Master Kong moving upmarket

Wei Chuan Foods Corp (味全食品), the nation's second-largest food company, fine-tuned its marketing strategy by launching medium-priced instant noodles under its renowned brand Master Kong (康師傅) yesterday, aiming to expand its market presence in the already mature sector.

"Our target is to raise market share to 25 percent at the end of this year," chairman Wei Ying-chun (魏應充) said at a press conference yesterday.

The new noodles sell for NT$25 a pack, demonstrating a different marketing strategy from the low-priced tactics employed when Master Kong entered the local market at the end of 2002.

But Wei Chuan may find it hard to achieve its goal, said Rachel Lee (李依慧), a researcher at Polaris Securities Group (寶來證券).

Several famous products, like the ground-pork noodles (肉燥麵) manufactured by Uni-President Enterprises Co (統一企業), or the fried-sauce noodles (炸醬麵) launched by Wei Lih Food Co (維力食品), have been selling well for years and will be difficult for new competitors to beat, Lee said.

"As consumption will not dramatically expand in this mature sector, the company must develop unique flavors of noodles," she said.

Lee noted that Wei Chuan's low-price marketing strategy did not really work -- despite causing shock waves at the beginning -- as it had slashed margins by 4 percent when sales of Master Kong fell short of targets.

"Therefore, it turned around to seize the medium- and high-priced noodle market," she said.

According to ACNielsen Taiwan's statistics, Uni-President accounted for 46 percent of the nation's NT$8.42 billion instant-noodle market from May last year to last month, down 3 percent from a year earlier.

It was ranked the No.1 noodle brand last month in major retail channels, including supermarkets, convenience stores and mom-and-pop shops, the report said.

It was followed by Wei Lih, which held 20 percent, and Vedan Enterprise (味丹企業) and Master Kong with around 12 percent each.

Master Kong has been refused access to the more than 3,500 7-Eleven outlets owned by Uni-President's subsidiary President Chain Store Corp (統一超商), meaning that the brand is being deprived of exposure in 20 percent of the market, according to Wei Chuan's managing director, Michael Su (蘇守斌).

"But we'll work harder so that 7-Eleven will find it difficult to reject our products," Su said.

Admitting that Master Kong's market share has declined by between 5 percent and 10 percent since December because no innovative products were launched, Su expressed optimism about another shake-up in the market.

"We hope to jump to second place to compete head-to-head with Uni-President," Su said.