Marketing Case Study Olive Oil
Marketing Case Study Olive Oil
Introduction:
Since prehistoric times, olive oil is considered as the golden liquid and was discovered around the Mediterranean basin. Since that time, Olive oil has been produced in this region and represents more than 77 % of the world production in fact Spain, Italy and Greece share 97 % of the European production. Since a few years we can also find some olive oil producers in Africa and Asia witch respectively represent 12 % and 7% of the word production (Case study, 2007). Olive oil has been recognised by the British government to be more beneficial for health and especially for specific diet and healthy lifestyle.
The objective of this essay is to analyse and evaluate the market of the olive oil to recommend an international marketing strategy to launch the company Petroliva in the United Kingdom Market. Thus, the olive oil industrys strategic analysis is being studied, some tools as a SWOT analysis and the PEST analysis are used to establish and recommend the market entry strategy for Petroliva in the UK market.
The olive oil market
Olive oil is the base of any mediterranean life style, Spain, Portugal, Italy, Greece, Turkey, Tunisia, and Morocco represents more than 90% of the world production. Beyond the use of Olive oil for cooking, more knows with the mediterranean diet, they are also plenty of uses around the home as some tips & tricks web sites explain. Olive oil has been also recognised by the British government as healthy lifestyle and for consumer a benefit of a mediterranean style diet (case study, 2007) in fact it reduces the levels of bad cholesterol and its also use as high natural antioxidant (Olimarket, 2007).
European countries represents in term of consumers and producers the first with 79 % of the world production, African countries represents 12 % with Tunisia and Asian countries represents 7% with Syria and Turkey (case study, 2007). According to the latest estimation of the International Olive Council (IOC), the European anticipate to consume 1.8 millions ton in 2010-2011, the United States should remain the second highest with approximately 260,000 tons.
New horizon with the IOC is been campaign in China, Russia, United States, Canada, Japan, South Korea and Australia (Bulter, 2010).
Spanish Olive Oil Industrys
Spain and Italy, two major worldwide producers and consumers have been competed with one another to be recognize as the first producer of olive oil in the world.
The geographic conditions with the diversity of climates and microclimates gives to Spain the opportunity to offer a wide range of olive oil types with intense fruit aroma, around 260 olive tree cultivars but only 24 types are used in olive oil (Olive Oil Times, 2010). Spain is covering more than 2 million hectares with 300 million olive trees witch represents more than 25% of the worlds olive cultivated surface area (Asoliva, 2010). Spain exports its olive oil in more than 100 countries over the 5 continents, Europe (84%), North America (5,7%), Asia (4%), South America (2,8%), Oceania (2,5%) and Africa (1%). The spanish olive oil is been exported mostly in bulk or in containers of less than 5 litres to international buyers such as Italy, France, Portugal and United Kingdom (UK) who package and market the products and export them to international market, using their own distribution channels. However, Spanish brands know some difficulties to position themselves and their products in the international marketplace. That is why, two public organizations, the Foundation of the Communal Patrimony of Olives and the Inter-professional Association, corresponding at the agricultural and the industrial sector, have been created in order to change the perception of the quality of Spanish oil and position it as the worlds benchmark for quality (case study, 2007).
According to the Spanish Association for the Industry and International Trading of Olive Oil (ASOLIVA) for 2009/2010 period, the production of olive oil in Spain was around 1.3 million tons. These figures reinforce the position of global leadership of Spains olive oil production, well ahead of other producing countries such as Italy (with an estimated production of 300,000 tons) or Greece (280,000 tons) (Olive Oil Times, 2010). As it been explain early, Spain exports in more than 100 countries, the spanish is often consider to be the cheapest olive oil and so associated as bad quality. The producers and exporters were more focused on price rather than quality. But a reform on quality in the year 2000 change their strategy. From that time, Spanish firms focused more on quality, commercial and marketing department became more important.
British