The battle of Fruit juice heats up

May 2008

In this hot season, almost ten new products from fruit-juice manufacturers have been launched into the market, among them are Tipco Cool Fit, San Miquel Mocktail, HAP and Malee Juice Mix Cool Max.

Since early April, most fruit-juice firms have set aside marketing budgets worth 300 millions baht to launch new campaigns, products and packages. Three newcomers have also announced they are entering the arena.
The 7-billion baht fruit juice market, tough competition is expected among new players while veteran manufacturers are expected to fight for market share.
In this hot season, almost ten new products from fruit-juice manufacturers have been launched into the market, among them are Tipco Cool Fit, San Miquel Mocktail, HAP and Malee Juice Mix Cool Max.San Miguel (Thailand), a giant from the Philippines, is launching a new fruit "mocktail" called "Oops! Mocktail". It categorizes the brand as a middle-end fruit-juice product, being 15-per-cent fruit based. It will introduce four flavors: Blue Angel, Nave Green, Orange Killer and Poison Rose. The company will invest 70 millions baht to build awareness among customers aged 13 to 25 in its first year of launch. San Miguel aims to capture a 5 to 10-per-cent market share in the middle range market, which is worth 450 millions baht.
TAC Beverage, a player in the green tea market with its “Zenya” brand, has launched a 20-per-cent fruit juice called HAP, which targets teenagers. TAC has allocated 20 millions baht to market its HAP in the first year.
Launching the brand is not only a strategic play to tap health-conscious consumers but also to maintain a strong sustainable youth market. TC Pharmaceutical Industry, a major player in youth market selling “Red Bull” energy drinks and “Puriku” white tea, will be launching a 15-per-cent orange juice drink called Fit For Fun at 15 baht a bottle. The firm has imported machines from Germany to make the drink.
With the new competition, old players will need to work hard to keep away rivals. Some players are trying to use a more creative approach. Malee Drink is launching Malee Juice Mix Cool Max as a cooling drink that uses fruit juices. The brand has a 15-per-cent fruit blend and carries three flavors, Cooling Red, Cooling Blue and Cooling Orange. It also target customers aged 15 to 25. Malee has a marketing and advertising budget of 60 millions baht. It is seeking to capture 11 percent of the market or 1.3 billions baht in sales.
Tipco Foods (Thailand), the big fruit-juice brand will launch Tipco Cool Fit, which has less than 25-per-cent fruit juice content, starting with a lemon flavor drink. Its 30-million baht will spend on advertising and another 20-million baht marketing budget will target convenient store and shops.
Pepsi-Cola (Thailand) Trading will also launch a new drink with returnable bottles for its lower-than-25-per cent orange juice called Twister. Pepsi will sell Twister at 10 baht per bottle in a move to stimulate buying. It will also use a new advertising campaign called Perfect Balance, which focuses on balancing sour with sweet products. Its ad campaign will cost 40 millions baht. Pepsi's marketing director said the firm was already a major player in orange juice after entering the market two years ago. It aims to expand its market share by using distribution of Pepsi to compete against Splash, an orange juice which is backed by Coke.

Special Report: The Local Hero

April 2008

Today, the value of facial-care market in Thailand is 2,742 million baht, dominated by facial foam 95% and the rest is tonner 5%. The main segments in this market are whitening 27.1% and scrub 13.3%. The biggest share in this market belongs to Pond’s - the no.1 global facial-care brand of Unilever 39.8%. However, the second share is 18% belongs to “Smooth E” – the local brand, and followed by Nevea – the big global skincare brand, who gains 12% share and Garnier with 6% share.

The second position of Smooth E among global brands in facial-care market came from 2 outstanding campaigns; Facial Foam “Love Story” and Facial Foam Scrub “Teen Problems”, but before we discuss about these 2 campaigns, let review a strategy of Pond’s in Thai market.

Global Brand Global Strategy

“One of the most significant marketing challenges we now face is striking the right balance between the global idea and the extent to which it’s adapted to local markets,” said a Global Chief Marketing Executive (CMO) of Unilever. “We always knew that consumers were different, but we just choose to treat them the same,” said CMO.
According to Nielsen Media Research, Pond’s Facial-Skincare product was the No.1 brand in Ad spending, for the last year, Pond’s spent in both facial and skin care almost 877 million baht.


Pond’s advertising strategy always uses the superstar as its presenter and broadcasts with a heavy weight media budget.

Up to now, Pond’s always use a Global platform strategy that determining best combination of global and local activities for competitive advantage. In term of TV advertising, Pond’s also has a platform of 1-2-3 or Problem – Solution (Pond’s) – End result. And in most regional campaign, Pond’s used the same story but different talent which usually a superstar of each country.

Local Brand Strikes Back

After entered the market for 7 years and used the follower strategy with the same pattern of facial-skin care advertising which was 1-2-3 and superstar, Smooth E still followed 3-4 global brands in term of market share. Then in 2005 Smooth E decided to make a big change.

“Our brave client, Smooth E asked us to go after a younger target audience, yet still appeal to existing customers, but not using a celebrity,” Jureeporn Thaidumrong, the founder and executive creative director of Jeh United Thailand stated and then continued that she asked herself what do teenagers and young adults in Thailand have in common? and this subject should be more interesting and convincing than a superstar. And her answer was “Love” but it was not all, she added “Decades ago before DVDs, the classic Thai selling method was free outdoor cinema that sold a product during a show and we brought that back…”

As a result, they created “The Love Story” series of 4 episodes that not only sells but also pokes fun on conventional ‘Beauty’ commercials of most global brands. And the series were promoted as if they were a feature films; one week before launching date, they painted the town with the handbills and newspaper ads promoting the 4 episodes scheduled. And they also promoted the schedule of each episode with radio spots and newspaper ads. The episodes ran in prime time (8:30 pm) on the two most popular channels in Thailand every Friday, Saturday & Sunday from June 24 to August 14, 2005.


Smooth E Facial Foam “The Love Story Series” won Gold Cannes Lions in films and also won the heart of Thai female teenagers. The series composed with 4 episodes of 90 sec. TVC that not only sells but also pokes fun a conventional 'Beauty' commercials of global brands.

After its launch, “The Love Story” series hit the record of “No. 1 Top of mind advertising recall” within 2 weeks with only a 24 million baht media budget, or half of the budget of former No.1 ad recall. Moreover, Thai female teenagers and young adults asked for “The Love Story” series VCD from Smooth E and 250,000 gift sets of product + “The Love Story” VCD were produced. They sold out in 2 weeks.


In terms of brand awareness in the facial foam category, Pond’s had been the strongest player before Smooth E released “The Love Story” in July. The result showed that Smooth E became the winner while Pond’s moved down to the first runner-up and Biore came in third. (See the green line in figure)

After the launch, Smooth E’s sales rose dramatically by 153.33%, the highest sales in its history, and they continued to rise throughout the campaign.
“The Love Story” changed the face of cosmetic advertising in Thailand. Many global brands such as Unilever and P&G were conducting research on Smooth E "Love Story" as a case study.

The Strike Back Continues

Last year, while facial care especially whitening segment was saturated with so many products and consumer confidence was low from politic uncertainty, the scrub segment was encouraged by a big campaign from Smooth E Scrub “Teen problems” under the strategy as follows:

Challenge
During the downturn, Smooth E wants to create a good mood for Thai consumers and at the same time introduce a new facial-foam scrub into the market who leaded by Pond’s and other global brands.

Solutions
Enhance Brand positioning by being a solution of both consumers’ life and facial care problems.
Create an idol of Smooth E, “Big sister - Aoi”, as consumers’ sister. Deliver a key message through a sit-com of 7 episodes with trailer that speaks to the heart of teenagers, while at the same time keeps poking fun at the conventions of standard ‘Beauty’ commercials of global brands.

The Executions


The Smooth E Scrub “Teen Problems” Campaign 2007 composes with; 1 x30 sec. Trailer of 7 episodes and 7 x45 sec. TVCs; Foam, Brand X, Daddy, Materialism, Boring Face, Everyday Use, Again and Again.

Results


During the launch, all 7 episodes were voted by consumers to be Top 10 TVCs reported by Adintrend.com June 25, 2007

• After the campaign launched, Smooth E Sales boosted up over 200%, salesperson reported that at 7-11 convenient store which is the main channel of distribution, had the orders come in daily instead of weekly or monthly as before the campaign ran.
• Consumers love them and request for a new episode, and even create some new stories and posted in consumer webboards.
• Again, “Teen Problems” campaign created “Talk of the town” effect and challenged the pattern of cosmetic advertising in Thailand.

The Local Hero

After these 2 outstanding campaigns, among all global brands in facial-care category, Smooth E is the only local brand that now moves up to No.2 and continues gaining more and more share everyday. The results indicate that Smooth E benefits from its higher consumer awareness than global brands do. And Smooth E enjoys a strong image of rebellion and anti-conventional global brands. In addition, it benefits more not only from customer perceptions of quality but also from perceptions of better familiarity and relationship than do global brands. However, as the global brands with much bigger budget, Pond’s and Nevea may still use their superstar strategy with their huge media budget instead of reviewing the effectiveness of their campaigns. As a result, Smooth E, in Thai consumers’ eyes, will have more clear positioning as The Local Hero with smaller budget who does the opposite and fights against Global Giants, in this scenario most consumers will cheer Smooth E and love to see it become No.1.

Higher rice prices help Thai economy

April 2008

As the world's largest rice supplier, Thailand is expected to export more than 8.75 million tonnes this year, followed by Vietnam, India, the United States and Pakistan.

So far, India has imposed a minimum export rice price of not lower than US$1000 (31,600 Baht) per tonne. Vietnam has issued an export ban due to a climate change problem. Egypt is the latest rice exporting country to suspend rice exports until October this year.
Unlike other rice exporting countries, Thailand will not face a rice shortage problem, thanks to a plentiful rice supply from three to four crops, compared to only one or two of others, said the Commerce Ministry of Thailand Secretary.
As the world's largest rice supplier, Thailand is expected to export more than 8.75 million tonnes this year, followed by Vietnam, India, the United States and Pakistan.
Though Thai consumers fear a rice supply shortage in the country caused by increasing demand in the global market, the Commerce Ministry of Thailand does not plan to raise control restrictions against exports but instead foresees that the high price environment will benefit all parties concerned.
Commerce secretary said that although consumers may shoulder higher rice prices, the price increase will benefit farmers and the overall economy. On average, consumers spend 5 baht for rice a day. Rising rice prices now should only slightly force up spending for rice to 6-7 baht a day, Secretary said.
Rice prices are predicted to climb above US$1,000 (31,594 Baht) per tonne. This presents Thailand with a new challenge. As a result, the government will closely monitor both supplies and exports to shield local consumers.
Commerce secretary suggested that rice exporters should take the opportunity to learn how to bargain for the best price. As the world's biggest rice exporting country, Thailand should create a "Rice Pool" as a cooperative measure for marketing and export. This would increase bargaining power. Currently, the market belongs to rice traders.
However, the overall economy will grow as farmers are the majority population of Thailand. Moreover, as the government has a stockpile of up to 2.1 million tonnes, the domestic market should not be affected by skyrocketing rice prices.
Asked about a pricing trend, Secretary is optimistic that rice prices should remain high and never turn low as in the past. "Inevitably, consumers may face higher rice prices because of high demand for the world's consumption. However, we should enjoy long-lasting benefits from higher rice prices as the major rice supplier," said Secretary. The world will continue to demand higher quantities of rice for consumption while rice plantation areas may be shifted to plant fuel crops. To insure sustainable development for Thailand’s rice plantations and to remain as the world's largest rice supplier, the government will continue to set strategies to increase rice yield and transfer this knowledge to farmers.

FDA warns about Baby Face treatments

March 15, 2008

Two techniques called "stem cell roller" and "derma roller" are not approved as the main devices used in such treatments are rollers equipped with needles that clinicians roll around a customer's face, the clinics require a high level of hygiene in both use of the rollers and subsequent cleaning.

Want to have a baby face again? Planning a visit to a beauty clinic to have those wrinkles lifted? Make sure the treatments offered are not called "stem cell roller" or "derma roller", two techniques that Thai Food and Drug Administration (FDA) has not yet approved due to safety reasons.
Two techniques called "stem cell roller" and "derma roller" are not approved as the main devices used in such treatments are rollers equipped with needles that clinicians roll around a customer's face, the clinics require a high level of hygiene in both use of the rollers and subsequent cleaning. The FDA called a hurried press conference after it found that two popular beauty clinics - Nitiphon Clinic and Vuthi-Sak Clinic - have offered their customers such treatments. Deputy Secretary of the FDA, said the treatments required specific medical devices that the FDA had not yet allowed to be imported as their qualifications are still doubtful.
While the two beauty clinics advertised the techniques as wrinkle removals that boost collagen to create clear, "Baby Faces", FDA said the stem cell roller and derma roller techniques could cause dermatitis and infection on facial skin. FDA was afraid that if clinicians were not aware and hygienic enough, the treatments could spread infectious diseases.
The FDA together with the Department of Health Service Support, which oversees private hospitals and clinics, raided Nitiphon clinics as well as Vuthi-Sak Clinic's after learning that the clinics had posted advertisements about the two treatments on the Internet.
President of the Dermatological Society of Thailand, said there had been no research on the effectiveness and adverse impacts of the two treatments, even the United States FDA has not yet certified the safety of the treatments. He said he was informed that the Medical Council of Thailand had received several complaints from customers who received adverse effects from the two treatments. The president said he had alerted dermatologists who are members of the association across country not to use these medical devices on patients. He said the association would ask the medical council to consider whether or not the use of these devices was in violation of professional medical standards. If these found in violation, users would be punished according to the 2007 medical device control laws.
FDA said the clinic owners and the importers of these devices had violated the Public Health Ministry's ministerial regulations of 2006. Under the law, importers could be fined a maximum of 250,000 baht or five-years' imprisonment or both, and clinic owners could be fined a maximum of 20,000 baht and jailed for six months for falsely advertising the benefits of the medical devices.
However, the owners of the two beauty clinics said they were not informed by the FDA about the case. "Our operation always abides by the law and FDA regulations," both said.

More Consumer Confidence - But later

March 1, 2008

Thai consumers were likely to appreciate the government's tax-exemption package, but it did not mean they would immediately go out and shop. Because in the past consumers has learned to be very careful about spending. The key point is the government must be able to convince consumers to change their shopping behavior, back to their normal spending.

The 42-billion baht tax-exemption package which recently launched will boost consumer and business confidence after a long period of gloom, yet any positive results will be seen for three to six months, says a leading advertiser.
CEO of Creative Juice/G1, Thailand’s leading advertising agency, believes the government's plan will boost advertising 5 percent this year after experiencing the lowest growth in eight years. Growth registered a negative 7 percent year on year in January and February.
Thai consumers were likely to appreciate the government's tax-exemption package, but it did not mean they would immediately go out and shop. Because in the past consumers has learned to be very careful about spending. The key point is the government must be able to convince consumers to change their shopping behavior, back to their normal spending.
Advertising Association of Thailand (AAT) chairman agreed that the tax exemptions combined with the government's mega-projects would indirectly boost consumer spending. This is because enormous jobs will be started, and they do not have to pay tax at the same high level as before. That will leave more money in their pockets.
"We hope the measures will help boost consumer spending in the retail sector. Thus, competition within the industry among retail operators will be very intense, due to more advertisement and marketing activities, which in the end will have a positive effect on the advertising industry," the chairman said.
G1 CEO was even more optimistic that consumers would start to spend more. Thus, advertisers will beef up their advertising and marketing budgets as early as this month or next. "The high-season shopping period and hot season are coming in which beverages, sun-protection cream and the air-conditioning market will become fiercely competitive" he said but he also felt consumers will still want to keep money in their pockets and wait to see the government's stability and performance for a while before deciding to start spending normally again.
However, even without the economic-stimulus package, the advertising leaders have witnessed many advertisers being more active in planning their advertising and marketing strategies with advertising agencies. Both G1 CEO and ATT chairman said companies in the consumer-products sector continued to be major spenders, because they had the main products for daily life. Telecommunications is another expected top spender this year. Media channels that will certainly promise high returns will continue to be popular among advertisers. Most are still traditional media, because advertisers hesitate to use new media channels. As a result, new media channels like digital media would experience slow growth. ATT chairman saw more possibilities for advertisers to spread their spending to marketing activities instead of normal advertising, in order to ensure more impressive returns. Thus, spending will not go into the advertising industry in a normal manner.

‘Radio TV live broadcasting’ for mobile

February 15, 2008

An AIS presenter shows the ‘radio TV live broadcasting’ service available to mobile-phone users.

Advanced Info Service (AIS), the biggest mobile network in Thailand has tied up with FM 99.5 radio channel to pilot a service that allows mobile-phone users to "watch" live radio programs from their phone. AIS executive vice president for marketing said the tie-up reflected the convergence between two different industries to create value-added service.
An AIS presenter shows the ‘radio TV live broadcasting’ service available to mobile-phone users.AIS executive VP estimated 4 million of 24 million AIS subscribers own Real Player-equipped mobile phones. And those AIS users whose mobile phones feature the Real Player can now access the 99.5 radio channel to watch its DJ working behind the microphone, music videos and advertising via the high-speed AIS data network, instead of just listening to the program.
AIS executive VP said AIS will charge 1 baht per minute for accessing content via its nationwide high-speed network. Mobile phone users can select to pay for the network service on a monthly basis for a certain period or an unlimited period of usage. And when had been asked if customers would be willing to pay to watch the radio station via its high-speed network, AIS executive VP said it would depend on the content. For example, the station could attract audiences by interviewing foreign superstars live, or broadcasting an video stream of concert and music video instead of only music.
While, FM 99.5 channel executive said ‘radio TV live broadcasting’ would differentiate our station from others. It would also enable our station to gain more advertising spots, offering that the audiences can both listen to and watch commercials, unlike conventional radio stations.
AIS executive VP estimated the market value of non-voice services this year would be 20 billion baht. The company has set a target to secure half of the total market value. AIS has continued launching many new services on its high-speed network, despite the fact the 3G broadband spectrum is not yet now available. However, in the near future the 3G spectrum will be available in Bangkok and will be expanded into nationwide. And when the time has come, this 3G broadband spectrum will enable cellular operators, especially AIS, to offer bandwidth-hungry content such as video streaming, TV programs at a faster speed and of course a higher margin.

Online advertising in Thailand

February 2008

Hi5.com now has about two million members in Thailand aged from 15 to 40. Its biggest age group is 18 to 29 as they account for over 60 percent of the total. It is a new alternative channel for advertisers to reach their target groups at very low costs.

Vice president of ‘Sanook Online’- the most popular website in Thailand, says Thailand's online advertising market is in its infancy but its potential is boundless. He believes that the emerging generation of online advertising professionals needs to have more diverse qualifications than previous generations.
Hi5.com now has about two million members in Thailand aged from 15 to 40. Its biggest age group is 18 to 29 as they account for over 60 percent of the total. It is a new alternative channel for advertisers to reach their target groups at very low costs. "For online advertising today, I think we need to have strong marketing communication skills and be very creative and technology-savvy if we're going to do well in this field. However, Thailand's online advertising market is accounting for just 0.5 to 1 percent of total ad spending," said Sanook Online’s VP.
"In money terms, it's just something like 450 million to 900 million baht a year in a market worth a total of 90 billion baht. While, traditional media, like TV, newspapers, radio, cinemas, etc still dominated. To move online ads forward, we need the clients, ad agencies, media buyers, etc to work together. Multinational companies like Unilever, Pepsi, Sony or Samsung or Intel are all well aware of the benefits and growing strengths of online ads and now aim as much as 50 percent of spending at online customers," he said.
In the world of online ads, the prime space is diagonal, from the screen's top-left corner to the bottom-right corner. Ads in these areas are the most expensive since they attract the most attention from viewers. Besides standard ads, advertisers try to attract viewers by other ad forms that cost less such as viral marketing.
"In the so-called viral marketing campaigns, we engage our targeted audiences by cool activity, such as having a photo contest for a fan club of, for example, users of Toyota Yaris, advertiser may hold a photo or video contest to marry its product's personality with that of prospective customers. So, users may take photos or a short video of themselves with Toyota Yaris, then upload photos onto the Net and show it off to friends, who will then help spread the message. It is the era of digital-brand engagement," said a chief executive of Top Space, an online media agency, representing Hi5, and shopping and e-commerce websites associated with eBay.
"In case of Hi5 which has about two million members in Thailand and has also become a very popular around the world in the last two years with a total worldwide membership of 80 million. Hi5 is a global friendship network of many-to-many since when you have a group of friends, friends of friends can become your new friends, it is like a chain relationship, which can be used by advertisers in the digital era.” "In other words, it's not just the space for ads on the Net but also its coverage and community. In our case, we could cover as many as million of Net-users here. Yet one of our challenges is to create a creative advertising program that effective connects to these million users,” added Top Space’s chief executive.