15 September, 2015

David Chow, Department of Decision Sciences and Managerial Economics

Fred Ku, Department of Decision Sciences and Managerial Economics
Andrew Yuen, Department of Decision Sciences and Managerial Economics

GOOD LUCK: Targeting the Younger Generation (A)1

It was the first Monday morning in May 2015 when CEO of GOOD LUCK (Exhibit 1), Marcus Chan,
was frustrated with the marketing report in front of his office table (see Exhibit 2). It is found that
although the packaged drink market had been expanding in the last ten years, the market share of the
GOOD LUCK Lemon Tea (GLT), the core product of the company, had been shrinking. Marcus
believed it is time to rethink the corporate strategies to regain GLT’s competitiveness in the market.
After looking at the data in detail (Exhibits 3 and 4), Marcus found that GLT had been losing territory
in the younger generation market, a fast growing market segment.

Given this, he decided to call for a meeting with Fiona Wong, the marketing manager of Good Luck.
As the hot season had just begun, meaning more people would want to have cold drinks, Marcus
wanted to meet up to discuss the upcoming marketing strategy for the GLT. The focus of the meeting
is on exploring the market of the younger generation. Marcus began:

Since 1970s, GOOD LUCK is the first company in Hong Kong to bring in packaged
drinks to the market, and we have been the market leader since then. One of our best-
selling products is undoubtedly GLT. However, it is seen that the market share and
market size of GLT is shrinking. It is shown in a recent study that the younger generation
is no longer drawn to GLT. Among the many possible reasons, I think a major one could
be that the youngsters find drinking lemon tea very “old-fashioned”, not cool enough for
them. Meanwhile, other companies selling similar products are beginning to target the
young market, causing GLT to lose its competitiveness and possibly its leading position
1
The case is developed solely as the basis for class discussion. It is not intended to serve as endorsements,
sources of primary data, or illustrations of effective or ineffective management.

Copyright © Chow, Ku and Yuen. All rights reserved. No part of this publication may be reproduced,
distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic
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 in the market. In view of this, I think we must not waste any time more and step up our
actions to target the younger ones in our market. Do you have any suggestion on how we
can do so?

It is getting forever more difficult to catch the attention of the younger generation amidst the vast
amount of information. Fiona was extremely energetic that day and had many ideas flowing in her
mind. She thought it would be an excellent idea to start a marketing campaign that aims at rebranding
and creating a new image for the GLT. She recalled that recently she had seen quite a number of short
films videos, or in another name, micro-movie, posted online as marketing campaigns for other
companies’ products. Fiona suggested:

I think micro-movie will be a very good way to promote GLT. I have seen other
companies producing micro-movies, usually 3-10 minutes long. It is more attractive than
the traditional types of advertising because it doesn’t involve hard-selling or mundane
facts about products. Rather, young people like these movies a lot as they are always with
very catchy storylines that youngsters can sympathize with. How about we create a
micro-movie for promotion? To generate more interest and talk in the society, we can
make it in two episodes and release them separately.

Marcus found Fiona’s idea brilliant. He then asked her to determine the advertising platform for this
campaign. Other than traditional channels, like TV ads, Fiona thought that online platform could be a
good potential candidate.

Posing the Questions

Fiona reckoned that Jody Lam, the new marketing executive who was still at her late twenties, would
be a perfect assistant in this project given her expert knowledge on social media. She was known
among her colleagues for being able to keep her finger on the pulse of current events through the use
of different social platforms. Before joining GOOD LUCK, she was one of the masterminds of online
marketing strategy in her previous company. Fiona decided to invite Jody to assist in the campaign
and asked her to join the second meeting on 2 June 2015. Marcus directly asked:

We are brainstorming about ways to promote GLT to the youngsters. Fiona suggested
making micro-movie and then spread it on the online platform. However, GOOD LUCK
had previously focused our efforts on traditionally form of advertising like TV
commercials. I am not sure how these online platforms work. Are they cost-effective and
efficient?

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Jody immediately replied:

I strongly recommend using micro-movie and online platforms for marketing,

especially in the youngster market. Online marketing is beginning to take over other
traditional forms of marketing mainly because of its lower cost and ability to reach a wide
range and large amount of audience. Who doesn’t use the Internet these days? I would
even say there are more youngsters who surf the net then watch TV or read the
newspaper and magazines nowadays. If we plan carefully enough and have interesting
ideas, our micro-movie can even go viral with everyone talking about it.

Fiona added:

Exactly! Besides, there are so many social networking platforms now. Most of the
young people are users of Facebook, Instagram or Twitter, and there are so many other
platforms such as Weibo and Tumblr. These platforms allow youngsters to share their
opinions and express their interest. For example, if they see a funny photo, it only takes
one click to share in on their own profile, while this action will appear on the newsfeed of
the friends of this person. If the friends press the “like” button or share it on their on wall
as well, soon everyone will be talking about this photo. It will surely be a good way for
us to promote our micro-movies on these platforms.

After some thoughts, Marcus concluded:

Indeed there are many platforms, but I believe it is better to narrow down and focus
our efforts on one platform first since this is our first attempt on online marketing, and
this can also ensure that cost will not be too high.

Jody replied:

I will suggest either choosing Facebook or Instagram. Twitter has more users in the
West while Weibo is more popular in China, but Facebook and Instagram have more
Hong Kong users.

Getting the Data

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The group continued to discuss the details of the new campaign. In the end, Marcus asked Jody to
conduct a research to study the popularity and effectiveness of Facebook and Instagram. As a new
member of GOOD LUCK, Jody realized this was a prime opportunity for her to unleash her potential
and prove her ability. She was anxious to make sure the best social media platform was used for this
marketing campaign, and she knew that she had to provide concrete evidence to convince the boss.
Right after the meeting, without further ado, she went straight off to work. To start with, she
considered some marketing survey used by Good Luck in the past, which include telephone interview,
face-to-face survey and online survey. Telephone interview involves calling randomly generated
phone numbers, while face-to-face interviews are conducted outside MTR stations of some core
business and shopping areas like Causeway Bay, Tsim Sha Tsui, and Mongkok. As for online survey,
emails are sent to people who have previously participated in other Good Luck’s online marketing
campaigns, such as players of online games that the company has previously launched. She had to
decide which data collection method is more suitable for this study. On the other hand, she also
wanted to collect some demographic characteristics and consumption pattern of young customers for
further study.

The First Glimpse into the Data

After reviewing all the data collection methods, Jody chose one of them and sought help from a
marketing firm to do marketing survey. The reliable company collected all necessary data on 15 July
2015 (Exhibit 5). With the data at hand, a meeting has been scheduled on 31 July 2015 to make a
decision whether Facebook or Instagram will be used for the promotion of the first episode of the
micro-movie.

Meanwhile, Fiona and Jody also got in touch with one of the best video production teams in town to
create two episodes of the micro-movie, which would be used for the first and second phase of the
campaign respectively. The micro-movie would be about a story about a pair of young lovers who got
to know each other when buying GLT in a convenience store. They also invited a very famous local
singer to sing in the theme song. Jody believed that these kinds of stories are very attractive to the
younger generation.

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Tasks:

Assume that you were Jody Lam, the new marketing executive of GOOD LUCK.

1. After the meeting on 2 June 2015, you have to provide advice to Fiona Wong, your
immediate supervisor on survey method: Among the three sampling methods used by Good
Luck for its marketing survey before, which one would you recommend to Fiona, in order to
ensure the representativeness of the sample? Explain.

2. At the meeting on 31 July 2015, you are required to present the major results of data
collected, and provide advice on the choice of the platform, Facebook or Instagram? Prepare
two-page slides for it.

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Exhibit 1 Background Information of GOOD LUCK

GOOD LUCK was founded in Hong Kong in the 30s, and now operates under the GOOD
LUCK International Holdings Limited. GOOD LUCK’s main products were packaged
beverages, such as soy milk, juice drinks, distilled water and tea. GOOD LUCK also
produces sandwiches. In the year ended 2014, almost half of GOOD LUCK’s sales came
from tea, sales of juice took up 20%, and the remaining products each accounted for less than
10% of the total sales.

A Hong Kong-based company, GOOD LUCK’s sales in the year ended 2014 focus mainly,
that is around 60% of sales, took place in Hong Kong and Macau. Meanwhile, around 30% of
sales came from Mainland China, and the remaining from North America, Australia, New
Zealand and Singapore.

In the previous 5 years, an increase in the Groups sales and gross profit can be seen. Sales
increased for more than 1 million HKD. Net sales revenue increased 10% to HK$5,489
million in FY2013/2014. In Hong Kong, it maintained its leading market position in tea and
juice. Despite the rising cost in raw materials, the Group succeeded in sustaining the same
gross margin as the year ended 2013, at 52%, through price adjustments and enhanced
manufacturing efficiency. The financial position of the Group is healthy and sound, and the
total dividend per ordinary share for FY2013/2014 was HK19.5 cents per share, as opposed
to HK18.7 cents per ordinary share in the previous year.

In the future, GOOD LUCK will seek to increase profitability and build shareholder’s value.
Rising price level in commodities will bring negative influence in the aspect of cost of
production. The company also has to address the growing concerns over the environmental
impact of production as well as the health needs of consumers.

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Exhibit 2 Market Size of Packaged Drinks and Market Share of Good Luck Lemon Tea
(2005-2015)

Total market sales and GLT market share in 2005-2015

45.0% 12,000

40.0%
10,000
35.0%

30.0% 8,000

25.0%
6,000
20.0%

15.0% 4,000

10.0%
2,000
5.0%

0.0% -
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Good luck market share Total market sales (in HK$ million)
Source: Created by case authors

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Exhibit 3 Total Market Sales of Packaged Drinks by Age Group (2005-2015)

Total market sales (by age group) in 2005-2015

5,000.00

4,500.00

4,000.00

3,500.00

3,000.00

2,500.00

2,000.00

1,500.00

1,000.00

500.00

-
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

15-25 26-40 40 or above

Source: Created by case authors

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Exhibit 4: Sales of Good Luck Lemon Tea by Age Group (2005-2015)

GLT sales (by age group) in 2005-2015

2,000.00
1,800.00
1,600.00
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
-
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

15-25 26-40 40 or above

Source: Created by case authors

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Exhibit 5 Data Collected

Surveyee ID FB Visit IG Visit Age Job Status Income (HK$)

1 28 44 18 2 12,900
2 26 14 19 0 0
3 37 102 24 -- --
4 50 60 17 1 16,800
5 45 59 24 2 10,400
… … … … … …
199 32 21 24 1 16,900
200 0 93 17 2 15,200

FB Visit: Average Weekly Facebook Visit

IG Visit: Average Weekly Instagram Visit
Job Status (categorical variable):
0 = student
1 = white collar
2 = blue collar
-- = no response
Income: Monthly salary

(The full data set could be found in datafile A.xls)

Source: Created by case authors

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