Vitasoy International Holding Ltd.

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Korean is high context with fast diffusion. People from the high context culture would have higher perceived degree to the difference of the advertising. Therefore, the content and the wording should be localized to cater to Korean. Company can use more tone of voice, facial expressions, gestures and posture to greater use of non-verbal messages.

Technological considerations refer the ability to collect the data on markets and the operational applicability of the electronic communication. The internet has become the global communication and the range for the business relationship. Using internet as the business medium, sellers can link with buyers at any conditions. For examples, Vitasoy can sell the soya bean milk on the internet like G-Market which is a Korean online shopping website. Consumers can buy the products directly. On the other hand, Vitasoy can procure the raw materials in Korea like soya beans while it can reduce the transport cost of production.

The strength of Vitasoy is that there are many flavors with delicate packaging which highly draw customers’ attention. Vitasoy is made of purely natural ingredients. It can be kept for months without refrigeration because of the Tetra Pak packaging technology. Also, there is accurate brand positioning and advertising. Image of warm and joyful infect many people to buy Vitasoy. However, the weakness of Vitasoy is small targeted consumers. According to the advertising of Vitasoy, Vitasoy become the signature drink among teenagers. Vitasoy low sugar soybean milk would be the opportunity to the Vitasoy. It is because the life style of people has become healthier. Low sugar Vitasoy would attract the people who chasing healthy life style. Shortage of non-transgenic soybean is the threat of Vitasoy. Also, people might choose other type of drink like orange juice apart from soya bean milk.

Market research of Korean market

First, the accessibility of Vitasoy depends on whether it can get through without having to handle the corruption, tariff barriers or many government regulations. China is the largest trading partner with Korea while Korea had 46.9% imports from China (2012 est.). Korea also is the major trading partner with Hong Kong. Besides, Hong Kong and Korea Customs has agreed on closer co-operation and mutual recognition of Authorized Economic Operator programs. They signed an arrangement to mutually recognize the respective AEO programs. Under the agreement, the company which certified as "approved economic operators” can enjoy the benefit of clearance facilitation. For example, it will reduce the priority acceptance inspection or customs clearance when it imports and exports the good.

Second, we should consider the profitability. The elements of Korean financial market include exchange rates, currency regulations, distribution of the wealth and the state of the economy. The exchange rate of Won per US dollars is slightly movement. It remains at $1,100 to $1,300. The distribution of family income which is Gini index is 41.9 at 2011. The state of the economy is recovering because of the sinking of the MV Sewol. The economy of South Korea was affected by this accident.

The market size of South Korea is large. There are 50 million populations in Korea. The demand of drinks in Korea is large.

Vitasoy need to process chance on a scale of attractiveness. According to Business Portfolio Matrix (Harrell, 1993), there are three kinds of combinations. Primary opportunity is the best chance for long term strategy development. A permanent local presence and investment in further research and testing should be considered. Then, there are potential markets with some political or economic risks. Third opportunity is involving high risk locations. The competition must exist in this situation. One of the popular banana milk, Binggrae has great brand awareness and market share. Both Korean and Hong Kong people are familiar with this banana milk. It have 40 year of popularity in Korea. And it is the no.1 selling items of banana flavored milk in Korea.

Recommendation

Ansoff matrix (Ansoff, 1957) is the entry strategy for Vitasoy to enter Korean market. Vitasoy is suggested to use trading company as the entry of Korea. Trading company is mainly referred to global B2B trader which is highly specialized in the one goods category and strong logistic organization like distribution and delivery. The importer would maintain a stock and carry the products to shop or large end customers. In the short term goal, Vitasoy should use market penetration which the product remain unchanged but increase the sale in the existing market. Vitasoy might use sale promotion to raise the attention of the public in order to increase the brand awareness in Korea. Korean would be attracted by the lower price of soybean milk. They will be more willing to try the new product. In the medium term goal, Vitasoy should create the marketing development. The product still remains unchanged but a new market has developed. For example, there is unique formulation of soya bean milk for the kids. It can increase the market share of Vitasoy. Furthermore, product development would be the long term goal. Vitasoy should produce new product which is localized for Korean in order to satisfy most of the Korean needs. It would create value to Vitasoy.

Conclusion

If Vitasoy wants to enter the new market, South Korea, it needs to consider numerous aspects both internal and external. After this analysis of the market environment, Vitasoy is potentially to enter South Korean market as the second expansion of industry in Asia.

Reference

Ansoff, H. (1957) Strategies for diversification, Harvard Business Review, 25 (5), 113-125

Doole, I. and Lowe, R. (2012) International Marketing Strategy: Analysis, Development and Implementation, 5th Edition, London: South-Western Cengage Learning, Chapter1

Douglas, S.P. and Craig, C.S. (1995) Global Marketing Strategy, New York: McGraw Hill

Drummond, G., Ensor, J. and Ashford, R. (2003) Strategic Marketing: Planning and Control, 2nd edition, Butterworth-Heinemann

Harrell, G.D. and Keifer, R.D. (1993) ‘Multinational market portfolio in global strategy development’, International