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Marketing Olive Oil: A Case Study from Greece

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The purpose of this paper is to examine the issues related to the production of olive oil, by the Greek company Elais, and the marketing practices implemented by the company. Thus, the product, its target market and competition are examined, a SWOT analysis is performed and the marketing mix is presented. To gain an initial understanding of the marketing practices employed by the company the case study method was applied, since its fundamental characteristic is the “focus on a particular setting or event”. The findings showed that the company has a leading position in the market because it offers high quality products in good prices. It has modern technological equipment and an efficient distribution system. The company is regularly conducting market researches to identify customers’ needs and develops new products. In addition, it has intense promotional activities. This paper can add to the present pool of knowledge in olive oil sector, since it is one of the few that have provided an important insight in Dr. Evangelia Blery is currently occupied in marketing of innovative technologies at the NCSR Demokritos and as a professor of marketing at the Technical Educational Institute (TEI) of Athens.

Dr. Blery has an MBA and a PhD in marketing from the University of Surrey in Guildford, UK and has ten years of experience in consulting services. Her areas of specialization include consumer behavior, survey research methodologies, case studies and data collection and elaboration. Mrs. Konstantina Kapsopoulou is a graduate student in Marketing at TEI of Athens. Her areas of specialization include marketing management and marketing planning of consumer products and services, consumer behavior and marketing researches. Address correspondence to: Dr. Evangelia K. Blery, Technology Park, NCSR ‘Demokritos’, Patriarxou Grigoriou and Neapoleos, 15310, Athens (E-mail: [email protected] pathfinder.gr, [email protected]). Journal of Food Products Marketing, Vol. 13(4) 2007 Available online at http://jfpm.haworthpress.com Ó 2007 by The Haworth Press, Inc. All rights reserved. doi:10.1300/J038v13n04_03


the production and marketing of olive oil in the Greek market. The results of the study support the findings of other studies mentioned in the literature and they can be of definite interest and potential value to managers in this sector. doi:10.1300/J038v13n04_03 [Article copies available for a fee from The Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address: Website: Ó 2007 by The Haworth Press, Inc. All rights reserved.]

KEYWORDS. Olive oil, case study, SWOT analysis, PEST analysis, marketing mix

INTRODUCTION Olive oil is preferred by the majority of consumers and is widely used in cooking worldwide. As Duff (1998), mentions, the mystique of olive oil and the reputation of ‘cold pressed extra virgin oil’, can be translated into arguments based on health: epidemiological studies suggest that the replacement of saturated fats by olive oil in diets is associated with a lowering of the rate of heart disease. Thus, olive oil represents a food, which simultaneously attests to the cosmopolitan palate of the person who uses it, and to a reduction in the risk of premature death associated with a high consumption of saturated fats and oils

The objective of this study is to examine the issues related to the production of olive oil and the marketing practices implemented by ‘Elais S.A.’ a market leading company in Greece producing olive oil. Thus, the olive oil products of the company, its target market and competition are analyzed, a SWOT analysis is performed and the marketing mix is presented. The marketing practices implemented by the company will then be assessed on the basis of those employed by other companies in the international market. LITERATURE REVIEW The European Olive Oil Market The European olive oil market has enjoyed a growth rate of above 3 per cent from 1999 to 2004 (FOOD, 2004). The production of olive oil is considered to be an important sector in European and especially in Greek agriculture mainly due to the climatic conditions, which are suitable for this crop. Over 350.00, that is, one-third of the rural population are occupied with olive oil cultivation. Greece is one of the leading olive oil producers in the world ranking third after Spain and Italy. Greek olive production accounts for almost 22 percent of the European and 17 percent of the world production. However, Greece has many competitors concerning olive oil and its agricultural products in general (Sandalidou and Baourakis, 2002).

Marketing Practices in the Olive Oil Industry As it was mentioned, olive oil is widely promoted for the technical reasons, which declare it to be beneficial to health since saturated fats have carried most of the blame in epidemiological studies for heart disease (Duff, 1998). For example, in Britain the COMA Report on diet and health recommended that consumption of both saturated and polyunsaturated fats should be reduced and olive oil, with its high monounsaturates content, was increasingly recognized as part of a healthy diet. Thus, the consumption of olive oil in he UK grew rapidly and this was often attributed to healthy eating and avoidance of saturated fats. However, according to Thompson, Haziris and Alekos (1994), this does not seem to be the main determinant of usage. The results of their research showed that the attributes most strongly correlated with the intention to use olive oil were those regarding improvement to the taste of both salads and cooked meals. Health attributes were also found to be an important, but lesser, predictor of usage.

Price considerations and special occasion usage were found not to be important. Social factors were not found to be a good indicator of olive oil usage. In Australia, unsaturated oils showed an increase from the early 1970s and butter showed a steady decline from 1960 to 1990. Margarine made from plant rather than animal sources was then promoted, however, legislative change was required to permit its selling because until 1972 the Australian butter industry was protected by quotas imposed on unsaturated margarines (Lester, 1994). As a result, there was a marked increase in margarine consumption between 1972 and 1980 following the legislative changes. The shift from butter to edible oils should not be described simply as rational calculation by individuals of the likelihood of heart disease, but the interaction of industrial strategies, relative costs of butter and margarine, health promotion messages, advertising of margarines based on health claims, multiculturalism etc. (Duff, 1998).


It should be mentioned that a major consideration of the consumption of olive oil is its cost. Consumers pay a high market price, which depends on where the oil comes from, and whether it is ‘extra virgin cold pressed’ with its characteristic green tinge recognized by connoisseurs. The choice of olive oil over margarine is governed not only by knowledge of its health benefits, but also by cost and by the potential for olive oil to be used in a display of ‘distinction’ (Bourdieu, 1984). The market leader for the distribution of olive oil in Europe and Worldwide is Unilever, which launched in France a new, premium quality olive oil ‘Puget’ in what consumers might perceive to be an authentic traditional container. Based on an extensive consumer research study, Puget decided to stress the authenticity and pure nature of Puget Héritage, thus tapping into current consumers concerns of health and quality of life. Tinplate containers were traditionally the preferred packaging medium for olive oil together with glass bottles, and for this reason a classical steel container was chosen for Puget Héritage. In addition to its authentic appeal, the packaging features a pouring mechanism and screw cap.

An additional advantage of the steel container is the fact that the tinplate can protect the olive oil from light, which is imperative in maintaining the high quality of the product. The packaging is also unbreakable and safe for children. Another key factor behind the decision to use steel was shelf impact. Virtually all olive oil in France is packed in glass bottles, and Puget Héritage steel cans therefore clearly differentiate the product from the competition (FOOD, 2004). This is reinforced by the research of Sandalidou and Baourakis (2002) in organic olive oil, which showed that the material, the capacity and the resistance are the main competitive advantages of its packaging The research of Crescimanno, Di Marco and Guccione (2002), concerning organic olive oil in Sicily, revealed that the marketing campaign consisted of promotion and advertising.

Bilingual catalogues of all the producers were issued and promotions in restaurants took place, as well as participation in trade fairs in Italy and abroad and the companies were directed towards specific distribution outlets. The packaging was given special attention so as to create visually a prestigious market image. Labeling, the choice of brand names and the shape of the bottle have all received careful attention. The EU regulations introduced some beneficial changes concerning the classification of oils and the determination of origin, which can be an important stimulus to improve, innovate, create new value added and more important relationships with the market (Crescimanno, Di Marco and Guccione, 2002).

RESEARCH METHODOLOGY Case Study Approach The case study method is employed, since its fundamental characteristic is the “focus on a particular setting or event” (Stake, 1995). Sampling Method Purposeful sampling is the most appropriate for the case study approach, because ‘information-rich’ cases can be selected so as to get more information (Patton, 1990). Two types of purposeful sampling were used in combination: “snowball sampling” and “maximum variation sampling” (Minichiello et al., 1990). Snowball sampling relies on people identifying others to investigate. The maximum variation sampling was needed because it allows to pick cases purposefully and illustrate a wide range of variation on dimensions of interest. Thus, the interviewees came from different departments of the company. The General Manager was approached and he was asked to suggest five more people in the company from different departments.

In particular, six in-depth interviews were conducted with the General Manager and the managers and top executives of the departments: Commercial, Customer service and Public Relations. Data Collection Methods Apart from the six in-depth interviews secondary data concerning general information about the company were gathered through press articles, the company’s leaflets and its Web page. In-depth interviews are considered to be the most valuable data collection method (Lincoln and Guba, 1985). The in-depth interviews were based on a questionnaire presented in Appendix 1. The questions were broad, to allow respondents as much freedom in their answers as possible. The summation of the responses was based on the content analysis method (Stake 1995). Qualitative content analysis was applied and the material from the interviews was divided into content analytical units. Thus, the results were carefully put into categories according to the points of interest of this study and the strong points were presented.

THE FINDINGS General Information Elais was established in 1920 and since 1996 it is a member of the Unilever group. It is the biggest company in the sector of oil and tomato products in Greece and it has a strong presence in the Greek food market. Apart from olive oil, the company has a presence in other markets including: the seed oil market with the sun oil ‘SOL’, the corn oil ‘Flora’ and the seed oil ‘Becel’, rich in fats O-3 and O-6; the margarines market with the well-known ‘Vitam’; the cold sauces market with ‘Hellmann’s; the cooking cubes, spices, sauces and soups market with ‘Knorr’; the canned tomatoes market with ‘Pummaro’; ‘the frozen-battered fish and chicken market with ‘Iglo’; the cream caramel, jelly, marmalades, syrups market with ‘Alsa’. In addition, Elais has ‘Quaker’ cereals, and the low calories products ‘Linea’. It is also activated in the meat market with Zwan (classic, light and with herbs). Furthermore, it has the leading position in the market of cooking fats with the very famous in Greece ‘New Fitini’, which has become synonymous with the product category.

Elais, as a member of UNILEVER, is distributing the products of the other members of the Group to the rest of Europe. It distributes JOHN WEST fish products, LIPTON tea, ZWAN meat, the low calories products IINEAand others. The Unilever Group is undoubtedly one of the biggest producers of standardized products in the world, with factories in 100 countries and about 234.000 employees. The Group has the following food products: Vitam, Altis, Becel, Hellmann’s, Lipton, Pummaro, Captain Iglo, Algida, Carte d Or; the domestic care products: Klinex, Omo, Skip, Jif, Cajoline and the body care products: Dove, Lux, Axe, Rexona, Timotei, Ultrex and Aim. Elais in 1999 bough the company ‘PUMMARO–PELARGOS’, in 2000 established a collaboration with the tomato producing company ‘STELLA’ and in 2001 a collaboration with “KNORR BESTFOODS HELLAS ABEE”, and undertook the distribution of its products. Elais is also exporting products such as oil, margarine etc. Olive oil is especially exported in Canada and Australia where it has established its position in the market among other similar products of the international competitors.

The company is aiming at: “ development, profitability and constant improvement of efficiency”. The vision of the company is: “To be the best company in Europe in nutrition products”, however the company should always respect its values: PASSION: Exceed competitors and always be the market leader. DARING: Set difficult targets and work as hard as possible. INTEGRITY: Trust employees and give them responsibilities and freedom to act. The company is promoting teamwork and ideas’ sharing. The Market Greeks prefer olive oil and as a result the market of showed an increase in the last three years, however the market is influenced by the production of olive oil. In the olive oil market Elais has various competitors. However, its long-term presence in this market, its experience and its good brand name, gave the company a leading position.

Competitors are trying to increase their market shares, however, important changes were not made in the last years. Its main competitor is the olive oil producing company ‘Minerva S.A.’. However, the lack of history is negatively influencing competitors’ position in the market. They are trying to offer olive oil of high quality to satisfy consumers, but Elais exceeds them in quality. PEST Analysis PEST is an analysis of the external macro-environment that affects all companies. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment of a company. Such external factors usually are beyond the firm’s control and sometimes present themselves as threats, however, some other times can create new opportunities. PEST analysis is essential for the development of marketing and strategic plans for all companies in all business environments. As Kotler (1998), argues, PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PEST are a framework for reviewing a situation and the analysis can be done together with SWOT. Elais, despite the difficult economic situation in Greece, has managed to maintain the leading position in the Greek market without high increases in prices. Thus, it remains first in consumers’ preferences by offering high quality in good prices.

Elais is influenced by the social trends and its products are suitable for the Meditterannean nutrition, which is preferred by the majority of Greeks. The company is following the technological evolution. In 1991 Elais synchronized its factory and made serious investments in technological infrastructure, in informatics and installed a Total Quality Management system. In 1992 big investments were made for a new unit of oils refinement, which is the first in Greece and among the first three of the Unilever’s units worldwide. The company won the second place for the years 2004 and 2005, in the competition of “The Best Workplaces”, where employees choose the best working places. In 2004, the company introduced new technology for the production of ‘light’ margarines, and in parallel upgraded its equipment so as to satisfy the increasing demand for safety and high quality of nutrition products. At the same time packaging was also improved and the reliability of the final product has increased. This was achieved with the application of SAP one of the most synchronous ERP (Enterprise Recourse Management) systems in production planning.

Finally in 2005, it was decided to automate the production of ‘Knorr ‘dressings (mustard, mayonnaise, ketchup, etc). SWOT Analysis SWOT analysis is a tool for auditing an organization and its environment that helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats and requires listing and analyzing these four issues (Doyle 1994). Thus, a SWOT analysis is performed to identify the company’s strengths and weaknesses as well as its business opportunities and possible threats: Strengths The company’s principals and values reassure a productive future. All its activities are focused on customers’ needs for a balanced nutrition, hygiene and safety. The deep awareness of the connection between nutrition and the quality of life has been for the company an incentive to continue a new line of products suitable for all households. The company has an excellent distribution system which has helped to control shortages and at the same time to automate the supply process for all customers.

In addition, the company cares to develop the abilities and skills of its employees so as to become as productive as possible. Thus, it offers them training courses based on their needs. Furthermore, Elais is rationally managing natural resources and energy, contributing in this way to the protection of the environment. Weaknesses Elais does not have strong weaknesses because it has a leading position in the market and has up-to-date technological equipment. However, the needs of consumers are constantly increasing and are becoming more specialized, thus there is a need to continuously conduct marketing researches so as to identify customers needs and satisfy them. Opportunities The sector where Elais is activated is broad and always offers opportunities for the development of new olive oil products.

Elais is willing to satisfy all customers’ needs in collaboration with them. The company has all the means needed to achieve this. Threats External factors can influence the company’s sales such as the difficult economic situation in Greece and consumers anxiety concerning nutrition, which has resulted in a reserved buying behaviour in the recent years. The company controls its production so as not to face any problems in the future. In the olive oil market a big problem is the illegal trading of unpackaged olive oil and the unlawful competition, which standardized olive oil faces. In order to resolve this problem the government should strictly apply the existing legislation and inform consumers about the dangers engendered in the consumption of unpackaged olive oil. In Figure 1, SWOT analysis is presented. The Marketing Mix The marketing mix is also known as the ‘four Ps’. The marketing mix elements are product, price, place and promotion. A fifth ‘p’ was also added to the marketing mix elements, people (Kotler 1994).

The company in order to achieve its objectives follows a predefined strategy and used specialized tools so as to form the marketing mix appropriately. Product The olive oils are ‘Altis’ and ‘Elanthi’. Altis can be found in the following types” Classic, Soft, Traditional, ‘Green’ and Biological. Altis has high quality and during the last years sales are constantly increasing and it has the first place in the market. In 2004, the production of olive oil was the lowest of the last decade, thus, prices increased. However, the Union of Standardized oil Industries in collaboration with the Greek Ministry of Development and the European Commission conducted a campaign to inform consumers and contributed in this way to a 14% increase of the standardized oil market in 2004.

Elais is applying a Total Quality Guarantee System in all the stages of the production of olive oil. The company examines almost the 70% of the Greek production and selects only the 4% for Altis. It conducts more than 30.000 inspections each year to reassure that it offers the best quality of olive oil to its customers. The company elaborates and sends the olive oil to shops within one week at the maximum so as to reassure the best quality of the product. Elais is always trying to keep high quality and the same taste. The suppliers of olive oil are mainly Greek. The company since it is a member of the Unilever Group, uses the ‘Unilever Raw Material BV’, which is the Groups’ supplying network. In this way the company can achieve economies of scale and better conditions in the supply of raw materials. Elais establishes long-lasting relationships with its supplies and in this way a better service level is achieved and both sides have benefits. Price Concerning its pricing policy, the company cannot make big changes in short-terms. Prices cannot decrease, because then consumers will become suspicious of the quality of the product. In addition, a sudden increase in prices would result in a loss of market share.

Pricing is based on production cost plus profit, taking always into account the economic abilities of consumers, since the company’s products are first need products and they should be in every household. Thus, Elais does not have many possible choices as far as its pricing policy is concerned. Promotion For the promotion of its products Elais uses many promotional tools. Except form TV and radio advertising, the company organizes competitions, distributes samples as well as coupons through magazines and organizes free trials in shops. The promotional campaign is conducted by specialized companies, such as McCann Erickson, which is responsible for the promotion of ‘Altis’. The amount to be allocated for promotion is defined in the beginning of each year as a percentage of the total budget. However, sometimes, additional amounts from the company’s profits are given for the promotional campaigns. The social work of Elais has an important role in the company’s promotion. The company feels responsibility towards the people who trust it for years and contributes to the social needs concerning education, civilization, health etc.

Elais has established collaboration with the Economic University of Athens for the last 30 years, aiming at assisting the professional orientation of young people. The company in order to educate young children in issues concerning nutrition, has created, together with the Children’s Museum’, an educational program for young children titled the ‘Nutrition Exhibition’. This is a program aiming at helping children to adopt the right nutritional habits from their childhood. In addition, more than 2000 students visit the company’s factories each year and can gain an insight in the production process of olive oil. The company helps schools and finances activities of the Local Authorities on issue concerning education and civilization Furthermore, Elais because of its profound knowledge on issues concerning olive oil, organized seminars concerning ‘the sense of taste’ of olive oil. Many specialists were present as well as journalists and they were informed about the quality, the selection and the ‘the sense of taste’ of olive oil. Olive oil ‘Altis’ was a sponsor in ‘Cooks Golden Caps’ which is the most important event rewarding the best restaurants and the best chefs in Greece each year.

Elais uses its web site for advertising and for communicating with consumers. Through the web-site consumers can learn about the company’s products, ask questions and give new recipes. During the Olympic hospitality program, Elais, together with other companies of the Unilever Group, offered hospitality to some famous persons who visited Greece. In this way the company helped the country’s image abroad. Elais is visiting charity organizations and orphan-houses and offers financial support and food. It also assists the charity activities of churches and organizes bazaars. The company has the Elais Charity Organization, established by the wives of the employees of the Unilever Group, which collects money to help the poor. Furthermore, Elais supports the ‘Food Bank’ to fight hunger and control waste in poor countries such as Serbia. Elais on the ‘International Heart Day’, organized together with two well-known Greek Clinics, an eight days excursion in some remote islands in Greece and informed more than 2500 people, on issues concerning nutrition and heart’s health. It also offered free of charge cardiograms and instant examinations of cholesterol and sucrose.

Place The distribution network of Elais covers all the country and even the most remote islands, either through direct delivery or through local representatives or collaborators of the company. Elais has collaboration with MAVE Limited, a company specialized in storage, and through its distribution centers, supplies all the local representatives. They then supply the retailers of their areas. Big store chains are supplied directly by the company through special ordering and distribution programs which are developed on the basis of the needs of each store. People Elais is investing in its employees and conducts training courses for them every year so that they will develop their abilities and skills and they will become as productive as possible. Thus, the company has established a yearly plan for employees training on the basis of their needs.


Elais has managed to maintain the leading position in the Greek market by offering consumers’ high quality products in good prices. All its activities are focused on customers’ needs for a balanced nutrition, hygiene and safety. The company conducts marketing researches regularly to identify customers’ needs and satisfy them. Elais has a very good working environment and up-to-date technological equipment. The company’s distribution system has helped to control shortages and automate the supply process for all customers. Elais offers training courses to its employees to develop their abilities and skills so as to become as productive as possible. There is a strong competition in the Greek olive oil market, however the company can defend its competitors because of the high quality of its products and its long history in the market. The consumption of olive oil in Europe and in Australia showed an increase in the recent years. As it was mentioned in the literature review, the reason consumers prefer olive oil is not only because it is beneficial to health (Duff, 1998). There are also other reasons, such as the improvement of foods’ taste (Thompson, Haziris & Alekos 1994).

However, according to Bourdieu, 1984 and Duff, 1998, cost is a major consideration for the consumption of olive oil. Thus, Elais did not make high increases in its prices. As in all markets, promotion and advertising are important in the olive oil market (Duff, 1998; Crescimanno, Di Marco and Guccione, 2002). For example, Unilever through advertising stressed the authenticity and pure nature of its new olive oil ‘Puget Héritage’ and tapped into consumers concerns of health and quality of life (FOOD, 2004). Thus, Elais should continue its intense promotional activities. For the promotion of its products Elais uses many tools such as TV and radio advertising, distribution of samples, coupons and free trials in shops. In addition, it offers financial support to schools, charity organizations and orphan-houses. Furthermore, it participates in competitions such ‘Cooks Golden Caps’ and in events such as the ‘International Heart Day’. As it was mentioned, packaging can differentiate olive oil and create a good market image.

The material, the capacity and the resistance are the main competitive advantages of packaging (Sandalidou and Baourakis 2002). In addition, labeling, and the shape of the bottle should receive careful attention (Crescimanno, Di Marco and Guccione, 2002). Thus, Elais should pay special attention to packaging, bottles, labels etc. and try to differentiate from its competitors. If the level of production of olive oil is low, prices increase. For example in Greece in 2004 when the production of olive oil was the lowest of the last decade, prices increased. Thus, governments’ support and policies are needed to increase the level of production of olive oil and achieve lower prices (Sandalidou and Baourakis, 2002), (Sandalidou and Baourakis, 2002).

In the olive oil market a big problem is the unlawful competition from the illegal trading of unpackaged olive oil. Thus, the government should strictly apply the existing legislation and inform consumers about the dangers engendered in the consumption of unpackaged olive oil. In addition, to resolve these problems, as Crescimanno, Di Marco and Guccione (2002) also mentioned, olive oil producers should collaborate with each other, with Associations, the industry and distributors and create clear rules respected by everyone. THE CONTRIBUTION OF THIS STUDY This study contributes to the olive oil sector since it is one of the few so far that have provided an insight in the production and marketing of olive oil and has gathered knowledge concerning the Greek market where very limited research has taken place in this sector. The results of the study support the findings of other studies mentioned in the literature and they can be of definite interest and potential value to managers in this sector. Academically, further research based on these findings can add to the present pool of knowledge by further examining the marketing practices employed by other companies in this sector in Greece and worldwide.


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