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| Sunday, 8 January 2006 |
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Features |  |
| News Business Features Editorial
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Marketing
and consumer preference on herbal/medicinal beverages
by Dr. S. K. D. Frank F. Niranjan and Prof. H. P. M. Gunasena Continued from last week There is a good international market for Sri Lanka herbal medicinal products due to the intrinsic qualities such as flavour, aroma, nutritive value, colour etc. The most popular overseas markets are USA, Germany, Australia, Switzerland and Singapore. According to the manufacturers high potential exists to expand these markets and to develop new markets. There is an emerging market competition due to the increasing demand for these products. Propaganda In the future the demand is expected to increase and with that the competition and this factor has to be considered in expanding the herbal market. The marketing requires propaganda for sales promotion. Some of the manufacturers have carry-out promotional campaigns for their product through posters, leaflets, bulletins, magazines, and newspapers, trade fairs, electronic media etc. However, a majority of them have not carried out any primatial campaigns. Therefore, vigorous market promotion needs special attention of the manufacturers. Raw materials The survey has identified several factors constraining the development of this industry. * High cost of production is the major factor that the manufacturers are concerned with. This is due to two factors; the imported raw materials are cheap, but poor in quality and ends up with inferior products. The local raw materials are better but expensive, hence the cost of production is high and the profit margins are low. Furthermore, superior packaging materials are not manufactured locally and they have to be imported. This increases the cost of production further. Inadequate The modern manufacturing machinery and equipment are also expensive and the initial cost of establishment of an industry is also high. * Lack of quality raw materials is another factor constraining the expansion of this industry. Although there is a growing demand for these products, both in the local and international market, the industry cannot expand itself due to the inadequate supply of raw materials. When exports are resorted to the quality is reported as poor and the local products are expensive. Poor quality products are available in the open market due to the open trade policies and the local producers are not able to compete in spite of their high quality. Longterm retention As stated earlier, it is essential for the growers to embark on commercial cultivations with assurance by the manufactures through forward contracts. * Lack of skilled labour and high wages is another problem faced by this industry. The manufacturers have to invest additional funds for training without any assurance on their longterm retention. * An appropriate marketing strategy to compete with international markets is not in place yet. In the international market all products are subjected to rigorous quality testing prior to issue to the consumers. Present level These products have to undergo clinical tests and other accepted standards according to the international rules and regulations. At the present level of operation, only a very few products could compete in the international market, hence many of the manufacturers tend to export them under the category of food and beverages. * Government policies are reported as barriers for the expansion of this industry. Some relate to plant quarantine regulations, Food and Drug Administration (FDA) and lengthy documentary procedures. Others include inadequate credit facilities, marketing problems and inadequate scientific knowledge. It is not clear whether there are explicit policies regarding the manufacture and distribution of herbal medicinal beverages. It will be necessary to develop favourable import and export policies to assist the industry. |
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