Home > Home > Oman: The right moves

1/1/2012  www.businesstoday.co.om

By Ramya DilipKumar

Over the years, Omani manufacturers have targeted the international markets for long-term sustainability and growth. While the concept of brand positioning may not be all too prominent for industrial products that are being exported, getting the brand to connect with the end user is imperative for the fast moving consumer goods (FMCG) and consumer durable products. Companies like Areej Vegetable Oils & Derivatives (AVOD), A’Saffa Foods, Amouage, National Detergent Company and Poly Products are among Omani companies that have entered the international markets successfully.

Those at the helm of affairs at these companies say what has worked best for them is keeping the core message of the brand intact, while adopting different approaches to connect with the consumer.
While the relatively nascent local producers can learn a few lessons from established players who have seen reasonable success in the international arena, Omani products still have a long way to go before they can garner the kind of success witnessed by international brands.

V Sundaresan, director, National Detergent Company (NDC), says the sultanate is not as cost-effective as some other countries in the region for manufacturers, so it is important for Omani companies to carefully craft a suitable branding approach. He says they have to also focus on technical aspects that will enhance quality, to stand out in the export markets and increase their competitive edge.

Enticing the consumer

When it comes to positioning a brand effectively in the international markets, executives are unanimous that the core attributes of the brand message cannot vary much across markets. A careful analysis of consumer trends and determining the right approach to connect with them appear to be a major factor for the success of a brand. S Balan, head of marketing, Poly Products, the makers of Raha and Cloud Nine brands of mattresses says, “In Dubai, we had to ensure that our brand was visible in outlets with a vibrant and pleasant ambience, as our customers there are the high net worth individual purchasers who are exposed to such experiences with other international brands.

But in a geographically vast country like Saudi Arabia, our focus has been to ensure maximum reach in the market, taking the product to the customers’ doorsteps in Riyadh, Jeddah, Makkah, Madinah, Dammam and so on. So, what works in one market need not necessarily work in other markets.”
Focusing on certain attributes of the brand also helps gain an edge over competition in the GCC.

Sidharth Lenka, head of marketing, A’Saffa Foods, says the main factor they choose to highlight is the freshness of the product. “We emphasise the natural qualities of our products, the pure feed we use for our chicken and our commitment to ensuring that it is produced in a Halal way from a Muslim country. We highlight that our products originate from Oman.”

While the ‘Made in Oman’ tag is a main focus for A’Saffa, luxury brand Amouage has focused on positioning itself as an international brand. According to David Crickmore, CEO, Amouage, the brand aimed to set itself apart by creating its own fragrances and by not falling prey to ‘the fickleness of fragrance fashions’. “Knowing the market implicitly and understanding it well is the first step towards success, not brashly arriving with a set of products expecting them to be immediately successful as they are in their home market without doing any research first,” says Crickmore. This approach has worked well for Amouage, he adds.

Companies also need to be realistic about their potential reach in the international markets and focus on niche segments instead of looking to capture a huge market share, say some executives. When NDC began targeting markets like Australia, it chose to market Bahar in Arab ethnic supermarkets in the country as they discovered that the Arab population residing there had a distinct preference for Arab-origin products.

Packaging for these markets also differed from that for the GCC markets as per consumer trends. “In Saudi Arabia, the tendency of consumers was to buy in bulk, hence we worked on a special bulk packaging that appeals to the consumers and also withstand the long-distance haulage and storage conditions till it reaches the retail shelves. But in a market like Australia, our detergents are sold in smaller packs. Hence, you need to have a fairly clear idea of what the market demands,” says Sundaresan.

When it comes to marketing and gaining insights into consumer trends, Omani companies have mostly depended on building a strong distribution network and working out which of the export markets they have to be physically present to enhance their brand identity. But Jayanto Banerjee, general manager, Asha Advertising, says relying on market intelligence from local distributors in international regions alone does not help solidify a brand in the international arena. “One needs to be able to connect with consumers emotionally and culturally. Understanding music and movie preferences is a great starting point.”

To stand out in the international arena a little innovation also helps when it comes to marketing. Salem Nasser al Bortmany, deputy general manager, AVOD, says the company adopted a two-pronged approach which has worked very well for their products that are sold across the GCC, GAFTA (Great Arab Free Trade Agreement) areas and other Middle East countries. “Our products are sold under a distributor’s brand across most markets, as some distributors have their private labels well established in their respective markets.

They have the tools and means of marketing this product, along with the infrastructure for distribution and re-allocation of marketing investment. They can create value for their business through brand extensions within their product portfolios. Brand extensions strategy has become a critical success factor in our business also in some countries like the UAE where our portfolio of products is sold as standalone goods established under a single brand. This was made possible through creating a brand equity in our core business and establishing  our own distribution channels ”

The approach in marketing also varies for consumer durables and FMCGs as products like mattresses are more of an informed purchase while the latter is mostly an impulse buy. But that doesn’t mean either of them has it easy. While brand positioning has to be more precise for consumer durables, the frequency of promotions for FMCG goods is higher as they compete against a wider range of international products on the shelves. One aspect that all agree upon is that the quality of the product needs to back all the claims made while positioning the brand in any market.

Challenging dogmas

Often, companies from Oman that look to break into the international scene are those with an enormous presence in the home market, where the brands of their products are well established. Hence some clients are shocked when they are faced with the harsh reality that their brands are not well known in the international arena, says Banerjee.

“Firms that are very well respected quite often don’t know how to start out as a small guy again in a new market and this is a big challenge.” He adds that as of now the brands here that have an international appeal are mostly in the hospitality space and many of the top homegrown brands within Oman are often not as well known in the international arena.

But that does not mean one has to think small in terms of branding while moving into the international markets. “Starting out small and testing the waters is not the right approach for success. Companies need to have a long term vision for their brand in a new market. There is a cost of entry into each market which the company or brand needs to be fully aware of and is willing to commit to. Brands will often not succeed if they look at a new market as simply a tactical opportunity,” says Banerjee.

Manufacturers say the biggest challenge is the financial investment needed to create brand awareness in the international markets. “The FMCG business is moving towards modern trade. The concept of wholesale is shrinking, while hypermarkets and supermarkets are coming up and expanding in a big way. So you have to aim to get your product registered, displayed in a prominent place and recognised by end consumers from among the tens of brands available on the shelf.

On the other side, there is additional cost in creating value for the product and communicating that to the end customers using various communication methods. That and above the line marketing are expensive,” says Bortmany. Except Amouage, most Omani brands tend to focus more on below the line marketing.

Most Omani firms exporting their products do not have deep pockets like the multinationals to invest in strengthening their brand identity in a new market, says Sundaresan. “In the detergents space, we don’t have any locational cost advantage and it is not really a high technology oriented industry. Hence the company will have to plan their branding approach keeping these challenges and realities in mind, in the international arena.”

When it comes to branding for the international markets, no single approach has proven to be the magic formula for success. What works best is a healthy mix of media to position the product and knowing the target customers in the international arena.

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