Final repot

Marketing Mix and The Sustainability for

Almarai Saudi Company

Table of Contents

1 Introduction:.......................................................................................................................3

2 Marketing Mix:...................................................................................................................3

2.1 Marketing Mix 4P’s and 7P’s:.......................................................................................3

2.1.1 Product:................................................................................................................3

2.1.2 Price:....................................................................................................................4

2.1.3 Place:....................................................................................................................6

2.1.4 Promotion:...........................................................................................................7
 2.1.5 People:.................................................................................................................8

2.1.6 Process:................................................................................................................8

2.1.7 Physical Environment:..........................................................................................9

2.2 Marketing Mix 4C’s:......................................................................................................9

2.2.1 Cost (Pricing and Cost Structure).......................................................................10

2.2.2 Customer Wants and Needs:.............................................................................11

2.2.3 Communication:.................................................................................................11

2.2.4 Convenience:......................................................................................................11

3 The Company’s Strategy:..................................................................................................12

4 Differentiation and Competitive Advantage:....................................................................12

5 Coping with Commoditization:....................................................................................13

6 Segmentation:...............................................................................................................13

7 Branding:.......................................................................................................................14

8 Managing:.....................................................................................................................15

9 Role of Internet in Marketing:.......................................................................................16

10 Stakeholder and Sustainability......................................................................................16

11 TBL:...............................................................................................................................17

12 Conclusion:...................................................................................................................17

13 References:................................................................................................................
1 Introduction:

Almarai is a dairy food company founded in KSA 46 years back as an initiative done by a

Saudi prince in partnership with two groups to improve the economic and social system of the
Kingdom. Its core product was dairy foods like Yogurt, Cheese, and milk but then its portfolio
was expanded with a variety of products such as juice, poultry, and so forth. Although
Almarai outspread to Egypt, Bahrein, Kuwait, Jourdan, Oman, and the United Arab of

Emirates, it has many competitors such as Al Safi Danone, the National Agricultural
Development Company, the Saudi Dairy and Foodstuff Company, and so on.
This study aims to analyze the marketing management of the company to figure out to
what extent the marketing strategy of the company is sustainable, what are the gaps that
should be considered by the firm management, and what recommendations should be
highlighted for the company to improve its competitive advantages.

2 Marketing Mix:

The marketing mix is a strategy introduced by Neil Borden in 1953 to improve marketing
management through different processes. According to [CITATION PhD22 \l 1033 ].
Marketing Mix 4P’s was introduced by McCarthy in 1464 including 4 processes starting with
the letter P for; product, price, place, and promotion. This strategy, according to[CITATION
Gra20 \l 1033 ] had been undergoing some additions until 1981 where Booms and Bitner
introduced the 7P’s strategy by adding three more Ps namely: people, physical evidence, and
process.
Almarai Company is practicing a unique marketing mix taking into consideration
sustainability wise and here we can use the famous marketing mix strategies such as 4Ps, 7Ps,
and 4Cs to analyze the marketing management of the company.

2.1 Marketing Mix 4P’s and 7P’s:

As the 7Ps strategy emerged as completion of the 4Ps one, the few coming lines will be
discussing all Ps starting from product and ending with the physical environment just as
follow:
2.1.1Product:

Almarai company is a multi-product company that produces milk, cheese, cream, yogurt,
dairy desserts, and juices [CITATION CAS07 \l 1033 ]. About one-fourth of its milk is being
sold in two types low fat and full fat where the rest of the milk is converted into yogurt and
different types of cheese. However, the main product of the company is milk and its
derivatives the company diversified its portfolio by producing bakery, poultry, and juices
taking into consideration “Quality you can trust” [CITATION Alm20 \l 1033 ]. The table
below clarifies the Revenue Segmentation based on products.
Figure1: Sales per product – SAR Billion.

Sales by product
(SAR billion)
Other Sales

Fruit Juice

Long Life Dairy

Bakery

Poultry

food

Fresh Dairy

0 1 2 3 4 5 6
2.1.2Price:

Almarai, Al Safi, NADA, and NADEC enjoy most of the Saudi market share so the war of
competition occurs from time to time among them that is why the four companies entered into
several agreements to stabilize the prices and avoid the price wars[CITATION rec08 \l 1033 ].
Despite this business conflict, Almarai tries to satisfy its clients by stabilizing the prices but
according to [CITATION Arg18 \l 1033 ] the company had to add between 5-9% increase to
the old prices Because of the high costs of production represented in transportation, energy,
and the import of workforce and fodder. The table below shows the differences between the
old and new prices for milk and yogurt.

Table 1: comparison among prices of the milk and yoghurt .

Size Product Old price(SAR) 2018 2022
500ml Yoghurt full fat GT 2.75 3.00 3.25
1L Yoghurt full fat and low fat 4.25 4.50 6.00+9%
1L Yoghurt full fat and low-fat 4.25 4.50

GT
500ml Milk full-fat & low– fat 2.75 3.00
1L Milk full-fat & low– fat &fat 4.25 4.50 6.00+9%

free
2L Milk full-fat & low– fat &fat 7.50 8.00 10.95+10%

free

source: Argamm website, Almarai increase the prices

The company increased the price of other products just as shown in the table below for

Almarai orange juice 1.5L

FIGURE2: Different prices for orange juice.

 source: CanBkam Website

Generally speaking, the prices increase will influence negatively the acceptance of the
company Where Saudi citizens began calling for a boycott of the company's products, thereby
the company management should consider clients' concerns, more so the company should find
cheap resources for instant Sudan Country where the farming is much easier and cheaper from
one side and another it will help Sudanese people and economy to grow up in addition to the
positive impact for the environment from farming and combat desertification. The company
can find qualified employees from third world countries like Yemen which will help the
company to reduce the costs of production and so the prices will be decreased accordingly.
2.1.3 Place:

Almarai was a decentralized company consisting of five plants and ten dairy farms which
underwent several adjustments, so it became a centralized one and substituted the plants and
the farms with factories and huge farms placed in the Najd region [ CITATION Mot21 \l
1033 ]. The company plants now exist in many countries investing on different sides such as
agriculture, dairy farms, and manufacturing. The table below shows where and for what the
company exists.
FIGURE 3: Existence of Almarai company per places.

Almarai company existance

1.2
1
0.8
0.6
0.4
0.2
0
Saudi Arabia UAE Oman Bahrein Kuwai Jurdan Egypt USA Romania Argentina
Arable farms Dairy farms Poultry farms Manufacturing Sales depots 2

Source: Almarai.com
Although Almarai outspread in different countries there are still some important places where
the company can invest, such as Yemen, Syria, Iraq, and so forth. The fourth mentioned
countries have a lot of natural resources such as water, arable areas, and poor people who are
willing to work with low wages, so the company can get the benefit of such resources.
2.1.4Promotion:

The promotion strategy of Almarai company is well designed using social media and the
internet to communicate directly with actual and potential customers to figure out their
demands and needs in one hand and to listen to their concerns and comments to react
accordingly on the other hand. According to [ CITATION You18 \l 1033 ] the company has its
profiles on Facebook, Twitter, YouTube, Instagram, and so forth in addition to the company
web site and applications which made it easy for interested buyers and job applicants to get
whatever they are looking for.
Figure4: Presence of Almarai company in Facebook and Twitter.

5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
Column1
500,000
Facebook
0
es w ts ng s os
Lik ollo wee wi wer hot
f T o lo P
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os
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Facebook Column1

Source: Journal of Management Information and Decision Sciences.

The company initiated another promotional program called the loyalty card which either be
bought directly from the company plants or to be given to important purchasers after a
significant shopping. This card encourages the consumers to increase their sail to obtain
points in exchange for their purchase because the more points the customer gets the more
likely they get one of the rewards identified by the company in advance.
The company may sometimes go further to use the traditional way of marketing by using
ambassadors for its brand within communities and motivate them to disseminate for it in
addition to the magazine and newspapers advertisements for the same purpose. These two
tactics are somehow effective but there are better ways to do the job by using TV programs,
parties, and electronic shopping platforms.
2.1.5People:

The company has a big human capital consisting of 41000 employees most of them are from
the Philippines, India, Egypt, Bangladesh, Yemen, and Sudan while the European and
American nationalities occupy most of the management positions in addition to, New Zealand,
Australia, and Saudi Arabia [ CITATION Sad07 \l 1033 ]. The company pays attention to the
safety and wellbeing of its cadres said chairman Naïf Bin Sultan Alka beer considering them
as a key pillar of the company sustainability framework thus the company completely locked
down some of the farming and manufacturing sites due to the high risk of
Corona infection as these facilities were not ready for such circumstances[ CITATION
Alm20 \l 1033 ]. The managing director of the company Bader Al Issa stated that the safety of
the employees comes first adding that more than 27000 employees live in the company’s
facilities following Covid19 mitigation measurements. [ CITATION Alm20 \l 1033 ]. Despite
the diversity of its employees, the company has to hire more than 26%, the percentage of
Saudi staff that exists in the company, so that it can guarantee the continuity of its ongoing
activities even if anything happens and likely can affect its work such as the travel restriction
for international staff during Covid19 which already trapped about 24000 workers. Regarding
capacity building, the company is very serious about training and upskilling its staff for their
benefit and the consumers in general.
2.1.6Process:

Process refers to the organized activities and procedures during which the goods are produced
by the company on time and with minimum cost therefore, Almarai company scans the
environment frequently to identify good chances and predict the bad ones which will affect
the company’s overall goal and its vision of sustainability [CITATION Sad \l 1033 ]. Almarai
Company claims the utilization of an integrated strategy of marketing where the whole goals
and capabilities are aligned with the client’s needs [ CITATION Alm17 \l 1033 ]. Milk
production is a good example where very strict procedures must be followed starting from
collecting the fodder from the best farms and taking good care of the cows on daily basis
focusing on health conditions, cleanliness, and nutrition. The milk is collected by trained staff
and transported in special containers under constant monitoring. In the factory the same
procedures are applied using artificial intelligence and the automated system to make sure that
products comply with international standards. Worth mentioning that Almarai Company has
received several awards and recognitions from different sides and institutes such as World’s
1st Pandemic Prepared Certification – AIB International, 2020, Middle East’s Top 100
Companies, and so forth.

2. 1.7Physical Environment:

The physical evidence plays an important role in the marketing process and increases the
productivity and the creativity of the employees within any company as it was proved by
several studies [CITATION Ala20 \l 1033 ] Thus Almarai made sure that its internal and
external environments are encouraging and suitable for its employees by providing them with
well-designed and good ventilated facilities and warehouses especially in some parts of KSA
where the temperature usually is very high. In manufacturing, marketing-wise, the company
makes its products in different sizes and shapes that is why Almarai products have a positive
impact on all different parties of society.

The beautiful bottles, cans, and boxes for Almarai products occupy the market's shelves and
consequently enjoy their place in the client’s memories and minds. The company should
maintain such a level of the physical environment and should find alternatives to deal with the
global increase of the production costs to avoid affecting the quality and the appearance of its
products and the wellbeing of its staff.
2.2 Marketing Mix 4C’s:

Marketing mix 4Cs is a powerful strategy used by large firms to introduce their services and
goods while small firms that started very soon may face a big challenge as customers don’t
aware of new products, especially with the emergence of digital shopping. the 4Cs is a
powerful strategy containing 4 elements that will be discussed in the following lines:

Figur5: Marketing mix 4cs.

Marketing mix 4cs

Cost Customer Communication Convenience

Source: Proceeding of the 8th International Conference on Management and Muamalah 2021

(ICoMM 2021)
2.2.1Cost (Pricing and Cost Structure)

The company made a courageous decision to increase the number of cooling containers to
ensure delivery of products on time, meanwhile, the company applied mitigating measures to
avoid any impact on coasts and prices [ CITATION Alm14 \l 1033 ]. The coasts and prices
were somehow stable until the year 2020 which witnessed a significant increase in the coasts
and prices due to the increase of the feed costs and the extra costs for COVID19 prevention
measurements. The company had to find solutions to reduce the impact such as using solar
panels system instead of generators. Though, the company tried to reduce the influence of
global coast increase, it is highly recommended to think about importing fodder from
neighboring countries like Yemen. The company also should add innovations to its
competitive products for instant enriching the nutrition and health values of the milk, yogurt,
cheese, juice, and so forth.
2.2.2Customer Wants and Needs:

Customers, in this marketing strategy, refers to anyone who uses or handles the company’s
products either a targeted one or not, so it is an important step to improve the company’s
marketing process and discover new tactics for getting more and more customers. Almarai is
fully aware of this issue, yet the company still needs to find new techniques to draw new
clients' attention. The company, as clear in annual reports 2004 and 2020, designed its
marketing strategies according to the customers’ demands and real needs. It had been digging
up among the clients to figure out their impressions of the current set of products and what
else they are expecting from the firm. On the other side, the company seriously thought about
the impact and the harm some of its products may do for the consumers such as yogurt which
in general contains some dangerous ingredients as claimed by [CITATION STE \l 1033 ].
2.2.3Communication:

The Division of Public Relations is responsible for communication externally with

shareholders, governments, organizations, and so forth and responsible for organizing some
important activities such as organizing the prize of innovation and making all the
arrangements in this regard [CITATION SAD06 \l 1033 ]. According to the annual report
2020, the committee of risk management oversees communications with all employees,
shareholders, clients, and so forth in emergencies. Almarai adopts a useful communication
system that contains:

- The online platform for internal usage only and by which the staff can get
benefitedfrom all human resources services.
- The company web site almarai.com.

- Almarai WhatsApp, Facebook, Twitter, and Instagram profiles.

The company should activate the Walkie-talkie system for quick communication and

GPS service.

2.2.4Convenience:
To make the clients more convenient, the company always tries to meet their expectations
either in products delivery or in products manufacturing. The market is full of different shapes
and kinds of products holding Almarai brands so most of the people are pleased to have such
goods. Children, adults, housewife, and so forth can find their desired stuff as Almeria
segmented its product to fit all kinds of people. On contrary, Saudi citizens and others are
getting worried about the concrete increase of the products for which the company should find
reasonable solutions otherwise the client’s compass may change to another direction.

3 The Company’s Strategy:

The company has a strategy based on three billers: innovation-based diversity, geographical
expansion, and organic growth as mentioned on the company website [CITATION Alm22 \l
1033 ].These billers helped the company to thrive and continue its success in addition to
different tactics the company developed from its long experience in this kind of business.
Hereunder, these important tactics will be discussed to figure out to which extent the company
got benefited and how can the company deal with differentiation and competitive advantage,
coping with commoditization, segmentation.

4 Differentiation and Competitive Advantage:

Competitive advantage refers to the strategy where the company can deliver products with the
same benefits that are being delivered by other competitors but with a lower price and cost or
deliver products with more benefits can others do[ CITATION wen11 \l 1033 ].Almarai
Company has its prevalence over its competitors within and outside the Saudi Kingdom
however, the company management still working hard and applying some key factors like:
 Electronic customer Relationship Management(E-CRM) [ CITATION Nai21 \l 1033 ].

 Constant participation in annual market reports about salaries and compensations to

enable the company to collect the needed data including pricing structures, payment
policies, and so on [ CITATION Alm20 \l 1033 ].
The company, according to [ CITATION Mur19 \l 1033 ] is maintaining its competitive
and differentiation advantages by the following
 The constant innovation of the company to distinguish its products from others.

 Economic efficiency as the company has a lot of plants inside and outside the country,
this thing enables the company to stay ahead of others.
 The excellent care to the livestock.

 Taking care of social responsibility as the company supports the poor and charities, as
well as sports, education, and so on.
 Monitoring clients’ opinions and finding out solutions to their problems.

 Commitment to Quality: The company maintains the quality of the products it offers,
to uphold its name and preserve the health of consumers.
Figure 6: The top five brands in Saudi Arabia 2020
 Source: Periodica Journal of Modern Philosophy, Social Sciences and Humanities
5 Coping with Commoditization:

To cope with commoditization the company tried to decrease the size of some juices cans and
to increase the prices of some other products, which caused a strong revolution among
customers and led to the boycott of products therefore, the company called off its decision in a
try to calm down its clients and applied new strategies based on the competitive advantages
for some of the products while some of its unique brands remain the same or witnessed some
increase in terms of price.

6 Segmentation:

The company started its business in 1977 for developing traditional milk manufacturing with
350 cows and kept growing up until the company signed a memorandum of understanding
with external bakery companies to enter a new business area. In 2009 the company announced
its partnership with PepsiCo company to produce juices and in the same year, it entered the
poultry sector by acquiring the Hail Agricultural Development Company [ CITATION 21 ‫\ بوغ‬
l 1033 ]. Now the company targets different Categories of society including children, adults,
men, women, and so forth inside the country and somewhere else’s outside see the figure1 and
figure 3
Figure 7: sales segmentations per places .
7 Branding:

Almarai company has five brands as clear in the below table: best of which is (Almarai)which
reaches more than 18 million consumers daily where the company produces dairy and juice
products under this brand while the second brand is ALYOUM for poultry products, Lusine is
the third brand for bakery products, Nura is the fourth one and special for infant formula and
the fifth brand which is well known as 7days for bakery products such as snacks and cakes.
The brand Rank within the company brands Products under the brand
1st in the middle east Dairy

Juice
Famous brand Poultry

Well known Bakery

Well known in Egypt Infant nutrition

Well known Bakery (snacks, cakes)

8 Managing:

Capital management plays a very important role so that all successful companies invest great
efforts in this domain and try to keep improving it as the company through a reliable and
effective business capital can cover the expenses of daily tasks by rapidly accessing its funds
including the use of the assets in an appropriate way in addition to creating a balance between
all the capitals [CITATION ‫ال‬ht \l 9217 ].
Almarai Company is successful in managing its capital, yet it still needs to apply new
strategies and find innovations to alter the status quo. The table below shows the total sales,
profit, and cash flow for the last three years 2018,2019 and 2020:
Capital management highlights.
2018 2019 2020
Total Sales (SAR million) 13,558 14,351 15,357
Net profit (SAR million) 2,012 1,812 1,984
Operating cash flow (SAR 3,669 4,732 4,203

million)
Source: Almarai annual report 2020. Fro
m the table, we can see that Almarai management sales were increasing during the last three
years, but the net profit indicates that the company reduced the profit ratio to increase its
sales. In 2020, as the people were forced to go for online marketing the company took the
opportunity to stabilize the prices which was a good move for reinforcing the trust and
improving the relationship between the company and its clients in the long term. We can
understand the differences between the profit ratios by following the formula: net profit
/Total Sales =profit per sale

2018 2019 2020

2012\13,558=0.14 1812\14,351=0.12 1984\15,357=0.12

9 Role of Internet in Marketing:

In the beginning, the internet was not meant for marketing and business-related issues more so
the firms were banned from using it until the internet was privatized by Congress in 1995
[CITATION fil \l 1033 ]. It was mentioned that a few years later the companies started doing
their businesses by using the internet platforms such as Amazon, Apple, and so forth. Other
companies realized the importance of such business and tried to have its platforms such as
Facebook, YouTube, Yahoo, Ali Baba, and so forth. Almarai had to join this global domain but
instead of creating an online platform, it decided to use the current famous ones such as
Facebook, Instagram, Twitter, and so forth as clear in figure4.

10 Stakeholder and Sustainability

According to [ CITATION Suh21 \l 1033 ] KSA is a desert country facing many challenges
about water so Almarai company paid more attention to this essential side by applying some
procedures where it started using new techniques to reduce the utilization of water during its
manufacturing and production processes. The company created strict rules about
environmental pollution trying to reduce the impact on the environment and prevent any
potential risk in the future in addition to its great initiative about the environmental balance
that started in 2010 by rewarding the best veterinarians in the country. For the people's
wellbeing, there are many activities to help vulnerable people for instance the winter clothes
and the food baskets distributed by the company, yet most of the customers are concerned
about the potential side effects from some of the products after a long stay in the stock or long
exposure to a high and low temperature such as the yogurt

11 TBL:

Triple Bottom Line (TBL) was developed by John Elkington covering three dimensions of
sustainability namely: the economic dimension, the social dimension, and the Environmental
dimension. He claimed that business activities should create good solutions to lead the firm to
sustainability by benefiting simultaneously the society, environment, and the business in the
first place. It helps the managers to figure out good chances to develop competitive
advantages via these three sustainability dimensions [ CITATION Mar14 \l 1033 ]. Taking
about Almarai Company concerning TBL, it is clear that:
For business, the company has been expanding over the Arabic geographic area in terms of
manufacturing, producing, and marketing where its products are very famous in many
countries in the Arab world. The company pays more attention to the quality of its product and
revenues.
 Socially speaking, the company serves a lot the Saudi society by offering them good jobs,
supporting charities, supporting sports activities, and so on.
Almarai Company is moving forwards to be a sustainable company where it started using the
solar system to produce electricity, importing fodders, from foreign countries, activating risk
management committees, and applying new procedures for waste management.

12 Conclusion:

To sum up, Almarai company started from scratch to improve the social and economic system
of KSA and since that time it was thriving to achieve its overall goal. The company became
the best dairy provider in the middle east and the biggest one in the globe in addition to its
good reputation in other production fields such as juice, poultry, and bakery. The marketing
strategy of the company is a mix of several tactics and procedures through which it was able
to take the lead in the Arab market besides the digital marketing the company performs to be
in touch with its consumers via social media. The company is a double-edged sword having
business with companies and individuals (B2B/B2C)and claimed to be a sustainable company
in the Arab area, however, there is a long way for the company to go for instant changing the
outstanding hiring system which is a nationality-based system and reinvestigating its products
to identify any harm the customer may have in the long shot.

13 References

Al marai Company, 2020. Anuual Report 2020, Ryadh: Al marai websit .

Alayis.M.H.M, A. A., 2020. The Effect of Indoor Environment Quality on Customer Service

Employees' Creativity in Telecommunication Companies in Saudi Arabia. International

Journal of Innovation, Creativity and Change, 13(4), pp. 1-20.
Almarai Comapany, 2017. Almarai Induction Brochure. [Online]

Available at: https://www.almarai.com/corporate/almarai/almarai-corporate-brochure-2017/

[Accessed 15 3 2022].
Almarai Company, 2014. Annual Report , Rhyadh : Almarai Company .

Anon., 2018. Argaam. [Online]

Available at: https://www.argaam.com/ar/article/articledetail/id/557827

[Accessed 15 3 2022].
Anon., n.d. Al marai. [Online]

Available at: https://www.almarai.com/en/corporate/almarai/profile/

[Accessed 10 3 2022].
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