Hi, my name’s Paul Baines, I'm Professor of Political Marketing
at Cranfield University
and co-author of Marketing by Oxford University Press.
In this next sequence, we talk to
Abdur Ahman Almimani, the General Manager at Aldoraq Water Company
in Medina, Saudi Arabia and in this sequence
Abdur Ahman talks about the difficulties the company was facing
in competing against the big boys like Nestlé and PepsiCo.
My name is Abdur Ahman Almimani
I work for a company called Aldoraq Water Bottling Plant
it’s a member of Almaimani group which is owned by my family.
My role is the General Manager of Aldoraq Water.
Our customers are mostly supermarkets
medium and small store
with a distribution channels direct to the customers,
also we have, some of our customers are restaurants,
fast food chains, caterings company, hospitals, and household.
We produce bottled water from the Holy City of Medina
and that’s coming in a container from, starting from 250ml
all the way up to 19 litres
and we get the 200ml in the plastic cups and then we get the 375ml
and then we have the 600ml
we have the two litre, the one gallon, the five litre, the five gallon
and starting from May 2016
we’re gonna have our two new products, the 300ml
and the 1.5 litre.
Most of the supermarkets, when they start to make that decision
they make the decision who to, how to get the cheapest water
so they can get more profits when they sell it
as an individual to the customers.
For example, when they buy the 40 containers box from us
they get it for 12 Riyals and when they sell it, they sell it for 20 Riyals.
So they look where they can get the more profit margin
from different companies
if I'm selling at 12 and the other one is selling at 13, they will get
from me because profit margin’s larger than the other one.
It’s mostly about profit, how much they're gonna make.
Customer usually make the decision in who they will buy from
based on a few things, the first one is the price mostly
but second about the services they are getting
also about getting
some of the customer t-try to get a local product, local products
and some of the customer, they just want to get something that been
used to for a few year, for many years.
Since we have been in the business for 20, 20 years
most of our customers have just been used to get our product
they are not willing to change
and some of the customers start making their decision
starting, we see it starting from beginning of this year
is because we start delivering for 24 hours
because some of our customers are hospitals
and catering companies and they want their
product to be available for 24 hours
so we give the chance to deliver to any customer for 24 hours
and that just make a very big change in our market.
So the competitive nature in our market started a few years ago
when the Kingdom of Saudi Arabia allowed international businesses to
start having product produced in Saudi Arabia.
When we first start in 1994, we were the only water factor in Medina
and over the year, more than five to six new businesses
start in Medina for water bottling. Also,
today we have more than 30 companies distributing their product
to the city of Medina.
Some of them are the big names including
Aqua Fina, including Nestlé,
including Aqua which is manufactured by Coca Cola,
and also BDA, Deryon, the one from Turkey,
and that just makes it very crazy in the market to compete well.
Aldoraq is facing a problem completing with international names and
big companies like Nestlé, Aqua Fina and Arrow which is manufactured by
Coca Cola.
Those companies has one of the biggest supply chain in the world
and because for example, Pepsi’s supplying
all, most of the soft drinks to the supermarket
they try to push their product by telling the supermarket,
“If you want to get our products, you have to get the water from us.”
And in the beginning, they give it as a free sample to the supermarket
and if you start giving free, everyone will get it from you,
and then they start pushing it, said “If you need to get the Pepsi,
you have to get the water also from us.”
Coca Cola, a year later when they start having their
water product, they did the same
and they pushed everyone button by saying,
"If you wanted to get the Coca Cola in your
supermarket, you have to get the water from us.”
And that just took a big chunk, a big, a big margin of our
customers because of the trick they did in the market
that was the hardest thing to compete with.
I am solving this problem by doing a few things, first of all
I'm focusing with the household
I'm driving the water all the way to the w- to the, to their doors
I'm giving them a 24 hour services
also I'm giving a special discount to religious places and charities
for example mosque.
Also, I had a campaign, awareness campaign about the local
about supporting the local products
and, and because I'm focusing on the city of Medina
and because I'm doing very good right now.
I'm expanding in the western region only.
Speaking about our competitor
Nestlé is expanding very big in the whole Kingdom, not
just only in the western part
so they’re responding to us by opening a new market that is gonna be
a little bit difficult for us to go in because of the transporting price.
I'm competing with big names, with the contract of supply chain partnership
including some of the water factories in the Kingdom of Saudi Arabia
for example, I have a partnership with a factory in Riyadh, another one in Jeddah
and we exchange customers in order to reduce the cost.
For example, if I have a contract in Riyadh to supply water to the hospital
I call the factory and they are to supply the water from them instead of me
having to carry it all the way from Medina to Riyadh,
and in return, he do the same with me when he have a customer in Medina
or near the city of Medina.
The future for Aldoraq Water is that we are planning to
expand our production capacity by double, also expanding the
delivery trucks for household from eight trucks to ten trucks by the end of 2016,
and for the local distribution channel, we’re expanding our delivery truck
from 60 to 100 by the 2017.
The future for Aldoraq Water is very bright for us.