The history of siddhalepa marketing essay

1. 0 Introduction21. 1Siddhalepa22. 0 Data Collection33. 0 Current Market Position 43. 1 The 4 ‘ P’s44. 0 Market Overview65. 0 Siddhalepa SWOT Analysis75. 1 Strengths75. 2 Weaknesses75. 3 Opportunities75. 4 Threats76. 0 Key Issues, Objectives and Assumptions97. 0 Ansoff’s Matrix107. 1 Strategy – Market Development108. 0 Target Market118. 1 Positioning Statement119. 0 Porter’s Five Forces129. 1 Bargaining Power of Suppliers129. 2 Bargaining power of Consumers129. 3 Threat of New Entrants129. 4 Threat of Substitutes129. 5 Competition between Firms1210. 0 Porter’s Strategies Matrix (The Generic Competitive Strategies)1410. 1 Branding Strategy1410. 2 Product Strategy1410. 4 Place1510. 5 Pricing Strategy1610. 6 Promotions Strategy1611. 0 Assumed Annual Budget18Note 01 – Canadian Market Overview23

1. 0 Introduction

1. 1Siddhalepa

The history of Siddhalepa goes back to the beginning of the 19th Century when Mr. Hettigoda Gamage Don Carolis de Silva, the Ayurvedic Physician and astrologer, back then became famous within a small village in the Southern coast of Sri Lanka for his exceptional avurvedic knowledge in healing various illnesses caught by the people around. This knowledge that was passed down to one of his two sons, Mr. Victor Hettigoda, was further expanded after studying the field of ayurvedic medicine and astrology in India, and as a result of this, the secret formula of the wonder balm‘ Siddhalepa’ was disclosed to him. It was after all this that Siddhalepa was started with a small investment in the year 1971 and after several years of successes and downfalls today it remains to be one of the most successful local companies which also consists of products that are highly demanded by certain foreign markets as well. Despite the fact that all possible moves are being taken locally to maximize its profits, they believe that boosted profit margins can be achieved via foreign markets if captured properly and hence it perceives Canada to be a potential market to be captured especially due to socio-economic reasons. This includes a marketing plan, which consists of all the information required by the company’s director board so that it enables them to assess the feasibility and effectiveness of pursuing the above market development strategy.

2. 0 Data Collection

Generally, collection of accurate data about a foreign nation before doing a business is quite difficult by the local parties alone due to several reasons where the ones that come under socio-economic factors can be highlighted. Hence hiring a research agency from Canada itself would be the wisest suggestion to research on the required topics under the given conditions. However, it is also recommended that the revealed data should be double checked via all possible local sources as well. For example, in the above case some local sources of information include, details from the Export Development Board, Trade Chamber, trade directories etc. Added to this, some international data sources include, The Global Data LocatorInternational Business InformationVirtual International Business and Economic SourcesInternational Trade AdministrationHuman Development ReportCorporate IntelligenceIMF, UNESCO, UNIDO, FAOUNSTAT DatabaseNational Trade Data BankCountry Commercial GuidesInternational Marketing Insight ReportsThe Economist Intelligence UnitThe Political Risk YearbookInternational Financial StatisticsPrincewaterhouse Coopers Information Guides

3. 0 Current Market Position

3. 1 The 4 ‘ P’s

3. 1. 1 Product

The product portfolio of Siddhalepa can be mainly categorized into six specific areas which are mentioned in the following along with the main products that come under each. Health CareThe Siddhalepa Balm (25g and 50g), Siddhalepa inhaler, Ayur Diacin Tea, Siddhalepa Oil, Caugh Arihtaya and Lakpeyawa. Personal CareNaalayadi Thailaya, Kekulu baby soap, Visaka Soap, Supirivicky toothpaste, Divya Shampoo, Ayur Shower Gel, Food SupplementAyur Tea, Ayur Lean Capsules, Herbal OilsVatha Oil, Peenas Oil, Mahanarayanaya OilGift PacksMother’s Day Gift Pack, Father’s Day Gift Pack, Body Treat Gift PackAs mentioned earlier, the above include the most demanding products that come under each category. The major local competitors for Siddhalepa include Vendol Lanka (Pvt) Ltd, also Link Natural Products, Swadeshi and Harischandra. So each of these companies consists of certain product lines that are almost of equal quality as above and also equally demanded. But despite this, Siddhalepa posses a competitive advantage is a majority of the products that come under the personal care, health care and herbal oil categories mainly due to the good localized brand image it has built in the past. The products are also developed via individuals that posses years of experience and knowledge in ayurveda and also they are made via updated technology.

3. 1. 2 Place

In terms of the local markets, products that come under the personal and herbal care and herbal oil categories can be found and is highly demanded in places ranging from high class supermarkets and pharmacies to small stores found in villages. The highly medicated products will be available on pharmacies and ayurvedic stores while the gift packs are placed only in certain places that posses a demand e. g. reputed supermarkets. Next, in terms of the international markets, Siddhalepa is currently available in more than 25 countries which mainly includes India, Maldives, Germany, France, England, Japan, Latvia, Bulgaria, Bahamas, Los Angeles, Sweden, West Indies, Switzerland, Austria and the Czech Republic. In these countries also the products were found to be places especially within supermarket shelves and pharmacies.

3. 1. 3 Price

In terms of the local markets Siddhalepa products are demanded by individuals of all classes without any hesitation. And also since there are similar products especially from the competitors mentioned earlier, all products except for the gift packs are competitively priced at reasonable rates. Next, when moving towards international markets, markets like India and Japan already possess their local ayurvedic brands. Hence Siddhalepa products are competitively priced whereas in the Western markets, where the consumers are currently gradually shifting towards preferring herbal remedies, the products are priced at a medium rate with a reasonable profit margin

3. 1. 4 Promotion

Siddhalepa being a company which properly understands the exact methods of catering the local demands, understands that the best way to promote their products is via community service. Aiming at this, they spend enormously on activities like, social welfare and religious events, environmental awareness, pilgrim support at various religious places and events, development of schools, hospitals, temples and churches, conservation of animals and plants, saving cows from being slaughtered etc. While these remain to be the main elements of the promotional mix they also do focus on media such as television, radio, newspaper and internet advertising. In terms of the foreign markets, they were found to focus mainly media such as billboards and mainly via magazines and newspapers.

4. 0 Market Overview

Despite the competitive advantages possessed and the high profit margins achieved via Siddhalepa, the competition coming especially via the products offered by Vendol, Link, Swadeshi and also via other ayurvedic product manufacturers increasing gradually within the local markets. In addition when considering existing sales also, it is understood that the average size of an annual sale for one person or family is quite small apart from the FMCG products of Siddhalepa. So while development of strategies to increase local sales were continuing, Siddhalepa put high consideration on penetrating more foreign markets. Their past experiences have enabled them to understand the fact that even though marketing in Asian regions are quite easier than that of the Western markets due to the closeness they have in terms of culture, the Western markets are the ones that are richer and that they are the ones that bring them more profit if captured properly. On the other hand, export incomes are not subjected to tax via the local governments since they are desperate in receiving valuable foreign currencies.

5. 0 Siddhalepa SWOT Analysis

5. 1 Strengths

Presence of its flagship brand the ‘ Siddhalepa Balm’ which posses a competitive advantage among all of similar productsA highly experienced and skilled workforce in the R&D and the manufacturing segmentPresence of updated technology that ensures the preservation of the natural healing properties of the raw materialsPresence of a good brand image in Maldives, India, Germany and Japan while there are also several other export markets where the brand image is gradually developingHigh profit margins within Europe and also Los AngelesPresence of several awards and certifications which mainly include, Pharmaceutical Registration Number (PZN), Good Manufacturing Practices (GMP), US Food and Drug Administration, Superbrand, necessary ISO certifications, Halaal etc. Sufficient resources to gather enough information on unexplored international marketsPresence of several partnership agreements with reputed organizations both locally and globally

5. 2 Weaknesses

Low Profit margins within the local markets for certain products even though there is a demandInsufficient machinery for the production of goods to cater foreign demandsLack of much online sales

5. 3 Opportunities

High potential of Siddhalepa being successful in Canada and also would be quite convenient to capture due to the high percentage of Asians currently presentIntroduction of bundle pricing to goods that are of less demandOpening up a manufacturing plant in India due to the high demand and also for the reduction of distribution costs for certain regions

5. 4 Threats

Ayurvedic products are not much attracting to the youth segmentLocal consumers preferring foreign medication than the traditional ayurvedaIn developed nations, medicines and food products are subjected to strong laws to ensure quality and to protect domestic economiesPerception among some individuals that South Asian products are of low quality

6. 0 Key Issues, Objectives and Assumptions

As mentioned earlier and also as seen via the analyses carried out, it is understood that, due to the upcoming competition and the difficult times ahead, in order to maintain Siddhalepa’s profitability in the long run, the best option would be to focus on expanding its international operations. This is because unlike the local conditions, a foreign market if captured properly, would enable Siddhalepa to gain higher margins due to factors like, good economic conditions, higher population with more disposable income. Hence as revealed through the SWOT analysis above, targeting Canada as a potential market, and also opening up a manufacturing plant in India would be two good strategies to pursue. By pursuing these Siddhalepa aims at achieving the below objectives within the next 5 years. Increasing sales revenueNew sales by 35%Online sales by 25%Reducing the cost of operationsTransportation costs by 10%Increase customer base by 50% internationallyPromote and enhance the Company’s image in the marketWhile these objectives are planned, it is incorrect to ignore the fact that the major two local competitors for Siddhalepa, Vendol and Link, would stay idle for the next five years. They also being potential player with talent may target the same market. Hence this plan considers the following to be assumptions for the next five years. Vendol and Link would not follow the above two strategies targeting Canada and IndiaAyurveda market and increasing consumer attitude towards herbal products will remain unchangedCanadian economy will remain unchanged

7. 0 Ansoff’s Matrix

New MarketsExisting Markets

Market Penetration

Relationship Marketing

Product Development

Re-banded and Re-packagedproducts

Market Development

New sellers, Self employed professionals

Diversification

Partnership ActivitiesExisting ProductsNew ProductsFigure 1 – The Ansoffs Matrix

7. 1 Strategy – Market Development

Siddhalepa aims at increasing its revenues and widening its brand image within the upcoming five years by pursuing a market development strategy to the Canadian market with its popular brands by mainly targeting the middle and upper aged segment of all classes of income.

8. 0 Target Market

When taking Canadians in general, it can be stated that a majority of the middle and the upper aged people are aware and concerned in eating Natural Health Products (NHPs), herbal remedies and organic food. Therefore there is a greater chance that Siddhalepa products can be persuaded to these two segments. The upper and also the upper middle class segment greatly concerns on the quality of the products they purchase. However it is unlikely for Siddhalepa to face an issue on this since it has achieved prestigious awards for maintaining its quality standards. According to the Canadian culture, the family decision maker in making purchases is known to be the ‘ wife’. Similarly it is mostly the women that are more concerned of the health and wellbeing of their families and also the goodness of the products they purchase. Therefore, our main target would be the women in the household who are working at an office or as a housewife, because they have a great say in the ultimate decision in the family. Also according to the 1997-2002 Statistics Canada Survey of Household Spending data, the fastest growing household spending category are health care and education. Therefore considering all these factors, the primary focus in promoting Siddhalepa among Canadian families should be made by targeting women of all classes who are at their middle and the upper ages as a pain relief product that suits people of all genders and ages. Targeting the middle and the upper ages would give another advantage since it is them who usually suffer from various physical pains. These products may not appeal the younger generation at first, but once the market is established the also can be targeted by e. g. applying Siddhalepa for various aches caused by sports activities. Doing this by using once of their role models would be more effective.

8. 1 Positioning Statement

‘ Siddhalepa, Ayurvedic Products not Harmful to Human Beings’

9. 0 Porter’s Five Forces

9. 1 Bargaining Power of Suppliers

In this scenario of international marketing, the above criteria does not create much of an impact since this emphasizes on the raw materials used to make the product in Sri Lanka. Therefore this can be considered to be low since if a supplier changes, there would be plenty of others more to capture the giant company Siddhalepa in supplying quality raw materials

9. 2 Bargaining power of Consumers

Since all players are fighting to capture this special but gradually growing market, maintaining high satisfaction levels of consumers is very critical and hence this can be considered to be high.

9. 3 Threat of New Entrants

There is a likelihood that equally competent companies like Link, Swadeshi and Vendol (locally) and also foreign players like reputed ayurvedic manufacturers from India and Japan to enter easily to Canada and aim at the market share since the trade restrictions are quite low provided that quality products are brought in. Hence this can be taken as moderate

9. 4 Threat of Substitutes

Canada being a Western country, the most popular medication happens to be Western medication itself. Therefore even though at present consumers are pursuing herbal remedies, effective strategies from the above industry can easily reverse this trend. Added to this the various ayurvedic treatment centers found in Canada are also substitutes Siddhalepa products since they cater a similar need to consumers and also communicate at a personal level.

9. 5 Competition between Firms

The ones below are the major direct competitors for Siddhalepa in Canada. They are mainly Indian products that had pursues similar strategies to what Siddhalepa now targets. Zandu (Products related to the curing of fever, stomach issues and body aches)Himalayas (Consists of a very similar product portfolio to that of Siddhalepa)Dabur (Health Care, Personal Care, Foods and Home Care)Biotique (Nourishment and beauty of hair and skin)Sewanti Products (Diabetes, Arthritis, Mental Balance)All of the above currently undergo high competition among them especially with respect to the qualities of the products being offered at competitive rates

10. 0 Porter’s Strategies Matrix (The Generic Competitive Strategies)

Out of the three main strategies available under this pursuing a cost leadership strategy throughout is not possible unless market leadership gained. In addition it will simply be ineffective in a country like Canada also since those consumers do not take the price as a big issue. Since the ayurvedic segment is currently preferred among a niche market only, the characteristics of this strategy somewhat fits that of what Siddhalepa is following currently until this segment is allowed to expand. However the characteristics of the differentiation strategy according to porter more likely fits the strategy of Siddhalepa since it aims at making their product more attractive and effective compared to competitors in all possible ways. This is make Siddhalepa perceive as the brand of the highest quality. So when considering all this, since the strategy of Siddhalepa consists of a touch of both focus and differentiation, it can be said that the strategy it pursues is more likely focused differentiation.

10. 1 Branding Strategy

Establishment of the Siddhalepa brand among the Canadian consumers is crucial for building the long term brand image and to produce repeat purchases in future. Effective branding strategies create loyal customer bases and so when trying to effectively penetrate an existing market building such an image would be very convenient. In order to show all consumers that Siddhalepa Balm is a very popular brand that comes from a reputed group of companies a few mystery advertising can be done with the brand so that it will stimulate the parties to research on the company on their own.

10. 2 Product Strategy

The Boston Matrix is to be used to identify what products would exactly suit the foreign market. According to it, most of the popular Siddhalepa products are cash cows within Sri Lanka and also on many foreign markets. The initial product to be introduced is ‘ The Wonder Balm, Siddhalepa’. The Sinhala name would not be a problem since it also includes the English slogan and also because the name is famous among many other countries. After this introduction, the Siddhalepa inhaler is to be promoted and afterwards the toothpastes, soaps, creams and the spa products are to be promotedThe products offered to Canada (apart from balms and similar other items used for medication only) would be classified as ‘ Food Supplements’, Ayurvedic products not harmful to human beings, instead of drugs. This is mainly to prevent people from developing the perception of medical prescriptions for purchasing Siddhalepa products. All products are planned to have a identification number where all its details will be computerized. The packaging should be customized to suit the Western tastes. For example having a Canadian celebrity, but despite this it also should be ensured that it should be done without harming the band identity.

10. 4 Place

The initial introduction of Siddhalepa is planned to be to the population of 812, 130 to the capital city of Canada, Ottawa which is one of Canada’s largest consumer markets. It is after this that main cities such as Toronto, Burlington, Oshawa, Montreal region and Greater Vancouver are planned to be coveredCanadian trade activities are well regulated to ensure fair trade practices and they also ensure that private sector organizations get fair competition. Regulations mainly include the, Investment Canada Act, Consumer Packaging and Labeling Act, Intellectual Property Policy, Competition Act, Personal Information Protection and Electronic Documents Act, pension and retirement act and consumer protection laws. Information collected on Canadian business reveals that consumer goods are distributed via several wholesalers and retailers where supermarkets, small stores and groceries play a major role in the distribution channel. Therefore consumers prefer purchasing their goods through the above mentioned dominants in the distribution channels. Hence placing of Siddhalepa products can be made in the above locations as well as on pharmacies. Added to this most of the Western buyers prefer online purchasing of products. Hence this option is also available via the Siddhalepa’s websiteAfter establishing itself within the market, Siddhalepa initially aims at developing partnership agreements with players such as reputed supermarkets in Canada and afterwards aim at opening up their own outlets within the areas of high demand together with spa facilities. Refer Appendix Note 01, Page 23 for an overview on the Canadian market

10. 5 Pricing Strategy

As mentioned above, Canada being a rich country, the people do not normally consider the price to be an issue. Their main criteria in selecting product would be its quality. But despite this the Canadian market for herbal products is highly price competitive and thus, Siddhalepa which plans of creating a good brand image cannot ignore this factor. Since it is the introduction stage, if the balm is priced too low, it would reflect the consumer eyes that it is a product of low quality and also, on the other hand if it is priced too high, the consumers would risk trying it. Hence it would be priced competitively at a reasonable rate similar to that of its competitors. E. g Zandu Balm – USD 10/-, Sewanti – USD 20/-, Siddhalepa – USD 14/-Added to this, the goods will be sold only in retail terms and also the buyers should make the full payment immediately after the purchase. However, credit card payments can be made since online purchasing was an element that was always available

10. 6 Promotions Strategy

A major risk that has to be compromised by Siddhalepa is the removal (if any) of the perception among certain individuals that South Asian products are of low quality. However, this would not be much of a problem for ayurvedic products since Sri Lanka and India are mainly the countries that are the best in it. Another major problem is the education or giving the initial snapshot of the product information to the consumers. Despite herbal products are highly preferred a better impression on the product can be given if the natural goodness of the herbs used are also educated. However this barer is somewhat minimized via the herbal dictionary present in the company website. If the Canadians find Siddhalepa appealing, it is likely that the word of mouth would spread among the entire Western atmosphere since many Western nations are interconnected to the Canadian Boundary.

10. 6. 1 Media Mix

BillboardsBefore the introduction of the product mystery advertising is to be done for the first month via billboards placed in front of supermarkets, major retail stores, playgrounds, hospitals, pharmacies, hotels, spas, bus stands and railway stations. Hints to the natural goodness of the product that is to be introduced is emphasized in an attractive manner so that the people will desperately want to know what it is. Due to the cost effective nature, billboard advertising is to continue for the first eight months after the product introductionMagazine and Newspaper AdvertisingA majority of the middle and the older aged individuals of Canada were found to have the habit of sticking to magazine and newspaper reading at least via online. Therefore advertising Siddhalepa in popular newspapers and magazines such as Toronto Life, Vancouver, and also in Magazines targeted for women would reach the desired marget effectively. Added to that, the consumers also can be educated of the goodness of the herbs included. Other ToolsIn order to advertise the good image of the entire company, a selected set of customers can be given a chance of spending a leisurely one week vacation in the Siddhalepa Spas and Resorts situated in Sri Lanka and also in Germany. With this the consumers will get to know that Siddhalepa is a product of a reputed group of companies in Asia. After establishing itself in the market it aims at focusing on public relations activities in Canada targeting both the foreign and the Asian individuals

11. 0 Assumed Annual Budget

Activity

Budgeted Amount for the 1st Year

(Rs.)

Approval from the relevant authorities500, 000Agreement with logistic company600, 000Employee training and recruitment4500Promotional Activities65, 000, 000Transportation91, 000, 000Packaging600, 000Production21, 000, 000Wages120, 000Other Expenses7, 000, 000

TOTAL

185, 824, 500

Note: The costs are assumed to be increased by 4% each year for the next 4 consecutive years. 12. 0 Risk Management(3)(2)(4)(1)HighLowLowHigh

Degree of Damage

Frequency of Occurring

AvoidPlan ContingenciesPlanIgnoreThe possible risks that may happen in a project can be categorized into 4 areas as shown in the above matrix. Risk plans enable forecasting of the possible risks so that a company can be alert on such risks if they actually happen. Possible risks are as follows, Changes in the political and socio-economic factorsE. g. increase in government regulations or trade barriers, changes in consumer tastes, lifestyles etc. So such instances Siddhalepa has to develop instant strategies to compromise on the loss of expected profitsIncorrect data revealed by the research agency about the Canadian marketSo its always better to double check with at least a few personal trusted sourcesLocal competitors also targeting Canada as a potential marketTherefore regular environmental scanning is criticalComputerized data being corrupted by a virusTherefore it is always recommended to keep backupsProducts getting contaminated by some germ in the transportationEnsure all methods of safe transportation are used13. 0 Conclusion14. 0 Recommendations