Petrolivia and the olive oil producers market

Résumé du document

For many years, the olive oil producer market has been dominated by three European countries: Spain, Italy and Greece, which account 97 per cent of the European production and 77 per cent of the world production. These three European countries are followed by African countries such as Tunisia, and Asian countries. The big fight between Italy and Spain has conducted the International Olive Oil Council (CIO), the European Union (EU) and the World trade organization (WTO) to introduce rules and laws in order to regulate and control the olive oil trade over the world. This has helped countries such as Argentina and Australia, to develop their own production of olive oil but also countries such as USA and Japan to increase their consumption rate of olive oil. The olive oil industry became more competitive and the new entrants are now threatening the leading position of the three European countries. (Case study, 2007)

Extraits

[...] It is a global product and a guarantee of quality. It has been defined by the CIO in 1979 as a product which must be obtained exclusively from the olive. The term of olive oil can only be used in the labelling if the product contains more than 50 per cent of it. Olive oil is graded and judged according to its level of acidity. The market of olive oil is divided in three types: plain, virgin and extra virgin. [...]

[...] Petrolivia have to re-establish its brands into this way and communicate on the benefits of its products. Advertising and promotion are playing a huge role in the differentiation process by creating the product image and the brand loyalty. Then, regarding the certain segment, as seen in the strategic analysis below, the market of olive oil is changing, leading by changes in the consumer consumption. The standard cooking oil is falling behind the rise of olive oil and consumers are paying more intention to healthy eating. [...]

[...] First of all, the treat to entry in the olive oil is quite low, even if the benefits associated with bulk purchase generate economy of scale, which should normally be a treat to entry high. But, actually the government actions in the regulation of olive trade have allowed other non-traditional olive oil producer countries such as Australia and USA to enter in this market. In addition, the important of differentiation seems to be quite low as well as British consumers tend to buy supermarkets' own label brands. The top five supermarkets account by themselves 80 per cent of the total olive oil sales in the UK market. [...]

[...] Nerveless Petrolivia brands are relatively new; the company started selling its products under its own brands only since 1987. (Case study, 2007) Entering into the UK market, Petrolivia will need to consolidate its position and gain competitive advantage against its future competitors. According to Porter's, the strategic options are the following: cost leadership, product differentiation and the specialisation in a particular market segment. (Porter, 1990) In order to be competitive in this new market, Petrolia has to differentiate itself to other competitors and this is about offering a unique and superior product to the certain target. [...]

[...] Actually, according to the case study, Petroliva has a long tradition in the olive oil business; the company started in 1940 and had a strong reputation in its home market. Moreover the company has a high production capability, a wide range of product of olive oil such as extra virgin olive oil and sunflower oil. The brand is also present on numerous markets abroad such as China, Japan, Philippines, USA, Chile, Mexico, Brazil, Ecuador, Canada, Germany, Holland and Russia. But, the company has always handed marketing activities through third parties which is making the company in a bad position regarding marketing in a new market. [...]