Export of Vitamins to South

Export of Vitamins to South Korea

Exports Plan

Product Description

Vitamins are the fuel that the human body requires for proper functioning. Doctors have decided upon a recommended dietary allowance that individuals need to follow daily in order to ensure a healthy state (Merck, 2009). Vitamins have important effects on mental and physical levels. However, vitamins do not address unhealthy individuals only. Certain types of vitamins are destined to help increase the intellectual and physical performances of the individual. For example, athletes use vitamins in order to stay in shape and to increase their resistance and performance. Vitamins have direct effects, like: increasing memory abilities, improving the immune system, increasing physical performance, counteracting depression. Vitamins also have important advantages in counteracting a series of mental and physical deficiencies.

Target Segments

Vitamins consumers generally do not differ from one country to another. The targeted customer segments are usually quite similar in each country, making it easier for buyers to establish a marketing strategy based on each consumer type. In the case of the South Korean market, the following customer segments have been identified:

Children

Teenagers

Young adults

Adults

Seniors

Athletes

As one may observe, the targeted customer segments correspond with each group age and its special necessities. Children require special vitamins consumption designed to help them with their growth and development process. This age is especially subjected to health deficiencies that are amplified by the lack of certain vitamins. Therefore, in such cases it is recommended to include vitamins in children's daily diet.

Teenagers are another category of customers that requires a special program that includes various vitamins in their diet. At this age, the growth process reaches the most important phase. Therefore, it is important that the growth process is not negatively affected by any vitamin deficiency.

Young adults are a category of consumers quite similar to teenagers. At this age, the growth process is mainly completed. Young adults are supra-solicited because this is the time when they work very much, they start their careers, continue their studies, and handle other matters at the same time. Therefore, it is important that they maintain a stable energy level that allows them to perform their intellectual and physical tasks in a suitable manner.

Adults are another category that may require an extra volume of vitamins. This age corresponds with a series of social and professional requirements from adults, which have to manage their professional and family lives. Also, their health might not be in the best state. This is why this category of customers represents a suitable candidate for vitamins consumption.

A similar situation can be attributed to seniors. Their energy level is significantly reduced, while the requirements increase. Their health state is usually a decayed one. This is why vitamins can help this category, due to the effects detailed above.

The customer segment that consists in athletes presents special characteristics. Athletes are usually in a good state of health, but their intense activity requires tremendous energetic resources. They increase these energetic resources by consuming a series of energizing food and drinks, and also vitamins.

Basically, given the targeted customer segments, any member of the South Korean population can become a prospective customer. Therefore, it is important to take into consideration the country's demographic situation.

South Korea's population reaches a total of 48,508,972. The age structure is the following: 0-14 years -- 16.8%, 15-64 years -- 72.3%, 65 years and over -- 10.8%. The median age is 37.3 years in general, 36 years for males, and 38.5 years for females. The population growth rate is 0.266% (CIA, 2009).

Also, the customer segments targeted for this product are consisted of educated individuals that live in the urban area of the country. South Korea's urban population reaches 81% of the total population, while the annual rate of urbanization reaches 0.6%. The literacy level of the total population is 97.9%. South Korea's education expenditures reach 4.6% of GDP.

Competition

There are several local manufacturers of vitamins in South Korea. Consumers in this country favor local manufacturers. This is because their prices are obviously lower than the prices of international vitamins exporters to South Korea. Another reason for which local manufacturers are preferred over foreign ones consists in the attachment of local consumers to national brands.

However, there is still room for new companies exporting their products on the South Korean market. This market sector is currently in full growth and development process.

Product Specific Regulatory Considerations

Government regulation

Vitamins are considered to be dietary supplements and are not legally treated as drugs, but as foods. This classification attracts several consequences regarding the management of this activity. For example, vitamins' producers are entirely responsible for the safety of these products, and not the government.

This situation has further effects. In comparison with drug products' situation where their safety and efficiency must be proven before reaching consumers, in the case of vitamins "there are often no provisions to approve dietary supplements for safety and effectiveness before they reach the consumer" (Wikipedia, 2009).

Vitamins testing requirements

Regarding the testing of dietary supplements, the process is not different from the testing process of foodstuffs. As mentioned above, vitamins are part of the food category and the legal requirements applied in the case of food products are applied in the case of dietary supplements, including vitamins.

Tariffs

Given the fact that vitamins, just as other dietary supplements, are part of the food category, the same tariff policies applied to food products are applied to vitamins also. In such cases, the market is the factor that regulates prices.

The pricing of vitamins is subjected to the factors of influence of the market in case. These factors include: number and size of competitors, number of consumers, economic development level of the region in case, the size of the market, trends affecting the market in case, the position the company occupies at a certain point, and others. Any modifications of these factors have a direct or indirect influence on the prices of vitamins.

Influence of regulatory considerations on the pricing of vitamins

The new system of classification for medicines in South Korea has a direct significant influence on the market's evolution in this country. This means that "sales of OTC healthcare products in South Korea amounted to $1.1 billion in 2002, making it the Asia Pacific's region's second most important national market after Japan, and ahead of China's OTC market value" (Decision News Media, 2003).