[FBEC 2002] Marketing Report
- 1. Marketing Plan By: Phillip Hammer Leona Lam Cindy Lu Duanrui (Gloria) Shi Eunice Wang Jingbi (Marina) Yang
- 2. 2 TABLE OF CONTENTS 1. Executive Summary……………………………………………….....2 2. Situation Analysis…………………………………………………......3 i. Customer Analysis…………..…………………………...…3 ii. Competitor Analysis…………………………………….....4 iii. Market Analysis……………………………………………...6 iv. SWOT Analysis………………………………………………..7 3. Recommendations………………………………………………...…..9 i. Marketing Strategy……………………………………...……9 1. Targeting & Positioning……………………………….9 ii. Integrated Marketing Strategy………………………….11 1. Product……………………………………………………...11 2. Price…………………………………………………………..11 3. Place…………………………………………………………..11 4. Promotion…………………………………………………..12 4. References…………………………………………………………………13
- 3. 3 EXECUTIVE SUMMARY Vitasoy has already effectively been saturated into the Hong Kong market, becoming a household name that most hold dear throughout generations as more and more drinkers are introduced to the Vitasoy through the familial branding of this product. With the soybean’s increasing popularity due its health factors, and in addition to the construction of a new plant in Foshan (Southern China), the Mainland China market makes for an attractive market for Vitasoy to expand its distribution channel and push its way into new territories made of millions of potential lifelong consumers. By asserting Vitasoy’s mission to promote lifelong health for all age groups through entering the Mainland Chinese market, we will be able to see the same result that has been seen in Hong Kong. By bringing more awareness to the Mainland market, we plan to create Vitasoy as a brand that is not only health-‐conscious but family oriented as well, which is best done by reaching out to the youths of today who will become the future of tomorrow, passing along their brand loyalty to their families. Long-‐term relationships with customers are extremely valuable because customers are consistent sources of positive word-‐of-‐mouth and product consumption. In order to promote Vitasoy as a nutritious and inclusive drink for those of all ages, ideals valued by these consumers will be considered when it comes to the Vitasoy campaign. The use of celebrities who project a wholesome image as well as interaction with the consumer will be considered as tactics to connect with the mainland audience.
- 4. 4 SITUATION ANALYSIS Customer Analysis Personal: Research has shown that soymilk can benefit women’s health because it can reduce the risk of breast cancer by more than 30% for Asian women who have habitually drinking soymilk. As for children, there is no doubt they are in desperate need of protein, necessary for growing children. Vitasoy’s soymilk has many flavors such as strawberry and chocolate, all of which can attract children to drink an otherwise plain old healthy drink. In addition, protein is also of great importance for senior citizens. It can maintain the metabolism of the body, enhance the immune system and assist in aging gracefully. In fact, people demand more protein as they age. Thus, soymilk is a good choice for women, children and also senior citizens. Cultural: About 2000 years ago, the king of the western Han dynasty started to make soymilk for his mother, showing that soymilk has had a long history in China, just as coffee has in western countries. Soy is so imbedded in Asian culture that it goes beyond just beverage, but there is food made from soybeans as well, Tofu for example. Many nutrition experts think that soy based foods make digestion and absorption of nutrients easier for those from Asian countries. Psychological: There are various ways for people to gain protein and many think drinking soy milk is the healthiest way compared to eating meat or protein powder. As a result, many believe herbs and vegetables have fewer side effects than animal and medical products, so soymilk is their best choice. Furthermore, Vitasoy was established in 1940’s and has become a happy memory in many Hong Kong citizens’ minds. People may feel warm when drinking Vitasoy in cold winter because it can remind them the happiest time they had in childhood. Moreover, if in a family grandparents drink Vitasoy, younger generations may follow suit.
- 5. 5 Competitor Analysis Nestle: The world’s leading Nutrition and Health Company. Nestle is an international company, well known in the world, including the Chinese and Hong Kong market. They offer a large variety of products, from baby food to bottled water to ice cream and so on. The vision of this company is to better the lives of their customers by offering healthy foods, as is reflected in their slogan: “Good Food and Good Life”. They provide different products in different countries; in the Hong Kong market, Nestle produces soymilk for its Asian audience, and thus became Vitasoy’s competitor. Nestle has also shifted their targeted demographic from teenagers to mothers such that the whole family may find a drink suited to their taste. Yeo’s: An international corporation and drink manufacturer. The main products in Yeo are food and beverages. Yeo’s offers many different kinds of beverages in the market, such as Asian drinks, ready-‐to-‐drink tea, soymilk and so on. Yeo’s emphasizes product innovation, as reflected in the thousands of drinks that they offer in order to reach a larger market and cater to the varying demands of different consumer groups. The main market for Yeo’s is the Asian market. In order to satisfy those customers, Yeo’s developed a series of drinks called the Asian drink. This line of traditional drinks, provides chrysanthemum tea, winter melon tea, sugarcane drink and so on, is more popular among adults and seniors. Yeo’s is well known by local Hong Kong citizens, and to some, these drinks remind hem of their childhood. Compared to other markets such as Mainland China, Yeo’s has better market performance in Hong Kong. Yili: A Mongolian industrial group which advocates the health benefits of nourishing drinks which focuses on 5 major sectors: liquid milk, ice cream, milk powder, yogurt, and raw milk. The marketing campaign of Yili centers
- 6. 6 on celebrity endorsements, seen through the images of celebrities on the product as well as advertising campaigns. This distinguishing feature separates Yili from Vitasoy, giving Yili a comparative advantage in a culture that values opinions and support of well-‐known stars. Yili also sponsored the 2008 Beijing Olympic Games and the Shanghai World Expo, bringing more awareness to the Yili brand. Yili has a very large share in the Chinese market, establishing itself as a drink of the masses. However, it has a very small market in Hong Kong, and is not considered to be a strong threat to Vitasoy there. Similarities: There is one major similarity amongst the four brands: promotion of health drink that is currently high in demand. As people obtain a higher living standard than before, they are also becoming more concerned with nutrition and health. By following such market trends, and selling products at affordable prices, the competitors of Vitasoy have been able to achieve success respectively. Due to the similarity among those brands, Vitasoy has no advantage in promoting itself as primarily a health drink. Differences: Although these four brands sell similar products, they have different market performances in the markets of Mainland China and Hong Kong. This may be due to cultural differences, leading to different reception of different brands. Nestle, being an international brand, is more welcomed by the younger generation in both Mainland China and Hong Kong. Vitasoy and Yeo’s are local Hong Kong brands that have become a part of the local lifestyle, providing products that target the Asian population. Comparing Yeo’s to Vitasoy, our research suggests that the latter is more popular in the Hong Kong market.
- 7. 7 However, in the mainland market, Yili is the winner among those four brands. As mentioned before, Yili promotes their products by using celebrity endorsements, which is a good way to use in mainland market. People in China are getting used to seeing advertisements with celebrities. If Vitasoy wants to expand the to the China market, it should do something similar as Yili in order to target people in Mainland China. Market Analysis Macroeconomic forces: Demographic forces: VitaSoy offers a large range of suitable beverages for consumers of all ages. The drinks that are produced target all different consumers. Economic forces: The recent global economic slowdown in the various major markets has negatively impacted the sales of VitaSoy. The slowdown led to a decrease in overall consumer spending. There has also been inflationary pressure and rising wages globally, leading to increasing costs for VitaSoy. The volatile employment environment has also posed challenges for VitaSoy. Natural forces: In the past two years, there has been unexpected downtime at various VitaSoy operations due to severe weather conditions. As a result, there were production delays and logistical delays. Cultural forces: In Hong Kong, there has been a trend of having a healthy and on-‐the-‐go lifestyle. Drinking VitaSoy products in moderation fits this type of lifestyle.
- 8. 8 Microeconomic forces: The company: VitaSoy is based in Hong Kong and its main function is the manufacturer and distributor of food and beverages products. Suppliers: The largest supplier accounts for 23 percent of total purchases and the five largest suppliers account for 30 percent of total purchases. This is potentially detrimental because if anything happens to the business of these suppliers, significant portions of VitaSoy’s purchases are in danger. Marketing Intermediaries: VitaSoy does not have its own retail shops and third parties such as supermarkets and convenience stores sell all VitaSoy products. Customers: The largest customer accounts for 6 percent of total sales and the five largest customers account for 20 percent of total sales. This is potentially unfavorable because if anything happened to the business of these customers, one-‐fifth of VitaSoy’s sales are in danger. Competitors: There is intense competition among brands and across food and drink categories especially with the influx of Japanese, Korean, and Taiwanese drinks. SWOT Analysis: Strengths: VitaSoy has strong brand equity, so when people hear “VitaSoy,” they associate it with a strong sense of credibility. The company also has a good local reputation because the people in Hong Kong have been drinking VitaSoy for many generations. VitaSoy has also successfully penetrated into overseas markets and can be found in North America, Australia and New Zealand, and Singapore. The company offers a diverse selection of products including soymilk, tea, tofu, lunch box and snacks, dairy milk, distilled water,
- 9. 9 and juice drinks. These products are distributed through many different channels. Weaknesses: VitaSoy products and drinks are only top of mind in Hong Kong. While in other places, VitaSoy products are only either brand recall or brand recognition on the brand awareness pyramid. Therefore, VitaSoy only has a relatively small market share in other countries. Another weakness is that most of the VitaSoy drinks have large sugar contents and this generates some criticism. Opportunities: Soymilk is increasing in popularity because the antioxidants in the soybeans have been found to prevent cancer. VitaSoy has built a new plant capacity in Foshan, Southern China in hopes of expanding its distribution channels and widening its territorial foothold in Mainland China. The company has also penetrated the plastic bottled drinks segment in Hong Kong and this can compete with the influx of foreign drinks. Threats: VitaSoy continues to face increasing labor costs and logistical costs. The increasingly competitive landscape also threatens VitaSoy’s sales.
- 10. 10 RECOMMENDATION By asserting Vitasoy’s mission to promote lifelong health for all age groups, we hope that by entering the Mainland Chinese market, we will nurture lifelong customer relationships with the youth (and in turn, the entire family unit). Seeing the results of similar approaches in Hong Kong, this can lead to positive future outcomes as future generations become repeat consumers. Long-‐term relationships with customers are extremely valuable because customers are consistent sources of positive word-‐of-‐mouth and product consumption. Marketing Strategy Segmentation: Vitasoy has segmented the market in several major ways, including by demographics, geography, Psychographic, and Behavioral. Geographic: Vitasoy currently operates in 40 different countries, and has split the world into five major segments; Mainland China, Hong Kong and Macau, North America, Australia and New Zealand, and Singapore. Out of these groupings, Mainland China remains the most important segment, as it has the largest population, a growing middle class, and a low level of consumer identification with the Vitasoy brand. This low level of saturation makes the mainland a more attractive area of expansion than Hong Kong, as there is a much larger proportion of the population that can be tapped. Demographics: We have aimed to target all ages, all income levels, and continue to establish our products as naturally inclusive; appealing to people from across many demographics can enjoy this product. The company has been especially focused on attracting the youth to Vitasoy products so that we can build long-term relationships with these customers for decades. Making an impact on young consumers is crucial for our long-term
- 11. 11 sustainability. Consumers whom we are able to build long-term relationships with are naturally more profitable than one-time customers, as they offer more than sales, by providing positive word of mouth. In addition, because of our family-oriented market strategy, establishing these relationships can yield positive results as the entire family unit, with multigenerational potential, adopts our product. Psychographic: Vitasoy has worked to present itself as a conservative, family oriented company that can appeal to the family unit. We have family friendly commercials that promote a positive message of togetherness. Our “Stand By Me” campaign, for instance, shows people from all walks of life drinking various Vitasoy products in a variety of environments, all singing one song together. This contrast greatly with traditional commercials from competitors like Coke, which runs ads featuring sultry actresses in sports cars, drinking Coke and conveying poor family values. We are looking to target the market of the health conscious consumer, and making the case that Vitasoy is a healthy, delicious, cheap, and convenient substitute to most other products. Vitasoy can be consumed at any point in the day, but it has been shown to be a convenient morning beverage that helps start the day off right. Behavioral: Our marketing scheme aims to target the low loyalty, light use, low brand recognition, and high potential consumers. We acknowledge that targeting our most loyal customers is unlikely to result in high returns, as these consumers are usually near their upper limits in consumption potential. Instead, by focusing on people who are less committed to the Vitasoy brand, we have much more potential to grow. In addition, we hope that there will be a positive spillover effect for our loyal users. While our commercials are aimed at attracting new customers, they will also have the benefit of reaching loyal customers, and reinforce their level of satisfaction with our brand.
- 12. 12 Positioning: We hope to achieve a level of brand positioning in which we can reinforce a sense of nostalgic familiarity for parents, and bridge the generation gap between children and adults. The long history of Vitasoy means that we have sold our goods to many generations, and we hope that our products will act as a bridge through time, allowing parents and their children to have a common bond. We also hope to position Vitasoy to be perceived as health conscious and delicious. It is important to the long-term success of the company that our consumers are aware of the health benefits associated with the Vitasoy brand. Finally, because they are one of our most critical demographics, it is critical that we maintain a brand image of youth-friendliness in order to attract new and youthful consumers. Integrated Marketing Strategy Product: The product we are focusing on is the soy milk, tea, and juice sector of Vitasoy. The product branding positioning taken as a part of this campaign is “sincerity”. Our marketing campaign will center on family values—so our product will convey the message of being beneficial to the family and it’s health. Price: The strategy we want to use for this campaign is penetration. Thus we want our product to be produced on a large scale at a low cost. This way, everyone, no matter what income level they belong to, will be able to afford this product. Place: Since we want our product to be thoroughly accessible in the market, we want Vitasoy to be available in the most convenient locations for the consumers. Currently in China, we have noticed from personal experience that many convenience stores do not carry Vitasoy products. Since our target is on family and children, we want our product to be in areas where children are in. This includes classrooms, playgrounds and other youth-orientated areas. In Hong Kong, there is a high use of vending machines in areas such as schools. We will try to bring this model to China. Euromonitor International did a study on
- 13. 13 vending machines in developing countries (n.d.). In Japan, there are very low rates of vandalism because it is a relatively safe country (Spacey, 2012). In contrast, China is still a developing country but growth for vending machines is still on the rise. Promotion: In order to focus on our “target”, we plan to use promotion in order to reach our consumers—especially students and the younger generation so that these purchasing behaviors can stay with them even as they mature. Public Relations: First off, the competitor brand “Yili” is doing extremely well in China. Their main strategy is to use celebrity endorsers. For example Yili uses celebrity images on their products and uses them in all promotional campaigns across the field. The reason why they are so successful is because this is aligned with the consumers taste in China. Celebrities are a huge part of Chinese culture since the Chinese place a great amount of trust amongst celebrities. For our campaign we will use relevant celebrities that have a “family” orientated image--viewed by the community as having a healthy lifestyle. Sales Promotion: Since our target is the youth, we want our campaigns to be tech-savvy. It is easy to capture the younger generation with new technologies as they use it quite often. One sale promotion campaign is to have QR codes on the Vitasoy boxes to scan. After scanning a certain number, they will be able to obtain a prize –such as a Vitasoy pedometer. This interactive experience engages the users, while allowing them to share their achievements on social media sites. Another sales promotion campaign is to give Vitasoy coupons in taxis after users enter their phone numbers in TouchMedia’s monitor. Social Media: This campaign is aligned with the public relations campaign. Celebrities would use Weibo to endorse Vitasoy. This way the consumers can see the product being tied to their favorite star. Advertising: We would use vending machines in high profile areas. This not only gains the attention of many but also increases sales—serving a dual purpose.
- 14. 14 As mentioned before, these vending machines would have extra security to ensure that vandalism is kept to a minimum.
- 15. 15 REFERENCES "The Battle of the Brands: Winners and Losers in the Culture Wars." Yahoo! Finance. PR Newswire, 21 Mar. 2013. Web. 20 July 2013. Lau, Adaline. "Vitasoy Makes HK$10m Brand Investment." Marketing, , HONG KONG, MARKETING, Campaigns, Out Of Home,. Marketing- Interactive, 9 July 2013. Web. 9 July 2013. Spacey, John. "Vending Machines in Japan: 5.6 Million Robots Can't Be Wrong." Japan Talk. N.p., 12 Aug. 2012. Web. 19 July 2013. <http://www.japan-talk.com/jt/new/vending-machines-in-Japan>. "Vending in emerging countries." Market Research World. N.p., n.d. Web. 18 July 2013. <http://www.marketresearchworld.net/content/view/157/77/>. "VITASOY International Holdings Ltd." VITASOY International Holdings Ltd. N.p., n.d. Web. 1 July 2013. Wang, Jasmine. "Vitasoy Finds Favour amid Milk Scandal." South China Morning Post. N.p., n.d. Web. 10 July 2013.