Trappist Dairy is glad to providing quality and healthy beverages for customer’s daily consumption. Trappist believes that milk is the best natural source of nutrition that good for people. Trappist Dairy started out as a small dairy farm operated under the Trappist Monastery in the early 60’s to supply bottled fresh milk for Lantau Island. The small operation carried on until as recently as the early 80’s when Trappist Dairy relocated from Lantau to Yuen Long in order to meet increasing demand for the Trappist brand fresh milk from the public.
Trappist Dairy also carries a wide range of delicious flavored milk drinks and unique milk drinks. Because the milk industry in Hong Kong is very competitive, to ensure continuing growth, Trappist is looking to extent its products and develops a new product to customers, based on the reasonable price, good-quality milk in Hong Kong.
And I hired by Trappist Dairy, I will develop a marketing plan to capitalize on an opportunity identified in Hong Kong. Three parts are included in this marketing plan, including introduction, current market situation and marketing objective.
I will investigate the current market situation deeply by analyzing the market and my company. I will then conduct SWOT (Strength, weakness, opportunity and threat) analysis, competitor analysis and customer analysis. Finally, I will recommend a target market and position of Trappist Dairy.
The market analysis includes both the internal and external business environment. It is vital for Trappist Dairy to carefully monitor both the internal and external aspects regarding it’s business as both the internal and external environment and their respective influences will be decisive traits in relation to Trappist Dairy’s success and survival in the milk industry.
Internal Business Environment
The internal business environment and its influence is that which is to some extent within the business’s control. The main attributes in the internal environment include efficiency in the production process, through management skills and effective communication channels.
External Business Environment
The External business environment and its influences are usually powerful forces that can affect a whole industry and, in fact, a whole economy. Changes in the external environment will create opportunities or threats in the market place Trappist Dairy must be aware off. Fluctuations in the economy, changing customer attitudes and values, and demographic patterns heavily influence the success of Trappist Dairy’s products on the market and the reception they receive from the consumers.
Trappist Dairy is concerned with overall state of milk market in Hong Kong. According to the Trappist Dairy’s research, about 31.3% people like to drink
fresh milk, 28.3% Hi-Cal low fat milk drink, 1.5% Skimmed milk drink, 1.5% Pure milk drink, 15.6% Chocolate milk drink, 21.8% other milk favorite taste. The demand for Hong Kong grew at around 5-10% per annum from 1999 to 2006. Current sales of imported milk are less to foreigners. Less than 10% market of milk import from USA, Canada, Mainland China, Europe, Australia, New Zealand etc.
The sales volume for the milk segment in Hong Kong reached $36.2 million in 2006 for a volume of 130 million liters. It has shown a steady growth since 1980: an increase of 9.5% over a period of 26 years. The consumption rate per new product in 1995 has reached 0.98 liters, which represents a 4.0% increase compared to 1999. The growth of new market is largely due to a consumer trends.
Trappist Dairy is a medium sized company with a large amount of market share in Hong Kong. It produces products of high quality and good taste. The company currently produces ten products in three product lines, namely pure fresh milk, delicious flavored milk drinks and Low Fat Yogurt Drink. Pure fresh milk is a traditional style milks with (Protein, Fat, Calcium) natural source of nutrients. Hi-Calcium Low Fat Milk Drink contains one-third more natural calcium than average milk products with level of fat as low as 1.5g, Skimmed milk with 0% fat but no cholesterol, Chocolate Milk with a perfect blend of intense aroma and sophisticated mouth feel. Trappist Dairy also provides another favor taste such as Mango Papaya Low Fat Milk Drink and Ginger Low Fat Milk Drink.
Trappist Dairy can manufacture competitive drinks at competitive prices with implementation of its newer and cutting edge technologies. Trappist Dairy believes in total quality control. For fresh milk, quality control starts from the selection of feed. Trappist Dairy monitors the health and living conditions of the dairy cows to ensure that Trappist Dairy can deliver supreme good taste and nutritious milk.
Trappist Dairy production lines run daily to ensure fresh delivery every day to customers, while Trappist Dairy salesmen and telesales team are dedicated to deliver the best service to satisfy customer needs. So they can gain overriding market share.
In Hong Kong, the milk industry is quite competitive. The industry is divided into milk, soy milk and yogurt. Compared to soy milk and yogurt, the market for milk is very large because Hong Kong people think that milk is an essential and health drink. Also, Government and school always promote milk and its health benefits, from baby to adult, the milk market has been growing since 1980.
Hong Kong’s three largest milk producers control approximately 90% of the local’s milk market. There are two major competitors in below.
The Kowloon Dairy LTD was founded in 1940. Today, It produced fresh milk in Tuen Mun factory, employ nearly 500 people and had distribution network reaches almost all corners of Hong Kong and Macau. They have diversified to produce a variety of recombined milk drinks, such as Hi-calcium milk, skimmed milk, different flavored milk, and other ice cream products.
Vitasoy Group was bringing the milk drink made from this healthy little bean to a wider market began in 1940. They introduced paper packed products and were the first Hong Kong company to introduce Tetra Pak packaging technology for drinks production. The Tetra Pak packaging system, which ensures that, a drink product can be kept for months without refrigeration. The Group pushed into overseas markets in 90s. The group’s products sell in over 40 markets around the world – including the USA, Canada, Mainland China, Europe etc.
There are other competitors such as foreigner brand or small local brand. However, they are less competitive compared with these two brands (Kowloon Dairy & Vistasoy) and less marketing share in Hong Kong market.
Given the size of the Hong Kong market, Trappist Dairy will concentrate on entering the market in the supermarket, Convenience stores and some classic stores. This is a wealthy segment of the market, consisting primarily of aged 3-80 years and interested in purchasing milk as a health and keeping nutrition like calcium recovery. Targeting this group will allow Trappist Dairy to enter the market at the top and keeping competition with another brand of product. A strategy could be to target on the price and quality. An advantage of targeting all age is that they have a great need on milk, it regards as the potential to become long-term customers and have not yet developed taste of milk segmentation. If Trappist Dairy can satisfy this market, it will theoretically be easy to penetrate and expand to Hong Kong or other markets. A number of behavioral and attitudinal descriptors are identified in the table on the following below.
Segmentation parameters Future Hong Kong market Age 3-80 years
Sex Male or Female or Both Income Above average $6000/m Geographic Hong Kong
Attitude health and keeping nutrition and seek long-term advantages Lifestyle young, mature, old Usage rates daily users
Benefits desired Buys for the benefits of health, quality and reasonable price
Furthermore, within this market it is possible to further segment the preferred target market for Trappist Dairy’s offering. Age can be used to further segment the market. Although older members of the family have a large influence on purchase decisions in Hong Kong, these older people are part of the ‘late majority’ group, which is not an attractive group for new products. Therefore the age of the target segment will be 18 to 44, as these individuals should be more likely to adopt new products or at least be influenced by ‘early adopters. These individuals make up almost 50% of the total population, and so form a profitable target segment.
In the following SWOT analysis, I investigate the strengths and weakness of Trappist Dairy. Also, I try to find out the opportunities and threats facing Trappist Dairy.
•Staff are highly trained and always be aware of the nee of customers •Trappist Dairy offers quality and healthy beverages at reasonable price. •A strong brand of Trappist Dairy is built through brand building and promotion Trappist Dairy provides standardized products, efficient for productive and specialized milk. •Trappist Dairy is able to maintain good relationship with customers’ e.g. facebook fanspage The strengths are a devotion to customer service, and the tastes and innovativeness of the products. Customer service is a essential level in Hong Kong in terms of building relationships with new customers. Trappist Dairy offers outstanding after sales service, with teams located in every major superstores.
The Trappist Dairy also has a follow-up strategy that includes phone calls and emails to new customers giving them the chance to open dialogues with the firm. Also, Trappist Dairy are proud to highlight four of new and unique milk drinks: Low Lactose Low Fat Milk Drink, Ginger Low Fat Milk Drink, Mango-Papaya Low Fat Milk Drink and Oats Hi-Calcium Milk Drink. They offer unique flavors and functions for the needs of different customers.
Has been operating successfully for over a century. Is known world-wide and operates in more than 20 countries. Trappist Dairy has a large share of the milk segment – holding approximately 40 per cent. The Trappist Dairy Company is one of most recognised trademark in the world.
The time taken to do business in China will stretch human resources Capital is required for expansion into exporting
• The prices could not be fitted by all. Lack of prior exposure to Chinese market. Experiencing Chinese Distribution system will be a greater challenge. Introduction of new organizational practices and employees with lack of experience will be a challenging part.
•Image of Trappist Dairy is clear and it is good for developing the brand name of Trappist Dairy •Marketing becomes more easy as people is familiar with the brand name of Trappist Dairy •As Trappist Dairy has launched in Hong Kong for long time, it knows the taste and preference of Hong Kong people well and it can develop popular food more easily. Milk is perceived as healthy.
Milk consumption is growing
Has significant growth opportunities. Has sufficient capital to expand. Has the potential to innovate and differentiate the company’s products to sustain a competitive advantage. May merge with other global businesses to eliminate competitors. Capable of expanding into other markets other than the soft drink market. Has many major global competitors with its main one being Turner Dairy. Trappist Dairy can be substituted by other milk drink products made by its competitors. These competitors may develop marketing strategies to eliminate The Trappist Dairy Company.
According to an analysis of the external environment, two major opportunities exist. These are an increase on sales of milk over the past year, and a minimum of Ginger low fat milk drink products being marketed by competitors. According to Hong Kong Discuss Forum, the new taste of milk drinks increased by 8% in 2009. This shows that there is an increasing market for the new of taste milk drinks.
Language and cultural differences exist
Business relationships take a long time to forge
Less ability to make a family image to another country customers Hong Kong and China Government are very concern the quality and ingredients. •There is keen competition from competitors selling similar products e.g. Kowloon Dairy LTD, Vitasoy etc. Biggest threat would be Hong Kong’s local of milk brand. Existing companies like Kowloon Dairy LTD would add-up to the threat. Young people like to choose the new things such as new taste of milk or product from Kowloon Dairy LTD presented.
Recommended Target Market
This is a wealthy segment of the market, which will allow Trappist Dairy to keep the market at the top and filter its product down easily. Because Hong Kong people are familiar with Trappist Dairy, and Trappist Dairy has already occurred in Hong Kong over 50 years. It is the main place for Trappist Dairy to get money. Also, Trappist Dairy had already doing many research and have a big piece of milk market penetration. It regards as a star with a long term development. A strategy could be to target the Hong Kong through many advertisements. It is a very effective to target all-aged. If Trappist Dairy can satisfy this market, it will theoretically be easy to expand to other markets.
A large potential market for milk in China remains. With relatively low capita consumption of milk, this market has a great opportunity to growth. According to China Gov news, many production milk of company can’t provide a good quality to their resident, even worst that made their body get harm. The reason is that they are not very focus on quality control and ingredient. They are just focus on the money. This is a very great of opportunity for Trappist Dairy becoming a success, if Trappist Dairy provides a good quality and reasonable price to Chinese. Chinese is also focusing on health and nutrition. Trappist Dairy can shows the performance like Hong Kong to let them know that Trappist Dairy is a brand which is dedicated to providing dairy products of the best quality and family’s daily consumption.
The intended positon for Trappist Dairy’s product is to be at the middle to high of the local or imported milk. That position may be interpreted as a high-quality, health, fitted all-aged and many taste provided. The retail price range of the Trappist Dairy’s product is depend on the competitor product. Generally, Trappist Dairy preferred to set the same or lower than their price.
Goal: To increase flesh milk and daily market share and product awareness Objective: To obtain 60% market share of the milk market in Hong Kong within January 2012 to December 2015. To obtain 13% market share of milk market in China Future: Trappist Dairy’s will develop new marketing strategies end of 2013 -We aim to increase earnings per share by at least 10% every year for the foreseeable future.
– We aim to build customer database of at least 250,000 households within the next 12 months.
-We aim to achieve a market share of 60%.
– We aim to achieve 80% customer awareness of our brand in our target markets. Overall Marketing Objectives:
-Predicting and satisfying customer needs.
-Analyzing marketing trends.
-Anticipating change and overcoming its effects.
-Increasing positive perception among its customers.
-To identify distinctive, compelling and competitive positioning in promoting Trappist Dairy
-To increase overall awareness of Trappist Dairy by health and aggressive advertising.