The report focuses on the marketing aspects of Spar Company in Oman. Spar is a US based international predominantly retail and merchandising company. The company is headquartered in New York. The company had started its operations in the Middle Eastern region recently. The various factors that can affect its marketing functions in the region need to be analyzed significantly in order to enable the effective implementation of better marketing techniques in the future. The marketing conditions, aspects and function of the company in Oman is being considered for the study. The company has an 80 year old history and has around 12 thousand stores across the world in as many as 40 countries (SPAR – Global Leader in Merchandising Solutions 2018). It is the largest voluntary food retailer in the world. The company has recently signed a permanent license agreement with Khimji Ramdas LLC. The company has had a successful initiation of operations in the country and is planning to further increase its customer base by the end of the present year. The company wants to establish minimum 21 stores across Oman by the beginning of 2019.
Bargaining power of Buyers
In a country like Oman the bargaining power of the buyers is significantly large. Buyers are affluent and choose from a large number of stores to buy from. This is particularly a high risk factor.
Bargaining Power of Suppliers
Bargaining power of the suppliers range between medium to high. Some of the suppliers are based outside Oman. However, Spar already has a good network and partnering with Khimji Ramdas can help it to ease pressure of the Suppliers (SPAR – Global Leader in Merchandising Solutions 2018).
Threat of Substitutes
Substitutes are freely available in case of local items. However, for products that are not locally produced there are not much substitutes. The local neighborhood markets can act as significant substitutes.
Threat of New Entrants
Threat of New Entrants are significantly low as the concept of neighborhood supermarkets are not much common in the country. Hence there is much low threat of new entrants.
Competition
The main competitors will be Carrefour and Almeera. However, since the company has sided with Khimji Ramdas, the competition will be lower to some extent.
Political
Oman is a sultanate with strict laws in regards to the items that can be sold in the country. Apart from this the political climate is relatively stable (Aaker and McLoughlin 2010). The country follows the system of constitutional monarchy and is much liberal considering the other Middle Eastern countries in the region. The business scope of the country is fairly large and opportunistic.
Economic
The country is economically very stable. This is mainly because the country has large oil and natural gas reserves. A substantial part of the population is affluent and the GDP of the country is good and influenced largely by the industrial sector.
Social
The country has an Islamic society. This means that the supermarkets have to be aware of the Islamic values and products that are normally considered to be haram should not be sold. However, the country has a large expatriate population which can be targeted for selling varied range of products.
Technological
There is ample scope for the usage of better technology to enhance the functions of the country. Oman has already has a good environment for the application of technology. Technology is easily available in the country (Wippel 2016).
Strength
International expertise is a significant strength of the company. Spar has a large international network that it can use to its advantage while providing newer products to the customer. The initial success generated is also an essential strength.
Weakness
The weakness of the company is the relative inexperience in the market conditions of the Middle East. Another significant weakness is lack of wide supply network in Oman.
Opportunity
The company has the opportunity to further consolidate its position in the market of Oman. The company can become a successful venture due to the new value it adds for the Omani customer base.
Threat
Operational costs can increase due to the supply chain functions of the enterprise. The company can face issues related to taxation if taxes are imposed on foreign supplies in the future.
Market segmentation for Spar needs to be done on the basis of the types of customers that the organization have to serve. The significant market base of the company will be divided into the consumers with regular retail demands and customers with demand for high end products (SPAR – Global Leader in Merchandising Solutions 2018). The customer base will depend on these two major market segmentations. The retail customers will essentially be everyday customers with everyday needs. They need more discounts as they will return to the shop. The high end customer segment will be sizeable given the large number of affluent people in the country. Moving forward the customer segment can be divided further to include the expatriate populations and the young Omanis. The company should focus more on catering to the needs of the middle and higher classes of the society without disregarding the lower income group. It is also important to segment the market on the basis of age as the younger generations are more inclined towards buying from newer supermarkets. One of the main reasons behind the initial success of the company is due to the inclination of the emerging customer base of the country towards Spar. Given the international recognition of the brand these segmentations need to be effectively managed.
The Smart framework can be applied in order to form the marketing objectives of Spar.
Specific- The specific objectives will be to increase the customer base of the Spar in Oman. The newer customers need to be completely utilized by Spar. The company will like to expand its consumer base across the country in order to better reach people.
Measurable- The goals of the company need to be measurable. Hence, the company will aim towards doubling its revenue in the first year. The company will like to greatly increase its profitability in the first few months.
Attainable- The Company will aim towards specific goals that it needs to achieve within a certain period of time. The company will focus on gaining a significant customer base in each of the four monthly quarters in a given year.
Realistic- The Company will aim toward gaining significant momentum in the market before consolidating its position further. Spar will focus on customer satisfaction primarily before taking decisions to expand. The company will want to expand to only the major cities of Oman before moving on to the other areas.
Timely- The Company will set a five year growth plan that will be divided into quarters, half-years and years. This way the company can keep a track of the time and also provide offers to customers accordingly.
Product- Spar sells a wide range of products through its Supermarkets chains in Oman. The effective strategy should be towards selling as many products as possible in the stores. This will draw more customers. The focus should be towards selling branded and quality products to customers.
Price- The pricing strategy should be reasonable and divided in accordance with the market segmentations (Aaker and McLoughlin 2010). The regular retail customers will be given more discounts concerning the food, utility and other retail products.
Place- The place will need to be both offline and online. The shops will need to be located around the large marketplaces in the major cities. This will make sure that the people are attracted more towards the company at places that are most visited. The shops need to be located at central city areas. The online placement should also be present as Oman has a fast growing number of internet literate people.
Promotion- The promotion would be done through the use of multichannel marketing. Hence, the promotional aspects will be enhanced through the use of various media (Chaffey and Ellis-Chadwick 2012). The focus will be towards promoting the new value that the customers can get through Spar. Initial offer coupons and discount cards will be distributed. Khimji Ramdas will collaborate in the promotion process. This will help towards the better promotion of the supermarket.
The evaluation and control need to be done through the Key Performance Indicators. The company will use data management systems to monitor the progress of the company. The most important KPI in the initial months of the supermarket will be revenue growth and market growth. The company will focus towards measuring the customer numbers in order to evaluate the initial growth of the organization. The cost effectiveness of operations will also be a significant KPI. Initial revenue targets will be selected on the basis of which the achievements of Spar will be effectively measured. Customer feedback mechanism will also be used in order to gain significant understanding of customer satisfaction and demand.
Conclusion
In conclusion, it can be said that Spar has a very good opportunity to capitalize on the market of Oman. The country is growing in terms of the market demand being generated. This can be well understood through the initial success of the organization. Hence, Spar, Oman has to focus toward further consolidating its position. The placement strategy is in line with the results that have been generated from the PEST, Porters Five and SWOT analysis. It was found that Oman is an emerging market and the prospects for growth for Spar is good due to the feasibility of the political, social and market environment.
References
Aaker, D.A. and McLoughlin, D., 2010. Strategic market management: global perspectives. John Wiley & Sons.
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Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice (Vol. 5). Harlow: Pearson.
Dibb, S., Simkin, L., Pride, W.M. and Ferrell, O.C., 2005. Marketing: Concepts and strategies (p. 850). Houghton Mifflin.
SPAR – Global Leader in Merchandising Solutions. (2018). Leaders in Retail Merchandising | New Store Sets, Assembly & Installation | SPAR. [online] Available at: https://sparinc.com/
taxsummaries.pwc.com, (2018). [online] Available at: https://taxsummaries.pwc.com/ID/Oman-Corporate-Deductions
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