Malaysian Market Essay Example
Malaysian Market Essay Example

Malaysian Market Essay Example

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  • Pages: 5 (1114 words)
  • Published: October 7, 2016
  • Type: Case Study
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In the 1830s, soft drinks were initially introduced and their consumption has since increased due to advancements in production technology and availability. Currently, soft drinks have become the largest global beverage sector, surpassing hot drinks and water. Malaysia is also following this trend with a significant number of soft drink consumers. Reports show that approximately 1000 cans are consumed per minute in the country.

Despite the rising demand for soft drinks, the Malaysian food and beverage market is greatly impacted by this sector. According to a study using data from The National Health Morbidity Survey in Malaysia, 20.7% of adults were overweight and 5.8% were obese. Obesity rates were higher among women, specifically Indian and Malay women compared to Chinese women. For men, Chinese individuals had the highest obesity rates, followed by Malay and Indian men.

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Malaysia's nutrition and health surveys reveal that as the country moves towards becoming a developed economy, it is facing similar health issues to Western countries, such as increased consumption of soft drinks. The rise in obesity, once thought to be limited to urban areas, is now impacting rural populations rapidly. Consequently, the overall health of Malaysians is expected to decline. Therefore, it is crucial to implement a national strategy that tackles both dietary and activity related factors contributing to the growing weight problem among Malaysians.

Malaysia is currently grappling with the urgent problem of childhood obesity, which requires immediate attention. Parents in the country are concerned about their children gaining weight and are searching for healthier alternatives to sugary beverages. In order to effectively address this concern, our team is dedicated to providing

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smart solution for Malaysia's food and beverage industry. Our objective is to offer children the opportunity to enjoy fizzy drinks while prioritizing their well-being. We would like to introduce Sodastream, an innovative appliance that effortlessly transforms water and juices into delightful carbonated beverages. The upcoming products we plan on introducing feature a sleek design, enjoyable experience, contemporary appeal, and user-friendly operation.

Furthermore, the Sodastream not only provides better beverage quality but also contributes to improved health compared to the soft drinks available in the market. In Malaysia, a country categorized as an upper middle income group, there is a projected 4 percent growth in Gross Domestic Product (GDP) for 2012 and an expected expansion of 5.6 percent from 2013 to 2016. Additionally, there is a forecasted increase in sales within the Malaysian food and beverage retail industry from US$15.69 billion in 2011 to US$21.17 billion by 2015.

The Malaysian food and beverage retail market presents various opportunities, with an estimated annual growth rate of around 10 percent. The global carbonated beverages market is substantial, reaching a total value of $264 billion. This includes $225 billion spent on carbonated soft drinks and an additional $39 billion on sparkling water. On average, Malaysian households allocate approximately 24 percent of their income towards buying food and beverages. Consequently, this situation creates a favorable opportunity for the introduction of our new appliance.

The Malaysian market is extremely competitive and price-conscious. However, Malaysia strives to become the worldwide leader in halal products and the central hub for such items. Consequently, the country's standards for halal certification are projected to become more stringent as time progresses. To penetrate

this market, obtaining approval from JAKIM, the Malaysian Government’s entity tasked with certifying halal products, is imperative. Sodastream positions itself as a versatile household appliance that caters to various market segments.

The health of family members is becoming a top concern for middle-income households in Malaysia, influenced by the government's emphasis on health and increasing awareness among the population. Our target audience consists of children and young adults from these households, who make up a significant portion of the soft drink market. Our objective in this market is to establish our products as healthier options compared to current soft drink choices.

Our products have distinct characteristics that set them apart in the market. They also offer consumers convenience, affordability, health advantages, customization choices, and eco-friendliness. To enter the local Malaysian market, we intend to use hypermarkets as our distribution channel because they are renowned for providing top-notch products.

In order to achieve our goals, we have decided to utilize various channels such as Tesco, Carrefour, Aeon Jusco, Parkson, Coldstorage, and Giant. Our strategy for introducing the product involves bundling the Soda maker with the consumable product and offering it to new users in the market. This is done with the intention of creating long-term profitability from consumable products. We refer to this strategy as the complete carbonation system, which includes the soda maker, carbonating bottles, CO2 cylinders, and flavors. By adopting this approach, we can target sustainable long-term revenue generated from SodaStream's consumables.

The Soda maker is expected to generate $50 in revenue per user. However, over the course of 4 years, the projected revenue is $139. Our strategy for expanding

our business centers around consumer education and will employ two methods: in-store and out-of-store. In-store efforts will involve product demonstrations, showcasing features and displays, as well as controlled distribution and SKU management. Meanwhile, the out-of-store approach encompasses celebrity endorsements, internet and affiliate marketing, public relations and social media promotion, as well as advertising.

Sodastream is a new player in the home appliance industry in Malaysia, which means there are only a few competitors. To understand the carbonated drink market, Sodastream will analyze other brands and their production output as they have similarities to Sodastream's products. Sodastream offers various flavors for its carbonated drinks through its machine. One major competitor is The Coca-Cola Company, a well-known manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups. Coca-Cola owns globally recognized product brands like Coca-Cola, Sprite, and Fanta.

The Coca-Cola company's strong brand value allows for customer recognition and opportunities to expand into new markets, such as Malaysia, while also strengthening existing ones. Meanwhile, PepsiCo, Inc., the second largest beverage company globally, runs the Pepsi beverage division. Presently, Pepsi Company provides a range of almost 200 beverages that encompass carbonated drinks. These drinks are distributed to customers in over 190 countries through retail, restaurant, and food service channels.

Pepsi produces well-known brands like Mirinda, 7up, and Mountain Dew in addition to their own Pepsi brand. On the other hand, the Spritzer Group is a local company that holds the title of Malaysia's largest bottled water producer. The Spritzer Group consists of five subsidiaries involved in manufacturing and distributing various beverages, including natural mineral water, sparkling natural mineral water, distilled drinking water, carbonated fruit-flavored drinks,

non-carbonated fruit-flavored drinks, and functional drinks. Specifically for carbonated beverages, options include sparkling natural mineral water and Spritzer Pop – a Natural Mineral Water with a hint of fizz available in five exotic fruit flavors: Lychee, Apple, Lemon???????y Mixed Berries.

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