Almarai Research 2017
Almarai Research 2017
net/publication/329171040
CITATION READS
1 7,234
1 author:
Ajay Singh
University of Hail Saudi Arabia
18 PUBLICATIONS 7 CITATIONS
SEE PROFILE
Some of the authors of this publication are also working on these related projects:
The Growing Demands of Cross-Cultural Management In Higher Education – A Case Study of Hail University View project
All content following this page was uploaded by Ajay Singh on 25 November 2018.
Performance Measurement of
Almarai Products and Customer
Satisfaction
Ajay Singh1, Hagahmoodi S. O.2
1
College of Business Administration, University of Hail, Hail City, Saudi Arabia
2
College of Computer Science and Software Engineering, University of Hail, Hail City, Saudi
Arabia
Email address
a.singh@uoh.edu.sa (Ajay S.), s.hagahmoodi @uoh.edu.sa (Hagahmoodi S. O.)
Citation
Keywords Ajay Singh, Hagahmoodi S. O. Performance Measurement of Almarai Products and Customer
Almarai, Satisfaction. International Journal of Management Science. Vol. 4, No. 1, 2017, pp. 1-12.
Customer Satisfaction,
Performance Measurement,
Abstract
The aim of the paper, especially focuses on measuring the performance of Almarai
Milk,
company’s products through customer satisfaction. The key results are focused on the
Dairy Products
determination of distinctive preferences and expectations. Measuring customer
satisfaction emphasizes immediate and meaningful outcomes about customer preferences
and expectations and by the way the company’s performance may be evaluated in
relation defined satisfaction criteria that shows the pros and cons of performances of a
Received: October 11, 2016
company. Satisfied customers usually return and purchase more, they also impart the
Accepted: November 28, 2016
message with their surroundings about their experiences pertaining to particular products
Published: February 8, 2017
and services of a company they trust more. It shows that the Almarai Company’s
products are satisfying the customer’s expectations and requirement over its competitors.
It shows that the priorities and services of Almarai Company’s products are likewise the
other companies and performing over other companies. The overall study describes that
overall the performance of the Almarai Company is satisfactory and a large portion of
the population is satisfied with the wide range of company products.
1. Introduction
Performance measurement through customer satisfaction is a relatively new concept to
many companies and competitors that are prospering in the new global economy
recognize that measuring customer satisfaction is the key of success and by doing this
they understand how to better attract new customers. The successful competitors always
recognize that customer satisfaction is a critical strategic policy that could result in
increased market share and increased profits.
Performance measurement is the process of collecting, analyzing and/or reporting
information regarding the performance of an individual, group, organization, system or
component [1]. Moullin defines it as "the process of evaluating how well organizations
are managed and the value they deliver for customers and other stakeholders” [2].
The problem companies face, however, is exactly how to do all of this to understand
how to measure and quantify customer satisfaction. Plans are sketched out using
customer satisfaction research findings to target customers and processes that are most
favorable to extend profits. Too many companies rely on outdated and unreliable
measures of customer satisfaction as they focus sales volume describing their customers'
states of mind while these approaches are not perfect substitute of a valid and well-
designed customer satisfaction surveying program. The demographic characteristics of
the respondents (age, gender, level of education) influence the structure of their
2 Ajay Singh and Hagahmoodi S. O.: Performance Measurement of Almarai Products and Customer Satisfaction
expectations towards dairy product packaging, determine Various factors, namely, age, education years, food safety
their purchase decisions [3]. Environmental features of dairy awareness, evaluation of government regulation, policy,
product packaging have great significance for the evaluation of organic milk price, and purchase convenience,
respondents, and meeting their expectations in relation to have a significant impact on consumer trust [8]. A number of
their buying decisions [4]. dairy food companies in Saudi Arabia have been using varied
In most of the companies, marketing and sales employees competitive strategies over the last few years, but this study
are basically responsible for designing and implementing reveals how Al-Marai uses a strategy of market penetration
customer satisfaction surveying programs through to beat the competition [9].
questionnaires, focus groups, top management and marketing
division’s programs. Customers are informed about changes 2. About the Company
in the related product and services as a result of listening to
their needs. Performance measurement through customer Almarai is an integrated organization spanning its food and
satisfaction is incorporated into the strategic vision and beverage products from dairy farms through to retail stores.
mission statement of the company. Stakeholder The other brands are known as “ALMARAI”, “ALYOUM”,
compensation is also combined with directly to the customer “SMOOTHY” and “ZADY”. Almarai company limited, a
satisfaction surveying program. To be successful, dairy company, provides nutritious food and beverages in
organizations need to design a customer satisfaction Saudi Arabia. It provides dairy liquids, including flavored
surveying tool/program that meets the certain criteria and milks and lactose-free milk; yoghurts and desserts; food
employee performance and compensation can be attached to products, such as cheese spreads, cheese slices, butter, ghee,
the final results [5]. cream, and mozzarella; fruit juices; bakery products,
Customer satisfaction is the state of mind that customers including breads, ready-to-eat pastries, and biscuits; and
have about a company or its products or services when their poultry products.
expectations have been met or exceeded over the lifetime of Almarai means 'green pastures' in Arabic, a name that has
the products or services. The customer satisfaction leads to now become synonymous with freshness, quality and service
company loyalty and product demand. Customer satisfaction across the Middle East. Almarai is the largest integrated dairy
measurements have been made with an understanding and foods company in the world, with a reputation for quality that
filling the gap between customer expectations and is unmatched within the gulf countries. Almarai began in
performance of product and services. The relative price, 1976 under the leadership of HH Prince Sultan bin
price-quality ratio and price fairness influence producers' Mohammed bin Saud Al Kabeer, as it remains to this day.
loyalty and improved business relationship performance [6]. The company's headquarters are based in Riyadh, the capital
The majority of pre-existing food consumption research of the Kingdom of Saudi Arabia, and the Almarai company
supports imply that a good taste and a high degree of extends throughout the Arabian Peninsula, leading and
healthiness are incompatible with each other [7]. influencing the agricultural, dairy processing and food
Performance measurement and customer satisfaction itself distribution industries.
can be understood through a number of different facts about Company vision is the preferred choice in food products;
the relationship with a customer for example: promoting nutrition, health and well being in the GCC and its
Satisfaction with the quality of product or service; mission constantly exceed consumer expectations by
Satisfaction with an ongoing relationship with customer; providing the highest quality food products and superior
Satisfaction in the price of a product or service; customer services. However, Almarai is committed to
Satisfaction due to a product or service exceeded the ‘excellence in execution’ drives growth and wins consumer
customer's expectations. trust [10].
Source: https://www.almarai.com/en/investors/financial-information
Figure 1. Almarai Revenue Evolution.
International Journal of Management Science 2017; 4(1): 1-12 3
Source: https://www.almarai.com/en/investors/financial-information
Figure 2. Almarai EBITDA and EBIT Evolution.
The success of Almarai is not only its sophisticated farm packaging and consumer purchase decisions. Shijiu Yin, Mo
houses, its well established distribution network within the Chen et al. (2016), in his research paper focus on consumer
Gulf countries and Central Processing Plants but is also the trust in organic milk and influencing factor of different
result of continued focus on customer satisfaction, to deliver brands through using 876 randomly selected consumers in
high quality products daily to our consumers and to satisfy its Shandong Province of China. The finding of the research
stockholders. Almarai has since become one of the foremost describes that Chinese consumers generally lack trust in
food companies in the Gulf and spanning the food supply organic milk. The factors like age, education, safety,
chain from dairy farms and arable farms through to retail government policy, organic milk price and convenience have
outlets in six Gulf countries. significant influence on consumers trust. The other factors
The company has great emphasis on continuous research such as income, protection of the environment, and risk
and product innovation to ensure its customers and the taking capacity are not influenced consumer trust [8].
quality and value they expect. The company is a market Agnieszka & Anna (2015), examined the importance of
leader and holds approximately 50% of the fresh milk market the environmental factors of dairy product packaging during
with the next highest competitor holding around 30%. the consumer buying decision process with consumer
Almarai is viewed as an innovator in the area of marketing expectations. This paper consists of both of theoretical and
throughout the region, and has led the way in original empirical nature. In the theoretical part, the study used the
promotion and advertising. cognitive-and-critical analysis of the world’s literature. In the
Almarai’s strategic implementation plans 2015 showed empirical part, such research methods were used as:
continuous growth across its product range. “Almarai is one of questionnaire survey for gathering primary data using factor
five food companies considered by international media as likely analysis and cluster analysis for the analysis of the primary
to be among world’s most future brands [10]. In the company, data. Collins & Bogue (2015), examined stakeholder
the consumer is at the core supply chain as their insight guides stakeholder data to design health products for the ageing
the growth of the business and contribute in the product population using qualitative analysis. The research carried
development process. The company is constantly gaining out 16 in-depth interviews to identify the main product
significant financial growth as well geographical expansion design attributes. The finding of the research explains a
resulting in increased job opportunities for Saudi nationals. significant influence on the design of health promoting foods
targeted at the ageing population. Lumala Jokitalo et al.
3. Review of Literature (2015), explored in a study how certain consumer
characteristics such as dieting, health motives and food value
Agnieszka & Anna (2016), in an empirical study, analyze and taste cues shape, whether and why health and taste
the relations between customers’ expectations, product attributes are perceived as inclusive or exclusive over 40
packaging and their demographic characteristics such as consumers through personal and group interviews. The
gender, age and education. The research primarily applies findings of the study show that dieting status, health motives
cognitive-critical analysis and secondly survey questionnaire and food values shape the perception of inclusively and
for gathering primary. The tools used in the analysis were exclusively of health and taste, convenience, and candy
Factor analysis and the Kruskal-Wallis independence test. products.
The findings of the study concluded that demographic Laihonen Harri et al (2014), in a research on measuring
characteristics of the respondents pertaining to age, gender, performance on service system based on organization and
level of education have a positive influence on dairy product customer perspective, both evaluated the performance
4 Ajay Singh and Hagahmoodi S. O.: Performance Measurement of Almarai Products and Customer Satisfaction
measurement of a service system based on three perspectives: “favorable to unfavorable”, “pleasant to unpleasant” and “I
the performance of individual actor, the network efficiency like it very much” to “I didn’t like it at all”.
and customer oriented service operations. In the study of Eroglu, Sergin A, and Karen A. Machleit
Kathuria Lalit & Gill Paramjeet (2013), conducted a (1990), the six items asked respondents’ evaluation of their
research with the aim of understanding brand awareness most recent experience with ATM services and ice cream
among consumers and analyzing the attitude of consumers restaurant, along with seven points within these six items:
towards selected branded commodity food products, “please me to displease me”, “contented with to disgusted
especially focus on branded rice and banded sugar through a with”, “very satisfied with very dissatisfied with”, “did a
sample of 200 respondents across different cities of India. good job for me” to “did a poor job for me”, “wise choice to
Svensson & Wagner, (2012), in his case study based on a poor choice” and “happy with to unhappy with”.
regional producer of dairy products in Sweden, The data were
collected from managers through non-structured interviews 4. Importance of the Study
and corporate documents. The findings of the explore that the
company’s business cycle may be divided into nine stage Satisfying customers is the key success for any
initiated with arable land of dairy and supplying products to organization. The income of all these organizations is derived
the market involving retailers and consumers. The case study from the fund received from the products and services
stresses on the importance of environmental concern of delivered to its various customers. To attract and retain
business. Boniface & Gyau (2012), determined the dimensions customers, the company must satisfy them and for satisfying
of price satisfaction which affect the performance relationship the customer, the performance measurement of the product
between Malaysian dairy producers and the dairy processors and services is most important. Understanding the customer
who purchase their milk. The research tested eight hypotheses and measuring the performance thorough customer
using partial least square methods based 133 surveys of satisfaction help any company to identify opportunities for
producers in Malaysia. The findings of the study suggest that product and service innovation and serve as the basis for
price dimensions significantly influence producers' loyalty and performance appraisal and reward systems. It can also ensure
performance of the business. that quality improvement efforts properly focused on issues
In a survey of nearly 200 senior marketing managers, 71% that are most important to the customer.
feel that customer satisfaction is very useful in managing and For a long period of time a number of dairy products firms
monitoring their businesses, (Farris, Paul W.; Neil T. Bendle; have been operating and using the competitive strategies to
Phillip E. Pfeifer; David J. Reibstein (2010). stay in the Saudi Arabian market, but the present study shows
A study on Al-Marai and the Saudi food industry based on how Almarai is using its strategy against its competitors and
Middle East (2008), examined the management gaining an increasing market share than its competitors. It
developments across the globe and pinpoint practical strengthens its distribution and promotional emphasis in the
implications prepared by an independent writer. In this paper Middle East as well as in South East Asian markets [16].
the authors have gathered the information from the Saudi
dairy company, Al-Marai, their market position, their
competition, and their operations provides strategic insights 5. Scope and Objectives of a
and practical implications having influence on some of the Customer Satisfaction Surveying
world's leading organizations. Program
Sadi & Henderson (2007), in a case study focused on the
largest dairy food company in Saudi Arabia and its The objectives of the research are:
subsequent responses related to marketing. The findings of 1. To assess how well Almarai products are satisfying
the study explain that how Almarai company has been using customer expectations and requirements over its
strategic leadership over a number of dairy food companies competitors;
in Saudi since last few years and getting a competitive 2. To estimate established priorities and service standards
advantage. This study provides a unique perspective of a how well Almarai is performing over other companies.
dairy food company nationwide through offering quality 3. To identify factors that contribute to customer
products across the Middle East. satisfaction and dissatisfaction with the company;
M M Al-otabi and R K Robinsion (2002) have made a 4. To determine the current status or situation of Almarai’s
study on the dairy industry in Saudi Arabia to know the products or services;
current situation of the industry and to know the future 5. To know about the rank of the company on the basis
prospects of the industry and business in the country. some defined variables over other similar companies.
Work Berry, Leonard L.; A. Parasuraman (1991) provides
the basis for the measurement of customer satisfaction with the 6. Hypothesis
customer’s expectations of performance and perceived level of
performance. In this study, the respondents were asked to Hypothesis 1: That the Almarai products are not satisfying
evaluate their experience with both products, along with seven customer expectations and requirements over its competitors;
points within these four items: “satisfied to dissatisfied”, Hypothesis 2: That the established priorities and service
International Journal of Management Science 2017; 4(1): 1-12 5
standards of Almarai company is not performing over other The figure 4 explains that out of total 150 responses, 40%
companies. feedback is given by single or bachelors and 34% and 16%
feedback given by the person married having children and
7. Research Methodology person married not having children. The percentage of
widowed and divorced was very low.
The present study is based on primary data collected from a Figure 5 explains the most of responses collected from the
structured questionnaire from different customers of different persons who have completed their schooling were 50%. The
age groups of both male and female from Hail province of percentage of contribution in this research of bachelor degree
Saudi Arabia. The secondary sources of data are the part of holders and Master’s degree holders were 14% and 6%
Almarai published annual reports, different Journals available respectively. The doctoral degree holder’s percentage was
on websites and published reports from Almarai itself. The 16%. Only 14% respondents were less than high school.
data collected relate to mainly from the population of Hail
region of Saudi Arabia and the size of survey has been limited
to 150 respondents. Random selection of the responds has been
taken from the different age group of the population. The data
has been analyzed through graphical analysis, percentage (%)
method and testing of hypothesis has been done through Chi-
square test/ One-sample Kolmogorov Smirnov test.
The results of the figure 6 show that 72% people use the
Almarai products on the daily basis and 24% people use the
Figure 3. Age Status.
Almarai product not on the daily basis but at least once in a
week. Only 2% people said that they do not like Almarai
products.
It is evident from figure 7 that half of the population feel they don’t feel much difference with other company products.
better in using Almarai products and 30% population feel No any respondents said that the product form Almarai
that the products from Almarai company is much better than company is worse.
the products from any other brand. 20% population feels that
From the figure 8, it is clear that 46% percent population is definitely like the products from the Almarai Company and 46%
people also answered that they probably like the Almarai company’s products. 8% people were not sure that they would
always like to buy the same company products.
The above figure 9, shows that out of 150 surveyed people, surveyed respondents, 24 respondents said that along with
15 respondents said that they find the quality of Almarai the quality they also find the services of Almarai company
products is excellent, 42 respondents said the quality is very excellent, 45 respondents said the services are very good,
good, while 48 and 21 respondents feel that the quality of while 48 and 27 respondent feel that the service of Almarai
Almarai products is good and fair respectively. Only 24 company is good and fair respectively. Only 24 respondents
respondents feel that quality is poor. feel that services of the company are poor.
It is also evident from the above figure that out of 150
The above figure 10, is the outcome of the performance the product’s importance through quality, value what the
measurement as per the customers and it explains that out of customers get, purchase and usage experience as per
150 surveyed populations 27 respondents said that they are respondents. It explains that out of 150 surveyed populations
very satisfied with the quality of Almarai products, 84 36 respondents said that they feel that the performance of
respondents said the quality is satisfactory, while 48 Almarai products are very important quality wise, 66
respondents feel that the quality of Almarai products is respondents’ rate performance as important, while 48
satisfactory only at some level. No respondents feel that respondents rate the quality wise performance of Almarai
quality is dissatisfactory. products is important only at some level. No respondents feel
The similar type of the results has founded as it has been that quality wise performance of the products is not
shown in the figure 8, as the value that the customers get extremely important.
from the Almarai products is overall satisfactory. Only 6 Approximately similar results have found as it has been
respondents say that they feel some dissatisfaction which is shown in the figure 9 that the value that the customers get
negligible compared to the whole. from the Almarai products is overall important. Only 3
Similar to above, other favorable results also has found as respondents out of 150 feel that the values that customers are
shown in the figure 8, this shows that the purchase and usage getting from the products are not important.
experience through the survey outcome that customers get The same other favorable results also has been found,
from the Almarai products is overall satisfactory. Only 9 shown in the above figure 9 that the feeling of purchase and
respondents out of 150 feel some dissatisfaction regarding usage experience that customers have regarding the Almarai
these which are also negligible compared to the whole. products are overall important. Only 3 respondents out of 150
In continuance to figure 10, figure 11, is the outcome of feel the value they getting is not important for them.
The following table 1 and the figure 15 is the outcome of Almarai company’s product are performing either equally
some mixed responses from the 150 respondents. The overall with or more than its competitors/ companies with some
results from this table looks favorable. It means that the mixed public reactions.
Table 1. How are you agree/disagree: Some Mixed Response from Respondents.
[7] Harri Luomala, Maijastiina Jokitalo, Hannu Karhu, Hanna- [15] Agent Performance and Customer Satisfaction, December
Leena Hietaranta-Luoma, Anu Hopia, Sanna Hietamäki 2004 // Volume 42 // Number 6 // Feature Articles // 6FEA4
(2015), "Perceived health and taste ambivalence in food
consumption", Journal of Consumer Marketing, Vol. 32 Iss: 4, [16] Berry, Leonard L.; A. Parasuraman (1991). Marketing
pp. 290–301. Emerald Group Publishing Limited. Services: Competing Through Quality. New York: Free Press.
ISBN 978-0-02-903079-0.
[8] Shijiu Yin, Mo Chen, Yusheng Chen, Yingjun Xu, Zongsen
Zou, Yiqin Wang (2016), "Consumer trust in organic milk of [17] Eroglu, Sergin A. and Karen A. Machleit (1990), “An
different brands: the role of Chinese organic label", British Empirical Study of Retail Crowding: Antecedents and
Food Journal, Vol. 118 Iss: 7, pp. 1769–1782. Emerald Group Consequences,” Journal of Retailing, 66 (summer), 201-21.
Publishing Limited.
[18] Laihonen Harri et al (2014), Measuring performance of a
[9] Muhammad Asad Sadi, Joan C. Henderson (2007), "In search service system – from organizations to customer perceived
of greener pastures: Al-Marai and dairy food business in performance”, Measuring Business Excellence, Vol. 18 No. 3
Saudi Arabia", British Food Journal, Vol. 109 Iss: 8, pp. 637– 2014, pp. 73-86, Emerald Publishing Company.
647. Emerald Group Publishing Limited.
[19] Goran Svnsson, Beverly Wagner 2012), "Implementation of a
[10] Almarai Annual Report 2015, sustainable business cycle: the case of a Swedish dairy
https://www.almarai.com/en/investors/financial-information. producer", Supply Chain Management: An International
Journal, (2012) Vol. 17 Iss: 1, pp. 93–97. Emerald Group
[11] Saudi seen milking dairy fortune, Article, January 21 2013, Publishing Limited.
Bloomberg, http://www.iol.co.za/business/international/saudi-
seen-milking-dairy-fortune-1.1455706 [20] "Al-Marai and the Saudi food industry: The challenges facing
a middle-eastern dairy producer company", Strategic
[12] Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Direction, (2008) Vol. 24 Iss: 2, pp. 8–10.
Reibstein (2010). Marketing Metrics: The Definitive Guide to http://dx.doi.org/10.1108/02580540810848638
Measuring Marketing Performance. Upper Saddle River, New
Jersey: Pearson Education, Inc. ISBN 0-13-705829-2. [21] Al-Otaibi, M. M. and Robinson, R. K. (2002), “The dairy
industry in Saudi Arabia: current situation and future
[13] M M AL-OTAIBI and R K ROBINSON, The dairy industry prospects”, International Journal of Dairy Technology, 55:
in Saudi Arabia: current situation and future prospects, School 75–78. http/dx. doi: 10.1046/j.1471-0307.2002.00048.x
of Food Biosciences, The University of Reading, Reading,
RG6 6AP, UK, 2002. [22] Mohan Kathuria Lalit, Gill Paramjeet, "Purchase of branded
commodity food products: empirical evidence from India",
[14] Measuring Customer Satisfaction: Improving the experience British Food Journal, (2013) Vol. 115 Issue: 9, pp. 1255–1280.
of King County's customers: Prepared by the Office of http://dx.doi.org/10.1108/BFJ-08-2011-0209
Performance, Strategy and Budget and the Customer Service
Director, King County Executive's Office, 401 Fifth Ave.
Suite 800 Seattle, WA 98104-1818206-263-9623