Volvic Water in Saudi Arabia - Example

Volvic Water in Saudi Arabia VOLVIC WATER IN SAUDI ARABIA Summary Saudi Arabia is an ideal location for selling water. This is because the Middle East region has an adverse deficit of water, and the area is subjected to high temperatures that make it difficult for individuals to stay cool. For a water company, it is the best location to sell water, regardless of the packaging strategy. Saudi Arabia is rich in oil, which means that the country has a lot of revenue generation through exporting oil. The country has a high turnover in revenue; hence, it is able to import valuable commodities such as water (Laermer, 2007). The major problem stems from the fact that the country is mainly surrounded by salty water, which is difficult to purify to obtain fresh water for consumption. The region has few rivers due to lack of water generating essentials such as trees and mountains. In addition, the vast amount of sand in the region presents a challenge for the country (Saudi Arabia) and the region (Middle East) to grow any crops. This is among the facts that have resulted in the region having increased imports, especially food and water. Market Research Based on this geological situation, establishing a water company in Saudi Arabia will be strategic and profitable. Importing water into the country will be the major factor in terms of production costs. The marketing should be based on providing various water quantities, which will vary on the packaging method (Aaker, 2008). The company’s objective should focus on varying the purchase options, which will vary from consumer to consumer. These needs may vary depending on the situation of a consumer (single, married, size of family among other factors). Market analysis will be fundamental in terms of understanding the behaviors, tastes and preferences of the market. The company should focus on dealing with more than one market segment, as the product does not need to be modified based on the different segments. The need of market research is to establish the various segments that structure the general market. Understanding the market will provide an analysis of the loopholes, or the needs that are catered to by competition (other water companies). The strategy should be based on addressing the shortcomings of the competition in order to establish the company in the market. It is considered as taking the opportunity to establish the company as a possible threat to competing companies. The element of market research should encompass the need to develop a high level understanding of the market (Kotler, 2006). As a new company, entering competitive market will be a challenge, hence the water company must seek to identify an opportunity to enter the water market and develop into a leading company in Saudi Arabia. Growth will be important, hence, the company cannot start making profits overnight. However, by selecting a factor that will provide a catalyst for growth, it will ensure that the company can evolve in the country and manage to create a large market that can translate into a high volume of sales and revenue. In the long run, the company can consider venturing or expanding into near-by countries such as Yemen and Bahrain (Gupta, 2005). The market research should initially seek to establish the various market segments that are already present in the water market. This will provide an understanding of the various niches that exist. Having segments of the market will allow the company to understand the factors influencing the sales, as well as the marketing strategies based on the manner in which the company will be packaging the products. Market Analysis The market research should provide essential data that can provide an indication of the next step for the company. The data should provide an understanding of whether the company will be able to sell water to each market segment or focus on a single segment that will be beneficial to the company. The most logical strategy will be to deal with each segment, especially because the company is seeking to establish itself in the water company business. The company should be able to structure itself based on the results of different market segments. The cost of catering to the various segments will not be high because the product does not need any modifications. The only factor that requires a change is the method of packaging or any additional factors that may come with the product, for instance, providing water for a consumer and purchasing a tank for storage. Such is the nature of market strategies, and hence, it is important for the company to assess its limitations and possible measures that can be utilized in developing the company as a brand. This will allow the company to avoid excessive costs and also ensure that the company works within its limits (Laermer, 2007). With the company diversifying into various market segments, various options will be available for it at the beginning of product selling. This will be beneficial because even though market research can provide data that will illustrate the nature of the market, testing the market is the best solution in obtaining essential information about performance of the company across the various segments (Kotler, 2010). It is not certain how the market will react to the company product, hence providing the product in the market will produce the essential data that will reveal the next course of action regarding whether the company should still target a large number of market segments, or whether it should deal with a single market group based on production costs. Marketing Strategies Marketing strategies will be based on the consumer targets. The essential nature is to entice the consumers into buying the product on a psychological level, by tapping into the preferences that they value in life. For example, when targeting children, it is essential to generate fun in an advert or other marketing strategies because children focus on fun as the ideal nature of their behavior. In the case of working adults, tapping into financial benefits will make the product more appealing to the adult consumer. As for working adults, providing factors that will make their life simpler (as old age makes them require simple things) will lead them to want to buy the product (Gupta, 2005). Therefore, after the company has established the nature in which it will sell the products, creating a marketing strategy that will appeal to the targeted audience will serve to improve the probability of selling the product. In this case, it is a universal necessity, and therefore, it is vital to create universal strategies that are intent on targeting the global market. In this case, the most ideal strategy would be based on the individuals that are more likely to purchase the product, which is the working adult (because they have a disposable income). The main factor is ensuring that the product is appealing to the consumer; hence, it is important to consider the factors that influence consumer (Gregson, 2008). A major factor is a cultural background. Culture is the foundation on which a person’s values, beliefs and behavior are based. They are the determining factor of how individuals will respond to various things and whether they will buy a certain product. Hence, since Saudi Arabia is based on Muslim culture, ensuring that the ideologies expressed by the company do not affect the Muslim culture, the company will appeal to consumers. Another measure is to integrate the culture of Saudi Arabia. This can include putting the writing on the water packaging in Arabic (and English for those who may not understand Arabic) (Aaker, 2008). In terms of packaging water, it should be diversified to increase sales in the company. The packaging should be done based on small consumption that is small water bottles for medium consumption, big litre bottles, such the ones used in water dispensers, and even for household consumption (using water tanks). This variation in packaging will facilitate the important element of the company being able to reach the general market audience by tapping into the various and probable market segments. It will also allow consumers to change tastes and preferences but still buy water from the company (buying big or small water bottles depending on the need at the time of purchase) (Nagle, 2002). Pricing Strategies Pricing of water should originally be based on undercutting the competition; hence, it should be reduced compared to the competition since the company is in the inception stage. However, the price can gradually begin to increase as the company gains popularity in the market. This is because Saudi Arabia is considered to be among the richest countries in the world - a fact attributed to the huge production of oil. Therefore, most families have a good income, and buying water will not be a problem because water is a need rather than a want (Kotler, 2006). Needs tend to have more value than wants, and as a result, consumers tend to spend large amounts of money to obtain needs. The fact that there is a deficit in water in Saudi Arabia is evident to the country (Gregson, 2008). This implies that water as a product will have inelastic demand even as the price increases, which means that the company can make a lot of money from selling water in the country. However, at the start, the pricing should be based on generating a market and still manage to cover costs for the company. Conclusion Saudi Arabia is an ideal region or market to establish a water company. The country suffers from a water deficit due to the high temperatures and sand that cannot retain water for generating or growing trees, which can provide water through rain. It is a need in the country and the company will not be affected by fluctuations in price of water due to inelastic demand. As a result, it will be important for the company to utilize strategic methods that are based on entering the market and being able to compete with established water companies. To accomplish this, market research will provide the company with knowledge of how to enter the market and gain a customer base, ensuring the company is successful in Saudi Arabia. References Aaker, D. (1998). Strategic Market Management. California: Wiley. Laermer, S. (2007). Marketing. New York: Harper Collins. Kotler, P., & Keller. K (2006). Marketing Management. Washington: Prentice Hall. Gupta, S., & Lehmann, Donald R. (2005). Managing Customers as Investments: The Strategic Value of Customers in the Long Run. Upper Saddle River, NJ: Pearson Education/Wharton School Publishing. Kotler. P., & Armstrong, G. (2010). Principles of Marketing. 13th Ed. California: Prentice Hall. Gregson, A. (2008). Pricing Strategies for Small Business. Self Counsel Press. Nagle, R. (2002). The Strategy and Tactics of Pricing. California: Prentice Hall. Read More