Strategic Marketing Plan for Unsweetened Coconut Milk

Topic: Business Words: 3034 Pages: 11 May 2, 2023

Background

The dairy product industry is a rapidly changing business area with shifting preferences in the market. This issue is particularly noticeable in Southeast Asian countries as health concerns about animal milk become a steadily more relevant problem (Robinson, Lakner and Otter, 2019). The Kowloon Dairy Group is the leading producer and distributor of milk and dairy products in Hong Kong, aiming to differentiate its products (Kowloon Dairy, 2022c). Consequently, unsweetened coconut milk is a low-calorie alternative to animal dairy, which supports the primary principles of sustainable development. Kowloon Dairy (2022c) is utilizing modern recyclability strategies to adhere to environmental regulations, and the introduction of plant-based milk would be the natural continuation of the company’s vision. As a result, Kowloon Dairy would be able to differentiate its products in a highly competitive environment and attract new customers. Ultimately, the current paper presents a comprehensive overview of Kowloon Dairy and proposes an effective marketing plan to introduce unsweetened coconut milk in the Hong Kong market.

Situation Analysis

Situation analysis is the broad term covering the essential aspects of internal and external audits, including the company’s resources, SWOT matrix, and PESTLE factors. It is crucial to determine the organization’s competitive environment and macro-environment to define the economic setting and develop an appropriate marketing strategy (Hooley et al., 2017). Ultimately, the current chapter thoroughly analyzes the internal environment, market conditions, customer needs, and the external factors affecting organizational development.

Internal Environment

The Kowloon Dairy Group is one of the leading producers and distributors of dairy products in Hong Kong. The organization has an extensive history dating back to 1940 and currently employs more than 450 skilled workers (Kowloon Dairy, 2022a). The company’s statement (presented in Figure 1) emphasizes the highest quality and service of the products, which makes Kowloon Dairy “the number one milk brand in Hong Kong” (Kowloon Dairy, 2022a).

Figure 1: Kowloon Dairy’s Vision Statement

The Kowloon Dairy Group offers a large variety of products, including fresh milk, hi-calcium milk, flavored milk, mochi ice cream, and other dairy sub-types. The company ensures the highest quality of its production through 100% local production, quality control, and innovative nutrition optimization strategies (Kowloon Dairy, 2022b). Figure 2 below presents a standard package of Kowloon Dairy fresh milk from the website.

Figure 2: Kowloon Dairy Fresh Milk Package

Nevertheless, Kowloon Dairy lacks a rich assortment of alternatives to animal milk; thus, unsweetened coconut milk is an excellent opportunity for the company to introduce more plant-based products and sustainable options.

Consumer Market

Consequently, it is essential to understand the customer needs to determine an effective segmentation, targeting, and positioning (STP) strategy. Hooley et al. (2017) suggest the following diagram (represented in Figure 3) to establish an accurate consumer profile:

Figure 3: Defining Questions of Customer Analysis

Table 1: Customer Analysis of Kowloon Dairy

Question	Customers of Kowloon Dairy
Who?	Approximately three million customers in the Hong Kong region drink milk produced by Kowloon Dairy (Koch et al., 2021).
What?	The customers adjust their choices of dairy products based on taste, price, and health concerns.
When?	Most customers drink milk daily, which further stimulates the trend towards healthier options and sustainable development (Zegler, 2021).
Why?	Milk is a nutritious product that contains essential vitamins and minerals (presented in detail in Figure 3).
Where?	While retail stores are always an accessible option, Kowloon Dairy specializes in complex programs of home delivery to improve the customer experience (Kowloon Dairy, 2022b)
How?	Customers generally drink milk in its natural form; however, they might also use dairy products in their cooking recipes.

The proposed 5W model for customer analysis is one of the most effective methods to determine consumer needs. Table 1 below provides a comprehensive overview of Kowloon Dairy’s potential customers.

Consequently, there are several unique consumer traits, specifically among the potential customers of unsweetened coconut milk in the dairy industry in Hong Kong. Table 2 below provides an overview of targeted consumer segments to demonstrate the distinctive characteristics.

Table 2: Targeted Consumer Segments: Unsweetened Coconut Milk Produced by Kowloon Dairy

Targeted Segment	Characteristics and needs	Feature/Benefit
Adults with various levels of income who are conscious of their health or lactose-intolerant	Look for health benefits of milk, including minerals and vitamins Are lactose-intolerant	Health benefits – unsweetened coconut milk is rich in medium-chain triglycerides, vitamin A, and Calcium (Sharma, Lourembam and Bisht, 2020).
Adults with various levels of income who are currently looking for milk alternatives due to a diet	Look for low-calorie alternatives Look for carbohydrate-free alternatives, making unsweetened coconut milk perfect for keto-diets Look for healthier alternatives without sacrificing the taste	Customers can replace animal milk with coconut dairy or merely add the product to their diet Kowloon Dairy ensures the highest quality of the products.
Adults with various levels of income who are willing to support sustainable development and ecologically-friendly alternatives	Prefer “green” alternatives instead of regular animal milk Want to actively participate in sustainable development and preserve the environment Are ready to change their daily life and pay additional expenses for “greener” alternatives	Plant-based and nut-based dairy products are sustainable alternatives to animal milk (Bridges, 2018) Unsweetened coconut milk promotes sustainability in the market since local production is available in the Hainan coconut plantations.

External Environment

Lastly, it is essential to analyze the external environment, including competitors and PESTLE factors. Kowloon Dairy has an extensive number of relevant competitors in the Hong Kong dairy market, including Oatly, Dairy Farm, Trappist Dairy, and Hong Ning. Including Kowloon Dairy, the four companies have been dominating the Hong Kong dairy market for nearly a century with varying degrees of success (Cheung, 2021). The local competitors utilized diversifying marketing strategies to achieve the top position in the industry, and Kowloon Dairy, Trappist Dairy, and Dairy Farm are still relevant companies in the market.

PESTLE Factors

PESTLE factors refer to political, economic, social, technological, legal, and environmental circumstances that define the macro-environment, organizational development, and marketing strategies. Koch et al. (2021) provide the following table (Figure 4) to illustrate the general elements of the analysis:

Figure 4: General Factors of the PESTEL Analysis

Each of the mentioned factors plays a vital part in the business development and should be accounted for in the marketing plan. For instance, recent years have transparently demonstrated that global events, such as the COVID-19 pandemic and rising political tension between economic superpowers, create a harmful environment for business. However, specific factors of the industry provide even more substantial incentives to adjust the marketing plan. Koch et al. (2021) assume that dairy alternatives, environmental sustainability, food safety, and organic production are among the critical trends in the dairy industry. Furthermore, Mintel Press Team (2019) ensures that the main trend in the food industry for 2030 would be conscious consumption, and unsweetened coconut milk is an excellent starting point for the plant-based product line. Thus, the introduction of unsweetened coconut milk meets the contemporary requirements of the industry since it is a significantly more ecologically-friendly product compared to animal dairy.

Product Analysis

Product analysis of unsweetened coconut milk is necessary to establish a differentiation strategy and define an appropriate targeting and positioning approach. Plant-based milk alternatives have been rapidly gaining popularity primarily due to the lack of cholesterol and lactose, which might cause significant health damage if consumed excessively (Sharma, Lourembam and Bisht, 2020). A 236g package of unsweetened coconut milk contains approximately 50Cal with a low amount of carbohydrates and proteins, making it a preferable choice for keto-diets (Sharma, Lourembam and Bisht, 2020). In other words, unsweetened coconut milk is an appropriate alternative to cow milk if the customer looks for lower calories and a lack of lactose. However, nut-based milk as a substitute for animal dairy might be harmful to infants and older children since it does not contain a sufficient number of proteins and vitamin D (Andreo, Rivero-Mendoza and Dahl, 2020). Thus, unsweetened coconut milk is a superior alternative to animal milk for older populations, and the marketing plan should focus primarily on adults. A comprehensive comparison table of nutrient profiles is presented below in Figure 5.

Figure 5: Nutrient Profile of Dairy Products

SWOT Matrix

Consequently, it is essential to provide an overview of the situation analysis by completing a SWOT matrix. Table 3 below demonstrates the primary elements of the breakdown, illustrating the strengths, weaknesses, opportunities, and threats of Kowloon Dairy.

Table 3: SWOT Matrix of Kowloon Dairy

Strengths	Weaknesses
Established brand image (Kowloon Dairy, 2022) A large variety of dairy products, including fresh milk, flavored milk, hi-calcium chocolate, and lactose-free milk (Kowloon Dairy, 2022)	Remaining fears among the public concerning the safety of dairy products (Yang et al., 2020) Lack of plant-based alternatives in the current assortment
Opportunities	Threats
A growing interest in healthier alternatives Demand for sustainable products in the dairy industry (Bridges, 2018)	Dense competitive environment Foreign competitors in the local market Rapidly shifting market and customer needs (Bridges, 2018)

Strengths

Established brand image. Kowloon Dairy has a rich history of more than eighty years in the Hong Kong dairy market, establishing a notable brand image. Customer loyalty is a substantial competitive advantage in the dense market.
A large variety of dairy products. Kowloon Dairy (2022b) has an extensive assortment of dairy products, which satisfy most of the customers’ needs.

Weaknesses

Milk safety. While not connected directly to Kowloon Dairy, the public image of the Chinese dairy industry is obstructed by several scandals. They include the addition of melamine to infant formulae, the Hong Ning controversy over milk formulae in 2015, and other frauds in the industry (Cheung, 2021; Yang et al., 2020).
Lack of plant-based alternatives. Despite the large variety of animal-based milk, Kowloon Dairy (2022b) does not currently have a sufficient number of plant-based alternatives.

Opportunities

Interest in healthier alternatives. The research reveals a consistent increase in plant-based dairy sales and the customers’ approval rating of sustainable alternatives (Schiano et al., 2020; Zegler, 2021). Unsweetened coconut milk satisfies the primary attributes: low carbon footprint, animal welfare, simple ingredients, and few preservatives, making it an excellent alternative to animal milk (Schiano et al., 2020).
Demand for sustainable products. In recent years, the dairy industry has demonstrated an increasing demand for sustainable products, recyclability, plant-based alternatives, and food security (Feil et al., 2020).

Threats

Dense rivalry. Kowloon Dairy directly competes with local brands, such as Dairy Farm and Trappist Dairy, and foreign companies that establish their presence in Hong Kong, such as Oatly, which focuses on plant-based alternatives.
Shifting market. In the information age, customers’ needs are changing rapidly due to the vast exposure to marketing campaigns.

Marketing Goals and Objectives

A comprehensive marketing plan establishes specific and achievable goals and objectives to achieve maximum productivity. In the context of marketing, goals refer to broad and long-term statements that define organizational development in the industry (Hartline, 2021). On the other hand, marketing objectives concern specific short-term goals that are necessary to establish priorities in the planning process (Hartline, 2021). Table 4 below presents Kowloon Dairy’s primary goals and objectives concerning unsweetened coconut milk.

Table 4: Marketing Goals and Objectives

Goals

Objectives

Establish a dominating presence in the local dairy market
Occupy the niche of plant-based dairy alternatives
Grow the consumer base and attract new customers
Achieve competitive advantage via the highest levels of product quality and performance
Build a positive image of the brand regarding socially responsible business

Introduce unsweetened coconut milk in the product line of plant-based dairy alternatives within three months
Conduct an effective marketing campaign on the benefits of sustainable options after the product launch
Emphasis on social media instead of television and radio to further focus on the targeted group – adults striving for sustainable development
Measure the customers’ behaviors and preferences regarding unsweetened coconut milk within the three months of the plan implementation

Segmentation, Targeting, and Positioning Strategy

Segmentation, targeting, and positioning (STP) strategy is essential to determine the appropriate marketing approach. Based on the analysis presented in Table 1, Table 2, and the SWOT matrix, it is possible to provide a comprehensive STP overview. The specific demographic group primarily includes adults with various levels of income who prefer healthier and more sustainable alternatives to animal milk. The psychographics of the group inclines toward a healthier lifestyle with conscious choices in food; therefore, it is essential to prioritize the health benefits of unsweetened coconut milk in the marketing campaign. Another contributing factor to the problem is that the obesity rate in Hong Kong reaches up to 30%, with approximately 20% of the population also being overweight (Hong Kong Association for the Study of Obesity, 2022). Ultimately, unsweetened coconut milk is aimed at adults with varying socio-economic characteristics and of all genders. It is expected that people with excessive weight who regularly drink milk will switch to healthier alternatives, assuming the marketing campaign will be successful. The perceptual maps in Figure 6 and Figure 7 present the comparison between Kowloon Dairy’s unsweetened coconut milk and its competitors’ products.

Figure 6: Sustainability/Health Perceptual Map

As seen from the maps, Kowloon Dairy should focus on the niche that provides affordable and sustainable alternatives to animal-based milk. Oatly is a relevant competitor in the segment of plant-based dairy; however, its oat milk is significantly more expensive than Kowloon Dairy’s potential unsweetened coconut milk (‘Oatly’, 2022). Considering the fact that almost 50% of the population in Hong Kong are overweight or obese, an offer of affordable low-calorie dairy might be particularly successful. Ultimately, Kowloon Group should target the adult population with varying socio-economic factors of all genders by conducting a specialized marketing campaign with a focus on sustainability and health concerns.

Marketing Plan and Tactics

Having discussed the situation analysis, objectives, and STP, it is possible to develop a comprehensive marketing plan to introduce unsweetened coconut milk to the market. The decisions below represent the primary directions of the marketing plan:

Product and brand decisions. Unsweetened coconut milk is a unique nut-based dairy product with many advantages over animal-based products. It is low-calorie, lactose-free, low sodium, rich with vitamins and minerals, maintains a pleasant and distinctive taste, and is reasonably priced (Bridges, 2018). Kowloon Dairy should design a similar package to its regular products (represented in Figure 8) to maintain resemblance to the animal-based product line but add several unique characteristics. For instance, labeling that provides information about sustainability and health concerns or distinctive packaging with coconut imagery might be a successful strategy to attract customers’ attention.

Figure 8: Kowloon Dairy’s Standard Package of Low-Fat Milk

Pricing decisions. It is essential to position unsweetened coconut milk as an affordable product line to establish the niche of cheap sustainable alternatives. Oatly one-liter packages of oat milk typically range from $35 to $40, implying that Kowloon Dairy needs to set lower pricings (‘Oatly’, 2022). Furthermore, the company should offer various packages ranging from 200g to 1.5l (up to eighteen bottles in a pack) to satisfy the customers’ needs.
Logistics decisions. Effective logistics is necessary to maintain the highest quality from local manufacturers and low prices to take the niche of affordable sustainable alternatives. Therefore, Kowloon Dairy needs to improve the supply chains from the Hainan coconut plantations, which would require significant initial investments. The local distribution of products should be conducted through the stores and unique Kowloon Dairy home delivery services. Lastly, it is essential to optimize the logistics process via innovative digital data options to ensure the supply chains “from grass to glass” (Lu and Bennett, 2018). According to Mintel, investments in seamless shopping, sustainability of supply chains, and digital solutions are decisive factors for the future of many companies (Zegler, 2021).
Communications decisions. The primary objective of the communications decisions is to raise the awareness of plant-based milk advantages while directly conveying the affordability of the product. Kowloon Dairy needs to initiate a comprehensive program concerning media advertising, public relations, and direct marketing. Among the instruments, social media incentives should be prioritized due to the peculiarities of the targeted demographic group. Consequently, the push marketing strategy might include search engine optimization, display advertising, and e-mail marketing with the existing customer base (Christina, Fenni and Roselina, 2019). Many people want to change their lifestyle toward healthier alternatives, and digital push strategies might be immensely effective to make people believe in the availability of sustainable options (Zegler, 2021). Another potentially beneficial idea concerns partnerships with relevant fitness gyms or sportswear companies to promote the health benefits of the product and plant-based dairy products in general. It is essential to create a sense of belonging and community in food choices, and collaboration with established sports brands would be a highly effective marketing strategy to attract customers who value a healthy lifestyle.
Internal marketing decisions. Internal marketing decisions concern positive relationships with customers, suppliers, and employees. Kowloon Dairy’s home delivery services and established brand image might separate the company from the rest of its competitors regarding customer loyalty.

Action Plan

Consequently, it is essential to propose an estimated action plan that incorporates the primary points of the marketing strategies. The current report does not include the financial information and analysis as per the instructions; however, a comprehensive representation of key timings makes the plan more reliable. The Gannt Chart (Table 5) below presents the overview of the action plan:

Table 5: Kowloon Dairy Marketing Action Plan

Implementation and Control

The ultimate part of the marketing plan concerns evaluation and control, which sets productivity standards and proposes corrective action in case of underperformance. Moreover, it provides instruments and strategies to identify the flaws in the marketing plan and isolate weaknesses of the program implementation (Hartline, 2021). The current marketing plan presents the following metrics to monitor the progress:

Daily and weekly analysis of the product sales;
Thorough calculation of costs, prices, and profitability;
Customer feedback analysis (taste, price, health benefits, and other relevant topics);
Continual research of competitive standing;
Customer retention and attraction of new consumers;
Public image of the company;
Media coverage in social media and search engines.

The market changes rapidly; therefore, it is essential to monitor the progress and evaluate the customers’ needs on a weekly basis. The contingency plan ensures corrective action in case the performance standards are not met. Depending on the identified problem, the company might need to invest more in marketing or quality control.

Reference List

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Cheung, C. (2021). Hidden Hong Kong: A history of local Hong Kong dairy farms. Web.

Christina, I. D., Fenni, F. and Roselina, D. (2019) ‘Digital marketing: Strategy in promoting product’ Management and Entrepreneurship: Trends of Development, 4(10), pp. 58-66.

Feil, A. A. et al. (2020) ‘Sustainability in the dairy industry: A systematic literature review’ Environmental Science and Pollution Research, 27(27), pp. 33527-33542.

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Hong Kong Association for the Study of Obesity. (2022) About Hong Kong Association for the Study of Obesity (HKASO). Web.

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Kowloon Dairy. (2022b) Our milk. Web.

Kowloon Dairy. (2022c) Our story. Web.

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Sharma, A. K., Lourembam, B. and Bisht, B. (2020) ‘New approach to plant-based milk alternatives – A review’ Indian Journal of Pure & Applied Biosciences, 8(3), pp. 130-133.

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