular products (Stark, 2007, p.203). The products complete their whole life-cycle within two years. The organization purposely introduces new products to avoid the business performance uncertainty (Figure 1). There are four stages in product life cycle. The products of Masafi rapidly reach to the growth stage from the introduction phase due to their strong brand image. There are several local competitors who try to copy the flavours of the products of Masafi. It is one kind of guerrilla marketing strategy. To mitigate such kind of risk Masafi used to withdraw the old product from market and reposition it by some effective value addition. It is one of the unique product strategies of Masafi. Competitive Advantages The pure and natural water from the down wells and mountains in Ras AL Khaima is the biggest competitive advantage of the company. Major of the local competitors use distilled and purified water and offer in public which taste awful. Moreover, unique marketing strategies and promotions have increased the core competencies of Masafi. Hey used to keep their own refrigerators in supermarkets and small groceries. It is the one and only mineral water producing organization that have vending machine in UAE. In UAE the organization faces challenges from the competitor like AL AIN. Effective quality control, adequate customer service, strong R & D department and competitive pricing strategy have brought success for Masafi. It is the only leading organization that has created new eco-friendly water containers in UAE. The products of Masafi rapidly reach to the growth stage from the introduction phase due to their strong brand image. Therefore, they always try to introduce new product in order to reduce the competitive rivalry. Brand Extension Strategy Since last 35 years Masafi has constantly expanded their product portfolio. The organization has four core product categories, such as Natural Mineral water, Facial Tissues, Masafi juice and the premium Basmati rice (Weforum, 2007, p.10). Brand extension strategy is one of the successful marketing strategies of leading organizations in global market place (Springer, 2008, p.9). Only the successful and popular organizations can undertake this strategy. Masafi is dominating the UAE mineral water market since last 30 years. Moreover, no-a-days they are exporting the products in foreign countries. Therefore, it is feasible that there is a huge demand for the products. Brand extension and constantly developing new products has some drawbacks too. It is difficult for the organizations to deliver a large order within the deadline without effective logistic and supply chain structure. Masafi uses traditional distribution strategy. The organization can constantly increase their product line, but they have to use advanced technology in order to deliver the orders in quick time. Use of Information Communication Technology (ICT) can handle several complex things in a business process of Masafi. Implementation of PDA services in supermarkets, Navigation system in order to make the supply chain structure can increase the core competency of the organization within the industry. Therefore, it can be state that use of advanced information system in business process will overcome the risks related with brand and constant product extension. Positioning Strategy Masafi is known as the producer of high quality FMCG goods in UAE. They are the producer of natural mineral water, facial tissues, premium basmati rice, and fruit juice and other food products like potato chips. Masafi has positioned its products basis on the product attributes. They have various product lines. Fruit juice of several fruit flavours, mineral water bottles that are available in different colours, premium basmati rice and several food products are introduced by Masafi targeting the kids, households and people of all ages. Moreover, the facial tissues are introduced in order to target the travellers who used to travel frequently. Therefore, it is feasible that Masafi has positioned all the products effectively. According to the brand image, brand awareness, all the required analysis of Masafi and with the help of Perceptual Map framework, it is feasible that the current position of the products of Masafi is superior in quality. In terms of price they both have expensive and reasonable priced products. Pricing Strategy The organization has settled the price of every product at a premium price against the high quality of products. This pricing strategy will help the organization to enter in a new market and capture major of the market share. Cost Based Pricing Masafi should implement cost based pricing strategy in order to achieve the business objectives. After achieving maximum market share, the organization will be able to manipulate the price of products either by reducing the profit margin or by controlling operational cost. Masafi should include all the variable and fixed cost when they would calculate the cost of every single product. Moreover, administrative costs, selling costs and freight cost also need to be included. Market Penetration The major purpose of market penetration is to attract a large number of customers in order to achieve maximum market share within the industry (Mackenzie, 2010, p.57). Reduction in premium price of products may increase the sales. Moreover, this will help o acquire new customers in competitive market (Wuthnow, 2009, p.190). Therefore, they need to offer the products of high quality in economic price level. The organization has to control the low pricing strategy efficiently. They should appoint this strategy only in highly price sensitive market place. Mass selling of a product can give several advantages to the organization. Increase of sales volume should result the reduction of production, distribution and other operational cost. Maintaining effective low price level will help Masafi to gain maximum market share for s short-run (Dury, 2007, p.749). Resources Wages and Energy Resources are the two important resource prices that have influenced the production cost of Masafi. Therefore, it is feasible that due to these increasing resource prices the pricing of products automatically get increased. It is being recommended that Masafi should reduce other operational cost in order to implement the cost based pricing strategy. As day by day the resource price is increasing, it will be difficult for the organization to implement reasonable pricing strategy. Recommendations The research and development team of Masafi should need to do extensive amount of research in terms of products quality. Fruit juice, mineral water, chips and basmati rice are the sensitive food products. Since last 30 years the organization has introduced several products in order to achieve maximum market share. Quality control of the food products is important enough. Therefore it is necessary for Masafi to maintain the quality of products. Before expanding in global market the organization should do extensive amount of marketing research. The global FMCG market is competitive enough. Before making any decision or implementing any action, the product extension strategy should be highly monitored (Craig and Douglas, 2005, p.53). Masafi is the leading player in UAE mineral water market. In order to create a strong brand image in global market, they should focus on global marketing and promotional campaigning. It will help Masafi to emphasize the socio-cultural aspects of each market in which they are entering. The organization is known for its effective CSR activities across UAE. The CSR strategies of Masafi need to be communicated globally. Therefore, the environmental initiatives of Masafi can be practiced with worldwide associates. In terms of pricing strategy Masafi need to implement cost based pricing. It will help the organization to acquire new customers. Moreover, it will maximize the sales volume of the products. Masafi should always evaluate and analyze the strategies of competitors in order it gain more competitive advantages in global market. They should implement Information Technology services for the betterment of supply chain and other business operations. The organization should recycle its water and solid waste. Moreover, they should control the carbon emission in order to reduce the environmental threats. These will create a huge goodwill and high reputation in global market of Masafi. Before expanding their business in global market the organization should be aware of the countries’ Socio-Cultural and Human Resource policies. Serving traditional food product and practicing ethical business practices will create a success story for Masafi. Conclusion The leading organizations in global market are trying to capitalize on the opportunities that have been created due to globalization. Masafi is one of the popular mineral water producers in the Gulf region that offers mineral water with various flavours across the globe (Ehteshami, 2007, p.97). The organization is looking to dominate the global market place by extending their product line. The pure and natural water from the down wells and mountains in Ras AL Khaima is the biggest competitive advantage of the company. The organization has settled the price of every product at a premium price against the high quality of products. The organization is known for its effective CSR activities across UAE. Brand extension and constantly developing new products has some drawbacks too. It is difficult for the organizations to deliver a large order within the deadline without effective logistic and supply chain structure. Masafi uses traditional distribution strategy. In starting years the organization had to face several environmental regulation issues. Masafi used to pack their product in poly ethylene packages. The environment rules and regulations have affected the brand image of their organization. Finally extensive research and introduction of PET packaging has overcome the poly ethylene packaging issues. Now-a-days Masafi is organizing several CSR activities in order to achieve huge reputation in the business field. References Craig, C., and Douglas, S., 2005. Inernational Marketing Research. New Jersey: John Wiley & Sons. Dury, C., 2007. Management and Cost Accounting. Stamford: Cengage Learning. Ehteshami, A., 2007. Globalization and Geopolitics in the Middle East: Old Games, New Rules. London: Routledge. Mackenzie, I., 2010. English for Business Studies Teacher’s Book. 7th ed. Cambridge: Cambridge University Press. Sell123, 2011. Masafi Mineral Water Co. LLC. [online]. Available at: http://www.sell123.org/company/United-Arab-Emirates/1196453.htm. [Accessed on March 9, 2013]. Springer, U., 2008. The History of Springer Publishing Company. New York: Springer. Stark, J., 2007. Global Product: Strategy, Product Lifecycle Management and the Billion Customer Question. New York: Springer. Wef, 2012. Industry News - Masafi named regions favourite water at Middle East Beverage Awards 2012. [online]. Available at: http://www.wef.org/about/StoryPage.aspx?story_id=180087202. [Accessed on March 9, 2013]. Weforum, 2007. He Unied Arab Emirates and the World. [pdf]. Available at: https://members.weforum.org/pdf/scenarios/UAE.pdf. [Accessed on March 9, 2013]. Wuthnow, R., 2009. Boundless Faith. California: Universiy of California. Appendix Figure 1: Product Life Cycle Figure 2: Perceptual Mapping Read More