BACHELORS THESIS

2011

AN EXAMINATION OF THE PROMOTIONAL MIX USED FOR NEW PRODUCTS IN AN ESTABLISHED MARKET.

Author: Afnan Zarief (100199597) Supervisor: Dr. Alison Lawson Date of Submission: 6th May, 2011.

B.A in Business Administration Module Name: Applied Business in Practice Module Code: 6IM003 Word Count: 12,046

ACKNOWLEDGEMENT It is a great pleasure to hereby present my Applied Business in Practice research paper. I would like to take this opportunity to send my gratitude and thanks to my supervisor and mentor Dr. Alison Lawson for her never ending support, helpful advices, valuable feedbacks, for keeping me on track and supporting whenever I wanted her to be by my side. I would also like to thank my friends in Riyadh, KSA who have been helpful throughout the writing process. My special thanks to my friend Sidra Majeed for the patience she showed in proof reading of my paper. The last one month, period of writing the research, have been filled with both expected and unexpected challenges. This research work has taught me many things including the way we look at research process and promotional mix. Today, finally after one month the writing of my research paper has come to an end and I hope that my work can contribute to my fellow students and their better understanding of the contributions of Promotional mix for new products in an established market.

ABSTRACT

This research was conducted to get the in depth ideas on the usage of the promotional mix used for new products in an established market. I started this research with an inductive approach and then changed to a deductive approach by finding the specific promotional tools which were being used by Almarai for their recently launched Vetal Digest Probiotic Laban. A quantitative, survey approach was used, to find out which promotional tools were used to promote Vetal Laban. Through the research, lots of information have been collected and learnt. As the market has developed, more consumers have started moving beyond simple motivations such as trying to lose weight or maintain normal health levels. Instead, people are increasingly looking to optimize levels of performance and wellness, in areas such as digestive and cardiovascular health. In meeting that demand, Almarai has launched their Vetal Probiotic Laban which offers numerous health benefits including the stimulation of a healthy digestion system. Almarai is a trusted brand across the GCC region, with market leadership in dairy, juices and baked goods. The largest integrated dairy foods company in the world, Almarai has particularly strong marketplace presence and distribution coverage in KSA and the other member countries of the GCC Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. In the following sections, the effective promotional tools that are used to promote new products are discussed along with the promotional tools adopted by Almarai in particular was examined and discussed in the later sections. Recommendations were being made too at the end.

TABLE OF CONTENTS
1. INTRODUCTION..04 1.1 Competitor Profile...05 1.2 Background .06 1.3 Promotional Mix..07 1.4 Aim & Research questions..08 1.5 Structure of the report..09 2. LITERATURE REVIEW 10-27 Promotional Tools..10-22 Advantages & Disadvantages of Promotional Tools.23-27 3. METHODOLOGY..28-33 1.1 Research Purpose28 1.2 Research Process.29 1.2.1 Research Philosophy...29 1.2.2 Research Approach.30 1.2.3 Research Strategy...30 1.2.4 Research Choice.30 1.2.5 Time Horizon..31 1.2.6 Data Collection31 1.2.7 Sample Selection.32 1.2.8 Data Analysis...32 1.2.9 Quality Standard..33 1.3 Limitation of the method 33 4. EMPIRICAL DATA34-47 Introduction of Almarai..34-35 Promotional Tools of Almarai39-44 Almarais Achievement...44 IMC of Almarai & Almarai Brand.45-46 5. ANALYSIS48-54 6. RECOMMENDATIONS & CONCLUSION.55-56 7. APPENDIX...57-59

INTRODUCTION
Its not only an ordinary dissertation but is a case study which holds quite an importance for the marketers which will definitely give them twofold advantage; an insight and some guidelines showing the usefulness of the tools of promotional mix applied in practice using the example of an established dairy firm from GCC Almarai Companys recently launched product Vetal Digest Probiotic Laban, their effectiveness and their pros and cons will be discussed further too. This report will likewise benefit the prospective students by providing them with an adequate knowledge on this significant field of promotion. Laban is an Arabic word which stands for Buttermilk and is a very popular thirst quenching drink and makes up an important part of the daily diet of the Arab consumer. Vetal Digest Probiotic Laban is a smooth, tasty, refreshing drink at the same time healthy drink which has gained popularity in the GCC region. As the weather of whole GCC region is quite warm in almost seven months of the year therefore people in these areas want something refreshing to drink. Therefore Laban products are popular in these areas. The target market of this product is mostly youth. Today's consumers want more than just a tasty, refreshing drink. They want a health miracle in a bottle. Gulf marketing review (2009) The health benefits which Almarai offers in Vetal Digest Probiotic are: Good source of potassium, Vitamin B-12, calcium and phosphorous. It also contains probiotics; they help with digestion and strengthen immune system. Easier to digest than regular milk because it contains even more lactic acid than can be found in skimmed milk. Has less fat than regular milk; the fats are removed to make butter. Healthy bacteria found in this drink improve digestion, boost Immunity, manufacture nutrients, protect against cardiovascular diseases and protect against carcinogens. On the other hand, Probiotics are the so-called good bacteria which help to maintain a healthy balance of bacteria within the digestive system. The World Health Organization (WHO) defines probiotics as live micro-organisms which, when consumed in adequate amounts, provide measurable health benefits. Because of all such benefits, many times physicians advertise patients to consume buttermilk instead of milk as it contains less fat, calories and skim milk. And the best part is that one can consume buttermilk anytime as a drink, which is refreshing and healthy!

The biggest competitors of Almarai Vetal Digest Probiotic are:

1.1 Competitor profile:

Al Safi Danone Company (Alsafi) Al Safi project was initiated by Royal Prince Mohammadvert Bin Abdullah Al Faysal in 1979 and he established the farm in Sahbaa valley, Kharj region. The company was basically involved in the entire range of the dairy foods industry, which included rearing cattle and yielding raw milk. In advertdition, the farm hadvert also established an integrated private factory, which processed and packed fresh milk, long life milk, as well as its various subsidiaries. At present, the company has approximately 3,500 hectares of land and has 1,400 employees. In 2001, the company entered into an agreement with Al-Faisaliah Holding Group and International Danone Group has formed a joint venture between Alsafi and French dairy. The joint-venture has allowed Alsafi to produce 165mn liters of milk per annum. Al Safi Danone is a joint venture between two giants: the French based Danone Group and the Saudi based Alfaisaliah Group since 2001.

National Agricultural Development Company (NADEC) The company was established in 1981 and has been engaged in producing the finest and healthiest nutritional products. NADEC is 20% held by the Government, while the balance of equity is in the hands of the local public. This makes the company one of the very few widely held Saudi companies. The company has a contribution to supply around 1,200tons of dried dates per year and 30mn liters of milk. The company has 4 cow farms that contain 24,000 cattle heads. NADEC has aimed to (i) reduce the dependence of Saudi Arabia on imports, (ii) increase dependability on national economy and (iii) encourage the contribution of the agricultural sector in the national product. This section looks upon the background of this research which is Promotional Mix and explores around the main tools of promotional mix. And also further discusses the aim and objectives of this research.

1.2 Background:
To make one exceptional, to be recognized in todays saturated industry, to reach the potential customer and to reach the firms goal; Promotion plays an essential role. Promotion is one of the components of marketing mix which is established in marketing theory which helps organizations to reap most of the profits from the market. Kotler (2005) Its one of the key factors in the marketing mix and plays a key role in market success. Promotion is used to make sure that a product is reaching the door of the desired consumers and that the consumers are aware of the product too. There are three basic objectives of promotion. These are: 1) To present information to consumers as well as others 2) To increase demand 3) To differentiate a product.
-Kurtz, Dave. (2010). Contemporary Marketing Mason, OH: South-Western Cengage Learning.

Consumers attentions are hard to get in this highly saturated market. Thats why marketers usually spread the communication load over several types of communication medium. The literature on the subject of Promotional Tools and its usage in the marketplace in general covers a comprehensive range of topics within the defined subject area, and for convenience, these areas have been grouped. The main tools mentioned in the literature to communicate with potential customer are: 1) Advertising 2) Sales Promotion 3) Personal selling 6

4) Public relation These basic Promotional Tools are still considered to be the main tools available to marketers. When the concept of promotional mix was first developed, the above were the only elements available to marketers. But in the past 40 years more promotional methods have been entering into the market which does not fit within these four main categories easily. For example, a logo on a T- shirt might be considered as advertising or as public relations. Blythe (2008) Promotional tools are described more below:

1.3 Promotional Mix:

The promotional mix is the direct way in which an organization attempts to communicate with various target audiences. Brassington & Pettitt (2005) Promotional mix is the combination of the different channels that can be used to communicate the promotional message to the customers. The channels to be used are: advertising, direct marketing, public relations and publicity, personal selling, sponsorship and sales promotion. Rowley (1998) Another business author Blythe (2008) has described promotional mix asPromotional mix is like a recipe, in which the ingredients must be added at the right times and in the right quantities for the promotion to be effective.

The above figure shows, how messages from the company about its products and itself are transmitted via the elements of the promotional mix to the consumers, employees, pressure groups and other publics. Because each of these groups is receiving the messages from more than one transmitter, the elements of the mix also feed into each other so that the messages do not conflict. Jim Blythe (2008) The general terms of the promotional tools are stated below and an in depth look would be given to them in chapter 2. Advertising represents non-personal, mass communication. Personal selling is at the other extreme, covers face-to-face, personally tailored messages. Sales promotion involves tactical, short-term incentives that encourage a target audience to behave in a certain way. Public relation is about creating and maintaining good- quality relationships with many interested groups (i.e: the media, shareholders, tradverte unions etc.) Brassington & Pettitt (2005) The importance of promotional mix have always been felt by marketers because of its immense effect on sales. All the channels of the promotional mix should be given equal importance to get the effective result out of the promotional campaign, which will definitely have a long term effect too on consumers if the message is sent in a proper way.

1.4 Aim & Research questions:

The aim of this research is to identify the advantages and disadvantages of a range of promotional tools used to promote new products and Almarai Vetal Digest Probiotic in particular. Based on this aim, the following research questions have been prepared: RQ1: In general, what are the key promotional tools used for promoting new products in a market? RQ2: What were the key promotional tools used by Almarai company to promote its recently launched product Vetal Digest Probiotic Laban? RQ3: Is Almarai getting expected success through the promotional tools being used? This research will also help in making recommendations for future promotion of Almarai Vetal Digest Probiotic Laban. 8

1.5 Structure of this report:

This study consists of 6 chapters and each contains the following data: 1. Introduction The first chapter gives a background to the subject Promotional Mix and is introduced with the theories of the effectiveness of promotional mix. 2. Literature Review Chapter two provides with theories presented in previous researches related to Promotional tools. 3. Methodology This chapter represents the methods used to conduct this research. 4. Empirical Data This chapter consists of the data collected from the Almarai company website, literature, journal and through observation. 5. Analysis

This chapter compares the empirical data with the results obtained from survey. 6Recommendations & Conclusions The final chapter contains the conclusions and recommendations of the research. Figure: Structure of this report

LITERATURE REVIEW
This chapter reflects on the range of literature to determine which tools are commonly used for promoting new products in an established market. A wide range of promotional tools and their usage are suggested in the literature, from which many of them are also used in combination. Following this, the literature available on the subject of the use of promotional tools adopted by Almarai in particular will be examined. The first section of this chapter will cover the main tools of promotion in general. Promotional tools in its own place are quite huge to be discussed here, therefore short description of each tools will be given. Following this, the advantages and disadvantages of the tools will be discussed. And in the fourth chapter which contains empirical data, will describe the promotional tools adopted by Almarai.

Promotional tools: 1. Advertising:

The word advertising originates from a Latin word called Advertise which means to turn to. The dictionary meaning of the term is to give public notice or to broadcast publicity. Advertisement is a paid-for medium. There is an underlying assumption that a bigger advertising spend will inevitably lead to a greater sales volume. At times, to attract consumers to buy a product, marketers even combine promotional tools, for an example, sales promotion with an advertisement through a special offer. An advert must have an unique selling proposition that no other firm possess. Artwork in an advert should be eye catching in an advert as it captures the attention of consumers as it aids recognition when consumer sees the product in a supermarket shelf. Blythe (2008) Advertising is always culturally based. This means that an advertisement shown in one country or aimed at a particular audience is unlikely to work for consumers in other countries, or for a different audience. Blythe (2008)

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While making an advert, it is important to keep in mind the cross cultural aspect of that specific region or the target customer for whom the advert is supposed to be made, because culture plays a vital role in the success of an advert. There are many advertising mediums like: television adverts, internet, radio, billboards, magazine or newspaper adverts, posters etc. Whatever the medium or style of communication is, it is essential that the message which is being conveyed is understandable by the general public and are at the same time relevant to the audience. Ginsberg (2005) once gave a valuable statement which fits exactly with our topic: Dont sell, enable people to buy This statement above intensely looks upon the importance of an advert which lures the potential customers through its strategic and well-designed depiction that are capable of touching the consumers heart and enabling them to buy a product. Among the broadly speaking two different types of creative appeals: rational and emotional, Rational appeals are more effective than emotional appeals when a product is new to the market, according to a study. Pelsmacker, Geuens & Bergh (2010). Rational appeal contains feature, practical details and verifiable, factually relevant cues that can serve as evaluative criteria. In a Demonstration which is a feature of rational appeal, consumers are shown how a product works. Its an easy way to focus on product attributes, tell about the benefits and product uses while demonstrating the product. Pelsmacker, Geuens & Bergh (2010). Making the simple complicated is commonplace, making the complicated simple, awesomely simple, thats creativity. Pelsmacker, Geuens & Bergh (2010)

Purpose of Advertising:
To create awareness of the company To stimulate demand for product To promote brand or product in particular To counteract the promotional activities of competitors To keep on reminding customers about a product To support values of companys shares from the risk of falling Blythe (2008) 11

Types of Advertising:

Source: Brassington & Pettitt (2005), Essentials of Marketing This research was based around the product oriented pioneering and competitive advertising. As the product we were going to research was recently launched in the GCC market. Pioneering advertising is used in the early stages of the life cycle when it is necessary to explain just what the product will do and the benefits it can offer. In these cases the prime emphasis in the advertising is to provide enough information to allow potential buyers to see how this product might relate to them, and thus to stimulate enough interest to encourage further investigation and possibly trial. Brassington & Pettitt (2005) On the other hand, Brassington & Pettitt (2005) also describes competitive advertising as: Its concerned with emphasizing the special features of the product or brand as a means of outselling the competition. Usually the seller seeks to communicate the unique benefits, real or imaginary, that distinguishes the product and gives it its competitive edge.

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Advertising campaign:
According to Blythe (2008), there are different categories of advert campaign to spread awareness of the product, as well as attracting maximum customers in the market. Some of them are:

Teaser campaigns: These types of campaigns are basically to tease customers. These are mysterious adverts having no meaning, just to attract consumers. After being aired for few weeks, second advert is aired by the advertiser explaining the first one. In these adverts, products are not features but the logo or brand names are showed at the end of the clip. Lifestyle campaign: This campaign targets the aspirational groups which mainly positions the product in consumers mind. Rational campaigns: According to Blythe (2008), it Appeals to the consumers cognition. This method of adverts features facts and persuade consumers through rational argument. Often authoritative figures like doctors, dentist, and scientist appear to lend more weight to the argument that is being shown. Before taking the decision of making an advertisement, a marketer must ask himself the following questions: 1. Does the product possess unique, important features? 2. Are hidden qualities important to buyers? 3. Is the general demand trend for the product favorable? 4. Is the market potential for the product adequate? 5. Is the competitive environment favorable? 6. Are general economic conditions favorable for marketing the product?

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7. Is the organization able and willing to spend the money required to launch an advertising campaign? 8. Does the firm possess sufficient marketing expertise to market the product? Source: adapted from Patti 1977.

Advertising in a cross-cultural environment:

Figure: Major components of culture

These cultural components may have an impact on how advertising messages are perceived and should be framed to be correctly understood by consumers in different cultures.

Unique selling proposition and Emotional selling proposition: While discussing about the USP & ESP, Pelsmacker, Geuens & Bergh (2010) said: Most companies stick to promoting one unique benefit of their brand, which can be functional or non-functional. A functional benefit, also called a unique selling proposition (USP), usually refers to functional superiority in the sense that the brand offer the best quality, the best service, the lowest, the most advanced technology. A non-functional benefit usually reflects a unique psychological association to consumers and is referred to as an emotional selling proposition (ESP). 14

Celebrity endorsement:
An expert endorsement does not seem to be perceived as irritating. On the contrary, one study even suggests experts evoke more positive affective responses. Pelsmacker, Geuens & Bergh (2010). Surprisingly, in a recent article by a CNBC Correspondent Wells, its said that: "Our study of more than 2,600 ads found thatcontrary to popular wisdomcelebrity ads do not perform any better than non-celebrity ads, and in some cases they perform much worse,"

2. Sales Promotion
Sales promotion is an initiative undertaken by an organization to promote an increase in sales, usage or trial of a product or service. Sales promotions are vary in many ways which will be discussed below. The ultimate goal of sales promotions is to stimulate potential customers to action. Altstiel, Tom, and Grow (2006). Research undertaken by GlaxoSmithKline, maker of the Ribena range of concentration black-currant juice, showed that consumers tended to use more squash if they kept it readvertydiluted in the fridge. The company wanted, therefore, to find a way of persuading mothers to make up bulk quantities of Ribena and store it in the fridge. A sales promotion was run in which a free jug was attached to 2 litre bottles of Ribena. The jug would fit either on to a shelf or into a fridge door compartment. The promotion was run over July and August in the major supermarket chains and over 1 million jugs were given away. The impact on brand sales was significant: a 37 percent increase over the equivalent period in the previous year. Brassington & Pettitt (2005) A decade ago, the advertising-to-sales-promotion ratio was about 60:40. Today, in many consumer-packaged-goods companies, sales promotion accounts for 65 to 75 percent of the combined budget. Sales-promotion expenditures have been increasing as a percentage of budget expenditure annually for the last two decades. Kotler (2002) 15

Objectives of Sales Promotion:

The objectives of sales promotion are: i. To introduce new products ii. To attract new customers and retain the existing ones iii. To maintain sales of seasonal products iv. To meet the challenge of competition Some of the examples of popular consumer sales promotions could be: a. Buy-One-Get-One-Free (BOGOF) - This is an example of a self-liquidating promotion. For example if a loaf of bread is priced at 1, and cost 10 cents to manufacture, if you sell two for 1, you are still in profit - especially if there is a corresponding increase in sales. This is known as a PREMIUM sales promotion tactic. b. Customer Relationship Management (CRM) - incentives such as bonus points or money off coupons. There are many examples of CRM, from banks to supermarkets. c. New media - Websites and mobile phones that supports sales promotions in recent times. For an example, in the United Kingdom, Nestle printed individual codes on KITKAT packaging, whereby a consumer would enter the code into a dynamic website to see if they had won a prize. Consumers could also text codes via their mobile phones to get the same result. d. Free gifts According to Kendrick (1998) Gifts are used in order to increase sales, enhance brand, create awareness and increase the loyalty among customers For an example, Subway gave away a card with six spaces for stickers with each sandwich purchase. Once the card was full the consumer was given a free sandwich. e. Discounted prices For an instance, Budget airline such as EasyJet and Ryanair, e-mail their customers with the latest low-price deals once new flights are released, or additional destinations are announced.

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f. Joint promotions These promotions are given usually between brands owned by a company, or with another company's brands. For example fast food restaurants often run sales promotions where toys, relating to a specific movie release, are given away with promoted meals, such as Mc. Donalds giving aways toys when new animated movies releases. g. Free samples Free trials can be used to strengthen attitudes and believes towards the brand. Blythe (2008). These includes tasting of food and drink at sampling points in supermarkets. For example, Almarais Vetal Laban was given away to potential consumers at supermarkets, in high streets and at petrol stations by a promotions team. h. Vouchers and coupons There are often seen in newspapers and magazines, on packs of the goods. i. Competitions and prize draws Can be seen in newspapers, magazines, on the TV and radio, on the Internet, and on packs. Sales promotion adopts short term, non-recurring methods to boost up sales in different ways. These offers are not available to the customers all through the year. During festivals, end of the seasons, year ending and some other occasions are the times when these schemes are generally found in the market.

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3. Personal Selling
Personal selling can be defined as two-way, face-to-face communications used to inform, give demonstrations to, maintain or establish a long term relationship with, or persuade specific members of a particular audience. Pelsmacker, Geuens and Bergh (2010) Among the other types, Trade selling is concerned with selling products to supermarkets, groceries, pharmacies etc. For an example, companies like Unilever, Procter &Gamble, CocaCola, have a strong negotiating position towards the trade because no store can afford not to have these brands on their shelves Pelsmacker, Geuens and Bergh (2010). Types of Personal selling:

In todays competitive business world, companies need to constantly keep in touch with their customers. Regular communication maintains long term relationship and thus it proves to be a healthy component for the companies finance sector. In personal selling, the salespersons literally have to go through some training procedures as it increases sales performance.

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4. Public Relation
According to the Institute of Public Relations 1984 public relation is defined asThe planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics: customers, employees, shareholders, trade bodies, suppliers, government officials, and society in general. Brassington & Pettitt (2005). Since the power of mass advertising on its own is not so effective in this saturated market, marketing managers are turning more to MPR (Marketing Public Relation). In a survey of 286 U.S. marketing managers, three-fourths reported that their companies used MPR. They found it particularly effective in building awareness and brand knowledge, for both new and established products. Kotler (2005) Undoubtedly, creative public relations can surely affect public awareness at a fraction of the cost of advertising. The company does not pay for the space or time obtained in the media. It pays only for a staff to develop and circulate the stories effectively and manage certain events. If the company develops an interesting story, it could be picked up by the news media and be worth millions of dollars in equivalent advertising. Kotler (2005) Following are the examples of PR: The Body Shop, for example, has spent very little money on advertising; its success has been almost entirely due to publicity. Kotler (2005) Microsofts campaign launching Windows 95 was an MPR success story. No paid ads for Windows 95 had appeared by August 24, 1995, the launch day. Yet everyone knew about it! The Wall Street Journal estimated that 3,000 headlines, 6,852 stories, and over 3 million words were dedicated to Windows 95 from July 1 to August 24. Microsoft teams around the world executed attention-grabbing publicity. Microsoft hung a 600-foot Windows 95 banner from Torontos CN Tower. The Empire State Building in New York was bathed in the red, yellow, and green colors of the Windows 95 logo. Microsoft paid The London Times to distribute free its entire daily run of 1.5 million copies to the public. By the end of the first week, U.S. sales alone were $108 million, not bad for a $90 product. Kotler (2005)

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The lesson is clear: Good advance PR can be much more effective than millions of dollars spent on advertising. In considering when and how to use MPR, management must establish the marketing objectives, choose the PR messages and vehicles, implement the plan carefully, and evaluate the results. Following are the major tools in MPR: 4.1 Publications: companies rely extensively on published materials to reach and influence their target markets. These include annual reports, brochures, article, company newsletters and magazines. Vetal laban is mentioned in the annual report. 4.2 Events: Companies can draw attention to new products or other company activities by arranging special events like news conference, seminars, outings, trade shows, exhibits, contests and competitions and anniversaries that reaches target publics. 4.3 Sponsorships: Companies can promote their brands and corporate name by sponsoring sports, cultural events and highly regarded causes. 4.4 News: One of the major tasks of PR professionals is to find or create favorable news about the company, its product, its people and get the media to accept press releases and attend press conferences. 4.5 Public-Service activities: Companies can build goodwill by contributing money and time to good causes. Kotler (2005) PR is usually used for conveying a firms important information to the concerned publics. It is of prime importance for every company in recent business world and is being called as the dynamic tool in business world now a day, whereas, many companies today use marketing public relations (MPR) to support their marketing departments in corporate or product promotion and image making. MPR can affect public awareness at a fraction of the cost of advertising, and is often much more credible. Some experts say that consumers are five times more likely to be influenced by editorial copy than by advertising. Blythe (2008)

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Integrated Marketing Communication:

Promotional tools work best if they are integrated, as they all works together towards the same objectives and goal. In this regards, Kotlers following statement might act as a perfect and practical example of IMC: Sales promotion seems most effective when used together with advertising. In one study, a price promotion alone produced only a 15 percent increase in sales volume. When combined with feature advertising, sales volume increased 19 percent; when combined with feature advertising and a point-of-purchase display, sales volume increased 24 percent.

Given the fragmenting of mass markets into minimarkets, the proliferation of new types of media, and the growing sophistication of consumers, companies need to use a wider range of communication tools, messages, and audiences. To do this most effectively, companies must embrace integrated marketing communications. Kotler (2005)

The American Association of Advertising Agencies also states, integrated marketing communications (IMC) is a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplinesfor example, general advertising, direct response, sales promotion and public relationsand combines these disciplines to provide clarity, consistency, and maximum communications impact through the seamless integration of discrete messages.

For an example: Warner-Lambert, maker of Benadryl, has creatively used IMC to promote its antihistamine drug. The company used advertising and public relations to increase brand awareness among allergy sufferers and to promote a toll-free number that provided people with the pollen count in their area. People who called the number more than once received free product samples, coupons, and materials describing the products benefits. These people also received a newsletter with advice about coping with allergies. Kotler (2005) 21

Commercial advertisers often seek to generate increased consumption of their products or services through "branding," which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers. Wikipedia The American Marketing Association defines brand as: A name, term, sign, symbol, or design, or combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Brands are powerful instruments of strategic marketing and important vehicles on the road to long-term profitability. Blythe (2008) Importance of branding: It gives customer the ability to assess quickly the value and quality of new products by association with a well-known brand name. Consumers also derive psychological rewards from brand names. For an example, some brands like Rolex and Lexus are regarded as status symbols. Similarly Almarai is such a brand which promises for quality and their tagline says it so Quality you can trust Properly implemented, IMC improves the companys ability to reach the right customers with the right messages at the right time and in the right place.

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ADVANTAGES AND DISADVANTAGES

Mix Element Advertising Advantages Good for building awareness, effective at reaching a wide audience, and repetition of main brand, product positioning helps build customer trust. Below are some advertising mediums and their advantages: Newspaper: Its one of the traditional mediums used by businesses, both big and small alike, to advertise their businesses. Allows business to reach a huge number of people in a given geographic area Flexibility in deciding the advert size and placement within the newspaper Adverts can be as large as necessary to communicate as much of a story as companies care to tell Readers can go back to the printed message again and again according to desire Quick turn-around helps an Newspaper: Adverts on newspapers are charged per its space Adverts has to compete against the clutter of other advertisers, including the giants adverts run by supermarkets and department stores as well as the adverts of competitors Usually adverts have a short shelf life, as newspapers are commonly read once and then discarded. Newspapers are a highly visible medium, through which competitors can quickly react to the companies pricing strategy. With the increasing popularity of the Internet, newspapers are facing declining readership and 23 Disadvantages The disadvantages of advertising mediums are discussed below:

advert reflect the changing market conditions. The advert decided to run today can be in customers' hands for one to two days or even more.

market penetration. A growing number of readers now skip the print version of the newspaper and prefer to read the online version of the publication instead.

Magazines: These are more focused medium, an alternative to newspaper advertising, however more expensive. This medium allows companies to reach highly targeted audiences. Better targeting of audience, as companies can choose magazine publications that cater to their specific audience or whose editorial content specializes in topics of interest to the desired audience. High reader involvement means more attention paid to the advertisement Better quality paper permits better color reproduction and full-color adverts As radio listeners are spread Radio: Its such successful medium, through which tactical adverts can touch the listeners heart and tempt them to buy that particular product. over many stations, companies may need to advertise simultaneously on several stations to reach the desired target audience. 24 Radio: Have to make plans weeks or months in advance for publishing adverts on magazines. The delay in publication increases the risk of an advert getting overtaken by competitors. There is limited flexibility in terms of advert placement and format. Space and advert layout costs are higher Magazines:

 It is an universal medium enjoyed by many people at one time or another during the day, at home, at work, and even in the car. Gives a business personality through the creation of campaigns using sounds and voices Rates of advertising in radio can usually be negotiated During the past ten years, radio charges have been seen less than the other media. Television: It permits companies to reach large numbers of people on a national or regional level in a short period of time Independent stations and cable offer new opportunities to pinpoint local audiences. Television being an imagebuilding and visual medium, it offers the ability to convey your message with sight, sound and motion.
Pleshette L.A

Listeners cannot go back to the adverts to go over important points . Adverts are an interruption in the entertainment. Because of this, a radio advert may require multiple exposures to break through the listener's "tune-out" factor and ensure message retention Radio is a background medium. Most listeners usually are seen doing something else while listening, which means that an advert has to work hard to get their attention. Television: Messages are generally temporary, and may require multiple exposure for the advert to rise above the clutter Adverts on network affiliates are concentrated in local news broadcasts and station breaks Preferred advert times are

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often sold out far in advance Limited length of exposure, as most adverts are only thirty seconds long or less, which limits the amount of information you can communicate Relatively expensive in terms of creative, production and airtime costs.
Pleshette L.A

Personal Selling

Highly interactive - lots of communication between the buyer and the seller. Excellent for communicating complex / comprehensive product information and features. Pleshette L. A

Costly - employing a sales force has many hidden costs in addition to salaries. Not appropriate if there are thousands of important buyers.
Pleshette

L. A

Sales Promotion

Has ability to increase sales by targeting promotional incentives on particular products. A good short term tactical tool. It helps to introduce new products in the market by drawing the attention of potential customers.
Pleshette

If used over the long-term, customers may get used to the effect. Too much promotion may damage brand image.
Pleshette

L. A

L. A

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Public Relations

Often seen as more "credible" since the messages seems to be coming from a third party (e.g. magazine, newspaper) Inexpensive way of reaching many customers - if the publicity is achieved through the right media. Pleshette L. A

Lack of control on what other people/press write or say about your product. May face criticism, which might affect sales.
Pleshette

L. A

This section has answered the research question 1 of this research paper which was:

What are the key promotional tools used for promoting new products in an established market?

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METHODOLOGY
In this chapter the methodology used in this research will be presented. This chapter will also present how data were gathered in order to find the answers to the stated research questions. The purpose of this section is to develop an understanding by the reader for how literature and empirical data were collected.

1.1

Research Purpose

There are several suggestions to use as research purposes, the most used are exploratory, descriptive and explanatory (Yin, 2003). Nonetheless, this research was basically a descriptive one. However, the research also included some exploratory stages as well according to our aim that we based this research on To identify the advantage and disadvantage of a range of promotional tools used to promote new products and Almarai Vetal Digest Probiotic in particular. Exploratory research means finding out what is happening; to seek new insights; to ask questions and to assess phenomena in a new light (Robson 2002). It is particularly useful if you wish to clarify your understanding of a problem, such as if you are unsure of the precise nature of the problem (Saunders, 2008). A great advantage of this kind of research is that it is flexible and adaptable to change. If you are conducting exploratory research you must be willing to change your direction as a result of new data that appear and new insights that occur to you, (Saunders, 2008). On the other hand, Descriptive research is to portray an accurate profile of persons, events or situations, (Robson, 2002). It is necessary to have a clear picture of the phenomena on which you wish to collect data prior to the collection of the data, (Saunders, 2008). Exploratory research was helpful in finding the answers for the research questions 1 and 2: RQ1: In general, what are the key promotional tools used for promoting new products in a market? RQ2: What were the key promotional tools used by Almarai company to promote its recently launched product Vetal Digest Probiotic Laban?

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1.2

Research Process:

The Saunders structure represented by the onion (Saunders et. al., 2007) had been selected as the most appropriate structure and therefore was primarily used to determine the methodology for this research project. Saunders famous research process onion provides different approaches, strategies and data collection methods across the continuum of research philosophy.

Positivism Realism Deductive Interpretivism Philosophies

Experiment Survey Mono method Case study Action research Mixed methods
Grounded theory

Objectivism Approaches

Subjectivism Strategies

Crosssectional Data collection and data analysis Longitudinal

Pragmatism Choices

Functionalist Time horizons

Multi-method Ethnograph y Archival research Radvertical Inductive humanist Radvertical structuralist Interpretive

Techniques and procedures

Figure: Research Process

1.2.1 Research Philosophy:

As business and management researchers we need to be aware of the philosophical commitments we make through our choice of research strategy since this has significant impact not only on what we do but we understand what it is we are investigating, Johnson and Clark (2006).

29

For this research, Realism was adopted which is a philosophy that deals with social issues and their impact on a proposed study. We were being investigating the key promotional tools used for promoting new products and their pros and cons.

1.2.2 Research Approach

There are two ways to collect theories and models for a research; these are called inductive and deductive, Jacobsen (2002). The inductive way of making a research is when research is collected with an open mind before studying theories. Theories are then collected and the data first collected analyzed. Through the deductive approach theories are studied from the beginning before making research and collecting empirical data, Jacobsen, 2002. For this research, at first the research was approached in the inductive way later on the deductive approach was chosen.

1.2.3 Research Strategy:

A research strategy is a general plan guiding the researcher to the answer of the research questions, Saunders (2003). Among many research strategies Survey strategy was felt the best for this research as it gives more control over the research process and when sampling is used, it is possible to generate findings that are representative of the whole population at a lower cost than collecting the data for the whole population. The survey strategy is usually associated with the deductive approach. It is popular and common strategy in business and management research and is most frequently used to answer who, what, where, how much and how many questions. It therefore tends to be used for exploratory and descriptive research, (Saunders, 2007). The Survey strategy will be able to answer the research question number 3: Is Almarai getting expected success through the promotional tools being used?

1.2.4 Research Choice:

As part of the strategy, the method I had chosen to conduct this research was Mono method also called Single data collection technique and corresponding analysis procedures. To be able to answer the research question 3, this method seemed to be the accurate option. The research question was: Is Almarai getting expected success through the promotional tools being used? To get the answer for the above question, Quantitative approach was adopted.

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Quantitative data are those whose values are measured numerically as quantities Saunders (2008).

1.2.5 Time Horizon:

A cross-sectional study is one that takes place at a single point in time. In effect, we are taking a 'slice' or cross-section of whatever it is we're observing or measuring. A longitudinal study is one that takes place over time -- we have at least two (and often more) waves of measurement in a longitudinal design. Trochim (2006). For this research, Cross-sectional study was selected for the inadequate time of this research paper.

1.2.6 Data Collection:

When a report is written the research can be based on either primary and secondary data or both of them together. This research study was based on both secondary and primary data. As the requirement was to gather focused information on the specific research question, thats why an open ended questionnaire was designed. In addition, to be able to find sufficient and unfolding data, secondary data were used together. Primary data is the information that is collected first hand by the researchers. It can be collected through: Surveys Interviews Focus groups Questionnaires

On the other hand, secondary data; is a data collected by others than the author itself and is collected for other specific purposes- Kotler (2005). Many times secondary data can be easier or more practical to use because of the availability of already existing information Saunders (2007) It is basically a kind of information that is already available and which is used by the researcher as a source for data used in their research. Different forms of secondary data include: Journals; Books; Census Data; Newspaper articles; and Biographies

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The secondary data used for this research were various journals, books, articles that had been collected from the library of the University of Derby and internet along with company websites, brochures, and annual reports were used. The searching process for literature started with searches regarding the marketing mix and promotion and was further narrowed down to search words like: Promotional Tools, effectiveness of Promotional Tools. Some of the search words used for this research are: Marketing, Dairy, Effectiveness of promotional tool for buttermilk, Effectiveness of promotional tool for dairy product etc. During the research, importance was given to select the up to date literature and articles but not the literature from many years back. The theoretical framework in this research starts with the theories regarding marketing mix, promotion and further the promotional tools. These fields of marketing were needed to be included at the beginning since they give the reader a wider look and an introduction along with an understanding on the field of promotional tools. In conducting this research; open ended, structured questionnaire had been used because of its ability to create discussions.

1.2.7 Sample Selection:

Getting in contact with the right respondent is vital for the research, if not it may turn out to be an invalid or insignificant research. To secure the validity of this study the quantitative research had to be done with an actual customer of Vetal Digest Probiotic Laban. Samples of 50 respondents were covered. Random sampling procedure was conducted. Respondents were requested to fill in the questionnaire from different districts of Riyadh city: Al-'Olayya (Commercial Centre of Riyadh) Al-Shemaysi Al-Bat'ha Al-Malaz Al-Ha'ir Umm Al-Hamam

1.2.8 Data Analysis:

When the empirical data had been collected the process of data analyzing started instantly. Miles and Huberman (1994) described three activities to analyze collected data and these are: 2.8.1 Data reduction: The phase where data is focused, selected, abstracted, simplified and transformed. The purpose of this phase is to organize the data so conclusions can be verified and drawn. 32

2.8.2 Data display: The phase where the data is reduced and organized in a compressed way to make it easier to draw conclusions. 2.8.3 Conclusion drawing and verification: The phase where the researcher starts to make comments and explain what thing means. When analyzing the collected data from quantitative research, the above activities described by Miles and Huberman (1994) were applied

1.2.9 Quality Standards:

There are two main concepts while deliberating the quality of research work, reliability and validity. These are described below: 1.2.9.1 Validity: Saunders et al (2007) define Validity as concerned with whether the findings are really about what they appear to be about. Quality of this research was increased by using established literature for defining the concepts used in the literature review section and by providing with the exact references at the end of the report. For time limitation and disability to interview some knowledgeable person of Almarai, the research was conducted within 50 samples from Riyadh and therefore cannot be generalized. 1.2.9.2 Reliability: Marshall (1997) defines reliability as the degree to which we could expect the same results if we or other researchers carried out the study again, using the same methods on a similar sample To increase the reliability of this research, the systematic data collection method was followed. Nevertheless, the result of the research might modify with the span of time since the Vetal Digest Probiotic Laban is recently been launched and that the perception of the consumer towards this product is subject to change in near future.

1.3

Limitations Of The Methodology

The sample chosen for the questionnaire may not be representative of the target market. Because of limited time and resources, this method and sample had to be chosen. An in-depth interview couldnt be taken because Almarai is a highly confidential company and doesnt allow anyone to interview their stuff without any reference. Consequently, the research might not be methodologically perfect.

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EMPIRICAL DATA
This chapter will present the empirical data which have been collected from the sources such as: Almarai website, literature, annual reports and through observation of its product Vetal Digest Probiotic Laban. In the beginning of this chapter, a brief introduction of Almarai will be presented. Later on the chapter will focus on the findings connected to the research questions sequentially.

Introduction of Almarai:
Almarai Company is a multinational company and a leader in the GCC region. Almarai is based in Riyadh, the capital city of Kingdom of Saudi Arabia (KSA). Since its establishment in 1977, the company has been at the forefront of transforming traditional daily farming in Saudi Arabia. Starting with the processing of fresh milk and Laban, the company expanded into many product ranges including fresh long life dairy which are made primarily from fresh milk, bakery, poultry, fruit juices, cheese and butter. Later, the range of fresh products was expanded to include Figure: Almarai Sales 2010 zabadi, gishtah and labneh which are a type of crme cheese spread, as well as low fat products and Almarai branded butter and cheese, imported from Europe. John O'Kelly, Marketing Manager of Almarai Company Limited said, "As with all our products, Almarai uses only the best and in doing so are able to produce products that aid in putting us at the forefront of the dairy market. Every new product we develop has been through numerous research procedures to ensure we can satisfy the consumer's requirements. Almarai utilizes a range of consumer and retail research methodologies and best practices which help them monitor market and consumer trends. This enables them in keeping their efforts continually aligned to what the customer wants. Annual report of Almarai

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Milk and Laban are core to the success of Almarai. The growth of these products continues to be strong and market shares in KSA reached record highs in 2009 Annual Report Almarai Anticipating the need to develop a strong distribution channel, Almarai went about installing powerful distribution information system for its fleet of sales vehicles and depots. By 1998, Almarai strengthened its market leadership position and became a low cost producer that reflected in its profitability. In recent years, the company added fruit yoghurts and dairy desserts, UHT milk and fruit juices to its list of high volume products. Almarai markets a range of food and beverage products under the Almarai brand, principally through retail outlets such as Othaim, Panda Hypermarkets, Carrefour, Geant etc. Almarai is an integrated group spanning the food supply chain from dairy farms to retail stores. Almarai products are shipped on a daily basis to distribution centers in all parts of Saudi Arabia and in other GCC countries, where Almarai has captured a leading 40% share of the fresh dairy market. Almarai's new plant complies with 3-A standards and the U.S. FDA Pasteurized Milk Ordinance (PMO). Vision statement: To be the consumers preferred choice by leading in chosen markets with superior food and beverage products. Mission statement: To provide quality and nutritious food and beverages that enriches our consumers lives every day.

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Figure: Almarai Products

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Almarai Vetal Digest Probiotic falls into the FMCG group which are sold quickly and at relatively low cost. Though the absolute profit made on such FMCG products are relatively small, but they generally sell in large quantities. To make these products sell, marketers need to work hard on getting these products famous to the consumers. Almarai Vetal advanced nutrition laban and zabadi products were launched into the GCC market, providing consumers with a probiotic alternative. The success of these products has surpassed our most optimistic projections and exceeded initial market share targets. Almarai Annual Report 2010 Almarai enjoys leadership status in the fresh milk and Laban categories across the GCC (Gulf Cooperation Council) countries. (The GCC includes Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman.) According to the Almarai Annual report 2010, Fresh dairy market of Almarai grew by 12.5%.
Figure: Vetal Digest Probiotic Laban

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Laban is largely consumed in KSA as the figure shows.

As the graph shows, Almarai has the largest share in the Laban market in the GCC regions.

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Advertising strategy of Almarai: The target group of Almarai for Vetal Digest Probiotic is: Young population The primary objective of Almarai in promoting Vetal Digestive Probiotic Laban through adverts is to reach the maximum Laban drinkers in the GCC market and convince them to buy their healthy drink. The strategy of Almarai is to communicate the health benefits of Vetal Digestive Probiotic Laban. And this is done by pioneering and competitive advertising techniques. Unique selling proposition and Emotional selling proposition: Though many companies stick to one benefit of their brands while promoting them, Almarai goes for both. As Almarai themselves is a well-known brand known for their quality for a long time, their promotional activities includes the brand identity showing their logo in every product they promote and also while promoting a specific product for example, Vetal Probiotic Laban, they show the health benefits of the product. Thus, they opt for both USP and ESP. This might be one fruitful factor which brought for Almarai a GEMAS effie MENA Awards which is a prestigious award for outstanding advertisements.

Promotional tools used by Almarai for Vetal Digest Probiotic Laban: 5. Advertising:
Almarai is a multinational company in the GCC region and takes every step to get their products to their customers. Almarai even combines promotional tools to promote its products. While promoting Vetal Digest Probiotic Laban, Almarai combined TV advert with Billboard promotion along with brochures to get the product to every targeted customers possible. Advertisings conducted in Kingdom of Saudi Arabia (KSA) are always culture based. As the maximum populations of KSA are Muslim, decent adverts are shown, because in Islam bareness is strictly prohibited. If men are to appear in an advert, they must wear decent dress and if women are to appear in an advert, they must wear hijab that is scarf and a decent dress. Otherwise the adverts arent allowed to play in any channels of KSA. Often the Laban manufacturers complicate their adverts by showing irrelevant things. Whereas, customers just want to have a quick grasp on the health benefits. Keeping this in mind, such advert should be created, which will show the basic health benefits of such Laban products. Almarai, while advertising Vetal Digest Probiotic Laban, shows a bottle of Vetal Laban and quick display of the health benefits.

39

Almarai uses rational appeals for its adverts on Vetal Laban where it shows the attributes, the benefits and product usage. No doubt, its an effective appeal when a product is new to the market. Among many advertising mediums, Almarai chose the following to promote Vetal Digest Probiotic Laban: Television adverts, Billboards, Newspaper adverts, and Posters.

Television adverts: Almarai spent a favorable amount on TV advertisements to promote Vetal Digest Probiotic Laban. The recent Vetal Laban advert that is on-air now, shows a working woman with upset stomach and feeling uncomfortable working. Just then she sees a bottle of Vetal Digest Probiotic Laban on a table and drinks that. After drinking she looks lively, fresh and energetic. Billboards: Almarai tries to reach the maximum market through continuous advert about Vetal Digest Probiotic Laban on Billboards. They locate billboards on such commercial areas such as Olayya, Tahlia etc where majority of the people arrives for many business purposes and entertainment as majority of the supermarkets, malls are in those places. Newspaper: Adverts can also be seen occasionally about Vetal Digest Probiotic on the front or the middle pages of newspapers. Posters: Almarai makes posters frequently and delivers those from house to house and in supermarkets. Posters have been proved quite beneficial in attracting consumers towards a product.

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2. Sales Promotion: From the findings through questionnaires, it was found that 26% of the customers of KSA get attracted towards sales promotion. But Almarai havent offer much sales promotion on Vetal Digest Probiotic Laban as it was recently launched and Almarai was taking other promoting tools to promote Vetal Laban. But Almarai surely distributed free samples of Vetal Laban drink in disposable glasses in supermarkets by a promotion team, when Vetal Laban was first introduced in 2010. 3. Personal Selling: Managed through four sales regions and 28 distribution depots, over 17,000 customers are serviced on a daily basis throughout the Kingdom of Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman. Over 400 three to five ton refrigerated town delivery vehicles are used to cover approximately 350 routes. The companys distribution network is second to none in the region. Product is also exported to Yemen and the Lebanon. Almarai performs trade selling. They deliver their products in the following sectorsFinished products are transported by a fleet of over 75 forty foot refrigerated containers to 28 distribution depots, strategically located throughout the Gulf Region.

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4. Public Relation: Community services Of Almarai: Almarai believes that by giving something back to the community in which we operate, we all will benefit in the longer term. Internal PR: Almarai believes that their employees are the most valuable asset to the business and that the companys success over the past few years would not have been achieved without their dedication. They believe that investing in employees is essential to maintain its competitive advantage. Almarai has a strong focus on employing and retaining local nationals and is working with government authorities such as Saudi Human Resource Development Fund and Technical Vocational Training Corporation to attract, recruit and train the prospective young talents for various positions throughout the company. External PR: Almarai has been a positive corporate member of the society which stems out of its belief in the importance of contributing to the social investment efforts. The company has been proactively engaged in the community through direct charitable donations and vital sponsorships of events supporting social causes around GCC. In combination with the Arab Bureau of Education at the Gulf Cooperation Council, Almarai took part in organizing the Scholastic Excellence Award for Public Education students. The award was inducted in the United Arab Emirates, where Almarai recognized and awarded 42 students from all levels of public education throughout the Gulf region for their academic achievements. In addition, an Award for Scientific Creativity was launched in partnership with the King Abdulaziz City for Science and Technology with the aim of encouraging scientific research which eventually benefits society as a whole. Moreover, Almarai supported Bin Baz Charitable Project to Assist Young Men in Marriage and enabled the biggest group-marriage that ever took place in Saudi Arabia. The event helped in increasing access to marriage for men with limited incomes. Events conducted by Almarai: With a view to supporting community based development, Almarai sponsors many conferences, forums and festivals. Some of them include: Pediatric Surgery Update Workshop 2009 Health and beauty show Womex Expo 42

10th Intensive Pediatrics Training Course 6th Forum for disabled Children Societys Women Members and Obesity Awareness Day

Public-service activities: Almarai has been always a optimistic contributor to the society. The Company has been proactively engaged in the community through direct charitable donations and dynamic sponsorships of events supporting social causes. Some of the welfare societies that Almarai supports include: Orphan Welfare Society (Ensan), Down Syndrome Charitable Association, Saudi Autism Organization, The Saudi Breast Cancer Society (Zahra) and The Saudi Blindness Welfare

Sponsorship: Almarai also sponsors the following: Almarai Vet Awards The first Gulf Therapeutic Nutrition Conference Womens career week

The following are the charitable activities performed by Almarai: Sponsor Disable Collective MarriagesRiyadh Deputy Governor Prince Sattam bin Abdulaziz, honored Almarai for supporting a mass wedding program involving 150 physically challenged people.

Cause of the DeafAlmarai also supported the Womens Cultural Center of the Saudi Association for hearing impairment. Prince Sultan CityAlmarai has sponsored cultural and entertainment programs as well for Humanitarian Services for patients with special needs. 43

Autism patientsAlmarai sponsored a function organized by the Autism Families Society at the Riyadh Gallery Complex. Quran memorization competitionTo encourage physical and mentally disabled children to memorize the Holy book of Islam The Holy Quran, Almarai sponsored a competition at Riyadh. Solidarity with terror victims of floods at JeddahAlmarai distributed aid packages and different foodstuffs to the flood affected victims in Jeddah last year on 2010. Supporting Association of BlindAlmarai donated 500 white walking sticks to the Association of Blind. Helping Orphans Perform HajjIn coordination with the Riyadh Orphans Care Charitable Society (ENSAN) Almarai paid the cost for a large number of orphans who wanted to perform hajj which is the fifth pillar of Islam, a religious duty that must be carried out at least once in a lifetime by every able-bodied Muslim. Recent Events of Almarai: 5th Scholastic Excellence Award for GCC Public Education Students in Oman Almarai sponsors Jeddah Equestrian Championship Tabuk Prince Stresses Gratitude for Almarais Scentific Innovation Award

ALMARAIS ACHIEVEMENT:

Almarai has won two GEMAS effie MENA Awards for its two successful Fresh Cream and Vetal Digest campaigns. These awards recognizes the best achievers who implement best international practices in the advertising industry every year which is a hard award to win by chance. Almarai's Fresh Cream campaign: The Perfect...Perfected!Won a silver Effie, while the bronze award went to the launch campaign for Almarais Vetal Probiotics range (Laban & Fresh cream). Mr. Hussam Abdul Qader, GM Marketing for Almarai, received the awards at a gala night held at Madinat Jumeirah, Dubai. "The fact that our two entries won the award means the campaigns were effective and on target. And that vouches for the effectiveness of our marketing and communications approach which is 44

driven by our permanent commitment to offering best quality products to our valued customers", added Abdul Qader, GM Marketing for Almarai.

IMC of Almarai: LOGO: Almarai has redesigned its logo to reflect the qualitative leap the company has taken in recent times and convey its message of quality. The green and blue which denote nature are the dominant colors in the old as well the new logo, shown below:

OLD LOGO

NEW LOGO

A new graphic in the center of the logo presents green pastures, nature, diversity, power and growth. In general terms, the logo expresses the spirit of rejuvenation, innovation and continuous development in Almarai. Almarais business expansion beyond dairy needed a new icon to embrace a wider reality. Visually and symbolically, the new brand icon has various explanations. It expands the brands dimensions with more variety and strength. The most direct interpretation of the brands new symbol are open fields, the rows representing the growth of Almarai and its business units, while the blue and green colors exemplify the food and beverage origin of the products in Almarais portfolio.

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ALMARAI BRAND: Almarai is an exceptionally strong brand. Its consumer impact in the local market can be compared to that of Ford, Coke, Guinness or other such high profile brands internationally. Almarai An Almarai branded product is a promise to the consumers that Almarais product meets their high standards and customers expectations every time. Quality You Can Trust remains central to everything that they do; it ensures that Almarai exceed their consumers expectations every time, it ensures compliance with regulations; it ensures they maintain their competitive advantage and ultimately, it protects their brand that they have developed over 3 decades. Focus on developing the quality culture has continued throughout 2009 through the continued development of internationally recognized integrated quality management systems and certification to world recognized food safety standards. Almarai is the first dairy company in the world to have been accredited with ISO 9002. They have also received the ISO 9001-2000 award, across all its operating divisions, including farms, procurement, processing, technical research and development, distribution and supply chain. The following brands are under Almarai brand:

Bakery Products

Poultry Products

Infant Nutrition Products

Dairy and Juice

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Today, with diversification into fresh juices, bakery and poultry sectors, the same insistence on quality applies across a much wider product range. Consumers have become familiar to Almarai as a synonym for premium quality and expect no less when they see the brand endorsement on new product lines.

This section has answered our research question no. 2, which was: What were the key promotional tools used by Almarai company to promote its recently launched product Vetal Digest Probiotic Laban?

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ANALYSIS
Which of the following attracts you the most towards a product?
Celebrity endorsement

12% Press release 4% Sales promotion 26% TV advert 20%

Billboard 32%

TV advert Billboard Magazine Sales promotion Press release Celebrity endorsement

10 16 3 13 2 6

Magazine 6%

Analysis: From the survey, it can be seen that billboard gets the most attraction in Riyadh, KSA market. Almost 32% of the respondents said they get attracted through billboards which are by the way the most prominent and an effective way of advertising products in KSA. The second largest vote went to sales promotions which almost 26% respondents prefer. And about 20% of the respondents said they gets attracted towards the TV adverts.

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Which of the following brand do you prefer most?

18% 6% 48% 28% Almarai Alsafi Danone Nadec Al Rabie

Almarai Alsafi Danone Nadec Al Rabie

24 14 9 3

Analysis: Almost 48% respondent, (24 out of 50) said they prefer Almarai brand over the other brands.

How did you come to know about Almarai Vetal Laban?

TV Advert 4% 10% Through friends 30% 40% 16% Billboard Sales Promotion Observed in supermarket

TV Advert Through friends Billboard Sales Promotion Observed in supermarket other

15 8 20 2 5

Analysis: 40% of the respondents said they came to know about the Vetal Digest Probiotic Laban through Billboards. 30% of them voted for TV advert and 30% said through friends. It is because Almarai had spent a lot on TV adverts and Billboards to promote its product. And from the analysis, it can be said that Word of mouth plays a vital role for companies profit growth.

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When have you seen a TV commercial of Almarai Vetal Laban? Last week Last month Last three months Last six months No 23 9 3 10

Last week 22% 7% 20% 51% Last month Last three months Last six months No

Analysis: When people were asked about the TV adverts on Vetal Laban, 51% people responded they had seen TV advertising on Vetal Laban last week. This means Almarai are aggressively promoting their product. One of the reason of this could be, the summer time in KSA. People wants thirst quenching smoothing and refreshing drinks in summer. Almarai simply are taking advantage of the demand.

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Which of the following adverts on Almarai Vetal Laban do you see most often?
4% 8% 12% 6% 20% 50% Billboard TV Advert Radio Magazine Newspaper Pamphlets Posters Other

Billboard TV Advert Radio Magazine Newspaper Pamphlets Posters Other

25 10 3 6 2 4

Analysis: Almost 50% of the respondents have said they see billboard advertising on Vetal Laban most often. It is quite justifiable from the previous findings and this one, that Billboards are seen quite effective in product promotions. 20% of them voted for TV adverts.

If you want Almarai to give sales promotion on Vetal Laban, which of the following promotion would you expect?
40% 8% 28% 24% 2 for the price of 1 Buy 1 get 1 free Instant lottery Scratch cards Free gifts

2 for the price of 1 Buy 1 get 1 free Instant lottery Scratch cards Free gifts

14 12 4 20

Analysis: It is seen from the survey, that 40% of the customers of Almarai expects free gifts. Whereas, 28% of them expects 2 for the price of 1 and 24% of them said they wants the Buy 1 get 1 free offer.

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If you are looking for Almarai Vetal Laban and find that it is out of stock. What would you do?
20% 24% 56% Search somewhere else Pick another brands' laban Do nothing

Search somewhere else Pick another brands' Laban Do nothing

12 28 10

Analysis: The purpose of this question was to identify the brand loyalty among people. But its seen from the graph that Almarai needs to work hard on Vetal Laban to get their customers loyalty towards this product. As seen from the graph, 56% of the respondents said theyll most probably pick another brands Laban if they dont find Vetal Laban around.

Which of the following are you?

38%

22% 40%

Price conscious Quality conscious A bit both

Price conscious Quality conscious A bit both

11 20 19

Analysis: From the graph, it is anticipated that 40% of the Almarai customers are quality conscious and 22% are simply price conscious.

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Are you happy with the price of Almarai Vetal Laban?

28% Yes 72% No

Yes No

36 14

Analysis: It is anticipated from the above graph that, majority of the Vetal Laban customers is happy with the price. The other 28% people are perhaps among the 22% price conscious people.

Almarai Vetal Laban is a healthy drink Strongly agree 64% Agree Strongly disagree Disagree

36%

Strongly agree Agree Strongly disagree Disagree

32 18

Analysis: 64% respondents strongly agree of the health factor of Vetal Laban. This is a positive sign for Almarai Company which shows they have successfully conveyed their product messages through prospective Medias.

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Are you aware of the health benefits of Almarai Vetal Laban?

30% 70% Yes No

Yes No

35 15

Analysis: Again the analysis has successfully shown that 70%, the majority of the people are well aware of the health benefits of Vetal Laban. The rest 30% can be made aware through more promotional campaigns such as sufficient distribution of flyers, brochures etc.

This section has answered our research question no. 3: Is Almarai getting expected success through the promotional tools being used?

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RECOMMENDATIONS
FUTURE POSSIBILITIES:
The consumption in Saudi dairy market is expected to increase at a CAGR (compound annual growth rate) of 2.0% during 2009-13, which is proportionately linked with the expected growth in the domestic population. It is worth mentioning that majority of the consumption inside the Kingdom is associated with fat rich and long life dairy products i.e. butter and cheese.
Almarai Annual Report The following are the recommendations given to Almarai:

1. Almarai should update their website on the nutrition information about Vetal Digest Probiotic. Though they have included the nutrition information on almost every product but have missed to provide the information on Vetal Digest Probiotic Laban. Its essential to include such important data so that consumers can grasp the health benefits just by looking at the website. 2. From the survey it was found that 30% of the consumers dont know the health benefits of Almarai Vetal Digest Probiotic. As the Laban market of KSA is already saturated, Almarai must make every possible move to grasp their consumers attention towards their healthy Laban Vetal.
3. Many consumers have suggested increasing their TV adverts, found from the open-ended

questionnaires. They should increase their sales promotions and TV adverts to reach the maximum market in KSA. 4. In case of celebrity endorsement, Almarai also should take such steps as one of the competitor of Vetal Probiotic Laban, Activias product was promoted by a well-known actress and author Jamie Lee Curtis which pushed everyone to consume that product. As Almarai isnt an international company and planning to operate in the GCC region, they might ponder on the idea of endorsing its Vetal Probiotic Laban with a celebrity football player, since Saudi people are fond of football. 5. As almost 31% of the population is made up of foreign nationals living in Saudi Arabia, Almarai should advertise in English too to grab those 31% customers in order to increase sales. 6. From the analysis it was seen that majority of the customers arent loyal to the Vetal Laban range. To get their loyalty towards this product, Almarai can increase their sales promotion such as: they might offer free mugs with each Vetal Digest Probiotic Laban or offer 1 more complimentary product with Vetal Laban to increase the popularity.

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7. From the 28% customers, who are unhappy with the price of Vetal Laban, might be made satisfied with the sales promotion scheme that is suggested above.

CONCLUSION
At the end it can be said that, Almarai Is no doubt a successful Company enjoying monopoly of the KSA market. The effie Award that Almarai got proves the effectiveness of the promotional campaign that they conducted to promote Vetal Digest Probiotic Laban. The influence of decision to purchase decision of the consumer also is clearly demonstrated by our study, as a percentage of 20% people interviewed admit that they are influenced by advertising, 32% of them said they are influenced by Billboards and 26% said they are influenced by the sales promotion to purchase a product. From here emerges the importance of advertising and billboards in the sale of new products in particular. The consumer is influenced in a relatively high percentage of billboard advertising to purchase a product. The survey we conducted confirmed that the interests of consumers to promotional activity is increasing, the causes that could influence this phenomenon is primarily the media and practiced advertising. I am convinced that the promotional mix is particularly important in the sale and distribution of food products, which is also the objective of this research. This assertion is supported by the conducted survey, which shows that the consumer decision to purchase is influenced by promotional activities.

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APPENDIX: A REFERENCE
Altstiel, Tom, and Jean Grow. Advertising Strategy: Creative Tactics From the Outside/In. CA: Sage Publication Inc. 2006. Blythe, J. (2008) Essentials of Marketing, Harlow: Prentice Hall Brassington F. & Pettitt S. (2005), Essentials of Marketing, Harlow: Prentice Hall E. Jerome McCarthy (1975) Basic Marketing: A Managerial Approach fifth edition, Richard D. Irwin, Inc. Foster, T. (1998( industrial Marketing Communication: An Empirical Investigation on the use of Marketing Communication Tool. Lulea University of Technology, 1998:09. Johnson P and Clark M. (2006). Mapping the terrain: an overview of business and management research methodologies Kotler P. (7th edition), Marketing Management. Prentice -Hall Kotler P. (2000). Marketing Management Millennium Edition, Prentice-Hall Kotler, P., Keller, K., Brady, M. and Goodman, M. (2009) Marketing Management, Harlow: Prentice Hall Kendrick, A(1998). Promotional products vs. price promotion in fostering customer loyalty: a report of two controlled field experiment, Journal of service marketing, Vol. 14 Miles, M.B. & Huberman, M.A. (1994). Qualitative Data Analysis (2nd edition) McNamara, Carter, PhD. General Guidelines for Conducting Interviews, Minnesota, 1999 Pelsmacker P. D, Geuens M. J and Bergh V. D. Marketing communications : a European perspective 4th ed. Pearson Pelsmacker P.D, Geuens M. & Bergh J.V (2010). Marketing Communications, A European Perspective. Harlow: Prentice Hall. Rowley, J. (1998). Promotion and marketing communications in the information, Library Review, Vol. 47, No. 8, pp. 383-387.

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Saunders M., Lewis P., Thornhill A. (2008). Research methods for business students, Pearson Education. Yin, R.K. (2003). Application of case study research, Thousand Oaks: Sage.

Almarai Annual Report 2010, Accessed on 5th May, 2011 fromhttp://almarai.com//assests/pdf/634370858282500000.pdf About Almarai, accessed on 27th April, 2011 from: http://members.tripod.com/apa_dtp/almarai.htm#Sales%20&%20Marketing Almarai Wins Two Effie Awards (2010). Accessed on 25th April 2011, from: http://www1.albawaba.com/news/almarai-wins-two-effie-awards ALMARAI CO LTD, Bloomberg BusinessWeek. Accessed on 23rd April from: http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=ALMARAI:AB About Almarai Company, Accessed on 20th February from: http://docs.google.com/viewer?a=v&q=cache:0ka3z8OqiVsJ:ae.zawya.com/researchreports/arab ic/Al%2520RajhiIPOResearchAlmaraiCompany.pdf+swot+analysis+of+almarai&hl=en&pid=bl &srcid=ADVERTGEEShbJ0bn6bdsMyYktHyggWbIWs3GZoCZejtf7M6CA5Go6WoIJpb2OIdam58sqLP0tJifP89_r5laeI6Rmq40xPqhYHAgjQs2faza7ieAqxi vQ9xFUaW_IMoHnNn9p428vSect-T&sig=AHIEtbTSOh3mFuI3gvBegGAonrL33xHXpQ Almarai video (2009) accessed on 20th February, 2011 from: http://www.facebook.com/group.php?gid=145940072384&v=wall Advertising. Accessed on 26th April, 2011 from: http://en.wikipedia.org/wiki/Advertising#cite_note-15 Branding Excellence. Venture Republic. Accessed on 26th April 2011 from: http://www.venturerepublic.com/branding/branding_excellence.asp Global Research Saudi Arabia, Investment Update (2010). Accessed on 23rd April from: http://www.gulfbase.com/site/interface/SpecialReport/ALMARAI_28032010.pdf Ginsberg S. (2005). Priceless pieces of business advertise. Accessed on 2nd April, 2011 from: 58

http://www.hellomynameisscott.com/66.pdf Population and language, Wikipedia. Accessed in 30th April, 2011 from: http://en.wikipedia.org/wiki/Saudi_Arabia#Population_and_language Advantages and disadvantages of advert mediums, Retrieved on 5th March, 2011 fromhttp://www.powerhomebiz.com/vol118/admediums.htm L. A. Choosing the Right Advertising Medium for Your Small Business. Accessed on 20 April, 2011 from:
Pleshette
th

http://www.powerhomebiz.com/vol118/admediums.htm Sales promotion, Lesson 24. Accessed on 27th April, 2011 from: http://www.nios.ac.in/Secbuscour/24.pdf Wells J. (2011). Do Celebrity Endorsements Really Work? Accessed on 24th April, 2011 from: http://www.cnbc.com/id/41081075/Do_Celebrity_Endorsements_Really_Work William M. K. Trochim (2006). Research Methods Knowledge. Accessed on 30th April, 2011 from: http://www.socialresearchmethods.net/kb/timedim.php

Glossary:
FMCG: Fast moving consumer goods that are sold quickly and at relatively low cost. Bin Baz Charitable Project: Its a charity foundation for helping the poor youths to get married in KSA. Othaim, Panda: Are hypermarkets which operates in Riyadh, just like Tesco, Sainsburys etc.

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APPENDIX: B
Questionnaire
Participant No.: Age: Gender: Occupation: Email id: Place where you live: 1. Which of the following attracts you the most towards a product? 1. TV advertisement 2. Bill board 3. Magazine 4. Sales promotion (Cash refund offers, price off, prizes, free trials, warranties etc) 5. Press release 6. Celebrity endorsement 2. Which of the following brand do you prefer most? 1. Almarai 2. Alsafi Danone 3. Nadec 4. Al Rabie 3. How did you come to know about Almarai Vetal Laban? 1. TV Advertisements 2. Through friends 3. Billboard 4. Sales promotion 5. Observed in supermarket 6. Other ___________________________________? 4. When have you seen a TV commercial of Almarai Vetal Laban? 1. Last week 2. Last month 3. Last three months 60 Male Female

4. Last six months 5. No

5. Which of the following adverts on Almarai Vetal Laban do you see most often? 1. Bill board 2. TV advert 3. Radio 4. Magazine 5. Newspaper 6. Pamphlets 7. Posters 8. Other _______________________ 6. If you want Almarai to give sales promotion on Vetal Laban, which of the following promotion would you expect? 1. 2 for the price of 1 2. Buy 1 get a complementary product free 3. Instant lottery 4. Scratch cards 5. Free gifts 7. What comes into your mind when you hear Almarai and Almarai Vetal Laban? Please answer briefly. _________________________________________________________________ 8. If you are looking for Almarai Vetal Laban and find that it is out of stock. What would you do? 1. Search somewhere else 2. Pick another brands Laban 3. Do nothing 9. You will prefer Almarai Vetal Laban instead of other Laban brands for yourself and your familys good health: 1. Strongly agree 2. Agree 3. Strongly disagree 61

4. Disagree 10. Which of the following are you? 1. Price conscious 2. Quality conscious 3. A bit of both

11. Are you happy with the price of Almarai Vetal Laban? 1. Yes 2. No 12. Almarai Vetal Laban is a healthy drink 1. Strongly agree 2. Agree 3. Strongly disagree 4. Disagree 13. Are you aware of the health benefits of Almarai Vetal Laban? 1. Yes 2. No 14. Is there anything else you would like to say about Almarai Vetal Laban? _________________________________________________________

Thank You for Your Cooperation

Full research results (i.e. the filled-in questionnaires) are available on request. 62