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In search of greener pastures: Al-Marai and dairy food business in Saudi Arabia

Sadi, M.A., Henderson, J.C.
British food journal 2007 v.109 no.8 pp. 637-647
dairy products, food marketing, food policy, case studies, dairy industry, food industry, distribution (economics), exports, trade regulations, sociology, market competition, Saudi Arabia
Purpose - The purpose of this paper is to concentrate on management responses in terms of marketing and is intended as a basis for discussion of the effectiveness of actual policies, possible alternatives and future prospects. Design/methodology/approach - There is much research that investigates the functioning of dairy food business, however, little attention is given to the responses of executives of the industry. This research aims to narrow this gap in the literature by focussing on the largest dairy food company in Saudi Arabia and its subsequent responses related to marketing. A case research of Saudi Arabian dairy food company, one of the market leaders in the entire Middle East, is advanced and discussed in detail. In addition, the paper highlights future challenges of its future expansion goals which would have implications for its operational, marketing and distribution strategies. Other important factors to consider are market differences, cultural conflicts, fluctuating exchange rates, cross-border invoicing and financial transactions, tariffs and taxes and host country government regulations. Findings - A number of dairy food companies in Saudi Arabia have been using varied competitive strategies over the last few years, but this study reveals how Al-Marai uses strategy of market penetration to beat the competition. Promotion emphasises brand strengths across segments and an intensive distribution network is maintained locally, with new channels sought in Middle Eastern as well as South East Asian markets. Originality/value - This paper provides a unique perspective of a dairy food company, which uses market penetration to beat the nationwide competition, thus stand high in offering quality merchandise across Middle East.