Expoting Ma'amoul to France - Business Plan Example

Number Paper: Country: Saudi Arabia Product Maamoul of the client firm: Executive Summary Sharing a proper meal with other countries is regarded as an old and honoured tradition of the Arabic world as well as an expression of hospitality. The report highlights the export plan for a Saudi Arabian product, Maamoul, in three target markets viz. France, United Kingdom (UK) and Germany. The three countries are examined carefully in terms of the buyer behaviour, target market and taste and preferences. After evaluation of these aspects, one particular country is chosen from the list of three, which has the highest demand of Maamoul. Apart from France, the product has moderate demand in UK and Germany. UK and Germany is chosen as the exporting country since exports of food items are higher in here. Sweets, pastries and chocolates are of less demand in UK and Germany, since residents are diet conscious and are in habit of consuming sugar free products. So, the three target markets will reflect different demands for Maamoul, but the export plan is created for the country with highest demand for the product. The target market or the country of export should exhibit the need and preference for consuming unusual and luxury pastries since Maamoul is one of them. Maamoul is expensive and is popular in Levantine cuisine. Food items of this cuisine are basically liked by Arabs. Hence, the target market should have purchasing power for the product.   Table of Contents Executive Summary 2 Introduction 4 The Product 4 Buyer Behaviour 5 Market size and segment 6 Market Trends 6 Lifecycle/ Seasonality 7 Target Market and Customer Profile 8 Suggested Techniques 8 Competition 9 Problems and Opportunities 11 Product 12 Price 12 Promotion 13 Place 13 Country Short list 13 Recommendation 15 Market Strategy 16 Sales and Costs, Profits and Budget Estimates 17 Summary 18 References 19 Appendices 20 Introduction Maamoul is regarded as one of the most delicious pastries in the Levantine cuisine. It is a small shortbread pastry, which is filled with ingredients like, pistachios, dates or walnuts. The ingredients are often replaced by figs, almonds or other fillings. The pastries are famous in Gulf countries such as, Qatar, Oman, UAE and Saudi Arabia. They are in shape of balls or flattened cookies (Television Food Network G.P, 2014). The pastries are either decorated by hands or are made in wooden moulds that bear specific structures. The product when filled with date is known as menenas. The product has a considerable market in chosen three target markets (France, Germany and UK) since these countries are populated with Arabs who are main consumers of the product. The Product Maamoul is the traditional food item across North Africa and Middle East. Nawal Nasrallah, a Middle Eastern food expert, had pointed out that Maamoul could be traced to days of ancient Mesopotamia. The region consists of Iran, parts of Syria, modern day Iraq and Turkey. As Easter approaches, the demand for Maamoul increases in Gulf countries and few places in Europe where concentration of Arab is higher. Maamoul resembles a cookie that is filled with nut. Other than nuts, the pastry can be filled up with pistachios, walnuts or almonds. The preparation of Maamoul is quite easy. Maamoul is regarded as the Middle Eastern cookie and is prepared by following traditional processes. It is typically made during holidays like, Eid or Easter. Maamoul is different from other pastries since it has subtle flavourings that are prepared with the dough and filling that includes Mahlab or Mahlepi (rose water, aromatic spice, mistika, orange blossom water and some incense of acacia) (FatRock Media , 2013). The innovative characteristic of the product is that it comprises all spices and ingredients that are liked by the Arabs. Semolina is used to prepare the paste of Maamoul. Semolina is the “coarse of purified wheat middling of durum wheat” (Mamas Lebanese Kitchen, 2013). It is yellowish in colour and is known as smeed khishin or coarse smeed in Arabic. Apart from coarse semolina, fine semolina is also present in Maamoul, referred to as farina or “smeed naaim” in Arabic (Wandering Spice, 2014). These ingredients are famous among the local Arabic population and are available at every grocery store. The filling of Maamoul is basically filled with dates, which are essential fillings for Middle Eastern diet. The Arabic cuisine usually consists of amalgamation of the best of Middle Eastern, Mediterranean and Indian food (Chef in Disguise, 2014). Children are excited during this time as they get to wear new clothes as well as to savour the delicious Maamoul. In many houses in the Middle East, it is found that Eid is not celebrated without baking Maamoul. So, it will not be incorrect to infer that Maamoul is delicious and attractive enough to be able to bring smile on one’s face (Chef in Disguise, 2014). Buyer Behaviour It is very difficult to understand the buyer behaviour. The buyers have the tendency to behave differently as opposed to the needs and desires stated earlier. They may get influenced and change at the last minute of sales. It is the main responsibility or mantra for marketers to study the perceptions, wants, tastes and shopping behaviour of target consumers. So, buyer behaviour studies response of the groups, individuals and organisations, in terms of ways in which they buy, use, select goods or services, experiences or ideas for satisfying their desires and needs (Atkinson, 2010). In this case, the buyer behaviour for Maamoul is examined in order to get an idea of tastes and preferences of the mass. The buyer for the product is basically the households. With passage of time, work pressure is increasing in lives of all individuals around the world. Hence, people do not have enough time or patience to prepare luxury food items. Instead, they choose to purchase the same from a place selling the best product. It is seen that Maamoul is regarded as the most wanted pastries during occasions such as, Eid and Easter. Market size and segment Even though the marketplace for Maamoul is open for everybody, it can only be afforded by consumers with enhanced purchasing power. It is little expensive, but smell and taste of the product is so good that money does not act as a limiting factor. Hence, there is no particular market segment for the product as it is targeted at every class of people. The product experiences demand in the national marketplace and is exported by manufacturers to different countries where Arab population has the highest density (Arabic Cuisine, 2014). Market Trends The market for Maamoul is expanding over the years as its demand is increasing. Despite its high price, people are eager to buy the product during occasions like, Eid and Easter. Both the occasions are incomplete without the delicious Maamoul. The product has such a good smell that it can bring a smile to everyone’s face while being baked. Apart from Gulf countries like, Qatar, Oman, Kuwait, UAE and Saudi Arabia, the product has huge demand in European countries like, France and Germany. In France, proportion of Arabian families is the highest among all European countries. The consumers in UK are diet conscious. They prefer to consume low calorie, less fat and vitamin fortified food products. They avoid very spicy food and usually choose desserts with less sugar. The rise in fast food restaurants has changed this habit of UK residents, but they still do not favour sweets and pastries. Thus, exporting Ma’amoul to UK will not be a wise idea since it is not fat free and contains huge amount of calorie. In UK, it can at the most contribute to bring about a change in taste of consumers who will have it for the first time, but the entire effort of exporting Maamoul from Saudi Arab will not be fruitful for the exporters. The consumers in Germany are not at all diet conscious (Rosin, 2013). There has been increase in overweight people over the years because of rise in the number of fast food restaurants in Germany. Germans are also quite fond of pastries and sweets. The export of Maamoul to Germany will be a wise plan, but it needs to be checked whether they are fond of Levantine cuisine or not. It is recorded that about 2% of the population in Germany are Arabs (Deutsche Welle, 2014). These Arabs like Levantine cuisine and Maamoul prove to be a good option for the whole range of pastries that are sold in Germany. However, it is to be observed that whether or not the Germans can adopt the new cuisine. In addition, about 19% of the population in France are Arabs and this indicates the fact that exporting Maamoul there will be a very good decision (Bruce, 2009). Lifecycle/ Seasonality Maamoul is an occasional product that is available during festivals such as, Eid and Easter. Even so, if it is made at home, then one can have it throughout the year. It is noticed that the demand for Maamoul increases during these two occasions and this triggers the bakers to prepare the same in huge quantities. Maamoul is an occasional food and has nil demand during certain periods of time. In UK, Easter is celebrated in a grand manner with pastries and special desserts, but Maamoul cannot take the place of these customary dishes since it is basically a Levantine cuisine and mostly liked by Arabs. The product is prepared with ingredients as per taste of the Arabs so it would be hard to change taste and preferences of the people in UK. Nonetheless, France will be the best target market since the number of Arabs is higher there. Target Market and Customer Profile The target markets for exporting Maamoul can be France, UK and Germany. All three countries have different proportion of Arabs residents. In France, about 19% of the population are residents. They celebrate Easter and Eid with enthusiasm and Maamoul is the best dessert for them during these times; without Ma’amoul, these festivals remain incomplete. Hence, it can be cited that Arabs are greatly fond of luxury and unusual recipes and Maamoul is one of them. Maamoul is filled with dates and is mostly famous among the Arabs of France. About 2% of the population in Germany are Arabs; so, this can also be a strong market for exporting Maamoul. UK is the least favoured market for exporting Maamoul, since there are less Arab families compared to the other two markets. The European market is observed to have higher concentration of Arabs and France and Germany can be considered as the best markets to export Maamoul. Suggested Techniques Exporting is a profitable technique for expanding the business. It reduces dependency on the local market and increases the risk of success. Exporting exposes an exporter to a number of new ideas and marketing techniques, which are not practised by the exporting company in its local market. The act of exporting also contributes towards reducing the fixed cost and products that are exported get the opportunity to enjoy global exposure. Maamoul is exported to France and Germany where demand for these products are relatively higher than other European countries. Exporting the product will present an opportunity to draw more customers and meet their needs by serving the delicious Levantine cuisine. Competition There is huge competition in this sector of business. Bakery is regarded as the most dynamic section of the food sector, which encounters rapid change in taste and preferences for the products. Maamoul is a traditional recipe across few countries in Europe and in the Middle East. The markets in Middle East consist of a number of businesses, which sell sweets all over the zone. Most of the companies are established in Saudi Arabia. So, it is a highly competitive market. The well-known names of such companies are Al Shareq Sweets, Almarai, Halwani Brothers and Kingdom Dates. Maamoul is prepared in the bakery sector of every company. It is noticed that sale of Maamoul accounts for 13.1% of the total sales in a particular company (Almarai, 2012). The sales of Maamoul in target markets are also high since the number of Arab residents is more in these markets and they love the Levantine cuisine. The competitive firms in the bakery industry are strong enough to pose challenge for any new entrants in the markets. Al Shareq Sweets is a family owned business, which manufacturers a range of sweets and bakery items. Its target market is Saudi Arabia, where the demand for sweets and bakery items is high. All products are made using the old artistic manual methods, which do not compromise on quality of the products. This forms the main strength of the company. The price of the products is kept within that of normal range of sweets. The sweet shop is run by the family members and they promote their products to customers who visit the shop for purchasing any product, who are also requested to recommend the same to others. Almarai is a leading company in the dairy industry. It has different divisions such as, fresh dairy, cheese and butter, long-life diary, fruit juice and bakery. Luisine forms the bakery sector of the company. It sells five products, which includes Maamoul, to the mass in Saudi Arab. The main strength of the company is that it uses a number of advanced machineries to manufacture its products. Another important Ma’amoul producer in Saudi Arabia is Halwani Bros. It is regarded as the pioneer of foodstuff distribution and manufacturing in Saudi Arabia. The company has improved its sales by inventing a number of new products. The company sells a number of variants of Ma’amoul to its customers. After taking into consideration all the above companies who are reigning in Saudi Arabia by providing the market with delicious Maamoul, it is obvious that this market has become saturated and competitive. Hence, the export plan is required for targeting new markets and attracting new customers. The main challenge for the industry is the rise in food prices that has affected all countries to a great extent. The industry has embraced new entrants, but they are not able to pose challenge for existing players since the latter are relatively stronger in order to sustain in the market in future. The existing companies are adequately competent to act as barriers for the new entrants since they have already acquired a significant customer base. Problems and Opportunities The marketing mix consists of product, price, promotion and place. All the factors can act as challenges as well as opportunities for the export of Maamoul to the three countries. Product Maamoul is a delicious pastry that is famous during occasions such as, Eid and Easter. The sweet dish is quite famous among the Arabs owing to the fact that it belongs to Levantine cuisine. The export of the product will prove to be successful in Germany and France since there is a larger concentration of Arabs in these two countries. The product is made up of semolina and dates, which are prominently preferred by the Arabs and are famous items of Levantine cuisine. So, it is a good opportunity for the export firm to enter into France, but the main challenge is to tap rest of the population there. Price The price of the product is high since it is luxury product. The high price of Maamoul also owes to the fact that the ingredients are equally expensive in order to maintain a superior quality. Despite the high price, the pastry is famous among the Arab families since it is the main source of excitement for children during festivals and is enjoyed by all households unanimously. Hence, it is appropriate for the product to be exported to Germany and France, but the same in UK will be challenge for the exporting firm. The purchasing power of Arabs is high and thus, exporting this product will be a success in Germany and France. The Arabs with lower purchasing power also buy this product during Eid since that is an added attraction of the festival. The price is appropriate for the Arab families’ in France, but it is not reasonable for poorer sections of the society. Promotion The promotion of the product is simple and easy. The sweet shops or bakery who will be selling Maamoul can request their customers to recommend it to others such as, friends or relatives, if they like the product. Leaflets can be distributed so as to make the people aware of Maamoul along with its various sumptuous features. The promotion through word-of-mouth is a lucrative opportunity for the exporting firm; whereas this technique can pose to be a serious problem, given that responses of the customers might be biased. Place The exported Maamoul can be sold in small as well as large sweet shops, besides the large bakeries. In UK, demand for pastries is high, which reasons the presence of large number of bakeries. Nonetheless, those bakeries only sell sugar free pastries. It will be quite challenging to export Maamoul to those bakeries in UK since the product is not free from calories. The idea of exporting Maamoul to Germany and France is excellent since bakeries and large sweet shops sell all kinds of food items (sugar free and with sugar). Country Short list The three target countries are United Kingdom, France and Germany. A comparative analysis of the three markets is made in order to identify the best one for Maamoul. The factors that are considered while comparing the three countries are as follow: Factors France Germany United Kingdom Target market Arabs who are fond of Levantine cuisine Arabs who are fond of Levantine cuisine Arabs who are fond of Levantine cuisine Market size There is a high concentration of Arabs. About 19% of the population consists of Arab families. There is a high concentration of Arabs. About 2% of the population consists of Arab families. There is a moderate concentration of Arab So; export of Maamoul to this country will be a challenge for the exporting firm. Relative Demand Demand of Levantine cuisine is high as the population of Arabs is high. Demand for Levantine cuisine is high among the Arabs as they are fond of unusual and luxury food items. There is limited demand for Levantine cuisine. Legal environment The rules pertaining to legal actions for export is stringent and goods are checked thoroughly when it reaches the land of export. The rules regarding legal actions for export is rigid and the goods are checked thoroughly on reaching the land of export. The rules pertaining to legal actions for export is strict and the goods are checked thoroughly when it reaches the land of export. Cultural Environment Eid and Easter are the main festivals, where Ma’amoul is demanded by the Arabs and residents of France. The Arabs dwelling in Germany are fond of Ma’amoul during Eid. The cultural environment does not suite the sale of Arabian food. Transportation The transportation of the product highly depends on trucks and big carriers. The transportation of the product greatly relies upon trucks and big carriers. The transportation of the product evidently depends on trucks and big carriers. Channels of Distribution The product can be distributed through the help of wholesalers and retailers. The product can be distributed directly to the shops and bakeries. The products can be distributed to the chosen shops by establishing channels through retailers and wholesalers. Promotion Through word-of-mouth Leaflets Advertisement in newspapers and media Outdoor hoardings By the way of word-of-mouth Leaflets Over the internet Leaflets Over the internet Recommendation After evaluating all factors that are highlighted in the comparison made between three countries, France is deemed to be the best country for the purpose of exporting the product. The reason behind this action can be depicted as below: 1) Maamoul is a Levantine cuisine and is famous among the Arabs people. The concentration of Arab individuals in France is highest among the three chosen target markets. 2) Arabs consider Maamoul to be the main sweet dish for festivals such as, Eid and Easter. 3) Arabs are fond of luxury and unusual food items and Maamoul is one of them. 4) In France, the exporting firm will get huge exposure to the customer base and will be able to effectively satisfy the taste and preferences of the residents. 5) The products can be distributed to chosen shops and bakeries through the wholesalers and retailers. Market Strategy The market strategy is based on behaviour of the buyers of the target market. It is observed during the occasions of Eid and Easter that buyers of Maamoul are basically women and even children appear to be quite excited since among the sweets, Maamoul stands as the main attraction in festivals. Though this food item is prepared occasionally, yet it enjoys huge demand in the Arabian as well as in non-Arabian countries throughout the year. The Arabian food items constitute culinary flavours from different corners of the world. This is one the primary reasons for Arabian food to be regarded as the main attraction during festivals when all cultures come together in order to share feelings and promote harmony. The Arabian food items even have the touch of Indian cuisine. Maamoul is popular in Levantine cuisine as well as among the Arabs residing all over the world. The Arab households worldwide consist of Egyptian, Lebanese, Syrian, Iraqi, Yemini, Jordanian and Palestinian (United States Census Bureau, 2012). The majority of Arab population around the world is recorded to be in Yemen. It is observed that majority of the Arabs live in nuclear families and their primary occupation is observed to be management. The highest paid Arabs comprise the Lebanese class. This Lebanese class has the ability to purchase any luxury goods for fulfilling their desire. Their income level is also very high and such families consist of 73.78 persons at an average (Central Bureau of Statistics, 2011). The expected sales of Ma’amoul in France are 8160000 Saudi Riyal. The export firm has predicted to capture a major portion of the market. The optimum locations for selling Ma’amoul in France are the bakery and sweet shops. Ma’amoul is to be sold in France at a reasonable price so that even the lower earning class can enjoy the delicious pastry as opposed to the rich Arab individuals. Sales and Costs, Profits and Budget Estimates This section of the report provides an estimate of sales of the exporting firm in context of France (Refer to Appendix 1 for calculation). Figure 1: Sales Forecast for 1 year (Source: Author’s creation) From the above figure, it is confirmed that the sales of Maamoul is expected to increase over the months in the first year. The cash flow statement of the firm consists of direct as well as administrative expenses along with the cash flow at end of the year (Refer to appendix 2 for calculation). Figure 2: Cash Flow Statement for 1 year (Source: Author’s creation) From the above figure, it is evident that cash flow of the firm is expected to rise over the months in the first year. The reason behind this enhanced cash flow is due to the increasing demand for Ma’amoul in markets of France. The income statement (Appendix 3) indicates that the exporting firm will earn a profit at the end of the first year’s operation. Summary It can be concluded that the export plan will prove to be successful if Ma’amoul is exported to France as it has higher concentration of Arabs and these individuals are fond of Levantine cuisine. It has been analysed that France is the best market for selling Ma’amoul during Eid and Easter. The market strategies are developed after considering all issues regarding marketing mix as well as strength and opportunities prevailing in the French market. References Almarai. (2012). Annual Report 2012. Retrieved from http://www.almarai.com/wp-content/uploads/2013/03/am_annualreport_2012_english_lo-res.pdf Arabic Cuisine. (2014). Tafathalo. Retrieved from http://www.canadianarabcommunity.com/arabiccuisine.php Atkinson, F. (2010). Buyer Behaviour. New York: Frank Atkinson and Ventus Publishing. Bruce, P. (2009). Should France Count Its Minority Population? Retrieved from http://content.time.com/time/world/article/0,8599,1887106,00.html Central Bureau of Statistics. (2011). Families and Households in Israel – Data for Family Day. Retrieved from http://www.cbs.gov.il/hodaot2011n/11_11_025e.pdf Chef in Disguise. (2014). Semolina Ma’amoul : stuffed cookies with dates and nuts. Retrieved from http://chefindisguise.com/2013/08/07/semolina-maamoul-stuffed-cookies-with-dates-and-nuts/ Deutsche Welle. (2014). Germanys Arabs Struggle to Fit in. Retrieved from http://www.dw.de/germanys-arabs-struggle-to-fit-in/a-1682563 FatRock Media. (2013). Maamoul Recipe (Maamoul). Retrieved from http://www.dedemed.com/mediterranean/maamoul-recipe-maamoul Mamas Lebanese Kitchen. (2013). Maamoul Cookies With Pistachio and Walnuts Recipe – Mamoul bi Joz w Fustuk. Retrieved from http://www.mamaslebanesekitchen.com/desserts/maamoul-cookies-pistachio-walnuts-recipe-mamoul-bi-joz-fustuk/ Rosin, T. (2013). Eating habits in Germany – a critical review. Retrieved from http://www.zess.uni-goettingen.de/wordpress/?p=919 Television Food Network G.P. (2014). Maamoul: Stuffed Date-Orange Cookies. Retrieved from http://www.foodnetwork.com/recipes/food-network-kitchens/maamoul-stuffed-date-orange-cookies-recipe2.html United States Census Bureau. (2012). Arab Households in the United States: 2006–2010. Retrieved from http://www.census.gov/prod/2013pubs/acsbr10-20.pdf Wandering Spice. (2014). Maamoul: Date and Semolina Cookies. Retrieved from http://www.wanderingspice.com/2011/08/11/maamoul-date-and-semolina-cookies/ Appendices Appendix 1- Sales Forecast Appendix 2- Cash Flow Appendix 3- Income Statement Read More