Power Root

Per’l Choco

Research Report

Context

Company profile 3

Introduction 4

Market 5

Power Root Per’l Choco as brand 7

Consumer and audiences 12

Media and communication 18

Advertising context 21

SWOT analysis 23

Recommendation 25

References 26

Company Profile

POWER ROOT (M) SDN. BHD.

Established 1999

Specialized Areas: herbal energy drinks, coffee, chocolate drink, cereal drink, tea. (in instant 3 in 1 packets beverage and can drinks)

POWER ROOT (M) SDN. BHD. was founded on 23 July 1999 in Johor Bahru, Johor. It is a company to develop and promote herbal energy drinks fortified with two main rainforest herbs which are Eurycoma Longifolla or commonly known as “Tongkat Ali” and Labisla Pumilia and Pathoina or “Kacip Fatimah”. These herbs are indigenous to Malaysia and its properties for promoting physical well. The company has invested heavily in research and development of these traditional herbs to create its own brand of products to compete in the international market. Power Root with its own operational objectives “Quality, Innovation, Sharing” expanded in Malaysia and Malaysians started to take notice of this company and as a brand of botanical energy drinks.

The company expanded very quickly and in March 2001, Power Root established a branch company in Kuala Lumpur to expand their business in the city of Malaysia. Power Root establish the company in Kuala Lumpur with the aim to better coordinate its logistic and serve its customers more affectively. In 2003, Power Root has started its own manufacturing plant in Johor Bahru after having a good response from the consumers. The company set up its second manufacturing plant in 2005, and at the same time, to meet growing demands from the market, the brand has also expanded its marketing arm in Kuala Lumpur. Power Root is a company which concentrated more efforts in research and development to develop new and improve the existing products.

Introduction

Instant beverage has become a must in every each of the household nowadays. It is easy to consume and most importantly, fast to prepare. In the new era especially due to the consumers’ impact lifestyle, instant beverage has become a general habit for them. There are lots of instant beverages’ choices to fulfill consumer’s demand and wants especially when the changes of habit are making new trend and people would found the easiest solutions to meet their daily demands. Therefore, there goes the same thing to the manufacturer and companies try hard to meet the demand of this habitual change in order to compete in the market. Power Root is one of the companies which have been making products people are demanding in this lifestyle. Power Root which is a company where focus on beverage products such as instant beverage and can drinks. Their specialty and which make them different from other product is herbal beverage. Targeting on those consumers who are concern on their health especially in the busy city, Power Root has slowly successful open their market in Malaysia. Power Root is well aware of the competition but it needs more promotions and advertises to challenge growing number of market products in its specializing areas which can also helps the consumers to trust and have more faith on this brand.

MARKET

Overall market analysis

Instant drink had became an important drink in the daily life of people, even from the different stage of ages, in Malaysia instant drink had became a big role in Malaysian daily life, there are different kind of brand and drink in the market, the customer had lot of choices to choose, so as usual the new brand are difficult to came in to this market, because the market had been control under the big brand, they already had their strong position in the market and the consumer trust them, they had directly and indirectly controlling the market.

In Malaysia market, Nestle is one of the famous brands in the food production market; their instant drink such as Milo, Milo is slightly became not just a brand but is a general name for all the chocolate instant drink in the market, when the consumer want to mention that they just drink a chocolate instant drink they won’t said its brand but they will said it as Milo, even the children when they see the chocolate instant drink they will just said it as Milo even though it is not, the Milo had became important in our daily life, Milo had build the image that they are necessary in our life.

So as can see that Nestle had enjoying a big good position in the market, but the market is not just controlling the whole market, beside Nestle there are also other instant milk that in the market that are divide up the market such as the Olvatine and Vico, this two brand is also one of the big and famous brand in Malaysia, they all had their strong and big position in the market, these brands are directly and indirectly controlling the market, they controlling the market by not just providing and making good quality product, but they also had good advertising in the media, making a good image to the public and get thing the trust from the consumer , promotion skill are also another way to helping them to get strong position in the market, because good promoting skill can attract more costumer to buy their product.

So as the big brand had directly and indirectly controlling the market, the small and new brand that wants to had a position in the market are very difficult unless they can provide good quality product, good advertising and promoting skill to convinces the consumers to change their mind.

Market share and segmentation

Although Milo had monopoly the instant drink in the market for many years in Malaysia but yet it is hard to know the market share that had been monopoly by Milo, for the other brand is also the same, all we had is the information from the research that we had done by visiting the shop and some of the internet but it is very limited.

In the market Milo is still the most well known brand and be the first choice to most of the people , Nestle had a strong and steady position in the Malaysia market; in the year of 2007 it had a sale of almost 3.4 billion and yet Nestle expecting there will be a grow in this year. The other competitor such as the Ovaltine and Vico, they are also diving the large part of the share of the market.

As for the new brand Power Root, it facing a large competitor but yet the Power Root is still growing and getting it position stronger in the market, in the year of 2006 the Power Root had increase it revenue to 98Milion comparing to the revenue at 2005.

As can see that the Power Root is having a very small market share of the market but it had the space to improve and the consumer is starting to welcoming the new brand to the market.

Power Root instant drink as a brand

Features of the brand

Power Root, which is a very new brand in the market, it start to appear in the market at 1999, it had existing the market for only nine year, and it brand is not famous as the Nestle, Ovaltine or Vico to many the Malaysian, the Power Root had many different kind of instant drink such as: Power Root – Ali Café Tongkat Ali, Per’l Choco , Per’l Café, Oligo Café , Oligo Cereal and Oligo Choco.

Although Power Root is new in the Malaysia Market comparing to the other brand in the market, but Power Root had the potential and opportunity to have a good position on the Market, and all of this are related to their brand’s feature in order to improve their position in the market.

Direct and Indirect competition in the market

The Milo from Nestle brand is the most challenging competitor to Power Root. This product had a very strong position in the market; after we survey and research in on this two we had this kind of result.

Above are the two factors that we had experienced in the hypermarket and shops:

- Most of the people will choose Milo without question or look in through it.

- Most of the people will choose Milo as their first choose and the other is Ovaltine and Vico.

- Most of the people know Power Root they prefer to buy as Milo, because they know Milo batter then Power Root.

- People know Power Root but very less people know Power Root – Per’l Choco

The Power Root biggest competitor Milo from the Nestle brand had done a lot of effort to keep its position in the market, every time when they had a new product they must had a promoter to promote the product in every hypermarket or super market, they also do a lot of sponsorship no matter in the small or big sport event, this is a good advertising strategy because it will make more people to remember their product. They also had done a lot of advertising in most of the big media such as the television and the press.

[pic] [pic]

(Power Root biggest competitor Milo, Ovaltine, Vico and Holick)(Figure 1)

But for the Power Root it is weak in the terms of display in the rack in the hypermarket, comparing to it most biggest competitors Nestle they had a large and more space for display on the rack, this will more attract the consumer but Power Root had very few space to display the consumer will hardly look at it, although Power Root had not just one competitor, it had other competitor such as the Ovaltine, Vico and Hoclick they all had a good position in the market. In the (figure 1) it can see that Milo and other brand of instant drink had much place in the rack for display. And yet there is an advertisement beside their product to attract the costumer.

But for the Power Root is weaker compare to the Milo, in the term of place of display that it had in the rack is far more fewer than the other brand as you can see that in figure 2, in the term by promoting Power had make big afford because they had promoter that promoting their product once in a time, not like the Milo just in the time while they had a new product, but power didn’t do any of the sponsorship at least not for the big event like the Milo do, and Power also had their advertisement in the media but yet it is lot more fewer comparing to the Milo.

[pic]

(Power Root just had a few place on the rack for display comparing to other brands)(Figure 2)

Brand characteristics

| | | | |
| |Nestle – Milo 3 in 1 |Ovaltine – 3 in 1 |Power Root – Per’l Choco |
| | | | |
|Price |RM 10.99 |RM 11.20 |RM 11.90 |
| | | | |
|Size |15 x 30g. |12 x 20g |12 x 20g |
| | | | |
|Packaging |20 stick per packet |6 stick per package |15stick per package |
| | | | |
|Taste |Chocolate |Chocolate |Chocolate |
| | | | |
|Ingredient | | |Sugar, Non Dairy Creamer, Cocoa,|
| |Sugar, skimmed milk powder, malt|Malt Extract, Sugar, Cocoa, |Skimmed Milk Powder, Instant |
| |extract, maltodextrin, cocoa, |Nonfat Milk. |Kacip Fatimah Extract, Matrix |
| |minerals and vitamins. | |Collagen, Salt, Permitted Food |
| | | |Conditioner |
| | | | |
|Expiry |1 year |8 month |1 year |

In the comparison that had been make above in the chart, it show that the Power Root – Per’l café is the most expensive comparing to the other brand but it’s worth it, comparing the ingredient it is the most exuberance, all the ingredient that in the drink is good to our health, in other brand they don’t had this kind of ingredient in their drink. And the other is quite the same. Among the research why the consumer still not to choose Power Root because is the brand, even Power Root had the most exuberance ingredient but the consumer still not trusted it just of it is a new brand, but for the other brand they had more longer history and this make the consumer more trusted to their product. So this is why Power Root is lower than the other brand even it is batter then other.

Quantitative Research

A research about how much the consumers know about Power Root as a beverage brand in Malaysia and also their beverage consuming habits. The research carried out using a survey form of 6 simple questions and a total of 10 target consumers from different age groups. Different age groups of consumers seem to have different opinions and choices on their beverage consuming habits. As our product targeting on women consumers, this research too, base on 10 females from different ages. The research actually bases on 3 aspects which are the amount of chocolate milk consuming; the awareness among the consumers about Power Root brand; and lastly the demand and opinions about chocolate milk.

As for younger consumers like teenagers and college students, they preferred milks and fruit juices as their daily consume of beverage. And most of them do drink chocolate milk even though not everyday they consume but very often as in 3 days once and some even are daily consumers of chocolate milk. While on the other hand, the older consumer where categorized in the age group of senior citizens, working women and also housewives, most of them prefer coffee and cereal drink. According to them, they only drink chocolate milk once in a while when they feel like changing taste on their daily beverage consuming.

As for the second aspect of the research which is awareness of the brand, most of the 10 consumers in the research are not highly aware about the brand, Power Root. To their knowledge, they do not know that Power Root has a chocolate milk beverage, to them, they only knew that Power Root produce coffee drink, which is the Tongkat Ali Café (another product of Power Root). Out of 10, 6 of them choose Nestle Milo as their choice of chocolate milk and 3 of them prefer Marigold HL chocolate milk and one choose Vico chocolate drink.

Third aspect which is the demand and opinions about chocolate milk among them, it is clear that all of them are concern more on the taste. Besides that, some older generations like housewives and senior citizens, they also concern about the brand and price of the beverage. According to them, they would actually prefer to stick the old brand after they thought it satisfied them enough after consumed. Younger consumers on the other hand prefer can drink and box drink comparing to the older consumers where they preferred instant 3 in 1 chocolate powder as hot drinks.

In my conclusion, chocolate milk is a product that is still popular among the consumers, where most of the people do drink chocolate milk. The only problem that Power Root had is where their consumers and also the public are less aware on their products. The public knew Power Root brand through their better known product ‘Tongkat Ali Café’ compare to ‘Per’l Choco Drink. Besides that, it is very important that Power Root think of a better strategy to build its consumers’ faith for their product since, most of the consumers prefer to consume the more established brand like Nestle and F&N Marigold.

F&B SURVEY

PRODUCT: POWER ROOT PER’L CHOCOLATE

Name:

Age:

Occupation:

Gender:

1. What type of beverage you used to drink/consume daily?

[pic] milk

(chocolate milk, full cream milk, low-fat milk etc)

[pic] cereal drink

[pic] coffee

[pic] fruit juices

[pic] tea

[pic] others

please mention: _________________________

2. How often do you used to drink chocolate milk?

[pic]everyday

[pic]3 days once

[pic]one week once

[pic]once in a while (depends)

[pic]I don’t drink at all

3. What beverage of Power Root you ever consumed/heard before?

[pic]Power Root Peri Chocolate

[pic]Oligo Cereal Drink

[pic]Per’l Café

[pic]Tongkat Ali Coffee

[pic]others

please mention: _________________________

4. What brand of chocolate milk you use to consume?

[pic] Power Root Peri Chocolate

[pic] Nestle Milo

[pic] F&N Marigold HL Chocolate Milk

[pic] Vico

[pic] Ovaltine

[pic]others

please mention: _________________________

5. What packaging/types of chocolate milk you prefer?

[pic]Instant 3 in 1 chocolate powder

[pic]Can drink

[pic]Box drink

[pic]Bottle

6. Which aspects you considered more when choosing the chocolate milk?

[pic]packaging

[pic]taste

[pic]price

[pic]brand

7. Please state down if you have any other comments or ideas about chocolate milk.

____________________________________________________________
____________________________________________________________
____________

Qualitative Research

[pic] [pic]

In the qualitative research, a cup of Power Root Per’l Choco instant drink was prepared for each taster. The research carried out on 5 female tasters in different age groups such as teenager, younger adults, adult and senior citizen and after they taste the drink, they were asked to fill in this form:

FOOD TASTING SURVEY

PRODUCT: POWER ROOT PERI CHOCOLATE

Name:

Age:

Occupation:

Gender:

Email:

Please fill in this form after tasted the chocolate milk.

1. Overall Taste

[pic] Excellent [pic] Good [pic] Satisfied [pic] Not Satisfied [pic] Bad

2. Would you like to purchase this brand of chocolate milk again?

[pic] Yes [pic] Most Probably [pic] No

3. Would you recommend this product to other people as well?

[pic] Yes [pic] Most Probably [pic] No

4. Other Comments: ____________________________________________________________
_____________________________________

Overall taste of the product for them is in the category of good and satisfied. From the survey, they said the taste is not much different from other chocolate milk drink. But overall all of them have different opinion when they were told that this chocolate drink consists of unique ingredients where it is beneficial to health for everyone, the naturally derived ingredients help to improve their maintain their health.

After the research, a conclusion of younger consumers which are mostly college students said that they would most probably purchase the brand again and would most probably introduce this brand to others since the taste is almost the same like other brand of chocolate milk and since it consists of special ingredients to benefit the health, they would love to give it a try on this new product. As for older consumers which are housewife and senior citizens, they would prefer to stick to their old brand of chocolate milk and seems to have lesser faith to the brand comparing to the younger consumers.

Media and communication

Existing media strategies for Power Root Brand

To build the image and let consumer recognize the brand, media is an important tools to achieve it. In terms of media strategies in its target market, Power Root chooses the unique media mix to reach its target audience and meet the media objectives. The media strategies used by Power Root will be discussed as below including the combination of reach and frequency, target audience strategies and media mix selection.

1. Mix of High-Reach & High-Frequency Strategies

The media strategy adopted by Power Root is high-reach & low-frequency mix. They aim at delivering message to the right level of exposure in terms of reach and frequency on the media objectives. Based on the research, Power Root always adopts high-reach and low-frequency strategies.

With reference to high reach side of the strategy, it aims to deliver a persuasion message for such a well-known mass-marketed brand by using local celebrity. Through the popular of celebrity, it easily gets the sight from consumer and recommend Power Root’s product to them. Furthermore, as a well-established local food producer in Malaysia, it also has networks of distribution covering as UAE and Middle Eastern Market.

With reference to the measure of frequency, the use of such high-frequency strategies because Power Root wants to build excitement about it’s constantly launched new products and upcoming events on television channels. For example, Power Root cooperate with TV3 a television program ‘Karnival JomHebah’ and they have new products advertisement on television channels in 2007.

2. Evening News Time Slot as Target Audience Strategies

Due to the factor of market saturation in Malaysia market, Power Root’s main focus is advertising. Based on research, it found out that the slot of the evening news which the period from 7pm to 9pm on television is their main target because it can reach a broad mass-market audience. Since its instant drink products, for instance, chocolate milk are daily necessities, its target audience is obviously household keepers, including both men and women. It is the most effective way to reach the target audiences with understanding Power Root at the right time in the right place.

3. Media Mix Consideration

For the different religion and culture of Malaysia, Power Root has to choose different media to the message to audiences, such as newspaper, television channels, radio and others. Different media has different circulation and audiences. For Power Root, it mainly adopts above-the-line media, represented by TV and blow-the-line media, taking the form of competition distributed in such contact points as shopping outlets to communicate to their target audience their events.

Existing media strategies for its competitors

1. Mix of High-Reach & Low-Frequency Strategies

Undoubtedly, Milo is one of the most famous chocolate milk drink brands in Malaysia. As well-known mass-marketed brands, it is primarily focused on high-reach strategy. It is important to point out that owing to the constant launch of new products, which are all fairly easy-to-understand product extensions under the brand of Milo in recent years, high-reach strategy is a workable choice. With reference to the measure of frequency, in stark contrast with Power Root, the use of such low-frequency strategies because Milo already built a prominent position in the market. It is unnecessary keep bombing consumer through complicated message. They aim at reminder message for the mass-marketed brands.

2. Evening News Time Slot as Target Audience Strategies

Milo is well established in its major market and consumers are always familiar with the brand. Hence, Milo no needs to spend huge sums of budget just for the prime-time TV time and prominent space in print media. It is shown that Milo mainly uses evening time to remind its consumers by public service announcement during some specific feast, Hari Raya and Malaysia Independence Day. Furthermore, the new product advertisement of Milo also can watch in evening news time on the television channels. It is the effective to inform consumer that there is new product of Milo.

3. Media Mix Consideration

Generally speaking, print and television, are the prime vehicles through which Milo messages are conveyed. Owing to the trustworthiness created by the above two media, taking advantage of them helps establish credibility for Milo. It is worth to mention that in Maggie’s case, it uses television to build reach and radio to build frequency. At the same time, it also uses brochures and pamphlets to sustain its name in the market.

Advertising context

The main competitor of Power Root is the Milo in the instant chocolate milk drink market. Similarity in product range and methods of distribution puts the two players in an extremely competitive situation.

• Existing advertising strategies for Power Root

Advertising Objective of Power Root

❖ Create conviction, belief. Power Root’s advertising in the healthy setting, which in the sense of care and warmth. It aims at personal’s helper and brings the message of pleasure and intimacy of brands and consumer.

❖ Stimulate desire, brand preference, intent to buy. From the packaging, tagline and advertising, Power Root always emphasizes their unique local medical to attract the sight of consumer.

❖ Sponsorship. Through sponsors the sports activities, it creates positive image and awareness of brands.

❖ Spokespersons. Through the local celebrity, it easily convinces to consumer the product of Power Root. During the advertising campaign, celebrity can get sight of new user and make them recognize the brand.

❖ Remind of brand. Repeating the message of Power Root to consumer and persuade them to repurchases the product.

• Existing advertising strategies for its competitors

Advertising Objective of Milo

❖ Create conviction, belief. The advertising by Milo is designed to tell the target audience that Milo is the best choice for the young, even whole family. They always emphasizes that Milo is full of nutrition and good for growing up.

❖ Stimulate desire, brand preference, intent to buy. From the packaging, advertising and tagline, it always emphasizes Milo is fit, energy, young, growing up and intent to success in life. It let consumer feel the positive image of Milo brands. Touch of emotion is the powerful key to persuasive consumer to purchases Milo.

❖ Remind of brand. Repeating the message to remind consumer by media tools, especially public service announcement on special feast. It make consumer feel that Milo always beside them.

❖ Sponsorship. Milo always sponsors grass root sports and athletic activities, especially the school sports. It can create awareness, enhance the active and energy image of Milo, and empower the credibility of Milo advertising.

SWOT analysis

However the strategies existed in the market for long time, Power Root has win its brand name as a producer of healthy drink need to expose much higher than now. Due to the intense competition among instant drink producers in Malaysia, Power Root has to understand themselves to improve. It is no doubt that any market and consumer behavior changed to affect Power Root. To develop a complete strategy in the future, it is necessary to analyze the strengths, weakness, opportunity and threats of Power Root brands.

Strengths

Power Root has been working to provide the high quality and mix herbal energy instant drinks from the first day of its operation. So far Power Root has successfully convinced people of its brand name in other products by its unique herbal ingredients. Furthermore, it has its own laboratories and trained workers to develop any new ingredients and immediate improvement to the instant drink of Power Root. Moreover, Power Root’s instant drink has acquired the certification issued by prestigious GMP, and HACCP. It easily convince consumer to purchases their product.

Weakness

Compare with other competitors, Power Root is a new brand in the instant drink market. It is only 9 years in the market for Power Root’s product. The time is too short to let Power Root to build an impression image for consumer and also let all Malaysian recognize Power Root brand. For the main competitor, Nestle Milo, it builds the images of healthy, young and fit, energy and it is a necessary drink of our daily lives. The strong impression let consumer has the first idea of the brand of chocolate milk is Nestle Milo.

Opportunity

Due to the strong demand of instant drink, the instant drink market is keep expanding. Consumer needs different and many choices to get their favorite one. Power Root has, same opportunities as other brands to grab part of instant drink market. However Power Root Peri Chocolate is not famous as Nestle Milo it has same opportunities as others. Power Root is well known as the unique local ingredients ‘Kacip Fatimah’ and it will make many opportunities in local community who love the ‘Kacip Fatimah’.

Threats

The main threats are come from few strong competitors, Milo and others foreign brands such as Vico and Ovaltine. They have better financial than Power Root, at least in this movement. This means they will keep improve its quality by empower research and development. Furthermore, they will develop many kinds of campaign, sponsorships and promotion to improve its brand name. So any campaign of Power Root to increase its sales in the market will be met counter promotion strategies of other brands.

Recommendations

Power Root –Per’l Choco had it potion to improve it brand in the market as to get more strong position while facing their strong competitor, as show in the research above before, Power Root had it strategy on advertising and promoting, but this is no enough to promoting to the new brand to the consumer, as a suggestion, through a new campaign Power Root are able to change the public mind.

We have some suggestion for improve its position in the current instant chocolate milk drink. Such as advertise in the main media for example like the television even through Power Root had did some advertising in the television but it very few, it should had more and can choose in the peak hour, the press, radio and internet is also another good media to advertise this will help them to more connect to different stage of age among the consumer and increase their position in the market.

Through the research project, it has stated out the weakness of the brand base and the space that it can improve, so base on the suggestion it hope that Power Root can increase their name among the consumer and gating a stronger position in the market.

References

Nestle(Malaysia) Berhad– Company Profile Snapshot (2008) retrieved on 6 April 2008 from: http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_C45825550

Power Root, (2007) retrieved on 5 April 2008 from: http://www.powerroot.com.my/image/perl_choco_eng.jpg

Power Root, (2007) retrieved on 5 April 2008 from:

http://www.powerroot.com.my/

Tastes good, smells good, (2007) retrieved on 5 April 2008 from: http://www.khaleejtimes.com/malaysia/mt_eco_cnt5.html

T.Sabry 21 April (2007) power drinks take root retrieved on 5 April 2008 from: http://thestar.com.my/news/story.asp?file=/2007/4/21/bizweek/17480666&sec=bizweek