Marketing Strategy Vitasoy Soybean Drink Essay

BackgroundSoybean milk was first introduced in Hong Kong by Dr. K.S. Lo under the brand name Vitasoy in 1940, with an intention to provide consumers with an inexpensive nutritious and high-protein soymilk drink. Since then, Vitasoy became a well-known household name and is now the flagship reaping of Vitasoy International Holdings Limited (VIHL), contributing 48% of the company total gross by categories in fiscal year 2013/2014. With the priority to promote quality of life through a wide range of great-tasting and nutritional products, the company grow beyond the soy beverage with a wide variety of food & beverages, under the derivative brand name Vita.Vitasoy Soybean Milk (Regular) Marketing fuseProductVitasoy soybean milk is the preferred brand among local consumers, but it is fast losing its attractiveness. Consumers are becoming more sophisticated and health conscious where umpteen are switching out to Fresh/ Organic soymilk which are fiercely competed by many rivals. The l aunched of Low Sugar variant may aim helped to slow down its eroding look at, but the product has passed the maturity stage. Instead of rationalizing the existing product line (multiple bunch up formats, photo beneath), the company continue to put out the product line with different pack formats (of recent, the PET packaging). This initiative may potentially lead to cannibalization and causing diseconomies of scales in drudgery.PriceTargeting the masses with price positioned below most of the organic and non-organic soymilk products across most convey. With exception to chain convenient stores, its pricing is much higher than most of the organic soymilk products. This distant price positioning in chain convenient stores may lead to consumers switching out to organic soymilk, which is cheaper, fresher & healthier. As observed (photo below) in 7-Eleven, pack of Vitasoy soybean milk 250ml cost HK$6.90 while pack of Pak Fook 236ml fresh organic cost HK$5.80, both at non-promotio n price.PromotionActively engage in promoting its product through several advertising platforms (eg. TV commercial, social media, magazine/ newspapers, billboards & event sponsorships) and conducted many consumer communication trends. Noteworthy is their in-store execution specially in chain supermarket which dominates legal age of the shelf-space with prominent product displays and conducted tactical bundle sales regularly.The recent campaign Anytime, Anywhere is seen as a desperate attempt to disassociate itself as breakfast-only beverage. The campaign was supported with the launch of PET packaging which is a better proposition for an all-occasion beverage. But again, pricing may not be appealing to the target consumers particularly in chain convenient stores which is much costly comparing to other channels.PlaceThe product is widely available through their extensive geographical reporting built over the years, reaching out to over 10,000 customers (eg. chain supermarkets & co nvenience stores, restaurants, bakeries, offices and independent grocery stores) serviced by 300 sales force and 100 rescue trucks. Also leveraging on the company subsidiary Vitaland, specializing in operation and management of school tuck shops and canteen business, has made the product more reachable particularly among younger consumers. These are the key factors that have helped to strengthen the company leadership in Hong Kong.RecommendationIn view of the competitive environment and evaluation of the product trade mix, the recommended growth strategies would be Marketing Penetration & Product cultivation. Both strategies are least risky and are capable to generate only business growth for Vitasoy in this mature market (Hong Kong)Market PenetrationVitasoy soybean milk emergencys to drive off competition and sustain their share in the non-organic soymilk segment via enlarge distribution reach, conduct tactical/ aggressive sales promotions (eg. Discount or bundle sales) and increase share of shelf-space. They need to reinforce barriers to entry in their key strategic channels (ie. chain supermarkets and chain convenient stores), as those are the key market entry channels and key breeding ground for competition. It is also crucial to rationalize their existing product line (multiple pack formats) to achieve economies of scale or prevent production complexity but most critically is to avoid cannibalization. In addition, to ensure the success of the product in PET packaging, it has to be nurtured with more effective marketing efforts with a pricing strategy that will appeal to the masses, specifically in chain convenient stores due to its geographical spread and 24/7.Product DevelopmentVitasoy soybean milk has passed its maturity stage, as consumers continue to be inclined towards beverages with higher nutritional benefits (eg. Organic, high calcium, low sugar & low fat). Nonetheless, the company must(prenominal) continue to protect its leadership in thi s category as it contributes 48% of the company total revenue. This can be done by leveraging on its reputation as Soy Expert and making the competition irrelevant. The company must aggressively take the lead in developing new modern product with clear product differential verses its rivals, through product line extension of their strategic growth brands (ie. Calci-Plus & Sansui). The new product line has to be forward-looking nutritious product with relevance to the health trends, this will eventually help to enhance consumer loyalty, gain more shares and potentially attract more switch-in from non-users.References1) Soyinfo center, website www.soyinfocenter.com/HSS/ks_lo_and_vitasoy.php 2) Vitasoy International Holdings, website www.vitasoy.com , www.vitasoy.com/pdf/pressRelease/EN 3) Vitaland Services Limited, website www.vitaland.com.hk4) Facebook VitaVitasoy5) Blog childhoodsnacks.blogspot.hk6) EuroMonitor International, website www.euromonitor.com/soft-drinks-in-hong-kong- china/report 7) Blue Ocean Strategy, W. Chan Kim & Renee Mauborgne, 2006 Harvard Business SchoolPublishing Corp