Besides, there is also a growing vegetarian market in Singapore now, due to the increasing number of vegetarian & people, who concern about their health, wants to consume more natural he
Trang 1Nowadays, there is a trend that young people go to temples, attend mediation class, putting themselves outside of the dynamic and ongoing life, distress and purify the soul Apart from Buddhist who eat vegetarian, there are also people who concern about their health seeking for vegetarian food Resulting an increasing demand for vegetarian food Besides, there is also a growing vegetarian market in Singapore now, due to the increasing number of vegetarian & people, who concern about their health, wants to consume more natural healthy food, as well as because this niche market has limited suppliers, PURE HEART VEGETARIAN LTD CO intend to enter this market in order
to seek stronger growth opportunities from overseas markets, as well as build a strong international brand to deepening market penetration in Asia market
Strategic analysis
PURE HEART is going to enter this market as an exporter, decided based on below deep international market analysis
External environment
Economic
Singapore is one of the most successful free market economies with strong service and manufacturing sectors, excellent infrastructure, and an open and corruption-free environment As of 8 August 2010, Singapore is the fastest growing economy in the world, with a growth rate of 17.9% for the first half of 2010 (Ramesh, Channel News Asia (Singapore)
Social
“As Singaporeans increasingly lead busier lifestyles, traditional meal preparation and dining at home with family is commonly shifting to meals being enjoyed at restaurants”,wrote SMa, 2004 Moreover, according to PriceWaterHouseCoopers, 2003, Singaporeans are living more like their Western counterparts, demanding healthier, more convenient foods Singaporean government also maintains a large health promotion program ( SMa, 2004) Besides, with 660,000 Muslim population, consuming 15-20%
Trang 2of total foodservice sales, more and more foodservice operators are obtaining halal certification in order to target this increasingly affluent and lucrative segment
Political
Singapore is a small domestic market that depends on imports for food, energy and industrial raw materials It hold several import regulations need noticing before entering the market (from Singapore Exporter Guide & Singapore FID database, 2006)
Virtually a duty-free port and does not apply tariffs or quotas to food commodities
A customs permit is also required from Singapore Customs for shipment of food products
A 7% goods and service tax (GST) rate is applied on the costs, insurance and freight (CIF) of all imported Agri-food products and beverages
The Food Control Division (FCD) of the Agri-Food & Veterinary Authority of Singapore (AVA) oversees food safety, licensing, inspection and import control
Technology
In her article , Merrett, 2007 let us know that the Singapore government has recently launched a food innovation and resource centre to compete in the global food industry
Internal environment
Business policy The company, adhering to a policy of “basing itself upon fundamentality and reaching the client satisfaction by excellent quality”.
Market:
Domestic: through out the country, while International market: USA, Australia, France, Belgium…
Main product
We guarantee that they are free of meat, fish, and poultry by products Our product is made from raw, natural sources with high nutrition and protein
Trang 3Competition environment
Five competitive force model:
Entry of Competitors:
Singapore don’t have natural resources to produce vegetarian food products, all resources are imported And some Asia countries export food to Singapore without tax such as the Vietnam, Malaysia etc The cost of vegetarian product is not too high, so that new entrants are easy to enter this market Moreover, Singapore has very few trade barriers For food sector, it required a certain high standard about quality, price, package (labeling and marking…) Since Singaporean like to try new food products, the entrant barrier to food sector is low
Threats of substitutes:
For people who eating vegetarian food is not a must (because of religious, special diet ), they may still use normal food These below are some spot light of non-vegetarian food sector, extracted from Process Food Market - Asia Pacific (2006-2007) report
Fish is widely consumed in Singapore with consumption averaging 71.6 kg / capita in 2003
Red meat is the most popular meat in Singapore with an average 10.5 kg/ capita in
2003
Poultry consumption has become popular in recent years mostly due to continuing concerns over the safety of red meat, especially beef
Eggs are also popular in Singapore with approximately 228 units/ capita consumed
in 2003
Moreover, with a push for healthier foods, consumption of vegetables has greatly increased in recent years Neighboring countries Indonesia and Malaysia, both large produce exporters, allow Singaporeans to enjoy large quantities of fresh produce
Bargaining power of buyers
Singapore has many Buddhist and Muslim, the bargaining power of customers is very strong, and most of Singaporean is vegetarian enthusiast because those people tend to
Trang 4keep good health But the most vegetarian products of different company are using same raw materials and the feature is similar, so that the buyers are very sensitive to the price, and difficult to build the consumer loyalty
Note that approximately 77% of Singapore’s population is Chinese, 14% Malaysian, and 7% Indian, and each of these segments maintain their respective culture and customs (Market Asia pacific, 2006) Furthermore, the country’s Muslim population abstains from eating pork or drinking alcohol, and strict Buddhists and Hindus do not eat beef
Bargaining power of suppliers
The main ingredients of PURE HEART vegetarian food are made from soya bean, vegetables, taro, cereal … therefore suppliers of the company are agriculture farms As an agriculture country, in Vietnam, it is easy to bargain and buy the material The bargaining power of suppliers is weak The only issue is that PURE HEART should develop and maintain a long term relation with any supplier that provide fresh and clean products
Rivalry among the existing players
With PURE HEART into Singapore vegetarian market, it will face competition from both
of the local vegetarian industries as well as foreign vegetarian foods Suxianzi Industries (which is the largest vegetarian company of Singapore) and Chaste Je Way (which is a company of Taiwan) are the main competitors And other local competitors are: Friendly Vegetarian, CK food, Green farm Food industries, and Jia Jia Wang trading and some European or American company (which price is more expensive than others); and some restaurant offered special dishes for vegetarian which is the potential competitors (or maybe customers) of PURE HEART In Singapore vegetarian market, vegetarian food is not the highly competition industry, thereby PURE HEART can reduce the cost of product, and increase the degree of product differentiation to entry this market
SWOT analysis
Opportunities
These below are those market and social trends and drivers that affect the FBT industry which help convenient vegetarian food such as PURE HEART products enter the market
Trang 5 With double-income families leading a busier lifestyle, there is greater demand for convenience and speed of food preparation
There is also increasing consumer consciousness of food safety, health and hygiene and the desire for environmentally-friendly products
There is a trend towards greater levels of pre-packaging, especially the growth of single-serving portions/packages
Levels of education and affluence are increasing amongst Singapore’s consumers They are highly brand conscious and have a growing interest in seeking new and innovative products
Almost all the F&B manufacturers SMa surveyed said that their costs of production in Singapore, or even Malaysia or Indonesia were higher than in Vietnam These push up their selling prices, giving us an opportunity to offer a lower price to customers
Ethnic cuisines appeal to both new immigrant groups and the increasingly diversified tastes of the indigenous population
Threats
In Singapore, big supermarkets are squeezing the FB manufacture’s profit margins very tightly There is also an international trend is towards supermarket house brands On top
of this, innovation technology of local manufacture with the support of government to produce better quality products & Singapore government also supports the local food manufacturers (People Daily, 2006)
Strengths
PURE HEART has abundant products with attractive product appearance and keeping product innovation to attract more consumers Besides, PURE HEART has the
expert power to produce the vegetarian food and has strong raw material suppliers and
worldwide distributions with excellent logistic systems, as well as the successful experience in abroad In additional, due to the lower cost of manufacture, PURE
HEART may set a lower price to compete with existing rivals in Singapore
Trang 6The competition is intense In supermarkets, over 25,000 new packaged-goods products were introduced in 1997 alone (Sales & Marketing Management, 1998) Vegans represent a fraction of the population, but Singapore merely has 3.87 millions populations (moveandstay.com, 2007) The taste of Vietnam and Singapore probably is different There is a strong local brand named “SUXIANZI”, and many new entrants like the
“Hong Kong Kam Kee”, TaiWan “Chaste Je Way”
Market segmentation
According the internal and external environment analysis, Singapore is a unique nation with its melting pot of ethnic races and cultures Singaporean is afraid of lose and death, thereby they tend to hard working and keeping health In Singapore, vegetarian marketing segmentation can be sorted by age, behaviors, religion and lifestyle …
Market target
In Singapore, the vegetarian target market includes whose diet consists of plant products only such as monks, nunsand some Buddhists who eating the vegetarian on 1st and 15th of every month; some patient can’t eat meats and youths who are want to lose weight or concern about health
Marketing mix
Product
1.1.1 Product characteristics and classifications
Vegetarian food products are non-durable goods Customers really value our product as foods good for health, and the basic product are the raw material, vegetable, fruits and other natural food; and customer expected lower price with high quality goods such as the material must be fresh, and taste must be good; comparison of this new market competitors, our augmented product is that providing extra services For instance, provide
a cookbook to customer if they buy our product or other product support services to distinguish competitor’s product
Trang 71.1.1.1 Product differentiation
Establish a Research and Development team to develop new products to satisfy the needs
of customers Such as introducing curry flavor food to attract more potential customers and retain current clients
Price
Singapore market pricing overview
Pricing in Singapore is very competitive Major department stores and retail chains offer fixed-price merchandise, while the smaller shops expect buyers to bargain Hard bargaining is common in the commercial and industrial sectors as well, where buyers usually want a discount and vendors inflate their initial offers accordingly
Trang 8Competition-based pricing
Introductory products: from $3.80 to 3.20 /per 200g piece
Suxianzi products : from $2.70 to $7.60, median and average $4
Chaste Je Way products : from $3.50 to $6
Based on the pricing of other competitors, we can set the price for our product that may rank from
$3.50 to $4.5.Aaccording to Kotler and Keller, 2005, as the company want to enter the new market, the uncertainty is obviously, and competition-based pricing is a good solution because it is thought to reflect the industry’s collective wisdom
Market-penetration pricing:
We can set our product at the price of $2.99 – a low price for new product in order to attract a large number of buyers and a large market share and psychological price Our product demand is highly elastic, with the price-sensitiveness of Singaporean, we can use this strategy to launch and penetrate the new market
Promotion
At this earliest state of introducing our product to a new market, advertising is most appropriate, given its capacity to reach large numbers of people relatively cheaply and quickly with a simple message Sales promotions can also bring a product name to the fore and help in the affective stage, perhaps based on discount, coupons and sampling, help to generate trial of the product Moreover, sales promotion will also be used in conjunction with intense personal selling effort to gain retailer acceptance of the product
Slogan
PURE HEART company can use the corporation concept: “Natural healthy vegetarian food to benefit people" or our product‘s core principle: “to give you the very best meat-substitute alternative” as our slogan for advertising campaign “Healthy food, healthy mind and healthy body” … can show off our benefit as well as our differentiation to other products
Major media types
There are many specialized trade magazines in Singapore and many trade fairs
food The major English-language daily newspapers are the Straits Times and the Business Times The major Chinese daily is Lianhe Zaobao (http://www.zaobao.com ) If using Television
Trang 9Chinese speaker, Suria channel for Indian…Depending on which segment we want to targets, those above media types would be considered to select
Public relation
Since we has an advantage of lower manufacture cost, as well as avoiding a common perception of oriental people “ good is no cheap, cheap is no good”, instead of maximizing profit, we can using more fund to building a “environmental friendly” product
Place
Singapore's distribution and sales channels are simple and direct Most consumer goods are imported by stocking distributors who resell to retailers Some goods are imported directly for sale
in the importer's own retail outlets Some of distributors that PURE HEART may consider such as Auric Pacific Marketing Pte Ltd, Be Fresh Pte Ltd, Ben Foods (S) Pte Ltd, Network Foods Distribution Pte, Paramount Food Pte Ltd, Toh Li Food Products Pte Ltd, Xie Chun Trading Pte Ltd… they are quite large food and beverage products distributors in Singapore
According to the survey conducted by AC nelson, FairPrice supermarket leads by a comfortable margin with 8 out of 10 household shoppers shopping at FairPrice at least once every month, following by DFI Super/hyper, shop&shave, cold storage, sheng siong… seems to be a potential business partner to the company
Conclusion
PURE HEART decided to add Singapore as our next location for expansion!
A growing vegetarian market due to the increasing number of vegetarian as well as people, who concern about their health, wants to consume more natural healthy food in Singapore; PURE HEAR’s own abundant vegetarian food choices, broad experience with oversea market, strong supply sources which help PURE HEART to set a lower price to compete with existing rivals in Singapore but quality much better than … all those are factor that lead to this decision
Trang 10 AC nelson surveys, 2003, Singapore shopper trend, at http://www.acnelson.com/
Kotler, P., Keller, K., 2006, Marketing Management, 12th, Australia, Pearson/ Prentice Hall
Market Asia pacific, 2006, Household income increase, Singapore country, Singapore
Merrett, N., 2007, Singapore centre targets innovative food production :
http://www.foodnavigator-usa.com/news/ng.asp?id=76994-food-innovation-chinese-halal
Market Asia pacific, 2006, Household income increase, Singapore country, Singapore
People Daily, 2006, Government support local food manuafacturers, at
http://english.peopledaily.com.cn/200701/13/eng20070113_340853.html
Process Food Market - Asia Pacific (2006-2007), 2007, at
(http://www.foodandbeveragereports.com/products/rnc46566.html
PriceWaterHouseCoopers, Corporate Finance Reports, Food&Beverage Bulletin, December
2003 Issue 1, Singapore
Singapore Exporter Guide 2006 - USDA Foreign Agricultural Service at
http://www.fas.usda.gov/scriptsw/attacherep/default.asp
Singapore - FDI - UNCTAD - Foreign Direct Investment Database at
http://www.stats.unctad.org/fdi/ReportFolders/ReportFolders.aspx?
CS_referer=&CS_ChosenLang=en
Singapore manufacturer federation (SMa), 2004, TRENDS AND PROSPECTS OF THE SINGAPORE FOOD, BEVERAGE & TOBACCO INDUSTRY
Singapore statistic department at http://www.singstat.gov.sg/
Ramesh, S (8 August 2010) "Govt's goal is to ensure all S'poreans enjoy fruits of growth:
PM Lee" Channel News Asia (Singapore)