New mindset turns YHS around


BY YAP LIH HUEY

THREE years ago, Tan Teow Choon came on board as the managing director of Yeo Hiap Seng (M) Bhd (YHS) to turn things around at the lacklustre company.  

At that time, the food and beverage (F & B) giant was weighed down by conservative, restricted management styles and mindsets. That resulted in new and existing players stealing its market share.  

Tan Teow Choon with the new Justea drink.

The determined Tan introduced an open and transparent management style to YHS. He encouraged his people to speak out and communicate with each other.  

He also broke free from the conventional way of hiring people. His sales and marketing team, for example, comprises people with a diverse range of backgrounds such as those in health and nutrition.  

In the belief that nutritional and functional foods would be the future preference of consumers, Tan introduced a range of products with these features, for instance, SoyRich, a high protein soy milk product.  

Most importantly, Tan has gradually changed mindsets at YHS. He has instilled the idea that brand equity would bring value to the company. He has brought in a lot of systems and processes like research tools, including a different approach, to product development and strategies. 

In short, he has changed the 46-year-old YHS, which established its first sales office in Kuching in 1957, into an energetic place to work in. People who worked under him for the past three years are seeing the changes at YHS and enjoying themselves.  

YHS is already doing well in the beverage sector but Tan wants to rev up its image. In line with his strategy to build up the Yeo's brand, Tan has decided to go after the youth market. That is a natural progression for YHS, which has saturated the older market with its packet drinks.  

According to research house ACNielsen, YHS beverages dominate the Asian drinks market with a 45.6% market share this year. For the same period, its ready-to-drink tea is a leader in the total tea market with a 47.6% share.  

Tan said production capacity should not be a problem to YHS. “It is more about the consumer uptake of our new products.” 

This year alone, YHS has spent RM2mil in upgrading its production equipment.  

“This would, in turn, help improve production efficiency and cost management,” he said.  

Millions of ringgit have been spent on research and development (R & D) as well as a media blitz for the new products.  

A new product he's banking on is Justea, a green tea drink with a lemon flavour with added vitamin C. The idea for Justea came about a year ago when YHS was conducting a number of consumer surveys, in- cluding a sampling at public and private colleges. 

Justea, available in packet and can formats, comes in an attractive packaging, in line with the company's aim to rejuvenate its product range. Gone are the traditional Yeo's rectangular packaging designs and structured logo.  

In its stead is a slim and jazzy packaging with eye-catching colours, conceptualised and de- signed by a team of talented and young people, who themselves are consumers of the product.  

“We have tried to stay away from the traditional Yeo's design and logo,” he said. “We are very interested to ensure the success of this new launch for Justea, as this will set the pace for other product launches targeting our young consumers,” Tan said. 

On top of using the normal audiovisual advertisements, Tan is focusing on youth-related medium such as the Internet and SMS marketing. YHS has tied up with local portal catcha.com, on Internet advertising and web contests. It is also currently talking with a local telecommunications company on SMS marketing collaboration.  

As of this month and beginning of August, YHS will be pushing Justea into the market via its extensive distribution network. “Before the end of this year, we should be able to see some results,” he said. 

Tan forecasts that in one to two years, Justea should be able to capture 10% to 15% market share of the Asian drinks market. YHS is targeting sales of 100,000 cartons of Justea per month starting in August for the whole nation, excluding exports. 

New nutritional products in the pipeline are Blacksoy, Green Bean and SoyKids. Again, Tan hopes to achieve between 10% and 15% market share for these products in the nutritional beverage segment in one to two years.  

On cut-throat competition, Tan said: “In an environment where consumers are given a wide variety of products to choose from, it is important to build consumer loyalty and brand affinity. Our marketing efforts are aimed at bringing our products closer to our consumers with key emphasis on product innovation, increasing product consumption within each category, tapping the potential of each segment and managing the brand for growth.  

“Something that we are always good at is our distribution. When we introduce new products to the market, they can be found in any retail outlet.”  

The group recorded revenue of RM106mil in the first quarter of 2003, a decline of 10% compared to last year. However, profit before tax has improved to RM6.1mil or 359%.  

The higher profit for the quarter was attributed to good cost management and measures to improve earnings. 

For the latest YHS share prices and charts click here

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