Flavored Mineral Water Strategy Japanese Market Essay Example For Students

Flavored Mineral Water Strategy ? Japanese Market Essay South Beach Company (SoBe)Flavored Mineral Water Strategy Japanese MarketINTRODUCTION:South Beach Beverage Company, SoBe, makes and markets herbal enhanced beverages. These beverages, called healthy refreshments have been designed to market to active persons concerned with their health. Other products that SoBe sells online are hats, shirts, limited collectibles, childrens clothing, sportswear, and some other miscellaneous items to include duffle bags and water bottles. SoBe products are available throughout Canada, Puerto Rico, Aruba, Anguilla, St. Kitts, Nevis, Grand Cayman Islands, Turks ; Caicos, Bolivia, Antigua, Barbados, Guam, Bahamas, Bermuda, United Kingdom, Ireland, The British Virgin Islands, El Salvador, Trinidad, Mexico and Curacao. Beverages can be found in convenience stores, grocery stores, mass merchandisers and warehouse clubs, delis, gas marts, and select restaurants/hotels. A separately operating unit of Pepsi-Cola North America, SoBe markets and sells its bevera ges through the combined efforts of Pepsi-Cola bottlers and independent distributors. Starting in 1996 by four partners who were into health and fitness as a way of life, the first product introduced, SoBe Black Tea 3G with Ginseng, Ginkgo and Guarana brought an overwhelming response. As a result, the company gained ground and immediately introduced SoBe Green Tea, SoBe Oolong Tea, SoBe Orange Carrot Elixir, SoBe Cranberry Grapefruit Elixir and SoBe Energy. These products started the company and now serve as the foundation for future brand development. Most SoBe beverages are sold in a 20 oz. glass lizard bottle that is double sealed to protect the freshness of the beverages. However, in order to make their product more portable and safe for places where glass isnt the best material to use, the company produced one line of their drink, SoBe Synergy, in a can which is 11.5 oz. SoBe also makes several other beverages to include SoBe Sports System, an advanced performance beverage syst em, SoBe Adrenaline Rush, an all-natural maximum energy supplement, Love Bus Brew, an energizing chocolate-flavored drink, and SoBe Ice, an icy-cold fountain-dispensed frozen drink. SoBes name can also be found on SoBe Gum and SoBe Chocolate two of their licensed products. The newest product is the 16-oz. energy-packed SoBe No Fear Super Energy Supplement. Being in the business of producing healthy drinks, SoBe even has a sugar-free product line called SoBe Lean. This line appeals to diabetics and all health-conscious consumers who want to avoid sugar. These drinks are sweetened with a blend of sucralose and ACE-K. The company boasts many different recipes for health drinks and there are currently over 200 different cap slogans in production. The flavor of the beverage is on all of the front and back labels, excluding the 3G Teas. Although some products dont have the flavor of the beverage on it, because it is part of their older stock still on the market, new labels are being generated so that all products will eventually have their flavor name on it. Another health issue for consumers is weather or not caffeine is added. SoBe beverages show an ingredient statement on the back label for all of their beverages. In general, all of their tea drinks contain caffeine that is naturally derived from the tea leaves. The list of flavors availa ble to consumers of SoBe health drinks is so long that room often needs to be made for the production of new drink flavors. There have been several flavors discontinued to make room to include SoBe Drive, SoBe Essentials, Edge, Eros, Red Tea, Orange-Tomato, Strawberry Carrot Elixir, Karma, Wisdom, Lean Green Tea, Lean Peach Mango, Lean Orange Carrot and Lean Citrus. However, some of these discontinued flavors may come back in the future. Although SoBe just came out with a 4 pack of SoBe bottles in their more popular flavors and currently make 12 pack variety cases, usually sold at wholesale clubs, they dont make the 6 pack. Complete Beverage Line:Exotic Teas and Fruit Juice Blends (Black Tea, Dragon, Green Tea, Nirvana, Oolong, Zen Tea)Powerline (Courage, Drive, Energy, Fuerte, Power)Elixir Line: (Pomegranate Cranberry, Cranberry Grapefruit, Orange Carrot)Lizard Line: (Black and Blue Berry Blue, Liz Blizz, LizFuel, Lizard Lava, Lizard Lightning, Tsunami)SoBe Lean: Cranberry Grapefruit, Peach Tea, TropicalSoBe Adrenaline Rush: Adrenaline Rush, Sugar Free SoBe Adrenaline RushSoBe No FearSpecial Recipes: Long John Lizards Grape Grog, MacLizards Special Recipe LemondadeSynergy: Fruit, Grape, Kiwi, Lemonade, MangoVariety Pack: Includes Green Tea, Lizard Lava, Energy, Orange Carrot Elixir Fountain Drinks: Includes Energy, Lean Cranberry Grapefruit, PowerSoBe Ice: Frozen drinkAs mentioned earlier, SoBe is a player in the international market and, therefore, already understands how to operate on that level. However, SoBe doesnt currently sell their products in Japan, a market that research has shown to be a luc rative one for exporters of health beverages. In addition, research has also shown that this is especially the right time for sellers of health beverages to get into this market because Japanese consumers are more health-conscious than ever before. This is so much the case that the market for these beverages continued to grow, even during Japans recent recession. Companies like SoBe, which produce natural, organic, herbal or fruit ingredients have a great chance of being a success in Japan as a result of this continued demand. Currently, 20 companies own 80 percent of Japans beverage market with one U.S. firm alone holding 35 percent. But these large market-players still need reliable suppliers of trendy health and natural products. This is why SoBe should initiate one or more of their product lines to the Japanese market. INTERNAL FUNCTIONS:PLANNING:SoBes new product in Japan will need to be designed to meet Japans market needs and to comply with SoBes core strategic plan. Before t he final product is marketed, manufactured, and sold, SoBe needs to ensure that all departments participate in providing a product that SoBe can proudly stand by. The departments that will be involved for finding the appropriate product for the appropriate market will be the marketing/sales, research ; development, production, and operations department. These departments will conduct the analysis that will provide for a defined strategic plan. Their analysis should ensure information to include economic, cultural, legal, and competitive conditions. After SoBe finds that its advantageous to enter a certain market, it will need to modify the product for that market. In addition, charts should be created by the production department to include action-plan deadlines for roll-out of the product. Mexico EssayTop-10 Japanese Bottled Water Companies Top-10 Japanese Bottled Water Brands Company ShareShare +/- Vol. +/- Brand Share Share +/- Vol. +/- CompanySuntory19.1-1.5+5.8% S. Alps Natural Water17.3-1.2+7.1% SuntoryCoke Japan11.4+2.0+37.9% Woods Water11.4+2.0+37.9% Coke JapanHouse Foods10.5-1.5flatRokkos Tasty Water10.5-1.5flatHouse FoodsMisubishi6.9-1.0flatVolvic6.9-1.0flatMitsubishiNestle Japan 4.8-0.1+12.4% Evian3.9+0.1+17.1% Calpis/DanoneCalpis/Danone3.9+0.1+17.1% Alkali Ion Water3.4flat+14.6% KirinKirin3.5flat+14.2% Crystal Gaiser2.9+0.8+58.9% OhtsukaOhtsuka2.9+0.8+56.4% Kon Kon Spring Water2.6-0.3+3.8% n/aSapporo2.0+0.7+75.0% Sapporo Tanigawa Water2.0+0.7+75.0% SapporoBourbon1.3-0.1+3.7% Natural Water in Japan1.8-0.4-5.0% n/aLEGAL ENVIRONMENT:To ensure compliance with Japans laws, SoBe should obtain legal advice from its legal department. It may be also useful to hire a legal consulting firm in Japan. Information that might be found would include the fact that Japan re quires that businesses operating in Japan provide semi-annual financial disclosures. As a result, SoBe will need to ensure compliance with this rule. The following legally-involved events could pose problems to the distribution of SoBes product: Trade war or restrictive duties on food/beverage exports into Japan could threaten supply Legal changes in shipping regulations would cause problems by leading to significant delays in fulfilling orders Drop in the value of the dollar (or in Japanese currency) due to legal changes and economic policies will make selling the product in Japan more expensive Change in government regulations around selling food products may force a change in package or product mix ENTRY MODE:SoBe will need to evaluate the advantages and disadvantages of each type of entry mode. Although SoBe can engage in exporting, turnkey projects, licensing, franchising, or joint ventures, SoBe would be best to pursue the wholly owned subsidiaries mode of entry so that they c an obtain tight control over their operations and core competence. This plan has the disadvantage of bearing all the costs and risks that come with setting up in Japan but it is the best match with consideration to SoBes strength and current position. COST/BENEFIT RELATIONSHIP:Analysis will show that SoBes venture in Japan will be successful with regards to the competitive, market, and economic conditions. While the costs are high for implementation with the plan to follow the wholly owned subsidiaries mode of entry, the benefits of providing this type of product which demand is ever-growing in Japan are high as well. To reduce costs, SoBe should ensure that all departments are properly staffed and fully involved in making strategic decisions. CONCLUSION:The best plan for SoBe would be to pursue the international strategy with entering the Japanese beverage market with their sugar-free flavored water. By pursuing an international strategy, SoBe will be able to earn a greater return from their distinctive skills or core competencies, realize location economies by dispersing particular value creation activities to those locations where they can be performed most efficiently, and to realize greater experience curve economies, which reduces the cost of value creation. It will need to do all this by customizing its product offering, marketing strategy, and business strategy to the Japanese market conditions. The flavored water product will do well because most new-age drinks designed for U.S. consumers dont translate well to the Japanese palate that doesnt like the fact that they are too sweet. But flavored-water, which tends to be sugar-free, is perfect for this market. In addition there is room to grow for this market, which is still smaller than that of France, the United States and even other Asian nations. SoBe should enter Japan with this product because research has shown that many consumers in Japan worry about the quality of their tap water. This is a special concern in metropolitan areas such as Tokyo and Osaka. Research also shows that despite of past problems with water conditions (such as the scare that occurred in Japan in 1996), consumers seem confident that bottled water ensures good flavor and high safety standards. Also, Japanese teenagers who see bottled water on television, and vacationers who enjoy it on overseas trips, contribute to the growing demand for trendy bottled waters.