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Yakult and Activia case study: launching probiotics in the nascent US market

Datamonitor
April 18, 2008
14 Pages - SKU: DFMN1770158

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Countries covered: United States

Introduction

This report on Yakult and Activia forms part of Datamonitor's case studies series, which explores business practices across a variety of disciplines and business sectors. It looks at at how Yakult Honsha and Dannon are striving to launch their respective probiotic products in the nascent US market.

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Gain insight into the methods used by important industry players to give them a competitive edge

Identify specific areas for operational improvements

Capitalize on the knowledge of experienced companies when entering a new niche or market

Additional Information

Each case study provides a concise evaluation of a company that stands out in some area of its strategic operations. Find out why the company has become one of the best in its field or how it deals with different problems. They provide a useful benchmarking tool and offer a useful blueprint for potential improvements.

DATAMONITOR VIEW: CATALYST; SUMMARY; ANALYSIS; Probiotics have been successfully marketed globally, but have only recently taken off in the US; Probiotics have been a major success internationally; A lack of knowledge about the perceived 'unappealing' probiotics market and a reluctance to spend a premium on a dairy product have hindered US growth; Evidence suggests that US knowledge of probiotics is increasing; Health, convenience and portion control food trends, have boosted US performance of probiotics; US consumers are also anxious to offset rising healthcare costs, meaning they are more likely to take a long-term approach to managing their health; Heritage and education have been core features of Yakult's marketing; Yakult has a strong heritage in Japan, dating back to the 1930s; Yakult has capitalized on the strong Hispanic market for probiotics by test launching in Hispanic areas before national rollout; Consumer education initiatives have been vital to help Yakult overcome consumer skepticism surrounding probiotics; Communicating its probiotic research activities has also been an important part of Yakult's education initiatives; The company has undertaken further research into probiotics with Danone to aid more understanding of the substance; The small size of Yakult bottles was initially a turnoff, but its uniqueness could be been turned to an advantage; Activia is marketed as an enjoyable food product with believable, tangible gut health benefits; The phenomenal growth of Activia has been aided by a substantial ad spend in its first year to market; Activia achieves sales of over US$100m in its first year; Activia has undertaken consumer testing, followed by product sampling, to gain an understanding of the market and promote word-of-mouth marketing; A substantial advertising budget has aided growth; Activia is now looking to expand its appeal using celebrity endorsement and sponsorship; Jamie Lee Curtis has been recruited for its adverts in 2008, capitalizing on her celebrity status; The company sponsors gastro health conventions and runs ads in medical journals to gain professional support for Activia; Product line extensions offering other desirable consumer benefits look set to grow the brand further
APPENDIX: Case study series; Methodology; Secondary sources; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Figures: Figure 2: Yakult product ideals, or 'Shirota-isms', are named after its founder, Dr. Minoru Shirota; Figure 3: 'Yakult Ladies' in Mexico and China, provide a home delivery service; Figure 1: Yakult is sold in unique-looking single-serve small bottles; Figure 4: Activia has undertaken celebrity endorsements to enhance the brand's profile; Figure 5: Dannon aims to enhance growth of Activia by releasing numerous flavors in both light and normal styles

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Yakult and Activia case study: launching probiotics in the nascent US market

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