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Student Name Kuruparan Thenukanan Reasonable Adjustments

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Contents
1.0 Background of Almarai ......................................................................................................... 4
1.1 Product / Services Details ................................................................................................. 4
2.0 Country of Destination – Analysis of the Market.................................................................... 5
2.1 Market opportunity ............................................................................................................ 5
3.0 Marketing Mix evaluation for Sri Lankan market ................................................................... 6
3.1 Product Strategies ............................................................................................................ 6
3.2 Price Determination .......................................................................................................... 7
3.3 Pricing Strategy................................................................................................................. 7
3.4 Distribution Channels used ............................................................................................... 7
3.5 Packaging ......................................................................................................................... 7
3.6 Promotion ......................................................................................................................... 8
4.0 Market Entry Strategy ........................................................................................................... 8
4.1 SWOT Analysis ................................................................................................................. 9
5.0 Marketing Activities for Launch of Almarai in Sri Lanka....................................................... 10
5.1 Advertising Launch Campaign ........................................................................................ 10
5.2 House Wife Forums ........................................................................................................ 10
5.3 Local Brand Ambassador ................................................................................................ 10
5.4 Retail Promotions............................................................................................................ 10
5.5 Sampling ......................................................................................................................... 11
6.0 Conclusion.......................................................................................................................... 11
7.0 Reference ........................................................................................................................... 11

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1.0 Background of Almarai
The founder of Almarai is HH Prince Sultan Bin Mohammed Bin Saudi Al Kabeer who recognized the
potential to transform the traditional dairy farming in Saudi Arabia in order to meet the needs of a growing
domestic market. Numerous agricultural projects were developed under his guidance to achieve the
objective of the company. Almarai stepped into the market with the processing of fresh milk and laban into
the modern dairy farms.

The Company has invested heavily in technologically advanced production facilities and recruiting the right
person for the right job. Almarai is considered to be the second and the larger Central Processing Plant
with a new cheese plant along with it. On a daily basis, Almarai is capable of serving high quality and
hygienic products to more than 43,500 customers within the GCC countries.

In 2005, Almarai moved from being a privately-owned Company to a publicly listed company and it has
over 70,000 shareholders.

In 2007, with the acquisition of Western Bakeries, Almarai expanded its product line to include bakery
products which improved distribution, and product innovation.

The success of Almarai is because of its unique infrastructure which includes farms, dairy, juice and bakery
processing plants. And also, it is determined by the marketing and distribution expertise, all of which are
working towards delivering a quality product to the consumer.

1.1 Product / Services Details

1. Juices: Almarai always uses the best fruit to make the juices that the customers love. It maintains
good balance between good health and great taste.
2. Home Snacks: Snacks products are the tastier and the simple one which would give relishing taste.
3. Yoghurts and Desserts: Pure and calcium-rich favourites for the entire family. Desserts are made
from 100% natural, fresh cow’s milk.
4. Culinary Products: Almarai provides the tastiest cheeses, and richest creams which makes
mother’s work easy in the kitchen.
5. Dairy Liquids: There is a complete range of delicious laban and milk based dairy products for the
entire family.
6. Kids Products: Kids products prove to be a fun and a healthy bunch for kids

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2.0 Country of Destination – Analysis of the Market

In Mercer’s Quality of Life survey (2017), Colombo ranked Number 1 in the South Asian Region. Sri Lanka
leads the South Asian region in terms of high human development indicators - high literacy and national
health rates. Sri Lankan quality of life is higher compared other south Asian countries allowing Sri Lankan
market to expand further into more developed product formats and services. Many global brands have
entered the market within the past years, especially in apparel sectors suggesting that per capita
expenditure is higher in middle class income earning households. SriLanka’s is considered far ahead of
third world country in terms of quality of life with affordable housing, healthcare and quality education.
The courtiers stock market is performing well attracting investments as the business operation cost is lower
and quality of skilled workers are high compared other South Asian countries. The CSE (Colombo Stock
Exchange) is currently trading at 8.3 times earnings and the Sri Lanka Investable Universe of 305 stocks
BF (blended forward) is 7.3 times earnings (Forbes, 2019). The opportunity of investing in Sri Lanka is
immense for foreign organizations and due to its strategic location, setting up production facilities and
catering near south Asian countries is also cost effective.
The National agenda for countries development is in progress currently and lot of infrastructure
developments and local production encouragements are in place. The future business are expected to
develop and even World Bank reports Sri Lanka as a high developing country. “By 2020, Sri Lanka intends
to improve its business climate ranking in the World Bank’s Ease of Doing Business Index, to be amongst
the top 70 countries in the world. At present, Sri Lanka is ranked 64th overall out of 136 countries in the
World Economic Forum’s 2017 Report”.

2.1 Market opportunity

Sri lanka’s quality of living improving consecutively over the years and this has led to pushing middle class
income earners expand their buying basket apart from essential commodities. Over the years number
international brands and shopping complex have entered to the Sri Lankan market. And all those brands
have started expand out Colombo into other major cities.

Sri Lankan’s are currently enjoying benefit of VAT reductions and most of local productions are supported
and encouraged. The income disparity have gone down slightly and it is expected harmonies to a stable
level over the years to come.

Sri Lankan’s have vast range food recipes and spices compared to many majority of the world. It is
exposed to all food cultures and it’s mostly a combination of one or two food cultures. In terms almarai the
opportunity lye’s mainly Liquid milk, powdered milk and juices. The sub industries like bakery or poultry
done by Almarai in GULF region will be difficult to establish in Sri Lanka as it is currently self-sufficient

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within the island. The government also encourage local farmers resulting in heavy tax barriers on bakery
or poultry.

The below article shows that Sri Lanka has immense opportunity in terms of fresh milk and milk powder
imports to develop. Almarai has brand which excel in quality and price .Compared New Zealand and
Australian milk powder which currently fill the deficit, Almarai has the advantage over price due to low
freight cost and tax concessions agreed with GULF regions. The contribution of domestic milk production
to the total milk requirement was 42 percent. The deficit is met by imports, mostly in the form of powdered
milk, which costs an average of Rs. 33.6 billion. A total quantity of 94,000 MT of powdered milk was
imported in 2016. Considering the quantity of imports over the last 15 years, there are ups and downs in
importation which indicate the unsteady nature of milk imports and its association with underlying factors
such as world market prices, tax structure and local demand. (Daily news, 2019)

Below research suggest that close 10% of the grocessary income is allocated to dairy based products in
Sri Lankan households which allows organization excel further with value added dairy products. Research
shows that Sri Lankan household consume 341.36 g per month according to the average monthly
household expenditure of all food items, the expenditure for dairy products is 9.4 percent. (Daily news,
2019)

3.0 Marketing Mix evaluation for Sri Lankan market

Almarai is organization with variety of product offerings. Yet the main business and globally it renowned
for its dairy business. Almarai currently has largest farm owned by single organization and enjoys price
benefit with its economies scale in mass production.
Based on the analysis it is clear that Sri Lanka has high potential in terms of establishing Milk powder
business for Almarai. We will evaluate the Marketing mix in the segment Almarai milk powder expansion
to sir Lankan market.
3.1 Product Strategies
Product Strategy is the heart of an organizations .Almarai is successful because it is vertically integrated
organization which uses latest technologies to produce end to supply chain requirements also. Almarai
produces milk with its own state of the art farms and complete processing and packing is also conducted
on their own factories. Almarai steps further than other organization by expanding its operations of
ingredient and other supply chain requirement production. Almarai maintain separate grass farms in Spain
and USA specifically cater the requirement their own farms requirement. And in terms packaging material,
all the plastic based bottles, palates and basket are made in house removing decency of third party
suppliers.

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Almarai take pride quality of product and it has received the quality recognition award many time for its
flawless production methods. Almarai farms are also considered famous case study for its success in
establishing milk farms in the desert.

In terms of Sri Lankan context, Almarai is more than capable of providing total Sri Lankan diary produce
deficit. Thus due to close proximity compared New Zealand or Australia it has opportunity provide far
fresher product to market faster.

3.2 Price Determination

Almarai is strong and establish organization GULF region. It has strength the hold with price war between
current local players. Almarai price strategy is always based pricing lower at the entrance and bringing the
price to parity of competition after 2 years.

3.3 Pricing Strategy

Pricing strategy is crucial for long-term survival of organization.it has to be combination making profits and
offering best retail price. While maintaining the profitability if the organization manage to offer the product
at magic price point. Consumers can be converted easily. But generally in practice it is difficult to maintain
in magic price point for long-term as it destroys bottom-line earning of organization.

Cost Based Pricing: In GCC Almarai prices its products based competitor behavior and competitor pricing.it
considers the complete production cost with seasonality impact and the price the final consumer product
less to competitor. Main competitor for almarai in region is nadec and and almarai is currently priced lower
than nadec.

Pricing for Sri Lanka: Almarai is recommended to follow the same strategy. This disrupt the current key
players into a price war and de-stable them in the long run.as the current retail structure of sri lanka is 95%
traditional trade base sale it is essential to provide higher margin to retailer than Fonterra products.

3.4 Distribution Channels used

Almarai has the strongest distribution system in GCC at the moment. Yet as Sri Lanka is new entrance it
is not advice to invest in distribution channel development of almarai own. The recommendation is to
partner with local distribution agent in the first five years and build the network of distribution and sales
team gradually. After the business establishment cost is covered and brand is stable in market to move
into its own distribution with almarai owned vehicle and employees under its direct pay.

3.5 Packaging
Packaging is crucial in sri Lankan market for two reasons product safety and customer attraction.as sri
Lankan storage system is not so user friendly in most of retailers and due high temperatures it is essential
to customize packaging with seven layer foil based inner pack covered cadboard carton box. Current key
players in market have established its brand ques such has grass lands and milk cow in there packaging.

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Almarai need to redesign the packaging with such brand ques with local language included description
align local food and safety authorities.

Bright colors are usually associated in Sri Lankan milk powder based products to attract consumer eye on
shelf. This practice has to be also implemented.

3.6 Promotion
Almarai will have to adopt the promotion plan with the combination media , in store and sampling activities.
Media will build the awareness for the product while in store promotions and sampling will allow faster
conversion of consumers from competitors.

1 TV and newspapers – these two mediums are the highest reaching effective Medias in Sri Lanka.
These will be used to with high reach and high frequency advertisement placement in the beginning
to quickly build awareness and then after 12 months it will move into building brand value and
functional benefits.
2 Sampling – The taste is crucial factor in milk powder consumption. People are relevant to switch
with higher switching cost for commodities like milk powder. Sampling in store is crucial in dry and
wet formats is essential to induce trail to make almarai successful in sri lanka.
3 In store promotion – In store promotion such as price offers, banded offers or raffle draws are
crucial in first age to create offtake in outlet. Building offtake will encourage the retailers restock
and push the product. Retailer discount schemes should also be introduced as Sri Lankan retailers
have lot of bargaining power over suggesting brands vs other countries retailers.

4.0 Market Entry Strategy

Based on above analysis, Almarai opportunity for growth and profitable business is to enter with dairy
products. Specifically with milk powder as it is the most consumed diary product among Sri Lankans. The
SWOT analysis is carried out to evaluate the further of Almarai entrance.

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4.1 SWOT Analysis

Strength: -
1 Sri Lanka allows open economy and the bilateral and regional trade agreement for GULF in order
to experience an increase in foreign trade.
2 It has experience an increase in growth rate in international competitiveness due to trade
agreements.
3 Sri Lanka offers the most competitive business cost to the foreign investors.
4 Corporate taxes and labor costs are reduced in 2020.
5 Stable economic and cultural environment.
6 A strong democratic political system with strong institutions.
Weakness: -
1 Local government is encouraging local production.
2 The main grid energy systems are not dependable. Mainly electricity shortages in drought seasons.
3 High competition from global brands ,which is already established in the country
Opportunities: -
1 Government supports foreign investor with legal and tax benefits.
2 Continuously growing Milk powder industry.
3 Growing per capita income and house hold expenditure.
4 Sufficient skilled and unskilled labor.
5 Government has taken serious measures in order to increase the efficiency of public administration
and infrastructure.
Threats: -
1 Strong Trade Union presents and protests.
2 High level of income disparity.
3 Corruption in government offices.
As per the above analysis it is clear that it is more suitable to launch Almarai brand in Sri Lanka with milk
powder and then move into other segments gradually.

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5.0 Marketing Activities for Launch of Almarai in Sri Lanka

Almarai is not well known brand among majority of Sri Lankans, in order to have successful brand
establishment it is essential to build awareness and brand affinity through different touch points. Marketing
strategy will be set for two years building the consumer awareness and key brand attributes. Below is the
suggested launch campaign to effectively launch Almarai milk powder in Sri Lanka.

5.1 Advertising Launch Campaign

The Milk powder industry is strong and establish market in Sri Lanka, Fonterra leads the milk powder
market in Sri Lanka with three main brands Anchor, Raththi and Anlene catering to different need
segments. All these brands are well establish and continually on different platforms advertising. In order
to build brand affinity it is essential to advertise on a high frequency and high reach campaign in the
beginning. The Sri Lankan traditional advertising medium are the still primary source of effectively reaching
consumers. The launch campaigns should contain TV and newspaper advertisements to build awareness.
Then TV talk shows and PR should sub secretly support brand claims by providing general population with
additional information. Milk powder industries main three drivers in Sri Lanka is awareness, price and taste.
In store sampling should be carried out coupled with price off promotions to induce trail creation.

5.2 House Wife Forums

Housewife or the mother of the house is main decision maker of grocessary list in Sri Lanka. So building
trust and awareness among women 30 – 50 years old is critical for success of the brand. In order to build
trust local house wife forums and clubs should be sponsored and sampling should be carried.

5.3 Local Brand Ambassador

It is essential to take local brand ambassadors and localize advertise to show case its relevance to Sri
Lankan culture. Best way to build trust is to affiliate medical professionals or public figures who respected
for knowledge based achievements in their carrier as ambassadors.

5.4 Retail Promotions

Sri Lankan’s have heavy attraction towards promotions on price or either as banded product offer.it is
essential to be on continues promotions and establish value for money to attract new users and improve
trail creation. Best method is couple promotions with in store wet sampling.

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5.5 Sampling
While media coverage is done high reach and frequency and building awareness, research shows sri
Lankan trail creation is below 23% As per Nielson.Sri Lanka consists 5.4 million households as per LMRB
and it is crucial to conduct minimum 4 million wet samples to attract sustainable level trail creation with in
first six months.

6.0 Conclusion
The purpose of the report is to evaluate present the marketing plan to launch Almarai Milk powder in Sri
Lanka. Our finding suggest that Sri Lanka is suitable market for Almarai to expand its business and enter
the market with introduction Milk powder. There is immense opportunity for other segments like juice,
cheese...etc. to be evaluated in future.
The complete launch campaign is suggested with two year marketing campaign suggestion, distribution
set up and localization of brand without losing its international appeal. Localization of brand is crucial as
competition drives on this platforms, yet essence and expertise of being international brand should not be
lost. Marketing and distribution plays hand in hand in terms creating trails and awareness to build the
brand.
As final note the Almarai is presented with great market expansion opportunity coming to Sri Lanka as its
geographical location is ideal to then move into other south Asian countries also.

7.0 Reference

• Daily News. (2020). Recent trends in milk production and consumption. [online] Available at:
https://www.dailynews.lk/2019/04/05/features/182279/recent-trends-milk-production-and-
consumption [Accessed 14 Jan. 2020].
• Preiss, R. (2020). Sri Lanka's Market: An Investment Gem Hidden In Too Much Pessimism. [online]
Forbes. Available at: https://www.forbes.com/sites/rainermichaelpreiss/2019/08/07/sri-lankas-
market-an-investment-gem-hidden-in-too-much-pessimism/#7093e17c5df6 [Accessed 14 Jan.
2020].
• Forbes.com. (2020). Ten Reasons To Invest In Sri Lanka. [online] Available at:
https://www.forbes.com/sites/jonspringer/2014/10/30/ten-reasons-to-invest-in-sri-
lanka/#67d3e17a3c1b [Accessed 17 Jan. 2020].
• UKEssays.com. (2020). Overview Of The Company Almarai Business Essay. [online] Available at:
https://www.ukessays.com/essays/commerce/overview-of-the-company-almarai-business-
essay.php [Accessed 17 Jan. 2020].

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