Abstract
The report addresses Suntory Holdings Company Ltd an alcoholic and soft drink giant based in Japan. The insights provided will help the company extend the market through the introduction of new product and targeting new consumers. The report starts by briefly describing the history of the firm, what the corporation sells and the businesses luxury brand. Also, the study has identified various markets served by the company such as Brazil, India, Germany, and Africa among others. Moreover, the research has identified and justified one option having the highest potential for growth by employing Ansoff’s Matrix concept. The paper has undertaken an analysis of segmentation, targeting and product positioning. The report has ended by developing marketing mix for the proposed company growth. The researcher has used secondary sources of data to complete the course work.
Marketing Report
1.0 Introduction
The work of Mannings (2008) indicates that Suntory Holdings Limited a brewing and distilling company group came into existence in the year 1899. Dojimahama serves as the company's headquarters as Weinstein and Weinstein (2004) reveal. The Corporation specializes in making and distributing alcoholic beverages, soft drinks and sandwich chain. Suntory, a multifaceted manufacturer of food and drink, develops premium alcoholic products on a wider global scale. The corporation delivers superior quality products and services that contribute to improved lifestyles for customers around the world. Turning to Mannings (2008), one finds that the Japanese soft drink giant has diversified internationally with the acquisition of firms such as Lucozade Ribena making the business one of the largest manufacturers of distilled beverages across the globe. Reference to McDonald and Dunbar (2004) reveals that other than mainstream business Suntory Group undertakes diverse operations in Japan.
The company has, for example, other subsidiaries such as Dynac Corporation that operate bars, restaurants and pubs. Moreover, the conglomerate owns Pronto Corporation that runs over 250 establishments. Subway Japan, a subsection of Suntory Holdings, handles Japanese franchise operations and makes products such as sandwiches and Izutsu Maisen. In a study of McDonald and Dunbar (2004), Orhun, University of California and Berkeley (2006) found that Suntory owns additional restaurant businesses overseas such as in Asia and Mexico. Suntory has a broad line of products, for example, alcoholic drinks cocktails and liqueurs and soft drinks. The company's luxury brand products include whisky, brandy, and vodka among others.
2.0 Marketing environment
Orhun, University of California and Berkeley (2006) perceptively state that the company has built a strong market in the U.S especially the North America region and has enacted strategies to strengthen it. The part acts as the company's largest market for spirits. Also, the company distributes healthy food beverages and soft drinks to bourbon markets, making the business acquire a leading position as the largest distributor. Suntory Holdings has expanded whisky distribution in Irish market following an increased demand for the product. Mexico serves as the company's most important and dynamic markets for tequila. Orhun, University of California and Berkeley (2006) point out that the firm prides to have a vibrant market in EMEA region, Europe, Middle East and Africa. EMEA, a vast and diverse region anchored in Germany comprise of mature and emerging markets. The company makes and distributes significant sales of Jim Beam and Maker Mark.
Orhun, University of California and Berkeley (2006) make clear that the duo drives strong growth in the area. Customers prefer Teacher's and Source, marked as client favorites in the market. Suntory Holdings has vibrant markets in Central, Eastern Europe and Russia. The markets have a growing thirst for premium spirits such as Sauza, and Courvoisier. The work of Qubein (2008) asserts that Suntory Holdings pride to have an active and growing market in the Asia Pacific South America region (APSA). Qubein (2008) describes the area as the company's future growth engine. Australia serves as an emerging market and is one of the largest recipients for Jim Beam. The iconic Midori liqueur brand makes Australia one the businesses’ strongest markets. The world’s giant soft drink distributor supplies its products in India, described by Qubein (2008) as having an emerging market with substantial growth prospects. Customers in India mostly prefer Teacher’s and Sauza. The company has made bottling and distribution infrastructure investments in the region to enhance the company diversification prospects in India.
South East Asia, China and Brazil serve as active markets for the company's products such as Courvoisier. The company undertakes processing and distribution operations in China. Suntory records high beer sales in Shanghai, one of the fastest growing for the company's wine products (Qubein, (2008).The home market in Japan has an extensive portfolio of spirits such as Shochu, Whisky brands that have acquired high reputation from consumers courtesy of the products high quality and craftsmanship. According to Qubein (2008), Suntory Ltd intends to achieve increased growth in various markets across the world by consolidating and leveraging leading brands and distribution network.
3.0 Identify and justify one option that has most potential for growth using Ansoff’s matrix
In an article by Qubein (2008) Suntory Holdings has identified Lucozade soft drink as one of the company's products having tremendous potential for growth. An analysis using Ansoff’s Matrix shows efforts and strategies the company has enacted to enhance the products growth.
Figure 3.0
Source: Sheehan (2011)
3.1 Market penetration
Research by Sheehan (2011) suggests that Suntory Holdings marketing department has made efforts to increase the level of Lucozade sales in the existing markets. The firm has developed new strategies and introduced a loyalty scheme to lure customers to choose and use more of the product. Furthermore, the company has launched offer promotion whereby if a client buys more than three bottles of Lucozade he/she gets one free. Also, Suntory has brought the price of Lucozade down and increased the product sales force activities (Sheehan, 2011). The conglomerate has made Lucozade distribution more extensive and ventured into online advertising for the product to reach more clients and increase the routes of the product to the markets.
3.2 Product development
The company has extended Lucozade by producing Ribena a different variant and carries out repackaging of related products. Sheehan (2011) observes that Suntory has improved customer service and continued to emphasize that the sales force shortens time to market the product. Suntory has developed Mizone and Orangina and placed the duo into existing markets in such as in Japan, U.S.A and China. Qubein (2008) discovered that as an attempt to raise the Lucozade sales, the firm has modified the product by changing the outlook such as introducing new flavors to increase the performance and quality.
3.3 Market development
Suntory has undertaken a move for market extension by taking Lucozade to new markets such as in African countries, Europe and Asia. The opinion of Sheehan (2011) is that the firm has conducted further market segmentation to assist in identifying additional customer base. The business moreover has employed approaches such as using new distribution channels, new product packaging and putting different pricing policies (Sheehan, 2011). Suntory Holdings commenced exporting Lucozade and Ribena to new countries such as Hungary and set branches in Middle East countries to ensure more sales. The company's marketing department regularly conducts PEST analysis and employs CAGE Distance Framework to identify opportunities and threats in acquired new markets. Sheehan (2011) found that the effort by Suntory to use marketing mix helps in understanding various ways to reposition the product.
3.4 Diversification
The company has introduced strategies to market and sell the new products in new ventured markets. According to Sheehan (2011), Suntory employs related diversification to distribute new products to new markets. The firm applies new promotional techniques such as direct sales, online selling to enhance product access to the new clientele. The opinion of McDonald and Dunbar (2004) is that the strategy is risky but has several advantages such getting high returns following compensation for the high risk. As Qubein (2008) says Suntory Holding stands to gain a foothold if the business acquires an attractive segment and realize reduction of the overall business portfolio.
4.0 Suntory Lucozade market
4.1 Market segmentation
The customer base that Suntory Company will direct the product will originate from continents such as Africa, Asia, Australia, as well as North as South America. Countries such as Kenya, India, China, Brazil, South Africa and others will serve as the principal markets for Lucozade (McDonald and Dunbar, 2004).. The company estimates to cover an urban population of up to 100 million residents in Africa, 50 million suburban people and 15 million from rural regions. The population targeted in America comprise of approximately 400 million people, 300 million from India and 20 million from (BrazilMcDonald & Dunbar 2004).
4.2 Targeting
The company will direct the product to a population whose age ranges from 20 to 70 years covering both male and female baby boomers and Generation X. The expected income in the highlighted regions will vary from $500 to $5,000 and will comprise mostly doctors, nurses and teachers. The consumers have a minimum of a college degree, and the majority will be Catholics. The company anticipates that the consumers will purchase the product for health reasons and will readily buy on an occasional basis (Mannings, 2008). Most of the clients will have a first-time user status.
4.3 Positioning
Suntory Holdings mainly designs Lucozadefor consumers experiencing energy deficiency and individuals involved in undertakings such as athletes, footballers, wrestlers after an engaging workout. According to Mannings (2008), the product is scientifically proven to rejuvenate individuals experiencing dehydration and helps people maintain performance. The company will position the product in wholesale and in retail outlets but not as a high-end product. Pepsi Company serves as the primary competitor to Suntory Holding product. The product is however differentiated from the items offers by rival companies making Lucozade unique (Mannings, 2008). Manufacturing and design department in the organization has put unique packaging and flavors differentiating the product from other substitutes from competitors. Suntory Holdings will present the product in diverse tastes such as the Caribbean Crush, Cherry, Cloudy Lemonade, Mango Mandarian, Orange and pink lemonade. The product possesses the ability to lure customers and provide immediate results.
5.0 Marketing mix
5.1 Product
Mannings (2008) explains that Suntory Company Lucozade designed the product for rejuvenation and boosting energy levels among customers.
Product flavors
Orange
Pink lemonade
Strawberry
Tropical fusion
Black edition collar
Lemon
Graffuiti
Ingredients
Carbonated water
Glucose syrup
Citric acid
Lactic acid
The company presents Lucozade in diverse forms allowing customer base reap maximum benefits. Mannings (2008) argues that the item best suits need of athletes, football players, exercisers, gym goers and sports lovers. The initiative to avail Lucozade in various forms such as tablets, jelly beans, energy bars and gels made the product famous in different company markets. The company has changed the product tag, packaging and labelling to make the item appear oriented and reflective of core features.
5.2 Place
Suntory Holdings hired an active team to ensure sufficient stocking of Lucozade in various retail outlets, for example, shopping malls, hypermarkets and supermarkets. Qubein (2008) notes that several healthcare facilities also stock Lucozade for patients. The work of Mannings (2008) asserts that Suntory has formed partnerships with learning institutions such as universities, where company agents sell the item in the campus canteens. Leading sports clubs and recreational facilities around the world also form pacts with the corporation to sell Lucozade (Mannings, 2008). The soft drink Giant has an extensive distribution network to ensure various outlets receive the brand in time.
5.3 Price
Suntory competitively prices Lucozade at a price higher than the average with an intention of building the product's image. Mannings (2008) postulates that Lucozade has acquired experiences on cost reduction making the item cheaper than products produced by rival companies such as Reb Bull. A 100ml bottle goes for 0.78 to 1.30 pounds while that or Red Bull 1.35 to 2.02 pounds.
5.4 Promotion
Suntory Holdings mainly uses advertising and promotion as the two promotional tools as Shen (2011) explains. The adverts run on TV to keep pace with dynamic markets. The work of Mannings (2008) reveals that Suntory sponsors numerous team players and athletics to reinforce market position and create product awareness among customers as Qubein (2008) further supports.
6.0 Conclusion
The Japanese conglomerate has over the years created a pleasant image for its products such as Lucozade as evidenced by the high number of customers who purchase the merchandise. The company, however, faces substantial challenges from products made by competitors as well as items from emerging soft drink corporations. The firm should, therefore, consider implementing strategies to secure customer loyalty and avoid customer switching. Suntory should invest heavily in research and development to identify changing customer needs and preferences. Moreover, the business should make more intensive inroads to access emerging markets and consolidate dominant market share. The markets have a youthful population. Therefore, the company should design products matching the generation's needs. Undertaking massive advertisements using various promotional methods would play a huge part in raising the volume of sales.
Bibliography
Mannings, R. 2008. Product positioning. Boston: Artech House.
McDonald, M., & Dunbar, I. 2004. Market Segmentation: How to do it, how to profit from it. Amsterdam: Elsevier/Butterworth-Heinemann.
Orhun, A. Y., The University of California, & Berkeley. 2006. Product positioning strategies.
Qubein, N. R. 2008. Market Positioning. Chicago, IL: Nightingale-Conant Corp.
Shen, B. 2011. Marketing management. Lausanne, Switzerland: AVA Pub.
Weinstein, A., & Weinstein, A. (2004). Handbook of market segmentation: Strategic targeting for business and technology firms. New York: Haworth Press.
