Category Analysis of Sports and Energy Drinks In Hong Kong
Category Analysis of Sports and Energy Drinks in Hong Kong
Introduction
Our company, Otsuka Pharmaceutical Co., Ltd, is planning for a product strategy to its product: Pocari Sweat. Pocari Sweat is a grapefruit-tasting, non-carbonated sweet beverage and is advertised as an “ion supply drink”. It is designed to increase endurance, replace electrolyte loss or prevent dehydration when exercising for long periods of time.
Pocari Sweat is well-recognized by the local people, especially to the athletes.
Category Attractiveness Analysis
Category Factor
The product category we defined is the Sports and Energy Drinks.
We gained the first mover advantage when the product was launched at 1980, which we are the market leader which has a off-trade volume of brand share of 43.8% in 2012 (see Appendix Table 6).
The threat of new entrants in this category is low due to the intensive competition, and there is low pressure from substitutes as sports and energy drinks are specialized products. The bargaining power of suppliers is low while the bargaining power of buyers is high. The competition in current market is highly intensive. Details can be referred to the analysis on Category Factors on Attractiveness in Appendix.
Overall, this category is still attractive.
Aggregate Factor
The product life cycle of Sports and Energy Drinks is more likely in mature stage.
From the historical figures of whole beverage market, the market size of Sports and Energy Drinks is relatively small. The market growth of off-trade sales volume of this category is increasing constantly by 5.4% from 2007 to 2012. It will grow constantly in the future by 5% of each year.
Since Sports and Energy Drinks are daily commodities for those people after exercising, the sales cyclicity and seasonality is low, as well as the profit variability. Profit level of the market is high.
Overall, this category is attractive.
Environmental Factor
Due to the rise of childhood obesity and the increasing number of
Introduction
Our company, Otsuka Pharmaceutical Co., Ltd, is planning for a product strategy to its product: Pocari Sweat. Pocari Sweat is a grapefruit-tasting, non-carbonated sweet beverage and is advertised as an “ion supply drink”. It is designed to increase endurance, replace electrolyte loss or prevent dehydration when exercising for long periods of time.
Pocari Sweat is well-recognized by the local people, especially to the athletes.
Category Attractiveness Analysis
Category Factor
The product category we defined is the Sports and Energy Drinks.
We gained the first mover advantage when the product was launched at 1980, which we are the market leader which has a off-trade volume of brand share of 43.8% in 2012 (see Appendix Table 6).
The threat of new entrants in this category is low due to the intensive competition, and there is low pressure from substitutes as sports and energy drinks are specialized products. The bargaining power of suppliers is low while the bargaining power of buyers is high. The competition in current market is highly intensive. Details can be referred to the analysis on Category Factors on Attractiveness in Appendix.
Overall, this category is still attractive.
Aggregate Factor
The product life cycle of Sports and Energy Drinks is more likely in mature stage.
From the historical figures of whole beverage market, the market size of Sports and Energy Drinks is relatively small. The market growth of off-trade sales volume of this category is increasing constantly by 5.4% from 2007 to 2012. It will grow constantly in the future by 5% of each year.
Since Sports and Energy Drinks are daily commodities for those people after exercising, the sales cyclicity and seasonality is low, as well as the profit variability. Profit level of the market is high.
Overall, this category is attractive.
Environmental Factor
Due to the rise of childhood obesity and the increasing number of