United Foods Company is located in Dubai and specializes in producing vegetable oil, butter, and margarine (United Foods Company (psc) n.p.). Its main concepts consist in producing healthy products for a healthy life. However, due to the fast-growing vigorous competition that has recently exploded between other food production industries, our company has decided to introduce a new product conception. In particular, we intend to launch oil brand extension and work out four new kinds of vegetable oils – corn oil with rosemary, vegetable oil with garlic and spices, vegetable oil based on natural herbs, and aromatized oil for salads.
Each type of oil is destined for cooking a particular dish; all ingredients involved in the products consist of natural components. In this regard, our main concept and purpose still remains and, therefore, customers will receive a healthy and natural product but now they will have a wider choice. Moreover, they can identify their tastes and make their dishes unique, original and healthy. In addition, the product also meets the eternal purpose of the market – high quality and variety of choices.
At the current moment, the product development remains at the stage of package designing and philosophical conception improvement. In particular, we are working on the ecological concept of “natural and pure packaging” for our healthy products. Therefore, the course is taken on the environmental marketing and all ecological concerns that influence the product concept development (Van der Ryn and Cowan 26).
So, our packages will be recyclable and reusable, which will provide environmental benefits including the utilization of virgin materials and decreased waste contamination. In such a way, we can consistently expand the product and brand conception.
The next stage will include the development of four original recipes, quality control, inspection, testing, and launching. The former stage will take about 2 weeks approximately for inventing four products. The rest will depend on the success of the presented recipes. We plan to launch the product within 2 months.
It is obvious that food products have limited shelf life, specifically those who can be affected by the presence of oxygen. In particular, vegetable oils can be subjected to the influence of oxidative rancidity development (Man and Jones 216). However, due to the fact that our oil production is complicated with the presence of herbs, garlic, and natural aromatized substances, the shelf life will be even more limited.
Nevertheless, the product has a relatively long shelf life as compared with diary, bakery, and medicine products. In addition, the production of vegetable oil and the introduction of brand expansion do not have legal restrictions because the ingredients are legally acceptable.
Before transferring to direct production of vegetable oil of four kinds, our company should be sure that all ingredients, namely sunflowers, garlic, and herbs have been cultivated with acceptable limit of pesticides utilization. In this regard, we consider it necessary to conclude an agreement with the product and pesticide produces that will insure that the final product corresponds to high quality standards.
Additionally, to secure the quality and safety of the food product under consideration, it is necessary to receive approval of the food safety laws and regulations established by the latest Dubai International Food Safety Conference.
Due to the fact that our company is going to expand the brand, it is paramount to conclude franchise agreement with leading European countries such as Germany, Denmark, and neighboring countries where the production of oil is limited. In order to conclude the franchising agreement, it is necessary to consider such issues as franchisor’s obligations and training, location, terms, investments, patent, trademark, and signage usage, advertising and any types of royalties.
Our attention is more focused on our partners in Egypt and we are planning to discuss various legal issues. We are going to set a 15% royalty of total sales, in case they launch an effective advertising campaign. Alternatively, the royalty will be about 10 %.
Aside from legal regulations and food safety certificates, the launch of the new production concept should be supported by governmental agencies regulating commercial and manufacturing issues. Hence, it is necessary to obtain an approval from the Chamber of Commerce located in Dubai that is responsible to controlling various production activities.
This is especially important for United Foods Company because the Chamber member is an obligatory condition to exercise any industrial, commercial, and professional activities in the United Arabic Emirates.
The approval of Planning Department is also essential for more effective introduction of new brand development of UAE market. This will greatly foster the product penetration to the country market and its active distribution among the retailers because this agency directly influence the local economical and commercial operations in the city.
More importantly, the consent of the Department of Health and Minister of Labor will assist in sustaining the company’s respectable image and developing a competitive advantage on the market.
Each product and conception should conform to the general standards of insurance requirements. As our product concepts involves the development of new recipes and natural packaging, it is necessary to provide insurance from manufacturing and design defects and marketing failures.
Due to the fact that UAE do not have specific product liability regulations, our company adheres to the international standards and classifications.
The country has also introduced a law controlling and preventing deceptive practices in business and commercial transactions providing specific liabilities on producers, suppliers and distributors. Such regulations also present explicit information on the country, trademarks, substances, and trademarks in order to pose a rigid liability on distributors and suppliers to secure our personnel.
Our company finds it necessary to adhere to the provisions about liabilities and warranties as established by UEA Commercial Agency (Kurer 561). Introducing their laws will also contribute to the security of our customer and this can also promote the company’s respectability. Moreover, it can also attract other consumers who will be persuaded in the quality and insurance of our product.
Certainly, any new product and marketing concepts will not stay long on the market until it successfully meets the customer’s needs. In this regard, it is necessary to keep track of the latest tendencies and trend development at the international market. Due to the fact that we live in the age of globalization and integrations, it is necessary to face those peculiarities to sustain a competitive advantage.
Due to the fact that our concepts is closely connected with the ecological and environmental problems, we believe that our vegetable oil products will be in high demand in we do not cease introducing different logos and messages aimed at improving the current ecological situation.
In addition, as we intend to franchise our product in other countries, we are planning to work out powerful strategies for adjusting successfully to cultural diversity issues. What is more important is that our company wants to develop a design for our product that will conform to the international standards.
It should also be stressed that the production process, maintenance and other concerns will also be taken into the deepest consideration. Aside from the product design, it is also imperative to consider the innovative teaching in installing modern equipment into the assembly line of vegetable oil.
In particular, we plan to introduce new technological device for filtering and purifying oil. Owing to the fact that our main purpose is to preserve the original flavor of the sunflower oil and to purify it in a proper way, we will use specialized equipment that differs from that destined for purifying olive oil.
In general the product process will include supply chain of ingredients (sunflower seeds, garlic, rosemary and herbs). At this stage it is necessary to take into consideration the freight expenditures, transportation, testing and insurance. Then, the next stage will be oil extraction and purifying. Other ingredients will be thermally processed. Garlic oil will also be extracted to add to the vegetable oil. Finally, once all products are ready, they are packed and delivered to the retails.
List of Expenditure Required for the Production Process (in Dirham):
Sunflower – DH 100 000
Garlic – DH 50 000
Herbs – DH 20 000
Packaging – DH 50 000
Brand development – 150 000
Freight – DH 20 000
Insurance – DH 100 000
Labor – DH 200 000
Repair, Maintenance, and Rework – DH 10 000
All calculations are approximate but they are made in accordance with the inflations rates and international currency exchange rates.
Kurer, Martin. Warranties and disclaimers: limitation of liability in consumer-related transactions. The Netherlands: Kluwer Law International, 2002.
Man, C. M. D., and Jones, Adrian. Shelf-Life evaluation of foods. US: Springer, 2000.
Rees, Naomi and Watson, David. International Standard for Food Safety. US: Spinger, 2000.
United Foods Company (psc). Mission Statement. Web 2 November, 2010.
Van der Ryn, Sim and Cowan, Stuart. Ecological Design. US: Island Press, 2007.