Camel Milk - Traditional Arab Drink

With economic development, an increasing number of people look for better foods which contain more nutrients. Camel milk, which is beneficial for health, fulfils people’s need for high quality food. Our target market sells camel milk products in London, as London is one of the most diversified metropolises around the world and there are a lot of inhabitants from different countries. In addition, there are existing camel milk products in the market so a good customer base has already been built, although not widely. The National Food and Agriculture Organisation claimed that camel milk has a bright future. It states that “ To devotees, camel milk is pure nectar. While slightly saltier than cows’s milk, it is very good for you. It is three times as rich in vitamin C as cow’s milk. Aside from vitamin C, it is known to be rich in iron, unsaturated fatty acids and B vitamins” (Life and style, 2006). It must be mentioned that all of our camel milk comes straight from Saudi Arabia, which is a very differentiated point to the competitors. As people consume milk products on a daily basis, selling camel milk would have a good market share. Furthermore, our products include basic milk and some new products, such as camel milkshake and ice-cream. Therefore, our target customer is mainly  children and young people. However, cow and sheep milk which are substitutes to camel milk are relatively mature products, compared with camel milk at the development stage.

Camel milk is a traditional Arab drink and it is quite new to the UK market. Therefore, there are only few suppliers in the UK camel milk market. However, as the market is small, the level of competition is insignificant. This tend to constructs a market structure of oligopoly market.

The three known dominant suppliers are

Mastermind camel milk

Jumbo express

Camel Milk UK Ltd.

These suppliers make their sale normally through retailer, e.g. local supermarket and snack shop. The graphical location determined their main business area but all of the suppliers tend to expand their market and the major concern of the business tend to be the profit margin rather than high market shares.

As mentioned previously, the market structure of UK camel milk market can be regard as a oligopoly market. So it is easy for us to understand the characteristics of the supply market. First, firms in the market have vast interest to improve barriers to entry. The capital cost of camel milk supplier is low as the milk all are imported. The only capital cost is only about warehouse rent. On the other hand, government requirements about importing camel milk are easy to achieve. Most food and drink products imported from the EU have no restrictions. However, new firms may face marketing barriers to entry as existing firms devoted many expense on advertising and establishing brand loyalty. It is easy to find camel milk advertisement through TV, radio and the Internet. Discount coupon and easily find on Facebook and Twitter if you registered with one supplier of camel milk.

Advertising and establishing brand loyalty can lead to another market characteristic of camel milk that all producers tend to avoid price competition and collude with each other.  A rise in price may lead to dramatically decrease in market shares then profit margin as there are only few suppliers in the market. Therefore each supplier is inter-dependent with other suppliers in UK camel milk market. However as the market is small, competition may only be aggressive in major cities in UK.

In conclusion, the UK market of camel milk can be categorized as oligopoly market. There are only few suppliers and as the market is small, the competition is not significant as a whole. The barriers to entry are mainly about advertising and brand loyalty from existing producer. Barriers from capital cost and government regulation remain weak. Non-price competition tends to prevail in the market and the barriers to entry can be a good example.

As a kind of dairy products, camel milk has a big range of substitute goods, such as the most general dairy, cow milk, and the ewe‘s milk which is widely accepted and has a good demand in London. The demand of camel milk will be easily affected by those substitute goods. If the selling price of camel milk goes higher, a huge amount of the costumer of the camel milk will choose the substitute goods instead of this uncommom and expensive product. That is to say, the higher the price of camel milk, the higher the demand for substitute goods like cow milk. On the other hand, as we mentioned before, all the camel milk comes from Saudi Arabia to Lodon there will be a huge amount of transportation expenses existed. And, also, as a kind of dairy, the camel milk must be esay to go bad, so the suppliers should keep the tempreture of the camel milk low enough to make sure that the camel milk will not be degenerative during th long-playing transportation. According to that, the cost of the camel milk might be higher than the substitute goods such as cow milk and ewe’s milk. In addition as a kind of product that is used by people in the daily life, the income of costumers will also affect demand. Firstly, the income elasity of demand is the ratio of percentage change in demand for a good to the percentage change in real income. That means, as normal goods, the higher the income of the costumers of the camel milk will lead to the higher quantity of demand of the camel milk, thus, there will be more suppliers enter the market, and the price tend to decrease. In our daily life, we are used to drinking cow milk for our breakfast or use the dairy product made from the cow milk. Therefore, camel milk is not a kind of essential product, it tends to be luxury goods. According to the data on the website of Camel Milk Association, the price of fresh camel milk is $99 every 9 pints, for the same quantity, the price of the frozen camel milk is $90, and the price of the frozen camel milk kefir is $135. To compare with other similar product from cow milk, the price of the products made from camel milk is really high. Due to all the factors above, camel milk should be luxury goods. As the suppliers of the camel milk, they might use the advertisement or other method to improve the demand of camel milk. For example, suppliers should make sure that the quanlity is high enough or try to make the camel milk more nutritive than the cow milk and the ewe’s milk. Camel milk is special enough to draw cutomers’attention, that is to say, suppliers should make sure that the quanlity of this product high enough to make the customers to try this kind of milk and have the possiblity to buy again. For example, the suppliers can introduce the new techonology to make the cover of the camel milk has the ability which can lengthen the shelf life of the camel milk longer, intead of going bad in several days, if the shelf life of camel milk is longer than the substitute goods like cow milk, customers will likely to pay for this kind of high-quality, easy to store and burgeoning product, the demand must go higher. Also, by introducing new techonology, supplier can decrease the cost and lower the selling price of camel milk, if the seling price getting lower, the demand will increase.    On the other hand,in order to improve the demand, the most common way is advertising. Those advertisements could be seen by cosumers through the mass media, such as newspaper, television or the Internet. The barnd cognition and the influence of camel milk will be expanded, that is to say, the market share will be better.