I.

Situational Analysis [10marks]

a) Company Profile: (approx. 100 words)
Describe history of the company and the business the company is in.
Describe company’s mission and business goals.
http://www.yakult.co.jp/english/company/index.html

Yakult is a well-known company as a probiotic industry pioneer for 80 years. In addition to

fermented milk drinks, Yakult also expand their business in pharmaceuticals, cosmetics and food
& beverages (Yakult 2016). Yakult is founded by Dr Minoru Shirota in 1930. He explored a type
of bacteria which he named it as Shirota strain that will help the human’s health by having it.
The Yakult is introduced in 1935 in Japan for the first time and followed up until 1938 and
Yakult is registered as a trademark. Yakult also acknowledged by the Ministry of Health as
“Food for Specified Health usage” in 1968 when the iconic bottles introduced. In Malaysia,
Yakult is officially established in 2003 till now. They expand their business in east and west
Malaysia and introduced the home delivery service. Yakult come up an idea which call Shirota-
ism for their business which is preventive medicine, healthy intestinal tract leads to long life and
price that everyone can afford. Yakult also believe in their philosophy in term of contribute
health and happiness for human around the world by excellence life science research and
development till todays (Yakult 2016).

b) Target Market(s) and Positioning Strategy: (approx. 200 words) [10 marks]
Describe general characteristics and needs of the target market(s) in terms of geographic,
demographic and/or psychographics of the target market.
Explain the current positioning strategy

In term of demographic, Yakult suitable for all age groups, especially for those kids and elderly.
It help us boosts our immune system, improve bowel movement as well as reduces harmful
substances by consuming these probiotics drinks. Nowadays, more and more people concern
about their own health so probiotics drinks take place in certain market shares compare to other
beverages. In term of psychographics, people nowadays is more concern about the health and
have the knowledge to it, therefore they preferred probiotics that will help in their health rather
than those carbonated drink. Yakult use this psychology method to pull the heart of the
consumer. They keep promote and shout out the importance of probiotics for human health to let
the consumer accept them. In this scientific era, people tend to believe more on scientific
evidence. Since Yakult has a strong scientific research so it backup it by introduce the benefits of
Yakult through experiments on human. Therefore, everyone can accept Yakult as a probiotic
drinks and not a supplement. In term of positioning strategy, Yakult positioned themselves in the
category which shine over all the competitors. The Shirota strain in the Yakult’s drink has highly
acid resistant compare to other competitor’s probiotics. Yakult’s strain able to survive the
journey from mouth and stay alive in the intestine and help maintain the balance of intestinal
flora and promotes good health. Nowadays, colon cancer cases increases day by day, as the
pioneer of probiotic industry, they do a lot of research on the colon cancer drugs to help people
prevent from this disease.

c) Competitor Analysis: (approx. 200 words) [10marks]

Identify and justify both direct and indirect competitors.
Vitagen

In the probiotic industry, Yakult has many competitors such as Chr. Hansen, Nestle, Groupe
Danone, Procter & Gamble, Danisco and many more (The star 2016). In Malaysia, the main
competitors for Yakult are, Vitagen, Nutrigen, and Nestle yogurt drink (Coursehero 2016). All of
them are probiotics drink but with different type of strains for human’s health. In Malaysia,
Yakult is a new comer for the industry but it start to become the main competitors for other
dominant probiotics drinks in just few years time such as the market leader, Vitagen (Coursehero
2016). In Malaysia, only 2 products is introduced which is the Yakult Ace and Yakult Ace Light.
Comparing to the competitors, they have more broad product lines with different kind of flavor
and this might threat Yakult in term of market share. One of the treat that Yakult face when
launch in Malaysia is the iconic bottle design, due to Vitagen has the similar design as well so
they force to change the design for the Malaysia market to meet the government regulations.
Comparing to other competitors, Yakult manage to get silver award under dairy beverages in
Putra Brands Award 2016 recently (The New Straits Time 2016). Moreover, Yakult has other
indirect competitors as well under the functional foods. For example, formula milk, carbonated
soft drink, coffee & tea and more. The value of these functional has an increasing trend in
Malaysia which means more people accept it rather take it as a supplement. Although they are
not the direct competitor for Yakult but it definitely will take up some market share from Yakult
(FFTC 2016).

d) Current Product and Promotion Overview: (approx. 200 words) [20marks]

Explain company’s product mix and product lines.
Yakult, as a probiotic industry pioneer, focuses on the probiotics products that able to give
benefits to the consumer. Currently in Malaysia, the product mix of Yakult are standard probiotic
drinks and less sugar content probiotic drinks. The product line for standard probiotic drinks is
known as Yakult Ace, whereas, for the less sugar content, is Yakult Ace Light (Yakult 2016)
(Figure 1). In 2003, Yakult Ace was the first product which was introduced to Malaysia, and was
well-accepted by the consumer. Yakult Ace Light has 56% lesser sugar content than Yakult Ace,
and is mainly for consumer who concern about body sugar level (Yakult 2016).

Explain any TWO (2) of the company’s promotional mix.

Promotional mix for Yakult include, advertising and public relations. Yakult uses informative
type of advertising to introduce the products, through printed media, broadcast and invited local
popular celebrities, as Yakult ambassador (Yakult 2016) (Figure 2,3&4 ). Yakult uses
scientifically proven evidences to educate consumer about probiotics benefits and its slogan,
‘Everybody, Everyday’, is included in the advertisements (Yakult 2016). For public relation,
Yakult increases its publicity by owning a company webpage and Facebook page, whereby,
Yakult able to interact, connect and share information with people through internet (Yakult 2016)
(Figure 5& 6). Furthermore, Yakult has been a sponsorships for events such as, Breast Cancer
talk, HOPE blood-donation event and Mid-Autumn Festival event, to increase consumer
attention and build image of the brand (Yakult 2016) (Hope Worldwide Malaysia 2016) (Figure
7,8& 9).

Promotional mix for Yakult include, advertising and public relations. Yakult advertises through printed
media and broadcast, by using informative type of advertising to introduce the products (Figure 3&4).
Yakult uses scientifically proven evidences to educate consumer about probiotics benefits (Yakult
2016). Popular celebrities and slogan, ‘Everybody, Everyday’, are included in the advertisements (Figure
2). For public relation, Yakult increases its publicity by owning a company webpage and Facebook page,
whereby, Yakult able to connect and share information with people through internet (Yakult 2016)
(Figure 5& 6). Furthermore, Yakult sponsors for events such as, Breast Cancer campaign, HOPE blood-
donation event and Mid-Autumn Festival event, to increase consumer attention and build brand image
(Yakult 2016) (Hope Worldwide Malaysia 2016) (Figure 7,8& 9).

e) SWOT – a summary (approx. 250 words) [20marks]

Assess company’s strengths and weaknesses, major threats and opportunities that the
company might face.

For strength, Yakult, as a dominance in the global probiotics market and was projected as an
intestinal wellness expert globally (Marketline 2016). Thus, Yakult, owns a strong brand image,
which earns consumer’s trust. Furthermore, Yakult has strong distribution network, in which,
their accessibility is high (Marketline 2016). They are commonly sell in supermarkets and
convenience stores in Malaysia (Marketline 2016). Furthermore, Yakult has adopted a home-
delivery system by Yakult ladies (Yakult 2016).
The major threat for Yakult in Malaysia, is from competitors, such as Vitagen, Nestle and
Nutrigen. Those brands have more variants in term of flavor and products as compared with
Yakult. Government laws and regulations, might poses a threat to Yakult too (Marketline 2016).
Non-compliance with applicable government laws and regulations, Yakult may face civil penalty
and will further affect its reputation (Marketline 2016).

People nowadays are more health conscious. This is an opportunity for Yakult, as Yakult
produced probiotics beverages that benefits intestinal health. Yakult products are free from
additives such as coloring and preservatives (Yakult 2016). Yakult launched Yakult Ace Light
Probiotic drink, which has lesser sugar content compare with Yakult Ace, the original series
(Yakult 2016). Hence, Yakult has become a more preferred healthy beverage compared with
other brands.

In terms of weakness, Yakult Malaysia, is heavily reliance on an area, which is the beverage
field, Yakult probiotic drinks . Currently in Malaysia, there is not enough product diversification.
Hence, if consumer change preference on probiotic products or there is problem with the
products, this could heavily endanger the survival of Yakult as a business entity.

II. Proposed Product Strategies (approx. 500 words) [10marks]

Discuss the need for a product modification or a new product
Less sugar (consumer who concern about health/ high sugar level)

Different flavour (like vitagen, competitor)

A product modification or a new product has always been an innovative way for
companies to stay competitive within the market. A product modification involves both retention-
type modifications and conquesting-type modification (Iyer & Soberman 2000). Retention-type
modifications focus on increasing the attractiveness of its existing product to maintain its
customers’ loyalty, whereas conquesting-type modification focus on increasing the appeal of its
products to encourage brand switching of its competitors’ customers (Iyer & Soberman 2000).
On the other hand, a new product may be a product new to the company and new to the market
or a product that is new to the company but has been sold by competitors. It is important to stay
innovative along the way due to the changing consumer preferences, increasing competition,
the advancement of technology and new market opportunities by developing new products and
exceed its customers’ expectations (Queensland Government 2016).

Every company has their own competitors, and Yakult is not an exception. Sometimes,
competitors may introduce new products that outperform and overtake the market share (Linton
2016). To combat Yakult’s competitive treats, Yakult may need to analyse and screen through
the market to make improvement such as a product modification or a new product instead of
getting into a price war. This is because cutting price will lower the perceived value of brand and
product and turns Yakult into the ‘follower’ category (Beesley 2012). Also, a product modification
allows Yakult to respond quickly. For example, Yakult can incorporate flavours such as banana,
orange and mango into its Yakult drink so that Yakult can maintain their consumers’ interest and
continue to make profits. Upon adding flavours to its product rather than the plain milk taste,
Yakult focused on an ideal niche of kids because it is impossible to hold on to every customers.
Those kids will be easily attracted by the colours and flavours and in turn Yakult will secure their
market share even in the face of competition.

Besides, Yakult may need a new product to expand their business by adding new
markets for its existing products to counteract the changing wants and needs of Malaysian
(Linton 2016). Nowadays, Malaysian and public health authorities are becoming more health
conscious. To build up a good reputation, Yakult can create a healthier choice of products
aiming to a healthy society globally. Therefore, innovation of a new product drink such as tea is
in par with the society needs. According to Mukhtar and Ahmad (2000), the phenolic
compounds in tea may reduce the risk of cancer and coronary heart disease. Not only that,
Yakult can also provide a sugar free Yakult probiotic drink because the high sugar content has
been a major health concern for many which resulted in consumers restraining themselves from
taking Yakult product. There are many modifications or new product that can be done by Yakult.
It increases the variety and choices of products offered by Yakult to gain competitive advantage
over rivals and also to increase sales. However, all modifications of products made must comply
with the local culture and regulatory requirement.

III. Proposed Promotional Strategies (approx. 500 words) [10marks]

Provide promotional objective/s.
Suggest TWO (2) main promotional mixes that could help in achieving the promotional
objectives.
Explain how the various promotional tools can complement each other to reach the target
market(s).

In order for Yakult Malaysia to rearrange their promotional strategy, the new promotional
objectives and promotional mixes should be created. “Create Interest” and “Stimulate Demand”
will suitable to be the promotional objectives. Although Yakult is not a fresh name to the
Malaysia consumers however most of the population remain to have limited knowledge or
information about the details of Yakult as a probiotic drink which brings health benefits. In a
plain description, consumers are buying the Yakult products in the thought of that product is
“good” but they are unable to explain what is good and some of them not even know what they
are drinking. The situation does not benefits the company as the customers are not bonded to
the company. Hence it is necessary for Yakult Malaysia to move their customers from the room
of awareness to the space of interest while in the same time increasing their clients. As recent
years is not a spring of the Malaysia’s economy, prompt actions has to be taken in order to keep
the company staying away from the cliff of lose and setting the goal to boost the sales by
stimulates the demand of Malaysia customers. The company has to come up with a new
strategy where a multiple markets are take into target and in the same time enhance the
purchase volume of current customers in order to close up to the Yakult’s tagline, “Everybody,
Everyday”.

To achieve the promotional objectives, there are 2 suitable promotional mixes, which are
“Advertising” and “Sales Promotion”. Advertising is any form of presentation or showcase of
goods and services by an identified sponsor when no personal is included (Kotler 2016).
Advertising can be done through broadcast, print, online, mobile or outdoor. Advertising not only
enable the company to spread the message in constant repeat, the message also reaches
masses of geographically dispersed buyers at a low cost per exposure (Perreault 2015).
“Informative Advertising” which serves the purpose to inform the public about the new product
should be taken in order to create new markets where “Reminder Advertising” and “Persuasive
Advertising” with the purpose of maintain the customer’s interest are the must to keep the
current markets and enlarge them.

As “Advertising” is obviously the first and main step to “Create Interest”, “Sales
Promotion” will be the final boost of confidence for the customers to say YES and buy the
products. Sales promotion is referring to the short-term incentives to stimulate the sales and
demand of a product (Kotler 2016). Sales promotion is no doubt the best way to attract
customers’ attention and as mentioned before that Malaysia’s economy is having more red
digits than black, a variety of promotions will definitely boost the sagging sales. By
understanding the consumer’s behaviours, prices discount and free goods will be the most
effective combination to stimulate demands of customers. A concept should be created where
customers feel that they spend less to have a better health in the same time getting the free gift.
As conclusion, “Sales Promotion” is the key step to “Stimulate Demand”. When “Advertising”
and “Sales Promotion” go together, they complement each other to “Create Interest” and
“Stimulate Demand”.

References

Beesley, C 2012, Got Competition? 6 Tips for Dealing with a New Competitor on the Block, U.S.
Small Business Administration, Washington DC, viewed 2 November 2016,
<https://www.sba.gov/blogs/got-competition-6-tips-dealing-new-competitor-block>.

Coursehero, 2016, 23 competitive analysis implications Vitagen, viewed 6th November 2016,
<https://www.coursehero.com/file/p5l5b70/23-Competitive-Analysis-Implications-VITAGEN-
DIFFERENCE-YAKULT-ACE-P-a-g-e-9/>

Coursehero, 2016, Nutrigen setting a lower price compare to Vitagen, viewed 6th of November
2016,
<https://www.coursehero.com/file/p3eo659/Nutrigen-is-setting-in-a-lower-price-compare-to-
Vitagen-it-may-attract-price/>

FTTC, 2016, The Functional Food Industry In Malaysia, viewed 6th November 2016,
<http://ap.fftc.agnet.org/ap_db.php?id=607&print=1>.

Hope Worldwide Malaysia 2016, Health Screening Cum Blood Donation at HGH Convention
Center, viewed 1 November 2016, <http://www.hopeww.org.my/newsandevents/Health-
Screening-Cum-Blood-Donation-at-HGH-Convention-Center/newspage>.

Iyer, G & Soberman, D 2000, ‘Markets for Product Modification Information’, Marketing Science,
vol. 19, no. 3, pp. 203-225, viewed 3 November 2016,
<http://faculty.haas.berkeley.edu/giyer/index_files/prodmod.pdf>.

Kotler, P. & Armstrong, G. ,2016, Principles of Marketing (16th ed). Pearson

Linton, I 2016, Product Adaptation Strategy, Houston Chronicle, Texes, viewed 3 November
2016, <http://smallbusiness.chron.com/product-adaptation-strategy-62189.html>.

Marketline 2016, Company Profile: Yakult Honsha Co.,Ltd., viewed 1 November 2016,
<http://www.marketline.com>.
Mukhtar, H & Ahmad, N 2000, ‘Tea polyphenols: prevention of cancer and optimizing health’,
The American Journal of Clinical Nutrition, vol. 71, no. 6, pp. 1698-1702, viewed 2 November
2016, <http://ajcn.nutrition.org/content/71/6/1698s.full>.

Perreault, W. D, Cannon, J.P & McCarthy, J ,2015, Essentials of Marketing : A Marketing

Strategy Planning Approach (14th ed) McGraw Hill Education

Queensland Government 2016, ‘New product development’, viewed 2 November 2016,

<https://www.business.qld.gov.au/business/business-improvement/becoming-innovative-
business/developing-products-services/new-product-development>.

The New Straits Time, 2016, Putra Brands Award 2016, viewed 6th November 2016,
<http://www.nst.com.my/news/2016/08/165158/new-straits-times-bags-bronze-award-putra-
brand-awards-2016>

The Star, 2016, Spreading probiotics to the masses, viewed 6th November 2016,
<http://www.thestar.com.my/lifestyle/health/2011/03/13/spreading-probiotics-to-the-masses/>

Yakult 2016, Yakult Malaysia, viewed 1 November 2016, <http://www.yakult.com.my/>.

Yakult, 2016, Yakult Japan, viewed 6th November 2016,

<http://www.yakult.co.jp/english/pdf/profile2016-2017_en.pdf>

Appendices:
 Figure 1: Yakult products (Yakult 2016)

Figure 2:Local popular celebrities as Yakult Ambassadors (Yakult 2016)

 Figure 3: Yakult Malaysia video advertisement ( Yakult 2016)

Figure 4: Yakult advertisement in printed media form (Yakult 2016)

Figure 5: Yakult Malaysia official webpage (Yakult 2016)

Figure 6: Yakult Malaysia’s Facebook page (Yakult 2016).

Figure 7: Breast cancer awareness campaign, that organised by Yakult in collaborate with
Guang Ming Daily (Yakult 2016).

Figure 8: Yakult Malaysia as sponsorship at HOPE blood donation event (Hope Worldwide
Malaysia 2016).
Figure 9: Mid-Autumn Festival event organised by Yakult Malaysia (Yakult 2016).