Marketing Strategy: Al Manar Ayurvedic Center

1 – Executive Summary

Unlike the old days, everyone is pretty much concerned about their health and well being. Everyone takes it seriously these days, and is always looking to improve their health, or fix everything if there is anything wrong on their health part. Health care is a critical service that touches the lives of thousands of people at significant and vulnerable times.

Al Manar Ayurvedic Center (AMAC) was established in 2003 to practice Ayurveda in its totality aiming at prevention, cure and rejuvenation of the whole being keeping up with the original Ayurvedic philosophy, texts and values thus promoting a balanced holistic way of life. The atmosphere at Al Manar Ayurvedic Center (AMAC) is very welcoming, soothing and the ambience created in our center gives one a feel of being in a place where they can find comfort to their all five senses. At Al Manar Ayurvedic Center under the guidance of our experienced doctors, and therapists, one can experience wealth of Ayurvedic treatments in their true form.

Al Manar Ayurvedic Center (AMAC) is not free from competition as well. It comes from both the organized and unorganized sectors. The main objective of this research is to analyze the marketing strategy of AMAC, identify issues through standard methodology, and then suggest recommendations, if any, based on the best practices in the current Ayurvedic industry.

First off, to study where the main competition and competitors come in, an exploratory research approach is used. After that an interview has been conducted within the organization from different branches. Several key tools and models are used to help analyze AMAC and its competitor’s strategies. To analyze it further, Porter’s Five Forces model is used to ascertain the industry structure attractiveness of the Ayurvedic retail sector in the UAE. A SWOT analysis was also conducted on AMAC to give a brief and compact review of its strengths, weakness, opportunities and threats.

AMAC is currently a good player in the market considering its current situation. But it needs to reanalyze its marketing strategies in order to develop its business in the coming decade since less development in the internet arena can really cause AMAC a downfall. Therefore based on the issues found, a few recommendations have been explained as well. If a detailed approach is taken with the recommendations given, AMAC can definitely grow with the growing of the UAE economy in terms of value, loyalty of customers and by becoming a major icon in the Ayurvedic market industry.

2 – Introduction

Al Manar Ayurvedic Center (AMAC) was established in the year 2003 to practice Ayurveda in its totality aiming at prevention, cure, and rejuvenation of the whole being keeping up with the original Ayurvedic philosophy, texts and values thus promoting a balanced holistic way of life. At AMAC we have totally dedicated hard working team of experienced doctors and therapists who are fully trained in traditional Ayurvedic ways. The structure of the business is a sole – proprietorship and all major business functions are handled by the proprietor’s family members.

2.1 – Product

AMAC basically does treatment and then gives appropriate Ayurvedic medicines for the incoming patients. It includes all kinds of treatment namely:

Ayurvedic lifestyle changing consultation

Panchkarama programme

Ayurvedic therapeutic marma massage

Shirodhara – drug free solution to stress anxiety depression insomnia and hormonal imbalance

Shiro Vasti – most sought after treatment for mental balance

Ayurvedic synchronize massage

Ayurvedic musculoskeletal programme- for back pain, frozen shoulder neck problem

Navara kizhi massage – effective in degenerative muscle diseases like poliomyelitis muscular atrophy etc

Herbalised steam

Pre and post natal massage protocol

Tarpanam- special treatment for eye problems

Nasya treatments- for chronic sinus , migraine headache hay fever problems

2.2 – Consumer Profile

AMAC basically caters to the expat and local population of the country. AMAC was basically set up in Kerala almost 32 years back. Therefore, the branch in UAE when opened in 2004 saw huge number of people coming in from different communities due to the already established name in India. Expat population volumes are mostly driven by Indians followed by people from different nationalities and origin. Also, the Arab population coming into the center is also very high. Majority of the consumers coming in are usually residents of UAE. We also receive a high number of people coming from neighboring countries like Oman, Qatar, Kuwait, Saudi Arabia etc.

2.3 – The Business Model

AMAC basically imports all its medicines and other requirements from its parent organization in Kerala, India. Then other basic requirements are brought from the UAE market as well. For that purpose, we work with a wide variety of suppliers based on cost advantage. The purchase function plays an important role in the business because the low cost we charge on the consumers for different treatments depends on the amount of the materials we get from the market. Therefore we always look for the best material with lowest cost possible.

The medicines and other supplies are stored in our warehouse and the Stock Keeping Units (SKUs) are managed through a centralized purchase and inter – branch network and an efficient logistics between the different branches and the warehouse.

2.3.1 – Key Considerations in the Business

Consumer Satisfaction is given prime importance in this business

Pricing is also a very important factor since the consumers always look for the cheapest and the best available option

Constant feedback system from the consumers who have already taken our treatment or have taken our medication is taken

A friendly atmosphere, and good amenities in the center also satisfies the consumers that come into the center

Spacious treatment facilities, qualified and experienced masseurs also help in getting a good word from the consumers.

2.4 – Market for Ayurveda

Everyone is looking forward to this traditional and herbal way of getting the ailments out of their way. With the global market for Ayurvedic herbal and medicine looking promising with an estimated value of US$100 billion, the world is just going to see Ayurveda transform itself into a major thing in everyone’s lives.

A recent research shows that increasing number of people all over the world are showing interest in alternative medicine and recognition given by the WHO is an indication of its gaining importance. It is estimated that the Ayurvedic market will grow substantially between 10 – 15 percent, with the same growth rate targeted for the next 10 years.

Ayurvedic Products falls into two categories – branded and traditional. Currently there are more than thirty thousand branded and about fifteen hundred traditional products available in the market. In India, Ayurvedic drugs worth Rupees six thousand crores are produced every year, of which Rupees fifteen hundred crore are exported outside. So just imagine the size of the market of Ayurveda and its medicines.

Ayurveda is now a part of a movement towards a global medicine system which will include the best medicine systems of many countries of the world. A medicine that is completely natural, completely free of any side effect is emerging. Out of all the health systems that we have, Ayurveda is probably the best point of synthesis for such a global medicine system as it contains the broadest number of healing knowledge and modalities. It is the answer to many unknown diseases which are obstinate and incurable in other forms of medicines. After that it also forms a layer so that the particular illness never comes back to that person. Therefore, it aims at both prevention and cure of diseases at the same time. The reason Ayurveda is successful is that it studies the basic human nature and urges like hunger, thirst, sleep, sex etc. and then provides measures for a disciplined, disease free life. Successful Ayurvedic Therapy is made up of a variety of treatments which help to cure disease condition like autonomic nervous disorders, digestive tract disorders, respiratory diseases, allergic disorders, skin diseases, genitor – urinary disorders and neurological disorders.

The healing powers of Ayurveda are becoming more and more popular around the world. Another thing is that along with the expat community, the local community is also becoming more and more interested in the product once they come to know the worth of Ayurveda. There are not much Ayurvedic Centers in the GCC, especially in the UAE. Also, only some centers actually offer authenticated treatment facilities. Therefore the market reach is huge, and if the business ideas are properly in place, it presents one of the best business opportunities in the region.

2.5 – Competition

Even though there are not much players in the market here in the region, AMAC is not free from competition. In the region, not many people prefer Ayurvedic treatments or medicines just because they have a usual notion that Ayurvedic medicines actually take time to heal, and since the consumers these days want everything to happen at a swift pace, other popular forms of conventional medicinal practices comes into play. If everyone takes a close look into the conventional system of medicines, it’s always the destruction and not the construction what is focused. Interference with the body functions and not aiding the body functions is what is focused.

The Ayurvedic industry in the region is marked by the presence of both organized and unorganized sectors. There are many unorganized players producing low quality drugs that not only have an adverse effect on the patient’s health but also damages the reputation of the industry as a whole. Sometimes standard quality control measures are not put in place, and therefore the industry as a whole suffers when small players or unorganized players do produce low quality stuff.

Most of the time, consumers always prefer the conventional style of medicines because they always want to get cured as soon as possible. But the notion that Ayurveda actually takes time to cure is not correct. Ayurveda, its treatment and medication actually work towards the root cause of the illness and take it out of the body without further damage coming in the future. But the conventional medicines can bring out results sooner and they are also said to have stronger side effect. Again, Ayurvedic treatments may also cost higher than the conventional style of treatments. This is also taken into consideration by many consumers.

3 – Methodology

An exploratory research approach is used in this study where AMAC and its competitor’s current situations are assessed. This research approach is chosen because of the versatility and wide-ranged approach it offers to the preliminary investigation. The exploratory research approach in this study draws upon interviews and secondary data sources.

3.1 – Interview Technique

Four different people from different branches of AMAC are selected in which all of them are based in UAE. The selected interviewees are the Doctor, Business Development Manager, and two sales executives. A qualitative interview technique is used. Armstrong and Kotler (1996) stated that there are numerous advantages of using qualitative interviewing. For instance, it allows the participant to describe what is meaningful or important to him/her using his/her own words rather than being restricted to predetermined categories, so participants may feel more relaxed and candid. It also provides high credibility and face validity, and it allows the evaluator to probe for more details and ensure that participants are interpreting questions the way they were intended. Furthermore, interviewers have the flexibility to use their knowledge, expertise, and interpersonal skills to explore interesting or unexpected ideas or themes raised by participants.

3.2 – Tools for Analyzing Secondary Data

The Ayurvedic Industry being analyzed in this research study deals primarily with organizations or centers that sell and cater treatments in the organized and unorganized market. This can be targeted to the expat, local, and the neighboring GCC countries in the region.

Several key tools and models are used to help analyze Ayurvedic Centers and its competitors’ strategies Porter’s Five Forces model is used to ascertain the industry structure attractiveness of the Ayurvedic sector in the UAE. In his 2004 edition of “Competitive Strategy: Techniques for Analyzing Industries and Competitors”, Porter built a framework that models an industry as being influenced by the risk of entry of potential competitors, the intensity of rivalry among established companies within the industry, the bargaining power of the buyers, the bargaining power of the suppliers, and the closeness of substitutes to an industry’s products. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. Porter stated that the stronger each factor is, the most likely established companies will be able to raise prices and earn higher profits.

The CLC (Company Life Cycle) and the PLC (Product Life Cycle) is analyzed. PLC has to do with the life of a product in the market with respect to business costs and sales measures. Hill (2005) pointed out that a product life cycle asserts four things: products have a limited life; product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller; profits rise and fall at different stages of product life cycle; and products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

Next, a SWOT analysis was conducted on AMAC to give a brief and compact review of its strengths, weaknesses, opportunities and threats. In addition, the retail mix of the AMAC is analyzed to understand the current strength and weakness of the retailer.

4 – Issue Analysis

Various tools have been used to analyze the business of Al Manar Ayurvedic Center. All these tools provide valuable observation and conclusions on which it will then help us in deriving the appropriate assessments and recommendations.

4.1 – Porter’s Five Force Model

Figure 1 : Porter’s Five Force Model

AMAC issue analysis can be easily described by Porter’s five force model which is shown in the Figure 1 : Porter’s Five Force Model. It’s definitely a profitable field to enter into. So companies will definitely look into getting into this mode of business. Potential entrants are companies or organizations that are not currently competing in the Ayurvedic industry, but have the capability to do so. It’s definitely a profitable area to start business in. But it is not really an easy business to get into. Established companies like AMAC will definitely try to dissuade potential competitors from entering the industry to protect their market share. The greater the costs to enter an industry, the greater are the barriers to entry and the weaker are the competitive force. Therefore, high entry barriers may keep potential competitors out of an industry even when industry profits may seem to be high.

There are many prominent players in the market in the field of Ayurveda here in UAE. Players like Kottakkal Ayurvedic Center, and Al Shifa Ayurvedic Center, and AMAC have a really good advantage due to being the first ones to enter the UAE market in terms of Ayurveda, and also due to their low cost structure. This comes only due to their cheaper operational procedures and also due to their great negotiation power in the market. Then another thing about cheaper operation is controlling the operation in terms of labor, retail space and management skills. The advantage these companies have is they represent lower risks than new entrants. One problem with the new entrants coming into the market is due to huge amount of government fees, and other charges in order to set up an Ayurvedic Center. This is probably the highest barrier to entry that most new entrants will face. Consequently, the above advantages reduce the likeliness of threats from outside entrants.

AMAC actually caters to large group of consumers when compared with other competitors in the markets. This way we can benefit from the economies of scale due to our large retail space at critical locations and well-established branch networks. Another advantage we have is that we also cater to the international mass market (GCC and other neighboring countries) by providing them cheaper options and reasonably priced medicines and treatments, which allow us to achieve that economies of scale as well. On the other hand, Al Shifa Ayurvedic Center caters benefits from economies of scale due to catering to the mass market by reduced profit margins and catering to low end consumers like the labor force from India, Pakistan & Bangladesh. Therefore achievements of economies of scale by several players in the Ayurvedic industry has made it harder for new competitors to enter the market.

To achieve a high market share, retailers must have good access to retailing channels. Porter (2004) claimed that the lower the access to distribution in an industry, the higher the barriers to entry. The established companies in the Ayurvedic industry have access to their own retailing channels and have built loyalty making it difficult for a new entrant to compete.

The intensity of rivalry is the competitive struggle between companies in an industry to gain market share from each other (Czinkota et al, 1998). The competitive struggle can be fought using price, product offering, advertising and promotion spending, direct selling efforts, and after sales service and support (Cravens and Piercy, 2006). As intense rivalry lowers prices and raises costs, it squeezes profits out of an industry. Alternatively, if rivalry is less intense, companies have the opportunity to raise prices, which leads to higher profits. Ayurvedic centers and retailers compete based on price of different types of treatments and medicines provided.

When the industry has many small retailers and a few large players, the buyers have bargaining power (applying marketing concepts of Porter, 1998). When buyers purchase in large quantities, they can use their purchasing power to bargain for price reductions. We also provide treatments and medicines for tourists. We have setup stations in many hotels in Dubai, where the tourists can get an experience of what actually an Ayurvedic treatment is, and if they are interested, and so on, we even ship the medicines to their home country due to the import and export license we have. We have several sales executives working for us in many emirates to help us to get to those customers, tourists etc. Therefore we make sure that we cater to every part of the UAE, and also make sure that our name reaches out everywhere in the market. Due to all this hard work and dedications, we have been even awarded the best health center in UAE by the Ministry of Health (U.A.E.) in year 2008 and 2009.

Porter (1998) stated that the suppliers are powerful if the industry is dominated by a few supplying companies which are far less in number than the amount of companies that they sell to. The supplier prices offer exclusive prices to a few large players in the unorganized sector. But in our case, our medicines and other amenities are manufactured by our own system based in Kerala, India. Therefore we have the exclusive rights to certain brands in the UAE market, and it can only be sold to other retailers or distributors through our plant based in India. But we also require other supplies in order to run the business. The prices from the suppliers are set on a quantity basis.

4.2 – Company Life and Product Life Cycle

Ayurvedic Industry in the UAE is at its growth stage. AMAC is growing along with that. When we started back in 2004, there were rarely any players in the market except for 3-4 companies. We have around 5 outlets and centers in the UAE now. Slowly and steadily by introducing more centers and allowing more genres of consumers to come in will definitely help us in getting the growth rate stable. Moving up in the retail value chain is also very important in this scenario. Our current way of branding our products as well as the promotions done in terms of the products and treatments offered, we can definitely expect substantial growth in the near future. Once the expansion of our retail outlets and our centers are done, we can definitely concentrate on a larger group of consumers, and then we can also focus on giving in house treatments. That is another possibility that we can look to explore. Right now, exposure for Ayurveda in the UAE market is not that high. But it’s definitely growing from what it was, and will definitely be preferred among consumers in the coming days compared to the conventional way of medicines due to the many advantages this health science provides. We are also looking to expand the center into a hospital, and make our current outlets into a full scaled Ayurvedic pharmacy. Right now, the awareness and positioning of the current Ayurvedic market does not allow us to expand to that level. But that will soon be a reality due to growth of Ayurveda in the region.

4.3 – SWOT Analysis

The following SWOT analysis shows the strengths, weakness, opportunities and threats of Al Manar Ayurvedic Center.

Figure 2 : SWOT Analysis

4.3.1 – Strengths

The main strength of Al Manar Ayurvedic Center is their location. We have been lucky as well as blessed to get some prime location spots in the UAE. So that definitely helps us to get consumers that way. Even if it is just people passing by, they will definitely feel to look into the center when they see the look and the style the centers are designed. Next strength that our center can be proud of is our medicines, and Ayurveda as a whole is completely natural, and fully free of any side effects. Since the medicines are produced in our own home plant, we can be hundred percent confident that the medicines are genuine. Our doctors, physicians and masseurs come up with a vast range of experience. Our main doctor has an experience of over thirty two years in the field of Ayurveda. His name is well know over the southern part of India, and using him as a marketing tool, we do get number of people coming in just to get treated by him. Due to all the facilities we provide, and also due to good work done by our staff, we do have a lot of loyal consumers. Even if they are approached by other centers, and other parties, they always do come back to us due to the good service that we provide to them. Now all this cannot be possible without having a good management team. We are really proud of our management team, since they mostly consist of family members, and they always clear any kind of glitch that comes in their way so that they could gain from it, and at the same time, the center can grow as well.

4.3.2 – Weakness

One of our main weakness that we could say is that the strict regime and the a little time consumption for the treatment to be effective. Due to swift pace of things happening in the world, all consumers would like to get everything sorted out as soon as possible. But in the field of Ayurveda, it does take some time, not a lot of time, but the Ayurvedic medicines actually go to the root cause of the illness, and gets it sorted out. Unlike the conventional medicines in which relief will be found out in a matter of 3-4 days, it might actually take a week for the Ayurvedic medicines to take effect. But the good thing about it is that, there is no any kind of side effects coming from the medicines. But on the other hand, conventional medicines do come up with side effects most of the time. At this point of time we only operate with 5 branches around the UAE. We do feel that if we have more branches, our name will reach more amounts of people, and we get more penetration into the market as well.

4.3.3 – Opportunities

The biggest opportunity that Al Manar Ayurvedic Center (AMAC) has is the growth of Ayurveda as a whole in the region. When AMAC was started, Ayurveda did not have much importance in the market, and many people were unaware about this. But now, Ayurveda is growing at a fast pace in the UAE market, and we will definitely be benefitted from this growth since we were one of the early players in the market. Another thing that we would like to do is to move up the retail chain in the market. We would like to reach a place in the market where the conventional medicinal stores/outlets are in. We are still at quite a distance when compared to the other systems, but we definitely see that as an opportunity and we would like to reach to that position in the near future. The next area that we find an opportunity is people who have started taking our medicines and treatments would always stick to our area of treatments and medicines. This is because most of the time, the conventional forms of medicines do actually come up with some side effects, if not any. This can be completely taken care in our form of medicine since there are no side effects in our way of treatments and medicines.

4.3.4 – Threats

Our major threat comes up from the conventional medicine systems and other medicinal forms such as Homeopathy and all. Then threat also comes in the form of competitors in the similar field. But the main problem is the one who sells counterfeit products. Usually Ayurvedic medicines are a little on the expensive sides. There are some retailers who just sells it out for really cheap value, and that too is not of good quality. What happens with this is that people get ill effects due to that and lose trust in the market. Also, consumers who come to our centers argue that they get it at a cheaper rate from those centers. One good thing is the government takes strict measures on people, property, and retail outlets when they see that they are doing something on the illegal side. But that does not reduce the amount of people and outlets that sells counterfeit products. Most of the people prefer cheaper products and therefore they are always on the lookout for those kinds of products and always fall in the trap of these kinds of retailers.

4.4 – Retail Mix Analysis

Figure 3 : Retail Mix Analysis

Product: AMAC offer more or less the same product as the competitors. As the demand of consumer and suppliers are the same, the difference in product offering is almost nothing. At this moment, AMAC has a good branding name in the market. So when compared to other key players in the market, AMAC does hold a good name. Since we are open from 4 am in the morning, till 10 pm in the night, we also have maximum coverage. Another advantage we have is the after sales service that we have.

Pricing of AMAC is less when considered to major players. The profitability is also maintained. AMAC is very considerate about the quality of the products they sell as well. We always provide better service and products for the pricing that we offer. Retail logistics are also managed very well. Central purchase and distribution to the stores are done very well.

AMAC has a lot of promotional strategies. We do direct marketing, and then also do a lot of advertise in terms of TV ads, Radio Ads. We also have lot of flyers going by giving it to an advertising agency. We also sponsor cultural programs that happen in the UAE. Training is one of the most important things in our centers and outlets. Our staffs are capable of handling any type of consumers that come in. Our staff is trained on each and every product we offer, as well as the different types of treatments we offer. We also have excellent sales executives who are able to convert the enquiries into sales. All of our staff are professionals, trained properly and also licensed as per the laws and regulations of the Ministry of Health, UAE.

As mentioned earlier in the SWOT analysis, AMAC needs to grow further, and needs to get better looking outlets and centers due to large amount of crowd that comes in to the center or outlets. Sometimes when its gets busy, some consumers do find it hard to get what they want, or to even grab a seat. So this needs to be sorted out so that the consumers get catered to their needs as soon as they enter our premises.

5 – Assessment and Recommendation

When looking from a business prospective, Al Manar Ayurvedic Center is doing well when compared to its competitors and can consider itself a decent player in the market. But in order to stay competitive and in order to reach greater heights, it needs to reanalyze its strategies and then look into what can be improved. Another advantage form AMAC is that they were early into the Ayurvedic business, and now has a strong base in the Ayurvedic business market. So that is probably a really good asset for AMAC. Also the natural benefits of the medicine, and also the loyal set of customers is also another advantage for AMAC

On another note, AMAC needs to have more outlets and centers so that it will be available to larger crowd, and can cater to much more capacity crowd than it already has. It also can work up further up its business and become a leader in the market. Therefore AMAC should take up its challenges and then decide to work it out and then change it.

Based on the assessment, there are a few points to be laid out. They are:

Competitive Pricing Strategy as its “strength”

Enter into the online web space

Take up innovative strategy

Reanalyze its retail strategy

To reach the top of the retail value chain

Continue giving natural and “No Counterfeit Products”

From the assessments from the issue analysis, a few strategies have been suggested in the report to address the few issues which has been identified. This is to tackle the current position Al Manar Ayurvedic Center is in so as to revive AMAC to a better and probably the leader of the market in the near future.

Develop a planned retail strategy based on the retail strategy mix and move into the organized market as a respectable player thereby completing the retail value chain

Create a positioning of a ‘Innovator or market leader’ within the market which could help in increasing volumes and thereby support growth and purchase power

Promotional efforts to increase footfall and which could lead to sales

Open up retailing options online and then open up business opportunities that way too

5.1 – Positioning

Considering the market dynamics and looking at the consumer segment and their price sensitivity and also the ‘Innovator or market leader’ status which we need to create volumes and thereby support growth and purchase power, can be derived as AMAC as a business destination where price sensitive consumers from all walks get the authentic medicines and treatments for the cheapest price and has a pleasurable shopping experience’. This positioning need to communicate through various retail points, staffing, branding and communication and promotion strategy.

5.5 – Branding

Right now, AMAC definitely has a good brand image. It should be increased more. This can only be supported with a friendly and energetic brand personality. This should reflect in each knock and corner of the organization