Pricing strategies differ in developed Asian petfood markets

Pricing strategies vary among market leaders in the petfood segments of South Korea, Taiwan and Thailand, according to a Euromonitor report.

In South Korea, the premium dry dog food segment is highly competitive, with four main companies dominating the market share. In 2009, Colgate-Palmolive's Hill's Science Diet, Procter & Gamble's Eukanuba and Nestle Purina's Pro Plan held market shares of 19%, 18% and 17.5%, respectively. Premium brands like Hill's Science Diet are not usually sold in hypermarkets or discount stores where price competition is usually more intense, but are instead marketed through veterinary clinics, pet shops and the Internet.

The petfood market in Taiwan is dominated by Hill's Science Diet, who held 28.3% of the market share in 2009. Little variation in price exists here, as most brands in the premium dry segment were priced around NT$150/kg (US$4.66/kg) in May 2010. The relative uniformity of pricing in this segment suggests that manufacturers do not think they can gain significantly more of the market share by undercutting prices of other brands.

A difference in Thailand's petfood market is that price remains an important consideration for middle-class consumers who are driving growth in this segment by trading up to premium foods. Hill's Science Diet replaced Eukanunba as the dominating brand over the past decade, partially due to its prices that are set about 13% lower than Eukanuba's. Veterinary clinics are a major distribution channel in this segment and accounted for 27.8% of value sales in the dry dog food marketplace in 2009.