Company Characteristic
Pokka Corporation is a large Multi-National Company, which operates in about 5 business segments. They are Food and Beverage products, which is one of its main business segments and offers products like coffee beverages, fruits and vegetable beverages, health foods and so on. (CreditRiskMonitor. com, 2008). Pokka’s key marketing skill is its innovation. The ever-changing consumer tastes and preferences, causes companies like Pokka to be innovative and very consumer conscious.
Pokka continuously produces new beverages to meet the needs of these consumers. Furthermore, they have food technologist from Japan, who has joined their Research and Development team to help develop new and exciting products. According to their website, the R&D department has come up with 40 new varieties beverage products, which are now being sold in countries around the world. (Pokka. ListedCompany. com, 2008) Pokka philosophy is Delighting customers through a commitment to provide “BEST-IN-CLASS” products and services and Pokka vision is to be the “BEST-IN-CLASS” beverage contract manufacturer of choice.
From statement above we can know that Pokka want to become the best in the industry by providing the customers with good quality product and excellent services to customers so whenever customers think beverage product they will think of Pokka (Pokka Ace, 2008). In 2008 Pokka revenue increase 15. 4% from last year, also Pokka net profit increase 273. 3% from 2. 5 to 9. 4 million US dollar. This is the first time Pokka company gain double digit revenue growth rate in six years (Pokka Annual Report, 2008). In 2007 Malaysia economy was the 29th largest economy in the world based on GDP (purchasing power parity) 357. 4 billion US dollar.
Malaysia has been the world largest tin, rubber, and palm oil producer since 1943 (times magazine, 1943) also Malaysia is one of the world’s largest exporters of semiconductor devices, electrical goods, and information and communication technology (ICT) products (US Department of State, 2008). Malaysia has opened economy system that allows people around the world to enter Malaysia market and also allows Malaysia product to expand to foreign country. Since 1970 until now Malaysia government maintenance controversy NEP (New Economy Policy) that gives more opportunity for ethnic Malays in many sectors such as education, health and other that can cause unfair competition in market but NEP shows slightly show some improvement in the economy in Malaysia in general.
Cultural Overview
Malaysia is a multi ethnic, multi-cultural and multilingual country. There is several ethnics in Malaysia such as: Malay 50. 4%, Chinese 23. 7%, indigenous 11%, Indian 7. 1% and others 7. 8%. The official language is Bahasa, but in Malaysia therea are so many language that being used by different ethnic such as English, Chinese, Tamil, Telagu and others (World Fact Book, 2008). Malaysians have several numbers of holidays and festivities during a year. Some public holidays are set by federal and some are set by individual states. Other festivals are practical by particular ethnic religion groups, but are not public holidays.
Political situation
Malaysia is a federal constitutional elective monarchy, where the federal head of state is Yang di-Pertuan Agong or referred as the King of Malaysia and the head of government is the Prime Minister of Malaysia (constitutional Malaysia). The system of government in Malaysia is similar to Westminster parliamentary system, a legacy of British colonial rule. UMNO is major politic party in Malaysia, all the Malaysia prime minister from UMNO. Legislative power is divided to two between federal and state legislatures. Malaysia based law is common law.
Legal
As we know, Malaysia is an Islamic country and also one of the harmony countries which has many difference races that live together in one country. Therefore, the legislation for food regulation is very strict in Malaysia. The food regulation in Malaysia is mentioned about the food’s prices must be acceptable and accepted by the government and to be ensured that it safes to be consumed before produced in Malaysia According to Selamat, et al. , (2003), in Food safety management and administration at Malaysia, government laboratories for food quality control services consist of the Food Quality Control Laboratory under the Ministry of Health, Chemistry Department, Department of Veterinary Services and so on.
These laboratories provide analytical support for food sampling actives and certification of food products for export. Lastly is Food Legislative, these regulation deals with such as food hygiene, labeling, imports and exports, advertising, and laboratories. In additional, the food products must have “HALAL” label which is required for Moslem people to recognize on which foods products can be eaten by Moslem people.
Geographic Overview
Malaysia is consisting of thirteen state and tree federal territories on Southeast Asia with a total landmass of 329,847 square kilometers. Malaysia’s population is over 27 million people. The capital city is Kuala Lumpur and the federal center in Putrajaya (World Fact Book, 2008). Other major cities are Ipoh, Johor Bahru, Kuching, Kota Kinabalu, George Town, Miri, Along Star, Malaka and Klang. In natural resource Malaysia is well recognizing in agriculture, forestry and minerals.
Host-Country Constraints (United Kingdom)
An assessment the economic environment in United Kingdom (UK) is to consider of its economic wealth which is determined by its Population, Infrastructure and Gross Domestic Product (GDP). UK become the fifth largest economy in the world, with gross domestic product (GDP) of US$2,345 billion (Source: World Bank, 2007) and it is forecasted to have the strongest business environment of all major European economies for the period 2007 to 2011 (Source: EIU, 2007) (UK Trade & Investment. 2008); which concludes that its economy is healthy and there is a probability for higher standard of living and more conscious on better lifestyle.
The population of the UK was 60,975,000 in mid-2007. This is an increase of 388,000 (0. 6 per cent) on mid-2006 and is equivalent to an average increase of approximately 1,000 people a day (National Statistics. 2008). Its rate of growth reflects the number of births and deaths during the period and the number of people moving to UK. For transportation infrastructure, UK is already the most crowded country in Europe. It is estimated that UK have to cope with 25% more traffic by 2010 (IBM Corporation. 2003). In response, to keep congestion controlled is to discourage vehicle ownership or reducing vehicles in traffic hot spot by taxing, charging and peak time rationing.
For railway sectors, according to UK Trade & Investment (2008), in 2007 there was more than 48 billion passenger kilometers recorded on UK railways, it is the 13th consecutive year of growth and the highest ever recorded in UK which is showing that network use is growing faster than anywhere else in Europe. By adapting the safety management, security and accessibility on stations and trains; make UK rail sector as reliable and sustainable transportation in UK infrastructure.
The logistic system in UK adapts Automated Storage and Retrieval Systems (ASRS) for Fast Moving Consumer Goods to further up the supply chain and to accelerate the cross-docking operation to create efficiency on the logistic process and also advance on tracking technology which creates new opportunities to ease the movement in urban areas. (McKinnon. 1996)
The UK’s Department for Environment Food and Rural Affairs (Defra) is revising packaging regulations. Under the EU’s Packaging and Packaging Waste Directive, countries must introduce systems for the return and collection of used packaging to attain a target whereby in the end of 2008 a minimum of 60% of packaging waste must be recovered or incinerated. Between 55% and 80% of packaging must be recycled (Roach, 2006).
This concern is to protect UK’s environment and give pressure to beverage and food industry to be more environmental friendly with improving their packaging which targets to greener solution. The Country’s competitiveness can build a competitive advantage to stand out among other countries. In UK, the employment is also involving the local labor and migrants; however the migrants are the valuable asset for food and drink manufacturer in UK. Therefore the shortage of labor in UK can create risk on food sector; According to Byrne (2008), she claims that as economics condition in UK decline, the flow of the migrants to UK is anticipated to fall.
For UK, it is important to discuss the potential impact of the government’s immigration and skill policies on the future productivity of the UK’s largest manufacturing sector and retain their existence to work in UK. Cultural Overview For British, drinking tea has become a culture and it is known as a ritual on daily, which are Afternoon tea and High Tea. The ‘Afternoon Tea’ is meant to abate the hunger between the meals. The afternoon tea was served along with a light meal between the hours 3:00-5:00 p. m. While ‘High Tea’ is an early dinner which includes tea in which take at 500-7:00 p. m. Another suggestion is that the expression “high tea” originated from the custom of having this meal on high tables, in comparison with the afternoon tea which was eaten on low tables.
We are targeting for people who concern in British Culture and Healthy issue, we divide them into two groups. Group 1 is focused for the tea bag and loose tea package, for those people who still follow British culture for having afternoon tea and high tea. Group 2 is focused for the carton box package, because most in this age of group is preferred instant, without having to brew the tea first. We consider Group 1 as our primary target market because we focus on British Culture for having tea and their preference on ritual of brewing tea. Living longer doesn’t always means having more years with a good quality of life, as a result this become Healthy issue, our product will fulfill the need of healthier lifestyle to support their life.
Product
Our chosen beverage product is Pokka Green Tea which not using preservative and coloring. Pokka Green Tea has depth product line in different flavors such as Pokka Green Tea Japanese, Pokka Green Tea Jasmine, Pokka Green Tea Honey Lemon and Pokka Green Tea Peach. Basically Green Tea is more beneficial to health whereby it can prevent certain cancers from the antioxidant activity is at last 100 more times more effective than vitamin C and 25 times more effective than vitamin E at protecting cells and DNA (GreenTeaBenefits. info, 2007). This beverage is well packaged in can and plastic bottle for the convenience as a Ready-to-drink Green Tea beverage and it is nice to be enjoyed with cold temperature.
To be internationally marketed, we intent to keep some aspects of the existing product, we will market all products in the depth of the product line such as Pokka Green Tea Japanese and Pokka Green Tea Jasmine to maintain the originality of the green tea as our standardization which is from Asia especially from Japan, as well as Pokka Green Tea Honey Lemon and Pokka Green Tea Peach to widen the choices of the Green Tea flavor for British. The reason why we maintain Pokka as the brand name is to maintain the credibility as Pokka is a well known brand for Green Tea beverage; it is to be easily recognized and accepted by the consumers globally.
We will also maintain Pokka Trademark which is a red color ‘P’ with slogan of The People’s Choice that we believe that Pokka is also able to be British Choice for Green Tea Beverage. According to The Pokka Corporation Singapore Pte Ltd (2008), “Pokka” trademark is synonymous to “Quality” and all products are manufactured under the license and strictest quality control standard of Pokka Japan.
The Quality emphasis Pokka puts into each product capture the loyalty of consumers who appreciate the finer taste of a ready-to-drink beverage. ‘Without a doubt the tea bag saved the tea industry. There is no way in our busy lifestyles today that we would have had the time or inclination to make tea the old way. ‘
Gorman . W (2008), Executive Chairman of the UK Tea Council. The needs for adaptation will depend on the customers’ favor; including our decision to add the packaging for Pokka Green Tea in tea bag and loose tea package. From the statement above, we make decision of adding tea bag package because it is more convenient to be served in a mug or cup as in a pot and with a string attach on the bag could be removed easily when the tea s ready to be enjoyed.
We develop our tea bag with quality when it is diffuse to boiling water, the tea bag won’t break an These can create more added values for our product to attract the consumers and make ‘convenience’ as our selling point without avoiding the original taste of the tea. While in loose tea package aims for consumers who still follow the British ritual for enjoying tea in a cup. They prefer enjoy brewing tea in a kettle then pour to a pot in order to get the smell and nice taste of the original aroma of the brewed tea. We also replace the can or plastic packaging into carton based packaging, this is due to the environmental regulation in UK.
It is an environmental benefit that transports of cartons produces fewer greenhouse gas emissions compared with traditional types of packaging such as glass or steel cans, whereby our distributors can move the same amount of product with fewer trucks, because carton can be flattened and can save space in a box which means less fuel used and fewer greenhouse gases emitted. The paper based packaging is biodegradable and also can be recycled into paper fibre that can be reused to other paper production. The recycle labels will be contained in our packaging to indicate that it is recyclable and will be accepted by cardboard recyclers. We ensure that our company is taking the responsibility of recycling the packaging waste. Due to the UK’s cold climate, we innovate new product depth which is called Pokka Green Tea Honey Ginger.
The combination of honey and ginger give a warm taste; it is good to cure respiratory problem such as cold, cough, runny nose and sore throat, while the honey flavor creates sweetness to make the ginger tastier. Due to the population of 2. 3 Million people has Diabetic in UK (NetDoctor. co. uk, 2008), the level of sweetness from the sugar or honey may be lowered to 50% to minimize the probability of uncontrolled of higher glucose level in blood that may develop diabetes.
Distribution
In UK, the distribution centres are usually owned by the supermarket chains. But meanwhile, due to the worst condition from the retailers in UK, according to Thomson Reuters UK(2008), reports that the retail spending is declining as a proportion of total spending, while the proportion of elderly people in the UK, who tend to spend less, is rising.
Then according to Downes (2005), reports that the only bright spot was the performance of its supermarket chain, Waitrose, which, following some store acquisitions from Morrisons, saw a 17 per cent improvement on last year. In this situation, we have to be careful in deciding which supermarket chains are appropriate, because it may also affect our sales. Taking the opportunity for several supermarkets that likely to survive, we distribute our product at Morrisons and Waitrose. We need export sales contract for the delivery of products in international trade to overcome the difficulties for delivery of product between the seller and the buyers.
We decide to transport the our goods to a seaport of UK and the responsibility of the goods delivery and the responsibility for paying duty and related taxes in UK will be on the buyers, other than that, we want to ensure that the goods are delivered and available to the buyer in UK. Therefore, the suitable Incoterm to use for this transaction is DDU (Delivered Duty Unpaid). Delivered duty unpaid means that the seller delivers the goods to the buyer and to the named place of destination accordingly to the contract of sale. The seller has to bear the costs and risks involved from then on, other than any duty applicable, including responsibility for carrying out of customs formalities for the export of the goods and for any transit to any country.
But the buyer has to deal with any costs and risks, if there’s a failure to clear the goods for import in time. However, if the parties wish the seller to carry out customs formalities and bear the resulting costs and risks, as well as some of the costs payable upon import of the goods, this should be made clear in the contract of sale.
Price
We are aiming to penetrate the market since we are still new in the market; therefore we are using price penetrating to stimulate the growth of the increasing market share and also to compete directly to our competitor and discourage them. Even though we set our price higher than the original price, we still set our price lower than our competitor.
We are using adaptation pricing strategy because it allows setting a price that is considered to be appropriate for the local condition, it helps us to survive in the new market and remain competitive in the export market. Our decision is based on the currency exchange, competitor’s price and cost of shipping. Due to the currency exchange in Pound sterling, our price will be higher than the original price in which we can make profits. For example, the estimation for our Pokka price in Malaysia in around 2. 50RM which means worth for only 0. 44 (XE. com, 2008), which means if we compare Tetley Pure Green Tea, our main competitor in UK, the product costs for, 3. 9 (ebay. co. uk, 2008).
Therefore, it means that there is a far difference from both prices. To keep survive in the market we have to adapt the local price to cover the costs of doing business such as the additional middleman as there are longer distributional channel in international marketing.
Promotion
We are going to use television, magazine, outdoor advertisement and internet. We choose to advertise our product on television because television enables us to reach large numbers of audience on a national or regional level in a short period of time. Not only that, it also offers the ability to convey our message with sight, sound and motion.
Because of these major strengths of television, the relative cost of TV ads will be higher (expensive), in terms of creative, production and airtime costs. In addition, we believe that television is not a luxury product anymore and almost every household is having a television set nowadays. So we ensure that television is able to carry out our message across to our target audiences. Pokka second selected media to advertise is Magazine. One of the major strengths of magazine advertisement is the excellent picture reproduction quality and the paper is more superior compared to newsprint. This will cause our advertisement has relatively long life because magazines are often kept for months and it makes our message keeps selling.
In addition, magazines allow us to reach specific audiences because they have highly defined readership that allow us to focus on specific market. Pokka third selected media to advertise is internet, especially on web banner advertising, which will be implemented for one year forwards. Nowadays people can easily surf on the web because of the low prices offered in the market. It can be proved by data showed that the population of the internet users in the world has increased to 1,114,274,426 (Internet World Stats, 2007). That’s why advertising through internet has the capability to reach a global audience in the fast rate and it can be an extensive exposure as well. Internet can be a media where we can present our advertising messages with pictures, animation, sound and text.
Developing the Marketing Plan
Green Tea expands the market to UK because the UK market size is bigger than Malaysia and the growth rate in UK is higher than Malaysia. The customer’s need of tea in UK is higher because as we know UK is a drinking tea country, drinking tea is one of the important lifestyle of UK people; to fulfill the need, Pokka introduces the Pokka Green Tea as one alternative way of drinking tea. Pokka will come out with new packaging to fit UK regulation by using cartoon box that uses bio gradable material as packaging.
In UK Pokka will use adaptation price based to cover the production and delivery cost. The Pokka price will be lower than competitor to avoid direct competition from competitors. And for the advertisement we will come out with media that can cover large numbers of audience to build brand awareness and influence target market behavior toward our brand.
