Sosyo in the UK - Essay Example

SOSYO IN THE UK By Location Soyso in the UK Introduction Soyso is an aerated drink that is produced in India in the region of Gujarat and Maharashtra in which its marketing is also within the same region. The product has been in circulation for 89 years meaning that its production began in 1927 by the family of Mohsin Hajoori family as an alternative to Vimto which was a British drink (Verma 2006, p. 383). Originally, Soyso was referred to as Whisky No as it aimed at attracting the alcohol drinkers within the Gujarat state in India but it was later renamed Sosyo which was coined from the Socious a Latin word that means socio. The name Whisky No was used because the drink tasted like alcohol but it did not have any alcohol content because it was just a mixture of apple cider and grape and other ingredients that came from Germany and Italy. The bottling plants of the Sosyo drink are located in The two Indian regions but the product has since been exported to foreign regions across the globe. The product has been able to achieve brand loyalty in India because of its distinguished taste making this to be part of its marketing strategy. UK target market appraisal In an attempt to achieve growth, the company sought to establish itself as a national brand through a franchising network that had forty franchisees across India. The company sought to also import its unique flavor to countries such as the UK, USA, UAE, Canada among a list of other countries, which was a mission for establishing new networks across countries (Bhuva 2012). The UK market is ripe for Sosyo because as much as the country has faced an economic downturn, the food and beverage market has remained relatively profitable over the years. However, consumers in the food and beverage industry only go for items that provide a value for the customer’s money to which this is an advantage to Sosyo because this is what it has been able to create over the years in its local market. Additionally, the UK has a high rate of income within its population making the consumers to readily accept the price of products making it to be above average in terms of consumption hence creating an opportunity for growth for international suppliers. FIGURE 1: Forecast of total UK value sales of carbonated soft drinks, 2009-19 Source: Based on IRI/Mintel Evaluation of selected target market gained via mintel/keynote data The demand for Sosyo is likely to be high because of its unique flavor and it being a non alcoholic drink as the UK population is focused more on eating healthy. Competition is also healthy in this country as only those that market rigorously can survive this market and can also have opportunities for growth and expansion. The man in charge of shaping Sosyo’s marketing strategy is Aliasgar who also happens to be the son of Abbas Hajoori one of the directors of the company. In the present world, factors such as nationality and race of those that have developed a product do not in any way influence the consumer buying behavior . Sosyo will not have a problem when trying to position itself in the UK market its target will mainly be the youth that will be provided with the option of having a healthy non-alcoholic drink while they are out having fun having fun with their peers. As per a Mintel report published on February 2015, consumers are now focused on healthy diets so as to make their lifestyles to be healthy meaning that Sosyo can be a preferred because of what it has to offer. Therefore, Sosyo can target this population that focuses on taking healthy drinks in order to suit their lifestyles. The report also suggests that the market is likely to drink Sosyo because 37% of them prefer a drink that quenches their thirst and has a refreshing taste. Reasons that internet users aged 16+ gave for why they take carbonated soft drinks shown only to consumers aged 18+ ** shown only to consumers aged 18+ who have used CSDs at home Source: GMI/Mintel Segment Sosyo is likely to appeal to the people between the age of 18 to twenty eight more because what unifies them is their social class and shared activities such as parties and not racial attributes. Mintel report suggests that 84% of the young population drink carbonated drinks while the usage of the same decreases with their advanced age. Also in the UK 24% of the adult population drink carbonated drinks to substitute alcoholic drinks which asserts that Sosyo has a place in this market and can also target this fraction of the population. The adult population that take non alcoholic drinks such as Sosyo do so in bar and restaurant establishments while 21% of the same age take them at home. Further, the product will not only target the Indians living in Britain that are already aware of the drink that is produced from their native land, but will also target the native British population. This means that it will be a drink for all irrespective of the ethnic origin of the target market, which implies that the target market is wider and international. Suitability of marketing strategy recommendations The chief rival products that Sosyo faces stiff competition from is Coca Cola and Pepsi that have a worldwide market dominance that even stretches to the UK market. When it comes to market dominance, Coca Cola products come first because of their ability to tailor their products as per the needs of the customer market. Within the Indian market, Pepsi tend to compete with Sosyo for the second spot with each taking the spot at different times making them to be competing head to head for market relevance. Based on this, it would be proper to suggest that Sosyo takes the line of developing new products that will be able to meet the demands of the UK market if they are to achieve growth in this region. The UK soft drinks market focuses more on producing drinks that are natural or fruit related in order for them to live healthy lives, which can serve as an opportunity for entry for Sosyo so as to meet this need. Additionally, the growing concerns over carbonated drinks as having pesticides as per the pesticide controversy also makes it easy for Sosyo to penetrate the UK market because it is a healthy drink made from fruits making it to be a healthier alternative. If Sosyo is to penetrate the UK market then it must be able to promote itself in this market so that it becomes relevant, which should be coupled with a good packaging of the same in order for it to sell across this market. A considerable number of the targeted consumers argue that the way that a product is packaged can serve as a free way of attracting tem to buy the same because they are likely to associate the packaging with the taste of the product. The plant will also require the hiring of employees so as to run the production process, which might mean that they might either have to import labor from their country or have to hire British locals depending on the existing laws that regulate the establishment of companies by foreigners in the UK. Labour recruitment might be costly but also the cost implications are likely to be high be high especially because of buying equipments for the new plant. There might also be a challenge when recruiting the management team because they night not be aware of Sosyo’s history and way of operations, which would require some sort of training. Essentially, training of new employees and the management should not be viewed as a liability to the new plant but should be viewed as a way of harnessing the potential that they might possess that might help the new market entrant in gaining competitive advantage over rivals (Gillespie & Hennessey 2011, p. 22). Secondly, Sosyo should be able to get to the targeted consumers with very minimal cost so as to ensure that the profit margins are high and also the quality of the product is upheld (Czinkota & Ronkainen 2013, p. 463). For the initial part, Sosyo might not be able to establish a bottling plant as soon as it commences operations in Britain but this might come later when the company has enough finances to produce the product close to where they intend to supply. This company can opt to apply the franchising method in order for their products to get to their target market in time as applied by McDonald, which helps in offloading the cost of setting up from the main company to the one that seeks to trade using their name (Ritzer 2006, n.p). When it comes to the promotion aspect certain elements such as branding, advertising, public relations, packaging, and special promotions can help in pushing the product to the market. Market Entry Method Recommendation When a product such as Sosyo decides to venture into foreign markets, certain limitations might inhibit their successful penetration into such markets such as varying costs, degree of control and the potential of incurring risks (White 2004, p. 540). In this case, the company might decide to either use the direct or indirect exporting in order to bring the Sosyo product to the retail sellers of the product before the company is able to set up a plant in Britain. Essentially, direct exporting refers to the exporting concept where a manufacturer of a product, such as Sosyo chooses to export the products directly the Britain while indirect exporting is where a manufacturer opts to seek the services of an export agent in order for them to ship their products for them. Exporting the Sosyo drink to Britain can serve as the best possible option while the product seeks to venture into this overseas market because the cost of setting up a plant might be high and the bottlers might not afford to do so at the moment. Direct exporting is the ideal way for Sosyo’s management team to use when they are exporting to their UK customers because they are in charge of handling the market research aspect rather than having to rely on second hand information from the export agents. In the direct exporting method, Sosyo will be able to handle the logistics involved in shipment of the product and the collection of the payment for the supplies made to the retail stores. The advantage that this method has is that the profits will be greater because there will not be any intermediaries where profits have to be shared meaning that the gains achieved will be visible (Sideri 2012, p. 78). Additionally, Sosyo’s management will be able to interact with the retailers that they trade with directly and can be able to contact them freely incase of any mishaps or when seeking to obtain feedback for the product (Doole & Lowe 2008, p. 239). Also Sosyo will also be fully committed in the exporting process meaning that they will be fully responsible for this venture and will be able to grow through this commitment (Doole & Lowe 2008, p. 231). Sosyo will also be able to better understand the needs of it’s target market and also be influenced in developing new products that will suit the needs its customer base (Kohavi & Provost 2012, p. 116). However, this aspect also attracts a number of disadvantages such as the company will have to invest a lot of time in research and also in delivering the products to their prospective customers that will be selling to the other retail consumers as compared to outsourcing through the export agents. Further, being responsible for the product means that Sosyo will be solely liable for the product as it trades within the UK market especially on matters quality and safety of the same. As much as the trading will be direct, Sosyo will not be able to communicate with their customers quickly as compared to having a local export agent in Britain that will be able to deal with customer concerns with the urgency that is required. Therefore, direct exporting is the best option that Sosyo has when it comes to penetrating the UK market as per its current financial status that might not allow the bottling company to set up a plant at this time. Marketing strategy Objectives Ideally, when a company’s product seeks to venture into a foreign country market, it is more or less the same as a start-up situation because in such a scenario a company does not have any sales, no marketing infrastructure and also have minimal knowledge about the new market. However, businesses that intend to venture into foreign markets should view this move as one that will serve as an extension for the business in terms of its products and services (Baker & Kiymaz 2011, n.p). As witnessed above, Sosyo should apply direct exportation as a way of penetrating the market rather than the indirect approach because their main aim should be achieving profits. Therefore, in line with the objective of making profits and establishing significant presence in a market, the direct market penetration and marketing is the most appropriate because this will assure Sosyo of gaining returns on the investment that they will have made (Gerber 2012, p. 84). On the contrary, this would also mean that the management team that should be charged with foreign marketing and international penetration should have knowledge in international marketing as this would mean that they would be able to align themselves with the objectives and goals that Sosyo has (Keillor 2013, p. 191). Sosyo will also have to have a vigorous marketing campaign that will enable the product to be known in this market and also communicate the benefits of using the same. This can ensure that the product becomes relevant in the intended market and the promotion process can begin early so as to build anticipation for the product. The objective here would be to make sure that the market is aware of its existence and the unique attributes that it has to offer to the same. Unique selling proposition The unique selling proposition concept developed by Rosser Reeves includes the advertising, competition and the moving of masses as requirements when seeking to attract potential customers to take up a new product in the market (Spiller & Bergner 2011, p. 52). A unique selling proposition helps in explaining to the masses the market position of a company, which can help a business to set itself apart from competitors that exist in the same market. A USP should be memorable, self explanatory and different while still communicating what the business has to offer to the market especially within a crowded market place (Wood 2009, p. 35). Sosyo can adopt a unique selling proposition such as “Take me to be your healthy way of refreshing your thirst”. Marketing mix recommendations The marketing mix often referred to as the 4Ps of marketing is market penetration and evaluations strategy that a business such as Sosyo can use before they can start operating in the UK soft drinks market (Dogra 2010, p. 80). The four Ps include the analyzing of product, place, promotion and price that affect a product so as to develop a market entry strategy that is likely to complement the goals and objectives that a company has (Quelch & Hoff 1986). In essence, a new market should have a product that will satisfy the needs of the market, should be charged at the right price, apply promotional strategies to make the product known and lastly the products should be sold at the right place that is accessible by the target market. When it comes to product, Sosyo should be a brand that is able to fulfill the function that is attached to it and used as a marketing aspect (Dogra 2010, p. 80). In essence, Sosyo should be able to quench the thirst of those that buy it and should also not have any alcoholic content as implied on the bottle. This means that the product should be able to meet the requirements of the customers no matter what in order for it to influence brand loyalty especially when seeking to penetrate the soft drink market where competition is stiff. Since Sosyo will be new to the UK market, it will be important to apply promotional strategies such as advertising on media avenues that can include televisions, billboards, newspapers so as to make the product more known. Direct selling can also serve as a promotional method as it will involve Sosyo’s representative with the consumers directly so as to push for them to buy the product. Unlike advertising where there is no information sharing and customer interaction, personal selling can help push the sales of Sosyo because the company representative can convince the customers to buy the same. Another effective way of promotion can be through sales promotion campaigns such as ‘buy one get one free’ or offering discounts during some seasons. Samples can also be provided to the targeted customers as a promotional strategy in order to allow them to have a taste of the product, which can help in boosting sales. Therefore, Sosyo should be presented in an attractive and appropriate way so as to capture the new targeted market, which will make it easy to inform and persuade the market to buy the product. With today’s advancement in the technology field and the age of social media marketing, Sosyo should also make use of this strategy because it is less costly and is able to reach many targeted consumers very fast. Making use of digital marketing and ecommerce avenues can help a business to penetrate a foreign market because they can use the same to create awareness and also obtain feedback from those targeted. Lastly, Sosyo should be priced according to the way other products in the market are priced because if they attach a high price then customers will opt for products sold by rival companies. The product should be sold at a pocket friendly price or slightly cheaper is there a possibility to do so in order to attract more customers and influence customer loyalty (Burns 2010, p. 349). Budget for the international marketing strategy In order for Sosyo to establish foot in the UK beverage market, it might need to have a bottling company in the same country so that it can be able to mass produce the soft drinks as to meet the demands of the market. The challenge that this presents is that the Indian based company that produces Sosyo is that operates on strict Islamic laws that are against borrowing that attracts interests, which is hindering the company from finding adequate finances to kick start this venture. The problem is that the company is not able to find a bank that offers them the facility that they need, that will not compromise their faith in the name of business. Once the plan has been rolled out, it is important to monitor and evaluate where the plan is successful and ascertain what is working and what is not in order to make the necessary changes for the good of the company. Measuring of the success of the plan will be through establishing the market share that the company as been able to achieve and the profit margins that product attracts for the business (Baines, Fill & Page 2013, p. 156). Bibliography Baines, P., Fill, C. & Page, K., 2013. Essentials of marketing. Oxford, Oxford University Press. Baker, H. K. & Kiymaz, H., 2011. The Art of Capital Restructuring Creating Shareholder Value through Mergers and Acquisitions. Wiley. Bhuvi, R., 2012. “Local Flavour”, Business Today. 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Cunningly clever marketing: the inside secrets of a marketing legend. Novato, Calif, Select Press. Appendices Appendix1: Forecast of total UK value sales of carbonated soft drinks, 2009-19. Source GMI/Mintel Appendix 2: Reasons that internet users aged 16+ gave for why they take carbonated soft drinks. Source GMI/Mintel Read More