Week 2 Group DB: Market and Products
“Discuss your target market, market segments and customers in these segments.
Address your penetration of the market, translate that into potential revenue over
three years and state whether your revenue share will increase or decrease with your
market growth. How will you price your service or product to make a fair profit and
be competitive? Why will a customer pay your price?” (p.2).
Also, “Describe the products and service offerings, the customers they address and
the value they bring to the customers in terms of customer pain. Describe why your
product or the way you’ll present it gives you the advantage over your competitors.
Also address how you’ll source your products and raw materials if you will be
manufacturing product.” (p.2)
1. Target Market
Peanut Butter & Co.’s main product, as will be discussed in further detail in the
next section, is gourmet peanut butter. As such, this product could be best described as a
luxury or gourmet food item. Therefore, PB should capitalize on its success in Hong
Kong and bring the product to Mainland China and South Korea. A study by Bain &
Company found that the market for luxury goods was the strongest in Southeast Asia,
followed by China and South Korea. (D’Arpizio, 2014). Additionally, China “continues
to boast a customer base that leads the world in terms of overall luxury consumption.”
(D’Arpizio, 2014). PB’s target market in China and South Korea would be middle-class
consumers who are interested in luxury items. China has one of the largest, growing
middle-classes in the world, and South Korea also has a vibrant middle-class that is
highly capitalistic and consumer-driven. (D’Arpizio, 2014). The customers in this market
would include young families, entrepreneurs, and young working professionals. (The
Hofstede Center, n.d.). These consumers in both countries are hard-working,
entrepreneurial, and highly interested in capitalism and business. (The Hofstede Center,
n.d.). They have brought a tremendous amount of economic growth and prosperity to
their respective countries, are upwardly mobile, and have high levels of disposable
income that previous generations did not. (The Hofstede Center, n.d.).
2. Penetraon Strategies
Asian culture contains many dishes with peanuts or peanut butter. Generating
demand for peanut butter should not be difficult. However, penetrating any food market
and starting a trend is challenging as food trends generally, “…surface randomly or
through conviction….” (Zamrano, 2014). By selling peanut butter as an affordable luxury
(more on this later), PB can create a unique niche for itself. This will entail selling to both
distributors and directly to consumers via the Internet. First, PB is already in Hong Kong
and can use social media the popular Asian social media site Hi5.com to reach out to a
more local audience. (King, Lee, Liang & Turban, 2012, p. 80). Even though China does
censor the Internet, PB can still create Twitter accounts for its product in China as long as
it stays out of politics and social issues, and will not have any problems with the use both
local and universal social media in South Korea, as the country is democratic. PB can
arrange to have tastings in different supermarkets to create product awareness. The
largest supermarkets in China and South Korea, respectively, are Bailian (Brilliance)
Group and Lotte Shopping Co., Ltd. (Farfan, 2011). It is imperative for PB to get its
product into these stores, as it will then receive widespread exposure. Then, PB can begin
to reach out directly to consumers using its website and Hi5 and Twitter accounts for
coupons, promotions, and invite feedback by encouraging consumers to use the hashtag
#tasteamazing. (Peanut Butter & Co., 2014). This will generate virtual word-of-mouth
inquiries and purchases of PB’s product.
3. Price
A discussion of pricing methods will lay the groundwork for an analysis of
revenue. Earlier, it was mentioned that the most effective marketing strategy would be
based on making the product an “affordable luxury”. Chinese customers, and to a certain
extent South Koreans, do not like to spend money wastefully. They are conservative,
often saving and splurging, and often look for bargains. (The Hofstede Center, n.d.).
Therefore, the price should be both comparable to its U.S. value of $5 to $6, and the
company’s “value size” items (28 oz.) should also be included for 50 cents to a dollar
more than their smaller counterparts. The price should be no more than $1 over what
