BPMM: MARKETING MANAGEMENT

GROUP PROJECT 4:
AL AIN DAIRY: MARKET EXPANSION

GROUP MEMBERS:

1. AHMAD FADZIL BIN MOHAMAD (825601)

2. SHUHD SALEH BASURRA (826427)

NAME OF LECTURE: DR. NOR PUJAWATI MD SAID

SUBMISSION DATE: 16 AUGUST 2020

1.0 INTRODUCTION

Al Ain Dairy began in 1981 as the first dairy farm in the UAE. It was set up under
the directives of the late H.H. Sheikh Zayed Bin Sultan Al Nayhan. At that time, they
had only 200 head of cattle, all imported from Australia. Al Ain Dairy’s challenge was
to provide consumers with an alternative to powdered milk or recombined canned
milk. A milk processing plant was commissioned the same year, and for the first time
consumers in the country were able to purchase locally produced fresh pasteurised
milk and yoghurt from their supermarkets. Over the last five generations, they have
not imported a single cow. Today, Al Ain Dairy has 5,000 heads of cattle in three
farms.

In 1996, Al Ain Dairy was merged with Al Ain Poultry to form Al Ain Farms for
Livestock Production with a paid up capital of AED140 million (1 USD ¼ 3:68 AED).
Under the directives of the UAE President, almost 54 per cent of the shares of the
newly-formed company were distributed freely to 7,600 low income UAE citizens
including widows and orphans. The company growth has been healthy: Al Ain Dairy
grew in double figures by 12 per cent. This is remarkable as the rest of the world
struggles with recession and the organic market prediction for growth this year was
only 6 to 7 per cent, organic growth. Al Ain Dairy sources 70 per cent of the milk from
its own local farms and 30 per cent from local farms. The farm currently produces
210,000 litres of milk and up to 80,000 litres of juice per day.

There are four basic values that guide the management leadership which is
people, customer relationship, business conduct and commitment to the environment.
Lastly, the success of Al Ain Diary depends on the conduct, professionalism and
responsible attitude of all employees and its leadership and successfully received the
ISO 22000 in year 2010.

2.0 CHALLENGE

Al Ain Diary company challenges in order to expand their business. First challenge
is providing the consumers with an alternative to powdered milk or recombined
canned milk. This challenge was face at the beginning of the business start, which is
in conclusion Al Ain Diary is new to the to market and lack of consumer need
knowledge. Well, they managed to overcome this issue later with a proper study and
research of the consumer need and wants. Moreover, they managed the consumer
able to purchase locally produced fresh milk and yoghurt from their supermarket.

Secondly is increasing production capabilities. By increasing the product

capabilities create a healthy growth line in the business. To overcome this challenge,
the company should have a good management and leadership. As said, they were
able to face this challenge by implementing four basic values. People, Al Ain Diary
comprises with 5 main executives to handle production capabilities. Second is
customer relationship; without customer this business cannot achieve rapidly. They
must strive to offer consumers a wide variety of choice and high quality and safe
product in order to attract the consumer to buy our product in the market. They were
always keep on promoting of their product in newspaper, online, magazines and more
reachable platform. Third values are business conduct, they conduct their business
with integrity and fairness and the same high standard from their reputable and
recognized suppliers and the last value is about commitment to the environment, they
commit to invest in protecting the environment such as water management. The
management always monitor the waste, water and emissions working frequently. This
values makes them to achieve the first companies in introduce recyclable PET bottles
in the UAE.

Next challenge is the supply chain management. Logistics in business are

important for those business dealing with fresh milk. They must transfer the process
milk to the supplier within 3 hours after the get the milk from the cow. In order to
produce safe products such as Al Ain Diary will make sure less bacterial infection.
The temperature is must kept in constant 4 degrees Celsius. These is the big
challenge and must supply all the process milk and juice safely to retailer without
facing any lost. They management give the important in supply chain to reduce all the
unnecessary expenses. While, the van used to make up to 20, 40 calls in order to
ensure and monitor the retailers maintain the required temperature for the stock.
3.0 SITUATIONAL ANALYSIS

In SWOT analysis we should often ask and answer questions to generate

meaningful information for each category to make the tool useful and identify their
competitive advantage. Strengths and weakness are frequently internally-related,
while opportunities and threats commonly focus on the external environment. In Al
Ain Dairy we can conclude the below in regards to SWOT Analysis:

Strengths: The benefits for Al Ain Dairy are they can create a brand recognition
and customer loyalty towards their products before the competitors enter the industry.
Normally, competitors will set a pioneer company as a benchmark for them to earn
the market share and success.

Weaknesses: Great investment needed for expansion. Al Ain Dairy would reduce
costs this means identifying areas in countries that are more fertile and cheaper to
operate and building a secure supply source. Al Ain Dairy needs to priorities its
investments for the next few years. Extensive budget needed for advertising and
marketing but still insufficient to meet local market needs.

Opportunities: KBB embark on cost reduction program through reducing waste,

improving manpower and machinery efficiency. Also managed to pass some costs
down to the consumers through increasing price.

Threats: Elements in the environment that could cause trouble for the business or
project. Different countries may impose a different regulation to the seller. The
purpose of the regulations is to protect a local product and to control the volume of
an imported product in their country.

4.0 PROPOSED SOLUTION

We can suggest some sort of solution for Al Ain Dairy in order to overcome its
weaknesses and improve their current situation. One of these solution that Al Ain
Dairy can implement is:
1. Construct an efficient and effective supply chain - An efficient and effective supply
chain is measured by how the company able to perceive their product to the
consumers within the time frame. Having a good supply chain helps Al Ain Dairy
to boost the sales and profit, increase the service quality and dynamic inventory
reposition. To make it run smoothly and earlier prepared for change of demand of
a product, Al Ain may refer to the previous sales or sales history and collect
information from the social media.

2. Hire a vendor manage inventory - Since Al Ain have a wide distribution of product,
it is advisable for them to have a vendor manage inventory. Vendor manage
inventory helps to maintain a good relationship between both parties’ consumers
and supplier. Besides, it will increase the inventory turnover rate and reduce the
administrative cost. VMI assist by order a product on behalf of a consumer base
on the information collected. The benefits of the VMI is to eliminate the out of stock
situations.

3. The operational strategies could imply low costing of products in a better way as
well. The advent of new technologies in a very short span of time in market needs
a special attention.

4. Should be a regular feature in their strategic planning as the growing heat is taking
its toll and the need for the milk and its various products, need to produce at a
higher rate and a higher amount to meet the needs.