Seafood Products in UAE Markets - Case Study Example

Seafood Products in UAE Markets Abstract Marketing is continuous process which requires that all the stages of it are thoroughly explored before making any decision. Product development being one of the most critical aspects of marketing also require that there is an integrated approach to be adopted in order to make a successful entry into any market. Strategic Marketing Plan “Introduction” We are a company intending to launch seafood products in UAE markets. UAE is fast becoming one of the most sought after destination for the tourists as well as the local people because of its recent economic growth and substantial increase in the standards of life. Hospitality sector is one such great opportunity existing within UAE markets which can offer a great opportunity to serve our ready to cook seafood products. Our strategy will be based on the value addition proposition which our products will offer besides offering other health benefits. Objectives & Mission Statement Short Term Objectives 1)      Establish strategic alliance with at least one local player to ensure local availability of the sea food raw material. 2)      Establish at least two outlets where we can sell our products at places where foreign visitors frequently visit in UAE. 3)      To start advertisement campaign targeting the visitors especially of European Origins. Through this, we aim to achieve an influx of customers to our outlets. 4)      To achieve moderate profitability level. “Mission Statement” To be the leading seafood products providers in the International market taking care of the nutritional value of our customers beside providing a less expensive, high quality and fresh sea food products to our customers through value addition. Customer Targets Tourism is considered as the main attraction of the UAE with annual shopping festivals of international stature besides offering a very cheap and more westernize environment to the visitors from Western countries. Our target market will be divided into two groups:   First group of consumers will be foreign touring UAE. We aim to serve them with traditional fish products of UAE besides offering customized cooked seafood products which are more in demand in Western Countries thus providing them an experience of second home market as for as serving their taste buds are concerned. Hospitality sector: Both in Dubai and across the country, it is the hospitality sector that is the largest single consumer group of seafood products, with nearly every 5-star hotel hosting a seafood restaurant. Competition in the foodservice segment continues to heat-up, keeping pace with both population and tourism growth (in 2006, Dubai's 371 hotels hosted a record 6.5 million guests). Competitor Targets Gulf Seafood LLC is considered as one of the oldest and largest players in the UAE seafood industry. There is a growing trend within the whole Gulf market that the trends are shifting towards the more health conscious seafood products with many local as well international players are coming into the market to define their own niches. A closer analysis of the competition suggests that there is a need for the company having more experience in serving Western customers. Since we are already having experience of serving Western Markets, therefore we believe that our products clearly fit into the competition with clearly defined niche market. Product/Service Features The product which we are going to launch is the process sea food. This product will be basically based on the processing of sea food items like fish, crabs etc to the UAE market. We will be selling our product based on our quality and freshness. This will be achieved while keeping in view the element of value addition in mind since sea food being a generic commodity; we believe our unique selling proposition will be value addition. Since the main market for our product is UAE which has very strict requirements for quality, therefore, our most important feature of the product will be the value addition. Our solo motto is producing quality seafood stuff which not only taking into account all the health related issues. As a secondary product benefit, the company will emphasize that we understand that for our customers it is very necessary that they receive nutrition which is on one hand is healthy and harmless to consume but it must also contain an element of taste and quality in it. Since Product quality, as a variable relating marketer’s action to consumer’s response largely depends upon the competitive positioning (Yoon & Kijewski, 1997) of the company therefore our product through its USP of freshness, quality and health consciousness will provide us the competitive positioning in the market. What makes our product and innovative is the fact that we are planning to create differentiation on three counts; Process the seafood, preserve its quality and sell it uncooked. Add value to the processed seafood by making various seafood dishes and prepare them as ready to cook products. Based on above two processes, our product line includes Fresh and Preserved Fish, Frozen seafood, Processed and Canned Seafood, Preserved and Frozen oven ready fish dishes for modern food service. Core Strategy As discussed in our earlier discussion, the unique selling proposition of our product will be the healthy nutrient added to our seafood products so that not only we provide tasty sea food but also the healthy and fresh food which can be taken as an alternative to the mainstream food supplies. Based on this, our core strategies include value proposition as well as the product positioning. As discussed our main focus will be on creating value added seafood products therefore based on this proposition, we intend to add value to the processed seafood by making various seafood dishes and prepare them as ready to cook products. It is because of this fact that we are planning to sell fresh and preserved Fish, Frozen seafood, Processed and Canned Seafood, Preserved and Frozen oven ready fish dishes for modern food service. The value proposition in this whole product will be the perceived health benefits which a customer can enjoy by eating white meat. Backed by latest research, we will market our product based on the idea that eating seafood is not only healthy but it can also provide great taste when cooked and processed in our way. Regarding the product positioning, as discussed earlier that we are intending to target the hospitality sector of UAE therefore, there will be two channels involved in carrying out our strategy. Firstly, we will target the hotels which will be selling our product and secondly, we intend to open our own stores cum restaurants which will be used to sell our product range. Since this will be an international venture and product positioning in international market require that products can be evoked and distributed as bundles of attribute capable of generating benefits for the customer (Johansson, 1985) therefore we believe that our product will include an intangible perceived benefits to the customer in terms of taste and healthy food. Marketing Mix: Communications & Promotion Since out main strategy involve value addition to the raw seafood by processing it in ready to cook food with special emphasis on the healthy nutrition involved in it therefore our message to our target customers will be to directly inform them about the potential benefits involved in consuming our seafood. Since out target market is based on two segments, one which is the hospitality sector of UAE and other the general public therefore we believe we need to customize our message in a way that it can be effective to both the segments of our market. Based on this analysis, we believe that we will be employing two methods to communicate our message. One will be through advertising to general public which will be well directed and focused on women specially because most of the shopping for home consumption is done by them and secondly we will be engaging into personal selling through our sales force which will directly market out product to the hotels of all range and stars to procure our product to serve them to the foreign customers. Marketing Mix: Price Price setting is on of the delicate arts which organizations has to perform in order to get back what is put into the product by incurring costs and investments into producing goods and services. From the marketing perspectives, setting prices or rather executing the pricing strategy is more of a control variable rather than an industrial organizational experiment. (Oren, 1984). As discussed earlier, we are targeting two consumer niches. One is the hospitality sector of UAE and other is the common end users who make purchases for the home. I.e. Women. In this way, we are facing two different sets of demand dynamics. One is derived demand and other is direct demand. We believe that while serving the hospitality sector of UAE, we may not be in a strong bargaining position and may be charging prices which are marginally covering our costs whereas in open market for general public, since our product is based on the premise of health, we may be able to charge premium prices on our products in open market sell. Based on these two different dynamics of demand, our pricing objectives will be different for both the segments of the market. While setting the prices for our products, we will be taking care of the following strategic objectives: (eyeswideopen.com, 2008) 1)      Have a focus on the value delivered and its outcome. 2)      Building competitive differentiation through price and quality 3)      Executing our own business strategy So our key objectives for setting the pricing for our products will be to achieve above three broad strategic objectives specially our focus will be on building competitive differentiation through our pricing and quality. However, on the more operational side, we will be focusing our pricing strategy to achieve healthy cash flows to achieve strong cash leverage so that our reliance on the external debt to execute our business is minimal. Based on that, we believe that there are different methods for setting up prices and each method has its own strong points and weaknesses and it’s more of a trial and error method before we can set up optimum prices to achieve our objectives. Based on our core strategy of value addition through healthy contents, we are planning to set our pricing strategy based on the value added based pricing strategy. (eyeswideopen.com, 2008). However before setting up the strategy, we will be checking the price elasticity of our pricing method as in order to sustain our future strategic presence in the region and meet the contingencies.   Marketing Mix: Product Policy When determining product policy, it is important to identify how to evaluate the market environment for opportunities to create more innovative or consumer-perceived revolutionary products (Penn State, 2007). With this definition in mind, in terms of new product development, this takes the company back to understanding consumer preferences regarding seafood products. We believe that the secondary benefit of our product is in packaging variety which will cater to the unique demands of the desired target markets. Nabisco company recently experienced tremendous sales successes from their innovative “fresh seal” packaging for Oreo cookies that allowed for removal of only a few cookies from the bag while still ensuring freshness (Kleiner, 2007). Though packaging might not ordinarily be considered part of the product policy for potential innovations to ensure product longevity on the marketplace, we believe that maintaining similar design options which will benefit the end user (such as shortened packaging for larger storage facilities at restaurants) can add increased life to many of our product line. The benefits of packaging as product policy are to increase the overall usefulness of the product from a consumer or large-scale business buyer perspective. We further believe that increases in revenue attached to creative promotional efforts to reinforce new and innovative packaging designs will outweigh the costs of printing and production of the packaging materials. These items can be sorted out as the business analyzes its current supply chain costs in relation to hiring professionals in the need of external production of our packaging needs. New product development should and will be a crucial element to the seafood business’ successes and should maintain a fully staffed research and development department to continue developing new preservation techniques to fully satisfy consumer expectations for quality products. Heavy emphasis on research and development will likely pose larger costs for company in the short-term, in relation to payroll budgets, however with innovation comes competitive edge and potential increases in revenues to offset those labor costs. When new product developments occur, perhaps in packaging or in food quality or variety, it is important for the company to understand the impact of these efforts on the total production and marketing budget. As an important tool for the company, new product sales should be forecasted quarterly to determine whether research and innovation efforts are bringing in the desired target revenues. If these expectations are not met, the pace and structure of the research and development department will be reconsidered in favor of other alternatives which can be addressed as needed based on sales figures of new products on the retail market. To facilitate our rather progressive product policy, the company must invest a portion of its marketing budget toward focus groups and test marketing efforts. Quarterly, a sample group of consumers should be brought into the business environment to sample new products made available by the research and development groups. This will provide us with the necessary test data to determine whether to fully launch the development and distribution of the new products or whether to abandon costly R&D efforts and focus on another product. This will suggest that the business must be flexible in terms of product policy and new product development in the event of any unexpected changes in consumer behavior or consumer preferences. The aforementioned focus groups should sample the products and view the packaging, using a wide variety of different consumer demographics and backgrounds to assist in this process. Marketing Mix: Channels of Distribution Because the entire product line is being targeted at the tourist industry consumer as well as generic consumers across the UAE, it is important to identify the key opportunities for distributing product which maintains low cost and reaches our desired markets. Restaurants in this region will be our largest customer base, expected to make up at least 60 percent of total customer-generated revenues. However, as part of the supply chain strategy, the business must determine the most low cost suppliers to receive raw seafood product which will be packaged and delivered under our brand name. To inspire and support local consumerism, the majority of raw seafood will be purchased by independent, licensed fisherpersons across the UAE. This will reduce the costs of an extended ground or sea transportation system and we will be able to truly boast that we provide the freshest of ingredients as they are supplied by local seafood merchants. Additionally, various canning supplies will be purchased by ABR Aluminum in the UAE who on contractual agreement has agreed to provide our canning necessities until 2011 without disrupting our expectations for product delivery timelines. The business must then provide estimated canning forecast requirements to ensure that we have an adequate supply and the business can avoid costs of expedited shipments due to inaccurate sales projections. The retailer and wholesaler will be our two chosen channels of distribution for finished product. As we believe that the majority of UAE restaurants prefer to buy from wholesale vendors due to pricing issues and bulk requirements, the wholesaler is ideal for ensuring that our product makes it to the appropriate restaurant buyer. Of course, a portion of the company’s marketing efforts will be utilized to target the restaurant buyer, such as in the form of direct mailings and catalog production, for wholesale delivery. The retail marketplace will require contractual agreements for delivery of finished product to make sure it ends up on store shelves in a rapidly-developing, commercial UAE. There are a wide variety of local markets and an escalating existence of the Westernized supermarket currently in the UAE, which will give us a broader national reach for expanding delivery on the supply chain. A pending agreement is currently in place with an outsourced, third party warehousing vendor which specializes in cold storage for products of similar variety to ours. This warehousing facility will act on deliveries directly to the retail marketplaces and handle all ground shipments through the UAE to the products final point of delivery. Though this keeps some control of the delivery process out of our own hands, it is a low-cost methodology and avoids the need to maintain high volumes of expensive refrigeration equipment at our own manufacturing facility. We believe this to be the best business strategy in the long term, even though we are forsaking asset accumulation, simply to ensure that we can keep initial supply chain costs low. Future expectations for business growth are to expand the company for a broader distribution effort into international territory outside of the UAE. If sales volume expectations are reached in this country, the business will be in a cash position to cater to other marketplaces across the world. Of course, distribution costs will increase when waterway transportation might be added or even air in expedited scenarios, however with increased market visibility and expansion the company will likely offset these costs immediately. Contractual agreements with other international warehousing facilities would need to be established to ensure that an adequate supply of seafood products can be housed near their expected foreign delivery points. All of these issues, however, will be addressed when tangible sales figures come in and are addressed. Marketing Mix: Customer Relationship Management Customer relationship management is one of the largest aspects that we must maintain in order to keep our customers loyal to our brand and satisfied with our service provision. Our definition of customer relationship management is a combination of different strategies which reorganizes the entire company to focus on customers as the primary business objective. We understand that all of our revenues will be generated by our consumer target markets and we must be adaptable to their needs. The company is currently working on a cobranding opportunity with Heinz company to interlink their established brand name with our own growing brand as part of a strategy to build consumer loyalty. Heinz produces several varieties of pre-packaged tartar sauces capable of being frozen with our products for extended periods. Using the Heinz name will afford us the chance to capitalize on their good brand name to build our own brand identity in this developing region. The company will also be creating an interactive website which outlines the product variety and even allow customers to leave feedback about their experiences with our product line. If measurable trends exist which show a favor or disinterest in certain aspects of the product, the system is designed to send back an automated response to customers thanking them for their valuable feedback. For future marketing efforts, a direct mailing system can be developed at relatively low cost to ensure that those who leave feedback are given low-dollar coupons for discounted items in our product line. We believe that this will create a more interested buyer who will be satisfied by our product quality, making this a great CRM opportunity for our firm. Internally, all of our staff, including customer service representatives, the research and development teams, on-floor production groups and the administrative end of the company will have training on modern customer relationship models. For instance, recent trends in consumer behavior will assist the telephone operators to provide better quality support and delight the customer. At the same time, any party in the business which has direct contact with vendors in the supply chain or with customers directly must understand certain elements of what drives behavior. For instance, under Abraham Maslow’s hierarchy of Needs, many people are in pursuit of a sense of belonging and self-esteem, thus it must be told to all staff members that people need to be treated with the utmost respect and made to feel as if they are part of our family of brands. The company will also use its resources to create a database where consumer information is stored. This will include the entire client list for all of our retail and wholesale buyers where we can periodically send out thank you notes or other discount incentives as an appreciation of their long-term business and loyalty. The company believes that this will create the perception in the customers’ minds that we are devoted to relationship-building and will go the extra mile to ensure that we value our customers for their brand loyalty. We also realize that customer relationship management is not a magic cure-all for making sure we keep our customers, but having the internal and external operating environment prepared to meet the needs of highly fickle markets should be priority number one for the business. By providing internal staff members with the technological tools necessary to perform a quality relationship with customers the expected results are higher volumes of satisfied clients and better word-of-mouth advertising. Finally it is quite important to make our customer focus highly transparent. In an area that we believe to be quite innovative and unusual in this UAE industry we will rely on public relations efforts to make sure that our efforts at delighting the customer are a paramount business objective. The release of periodic press releases will keep our brand name right on the lips of the desired markets and illustrate to the general consumer at the supermarket that we are prepared to fully back our products in relation to competitor quality. It is important that the end customer understand that all changes to products and new product varieties are catered to their needs and should be positioned as high quality merchandise in all public PR activities. With such a customer focused viewpoint there is little margin for error in terms of building long-term customer relationships. Poorly trained staff can only serve to undermine our efforts at building a broader customer base which is why training is the secondary item important to maintaining a positive customer-focused image. Conclusion We believe that we have a very clear idea of what our products will be and what we are going to serve them. Though we are new in the market however it is expected that we will be capturing good market through our sheer product quality and service. References eyeswideopen.com. (2008). Price Setting : How to Set your Prices Effectively. Retrieved March 1, 2008, from Eyeswideopen.com: http://www.eyeswideopen.com.au/articles/93/1/Price-Setting--How-to-Set-your-Prices-Effectively/Page1.html Oren, S. S. (1984). Comments on "Pricing Research in Marketing: The State of the Art. The Journal of Business , 57 (1), S61-S64. Orange Fairs & Events, Dubai Int’l Seafood Expo 2007, [online]. Retrieved March 2, 2008 from: http://tradeshow.alibaba.com/trade_shows/1104/Dubai_Int_l_Seafood_Expo_2007.html Yoon, E., & Kijewski, V. (1997). Dynamics of the relationship between product features, quality evaluation, and pricing. Pricing Strategy & Practice , 5 (2), 45-60. Brown, A. (2008). Consumer Buying Behavior. Retrieved March 3, 2008, from: http://www.udel.edu/alex/chapt6.html Johansson, J. K. (1985). International Product Positioning. Journal of International Business Studies , 16 (3), 57-75. Kleiner, James A. (2007). Creative Promotional Strategies. 2nd ed. United States, Thomson South-Western: 109-110. Appendices Read More