Principle of Marketing in the Food and Beverages Market - Research Paper Example

Marketing Strategy The food and beverages market is a highly competitive one, with the implication being that newcomers faced considerable challengeswhen trying to penetrate into the market. Indeed, as Steiner (2005) argues, both case studies and empirical evidence suggest that the key to success lies in the selection, not only of the most appropriate marketing strategy but one which is both cost-effective and feasible. This is effectively established by the experiences of Jones Soda who, through the deployment of poorly selected and over-expensive marketing strategies, ended up spending a total of 40% of its revenues on marketing, could not sustain this figures and ultimately had to sell the company (Steiner, 2005). Bearing these lessons in mind, the marketing strategies which shall be proposed for Shin Shii shall be founded upon the characteristics of the market in question and, proceeding from that, shall aim towards the maximization of effect within a reasonable budget. In selecting its marketing strategy for entry into the U.S. market, it is necessary to consider both the threats and opportunities which shall confront Shin Shii. Based on observations of the US beverages market, marketing and market research scholars have determined that the primary threats confronting both existing companies and new entrants are over-saturation and an increasingly health-conscious consumer-base (Swot,'2005). In other words, not only is competition extremely intense and dominated by a handful of major food and beverages companies but, health concerns are functioning as a threat to the maintenance of the existent market, let alone its expansion. While market research scholars have identified a number of serious threats confronting the food and beverages' market, they have also identified a number of attractive opportunities, especially pertinent to the case of Shin Shii. In the first place, while the beverages' market may be oversaturated, the U.S. consumer market is a highly experimental one by nature and is attracted to novelty (Swot,' 2005). In other words, it exhibits a persistent and unfailing tendency to test the new. In the second place, the trend towards health consciousness implies that while the soda market may be sealed off for the present, there is a market for beverages which are considered healthy or, at least, benign, in that they neither have negative nor positive health effects. Consequently, on the basis of the identified opportunities, it is quite possible to conclude that as saturated as the beverages market may be, the trend towards health consciousness and the experimental nature of the market, there is a place for Shin Shii. It is producing a healthy beverage and it is, within the matrix of the U.S. consumer market, new. Having determined, on the basis of an analysis of both the opportunities and the threats confronting the U.S. beverages' market, that there is a place for Shin Shii, the question to be asked at this point concerns the marketing strategy which would most likely allow the exploitation of the identified opportunities. Undifferentiated marketing is the optimal strategy insofar as the entry of Shin Shii into the U.S. market is concerned. According to Maoz and Tybout (2002), within the food and beverages' market, as with others, there is hardly a difference between the different segments therein consequent to the fact that the product in question, by its very nature, possesses universal appeal. Such products are not age-discriminatory in that they do not appeal to a particular age group but not another, as tends to be the case with alcohol, soda and energy drink. Likewise, tending to be very reasonably priced, they are affordable to all and, hence, do not discriminate between the various income groups. Insofar as products of this nature are concerned, the deployment of undifferentiated marketing strategies tends to be the optimal and most effective choice. Differentiated marketing, defined as "a market-coverage strategy in which a firm decides to ignore market segment differences an go after the whole market with one offer," (p. 418) is perfectly suited for Shin Shii because, as noted, its product possesses an almost universal appeal. In this case, the use of undifferentiated market is not consequent to a decision to ignore differences as much as it is an outcome that there are no real market segments where tea is concerned. Proceeding from the above stated, a number of things are evident. The first is that despite the perceived over-saturation of the US beverages market and the difficulties which new entrants confront, there is a market for beverages such as those manufactured by Shin Shii, not to mention the inherently experimental nature of the U.S. consumer market. The second is that, as pertains to the product in question, it possesses universal appeal, with the implication being that there are no real boundaries between the consumer market's various segments. Accordingly, undifferentiated marketing imposes itself as the optimal marketing strategy. It is, thus, advised that Shin Shii utilize this strategy vis--vis the US market. Positioning Positioning is as important and is the selection of marketing strategies. In order, therefore, to maximize its opportunities for successful entry into the U.S. beverages' market, Shin Shii has to make any important decision pertaining to the positioning of Kai Shii. Product positioning, "referring to the way the product is defined by consumers on important attributes," (432) directly affects the content and direction of the marketing campaign and, as such, the product's market performance. As a strategy for the determination of optimal positioning, the characteristics of the product need be carefully and critically considered. As inferred from the case study consumers are increasingly moving away from what they perceive as unhealthy drinks, or drinks which mat adversely impact their appearance. The American consumer is becoming a more health conscious one. This has immediate implications insofar as product position is concerned as it means that Shin Shii can position Kai Shii on health. This, however, is just the starting point. Relative to its competitors, Kai Shii is a healthy drink and should be positioned as such. However, observation of its other attributes vis--vis its competitors indicates that there are other characteristics which should inform product positioning decisions. In addition to being healthy, Kai Shii has longevity. Compared to its competitors whose beverages are influenced by ever-changing tastes, ultimately leading to their being little other than temporary fads,' Kai Shii is tea - a product which has proven its cross-cultural and cross-generational popularity over the centuries. It is not a fad and, indeed, the positioning should also be based upon quality - quality proven over the centuries. Further in comparison to its competitors, Kai Shii is also relaxing. It does not induce hyperactivity as do energy drinks or sweetened soda drinks and, also, unlike the aforementioned, it is gentle on the stomach. Therefore, its characteristic as a gentle relaxant, should also be considered in the positioning decision. Proceeding from the above stated, it is apparent that Kai Shii's positioning strategy should focus on the benefits offered. In addition to that and considering that positioning is ultimately on health and the product is, in the final analysis, a foreign one, personalities could function as a highly useful positioning strategy. Sponsorship by an American athlete will both stress the healthy aspects of the product while, at the same time, Americanize it, or render Kai Shii less foreign. In conclusion, therefore, positioning should be on health and positioning strategies should exploit both product benefits and personalities. References Steiner, C. (2005) Soda jerk.' Forbes, 175(7), 74-75. Swot analysis.' (2005) DataMonitor. Maoz, E. and Tybout, A. M. (2002). The moderating role of involvement and differentiation in the evaluation of brand extensions.' Journal of Consumer Psychology, 12(2), 119-131, Read More