Introduction
The growth of the market in the industry of perfumes has been a subject of consideration in the United Arab Emirates. Perfumes business is among the biggest ventures in the local area because it has captured many people. Ajmal begun as a small business which was owned by Ajmal. The main aim for Ajmal to venture into the perfume business was to provide the best perfume mixtures in order to impress the traders in Arab.
He was able to improve later where he expanded the business after launching of the first perfume. As one of the biggest creators and suppliers of perfumes, Ajmal has gained recognition across the world. While Ajmal continues to provision and supply of more fragrance in the UAE, they still aim at providing the finest quality perfumes.
A lot of competition has been encountered in the world market. Therefore, the mission of Ajmal perfumes is to provide standard fragrance to the refined class customers. Ajmal beliefs that the consumers of their products requires the best. Nonetheless, this company keeps making strides towards a greater market. However, there is a need for more developments in its marketing strategy.
More firms have come up, hence, they have resulted in unsolved debate pertaining the best strategies that can be implemented for more growth. Business strategies are a basic subject in a long-term objective in every business. According to Editors of Time Out, Ajmal is a classy perfumer from Arabia. It provides a variety of strong, natural scented perfumes in the region. Ajmal has the best perfumes compared to those in the western region. The Ajamal perfumes provides unique scents in various cities in Arabia.
Strategic Issues
Every business organization goes through various challenges in its operations. Most of these challenges are controllable, however, it depends with how the organization handles the situation. A company requires knowledge and skills in order to establish excellent market strategies. The skills and knowledge are the equipments which manages the company’s projects.
Specialists are hence recommended for such activities in order to control the projects at hand. The act of managing projects in businesses has become a regular mode. In this case, the Ajmal perfumes have had various challenges as a result of market strategies. Despite of its growth the market development, product development, cost and concentration have influenced its expansion. Competition has also been encountered since the market is growing rapidly. (Ajmal, 2009, P. 106).
Most of the products produced by Ajmal perfumes are bought by tourists and visitors hence sold at an expensive rate. Despite of the products being of high quality, they cannot be afforded by the locals. The company has targeted the wrong market, hence resulting in reduction of the sales. The company has not been able to control its management in operation. The reason has been as a result of the new inventions and international demands for more perfumes.
On the other hand, a lot of perfume organizations are coming up, this has resulted in more competition in the market. The market focus on targeting the consumers in the international level and forgets the locals. Celebrities have also hijacked the perfume industry because of their demand. Again, most of the perfume blends are feminine, hence leaving the males behind. Another challenge faced by Ajmal perfumes is the pricing strategy which has led to a great decline of the products.
External Market
In the United Arab Emirates, the potential market for perfumes lies on the foreigners in the country. Most of the people in the country are in the area for tourism purposes. The perfume industry capitalizes on this group of people through the application of marketing strategies on the places where the tourists visit most. To maximize on this group, it is important to use strategies that avail the customers with products at a place of their convenience.
With a large number of companies manufacturing the perfumes, the marketing strategies will help the customers in differentiating between the products. Failure of having good marketing strategies will result in losses in the company since the customers will prefer going to the other shops whose marketing skills catch their attention. Capturing the market base provided by the foreigners in the country guarantees the business higher chances of survival.
United Arab Emirates has a very high number of tourists in the country at any given time (Knight, 2013, p. 64). The presence of tourist attraction sites and the tourist destinations cites encourages the booming of businesses. The area is also rich in petroleum products making the region a business hub.
With most of the foreigners returning to their respective countries after the completion of their mission, the perfume industries aim at using this population to increase the market size for the perfumes. With the poor knowledge of the visitors on the locations of the various companies selling perfumes and the different products in the market, capturing their attention will result in desirable business deals. The foreigners mostly buy the perfumes as a reminder of their visit in the region.
Porters 5 Analysis
Threats of New Entrants
The high growth rate of the United Arab Emirates translates to the growth of industries with the entrance of new competitors (Tucker, 2010, p. 469). The new industries introduce new products and to higher quality increasing the level of competition in the field. New entrants in the market conduct research to find out the particular needs of the people in the industry and the financial capability of the population.
The entrants then produce goods meeting the demands of the people and at a cheaper price. The challenges posed by the new entrants are small since established companies like Ajman already have the customers who are loyal to them. Such customers keep the company going, but the competition becomes stiffer in the competition for new clients. The marketing strategies should be broad enough to tackle the challenge posed by the new entrants.
Threats of New Substitute Products
There are new products in the market. Such products include scented soaps and lotions that the people are using. With such products having customized scents, it becomes hard for the customers to but the perfumes. The new products are threatening the existence of the perfumes since they have a longer lasting scent making the customers buy them.
Due to the difference of the scents, the soaps, and the perfumes do not match. The perfume industries are now competing against the new products and the other companies too. This level of competition is high. Particularly with the increase of the scented products, the company’s manufacturing the perfumes have to be innovative enough to retain the customer base even with the substitute products. Ajman perfumes are now competing not only with the other industries but also with the soaps and the body lotions.
Bargaining Power of Customers
In the United Arab Emirates, the number of companies manufacturing fragrances is very high (International Business Publications, 2012, p. 72). The high number gives the customers a wide range of products to choose from with varying fragrances and costs. In some cases, the products have similar scents but different brands.
The bargaining power of the customers is high due to the vast number of brands in the market. The shifting of clients to the cheaper brands forces the companies to drop the prices of their products. The threat posed by this aspect is high since the customers may avoid certain products all together in favor of the cheaper products. By the reduction of prices and the weak sales resulting from competition, a company may go bankrupt due to the losses incurred with the loss of customers to the cheaper industries.
Bargaining Power of Suppliers
Most of the perfumes originate from the farm products such as millet. Such raw materials are available through imports from various parts of the world. The number of suppliers is high mainly due to the high economic capability of the region. The supply is steady, and the large number of vendors enables the acquisition of the raw materials cheaper.
The country has a vast population most of which are foreigners in the country in search of jobs. The high population guarantees a steady supply of labor in the industries. The threat posed by the suppliers is minimal due to the wide range of options for the amount. The labor is cheap reducing the costs incurred in the production of the perfumes in the company. The cheap labor helps the company make profits, which are enough to sustain the business.
Intensity of Competitive Rivalry
The competition in the industry is so big. Many manufacturers are producing similar products and the competition for the market is resulting in a tight race. The competition for the market is evident through the various advertisements in all forms of media. The advertisements reflect the tough competition in search of customers especially in the tourism sector that holds the bigger potential. The advertisements are costing the companies enormous amounts of money, and some of them are not resulting in the desired outcomes. Competition is high in the area threatening to pull some of the companies down. Companies are resulting in increasing the number of brands in the company to curb the competition by diversifying the range of products.
Success Factors in the Company
Ajmal applies different measures to ensure the success of the business. One of the factors is the production of a broad range of perfumes. From the information on the website of the company, the brands of the perfume are many giving the customers a variety to choose from for a choice of preference (McLoughlin & Aaker, 2010, p. 222).
With a single brand of product, the chances of providing the customers with the products they need are lower risking the chances of making the market base fulfilled. Different brands of a product increase the likelihood of meeting the diverse needs of customers through the diversity of the names. Some of the brands are an upgrade of the previous names. By upgrading and rebranding, the company produces a new brand with advanced qualities.
The company provides all the necessary information to the customers on the website (Siau, 2011, p. 87). The website provides the customers with the contact information of the company especially where to locate the stores selling the products. By availing the information about the shop, the customers can trace the shops and access the products.
By an enormous number accessing the shops, the company makes more profits, and most of the population accesses the shop. Such strategies enable the company to establish new customers as well as retain the older ones. By having many stores in the country, the company avails the products closer to the people making the products readily available. Few numbers of stores in the area would inconvenience the population in accessing the products. The customers prefer brands that readily available in the market.
The location of the industry plays an important part in the success of the company (Kolb, 2008, p. 211). In the United Arab Emirates, most of the local population is Islamic. The use of perfumes is high in the region. The other factor benefiting the industry is the financial capability of the area. The economy of the region is high giving the majority of the population the ability to spend on leisure products such as the perfumes.
With most of the people using the products, the potential market of the region is relatively high. People from other parts of the world go for shopping in the area. The presence of the people makes it possible for the industries to grow. Most of the people going for shopping in the area have enough money to spend on the products without any limitations. With the right marketing strategies in place, the companies enjoy the profits from the population.
Industry Profile
Perfume manufacturers capitalize in innovation for the success and growth of the business. The production of a new brand and with the right marketing skills enables the population to learn about the products and use the product in big numbers. Perfumes are products used by the whole community.
The success of the industry depends on the marketing skills and the ability of the company to increase the number of customers. The use of perfumes guarantees a future in the industry, and the rise in population translates to the growth in the demand for the perfume. The area is hot throughout the year. The climatic conditions mean that most people go to the area during the cold times in their respective countries. Such conditions provide a ready market for the perfume all year round.
The challenges in the industry revolve around the negative perception of people on the use of perfumes. Some of the people do not use the perfumes making the vast population not to be beneficial to the investment. The challenge is turning the people who do not use perfumes to users. Without such attempts, the industry will not benefit from the huge market base.
Some of the ingredients used to make the products produce allergies to some of the population. Being allergic makes the community avoid such products reducing the demand for the products. To increase the demand, the ingredients of the perfumes should be friendly to most of the population. Such challenges reduce the potential of the industry to make profits since the vast population does not translate to the enormous demand of the perfume.
Company Situation
Ajmal Perfumes concentrate on the production and distribution of both men and women perfumes. Although the company generates numerous profits from their wide varieties of perfume brands, the company has not attained the expected levels of growth and expansion as compared to other international perfume producers. The perfume industry has recorded significant growth in the recent years, with the international fragrance products, reporting a 5.7% sales growth within the first half of 2013. According to statistics, the total market share for fragrances is $36629.5 million, while the UAE and Africa fragrance market accounts for only $2652.3 million of the world market.
The African and the UAE fragrance market is not developed since the people lack awareness on the availability of the products and poor marketing strategies by the fragrance companies in the region. For instance, the number of women who do not use perfumes in America is only 17%, while the numbers of women who wear perfume in the same region represent 83% of the total women. Conversely, in the UAE and Africa, where Ajmal perfumes operates the number of people who wear perfumes are lesser than the number of both men and women who do not wear the fragrances.
Ajmal has established marketing strategies that they focus on utilizing to grow the UAE fragrance market by 14.4 % before the end of 2015. However, the company is making slow progress in achieving the goals since the strategies do not satisfy the immediate needs of the existing market (Brechbill, p. 26-28).
Despite the existing slow growth and expansion in the company, the conducting a SWOT analysis is important to establish the existing strengths, weaknesses, opportunities and threats, since it helps the company to design marketing strategies that suit their needs in accordance to the existing threats and weaknesses. The perfume industry is less competitive, hence Ajmal Perfumes should be in a position to compete internationally with other fragrance manufacturers from the US and Europe, who sell their perfumes across the globe.
Companies such as Kate Spade and Michael Kors, have achieved and maintained market leadership in the global market through continued innovation and market research, which enables the company to identify and satisfy the changing needs and trends in the market. Similarly, Ajmal should consider product diversity and creativity in their products to ensure that they maintain product leadership in the highly dynamic industry.
SWOT Analysis
Strengths
Ajmal Perfumes possesses several strengths to facilitate the achievement of the company’s goals in terms of expansion and growth and market leadership. These include;
- The company understands the diversity in customer tastes and preferences; hence, it avails a wide variety of perfumes to the market. Understanding of the needs of the market plays a vital role in achieving growth and market leadership, since the company attracts a diverse customer base, who builds trust in the quality of the company’s products (Gilani & Gilani, 2008, p. 8-10).
- The company operates in the UAE, where there is limited competition in the manufacture of perfumes compared to the competition experienced in Europe and the US. Low competition provides opportunities for growth and expansion for the local companies, since they possess better understanding about the local markets.
- The company possesses the required financial stability for the growth and expansion throughout the UAE region. Most companies fail to achieve the required level of growth due to financial constraints that hinder the achievement of their expansion plans, since they lack the relevant resources required for expansion efforts.
Weaknesses
Ajmal Perfumes possesses several weaknesses, which contribute to the slow growth rates experienced in the company. Weaknesses comprise of the factors that place other competing companies at a better advantage than the operating companies. The weaknesses that Ajmal Perfumes experiences include;
- The company majorly utilizes traditional media to market their products, including the television and print media. However, majority of the people in the UAE have embraced technology, and they often utilize social media platforms to find information on the emerging products and market trends. This weakness makes the international companies that have reverted to online marketing at a better position in finding customers from the UAE compared to the Ajmal Company. Hence, Ajmal Perfumes often loses the local customers to the international fragrance producers, since they use better marketing strategies to penetrate the global market.
- The company over relies on the perfumes as their major source of income. Other perfume companies have diversified their products to include products such as soaps, lotions, and creams among others. Diversification enables companies to generate more income to support their growth strategies. Further, diversification is important in winning customer confidence, which is vital in achieving growth in sales and company expansion.
Opportunities
The fragrance market is expanding, which presents several expansion opportunities for Ajmal Perfumes to grow and achieve a larger market share in the international fragrance market. The opportunities that exist for Ajmal include;
- The expanding global fragrance market forms a key opportunity for Ajmal Perfumes. A larger market indicates a higher demand for the company’s products, which translates to higher sales volumes and higher profitability in the company. Higher profits allow companies to expand by providing them with resources required to manufacture the products that are needed in the market, and to support the relevant marketing and research strategies.
- The UAE receives numerous visitors through business arrangements and tourism, forming an excellent opportunity for Ajmal Perfumes to market their products. Unlike other countries that lack these privileges, the perfume company possesses marketing advantages since it is an position to meet potential clients directly and examine their product needs and expectations on their desired products.
- Ajmal Perfumes has excellent growth and expansion in the African market, whereby people have not started utilizing the fragrances as desired due to lack of exposure and the lack of information on product availability.
- The company has diverse opportunities in the UAE, since the company does not face major competition in the region on the manufacture of fragrances. Further, Ajmal Perfumes can enhance its growth through the production of supporting commodities, which include soaps and lotions among others (Ahamed & Cooper, p. 52-54).
Threats
The major threats that Ajmal Perfumes faces include;
- New companies that manufacture perfumes in the region pose a great threat to the success and growth of Ajmal Perfumes. With the rising globalization, more companies are opening the UAE to manufacture fragrances that are experiencing rising demand in the region.
- The changes in the international policies that affect the exportation of perfumes pose a threat to the growth of the company. Following globalization, most countries have put into place measures that discourage the importation of foreign products, with the aim of protecting the local markets from unfair competition.
Recommendation
The growth of Ajmal company has resulted in the expansion of its market within Dubai and other countries. Ajmal produces an enlargement of its products which varies in range to meet the need of the customers. The experience and research of the Ajmal company for more fragrance extractions has improved its production. Many customers appreciate their products since they are quality from natural sources. The growth of more outlets has been encountered in the UAE and across the world as a result of providing a variety of products.
On the other hand, Ajmal perfumes takes a great position in the world across the middle east. The blends of these perfumes are derived from the earthly fragrances. They are then packaged in jewel-encrusted or gold bottles. These bottles attracts the customers from the display resulting to purchase. Most of the perfume shops are frequented by local ladies, visitors and tourists who purchase the products.
Within its years of operation, Ajmal perfumes has been able to produce various brands of perfumes which come in different packages. Some of the packages include gift sets, home fragrance, Dahn al oudh, ethnic chics, and en vogue. A variety of the perfume products are used by many ladies and men both locally and externally.
For example, the shadow fragrance which is made of fruity and spicy extracts is used and designed for men in essence of buoyancy. There are also available perfumes that can be used by both men and women. Some of these perfume brands are made of unique ingredients and formulas which captures many consumers. There are also soaps, toilettes, and shampoos which are provided by the Ajmal perfumers.
Despite of the great recognition of Ajmal products, this company is required to provide products that suit all customers. The company has greatly invested in introducing and finding new products in order to capture more markets. Nonetheless, most of their products are expensive since they target the global market. It is also clear that most of the perfumes are purchased by tourists and visitors.
The locals at the UAE are not able to purchase Ajmal perfumes because they are expensive. Every individual has a preference and likes. Some people are also influenced when they find out that their friends have wonderful foreign perfumes. Hence, they will go ahead to purchase the products because of admiration. However, they will not purchase them if they can’t afford despite their urge.
The market strategy involves consideration of the market growth. It is clear that more organizations have been attracted by the growth of Ajmal perfumes. This has resulted in the organizations venturing into the industry of producing fragrances. Ajmal has received a greater challenge while they try to launch more products to capture the European market.
Some of the strategies that the Ajmal company can venture into in order to boost its market include increasing more promotional events. Promotion of its products is highly essential because it makes the product known to the consumers. While Ajmal continues investing in and launching more perfumes, they may include other uses provided by their products. In essence, they can produce substitutes that replace the old products for the new.
Since most of their products have focused on specific consumers, it is important for the company to attract non-consumers. This will be a great method to influence those who do not use the products to make purchases. The company should also provide pricing strategies which will influence on product purchase. People have preferences for the kind of colognes and fragrances in the market. Some are attracted to them while others are not of preference. On the other hand, since men’s products have not been put into consideration before, the company should be able to produce more brands in favor of men. This will help men with grooming and stop feeling discriminated.
While the expansion of the Ajmal perfumes has been an area of consideration of this company, the consumers have been affected. Most of the old products have been replaced with the new products. The new products are expensive, this has made it difficult for consumer, purchase. The company should provide a variety of products which can be bought local consumers. Ajmal has been able to export its products across the world. According to De Laurence (647), popular foreign perfumes and fragrance imported from other nations is expensive.
This makes it difficult to purchase to the consumers who are obtaining the products. Ajmal is required to provide a recommendable price of its consumers globally. Lastly, the management strategy of the company should directed to a new channel. Every business operation recommends qualified personnel to control the business. Despite of the need of the Ajmal perfume company to expand towards the global market, they should be considerate. The locals play a bigger role in their business as residents, hence they should provide them with affordable products.
Conclusion
The Ajmal company has greatly improved on its supply as a result of global growth. More people, including tourists purchase its products since they are quality. Celebrities have also been able to obtain perfumes from this company. However, there is a need for the company to improve on its market strategy. They should focus not only on external customers but also the locals. This will be important in order to grow its market internationally.
References
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