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Introduction
Daali Earth Foods was initiated in 2005 by two friends, Marium
and Samia, offering organic
food, grown without the use of chemicals and dirty water. The
basic idea was to cater to the
growing niche market of health conscious populace. Daali
products were targeted towards people
who preferred healthy lifestyle and were available at premium
prices in limited number of
outlets. All products were minimally processed and rich in
dietary fiber, packaged in recyclable
and biodegradable materials.
Problems
Little awareness of organic food in the market. In addition to
this lack of consumer
awareness of the brand has led to the product still at the very
start of the product life
cycle- introduction despite in the market for quite some
time.
Placement of the product was an issue. Not only were the
products available at limited
number of stores, they were placed at unnoticeable shelf
areas.
The company had a patriotic stance as its chief marketing ploy
therefore it had opted for
recyclable and biodegradable brown paper leading to unattractive
dull packaging.
Since Daali used natural ways to protect the produce from pests
and insects, its products
had shorter shelf life than non-organic food.
The company depended solely on word of mouth advertising and did
not have a proper
sound marketing strategy.
Inability of the management to take advantage of being the first
mover in the market.
There is no direct competition but since the general awareness
of fitness and health is on
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a rising trend, new entrants may jump in leading to further
weakening of the prospects of
establishing itself as a market leader.
The most important of the issues facing the company is that of
finances. Though it has
the capacity to increase its sales by three times, scare
finances does not allow it to
exercise this option.
The head, Ms. Marium not being tech savvy has not yet explored
the idea of growing
business online that is not only cheap but taps straight to the
target market.
Reluctance of the management (risk averse) to make decision of
future financing through
entering a partnership fearing philosophy conflicts within the
partners.
Recommendation
The most significant issue at hand, which has led to creation of
other problems mentioned above,
is scarcity of finances. Marium needs to accept that in order to
grow the business, she must enter
a partnership. Not only would it bring the much needed
investment but also a helping hand in
making strategic decisions. However, if conflicts are deemed to
arrive the next option that we
recommend is that of venture capital. The second option is yet
again not without concerns. Being
able to provide good returns to the investors is a taxing task
that too in short span of time. As a
consultant first option is less risky, and limited liability
allows one to lose only the invested
amount.
The company urgently requires a full scale integrated marketing
strategy to create awareness of
its products. It would also include redesigning the packaging.
As the marketing tactics would
bear fruits, the idle capacity at hand can be better utilized
bringing down the fixed costs per unit
and improve profitability of the company. However, all these
decisions are dependent on
availability of resources.
