The emerging technologies have eliminated the geographic barriers to trade, and firms are currently exerting all efforts to expand their market share by venturing into new global markets. Exporting products from one country to another is one of the approaches that firms are currently using to manage the high market competition. It reduces the pressure felt in the local market by creating a new one where a firm can expand its market share. However, it also comes with a number of challenges that a firm must be ready to deal with and overcome in an effort to achieve the desired success.
An exporting company is expected to understand laws and regulations in the parent country and in the host country. In most cases, laws and regulations differ from one country to another. A firm must also understand the socio-economic and political environment to determine if the new market is safe and if the people are likely to purchase the products being exported. Understanding the socio-economic, political, and legal environment of the new country defines whether a firm will be successful in the new market or not. The report focuses on how a local date company in Saudi Arabia can successfully export its products to the United Kingdom.
Dates are fruits commonly grown in the Kingdom of Saudi Arabia. The fruit is very popular not only in Saudi Arabia but also in other regional countries such as Iran, Iraq, the United Arab Emirates, Kuwait, Egypt, and Sudan, among other countries. Saudi Arabia is one of the worldwide leading producers of dates. Soft or dry dates are often eaten out-of-hand. However, others prefer blending it with tahini, marzipan, or cream cheese.
Jain and Al-Khayri say that “dates may be partially dried then glazed with glucose syrup and then used as a snack” (56). Some people used chopped dates in a variety of savory dishes and sweets, while others use them in baking bread. Date syrup and date powder are often used in the manufacture of alcohol and vinegar. Some innovative companies have also come up with chocolate-covered dates for those who like chocolates.
The fact that dates can be taken in various forms and can be used to blend various other products makes it very popular not only in the Middle East, where it is a staple fruit, but also in other parts of the world such as North America and Europe. The product is also popularly used in the plastic and leather industry, as Doole and Lowe say, where it is used in coating pipes and leather bags to prevent leakages (41).
According to Zou and Fu, dates are rich in a number of important nutrients essential for the body (28). It is one of the best sources of dietary potassium. A ripe date has a sugar content of about 80%. The natural sugar found in dates is healthy, unlike processed sugar used as a sweetener in the confectionery industry. Other important nutrients in this fruit include fiber and protein. Elements of copper, boron, magnesium, cobalt, manganese, calcium, iron, fluorine, and selenium are also found in a ripe date (Doole and Lowe 82). The fruit is also rich in a number of vitamins. Common vitamins found in grapes include vitamins K, C, and E. The fruit is highly recommended for children and the elderly by doctors because of its borne-strengthening properties.
Cultivating dates is not complex and can be done on a large or small scale depending on one’s capabilities and availability of land. The plant grows to a height of about 22 meters high, and its roots go deep into the soil. The plant does very well in dry areas, which makes it popular in the MENA region. In Saudi Arabia, the cultivation of dates has become a common practice because of the huge demand in the local market. In the past, farmers relied on natural processes such as sun-drying to process the fruit. However, the need to process this product into various forms has made it necessary for those cultivating this crop to use modern technologies.
Large processing companies have emerged in the local Saudi industry, which processes the fruit in various forms both for local and international consumption. Although the fruit has its largest market in the Middle East, where it has been in use for several centuries, it is now finding a new market in Europe and North America. Its medicinal value and the fact that it can be taken in various forms has increased its popularity in the market.
Analysis of the Country (United Kingdom)
A study by Prabhakaran shows that when planning to export a given product into a given country, it is important to conduct a comprehensive analysis of the country in order to identify opportunities and threats that the firm is likely to face (23). The United Kingdom is one of the most profitable markets in Europe because of the purchasing power of its people, the population, and political stability. To conduct a comprehensive analysis of this country, it is important to use PESTLE Model. The following are some of the important factors about this country that this new firm must understand based on the mentioned model.
The Political Environment
The political environment in the United Kingdom has been stable for the past several decades. The constitutional monarchy that is practiced in the country has helped ensure that there is continuity in the country’s political leadership. Even in cases where the country seems divided along political lines, the queen is always a symbol of national unity. The political class has avoided getting directly involved in private and public companies in negative ways.
The legislations favor both local and foreign firms. It is a sign that this date company will not face any serious challenge with the country’s political environment. The recent BREXIT vote divided the country and caused general panic among foreigners doing business in the United Kingdom (Zou and Fu 87). However, the assurance from the political leaders that businesses operating locally will not be affected is a good sign for this firm as it expands globally and goes into this new market. This environment is conducive for this date company.
The Economic Environment
The economic environment is another important factor that defines how successful a firm can be in the market. The gross domestic product (GDP) of the United Kingdom is estimated to be $2.65 trillion, making it the fifth-largest economy in the world (Doole and Lowe 112). Its GDP per capita is also relatively high compared to other markets in the region. Before the BREXIT vote, the economy of the United Kingdom was growing at impressive rates.
However, the decision by the majority of the Britons to leave the European Union slowed the country’s economic growth. Some foreign firms have considered relocating to other countries within Europe, while others have elected to downsize their operations in the United Kingdom. It means that the economy will be directly affected by such decisions. Job opportunities will decrease, and some expatriates working in this country may consider moving to other countries. The economy was hit by inflation soon after the results of BREXIT were announced. The stock market also fluctuated due to the uncertainties in the local market.
However, most of these concerns have been addressed, and the country’s economy is starting to experience growth once more. The main concern of this date company is whether the market has the purchasing power to support sales of these products. Given that wealth is distributed fairly among the citizens of this country, it means that the purchasing power of an individual citizen is relatively high. The product will perform well if there is effective marketing.
The Social Environment
The social environment in the United Kingdom is conducive for foreign firms that are targeting it as a destination market for their products. In the past, the class system was common in this country. However, that is no longer the case. Although a class of the poor and the rich still exist, it is not as pronounced as it was in the past. Another major issue of concern is racial segregation and conflicts. In some of the developed nations such as the United States and Russia, racial intolerance has been common. A country where diversity is not tolerated may not be a good export destination because doing business there is very difficult.
In the United Kingdom, the problem of racism is not common. People of color, Whites, and people of different religious groups live together as a community with the sole objective of making life better for everyone. The recent BREXIT vote was divisive because some politicians targeted expatriates as the main cause of unemployment among the local population. In the past, foreigners have found it easy working in this country without any intimidations or discrimination. It is expected that this social environment will be restored soon. For this date company, the social environment in the United Kingdom is ideal for its product, especially given that the country has a highly socio-cultural diversity.
Technology is one of the major drivers of change in the modern business environment. As explained earlier in this report, businesses are using emerging technologies to improve their marketing strategies, invent new products, improve efficiency in production and logistics, and improve the existing ones for the purpose of achieving success in the market. In the date industry, firms have used emerging technologies to come up with unique products that meet the needs of different segments of customers.
The United Kingdom is one of the countries that have embraced technology. Doing business in this country requires a firm that understands how to use modern marketing and sales strategies. E-commerce is thriving in this country. It offers this date company the best opportunity to succeed in this market. Instead of investing a lot of resources to establish expensive physical stores, this company can elect to operate online stores.
Once a customer places an order, the product can then be delivered to them in their desired location. The management of this company should also consider making an investment in social media marketing. Facebook, Twitter, and YouTube are currently better marketing platforms than traditional methods such as newspaper advertisements. As it gets into this market, this company must be ready to respond to the emerging technologies in a swift manner.
The issue of ecology is becoming a major concern not only in the United Kingdom but also at the global level. In Europe, environmental conservation is taken very seriously, and companies are doing everything to convince their customers that their activities do not pose any threat whatsoever to the environment. In the United Kingdom, some environmental conservationists have been encouraging the locals to purchase local products that have not left carbon footprints while being transported into the country. This is one of the biggest challenges that this firm will face in the new market. It will have to convince its customers that its operational activities are environmentally friendly.
The Legal Environment
It is also necessary to look at the legal environment in this country and how it may affect the operations of this company. The United Kingdom’s laws allow foreign firms to operate in the country. There are laws about business registration and operations that a firm must observe. However, these laws are not restrictive. They do not limit operations of a foreign firm in the local market; and therefore, the date company will not face any serious challenge observing these laws and regulations.
The date industry in the United Kingdom is still developing. According to Wallenfeldt, many people in the United Kingdom are yet to embrace dates as fruit that are as nutritious as others, such as apples, avocados, and oranges (74). Most of the customers who purchase dates are immigrants or expatriates Muslims from the Middle East and North Africa regions. According to a report by Wallenfeldt, the 2011 census in the United Kingdom showed that there are 2,706,066 Muslims in the United Kingdom, making about 4.5% of the country’s total population (44).
Although racism is not common in this country, many people in this country still consider dates as fruits meant for the Arabs. That is why most of the customers purchasing this product in Europe are either Arabs or North Africans living in the United Kingdom. Dates are particularly purchased in high quantities during fasting seasons, such as Ramathan. The size of the industry is also small because of the small market available in the country.
Wallenfeldt says that one of the ways of increasing the size of the market is to convince more people who are not taking the product to start taking it (34). The United Kingdom is home to over 65 million people but the fraction of those taking dates on a regular basis, according to a study by Doole and Lowe, is less than 5% (78). It means that there is a huge potential in this market if the industry can convince more people to start taking dates.
Competition in this particular market is relatively low, and most of the time, the competitors prefer working as a unit to help promote the product in the local market. The Palm Center is one of the industry leaders. This local firm has been promoting the cultivation of this fruit locally instead of the country relying on exports from the Middle East. Date Palm Development Limited is another major player in this industry. Like the Palm Center, Date Palm Development Limited cultivates this fruit locally and sells its products in the United Kingdom and the regional European countries. These two local firms have specialized in various varieties of dates.
They deliver to the market products which already have value added to them. The Green Coast Nurseries is an Emirati-based producer of dates in the region. It also exports its products to the United Kingdom and other European countries. These are the firms that will offer stiff competition in the market. Green Coast Nurseries is yet to gain popularity in the United Kingdom’s market. Despite the presence of these well-established competitors, there is a gap in the market that this company can fill as soon as it starts its operations in the United Kingdom.
It is clear that the current players offer their products only to 5% of the entire population. It means that this firm is capable of convincing more people to buy its products by using effective marketing. In Europe, people are very sensitive about their health. Positioning this fruit as one that has medicinal value may help in reaching more customers.
The Targeted Segments
It is important to understand the demographics of the target market. The primary target market for this company will be, in general, all Muslims living in the United Kingdom. However, children between eight and fourteen years and youths below 25 years will be a special target. These are the people known to make impulse buying. Mothers will also be a target market. When marketing this product, issues about race, religion, living standards and level of education will be ignored because of the desire to have a wider market share. However, there will be a special appeal to the mothers and youths because of their population in the country.
To be successful in a foreign market, the firm will need to analyze its internal capabilities and external forces that may affect its operations. In the United Kingdom, the huge population that is not yet using this product is a huge opportunity. If they can be convinced to consume this product, this firm will have a huge market share. The emerging technologies also offer new methods of retailing, such as e-commerce- that will be beneficial to this new company.
However, this firm must be ready to deal with in the foreign market. It must also be ready to deal with the stereotype that date is a fruit meant for the Arabs and Muslims in general. This perception has restricted this fruit to Muslims in this country. The main strength of this firm is the small size that makes it very flexible to changes in the market. It can easily adapt to emerging technologies. However, the primary weakness of the firm is that it has limited financial resources, which means that it will have limited operations in the United Kingdom.
The Company’s Overall Mission and Vision Statements
Having a mission statement gives a firm a sense of direction. It enables it to streamline its activities with a specific goal. The following will be the firm’s mission statement:
To continuously offer high customer quality and a wide variety of date products in the United Kingdom’s market.
The following is the firm’s vision statement:
To be a leading supplier of quality date products in the global market.
Base on the above mission statement, the objectives of this firm will be as follows:
- To understand the market forces in the United Kingdom’s date industry;
- To come up with measures of offering excellent products to the target market; and
- To popularize the firm’s brand and its products in the market using both mass and social media.
As explained above, the product that this firm will offer is date fruit in various varieties. The target market in the United Kingdom has been defined as majorly consisting of youths, children, and mothers. Their needs must be met in the best way possible in line with the above objectives.
Marketing Strategy and Marketing Objectives
The firm’s primary marketing objective is to increase the market size for date fruit by convincing more people that it is a product with medicinal value. To achieve this objective, it must come up with an effective marketing strategy. The product must be positioned in a way that will be convincing to the target market (Al-Khayri, Jain, and Johnson 49). For the mothers, emphasis will be put on the product’s medicinal value when advertising. For the youth, the unique taste of the fruit and numerous variants that it has will be the selling point. Youths will be primarily targeted with the help of social media where they always frequent.
Plan for the Marketing Mix
In order to ensure that this firm achieves success in the foreign market, it is important to come up with a unique plan for the marketing mix. The firm’s products will include a wide variety of dates blended with other products to enhance their medicinal value. The place element of the marketing mix will focus more on e-commerce than the use of the brick-and-mortar approach. Customers will be able to order this product directly through the company’s website. The product’s price will be based on the industry’s average. It will be priced slightly lower than the industry’s average to increase sales. Promotion of the firm’s brand and products will be done on social media, especially on Facebook, Twitter, Instagram, and YouTube.
Al-Khayri, Jameel, Mohan Jain, and Dennis Johnson. Date Palm Genetic Resources and Utilization: Volume 2. New York: Cengage, 2015. Print.
Doole, Isobel, and Robin Lowe. International Marketing Strategy: Analysis, Development and Implementation. London: Cengage Learning, 2008. Print.
Jain, Mohan, and Jameel Al-Khayri. Date Palm Biotechnology. Dordrecht: Springer, 2011. Print.
Prabhakaran, Nair. The Agronomy and Economy of Important Tree Crops of the Developing World. Amsterdam: Elsevier, 2010. Print.
Wallenfeldt, Jeffrey. The United Kingdom: England. New York: Britannica Educational Publishing, 2014. Print.
Zou, Shaoming, and Huifen Fu. International Marketing: Emerging Markets. Bingley: Emerald Jai, 2011. Print.