DAALI EARTH FOODS

Marketing Strategy Case SUBMITTED BY: GROUP# 8 AHSAN ARSHAD FAIZAN KHALID HINA QAISER MADIHA SAEED MAHEEN CHAUDHRY NIDA NABEEL ZUNAIR AHMED

MARCH 17, 2014

LAHORE SCHOOL OF ECONOMICS MS. TANIA HASSAN

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

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.