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Posted on June 13th, 2012, by

Each country is characterised by its local specific peculiarities, which produce certain impact on economy of the country and the marketing policy and strategy of companies operating in national markets. In this respect Egypt may be considered to be the country, which is characterised by one of the most difficult markets to enter, especially for foreign companies. In such a situation it seems particularly interesting to trace the successful entering and progress of St. George’s SAE originally Greek company specialised on food at large and baby food in particular. It is noteworthy that nowadays the company is situated in Alexandria, Egypt. So it is even difficult to say whether it is a foreign or Egyptian company.

St. George’s SAE products

As it has been just mentioned above, St. George SAE is specialised on the food, including baby food. However, it was not an easy task for the company to enter Egyptian market with its product. In this respect, it should be pointed out that baby food, which initially was imported to Egypt by St George’s SAE from Greece, was a new product for the local market. This is why one of the major goals of the company was to promote the product and attract consumers to it.

Naturally, it was the result of the lack of customer experience to use baby food because consumers used to buy traditional products and not baby food supplied by St. George SAE. Also, it should be pointed out that the company had to import baby food from abroad that naturally created certain problems since it made the product rather expensive.

However, the company’s baby food had a number of advantages the most significant among which was the simplicity of the use of the product due to new and advanced technologies of packaging and easiness in cooking. Furthermore, the quality of the baby food was quite high.

As a result the company gradually gained its position in Egyptian market and became one of the leading companies in the market and, what is probably more important the company has started to produce a significant part of baby food in Egypt and refuse from its import from abroad.

The Egyptian market of baby food

Obviously the problems the company faced in Egyptian market was basically predetermined by the specific characteristics of the local market. One of the main features of the local market when St. George entered it was a strong protection of local producers and local traditions, including cultural ones which naturally influenced baby food. However, the market was obviously not sutured with baby food and initially the import of this product from abroad seemed to be quite logical.

Nonetheless, the protective character of Egyptian market forced the company to change its policy in favour of development of the production within Egypt. As a result, St. George’s SAE has managed to transfer production to Egypt and now the company is producing baby food mainly using local products.

At the same time, it should be pointed out that the company has still to import to Egypt the equipment, including packaging equipment and other highly technological equipment that cannot be produced in Egypt. As a result, the company still has to import some products from abroad and traditionally it has sea links with European continent and in such a way the main part of its import arrives by sea. However, in certain cases air transportation may be also used. It should be underlined that the main part of import arrives from Europe. This is why sea and air are basically used for transportation and there is no land transportation to be used. Though in the local market it is widely used.

Egyptian consumer buying habits

Speaking about Egyptian consumer habits, they may be briefly defined as very conservative. This is why it was very important for St. George SAE to gain its share of the market and become popular among Egyptian consumers. By the way, it should be pointed out that the latter initially did not use amply the company’s baby food preferring traditional food and domestic cooking for babies.

Nonetheless, due to successful marketing policy the company has managed to gain popularity among consumers and nowadays it is one of the leaders of this segment of the Egyptian market.

Distribution of products

As for the distribution of baby food by St. George SAE, it is necessary to point out that the company is basically focused on cities and supermarkets. It means that the company prefers to sell its products through the network of mass sails such as supermarkets. Naturally, it makes the company’s sales a bit limited by cities while Egypt, as a developing country is characterised by a significant share of rural population. As a result, the rural population is basically deprived of the possibility to be sufficiently supplied with baby food produced by St. George SAE.

On the other hand, the company’s cooperation with supermarkets provides the possibility to sell baby food to mass consumers in large amount that makes the company’s operation rather efficient.

Advertising

Naturally, St. George SAE could not achieve any positive results in Egypt without a good and efficient advertising campaign. In this respect, it is necessary to emphasise that Egypt is a very specific country and absolutely different from European countries where the company get used to work.  The main reason is that Egypt is an Islamic country and there exist certain restrictions as for advertising the products. For instance, traditionally it is not recommended to use images of people in advertisement campaign since it may hurt the feelings and religious beliefs of a significant part of consumers.

Nonetheless, the company amply uses traditional means of advertising, including such media as press, television, and radio. In recent years the development of IT and spread of Internet stimulated company to use it for advertising purposes. However, Internet is considered to be not very effective in Egypt because it is not widely spread in this developing country.

Pricing

Pricing is a very important condition of commercial success of the company and this was quite a serious problem for St. George SAE because at the beginning the company had to import its products to Egypt from abroad. Naturally, it led to the relatively high prices, especially compared to local producers. However, due to the use of innovations, such as the packing the products in sachets, and the innovative character of baby food in general, provided the company with the possibility to gain certain share of the market and gradually transfer production to Egypt. The latter naturally lowered the price of the company’s baby food that attracted more consumers, which were also provided by an efficient system of discounts.

Comparison with competitors

Nowadays, St. George SAE is one of the leading companies in Egyptian market. Nonetheless, there are also a number of competitors the company has to compete with. Among them the most serious competitor is obviously Nestle which is characterised by a variety of food products, including baby food. Obviously Nestle has an obvious advantage due to the world recognition of its brand and popularity in many countries. Also it has better financial resources and wider network of distribution of its products. However, St. George SAE keeps competing with this multinational corporation quite successfully and is still quite popular.

Government policy

Obviously, a significant role in the commercial success of the company operating in developing countries plays the local government. In the case of Egypt, the government also influences the local market. It should be said that baby food is extremely price sensitive in Egypt. In such a situation any changes in fiscal and monetary policy of the state are very important. For instance, in recent years the currency devaluation has taken place in the country. As a result, imported products have suffered price increases. At first glance it should not affect St. George SAE since it localised production but it is necessary to remember that the company still imports packaging materials, machinery, etc. This is why, it is very important that the government policy remained stabled and predictable.

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