Yakult - A Probiotic Health Drink

Competitor Analysis

Marketing Management

Institute of Management Technology,

Ghaziabad

Submitted By: Group 9, Section B

PANKHURI AGRAWAL 11FN-071

ANKUR BHASKAR GHOSH 11FN-013

KAPIL JAIN 11FN-050

NAMAN GUPTA 11DM-084

ROHAN AGGARWAL 11DM-127

SUMEET JOON 11DM-162

V SAI KARTHIK MANTHA 11FN-113

Yakult – A Brief Introduction

Yakult is a Japanese probiotic milk made by fermenting skimmed milk with

6.5 billion probiotic (friendly) bacteria - Lactobacillus casei strain

Shirota. These probiotic bacteria are able to survive the acidic environment

of the stomach and reach the intestines alive In the intestine they change the

environment to favour the growth of beneficial bacteria and suppress the

growth of harmful bacteria. Yakult help to improve digestion and build

immunity when consumed everyday. It is recommended for all age groups

and trusted by more than 30 million people of 32 countries.

Yakult Danone

Yakult enters into Indian market in October, 2005. It entered into a 50-50

joint venture with Group Danone (world’s largest maker of dairy products)

to form Yakult Danone India Pvt. Ltd in December,2007. The total

investment accounts for 136 crores INR. The first state-of-art

manufacturing plant for probiotics was set up at Rai, Sonepagt, Haryana.

The plant has a total production capacity of 10 lakhs bottles per day. The

whole production process is fully automated and all machinery is imported

from Japan to ensure the quality of the drink.

Competitive Analysis

Porter’s Five Forces Model

1. Industry Competitors : Probiotics Industry

This industry operates in four product segments and each have a number

of companies competing for the market share.

a) Milk – There are mainly two companies in India which produces

fermented milk, also known as Probiotic Milk. Yakult and Mother

dairy have their products namely Yakult and NutriFit respectively.

Though Mother Dairy is a well established player in Indian Market

for dairy products but though it has many other products the company

is much focussed on other product variants which holds for major

chunk in its revenue.

b) Yoghurts/ Curds : In India, today many dairy products companies

are concerned about the probiotic variants. They mainly produce

yoghurts and curd with different flavours. The major companies and

their product brands are: Mother Dairy’s B-Activ Probiotic Dahi,

Mother Dairy’s B-Activ plus Fibre Rich Curd, Nestle’s Nesvita,

Amul’s Flaavyo Yoghurts available in different flavours, Amul’s

Prolife Dahi and regional players like Avesthagen Avesta Good Earth

Dahi.

c) Lassi – The major dairy companies like Mother Dairy and Amul also

supplies probiotic lassi under the brand name of B-Activ Probiotic

lassi and Prolife Lassi respectively.

d) Ice-Creams : Today as people are more health conscious, probiotics

sector is growing at fast pace. The ice-creams are now replaced with

probiotic ice-creams and it is also well accepted by people. Amul’s

Sugar Free Probiotic frozen dessert (for diabetes patients), Amul’s

Prolife wellness Ice –Cream, Nirula’s Biolite and Avesthagen Avesta

Good Earth ice-creams are easily available in Indian Markets.

2. Suppliers – Yakult Japan is the technology and quality partner for

Yakult - Danone Pvt. Ltd. It supplies the probiotic bacteria -

Lactobacillus casei strain Shirota, which is the main ingredient for the

fermented milk.

3. Potential Entrants – The main potential entrants in business of

fermented milk are:

a. Britannia - The key player in Indian Market is about to come with

their variant of fermented milk very soon.

b. Vitagen- The biggest competitor of Yakult in international market,

mainly in Malaysia and Singapore. Thus there is all possible threat

that Vitagen could enters to Indian Market.

c. Danisco – One of the biggest probiotic company, which is known for

the probiotic products in international market can also foray into

Indian markets.

d. Danone’s Actimel – As Danone is the world’s leader in dairy

products, it has its own product Actimel, probiotic milk drink in

various countries. Since Danone has 50% stake in Yakult, it can also

come out with its own variants.

e. Good Belly Juices – The probiotic fruit drink is also considered as a

possible threat to Yakult if it enters to indian market.

f. Pepsico-Naked Juices – Pepsico also have the probiotic alliance with

Naked Juice which produces fermented juices in various flavours.

4. Substitutes – Yakult probiotic health drink is mainly positioned as

product which makes digestive system works better. Since for better

digestive system and better immune system there are various number of

other products other than Probiotics are available in market. For eg.

Dabur Chyawanprash, Himani Sona Chandi Chyawanprash, Health

drinks like Horlicks and Complan, Probiotic Tablets by Chr. Hansen,

Pharmaceutical Companies like Dr. Reddy’s Laboratories,

GlaxoSmithKline, etc, Ayurvedic Remedies like Ayurvedic Rasayanas,

Dhanvantri Guj Herb, Nisargasampada, etc and Natural foods like Milk,

Amla, Apple, Papaya, Dry Fruits, etc.

5. Buyers - Yakult is recommended for all age groups. Indian consumers

need to be educated about the health benefits of probiotics. However,

increase in disposable income, lifestyle changes and the desire to buy

quality products are favourable factors.

Main Competitors

a) Amul – entered into probiotics category very lately and is well received

by customers. Amul Probiotic Ice Creams under the brand name of

Prolife was launched in 2007 and since then customers showed great

desire for probiotic ice-creams. Earlier this year, Amul also launched its

yoghurt and sweetend lassi variants in some of the areas of its operations

mainly in Gujarat and Maharashtra. Success of probiotic products can be

shown in terms of contribution to the total sales. Where Ice-cream

accounts for 10%, probiotic yoghurt stands at 25% of total sale of the

products.

b) Nestle – Since, Nestle have declared that they seek the dairy as their

area to excel, they are now well settled to introduce probiotics to their

carts. With Nestle Nesvista(Probiotic dahi) it has already started to see

the results. 30% market share of packaged curd is hold by Nestle which

accounts for 15000-20000 tonnes per annum. Since probiotic is new

concept its introduction to market is estimated to have 10-20% of total

market share of Nestle. Nestle is also launching varieties of flavoured

probiotic milk.

c) Mother Dairy – Subsidy of National Dairy Development Board,

Delhi. It is one of the largest dairy industry with selling more than 2.5

million litres of milk/day. It mainly operates in New Delhi and National

Capital Region which accounts for 66% of market share of branded milk

sales in these regions. Ice-cream were introduced in 1995 and today it

boasts 62% market share in these areas. Recently Mother Dairy came

along with a large variety of Probiotic products like b-Activ Probiotic

Dahi, b-Activ plus fibre rich curd, b-Activ Probiotic Lassi and probiotic

milk drink Nutrifit.

Currently, Nutrifit is the direct and sole competitor of Yakult in Indian

Market.

Analyzing Competitors: Strategies and Objectives

Yakult : As yakult is operating in more geographical dimensions than

its competitors. It needs to tap the opportunity and should increase penetration.

They positioned Yakult as a daily health drink for all age groups.

Mother Dairy : Main focus on northern region. With the vast variety of

products in the cart, it would be easy to get new customers attention. They must

expand their market area to increase the overall market share. It mainly focuss on

younger age groups.

Nestle : Nestle recently launched new variants of their probiotic products. So

they need to create awareness of the same in order to increase sales. The

comparative higher prices and better packaging attracts the higher income

groups.

Amul: Introduction of new products like Probiotic dahi and sweetend lassi

needs recognition. Marketing strategy should be revived in order to focus on the

health aspects of probiotic products. Amul – ‘The Taste of India’ goes by their

name and emphasis on different flavours and taste along with health.

Avesthagen : It deals in probiotics with products such as Dahi and Ice-creams.

They need to be visible as the market competition is too high because of well-

established players such as Mother Dairy, Amul, nestle, etc.

Nirula : Biolite – probiotic Ice-creams by Nirula’s are yet launched but has poor

availability as its shelf place is limited to the Nirula’s outlets only. They need to

have a better distribution channel to cater the probiotic ice cream consumers.

Strengths and Weakness

Based on the survey results, Yakult’s strengths and weakness in comparison to its

competitors.

Customer

Awareness

Product

Availability

Variants and

Taste

Yakult Good Good Poor

Mother Dairy Good Fair Good

Nestle Good Fair Fair

Amul Excellent Excellent Excellent

Avesthagen Poor Poor Fair

• Name the company which first comes to your mind in the probiotic

industry? - AMUL

• Name the company from which you would prefer to buy a probiotic health

product? - AMUL

Competitive Strategy of Yakult

• Market Challenger with an Innovative Distribution Strategy

– Home delivery system: Yakult ladies who are given 1 month of

training to educate others of long term benefit, free sample on the first

visit to your home

– Brand Ambassador Kajol

– Positioning “Daily Piyo, Healthy Jiyo”

Competitive – Marketing Mix (Yakult and NutriFit)

• Product – Both are the probiotic fermented milk product.

• Price – Yakult is more expensive in comparison to Nutrifit as Yakult can

be had for Rs. 10 / 65 ml where as NutriFit is priced at Rs. 10/100ml.

• Promotion – Yakult follows a very comprehensive marketing strategy.

Their door to door delivery initiative worked very well for the awareness in

people. With Kajol as Brand Ambassador and Yakult Ladies, Yakult focus

on the whole family.

Nutrifit, a probiotic milk drink by Mother Dairy follows the same

marketing strategy as for other products like print, radio. Mother Dairy

focus on the younger age groups.

• Place : Yakult available in Delhi, NCR, Punjab, Jaipur , Chandigarh,

Mumbai, Pune and Bangalore at various retail stores like Big Bazaar,

Reliance Fresh, EasyDay, 24*7, more, spencer, etc. While Nutrifit is

available mainly in Delhi and NCR region at next door shops, Mother

Dairy outlets and also at retails stores.

Future Prospects

• Improve distribution in smaller cities

– Currently available in Delhi NCR, Mumbai, Pune, Bangalore, Jaipur,

Chandigarh and Punjab

• Explore additional distribution channels such as next door shops, tie up

with fast food outlets, etc.

– Currently available at More, Spencer’s, Twenty Four Seven, Big

Bazaar, Reliance Fresh, Easy Day, etc.

– Also, some 5 star hotels and hospitals in New Delhi.

• Introduce variants such as yoghurt, ice cream, etc.

• Introduce attractive packaging.

• Indian Probiotic Industry was valued at $2 million in 2010 and is expected

to reach $8-10 million by 2015.

• India currently accounts for less than 1% of world’s probiotic market and

this is a huge deficit considering that it is world’s largest milk producer.

References

http://en.wikipedia.org

Market Research and Surveys

http://www.yakult.co.in/

http://www.motherdairy.com/

http://www.amul.com/

http://www.avestagoodearthfoods.com/

http://www.nestle.in/

http://www.chr-hansen.com/

http://www.danisco.com/

http://www.academicjournals.org

http://www.foodindustryindia.com/newfood/index.jsp

http://www.exchange4media.com