Please read the case below and answer the questions at the end.

Branding Turkish Olive Oil for Export

The largest olive oil producer in Turkey faces the problem of building a brand name and brand identity to market premium extra virgin olive oil in the United States. How does it choose and promote a brand name in a competitive marketplace?

Tarisis the largest olive oil producer in Turkey. When PnarOzdenjoinedTaris' marketing department, she did not know much about the olives. Ten months after finishing her MBA, and eight months after beginning work withTaris, Pnar is asked to develop a major branding program for Turkish extra-virgin olive oil marketed for export, primarily in the United States. This is something that no major Turkish olive oil producer has successfully accomplished.

Tarisis a large agricultural sales cooperative operating in the Aegean and Marmara regions of Turkey; its olive oil refinery and packing plants are in Izmir and Pomace.Tarisis the largest producer of olive oil in Turkey; it also markets figs, raisins, and cotton.Tarisprovides packaging, distribution, and marketing for 33 olive oil cooperatives with 27,000 small producer members.

Pnar began by reviewing what she now knew about Turkish olive oil, and how it is marketed for export.

Turkish Olive Oil

Olive oil has been produced in Turkey for thousands of years, and used in every form of cooking. There are 85 million olive trees in Turkey, and 250,000 citizens are employed in the olive industry. Some olive groves have been in the same family for generations. Olive trees have a productive life span of 300-400 years, and can survive for centuries longer. Plato's olive tree is still alive, although it has not produced olives for several centuries.

Turkey is the fourth largest producer of olive oil in the world, after Spain, Italy and Greece and just ahead of Tunisia. Annual Turkish production of olive oil varies from 200,000 metric tons with a good harvest with to 90,000 tons a bad harvest. The average is 125,000 tons per year, of which about 80,000 tons are exported. Some 45% of exports are shipped in bulk to Italy, packaged and re-exported under "Italian" olive oil brand names. About 35% of production is shipped to Spain to be re-exported under "Spanish" brand names. Most re-exports go to the United States; the rest go to Australia, Japan, Canada, the Russian Federation, and Latin America.

Some olive oil is packaged in Turkey and given Italian or Spanish brand names to make it more acceptable to export markets. Major export markets for this olive oil are the United States, Australia and Canada.Tarisexports olive oil to the United States and elsewhere with the Italian brand names Bella, Giorgio,Selestaand Antonia. This 'Turkish" exported olive oil competes directly with the repackaged Turkish oil shipped from Italy and Spain.

Selling price is the major reason thatTariswants to create brand preference for their olive oil. A recognized brand of high-quality extra-virgin Italian olive oil sells in a gourmet food store in the United States for US$20-25 a 750 ml bottle. The same quality of Turkish extra virgin oil with an unadvertised "Italian" or "Spanish" name sells for US$9. If a branded premium Turkish olive oil could be sold at even a 25% premium over a less recognized brand, the Turkish grower would triple its net profit.

Tarisis one of the few companies already selling its own brands of Turkish olive oil in the US, but its brands are unadvertised and the olive oil is sold at the lower generic" price ofunpromotedbrands from Tunisia; Morocco or Spain.

Extra Virgin Olive Oil

The olive oil thatTariswants to brand is the best of its extra virgin olive oil, known as "Early-Harvest Extra-Virgin Olive Oil". Extra virgin oil comes from the first pressing of the choicest, handpicked olives. It must be harvested and processed by means that do not alter the oil (no heat refining), and is required to have less than 1 percent oleic acid. Early harvest oil has less than.7 percent oleic acid. The difference in taste is significant.

Oils with between I and 3 percent oleic acid are considered to be "virgin" oils. Oils simply called "olive oil" are usually oils that have been processed. Little or no virgin oil is exported to the United States. Processed "olive oil" is usually mixed with virgin oil, to lower its oleic acidity and restore the flavor lost in the refining process.

Extra virgin olive oil is normally consumed uncooked. It is used in salads or on beans, for cooking meals with vegetables, or added to pasta sauces.

Consumption of extra virgin olive oil has a beneficial impact on cholesterol levels, and the oil is now widely promoted in Europe and the United States for its role in reducing cardiovascular diseases.

The Quality Issue

The best Turkish olive oil is equal in quality to the best Italian oil. However, the only Turkish olive oil brand widely recognized among the world's best olive oils is "LaleliSelection" which comes from a small, "boutique" facility north of Izmir 4 When it won a major prize in Chicago several years ago,LaleliSelection was described as "Rich, soft, reflecting the nuances of an exotic cuisine"; terms that Pinar thought might be incorporated into advertising for the futureTarisbrand.

Lalelicopied production methods of the olive oil producers of Tuscany: use the bestEdremitolives; use cold pressing (because heat is the enemy of olive oil); do not filter the oil but allow sediment to settle to the bottom of storage tanks; and never use damaged olives, which distort taste. Making olive oil of the very best quality requires very careful production methods and quality control, but Pinar thinks there is no part of the process thatTariscould not copy.

The United States Market

Taris' intention is to create and promote a brand of Turkish olive oil targeted at the United States market. The US has the fastest growing market in the world; American consumers are conscious of health benefits and of quality, and are willing to pay premium prices for the best virgin olive oil. The European market is harder to enter because of the large number of established brands, and consumers' preference for olive oil of well recognized countries of origin. The Asian market is promising but too small to beTaris' first priority.

Owning a premium brand is even more important to marketing in the United States, because "value" retailers like Wal-Mart are now selling their own private brands of extra-virgin olive oil at discount prices. It is thought that the market for olive oil, as with coffee, will segment into a "quality, expensive, status-branded" segment and an "inexpensive, store-branded" segment, with little room forunpromotedbrands in between.

Within the "quality, expensive status-branded" segment it is thought that the US olive oil market further segments by income, education, psychographic variables such as health consciousness, and "status" brand consciousness, but Pinar does not have solid research-based data on this.

The Problem of "Country of Origin"

One of the concerns in attempting to brand a Turkish olive oil is its country of origin. The success of many brands is related to the country of origin of the product. "German" means sophisticated engineering, as with expensive automobiles. "Japanese" means high quality consumer electronics. "American" means the best consumer goods. "Italian" means high fashion. "French" means elegant cuisine, wines and cheeses. It would be much more difficult to brand and market Bulgarian engineering, or Syrian fashion.

What does 'Turkey" mean to a European or American consumer of olive oil? When American consumers surveyed by the International Olive Oil Council were asked to name the country they associate with fine olive Oil, the overwhelming answers were Italy and Spain. Greece was a distant third, and Tunisia a more distant fourth.

Part of the problem is linking "Turkish" with great olive oil. Using Italian names for Turkish olive oil may not succeed in the long run, because the European Economic Community and the World Customs Organization have ruled that the place of origin of olive oil must now be printed on containers. However, the wording of the regulation might permit a label with "Made inAyvalik", and certainly would permit 'Made inAyvalik, Aegean Coast of Turkey", rather than "Made in Turkey".

The Branding Problem

Pinar knew that brand building was a long-term undertaking, and wondered where to start. She knew that a brand was a name, but also a logo, colors, a symbol and a tagline, all identified with the product. Most important, a brand is a promise to deliver a set of features and benefits consistently. Ideally, brand building emphasizes features and benefits such that the consumer will come to value the brand as a 'friend", and will both pay a premium for the brand and be unwilling to switch to other brands

There are several accepted ways to build a brand.

1.Focus on the age and other demographics of a "target user", whom the purchaser can accept as their reference.

2. Emphasize the "culture" of the user (separate from the demographics) whether it be a "wife serving great meals", "a good mother feeding her children", or a user of a particular age or ethnicity.

3. Emphasize the attributes of the olive oil, its taste or cooking qualities, or its use on salads or vegetables.

4. Emphasize the benefits of the product its functional or emotional or health benefits.

5. Emphasize "values" associated with the product, for example conferring prestige on the cook who uses it.

Another approach is to "co-brand", for example to show the olive oil being used in conjunction with a recognized, branded product such as pasta.

Co-branding is usually used between highly accepted brands - BMW cars and Pirelli tires. Pnar wondered if any food manufacturer would want to associate their product with an unknown olive oil brand.

A central issue is the name to be given to the new olive oil. There are a number of possible approaches to choosing a brand name:

1.Use the name of a person for example Honda.

2. Emphasize an implied quality, for example Duracell; or Weight Watchers.

3. Suggest a product quality as with Healthy Choice, or a product benefit as in Craftsman tools.

4. Choose a name that is simply easy to pronounce, as in Crest.

5. Create an artificial name, as in Kodak.

Pnar knew that advertising could not itself create brand equity. Brand equity or brand bonding, occurs when customers believe the brand will deliver on its promises. Advertising can create brand recognition and brand preference leading to brand trial. Pinar will have to look to other brand building tools like sales promotion, public relations and a press program, to get her message across and set the stage for "brand-building" advertising.

Pnar can also consider activities that might run simultaneously with the beginning of brand advertising: trade shows, sponsorships (like cooking shows) and social cause marketing (like support of a charitable cause).

Finally, Pinar wondered if the brand image could be built around a celebrity personality, perhaps a recognizable gourmet chef, as spokesperson for the brand.

The good news is thatTarisis a major enterprise with commitment to the branding exercise, and extensive financial resources. Pinar has confidence that if she designs a good long-term branding program,Tariswill support her.

QUESTIONS

1. Conduct a SWOT analysis forTarisolive oil.
2. Design an integrated brand development program forTaristhat incorporates name, logo, symbols, and color of the new brand.
3. What is the brand promise? What should the new brand name mean?
4. Define the "target segment" in the United States for the new olive oil brand (If you do not know enough about the market segments in the United States to answer this, how would you find the information?).
5. Discuss how should Pnar incorporate other brand-building tools.
6. Sales promotion
7. Public relations
8. Sponsorship
9. Should the newTarisbrand use a celebrity endorser? Who? Why?
10. What should be the pricing strategy of the newTarisbrand? Discuss it