Al Freshco
Al freshco is a leading producer of dairy as well as food products. It is fully owned by farmers’ cooperative. The firm produces an array of dairy products. Additionally, it produces fruit juices and fruit related beverages. Processed products include butter, yogurt, and desserts among others. Food ingredients and selected prepared food items are also a specialty of Alfreshco (Alfreshco website). Its market remains largely local, accounting for approximately 35% of sales. Europe’s extra sales contribute to an additional 33% of the sales. Other markets contribute to approximately 10% of the company’s revenues (Alfreshco website). Al Freshco operates through 95 branches in more than 70 countries (Alfreshco website). Recent trends have seen the company pair up its range of products focusing on selling the brand as the best choice. The company also undertook re-organization within its structures of operation by setting of nine primary divisions. Al Freshco Frico Cheese (25% sales); Al Freshco Dairy & Drinks (16%); Al Freshco Consumer Products (15%); Freshco Vlag (8%); Al Freshco Butter Products (7%); Al Freshco Food Service (6%); Al Freshco Domo Ingredients (4%); Kievit (3%), and Al Freshco Asia Pacific (15%) (Alfreshco website). The latter division put much emphasis on improvement of the company’s image within the target market.
Al freshco specializes in flavoring of fresh ingredients. It produces delicious, all natural products that are easy to prepare as part of a healthy lifestyle. It is a leading producer of Dairy Products, selling over 5.1 million tons in 2009. Among its major products is butteroil.
Butteroil
Butteroil is a dairy product produced by removal of moisture and non-fat milk solids present in butter. Its packaging further makes it an efficient and economical way of butter storage and transportation. It has a number of fat lipid types (Waltz). Each fraction has a particular melting point. Triglycerides form the major component of butteroil. Milk fat melting point is 37ºC; butteroil starts to solidify at temperatures less than 17ºC (Waltz). Drums weighing 2000 kg are used to package the product with ambient temperatures preferred. Its packaging ensures that oxidation does not take place as air is replaced with either nitrogen or carbon dioxide. Its recommended storage temperature is 4.4ºC as this facilitates prolonged shelf life (Waltz).
Butteroil Composition
3 methods are commonly used in preparation of milk fat products. This yields different varieties as illustrated below (Waltz):
- Anhydrous Milk Fat:
- A large percentage composed of milk fat (99.8%). This is processed from fresh cream in combination with butter.
- Traditionally additives are not permitted in its processing.
- Anhydrous Butteroil:
- Its milk fat composition is set at 99.8%. However, unlike anhydrous milk fat it is possible to process it from different butter and cream ages.
- Alkali use in neutralizing of free fatty acids is permitted.
- Butteroil:
- It contains not less than 99.3% milk fat:
- The salt and fatty acids contents are 0.05% and 0.5% respectively;
- The value of peroxide content is 0.2%. This value indicates the level of peroxide contained in oils and fats. It is a measure of fat/oil oxidation.
- In case of heavy metals, butteroil is limited to 0.05 p.p.m. of Cu and 0.2 p.p.m. of Fe.
The general composition of butter oil varies in amounts. Fat accounts for 99.6%, moisture accounts for 0.3%, protein accounts for 0.1%, no lactose and ash are present.
Note: Both anhydrous milk fat or anhydrous butteroil have a low level of moisture estimated at 0.2%.
Butter oil uses
Generally, butter oil is light yellow colored and has a clean bland taste. It is not sour and has some level of bitterness. Its other properties include being rancid, oxidized and comes in flavors. Its manufacturing does not involve intense application of heat. Consequently, it does not have the flavor often associated with heated butter. Lecithin, present in butteroil assists in instance preparation of milk powder. Bakers also use butteroil in spraying of cracked surfaces in order to improve its gloss and aesthetic qualities.
Advantages of butteroil usage are as follows:
- Its non-splattering and does burn on during the process of sauntering.
- Offers increased puff for pie shells as well as pastries.
- Enhances flavor and aroma of bakery items.
- Controls fat bloom in chocolate candies.
- Easy to melt and pump making it easy to mix with other food ingredients.
It is also available in a lipolyzed form. This is as a result of its enzymatic modification with the help of lipases to yield concentrated cream sources and buttery flavor for bakery use, as well as in low-fat as well as low calorie products (Waltz).
Branding
Like many global corporations, Al Freshco believes in the importance of branding. Branding goes beyond simple logos or catchy taglines of creative marketing department activities (Trout 51). Brands are primary identification symbols of businesses. A brand should reflect authenticity and uniqueness of Al Freshco. It assists the firms in achieving a number of thongs. These include:
- Definition of the target market benefits as a result of the product’s usage.
- Definition of the product difference t others offered by competitors. it goes beyond what knowledge of what one does but rather what difference Al Freshco offers compared to its competitors.
- Promote a clear distinction to the products offered by the target market.
- Maintain focus on the firm’s image within the market.
- Ensure that the company’s services are a reflection of its brand mage.
- Maintain credibility within the target market.
- Maintaining relevance to the target market.
- Create an emotional link with the target market.
- Maintain client loyalty.
Additionally, branding adds value to the products through a number of ways. These include (Trout 81):
- Implying consistency (if consumers have had your product before, they expect it to be the same each time)
- Helping the consumer make efficient purchasing decisions (if they know the brand they will skim over other brands quickly)
- Communicating key benefits
- Generating loyalty to the branded product
- If protected legally, assists in developing a defendable competitive advantage
Branding is as important in business markets as in consumer markets. However, business buyers look for a different set of brand values. They ask what a product or service can do for their business (Trout 52). The sourcing and purchase decision is often consciously competitive, and will be more objective and less emotionally driven than retail consumer purchase decisions.
However, always remember that a sale connects people with people. Emotional brand attributes such as quality, reliability and innovation are very important. They just need to be packaged in a way that appeals to the people who will purchase for business reasons.
It is therefore important to carefully about who will make the purchase decision, and what they are looking for. Are they distributors, importers, or principals? What qualities they attach to the product and what they feel their clients want in such products (Trout 34).
Brand Positioning and segmentation of market
Al freshco is putting much emphasis of quality turnover enhancement as well as operations profitability. Much interest is directed on enhanced penetration of market and market share expansion rather than infiltration of new markets. The need for innovative approaches to solutions in response to the needs and demands of consumers is important. These products are generally characterized with low and volatile pricing. The key to successful competition within the existing markets is a tight price control in addition to brand image build-up.
Brand positioning is vital in pursuing and achieving differential advantage.. Essentially, it reflects “the place” occupied by a given product relative to the existing market segments (Ries 45).. Al Freshco market segmentation is purely based on pricing whereby the products produced target specific income groups. The major strategic segments chosen by Al Freshco are reflected by the pricing differences of its products. The three brands includes: discount/value, Al Freshco (mid-price), and high-end. The differential strategy has been able to work appropriately over the past decade and hence provide fro growth. However, its success is also attributed to its successful projection of its brand as the brand of choice within the industry. Both brand names and advertisement offer support to businesses and hence facilitate their quality and consistency perception by the intended market.
Al Freshco brand symbolizes a guarantee of quality of the products among the perceived clients. Nonetheless, in the recent past there has been growing competition from various players within the industry. New players as well as the existing players are putting much effort into gaining a share of the market enjoyed by Al Freshco currently. Al Freshco’s competitors are vast and distributed across its target segments. In discount/value market segment, Fiona’s Dairy serves as the major competitor and is targeting shares in the milk products market through its focus on flavor conscious clients at reduced product costs. In the mid-priced market, David’s dairies offer major competition while the high end butteroil segment is characterized by two major players including Gypsy and Vampire dairies all of whom have similarly strong brand names. This information informs the development of a brand positioning map for Al freshco relative to the existing competitors.
Beside the three original market segments, Al Freshco also explored a new segment: more mature group of customers, who were underserved before. The creation of new brand allows Al Freshco to transfer brand equity from the three original brands to this new brand. In addition, Al Freshco would also be able to relate its previous brands’ experiences to the new brand in order to increase the chances of success. However, the ability of the new brand to contribute to the overall financial condition of AL FRESHCO is still questionable.
Target Segments
Although people of various ages shops at Al Freshco, but Al Freshco specifically targets the health conscious population as well as the youthful working population. The sub-brands of Al Freshco also targets person’s conscious of flavors.
Selling Points
Al Freshco products include modern and stylish refrigerated shelves. It appealed to people who want to have sense of flavor.
Opportunities
Al Freshco has competent people in both of its management and production team. They all have strong business experience prior to joining Al Freshco. This increases the likelihood that the two teams would lead Al Freshco into the right direction. The redesigning of production has a favorable impact on customers’ shopping experience, which can ultimately maximize sales..
Threats
Continuous research and customer surveys are needed in order to keep pace with the apparel industry. Customers feedback to Al Freshco’s offering are really important. Al Freshco is risking losing businesses to competitors if it ignores customer feedbacks and insights. Also, maintaining Al Freshco’s identity can also be an issue as some people believed that discounted flavor was cannibalizing Al Freshco. If customers see no difference between Al Freshco and discounted brands, they would be indifferent between two brands and simply buy the cheaper one. In that case maintaining separate brand would be a complete waste.
Brand Extension
Brand extensions allude to successful brand name usage in launching of new as well as modified products within the existing market. It is based on the belief that the clients will buy product on reputation of its existing brand position. Successful brands are therefore a gateway to new product entries into existing markets without much trouble. Al Freshco broadened its focus by introducing brand extension for different product lines. Essentially, Al Freshco wants to capitalize on its brand equity in order to capture more shares in the Milk products industry. Brand extension can also be considered as Al Freshco’s strategy to diversify. The intense competitions lead to a limited room for growth which increases Al Freshco’s business risk. By putting “eggs in different baskets”, Al Freshco effectively reduces the amount of business risk.
Brand positioning statement
While the points discussed below ell illustrate the brand positioning statement driving Al Freshco, the statement below best summarizes it.
“For Dairy product clients, Alfreshco brand is the ideal product that not only provides satisfaction but also offers meets their needs and requirements because only Alfreshco offers flavors that meet the needs of all society classes.”
Conclusion
It is important to mention that branding has been key to growth of Al fresco. Butteroil sale is largely dependant on the branding image the company has accumulated over the year. Its focus has largely been on the existing market rather than expansion into newer markets. This explains the strong brand position the company has focused on. Additionally, all its products are launched with some level of attachment to the initial brand popular with the people. Rather than bank on pricing, the product basically sells on brand and its market position.
Works cited
Alfreshco. Alfreshco website. 2011. Web.
Ries, John. Positioning, The battle for your mind. New York: McGraw-Hill Inc., 2008.
Trout, James. “Positioning” is a game people play in today’s me-too market place”, Industrial Marketing, 54.6, (1969): pp. 51–55.
Trout, Rivkin. The New Positioning: The latest on the world’s #1 business strategy, New York: McGraw Hill, 1996.
Waltz, Loice. “Butteroil Ingredients.” Dairy Recipes. 2011. Web.