analysis of functional drink for health-conscious consumer
TRANSCRIPT
ANALYSIS OF FUNCTIONAL DRINK BUSINESS FOR
HEALTH CONSCIOUS CONSUMER SEGMENT
BY
MR. PHOOMKIT FANGMONGKOL
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2015
COPYRIGHT OF THAMMASAT UNIVERSITY
ANALYSIS OF FUNCTIONAL DRINK BUSINESS FOR
HEALTH CONSCIOUS CONSUMER SEGMENT
BY
MR. PHOOMKIT FANGMONGKOL
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE
OF MASTER OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2015
COPYRIGHT OF THAMMASAT UNIVERSITY
(1)
Independent Study Title ANALYSIS OF FUNCTIONAL DRINK FOR
HEALTH CONSCIOUS CONSUMER
SEGMENT
Author Mr. Phoomkit Fangmongkol
Degree Master of Science Program in Marketing
(International Program)
Major Field/Faculty/University Faculty of Commerce and Accountancy
Thammasat University
Independent Study Advisor Professor Kenneth E. Miller, Ph.D.
Academic Years 2015
ABSTRACT
The study of “Analysis of functional drink for health conscious consumer
segment” has been chosen as a part of contemporary topic in applied marketing. The
main objective of this research is to analyze industry structure and key competitors for
health conscious functional drink business of Thai Manufacturers. The first objective
is to study industry overview, business practices, innovation, financial performance,
key players and degree of competition among them. The second objective is to
analyze characteristic and consumer behavior of 2 key sub segments; Urban - higher
educational background and Suburban - middle educational background.
From the research findings, it is found that consumer buying decision
depended on various factors. Many barriers are found from the study. There are few
key factors that have caused consumer not to adopt this product category. The key
findings from the research results can be used to get a better understanding of industry
and consumer about their perception towards healthy RTD drink. Brand manager can
use this insight to develop innovative products and creative ways to attract this health
conscious segment which is believed to be the next growth engine of the industry.
Keywords: Health, Health conscious, Ready to drink, Functional drink, Healthy
drink, Health behavior, Healthy drink perception
(2)
ACKNOWLEDGEMENTS
I would like to take this opportunity to express my gratitude to my supportive
advisor, Professor Kenneth E. Miller, Ph.D. for his valuable time, thoughtful
comments and a kind encouragement throughout this research. I also would like to
thank you all of my friends from MIM-28 for endorsing the report.
Furthermore, I would like to express my gratitude to all the professors in MIM
program for the new marketing perspectives I have learned throughout the program.
Thank you all the MIM staffs and Asst. Prof. Pannapachr Itthiopassagul who
supported and facilitated throughout my master degree period.
Finally, I would like to sincerely thanks to all research participants, classmates
and my family for their help, encouragement, and understanding throughout my study
period.
Mr.Phoomkit Fangmongkol
(3)
TABLE OF CONTENTS
ABSTRACT (1)
ACKNOWLEDGEMENTS (2)
TABLE OF CONTENTS (3)
LIST OF TABLES (4)
LIST OF FIGURES (4)
CHAPTER 1 INTRODUTION 1
CHAPTER 2 INDUSTRY STRUCTURE AND 3
KEY COMPETITORS
Market Landscape 3
Ichitan PCL 5
Oishi Group PCL 7
Sappe PCL 9
CHAPTER 3 RESEARCH METHODOLOGY 11
CHAPTER 4 RESULT AND ANALYSIS 15
4.1 Key finding from secondary research 15
4.2 Key finding from primary research 18
Limitation of the study 24
CHAPTER 5 SUMMARY AND CONCLUSION 25
REFERENCES 26
BIOGRAPHY 28
(4)
LIST OF TABLES TABLE PAGE
Table 1 : In-Depth Interview Question Outlines 12
(5)
LIST OF FIGURES FIGURE PAGE
Figure1 : Top Consumer Health Categories – Retail Value 15
Performance 2010-201
Figure2 : Naturally Healthy Beverage 2008-2014 – Euromonitor 16
1
CHAPTER 1
INTRODUCTION
Thailand has always been recognized as the world supplier for delicious food
and drinks. Market size for functional drink and green tea drink is worth $1.4 billion
USD combined (Rinwong, 2015). Between 30-60% of revenue of this market comes
from exporting business to around the world, depending on the strategies of each
company (Prachachat Online, 2015).
Currently, there are some existing categories focusing on health conscious
consumer such as beauty drink, fruit juice, vegetable with mix fruit juice, energy
drink, and energy booster. However, each category have different advantages and
disadvantages over other categories such as key active ingredient, organic ingredient,
low calories, etc.
One of the big barriers of entry into health conscious functional drink category is
consumer belief. How to make them believe in the product benefit? Consumer in this
health conscious segment has different characteristic. For example, suburban and
middle educational background consumers tend to believe in celebrities, emotional
value and above the line media while urban and higher educational background
consumers are harder to convince unless showing scientific result and tangible
benefit. This makes crafting brand positioning for this consumer segment very
challenging.
This study is aimed to examine industry structure and key competitors in
functional RTD market focusing on health conscious consumer segment which will
cover two sub segments.
• Suburban and middle educational background consumers
• Urban and higher educational background consumers
2
Attitudes and perceptions of functional RTD will be analyzed and the
objectives to be achieved are as follows:
1. To understand perception and behavior of target consumers towards healthy
habit
2. To understand perception and behavior of target consumers towards RTD
drink
3. To understand perception towards healthy ingredient.
This report is expected to be beneficial to the functional RTD industry and to
provide a better understanding of health conscious consumers. The knowledge and
conclusion can be used in new product development, product communication to better
serve consumer needs which will lead to more product innovation in the industry. The
report is composed of knowledge from recent academic studies of related topics,
research methodology papers, key findings from in-depth interviews and conclusions
at the end.
3
CHAPTER 2
INDUSTRY STRUCTURE AND
KEY COMPETIRORS
The popularity and benefits of Japanese Green Tea, as well as the product
varieties offered by key manufactures, encouraged the growth for Ready To Drink
(RTD) category. Overall RTD market value reached 15.9 billion baht in 2015 with
4% CAGR. The lifestyles of Thai consumers and attractive offerings from many RTD
choices create a very intense market environment in RTD.
With intensive marketing campaigns, especially from big two leading players
like Ichitan and Oishi, RTD remained one of the most popular soft drinks for Thai.
Some consumer segments show strong loyalty to brands that offer numerous prize
competitions while other segments are loyal to the brands that are perceived to offer
better tastes and healthier functions. Sugar-free and reduced sugar RTD became
popular due to health concerns over high sugar levels in normal RTD products.
Players like Suntory, Ito En, Fuji and Oishi launched new reduced sugar products to
attract health-conscious consumers.
Market Landscape
In overall market, Ichitan Group dominated RTD tea in 2015, with around
37% market share in term of volume and 35% in monetary value. The brand emerged
with strong iconic Japanese Green Tea mogul, Mr.Tan Pasakhornathee. Oishi Group
was a second rank with 32% market share. Ichitan Group enjoyed strong current value
sales growth in 2015. Investment in new product developments and strong marketing
activities, including aggressive promotions and lucky draw campaigns, helped boost
sales and attractiveness of the product category.
Domestic players, led by Ichitan Group, Oishi Group and Sappe, continued to
dominate RTD in 2015. Unilever Thai Holdings and Pokka Corp were the only major
international players in RTD tea in Thailand. Dynamic product developments and
stronger marketing campaigns enabled domestic brands to lead RTD tea. Key new
4
products were launched by both domestic and international brands. Consumers tended
to try the new flavours from these new launches. Products with health claims and
unique flavours also became more popular among local consumers.
The key consumers of RTD tea in Thailand remained teenagers and the young
generation in general. New healthy RTD products started to grab popularity among
working adults and health conscious consumers. RTD products are normally
consumed chilled. They are often purchased from chilled cabinets in convenience
stores (such as 7-11), traditional retailers, and also supermarkets and hypermarkets.
Demand for healthier beverages is expected to be the next trend. Low sugar
and sugar-free RTD teas, as well as naturally healthy products, like oolong tea or
rooibos tea, are set to be launched by more competitors. In 2015, Sappe PCL (famous
for beauty drink product category) introduced new products to promote its strong
image for beauty drink, Sappe beauty eyes which claimed to nourish eyesight, Sappe
Silky Salon which claimed to nourish hair and nail. This helps drive innovation to the
industry while creating more intense competition. However, consumers get benefit
from wide variety of product offerings and benefits.
In the next section, 3 key players in the industry will be analysed.
5
Ichitan PCL
Company Background
Ichitan Public Company Limited (previously Ichitan Group Co.,Ltd) was first
established on 9 September 2010 by Mr.Tan Pasakhornathee. The company was
registered and listed on the Thai Stock Exchange in 2013. Ichitan is an independent
company manufacturing, marketing and distributing RTD tea in the Thai market. As
the founder, Mr. Tan has expertise in RTD tea and Asian drinks from his previous
success in Oishi brand, the company has its core business purely in this market.
Ichitan products were distributed very effectively in both modern and traditional trade
channels in over 300,000 places countrywide.
Positioning
Core products of Ichitan Group PCL are in RTD tea, considered one of the
most active categories in overall soft drinks. Even though the overall market saw
slightly lower growth in 2014 compared with the previous year, the company still
marked a double-digit growth. The market remained dynamic and competitive,
particularly in terms of product varieties.
The company positions itself in the mid- to low-end segment of the market.
Products from Ichitan are priced for the mass market. Nonetheless, thanks to
aggressive promotional pricing tactics, special prices were offered through selective
distribution channels and it was a successful strategy to fuel demand. Due to the wide
product portfolio of Ichitan, the company was also considered a leading player
responsible for new product innovation, since the company was normally ahead of
other competitors in terms of launching new developments into the marketplace.
With strong demand and consumption trend of RTD green tea products in
Thailand, Ichitan saw opportunities through unmet demand. In 2014 Ichitan managed
total production capacity of three bottle-filling lines and two can-filling lines. The
company claimed to have total production capacity of 600 million bottles and 200
million cartons per year. It equalled 252 million litres filled in PET bottles together
with 50 million litres in liquid cartons.
6
Ichitan’s products are not only for the domestic market but its RTD tea
products are also exported and distributed to other countries. In 2014, over two
million bottles of Ichitan RTD tea were exported to more than 20 countries
worldwide. Moreover, the company was expected to push the exporting number of
RTD tea to reach five million bottles by the end of 2014. With strong expertise and
knowhow in RTD tea, Ichitan dedicates its production and marketing resources on
this product category only. This makes Ichitan positioning very clearly to the target
market as a leading brand in Japanese Green Tea.
Since mid of 2014, Ichitan expanded its territory towards juice drinks by
acquisition of the Bireley brand, formula and production facilities. Its total investment
was Bt1.8 billion, including the Bireley trademark worth Bt240 million. The company
managed to strengthen brand recognition among its target audience and increased its
production capacity to serve increasing demand for RTD tea and Asian drinks.
Production was expanding for both product lines in metal beverage cans and liquid
cartons. The marketing budget was allocated for integrated strategies. Aggressive
marketing promotions and programmes were continuously lauched with the purpose
of stimulating brand awareness and sales. Some successful campaigns were pricing
promotions in cooperation with convenience stores, lucky draw campaign to win
iPhones, Bt1 million for 60 days, and also Mercedez Benz SLK.
7
Oishi Group PCL
Company Background
Since 1999, “Oishi” Japanese Buffet was first introduced by Mr.Tan
Pasakhornathee. As Japanese culture and lifestyle was getting popularity from
middle-high consumer group, the shop received very well feedback and began
expanding throughout Bangkok urban area. At that time, one of the most popular item
in the restaurant was Japanese Green Tea which was introduced for the first time. It
became very popular. Mr. Tan decided to take another step further by producing
Japanese Green Tea in a Ready to Drink format. The product was adopted by
convenience store very quickly and grew into the next trend for teenager to hold a
bottle of Japanese Green Tea at a premium price of 20 baht per bottle compared with
12 baht for soft drink. After Mr.Tan enjoyed huge success of this RTD drink for 6
years, Mr.Tan sold his share to Thaibev in 2006 which made Thaibev group a major
share holder of the company.
Positioning
In 2015, Oishi Group was the ninth-ranked player in soft drinks, with a 4%
share of off-trade value sales. Its soft drinks portfolio includes functional bottled
water under Amino Plus and RTD tea under brands like Oishi, Oishi Kabusecha, and
Chakuza. It was ranked ninth in bottled water and second in RTD tea in off-trade
value sales terms.
Oishi Group is positioned in the large and mature categories like bottled water and
RTD tea. Having established strong consumer awareness and brand loyalty over the
years, it has become a significant player in both RTD tea and bottled water.
Moreover, by using the same brand name as its restaurant chain, Oishi is becoming a
top-of-mind brand for consumers of Japanese food and tea in Thailand.
The company attained a significant position in soft drinks by focusing on a narrow
product portfolio instead of experimenting in every category. It targets middle- and
low-income consumers with mass-market strategies and offers affordable prices
through various types of retailers across Thailand.
8
Oishi Group has remained one of the top domestic players and a leader in
innovation. The company offers variety to consumers through RTD tea and bottled
water flavours, including RTD tea mixed with fruit juice, carbonated RTD tea and
functional bottled water fortified with glutathione, which is promoted as a skin
nourisher. The firm continuously improves the production process by using modern
technology and invests in research and development. Thus, it is set to offer more
innovative products for a new generation of consumers in Thailand in the short to
medium term.
9
Sappe PCL
Company Background
The company started its business on 1 March 1973 as a small bakery. Until
1979 the business continued to grow and built a factory to produce varieties of snack
products under the Piyajit brand. The company relocated in 1988 and established
Sapanan General Food Co., LTD
In 2014 the company changed its name from Sapanan General Food Co., LTD to
Sappe PCL and was listed on The Stock Exchange of Thailand under its code of
‘Sappe’.
Positioning
The company has a very strong position within functional bottled water. Apart
from its Sappe’ Beauti Drink, the company introduced Smarti Drink and Smarti Shot
in 2009. These products are positioned as functional bottled water with ginseng and
gingko extracts, which are claimed to benefit brain health. They target students and
first-jobbers. The company used labelling as a strategy to communicate with
consumers regarding the benefits of ginkgo and ginseng, rather than an above-the-line
campaign.
Back in 2001 the company began to expand into soft drinks with Mogu Mogu
fruit juice, which it calls “the innovative fruit juice made from natural nata de coco
blended with 25% fruit juice”. Since it was new to the market, the “Mogu Mogu”
brand was quickly accepted by major distributors and convenience stores throughout
Thailand. The company continued to make a strong presence in soft drinks with a
focus on innovative drinks. In 2004 the company introduced aloe vera Mix Drink, a
juice flavoured drink with mixed aloe vera cubes. In 2006 the company introduced
“Sappe’ Beauti Drink”, targeting female consumers via the concept of “Just drink....
you will be beautiful” in two formula: collagen, and fibre and L-Carnitine. The
product received great success in its first year, so the company extended the product
line with Sappe’ Beauti Shot in several flavours with collagen and fibre, Coenzyme
Q10, grape seed extract and lycopene. In 2011 the company introduced Sappe’ Beauti
Drink M in two flavours – collagen and fibre – to target male consumers.
10
In 2010 the company introduced the first 100% juice brand in PET bottles.
Sappe’ For One Day 100% fruit and vegetable juice offers full vitamins from fruit and
vegetables in amounts sufficient for one day’s requirements. This product is aimed at
targeting the consumer group aged 20-45 years. The product is positioned as a
supplementary drink for those who like to consume vegetables and two types of fruit
plus an additional 500mg of fibre for the digestive system. It also contains a
chlorophyll formula, providing vitamins from nine types of vegetables and nine types
of fruits, plus 57,000mg of detoxification products.
In 2014 the company launched its recent new product introduction of Sappe
Beauti Drink M. Its target consumers are not limited to women who tend to have high
levels of health and beauty consciousness, but the target has extended towards men
who love exercise and have a healthy lifestyle.
11
CHAPTER 3
RESEARCH METHODOLOGY
To answer the research objectives, research approach will be exploratory
research. The data will be secondary data and primary data. Research methodology is
qualitative method. Secondary data from credible sources will be analyzed to
understand current market situation and future trend. Regarding primary data, in-
depth interview of 10 candidates from those 2 sub segments will be conducted to
gather perception, attitude, trigger and barrier towards key attributes of healthy drink
product. The interview will take around 20 – 30 minutes per session. Focus group of 2
sub segments will be organized separately to collect insight of which attributes have
high impact and drive conversion. The session of focus group will take approximately
60 minutes.
To study the real behavior, on-site observation method will be taken around 7-
11 branches and hyper market in central business areas (Silom, Asoke, Chidlom,
Thaprachan, and Sathorn) and university locations which have high population of
both 2 sub segments. This research is designed to analyze industry structure and key
competitors for health conscious functional drink business of Thai Manufacturers.
The first objective is to study industry overview, business practices, innovation,
financial performance, key players and degree of competition among them. The
second objective is to analyse characteristic and consumer behaviour of 2 key sub
segments.
Sub Segment1 : Urban and higher educational background
Sub Segment2 : Suburban and middle educational background
Then the research will analyse and extract key attributes which have high
impact on purchasing decision, communication strategies which are effective to each
particular sub segments.
12
In – Depth Interview Question Outlines
Topics Questions
Screening Questions • Do you consider yourself a healthy person? If
not, what prevent you to be one?
Perception/Behavior
towards healthy habit
• What makes you think you are a healthy
person?
• Which healthy activities that you normally do?
How often?
• How do you like spending your free time?
• Do you consider yourself a food selective
person?
• If you can choose only one menu, what will you
choose between TASTY food (but bad for
health) or HEALTHY food?
• Why you want to be a healthy person?
Perception/Behavior
towards RTD drink
• Do you drink RTD regularly? How often?
• Which attribute in the drink make you prefer
choosing over other kind of RTD?
(Taste/Packaging/Type of Ingredient)
• Which barriers make you don’t want to buy
one?
• What is your opinion about nutrition infused
RTD?
• Which RTD type do you normally drink?
• Who can influence you to try for the first
times?
• Which marketing campaign can influence you
to try?
13
Perception towards
healthy ingredient
• What kind of functional benefit in RTD that is
most favorable to you?
• What is the first brand that you think of healthy
drink? What you associate with?
• What kind of proof of new ingredient that you
would like to know to make you believe in the
product benefit?
• Based on what are currently sold in the market,
which ingredient is the healthiest one?
• Do you believe in healthy RTD?
• Does country of origin of the ingredient has
influence on your decision? If yes, please rank?
Demographics • Age
• Gender
• Education
• Income
• Work
• Lifestyle
• Segment
Table1 : In-Depth Interview Question Outlines
Sampling Procedure
This study will use a convenience sample to obtain early interviewees. Then
those interviewees will be asked to recommend people who are likely to match with
research topic to recruit for in-depth interview and focus groups. All target
respondents have recent experience with healthy drink products and make a purchase
of this product category within the past 3 months.
14
Data Collection
For both in-depth interview and focus groups, the participants will be
interviewed with semi prepared questions. The mixed approach of face-to-face
interview and telephone interview will be used to collect to primary data, depending
on the convenience of respondents.
Data Analysis
The analysis will be made upon the data obtained from in-depth interview,
focus groups and observations. Qualitative analysis will be utilized for focus groups,
in-depth interview, and observations. The report will summarize factors that influence
the consumer decision-making process toward selecting the drink of choices in each
particular occasion.
Recommendations part will be provided to support manufacturer in
developing new product variety which are attractive to the market and also generate
demand from those 2 sub segments.
15
CHAPTER 4
RESULT AND ANALYSIS
4.1 Key finding from Secondary Research
Consumer health industry is one of the global rising industry with market
value of over $211 billion USD in 2015. According to Euromonitor (Figure1), vitamin
dietary and supplementary is dominating product category over 41% of total product
category consumption. Sports Nutrition might have lower share of all. But with its
outstanding CAGR of 9% compare with 3% on average, this sport nutrition can play a
big role in this product category in the near future.
Figure1 : Top Consumer Health Categories – Retail Value Performance 2010-2015 - Euromonitor
And if looking at consumer behaviour trend, consumer can now ask for their
remedy rather than requesting from pharmaceutical as the rise of the internet, smart
phone, blogger review era (Monica, 2015). It is harder than ever to use pure
commercial spot to convince consumer regarding the benefit of vitamin and dietary
supplement.
16
One of the main obstacles to reach this consumer segment is how to identify
who should be considered health conscious oriented person. Psychographic profiles
and social class can be used as important segment variables (Frederic B. Kraft,
Phillips W. Goodell, 1993) since these kind of variables have direct influence on
lifestyle and hence guides day-to-day behavior including choices of food and drink.
Figure2 : Naturally Healthy Beverage 2008-2014 - Euromonitor
In Thailand, market size of functional drink and green tea drink is worth $1.4
billion USD combined (Rinwong, 2015) and the market is dominated by big 3 players
; Ichitan Group, Thai Beverage and TC Pharmaceutical (Figure2). With this market
environment, it attracts new players to compete in this product category almost every
year. For example, the latest trend in this product category is to add bird nest into the
bottle (Thansettakij, 2015). Sahaphattana also launch new beauty drink name “Star
Infinity” brand which have collagen as core ingredient to position as a drink for
superstar (Thinsiam Dot Com, 2014). These evidences indicate that this product
category tries to add more value and position the brand to become more premium than
in the past. The phenomenon is also align with global trend that consumers with
increased health awareness are now rejecting mass-products and specifically
17
searching for high quality products with a higher added value to satisfy their health
conscious lifestyle (KATARÍNA – RENÁTA, 2015). Thai people start seeking for a
daily product that contain more vitamin, dietary and supplement which are already
mixed together in food and drink for convenience (Bangkokbiznews, 2013).
Even the ready to drink product category emerged more than 10 years, green
tea is still the beverage of choice for Thai people. A survey conducted during
February 2015 by market research agency Intage Thailand found that 21% of the
city’s respondents bought it on a daily basis. This compared to figures of 14% for
carbonated drinks, 13% for water, 10% for fruit juice and 9% for coffee
(Euromonitor, May 2015). This suggests that the blended of healthy ingredient
together with green tea drink can be combined to introduce as a new product variety
to the Thai market.
Besides from green tea product, fruit juice is also one of the active category
which has very intense competition (marketeer, 2014). Juice brands in Thailand are
trying to introduce new concept of fruit juice, added even more vitamin and called
new category “Fruitamin”. Concentrate vegetable drink also tried to introduce new
natural ingredient found mainly in tomato called “laicopene” to attract attention of the
market. Presently, in Thai market, there is still no clear winner in this new healthy
drink category.
Regarding communication strategy, it is hard to convince health conscious
consumers about product benefit and make them believe in brand. Celebrities have
long played a major role in local marketing communication, but this may be about to
change. Data analysis from major online search engines have shown a doubling in
search volume for ‘reviews’ and ‘consumer reviews’ in Thailand during the last five
years (Euromonitor, Jan 2015). Local consumers are paying more attention to the
views of their peers, the website adds. However, it advises that celebrities can still be
utilized to maximize awareness of products as this strategy has strong impact on
followers to help spread the brand.
Although the global market opportunity seems lucrative (Verbeke, 2004), the
industry still has insufficient knowledge to support good marketing decision due to
lack of understanding of consumer behavior towards functional food for wellness. For
18
example, marketers have to be more precise as to how information should be
conveyed to target consumers in order to get the desired result.
“When neither physiological nor health claims are allowed to be put on
packaging, almost 90% of consumers will continue to prefer the traditional,
non-enriched product, even when functionally enriched products are on the
market. When physiological claims are allowed, 25% prefer the enriched
product; this figure rises to 30% when even health claims are allowed.”
(Grunert, 2002)
This example shows that slightly difference in communication message can have
significant effect on consumer behavior. One study also found misperception among
food technologists, consumers and marketers, which have strong impact on new
product development targeting this segment.
“consumers valued pills as carrier for health claims and functional ingredients
significantly lower than marketing professionals and food technologists do. In
addition, experts are less inclined to invest in carriers which consumers are
willing to try (e.g. chocolate, soup).” (Kleef, 2002)
To break into this market, marketers also have to educate target consumers about
nutrition background that consumers perceive food with naturally rich and naturally
poor to have the same health benefit. And they end up choose unhealthy choices for
pleasure (Cornish, 2012). Further in-depth research about consumer behavior in this
target segment is still needed to get a clearer picture of how consumer perceive the
value and how to better communicate more effectively.
4.2 Key finding from Primary Research
The information that collected from consumer interview session provides
contains variety of responses due to the open-ended question set in the discussion
guideline. Obviously, key findings from the consumers who had experience with Club
21 e-shop are different from customers who are non-experience on Club 21 e-shop.
For ease of understanding on result interpretation, the data that collected from
respondents are reported under the framework of research study as specified in
chapter 3 of this study. Regarding to the “Framework of online consumer behavior” as
19
indicated to be study framework in the previous part, key findings will be summarized
in terms of factor that affect consumer online decision in each stage.
4.2.1 Demographic
General information of 30 participants from in-depth interview and focus groups is
summarized as follows;
• Age and Marital Status – Participants consist of 21 female and 9 male, age
between 24 – 38 years old. 8 participants are single, 15 participants are in
the relationship but not marriage, and 7 participants are married.
• Career and Level of Income - There are 18 participants working in private
organizations, 9 people are entrepreneurs or freelancers and 3 people are
new graduated and un-employed. The average individual income is 32,000
THB/month.
• Level of Education - About half (15/30) of participants have gradated or
have been studying Master’s Degree. Another half of participants have
bachelor degree or lower.
• Geographic - About half (15/30) of participants live in urban area in
Bangkok and Municipal. Another half of participants live in suburban area
outside Bangkok.
• RTD Consumption frequency – Consumption behavior tends to be vary
from once a week to 1-2 times per day.
4.2.2 Perception/Behavior Towards Healthy Habit
All respondent sees themselves as health conscious persons. However, the
degree of discipline is very different from person to person. Based on the responses,
there are two indicators that make people think they are health conscious persons –
frequency of exercise and food selection.
• Frequency of exercise – Respondents in this groups do some kind of sports
or exercise very regularly, at least 3-4 times a week compared with 2-3
times per month. This makes them perceive themselves as health
conscious persons. Regarding food selection, there are 2 different views;
20
one group tends to care more about calories intake while another group
thinks they can take more fat because they exercise regularly so they spoil
themselves more.
“It takes more than 45 minutes of running to get rid of the calorie from
one scoop of ice cream. With this in mind, I tend to choose food more
carefully unless I will ruin my hard work from the exercise.” Thanit
U., 33, Employee
“Exercise makes me feel less guilty when I eat whatever I like and
spoil my stomach. My rule is that if you take one yoga class then you
can have one fatty meal.” Jiraporn P., 38, Employee
• Food selection – Respondents in this group do not pay much attention
about exercise but they care more about what to eat. They normally avoid
deep fried, sweet soft drink, high fat and eat more vegetable. As they do
not like to exercise, careful selection of food is enough to stay in a
physically healthy condition.
“One of the big concern when choosing one RTD brand over another
RTD brand is sugar content. I normally choose very little sweet or
non-sweet RTD drink.” Jira T., 34, Employee
“Six pack doesn’t build in the gym, but rather in the kitchen. You are
what you eat.” Pathit P., 33, Entreprenuer
When asked why you want to be healthy and what kind of benefit you expect
from staying healthy, there are 2 main responses from both urban and suburban
segments which are very consistent in both groups ; physical benefit and external
appearance
• Physical benefit – Respondents in this group would like to stay healthy
because they want to avoid sickness. One of the key reason to exercise is
heart strength and sometimes feel tired very easily.
21
“As my age reached 30 years old, I could feel that the physical strength
was not the same. Just walked up 2 floor and I sometimes felt so tired. This
triggered me that I needed to start exercise.” Sathaporn T., 33, Employee
• External appearance – Male respondents in this group believe that stay fit
and firm increase their confidence and therefore enhance productivity in
work. Female respondents tend to care more about beauty which is also
related to confidence in both work and personal life.
“My weight was 98 kgs 5 years ago. After I managed to lose 20 kgs and
stayed at 75 kgs until now, I feel very good with myself. And as a sales
person, this is huge benefit since it increases my confidence in work such
as customer facing, delivering keynote presentation to big group of
audiences, etc.” Chanat T., 32, Employee
4.2.3 Perception/Behavior Towards RTD drink
Most of the respondents have the same view that they buy RTD mainly for
refreshment purpose. For example, they buy soft drink such as Coke, Pepsi for sugar
intake in the hot day. Some respondents choose RTD tea because of the aroma. So the
key decision factor for this group is taste.
“I buy RTD mainly for refreshment. I don’t care the benefit that the
brand claims on the product as long as it tastes bad. If I want more
nutrient or vitamin on a daily basis, I will eat a concentrated vitamin
tablet such as blackmore.” Oneta P., 34, Entreprenuer
Only 15% of the respondents agree that some functional benefits influence
their selection at the point of purchase. In this case, they will look for 100% fruit juice
that provides wide varieties of nutrients and vitamins. The last 5% of the respondents
looks for milk that provides high protein and calcium.
22
Regarding product barriers, respondents in urban segment agree that high
sugar content is their main concern. Based on the interview, urban segment people
care more about external appearance which makes sugar and fat the main threat.
Urban segment consumers receive information mainly from internet (such as social
media and youtube), out of home media and their peer. The tendency to try new
product increases significantly if the products are recommended by their friends.
“I like to try new product. When going to 7-11, I always look for new
drink. If my friend recommends newly launched RTD to me, then I will
definitely try. If it tastes bad, then I won’t buy it next time. The cost of
20 per bottle to try is nothing.” Oneta P., 34, Entreprenuer
Contrasted with consumers in suburban segment, they normally try new
product when seeing TV and radio commercials. When they see a well known
celebrity as a product presenter, it also has more credibility. However, if the product
tastes bad, they will not continue buying products.
“I would like to try the product when I see a commercial spot in TV. If
it tastes good and I get the benefit as claimed, then I will continue
buying the products” Nuttapong S., 26, Freelancer
The current pricing in the market is not a barrier in both urban and suburban
consumer segment. However, urban consumer segment can accept higher price of up
to 60 – 75 baht per bottle for high quality ingredient while suburban consumer
segment cannot accept the price higher than 35 baht.
4.2.4 Perception/Behavior towards healthy ingredient
When asked about what is top of mind brand for healthy RTD drink (unaided),
60% of the respondents recognize brand “Sappe” as the brand for beauty drink. When
provided with the list of the brands, almost every respondent can recognize brand
“Sappe”. Some respondents also mention the brand “Tipco”, “Malee”, “Sappe for one
day” which are the brands for 100% fruit juice providing nutrient and vitamin. Every
23
respondent accepted that they tried this product category once when the products were
first launched. However, only 2 respondents still consume Sappe beauty drink once a
month. The reason is that they didn’t receive the benefit as claimed by the brand.
“I felt like drinking artificial juice with a lot of sugar instead of
healthy drink. And I didn’t quite feel like I have more beautiful skin
from the collagen in the product.” Patchara M., 29, Employee
One of the respondents who had experience in vitamin and supplement
industry mentioned that the amount of active ingredient is the key point that makes
consumer see no benefit from this kind of nutrient infused RTD.
“The amount of active ingredient in each bottle is less than 20% of the
what is recommended by the lab due to cost constrain. As a result,
consumers need to drink at least 5 bottles per day to reach the point
where consumer can actually get some benefit from the active
ingredient. Moreover, when multiplied by other uncontrollable factor
of consumer’s daily routine such as sleep cycle, food and level of
exercise, it is even harder for consumers to see tangible benefit by just
drinking RTD.” Pathit P., 33, Entreprenuer
However, there is still a demand and opportunity in this product category if the
brand can actually deliver the benefit as claimed. When asked about what kind of the
benefit in the drink that the respondents are looking for, it can be grouped into 4
categories.
1. Skin beauty
2. Increase effectiveness of excretory system
3. Increase effectiveness of digestive system
4. Increase metabolism and calorie burn rate
24
RTD brand can use this information for new product development and target
this unment needs. Based on what are currently sold in the market, the respondents
mostly aware of collagen which helps improve skin quality and fiber which helps
improve digestive system. Other ingredients such as fiber, whey protein are still
unawared by this group of respondents.
In order to effectively launch new ingredient, urban and higher educational
consumer segment would like to see certificate from renowned lab and also real test
result from test group of at least 300 samples in the communication strategy.
Suburban and middle educational consumer segment would like to see testimonial
from well known celebrity, actress in TV or radio commercial.
Country of origin of the active ingredient can highly promote credibility of the
product. Urban and higher educational consumer segment gives high credit to USA,
European countries and Australia since many large pharmaceutical, vitamin and
supplement labs are located in those regions. Suburban and middle educational
consumer segment gives high regard to Japan and Korea due to their expertise in
cosmetic. Both consumer segment can accept higher price points if the brands use
active ingredient from labs in those countries.
Limitation of The study
Findings from this research cannot be generalized to the entire target market
due to the non-probability sampling method. With limited time and budget, sample
size of interviewees will be relatively small and could not take as the representative of
specific target profiles.
25
CHAPTER 5
SUMMARY AND CONCLUSION
This study is aimed to get a better understanding of industry and consumer
about their perception towards healthy RTD drink. Therefore, from the findings, it is
found that consumer buying decision depended on various factors. Many barriers are
found from the study and there are few key factors that have caused consumer not to
adopt this product category.
1. In this generation, people pay more attention to their health since it can
improve physical strength and external appearance which promote
confidence. Healthy products that can serve health conscious consumer
will be the next trend.
2. Consumers in both urban and suburban segment do not believe in
product benefit. Therefore, this prevents them from consuming healthy
RTD product. The brands need to invest more in research and
development to improve product quality and deliver result as promised.
3. There are obvious unmet needs and opportunities in this industry. Most
of the respondents say that if the brand can deliver the benefit, they
will become loyal consumers of the brand.
4. Communication strategies should be tailored made for specific
consumer segment. In urban and higher educational segment,
consumers believe more when they see scientific test result and proven
benefit from many samplings.
5. Brands should source active ingredients from countries where they
have high credibility even it costs higher since health conscious
consumer is likely not price sensitive. Moreover, urban consumer can
accept higher price point.
26
REFERENCES
Frederic B. Kraft, Phillips W. Goodell, 1993, Journal of Health Care Marketing p.20
“Identifying the Health Conscious Consumer”
KATARÍNA VÉGHOVÁ – RENÁTA MACHOVÁ, 2015, p.96 “THE CURRENT
TREND MODELLING OF THE CONSCIOUS IN HEALTHY LIFESTYLE
IN THE CONTEXT OF INTERGENERATIONAL MANAGEMENT”
Euromonitor (January, 2015) Consumer Trends and Lifestyles, Thailand – “Are
celebrities losing their marketing mojo?”
Euromonitor (May, 2015) Consumer Trends and Lifestyles, Thailand – “Green tea is
Bangkok’s favourite beverage”
Monica Feldman - Euromonitor Dec 2015 – “Consumer Health Trends – Reviewing
2015 and Looking Forward in 2016”
Wim Verbeke, 2004 – “Consumer acceptance of functional foods, socio-demographic,
cognitive and attitudinal determinants”
http://www.sciencedirect.com/science/article/pii/S0950329304000102
Klaus G Grunert, 2002 – “Current issues in the understanding of consumer food
choice” http://www.sciencedirect.com/science/article/pii/S0924224402001371
Ellen Van Kleef, 2002 – “Consumer-oriented functional food development: how well
do functional disciplines reflect the ‘voice of the consumer?”
http://www.sciencedirect.com/science/article/pii/S0924224402000687
27
Lara Spiteri Cornish, 2012, Journal of Consumer Behaviour p.298 “It’s good for me:
It has added fibre! An exploration of the role of different categories of
functional foods in consumer diets”
Prachachat Online. (2015, 05 21). “Sappe renews "Beauty Drink", introducing the
world first beaty drink for hair and nail.”
http://www.prachachat.net/news_detail.php?newsid=1432190056
Rinwong, S. (2015, 03 10). “Bottled Drink Market reaches 200,000 million Baht.”
http://www.bangkokbiznews.com/blog/detail/633926
Bangkokbiznews. (2013, 01 25). “Consumer behaviour in Thailand favour immediate
result in beauty, drive growth in consumer health segment.”
http://www.bangkokbiznews.com/news/detail/487284
Thansettakij (2015, 10 24). “Juice Nest lauched to capture untapped market –
Premium Healthy Drink”. http://www.thansettakij.com/2015/10/24/14671
Marketeer (2014, 04 05). “Juice cannot be just healthy, it need to be fresh to WOW
customers” http://marketeer.co.th/2014/04/
Thin Siam Dot Com (2014, 10 09). “Sahaphattana launch new brand, healthy drink
for healthy skin” http://www.thinsiam.com/1243
28
BIOGRAPHY
Name Mr. Phoomkit Fangmongkol
Date of Birth March 30, 1984
Educational Attainment Bachelor of Computer Engineering,
Chulalongkorn University