Table of Contents
- Introduction
- Company Background
- Country & Market Analysis
- Country Analysis
- Market Analysis
- Marketing Mix & Staffing Policy
- Marketing Mix
- Staffing Policy
- Market Entry Strategy
- References
The report about Oasis Water Company takes an in-depth look into the mix of factors available to the company for purposes of marketing and product promotion in the intended market of U.K ranging from conventional to the non-conventional means.
First, the report details the background of the Oasis Water Company and the success it has achieved in the UAE market. The report that follows details the general market for bottled water in the UK. Emphasis is laid on the market and the organizations that participate in that market.
The report does establish that even though the UK market for bottled water is very well developed, there is still enough room for new entrants because of the high purchasing power of the nationals of the nations due to high per capita incomes and heightened awareness on the benefits of water as compared to other beverages.
As per the report, the UK, despite having a largely middle class population, has enough working class nationals to provide labour for the processing plant that Oasis Water Company would establish in the European nation. The report also outlines the most appropriate staffing policy approach that the company should take and the merits of the particular policy.
The Oasis Water Company was founded in 1984, as the bottled water division of FMCG company National Food product Company (NFPC) (Oasiscome2life.com, 2015). The company became the first bottled water provider to introduce a 5-gallon bottle in the United Arab Emirates (Oasiscome2life.com, 2015).
It was the first bottled- water company member in the UAE to become a permanent member of the International Bottled Water Association (IBWA). The company declares on its website that it has become everyone’s favorite. Today, Oasis Water Company has the largest bottled water distribution fleet in the UAE, helping the organization make sure that deliveries are done “on time, every time.” This delivery is free of charge. It is the UAE’s leading bottled water seller (Francis, 2013).
Due to the popularity of its five -gallon water bottle, the Oasis Water Company is currently the single biggest 5-gallon bottled water seller in the UAE’s market with an estimated 70% market share (Oasiscome2life.com, 2015). In 2004, the company introduced ABB robots into its manufacturing plant, these have helped the company produce the 60,000 5-gallon bottles a day that it does, making Oasis Water Company’s facility the second largest 5-gallon water production line in the world. Today, the company has two water bottling facilities employing more than 1000 people, and bottling more than 1,000,000 liters of water each day.
Oasis Water Company is the only Middle East water bottling company that produces its own sparkling water (Oasiscome2life.com, 2015). Oasis Water Company also produces PET water bottles, juice, and dairy products. The company serves the second largest chunk of the UAE bottled water market after Masafi Mineral Water Company that serves 28% of the market. Oasis Mineral Water sells more than 1,000,000 liters of water each day to some 90,000 homes and offices (Euromonitor.com, 2015).
The United Kingdom has a population of just over 65 million people most of whom belong to the middle class by global standards. The country has a GDP per capita of US$ 41,787.47 with a national bottled water consumption of 3 billion liters each year. The UK bottled water industry is now worth an estimated £2bn per year.
The market for bottled water, just like elsewhere in the world, is expected to rise going into the future. This may largely be attributed to the increasing purchasing powers and the increased need of individuals to consume healthier and more natural sources of hydration in addition to many people seeking to increase their water consumption while on the go.
The U.K market is attractive to the Oasis Water Company because of a host of factors. For one, the nation has a very stable political environment. The U.K has a very stable system of governance that helps to create a friendly environment for doing business and a market economy free of interferences by state parties.
This allows the economy able to support free and fair competition of companies and firms. Inflation rates in the country are relatively stable, this allows the economy to flourish and ensures that consumers’ purchasing power is not eroded and therefore their ability to afford both core and noncore commodities is not hampered.
Corruption levels in the U.K are comparatively lower than a majority of nations in Europe and the world at large. This makes the U.K economy generally attractive to both local and foreign investment. Private sector debts are at also at very tenable levels. Each company can therefore easily access credit for purposes of investment or expansion, as and when the need arises; this allows them to carry out expansion and development plans.
In the U.K, citizens consume billions of liters of bottled water each year. Bottled water is largely available in stores and supermarkets in the country. Danone Water continued to be a strong leader in bottled water in 2014, accounting for over 32% off-trade value share (Euromonitor.com, 2015). The company benefits from offering the well established Volvic and Evian brands, which enjoy wide distribution and a strong reputation for quality.
Given the huge success that Oasis’ brands have enjoyed in the UAE, the company would be well poised to compete with these established brands. Oasis Water Company would favorably compete with new entrants such as Barr’s Strathmore Twist, Highland Spring Country, and Ballygowan who have been scrambling to take up a share of the multi-billion pound industry.
Trade barriers in the U.K are almost nonexistent making the European nation one of the top ten countries where doing business is easiest. This factor coupled with the availability of suitable labour makes the country an attractive destination for Oasis Water Company. Given the fact that the Oasis Water Company has highly embraced the use of technology in its processing plants in the UAE, it enjoys reduced production overheads and therefore overall cost of products, this would allow its products compete favorably with those of existing producers.
Marketing mix & Staffing policy
Oasis Water Company should adopt a marketing mix that concentrates on the 4Ps; Price, Place, Promotion, and Product. As regards the place, the products should be availed to consumers at their nearest department stores and retail outlets. The products of Oasis should be made available in as many places as possible in order to boost chances of purchase.
On the promotion front, Oasis should aggressively embrace advertising and sales promotion in order to promote brand awareness among the prospective consumers. Several methods of product promotion such as traditional and digital advertising should be used to promote the products and make them known to consumers.
In the advertising of their product, Oasis should tailor the adverts to the UK market and make their brand locally responsive in order to endear it to the people of the UK. The mode of advertising chosen should be one that resonates with the UK people and should be one that is easily accessible to as many people as possible.
In terms of pricing, the Oasis Company, having mostly automated its processing and therefore lowering production costs, should be able to favourably outcompete its rivals in the UK market just as is the case in the UAE market. The bottled water processed by the Oasis Company should be packaged in the mist attractive containers in order to appeal to prospective consumers and help the company wrestle away some of the market share from established competitors.
This refers to the human resource approach taken to source labour for a company (Whitehead, 2015). Oasis Water Company would be best served with a polycentric approach that would designate Emiratis as the top ranking employees because they are experienced in the company’s business model and practices.
The local workers would be assigned to other positions in light of the fact that the company needs to utilize local resources (Whitehead, 2015). The polycentric approach would help the company facilitate organizational learning of the local market (Whitehead, 2015). The approach would also provide better opportunities for the UK locals to improve their careers through promotion but only to key local positions and not central or corporate positions.
The Oasis Company could pick any one of the six modes of penetrating into new markets. Direct Exporting, which is the direct selling into a new foreign market before later establishing extensive networks with agents in the foreign nation. This method may be expensive and may also lead to poor representation of the company by agents.
It however is feasible because the original costs of setting that would have been incurred are eliminated. Joint venture refers to the coming together of two different firms with the intention of fulfilling a certain objective. This method of entry would lead to a perceived loss of identity by the Oasis Company. However, the method guarantees an almost ready market for the new company. It also helps by reducing the amount of startup capital required from each party.
In the assessment provided by this report, the Oasis Water Company would best be served by the strategy of joint ventures. This would allow the company to access a ready market that has been previously established. The company would also enjoy reduced startup capital as compared to the amount that would be required by a solo venture. The joint venture would also help the company gain new techniques and methodology of production and marketing due to a wider pool of knowledge and perspectives.
Euromonitor.com,. (2015). Bottled Water in the United Arab Emirates. http://www.euromonitor.com/bottled-water-in-the-united-arab-emirates/report
Euromonitor.com,. (2015). Bottled Water in the United Kingdom. http://www.euromonitor.com/bottled-water-in-the-united-kingdom/report
Francis, S. (2013). Drinking water: How much are you paying for it?. Emirates 24|7. http://www.emirates247.com/news/emirates/drinking-water-how-much-are-you-paying-for-it-2013-04-03-1.501112
Oasiscome2life.com,. (2015). Oasis Water – Delivery services. http://www.oasiscome2life.com/oasis-delivery.html
Whitehead, S. (2015). Staffing Policy & HRM Issues in International Business – Panmore Institute. Panmore Institute. http://panmore.com/staffing-policy-hrm-issues-in-international-business