EXPORT STRATEGY OF B’FAST INSTANT SOUPOF MASAN CONSUMER – MASAN GROUP TOSINGAPORE

UNIVERSITY OF ECONOMICS AND LAWS INTERNATIONAL ECONOMIC RELATIONS___________________________ GROUP PROJECTEXPORT STRATEGY OF B’FAST INSTANT SOUP OF MASAN CONSUMER – MASAN... UNIVERSITY O

UNIVERSITY OF ECONOMICS AND LAWS INTERNATIONAL ECONOMIC RELATIONS

_

GROUP PROJECTEXPORT STRATEGY OF B’FAST INSTANT SOUP OF MASAN CONSUMER – MASAN

UNIVERSITY OF ECONOMICS AND LAWS INTERNATIONAL ECONOMIC RELATIONS

_

GROUP PROJECT EXPORT STRATEGY OF B’FAST INSTANT SOUP OF MASAN CONSUMER – MASAN

MỤC LỤC

CHAPTER 1 THE COMPANY AND THE PRODUCT 1

1 The overview of Masan Group 1

1.1 Masan Group 1

1.2 Masan Consumer 1

2 B’fast instant soup 2

3 Potential export market – Singapore 2

CHAPTER 2 MARKET INFORMATION 4

1 The overview of singapore market 4

1.1 The economic – geographic environment 4

1.2 The political – legal environment 5

1.3 The social – cultural environment 6

2 Singapore’s instant noodles market 6

2.1 Singapore Instant Noodles Market Potential 6

2.2 Instant Noodles Market Shares 7

2.3 International Competitors 7

2.4 Price of Instant Noodles in Singapore 9

CHAPTER 3 SWOT ANALYSIS 10

1 Strength 10

2 Weakness 11

3 Opportunities 11

4 Threats 13

CHAPTER 4 PRELIMINARY MARKET – ENTRY STRATEGY 15

1 Product strategy 15

2 Pricing strategy 16

3 Distribution strategy 17

4 Promotion strategy 19

5 Strategy implementation 20

6 Cost estimation 20

LECTURER’S COMMENTS

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CHAPTER 1 THE COMPANY AND THE PRODUCT

1 The overview of Masan Group

1.1 Masan Group

Masan Group is one of Vietnam’s largest private sector companies with a focus onthe consumption and resources sectors They have a track record of actively building,acquiring and managing large-scale operating platforms that capitalize on Vietnam’sstructural consumption and resources stories

In October 2009, Masan Group increased capital up to VND 4,764 billion andNovember 5th, 2009 it was listed in HOSE with 476.4 million shares

MSN is one of top multi-industry investment groups in Vietnam, its portfolio includes bigenterprises that has high growth

Location: Central Plaza, 802 room, 17 Le Duan Street, District 1, TPHCM

Website: http://www.masangroup.com/

1.2 Masan Consumer

Masan Consumer is one of Vietnam's largest local diversified FMCG companies.They manufacture and distribute a range of food and beverage products, including soyasauce, fish sauce, chili sauce, instant noodles, instant coffee, instant cereals and bottledbeverages These companies have subsequently grown our product portfolio, domesticsales and distribution channels to establish a leading position in Vietnam’s brandedconsumer food and beverage product market Masan Consumer has created and ownssome of the most recognized and trusted consumer brands such as Chin-Su, Nam Ngu,Tam Thai Tu, Omachi, Kokomi, Vinacafé, Wake Up, Kachi and Vinh Hao through astrategy of putting Vietnamese consumers first

2 B’fast instant soup

B’fast is a product of convenience food in MasanConsumer product list In 2013, it was introduced to the market asthe first instant soup product B’fast is designed as the premiumbrand to provide a healthy breakfast for customers B’fast has noMSG, no color, no preservatives added Only 90 seconds inmicrowave or 7 minutes in boiling water, this instant rice chicken soup will give theperfect taste

B’fast instant soup is derived from the housewives' desire to bring your family anutritious and convenient breakfast Therefore, a special thing of B’fast instant soup is thecasserole pocket containing 100% real chicken and mushroom Cooking proceduresensure optimally to retain nutrients and flavor of chicken and fungi

Chicken and mushrooms after sautéed completion are packed in the casserolepocket - the special aluminum bag designed to prevent air penetration after being sealed.Then casserole pockets are sterilized in an autoclave at a temperature of 121oC for 45minutes to kill bacteria and other microorganisms, which helps maintain the shelf life ofchicken and mushrooms for a long time without any additional any preservatives Afterbeing sterilized, casseroles pockets are stored for 21 days at normal room temperature toensure the chicken and mushroom quality standards before being packaged

This is the modern sterilization technology used commonly in processing packagedfoods in developed countries around the world This production process helps to keepmore freshness and nutrition of food and do not need to use preservatives So consumerswho are interested in nutrition, health and safety can be assured when choosing B’fast

3 Potential export market – Singapore

The demands for instant food in Singapore are not affected by changes in theeconomic situation, which may be attributed to the low price points of convenient food

Besides, most of the customers expect that the perfect instant food is not only canbring them convenience, but also a delicious dish B’fast instant soup with 100% real

chicken and mushrooms has many standard food features such as taste, convenience, saving and cheap Therefore, B’fast may meet Singapore consumer’s requirements.

time-Furthermore, nowadays, more and more Singaporeans are taking health intoconsideration when choosing food to eat However, there are many reports showing thatmost of the instant noodles contain the quantity of fat and sodium beyond the restrictionrecently, which increases the risk of having disease such as heart disease and cancer Also,some experts point out eating non-fried instant noodles is healthier than eating friedinstant noodles B’fast is non-fried instant soup Accordingly, it is an opportunity forB’fast to enter the Singapore instant food market

For those above reasons, Singapore is believed to be a potential market for ourproduct

CHAPTER 2 MARKET INFORMATION

1 The overview of singapore market

1.1 The economic – geographic environment

First of all, one of the main advantages of Singapore is location Singapore islocated in the heart of Southeastern Asia Also, the country has the status of “a premierInternational Maritime Centre” thanks to its port It is the second biggest container port inthe world Moreover, one more big advantage of the port for the business is that it isconnected with 600 ports all over the world

Economic Indicators

Population: 5.4 million

GDP (PPP): $339 billion; 3.9% growth in 2013

Unemployment: 2% (2013 est.)

Inflation (CPI): 2.4% (2013 est.)

FDI Inflow: $63.8 billion (2013est.)

Public Debt: 110.9% of GDP (2012 est.)

Since independence in 1965, Singapore has a highly developed and successful free– market economy It enjoys a remarkably open and corruption-free environment, stableprices, and a GDP per capita higher than that of most developed countries

The prosperous economy performance of Singapore is an advantage for trading.According to the statistics from World Bank, GDP per capita is $60900 - the 6th biggest inthe world From 2003 to 2013, GDP nearly doubled from $187.9 billion to $339 billion.Besides, the country has one of the lowest unemployment rates in the world (2%).Therefore, entering Singapore, our company can enjoy its economic strength

Industry and services accounted for 27% and 73%, respectively, of Singapore’sGDP in 2013 Service is more and more important to Singapore economy, evidenced byincreasing share of the financial and business sectors Good services make anadvantageous business environment for exporting and selling goods more easily

Especially, Singapore has a large current account surplus, balanced fiscal budget,high savings rates and zero foreign dept This fact will help the business to restrictpotential economic risks and exchange rate risks.

As a result of trade liberalization policy, over the past decade, Singapore’s traderose significantly from S$516 billion in 2003 to S$985 billion in 2012 in nominal terms,achieving a compound average growth rate (CAGR) of 7.4% Export – import goods andservices in Singapore are free, except motorcycles, alcohol, gasoline and cigarettes aretaxed heavily It is an important advantage for foreign exporting companies

Finally, out company will get big opportunities due to Singapore's macroeconomicstability, excellent telecommunications and infrastructure, an educated workforce

1.2 The political – legal environment

The country has a parliamentary democracy and the Prime Minister is Lee HsienLoong He is the leader of People’s Action Party (PAP) – the people’s party has wonevery general election since 1959 There is also a President in Singapore who is takingcare of appointing the Prime Minister of Singapore At present the President in Singapore

is Tony Tan Keng Yam

In Singapore, a legal system is written under the English common law TheConstitution of Singapore gives the fundamental principles for the three main organswhich are The Executive, the Legislative and the Judiciary

According to the research made by one Singaporean consulting company, thegovernment in Singapore affects the business environment in a positive way Thegovernment “decides priorities and sets regulations using a rational, pro-businessapproach” Moreover, the government helps Singapore to become one of the mostindustrialized nations in the world As a result, the country has the best political stability

in Asia Furthermore, according to the research made by World Bank, the country hasthe easiest conditions of doing business

One more reason to name the government system of Singapore as anadvantage for companies is the corruption level According to the results received byTransparency International organization, Singapore is on the fifth place on the list of

the least corrupted countries in the world Moreover, Singapore has a good consumerprotection policy and a tight commodity standard system.

1.3 The social – cultural environment

Singapore is a multi-cultural country There are three main culture groups inSingapore: the Chinese (76,4%), the Malays (14,9%), the Indians (6,4%) The mainreligions in Singapore are Buddhism, Islam, Christianity, Hinduism and Taoism.Singapore has four national languages: Mandarin, Malay, Tamil and English For businessand politics, English is the language of choice

Singaporeans have both a perception of monochronic time and punctuality is aSingaporean's virtue Thus, it decides the consumer culture of Singaporeans In a research

of Swee and Chin (1985), Singaporeans are said to be increasingly "westernized" and tend

to be interested in the quickness and the convenience This trend was confirmed in ColdStorage’s report about the increasing demand for convenience products that supermarketsimports to adapt the changing needs about tastes and lifestyles of Singaporeans Researchalso has found that the concept of a non-cash society is very popular in Singapore andtoday, Singaporean consumers are better educated Therefore, they have higher purchasingpower and are more sophisticated in their choices Besides, the research also showed thatthe increasing number of women participates in the labor force; its impact on conveniencefoods is inevitable Since the women do not have time to prepare meals for their family

On the other hand, as Asian countries, Singapore and Vietnam have similar foodculture, so B’fast is likely to satisfy Singaporean’s taste

2 Singapore’s instant noodles market

2.1 Singapore Instant Noodles Market Potential

In Singapore, eating is often described as a national pastime and food, a nationalobsession With the highest per capita GDP in the world (in 2013 according to the IMF),Singapore’s per capita food consumption level is the highest in the region (approximatelyS$1,349 as forecasted for 2013 by Business Monitor International) Singapore importedover S$10 billion (approximately A$8.5 billion) worth of food Singapore is consideredthe most developed food retail market in Southeast Asia

Nowadays, Singapore is a country with a large young population for whomconvenience is important Singaporeans are too busy with working and nearly have notime for cooking so convenience food is their favorite because convenience foods can helpthem save time effectively.

Current value growth of instant food is set to continue its strong trend due to thegood performance of cups/bowl instant and pouch instant noodles which are the maingrowth drivers in 2013 Singapore’s demand for instant noodles in 2013 was the 28th of theworld, 130 million packs (bags/cups) of instant noodles were sold out in Singapore,according to World Instant Noodles Association

2.2 Instant Noodles Market Shares

There are many companies leading Singapore’s instant market Nissin Foods (Asia)Pte Ltd is set to maintain its clear dominance with a significantly high value share of 47%

in overall noodles in 2013 Followings are the local instant noodles brand KOKA of TatHui Foods Pte Ltd, MAGGI of Nestlé Singapore (Pte) Ltd and products of Nong Shim Co.Ltd All of them are the famous brands of local noodles market

There are also some products from Vietnam food companies, such as: Instantnoodles or beef Phở of Vina Acecook, Instant noodles of VIFON… However, shares ofthose companies in Singapore’s instant noodles market are not considerable

2.3 International Competitors

2.3.1 Nissin Foods (Asia) Pte Ltd

Nissin Foods (Asia) Pte Ltd, used to be named Myojo Foods Company (Singapore)established in Sep 1970 Myojo is the first company to manufacture instant noodle inSingapore since Feb 1971 Over the years, Singapore product has successfully penetratedinto the market of North America, Oceania, Asean, Middle East…

In addition to the production and sales of instant noodles products, the companynow provides specialized assistance to the Asian local subsidiaries in the fields such asR&D, marketing, finance, accounting, and HR NISSIN was awarded the HACCP in 2005,ISO 9001 in 2006, and was also given the “Healthier Choice” for some of their products in

2008 Not only all its products certified HALAL, Myojo brand was also Tasty SingaporeAmbassador from 2007/2008.

2.3.2 Nestlé Singapore (Pte) Ltd

Nestlé Singapore (Pte) Ltd is a wholly owned subsidiary of Nestlé SA.Headquartered in Vevey, Switzerland, it aims to be the leading Nutrition, Health &Wellness company Starting its operation in Singapore, Nestle has been present inSingapore, Nestlé has earned the trust of Singaporeans for being a food manufacturer withthe highest safety and quality standards

Nestlé brands are household names in Singapore These include Milo, Nescafé,Maggi, Kitkat, Purina, Friskies and dozens of other market leaders in their product lists

The MAGGI Brand of instans noodles’s also famous and in the must-choice list ofcustomers when they think about convience noodles

2.3.3 Nongshim Co Ltd

Nongshim is a food company that produces instant noodles and snacks It has ledthe Korean food industry since its establishment in September 18, 1965 Its vision is tobecome a global food company that pursues customers' health and happiness under theslogan of the "Do Dream World Best"

In Singapore, Nongshim’s products include: Bowl Noodle (hot-tasting), Big BowNoodle (shrimp-flavored), Shin Cup Noodle and Saeng Saeng Bowl Udon; Snacks (e.g.shrimp crackers, onion rings, sweet potato snack, honey twist snack, potato chips, etc.)have been also a great success

2.3.4 Tat Hui Foods Pte Ltd

Home-grown Tat Hui Food Pte Ltd was founded by Mr.Lim Hi Lay in 1985 Itstarted out as a trader of Asian foods, which includes the sale of noodles and bird’s nestproduct, before making heavy investments in instants noodles manufacturing and

production Tat Hui Foods Pte Ltd in the present day is well-known for offering a

healthier choice in the instant noodles category with its star brand Koka

Koka is definitely one of the few recognizable brands of instant noodles in theSingapore market Known for their signature red packaging alongside a large variety of

favorite local flavours such as ‘laksa’ and ‘satay’, brand recognition and recall seems torun high Koka has no trans-fat, preservatives, artificial colouring, and added MSG(replaced by natural spices and herbs, how lovely for the arteries!) In addition, being non-fried, the noodles also have a lower fat content of less than 1% as compared to the industryaverage of 20% In 1995, Koka was the first instant noodle brand to be awarded the HealthPromotion Board’s Healthier Choice label.

2.4 Price of Instant Noodles in Singapore

Regular instant noodles in Singapore can be priced as low as $1.80 for a pack offive because instant noodles are considered as convenience food with a low price for massconsumers Sometimes there are products targeting at premium market segment, likeLaksa LaMian, part of Prima's Easy Gourmet Indulgence range, costs $10.95 for a pack offour This product is also rated No.1 on the top ten instants noodles of all time 2013 byThe Ramen Rater

CHAPTER 3 SWOT ANALYSIS

1 Strength

Quality of management and staff

Motivation: with the mission: “Convergence and nurture talent and desire to seek abreakthrough to enhance the benefits of products and services for customers”, allemployees see their responsibilities in each stage of business process, with the goal ofsatisfying the customer's requirements

Masan staffs are highly qualified and are trained carefully Morever, most of themembers of the board of managers Masan Consumer have more ten years working in thecorporate multinationals like P & G, Unilever, Kraft Food, Pepsi There are 5 people oftheme was holding the most important positions, such as Director General

Members of the top management is also a major shareholder of the company shouldalways be faithful, voluntary, adherent, dedicated with company Therefore, humanresources are the greatest strength of Masan Group

Production capacity and flexibility

Supply of raw materials, Masan Consumer has many suppliers so not be dependent

on any single supplier The raw materials are supplied by more than 60 suppliers.Evaluating their suppliers periodically is to minimize the risk of contractors lackingcredibility

Synchronized modern machines, Masan Consumer is equipped with highautomation of AVE_ITALIA, applying strict standards of food safety Efficient productionsystems with the highest quality standards No outsourcing or hiring 3rd partymanufacturing to strictly control the quality and quantity of products

Operating 19 production lines at 4 factories, Masan Consumer R&D is comprised

of approximately 75 employees tasked with improving the range and quality of ourproducts Masan R&D is one of the most advanced R&D centers in Vietnam