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Introduction
Al Nassma Chocolate LLC, a UAE-based brand, is the first company to offer camel milk chocolate globally (Divecha 2014). The firm was founded in 2008 in Dubai with a mission to offer flavored camel milk-based products with added health advantages to consumers. For a successful international expansion, consideration of potential market bottlenecks, product/price analysis, and macro-environmental analysis is necessary to formulate effective competitive strategies for Al Nassma.
Spain, given its unique cultural heritage, is a market of choice for Al Nassma’s entry into Europe. Establishing a physical store in Barcelona would supplement the firm’s current e-commerce model and enhance its presence in the European markets. The primary objectives of this report include analyzing the Al Nassma brand using the 4P’s model and recommending appropriate marketing/sales and communication strategies for the firm’s flagship store in Barcelona.
Theoretical Framework
The marketing mix, a theoretical framework rooted in the microeconomic model, provides the ‘4Ps’ for developing strategies and tactics in a competitive environment. It helps determine, anticipate, and meet customer needs profitably (Hughes & Fill 2007). Using this tool, Al Nassma can determine the appropriate product offerings, pricing, delivery process, and marketing communications for the Spanish market. The earlier model contained four elements (4Ps), namely, Product, Price, Place, and Promotion (Hughes & Fill 2007).
Three Ps were added to the original marketing mix – People, Process, and Physical evidence – to give the current 7Ps model (Hughes & Fill 2007). A comparison of the two models would help identify the best framework for developing Al Nassma’s marketing strategy for its physical store in Barcelona.
The 4Ps Matrix
Product
Successful firms do market research to determine what consumers want and develop an appropriate product or service for each identified segment (Hughes & Fill 2007). In-demand products have the right attributes and quality that meet current and future consumer expectations. In this regard, an internal system for Al Nassma to measure the Spanish consumers’ perceptions, needs, and quality expectations is important.
Price
A product’s worth is determined by the price at which a buyer is willing to purchase it. In this view, the price should be competitive but not too low to affect profits. Price is a key element of the 4Ps matrix as it determines a firm’s profit margin. The important considerations in pricing include setting prices based on the customer’s perspective and taking into account value-adds and after-sale services (Hughes & Fill 2007). Al Nassma could consider a premium pricing approach, which is often associated with superior quality products.
Place
A firm must deliver its product or service “at the right place, at the right time, and in the right quantity”, while maintaining optimal levels of inventory and minimal costs (Hughes & Fill 2007, p. 48). The place or store must be convenient for the buyer, especially for brick-and-mortar businesses, such as Al Nassma’s Barcelona store. Also, the supply chains and logistics must be streamlined to ensure timely delivery and avoid delays. Optimized delivery mechanisms and websites could be critical for Al Nassma’s online store that involves limited direct interactions with customers.
Promotion
Promotion refers to the means Al Nassma may utilize to communicate its offerings to the target market. According to Hughes and Fill (2007), promotion includes a firm’s “branding, advertising, PR, corporate identity, social media marketing, and sales management” that aim to persuade a consumer to choose its brands (p. 52). Promotional activities should inform the consumer about the key product benefits and attributes and pass product knowledge to the users.
The 7Ps Matrix
In addition to the 4Ps described above, the 7Ps matrix contains three more elements.
People
Frontline staff interacts with customers directly during a sale event. The impression they create has a profound impact on customer satisfaction and brand reputation (Yelkur 2000). Therefore, the salespeople must be well-trained and highly motivated individuals to address customer complaints appropriately. Al Nassma’s online interactions should be formal and frequent to boost review ratings.
Process
The entire production process, including the delivery component, contributes to customer satisfaction before and after the purchase. The shopping experience, waiting times, and support received from staff influence customer satisfaction. Consumers require assurance that they are purchasing from a “reputable or authentic supplier”, therefore company systems should aim to optimize the production and delivery process (Yelkur 2000, p. 107).
Physical Evidence
Customers often prefer well-known products to unfamiliar ones, which are often considered risky. Al Nassma can eliminate this uncertainty by increasing customers’ confidence in their products. Having brick-and-mortar operations, an easy to navigate homepage, and a customer feedback mechanism, can help reassure buyers and enhance brand credibility.
While the 4Ps model focuses on product factors, the extended 7Ps matrix provides a framework for optimizing service delivery. Therefore, the 4Ps matrix is appropriate for product marketing while the 7Ps matrix is suited for service delivery. Since Al Nassma is a flavored camel milk brand/product, the 4Ps matrix will be used in this report to define an appropriate marketing strategy for the firm.
Marketing Mix
In developing competitive strategies using the 4Ps marketing mix, Al Nassma must consider the potential rivals (indirect) in the market, their chocolate products, and their strengths and flaws. Additionally, the firm has to analyze the characteristics of the main segments in the Spanish market, particularly its target geographical market of Barcelona. In this way, Al Nassma will be able to refine its 4Ps for a successful entry into this market.
Marketing Mix Strategy for Al Nassma
Product
A product strategy entails an elaborate scheme or plan for introducing an established brand in a new market. The key considerations in formulating product strategies include quality, quantity, and pricing (Yelkur 2000). Al Nassma already boasts of a luxury brand with additional health benefits for consumers. The strategy for the Al Nassma brand should emphasize luxury and exclusivity to distinguish it from existing milk chocolates. There are many comparable brands in the Barcelona market. Therefore, focusing on being different and exciting as opposed to mass production will help the firm create customer value and meet customer expectations.
Place
The choice of an ideal place for Al Nassma Barcelona store will be critical for its success in this market. An appropriate place will help reduce distribution costs and mitigate supply chain risks. Chocolates are fast-moving consumer products, and therefore Al Nassma requires reliable suppliers of quality camel milk and cocoa beans in Barcelona. In this view, the firm should consider selecting a central location in the metropolis for its store to provide its brands at the right time and place to the middle-aged professionals (30-55 years) with high incomes (>€30,000 p.a.), a demographic that constitutes Al Nassma’s primary target segment. In addition, a strategic location will facilitate linkages with suppliers and distribution outlets.
Pricing
Price is a key determinant of consumer demand for a particular product. The key considerations when determining price include production cost, product quality, and the pricing of rival products in the market (Yelkur 2000). Therefore, a firm’s pricing strategy considers the costs incurred, the nature of the competitive environment, and product quality. Al Nassma’s strategy for its milk products should take into consideration the cost of producing the chocolate camel milk in Barcelona, its profit margins, and the prices of other chocolates sold in this region. However, given its luxury and exclusivity status, a premium pricing strategy would be appropriate.
Promotion
Promotional strategies are useful when launching a product in a new market to create awareness. Promotional activities may involve local media ads, posters, social media ads, and newspapers, among others depending on the target demographic. Al Nassma could employ is a promotional campaign where buyers receive a free chocolate bar for an equivalent quantity bought to enable Spanish consumers to get used to this unique brand that is limited to the Middle East.
An additional strategy for Al Nassma could be product placement and ads in mainstream media in Barcelona, such as radio programs, TV, and newspapers. Such ads should emphasize on the nutritional benefits of flavored camel milk over conventional chocolates.
Sales Strategy
Firms need diverse competencies to support b2b marketing and sales activities in a complex and competitive market environment. Therefore, a collaboration between marketing and sales departments is required to attain value-based selling and profitable growth. Hughes and Fill (2007) describe value-based selling as a strategy focusing on the “true worth and benefits” a consumer receives by utilizing the product or service being promoted (p. 55).
It encompasses a well-coordinated and seamless approach to a sales strategy development and implementation. Value-based companies often design, customize, and communicate product value to customers while other organizations fail to focus on tailor-made or well-communicated value, a practice that erodes consumer loyalty and affects revenue growth or ROI.
In practice, the marketing or sales department develops the sales strategy executed by the field staff. Hughes and Fill (2007) explain that these strategies are usually ineffective because they do not reflect customer needs or are poorly understood by the sales reps.
Therefore, sales and marketing are interdependent entities that a firm can leverage to create a strong value proposition. Each department has unique information about customers and business rivals, segment-specific characteristics, value propositions, effective sales tools, sales/communication channels, and motivation systems (Hughes & Fill 2007). Therefore, integration between sales and marketing is required for a strong value proposition.
Al Nassma could use a value proposition to sell the camel chocolate bars in its Barcelona store. The sales strategy should communicate the health benefits, price, and value that a customer receives from the Al Nassma product. The firm’s product sells at about $50 for a 70g bar, making it costlier than comparable chocolates in the market (Divecha 2014). Thus, a value proposition approach can help the company to cultivate a position of brand exclusivity and maintain its brand image of luxury and indulgence. The sales team could explain to the customers how the price is consistent with the product’s value or quality.
The second sales and marketing technique for Al Nassma could be mass brand awareness. The concept of flavored camel milk may be new to the Spanish market; therefore, a media campaign to build brand awareness and increase acceptance is required. Al Nassma could place ads in mainstream media, including television, newspapers, and health magazines to generate a buzz among older consumers. Product placement in healthcare programs is another cost-effective method for informing potential consumers about the health benefits of camel milk. The approach will also distinguish Al Nassma from other chocolates in the market and reinforce its image as a luxury product.
The third technique could involve an e-marketing strategy to reach younger professionals in Barcelona. The strategy may involve online stores, ads in heavy-traffic sites, and search engine promotion. Emphasis on the health values of the chocolate, including its low-fat content and rich vitamins, could draw health-conscious consumers. The e-marketing strategy should also include discount schemes for bulk buyers.
For instance, buyers should receive smaller chocolate for one bar bought to create a buzz that will translate into sales. Awarding loyalty points to frequent buyers would benefit Al Nassma in the long-term. Providing differentiated products with wide-ranging flavors, such as orange or citrus, could appeal to diverse attitudes and preferences.
Communications Strategy
A holistic communications strategy for Al Nassma should involve creative content and the use of multiple channels to reach mass audiences. The aim is to inform or persuade the target customer segments to buy the product. Kotler and Keller’s (2011) marketing communications mix outlines eight channels, including advertising, sales promotion, personal selling, and direct marketing, among others. The Al Nassma’s target market could use different channels to communicate with the older (above 45 years) and middle age (30-44 years) segments.
For the older segment, advertising and personal selling could be the appropriate marketing communications channels. This generation is nearing retirement, spends less, has financial stability, and exhibits high health consciousness (Howell 2012). Thus, adverts targeting this segment should involve an element of nostalgia or health benefit to appeal to this demographic. In addition, individuals at this age tend to be emotionally bonded to a brand if they feel that their issues are addressed properly. Therefore, personal selling involving sales representatives respond to queries could be a successful strategy for this segment because of the interactivity element.
On the other hand, the younger target segment (30-44 years) often entails family-oriented individuals, high spenders, tech-savvy people, and leisure lovers. They are at the peak of their career but have limited time due to work commitments. Therefore, adverts placed on social media, websites, and search engines could be successful in reaching this segment. Studies show that the younger generation is brand conscious and highly exposed to multiple media outlets, including the internet (Bennett, Saga & Dees 2006).
They are also fashion-conscious, which makes media advertising, interactive marketing, word-of-mouth, and events and experiences the effective communications channels for this segment. These channels carry a sense of fashion that resonates well with this demographic.
I would use advertisements through traditional media, e.g., TV, to reach the older segment. In this case, Al Nassma will be portrayed as a healthy alternative to regular chocolates to create an emotional connection with the older audience. On the other hand, I would use the online communication channel as a quick and efficient way of reaching the middle-age generation. The product will be portrayed as a fashionable and ‘luxury’ product. Al Nassma could measure the effectiveness of advertisements based on the number of chocolate bars sold monthly. On the other hand, the effectiveness of the online communication channel could be measured based on the number of visits to company website and consumer product reviews in the blogosphere.
References
Bennett, G, Sagas, M & Dees, W 2006, ‘Media preferences of action sports consumers: differences between generation X and Y’, Sport Marketing Quarterly, vol. 15, no. 1, pp. 40-49.
Divecha, D 2014, Al Nassma Enters Global Market. Web.
Howell, R 2012, Market Segmentation: the Importance of Age Cohorts. Web.
Hughes, G & Fill, C 2007, ‘Redefining the Nature and Format of the Marketing Communic84ations Mix’, The Marketing Review, vol. 7, no. 1, pp. 45-57.
Kotler, P & Keller, K 2011, Marketing Management, Prentice Hall, New York.
Yelkur, R 2000, ‘Customer Satisfaction and the Services Marketing Mix’, Journal of Professional Services Marketing, vol. 21, no. 1, pp. 105-115.
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