I am helping out a family friend’s Coconut Trading Company (let’s just call it CTC for now) that is based in Asia. They import fresh premium coconuts by land directly from Thailand and started out as the only distributor in the local market. They have been in the business for more than a decade now and with no competition over the first few years, they were able to establish good relationships with the restaurants owners, beverage stands and hotels within their country.
About 5 years ago, an employee with the knowledge gathered from working at CTC decided to put up a business in the same trade, New Coconut Trading or NCT. The new player thought that by offering low grade coconut at a lower price will be enough to get into the market. But when they tried to tap into CTC’s client, NCT found out that offering a lower price is not enough. So NCT took a different approach by offering other fruit drinks that CTC doesn’t have and was able to tap into CTC’s client, which the loyal customers supported as long as its not coconut related. So with this, CTC learned to adapt to its competitor and the new changes that came with it but at the same time was able to maintain his client.
Everything seems okay for CTC and NCT until 2008. They are both facing a new challenge as another player made its introduction to the market recently. Rumour has it that previous employees from CTC and NCT joined forces to put up Another New Trading or ANT. And this time ANT is trying its best to tap into both CTC and NCT’s client by offering premium and low grade coconuts plus a new array of fruit drinks. Lets add to that the number of mobile vendors who are also now selling low grade quality coconuts in the streets. The demand for premium coconut is getting less as the supply of cheaper coconuts from Thailand is increasing in the local market.
What is the best Marketing Strategy for CTC to be able to survive these new threats and at the same time maintain their market share?
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Jay’s Answer: Here are a few ideas:
1) Diversify. If CTC is only selling coconuts, any new company that also offers coconuts will be a threat. Sell other products that CTC’s existing clients need.
2) Make Premium Brand Clearer. What are the benefits to the premium coconut? Taste? Vitamins? Organic? More milk? Less chance of spoil? Continue to highlight the benefits of your products to differentiate them from your competitors.
3) Make Service Clearer. Why are CTC’s customers continuing to purchase from it? Is it your refund policy? Your quality? Low spoilage? If you don’t know, ask your clients what are the top 1 or 2 reasons.
4) Merge (Co-market) with NCT. Use both of your names & customer lists to establish a stronger single brand or ease of ordering.