Factors to Be Considered in Promoting Australian Chilled Lamb in the Saudi Arabian Market - Assignment Example

 International marketing The Australian market is very sensitive to cultural issues which greatly influence the performance of many businesses. The Australian culture comprises of the religious beliefs, different patterns of behavior and various business practices. In Australia, the consumption of lamb has started to decline in the recent years because people have changed their styles of diet and are moving from eating red meat to white meat like chicken. The Australian market produces over 130,000 lambs in each year but local consumption is less than the production and thus most of the lambs produced are exported to other countries. In Australia, the demand for lambs is determined by the growth of the economy, the levels of income to consumers, the intensity of competition from other substitute products and the government policy (Fletcher & Brown 2011) As a result of this decline of local consumption rates of the lamb being produced by the Australian businesses, the lamb producers are interested in expanding their markets to Middle East countries like Saudi Arabia. This is because Saudi Arabia leads in the oil production hence it is among the wealthiest nations and its economy is good. Also they have good record of consuming lamb. Despite Saudi Arabia’s great economy, they are not able produce because of their weather and therefore the have to import most of the lamb products so that there will be sustainable lamb products to its population (Golder 2000) The issues associated with the exportation of lamb products to Saud Arabia is the cultural practices in order to excel in the Australian market, any exporter should be able to adapt the Saudi Arabia’s cultural practices so that the products can be sold in the market (Barczak 2003). The Islamic culture requires that any exporter of the lamb products should change the whole process of production for the product to be halal. The changes in the production process can be done changing the physical facilities, the products which are used in production and real production process. According to the Saudi Arabia’s religious beliefs, a lamb will be considered halal (allowed) if will meet the following conditions; in the first place, it should mix with any product that comes from the haram animal. The production facilities should also be clean according to the Islamic law and during the production process the lamb should not be contacted with a product from an animal considered haram (Calantone et al 2002). On the other hand, an animal can be haram if it comes into contact with pigs and carnivores, dead animals, amphibians, birds, alcohol and blood. In this regard therefore, the Australian exporters should consider the above issues before entering into the Saudi Arabian market or else their lamb products will be considered haram. Finally, the production process can be changed by changing the production facilities as stated by the Islamic religious beliefs, change the products used like slaughtering male lambs at least six months old and should be in good stable health (Calantone et al 2002). Finally, the production process should also be in line with the laws set in the Quran so that the process can be halal. For instance, the lamb needs to face Mecca before it is slaughtered as stated in the Quran. Therefore, after understanding the prevailing circumstances of the Saudi Arabian market, the Australian lamb producers should observe the above cultural beliefs so that their products can be accepted by the consumers who have the Islamic religious beliefs. Question 1: Cultural imperatives of Saudi Arabian market Islam is the major religion in Saudi Arabia and therefore it dominates its cultural practices among the Saudi Arabian people. The Islamic religion bases its beliefs in two issues which are the halal (allowed) and haram (unclean). The haram products in the Saudi Arabian market are considered unclean and therefore are not fit for consumption by Muslims. A product is considered halal by Muslims to be sold in the Saudi Arabian market if the product does come from animal or other products which are made of haram animals (Hassan et al 2003). This makes the product clean and therefore can be readily accepted by many Muslims. The Muslims also belief that a product can be halal if it is produced by processes and equipment that have been cleansed by the Islamic law as stated in the Quran. The Muslims also believe that an animal can be halal if it has not come into contact with an animal or product that is considered haram. In this effect therefore, the product can be acceptable by the Islamic culture that it is clean for consumption. On the hand, the Muslims also belief that an animal can be haram if it contains products or ingredients from an animal considered haram. Some of the animals which are considered haram are dogs, pigs, donkeys and carnivores. They also believe that a dead animal is not clean for consumption and therefore it is haram. Other animals considered haram by Muslims are the birds and amphibians. The Muslims further belief that a slaughter house should be kept purposely for slaughtering halal animals and not be contacted with animals which are unclean as it will contaminate the clean slaughter house. The Saudi Arabian market also has restrictions on the products to be sued. For instance, they believe that a lamb can be slaughtered when it is over six months for male lambs. According to the above cultures of the Muslims, the Saudi Arabian market is strict on observing the Muslims culture and therefore any business to succeed in this market, it has to consider the Muslim culture in order to maintain the Islamic laws (Young 2005). Question 2: Halal requirements can render the Australian product uncompetitive in Saudi Arabia because of the changing cultural believes of the Saudi Arabian people. The Australian market comprises of the Muslim cultural practices unlike in the Australian market where there are different cultures. First, the Saudi Arabian market can consider the Australian products for consumption according to their Islamic culture (Hollensen 2011). This is because the Australian product might have been produced without considering the Islamic culture and therefore the product can be considered haram and cannot be consumed by the Muslims. This will lower the sales of the product when it is compared with the Saudi Arabian products which are produced considering the Islamic culture and thus the Australian firm will not attract more customers due to competition from the Saudi Arabian nationals. On the other hand, the Australian product may not compete effectively in the Saudi Arabian market because in order for the product to be considered clean, the whole process of manufacturing should be changed to observe the Islamic culture (Hollensen 2011). In the process of changing the equipment of production, extra costs may be incurred which are then constituted in the prices of the products. This makes the Australian products expensive than the products manufactured by the indigenous Saudi Arabian companies. In this regard therefore, the Saudi Arabian products gain competitive advantage. Finally, the Saudi Arabian market prefer their own products than the products produced by the Australian companies as they think that the Australians do not understand better the halal requirements leading to low competitive advantage. Question 5 There are certain factors to be considered when promoting Australian chilled lamb in the Saudi Arabian market. They include the cultural beliefs, social, religious and aesthetic culture of Saudi Arabian people. The advertisement should consider the Islamic culture and so should not provoke the Muslims as they are the main market for the product. In this regard, the advertisement will not be opposed by the Muslims (Kotabe & Helsen 2004). Another issue to focus on the advertisement is the social elements of the Saudi Arabian market. The advertisement should consider the various tastes and preferences of the Saudi Arabian market. This is achieved by considering the segment which prefers the chilled lamb. Another aspect to focus on in the advertisement is the explanation on how the chilled lamb will adapt the new environment (Kotabe & Helsen 2004). The advertisement should show how the chilled lamb will adapt the Saudi Arabian market because the climate will change to extreme temperatures. Through this, the Saudi Arabian people will be convinced that the lamb will survive in the new climate. Lastly, the cost and channel of communication will also be considered. The medium of advertisement should be the one that is accepted by the Muslims. There are some advertisements Medias which are prohibited by the Muslim culture (Kotabe & Helsen 2004). Therefore the channel should be appropriate. Lastly, the cost of the advertisement should not be too high to an extent of increasing the prices of the chilled lamb so as to recover the advertisement costs. References Barczak, G 2003, Managing Global New Product Development Teams, Institute for Global Innovation Management Working Papers. Calantone, R. Kim, D. Schmidt, J & Shin, G 2002, The influence of internal and external Firm factors on export performance and international product strategy. AMA educators’ proceedings, American Marketing Association. Fletcher, R & Brown, L 2011, International marketing: an Asia Pacific perspective, 5th Edition, Pearson Prentice Hall, Frenchs Forest. Golder, P 2000, Insights from senior executives about innovation in international Markets, Journal of Product Innovation Management. Vol. 17, No. 5, pp. 326-340. Hassan, S. Stephen, C & Wael, K 2003, Understanding the new bases for global Market segmentation, The Journal of Consumer Marketing, Vol. 20, No. 4, p. 446-463. Hollensen, S 2011, Global Marketing - A Decision-oriented Approach, 5th edn, New York, Pearson. Kotabe, M & Helsen, K 2004, Global Marketing Management, 3rd edn, London, John Wiley & Son. Young, C 2005, Advertising Research Handbook, Ideas in Flight, Seattle. Read More