This report discusses various factors that need consideration while a product is introduced into a new consumer market, Singapore by company called Singapore Foods Inc. which is mainly indulging in the business of different kinds of ice-cream.We will write a custom Singapore Foods Inc.: Market Audit and Competitive Analysis specifically for you
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While analysing the prospects of marketing a new item like ice cream products, a lot of aspects including economic, cultural, marketing, finance, etc need to be strategically identified. Business customs and practices are also analysed. The business environment describes about diets, housing style and dressing style of Singaporeans. The section explains all aspects of culture that must be kept in mind before planning to market ice cream in Singapore. In the economic analysis, the data are mainly classified into two categories. In market audit and competitive analysis, information is collected on certain aspects such as the product that is to be marketed in Singapore market and its reliability, compatibility, complexity and relative advantage. The other information in economic analysis is consumer buying behaviour, product distribution, advertising and promotion, pricing strategy, competitor analysis, studying market size, depth and government’s participation in the market place. The preliminary marketing plan section includes a marketing plan which is designed for the company to market its ice cream products in the Singapore markets. The initial strategies chalked by this company would, to a large extent, determine its market success and ability to carve a niche of its own in successfully selling ice cream products to people of Singapore. The initial years for this ice cream business would indeed be testing and challenging and how the company sustains such risks and challenges would largely contribute to its overall growth and future success story.
Summary of the cultural analysis
Singapore has a rich, ancient and interesting culture which its inhabitants continue to practice even in the modern era. Besides, it has a very cosmopolitan outlook that is not averse to expatriates who come here for taking up residence, employment, or on business. The country has salubrious climate, genial people and good infra-structure that are ideal for ice cream products. Some of the other major advantages are the high level of education of local people, clean and hygienic environment and good governance, with a very effective law and order system. Culturally, the country’s ambience is quite favourable for setting up a ice cream business and it has all the chances of gaining a flourishing market and sustainable business in future.
The concept of international marketing can be simply described as applying principles of marketing and marketing capabilities in more than one country. International marketing activates the flow of company’s goods and services from one country to another country, for a predetermined profit. International marketing can be defined as “marketing activities intended to facilitate the exchange or transfer of goods between nations.” (International marketing 2004).
The marketers entering into international business must consider certain factors that influence their marketing in other countries. Before engaging in an international marketing, the organization has to analyse the differences in marketing activities based on the culture of the people, customer needs and preferences, economy of the country, political systems, competitive analysis and preliminary marketing plan.
Singapore has been chosen as the South East Asian country for marketing product internationally. Singapore lies almost on the equator. It is a prosperous city which has surmounted its scarcity of natural resources to become one of the famous economies in Asia. The country analysis deals with analysing the various aspects of Singapore such as;
- Cultural Analysis
- Economic Analysis
- Market Audit and competitive analysis
- Preliminary marketing plan
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This includes information that enables marketers to take decisions related to market planning. This is considered as an important aspect that must be taken into consideration by all marketers, because it is the culture that defines the lifestyle, taste and preferences of the customers in the respective country.
The company is engaged in producing ice cream products. It is planning to manufacture and market its products in the international market, specifically in Singapore. The company finds that this country is suitable for marketing its products where it is possible to explore the market successfully. So, for marketing its products in Singapore, the company analyses the cultural and overall aspects of the country. As is well known, Singapore is a cosmopolitan city that has a majority of Chinese population. What is perhaps enduring about the Singaporeans is their warmth and natural affinity for other communities, especially foreigners.
It also is a major tourist attraction with over 10 million people visiting Singapore. With increasing tourist traffic and a rising population, a new ice cream product business is expected to do well in this country. It is now proposed to do a detailed study of Singapore in terms of incipient ice cream business.
Brief discussion of the country’s relevant history
“The place name “Singapore” is derived from Singa-pura (“City of the Lion”), a commonly used term since the fourteenth century.” (Brogger 2009).
Singapore is famous for its attractive tourist spots and the building designs, which when taken altogether feels like it has been built by a single person.
Singapore is a city state which is located in the heart of Southeast Asia. Its area is about 642 sq km. It is one of the leading trading nations in the world and it has been often chosen as one of the best locations to start a business. The highest point is Bukit Timah which is 206 meters above sea level.
Singapore has a tropical climate as it is located near to the equator. It is hot and humid throughout the year. Rainfall is abundant in the month of December which is considered as the northeast monsoon. In the summer season, it is dry with a rainfall of 170 mm which is believed to be the southwest monsoon.We will write a custom
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Singapore is an island which is low lying, very greenish and surging with hill ranges at its centre part. Mangrove swamps are found in the coastal areas which is having inlet in the northern and western sides and also include many types of rainforest.
The families in Singapore give more value to harmony and mutual security. In the social structure, they are considered as the central part in building loyalty and unity.
The minimum age for the first marriage has been enhanced and the mandatory custom is that the youngsters should stay with guardians until their wedding.
The country has 80% men and 50% women population, who are employed, with superior positions provided for men.
The country gives more importance to education and people believe that good score will definitely lead to ways that make them to be in a higher position. Based on this, Singapore is known for invoking a system of meritocracy in its education. Children have to spend six years in primary schools, then four years in higher secondary schools and finally in vocational schools or university. The students are admitted in schools on the basis of interviews and depending on the scores.
Prosperity in economy and stability in the economic system are part of the Singaporean culture. In Singapore, parliamentary system is practiced. The state head is the president. He is elected for a period of six years and is elected at every five years. The cabinet is considered as the executive organ of the country. Various ministries and statutory boards are responsible for execution of the government rules and policies. The people action party (PAP) is having majority in the parliament. For goods and services, government charges 3% tax for shops and other department stores.
In Singapore, the British legal system is adopted for their judicial system. For drug smuggling, the judiciary imposes caning and even death penalty. The country also has the power of military and civil defences which is considered as the most critical safeguarding factor.Not sure if you can write
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This country is differentiated mainly on the basis of ethnicity rather than by class. The ethnic groups are those who experience an upward movement in their occupation. Singapore links the culture of India, Malaysia, Indonesia and China. In Singapore, the race is referred to multiple ethnic groups. The ethnic groups in Singapore are Japanese, Sikhs, Shanghainese, Armenians, Arabs and Javanese.
Business customs and practices
Manufacturing is the primary sector which contributes development to the Singaporean economy. The manufactured goods are mainly exported to different countries. The exported products are natural rubber, palm oil, electronics items and petroleum refined products. The trading partners of Singapore are Japan, USA, Europe and Malaysia.
Religion and Aesthetics
Religion and other belief systems
The people are at a liberty in religious practices, with certain exemptions are there. “Singapore has been described as one of the most religious countries in the world. The major religions are Islam (Malay), Hinduism (Indians), Buddhism, Taoism, and folk religion (Chinese), along with a substantial number of Christians of various denominations.” (Brogger 2009).
Singapore is the country, which does not have its own culture but is a mix of cultures, myriad culture borrowed from expatriates who settled here as well as tourist who come here in large numbers. The culture differences are due to the fact that there are lot of migrants to the country.
Diet and nutrition
The important food items of the Singaporeans are chicken, fish, spices, lime, coconut and tamarind. The people prefer to have food from food shops where they are not only cheap but also freshly made. Forks and spoons are used for having food. Chopsticks are used for consuming Chinese dishes and hands may be used for consuming Malay dishes.
85% of the Singaporean population live in public houses. Both the men and women are the working class, and the superior power is for men.
The dress codes in Singapore reflect climatic conditions. The men use shirts and trousers. They prefer dark blue and grey colour. Women prefer wearing business suits that are light weight and convenient to use.
Singapore consists of both private and public clinics which are well established with modern facilities. Traditional medical practices are also commonly practised.
Singapore is a multi linguistic state where the national language is Malay. It has four official languages, namely, Malay, English, Indian (Tamil) and Chinese (Mandarin). English is widely used as the medium of instruction in educational institutions and administrative agencies.
For all these languages, a variety of sub dialects are used by the Singapore people.
Summary of economic analysis
Despite the recessionary trend in major US and European destinations, Singapore has been relatively active not only in goods and commodities centre, but even in light industries. This augurs well for setting up an ice cream unit in this country, especially when there are high tourist movements and also the economic climate is favourable for investments of these kinds. Singapore’s strategic location and its membership with the World Trade Organisation (WTO) could be some of the major redeeming factors in as far as economies are concerned, not to be left out being the fact that a stronger GDP growth rate and good population growth rate would also augment economic business resources. Singapore’s tourist traffic at 10.1 Million yearly could also provide the necessary impetus for setting up a light food distribution business in this country.
Economic analysis is useful in understanding different insights of the economic conditions, conducted both in the micro and macro environment. Economic analysis is the barometer to assess the relative strengths and weaknesses of the country and to a large extent, mirrors the reasons for the upsurge in current financial and economic status of the country and the barriers that beset trade. The country’s economic analysis is being conducted for marketing ice cream products internationally.
Economic statistics and analyses
Singapore is a highly developed country with many potential buyers. There is a free market condition and the estimated purchasing power of the country is $244 billion, GDP is found to be $52900 and the rate of growth of GDP is estimated to be 3% annually. It is the second largest country in terms of economic autonomy, the high growth rate is in terms of service industry and growth from agriculture is less. The country is considered as one of the best places for business operations. As the country is the second largest in economic autonomy, they have the autonomy of overseas market, the monetary freedom. Inflation is considered to be lesser than that prevalent in other economies. An independent approach to business helps in overcoming challenges at different stages of the economy.
This analysis also considers the forecast of the country, and provides a clear idea about profit structure and inflationary trends.
Country Forecast Overview (3 Year)
|Real GDP Growth (%)||-4.09||-5.00||2.20|
|Consumer Price Inflation (av %)||6.54||.30||2.40|
|Budget Balance (% of GDP)||1.52||-1.10||-2.70|
|Current-Account Balance (% of GDP)||14.94||12.70||12.40|
|Exchange Rate US$:Euro (av)||1.41||1.45||1.37|
|Exchange Rate US$:Euro(year-end)||1.44||1.40||1.36|
|Year||GDP in Billions of USD PPP||% GDP Growth|
(Singapore country snapshot 2009)
Advantages and disadvantages of marketing the production overseas market
In the oversees country the market is flourishing at the greater extent. The different kind and the industrial base is flourishing at a greater extent. There are lot of the opportunity for the smaller company to become a big company in the oversees market.
There are diversification in the investments and the different product category and the product market can be achieved. The increased global share can be earned and the product life cycle finds its adequate expansion in the market. It also has the increases sales and the profit for the products and the increased revenue to the company and to the owner.
The disadvantages include the extra financial cost involved in the product and the extra features that are to be added to the market in terms of the distribution in the overseas market. The lot of the financial risk are been involved in the different kind of the operations that are been carried out as in the overseas market the collection of the payments are using the different methods like the consignment, prepayment and the documentary collection.
The generic strategy are those which are helpful in the achieving the competitive strategies they use three kinds of strategy, like the cost leadership strategy, differentiation strategy and the focus strategy.
Cost leader ship includes the emphases that are laid on efficiency in the operations and the products by considering the sales and the operations and the different kind of the cost reduction method for the analysis. Differentiation strategy includes the differentiation in the products and the different kind of the products in the market and the differentiation of them in the market. The focused strategy are those that include the focus to be provided on the products where they are concentrated on the target market and the different kind of the marketing is done within the segment.
The generic strategy include the different kind of the dimensions like the strategy strength and the strategy scope which may include the different kind of the strategy that could be put into practice in the market for the products and they are to be properly identified for the operation.
Brand positioning is the position held by the certain product in the market in comparison to the other products in the market. It is used to create reputation among people and recognition for the product among the people and the market.
Area-wise and population-wise, Singapore is a small city which is urbanized intensively; it is strategically located between Indonesia and Malaysia and this is useful for trade and building a platform for international marketing operation. The strategic location of Singapore has helped in the development of trade, communication and tourism, which contribute to development of the country and increase in income levels. It is a highly developed nation with government as the main authority in its development. In the manufacturing sector, the light industry segment provides a lot towards economic growth of this country..
Foreign direct investment
Foreign direct investment (FDI) is useful for the country for development. It also leads to employment opportunities for the people. As the country is a good trade route, investments made by players of foreign countries are in plenty. Europe, North America, Asia Pacific are the countries that currently offer investments to the country. They may contribute up to 82% as foreign direct investment. Investments are also made by countries like UK and The Netherlands which may contribute up to 77% of the investment. Hong Kong was the leading investor in Singapore in the past. FDI’s by other countries are welcome in Singapore, as they may contribute much for the country’s development.
“As per 2007 data, foreign investments measured in ‘$m’ (dollar – millions) in Singapore’s manufacturing sector amounted to $14,279.2M. Investment measured in $ billion for the Singaporean economy as a whole stood at 23.1billions for the year 2007.” (Foreign direct investment in Singapore n.d.).
The sectors in which foreign investments are concentrated are finance and insurance, restaurants and hotels, and manufacturing units. As employment opportunity of the people is more, investment made by them will also increase. Restaurants and hotels flourish as tourist traffic in the country is very high. The FDI has major share in the electronic industry which contributes to the economy and increases the indigenous supplies.
The retail sector
The retail sector is a boon to the country as it is the main source of increase in profit and revenue of the country through reduced operational cost. The country has lot of retail outlets from Wal-Mart to e-tailored business like SAP which offer a very good platform for investing opportunities in the country and it also has the ability to manage capital investments.
Holiday seasons are lucrative for the retail sector. According to a current survey, they are becoming more strategic in the business which suits well for prevailing economic climate. They find that internet marketing is the main source of supply and use the debit and credit cards for operations and ease in collection of materials.
The distribution channels of earlier kind are used, depending on economic condition and efficiency in distribution of materials. The overworked home markets, stiff competition and tight legislation have placed them in a position from where they could become global players. Recession has caused some kind of deflation in the economy, due to the pricing power and lowering of global capacity.
Trade restrictions and quotas
The bureaucratic frame works are responsible for different decisions in the retail industry and the development of the OECD Countries. The developed countries will have their own decision in their approach. The Asia Pacific Economic Co- operation (APEC) is mainly an important group, which is accountable for major trade in global arena. Singapore has faith in the development of the country by its membership in WTO and the advantage of trading system with multilevel operations in the country.
Free trade agreement
Singapore’s first FTA negotiations outside Asia need to be more detailed and should aid in liberalizing trade restrictions within the country. The decisions on Singapore are strategic and not immediate as they are new entrants to APEC. But, Singapore needs to show its commitment to the cause of FTA and provide guidance whenever required.
Intellectual property rights
IPR in this country is well developed and it has a robust knowledge base, it comprises of other new industries and the knowledge based economy which adds value and contents to industries. The planned and projected technical innovations and putting them to practice require huge investments in the country that need to be carried out by governments of other interested countries.
Singapore has developed a full compliance with WTO agreement in trade related activities.
Education has to be given priority in order to make the inhabitants aware of the intellectual property rights that are implemented by the firms. It is also useful in creating awareness about pirates and illegal access by authorities. The country takes keen steps on the educating the survivals.
Legal bodies like the police, customs and excise, and the other government bodies take relevant steps for monitoring pirates and protecting the country. “This high degree of openness leaves Singapore vulnerable to periodic external shocks.” (Singapore: a successful economy 2008).
Singapore is a country which primarily functions as a free trade economy. The imports done are on duty free basis; but taxes are imposed on liquor, tobacco etc on minimal basis for socio economic reasons.
Trade barriers are negligible in Singapore compared to US. “The country maintains a tiered motorcycle operator licensing system based on engine displacement, which, along with a road tax based on engine size, places U.S. exports of large motorcycles at a competitive disadvantage.” (Singapore: trade regulations, customs and standards 2009).
The customs valuation code is enforced in Singapore; it is mainly used for identifying the imported goods and imposing charges on export of these items. Insurance, freight, sales charges are added for imposing duties. Penalties are also imposed on the charges when customers try to devalue the product in order to pay lower quantum of custom duties..
The media development authority of Singapore has the main aim of understanding how the media can constrain the government and how the government manipulates the different activities of the people. The media mainly uses the satellite for technology; it has different kinds of offers to the people, like providing medicine from distant places, providing different sorts of help to them.
The media and communication technology are related, they serve as tools for the economic development.
Summary of Marketing Audit and competitive analysis
Having considered the cultural and economic factors, it is now necessary to work out marketing audit plans and competition. The two positive aspects regarding Singapore could be seen in the steady tourist population and even an average 12% increase in country’s population which is critical, especially in the consumer food industry. Thus, marketing audit would need to assess the current situation in the food and non-alcoholic beverage business and adopt strategies that could ensure a strong footing in the market. It also needs to consider the present competition from both big and small ice cream farm operators, retailers and others along with the supply chain that could be rivals for this business. Some of the major competitors could be Fraser and Neave Holdings (F & N Group), Fonterra Brand (Sing) Pte Limited, Nutrik Overseas Pte Limited, Singapore Food Industries Ltd.etc. Thus, strategic alliances need to be chalked out with some players for franchising till such time the business becomes strong and ready to spin off on its own.
Market Audit and competitive analysis
In a business promotion of this kind, which involves making marketing forays into the export market, it is first of all necessary to make a thorough and comprehensive pilot survey about current demand for ice cream products in Singapore and the best entry method that could be adopted for selling the company’s products in the Singaporean markets. Thus, it is not only necessary to know the best option, but also to have a first hand account of the competitors, their market share, and their perceived responses to the company’s entry into Singapore.
Consumer spending on food and non alcoholic beverages
As is well known, Singapore has a cosmopolitan outlook and is not averse to innovation and new trade practices. As a matter of fact, the total consumer spending on food and non-alcoholic beverages has risen from US $ 3097.8 million in year 2001 to US$ 5242.8 million in year 2008. (Food and non-alcoholic beverages n.d., p.45). An increase of 70% in just 8 year is a good rate of growth and it could safely be assumed that the annual growth rate for spending on food is in the range of around 10% which is sufficient incentive for launching food products in this country. Again, it is seen that the population growth in Singapore is also rising, from 4138,000 in year 2001 to 4639,000 in year 2008. (Population n.d., p.17).
Thus, an increase in population of around 12% is good and positive reason for investing in food products in Singapore.
Pestle analysis of food product industry in Singapore
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Porter’s Five Force Strategy
- Threat of entry: It could be evidenced that newer and better quality ice cream products especially from New Zealand and Australia, or other European countries could come to this place. Moreover, these entries could be at lower prices with better benefits. However, the main threats could be from existing business since this novice business in Singapore needs to be consolidated in the first place.
- Threats of competition: There are a plethora of big and small ice cream product manufacturers available in Singapore, and the list is growing. Thus it is important that pricing and quality considerations are maintained consistently. Moreover, the quantum of business also plays a strong participation in trade.
- Threats of substitutes: The retail trade in ice cream products could face threats from substitutes, especially smaller units, who could operate at lower margins with lesser overheads. Under such circumstances, it may be a cause of genuine threat to this company.
- Power of buyers: Being a new entrant who still has not consolidated its position in the Singaporean market, the powers of buyers who exercise control over markets may be overwhelming and real. Thus, this new entrant needs to devise ways and means by which powers of buyers may be marginalised whenever necessary.
- Power of suppliers: It would be first necessary to develop a portfolio of suppliers at reasonable pricing and terms in order to gain better business advantages and opportunities. In as far as the ice cream product market is concerned; the main suppliers would be sellers of raw materials, suppliers of inputs, etc.
SWOT analysis of this company could be said to be as follows:
- Strengths : Fresh approach to marketing, new entrant in the business in Singapore, strong infra-structure and financial strength, quality product at reasonable prices
- Weaknesses: No previous experience selling in Singapore market, aspects of rivalry and competitive business, no strategy developed to deal with business in this part of world, difficulties faced by new business unit, lack of local support
- Opportunities: Could be in terms of better business leads and inroads, quality and pricing as major inputs, more diversified business lines, etc
- Threats: From existing ice cream product manufacturers in Singapore, need to sustain stringent local laws, possibility of business takeover by larger unit, delayed break even, etc. Besides ice cream needs to be stored in special refrigerated conditions at specified temperatures to prevent frosting and retain quality and flavour. Besides, the shelf life aspects of ice cream also need to be specially watched.
Large floating population and tourist traffic
Another aspect that must be considered is that Singapore boasts of a large floating population consisting of tourist traffic. There is large volume of business in hotels, restaurants and public and private food eateries in Singapore. It would be ideal for placing the company’s ice cream products in hotels, eateries and restaurants throughout the length and breadth of Singapore city.
It is seen that the proportion of tourists who visited Singapore has gone up in the recent past. “The proportion of holiday visitors went up by 9 percentage points from 30% in 2005 to 39% in 2008, and, business travellers & MICE visitors also registered increase (+3 percentage point) when compared to 2005.“ (Annual report on tourism statistics 2008 2009, p.04).
Again, it is also proved through statistics that most of the people who came to Singapore stayed in hotels which strengthens the case for this company selling branded ice cream products.
Thus, with the fact that around 10.1 million tourists visit Singapore every year, especially from western countries, it is quite possible that the company’s excellent ice cream products would have a good and sustained market in this place. However, it is better to enter into franchising with some other reputed local sponsors, who would be able to take up the initial marketing and business building strategies. After about 3-4 years in the business, it would be possible for the company to have its infra-structure after it has been able to consolidate its position. So, initially the entry strategy would be through franchising company’s ice cream products through food chains that may be operating throughout the country. Later on, after the company gets a good understanding about competition, quality standards, government controls over the food industry in Singapore, customer preferences, etc.Some of the major aspects in ice cream business are that changes in consumer income could affect the demand for ice cream products. Profitability could be impacted by the degree of low cost and effective operations; more so since the main product used in ice cream products is milk. It is better that the company first goes in for a lower business, in order to keep costs low. Considering the fact that the business is capital intensive, more efforts need to be made to keep profits consistent. “The four major product segments are fluid milk and milk products ($25 billion); cheese ($20 billion); ice cream and frozen desserts ($12 billion); and butter ($1.5 billion). Most companies specialize in only one product segment, although large companies may participate in several. Because of the perishable nature of much of the products, especially fluid milk, local production is the norm“. (Diary products manufacture 2009).
The aspects of health impacts and local governmental regulations regarding health and hygiene in Singapore are also major aspects that need to be considered. Moreover, it would be injudicious in a price sensitive market like Singapore for a new entrant to charge higher prices. Moreover, it is also seen that initially it is important to keep prices low in order to capture the market from competitors. While the company’s products may initially not be able to match with British or Australian
ice cream products, it is important that these standards be realized in order to compete effectively at a later stage. Again, it is also seen that use of local franchisees could, to a certain extent, help in neutralizing the adverse effects of competitive business.
Coming next to the competitors for ice cream products business, they are:
- Fraser and Neave Holdings (F & N Group)
- Fonterra Brand (Sing) Pte Limited
- Nutrik Overseas Pte Limited
- Ptsh Holding Singapore Pte Limited
- Singapore Food Industries Ltd.
“From purveyors of carbonated soft drinks, the F&N Group is one of Malaysia’s diversified blue chip companies with leadership of the nation’s soft drinks, dairies and glass industries.” (About us 2009).
Marketing Strategy for” Sub Zero” Brand of ice creams:
Initially, the ice cream business would envisage six well selling flavours that are being sold by rival businesses. Innovative flavours would be chosen after market surveys and customer feedback. The different packaging would be to accommodate half kg, one kg, 2 kgs, 5 kgs and 10 kgs. Primary packing would be plastic boxes and secondary packing would be hygienic cardboard boxes which are designed to hold one dozen units of particular weight. Since maintenance of ambient temperature
Is critical to maintain quality and solidity of the food, it would be necessary to put them in cold storage immediately after manufacture and packing. Cold storage rooms with controlled temperatures are critical aspects of ice cream distribution.
As planned, this is a new business in as far as Singapore is concerned, and it is expected to be trading business with local sponsors till the brand is well established. The brand name would be “Sub Zero” Brand and it would be first distributed to local supermarkets, chain stores, hotels and restaurants in and around Singapore. The first need is to build and consolidate a strong brand image for Sub-Zero. Thus quality and servicing outlets are important. It is expected to start own manufacture of Sub Zero within a period of three- four years hectic trading by which time the necessary goodwill and reputation, competing with local and foreign brands would be well established. Since Sub Zero would be competitively prices, slightly lower than brands available locally, it is expected to capture market share within 16-20 months of operations in this country. Certain discount schemes and Gift schemes would also be introduced to lure customers away from other brands and choose Sub-Zero.
Entry strategy into the ice cream produces business in Singapore:
- Set up own office and manufacturing unit in Singapore
- Build franchisees in Singapore who would sell on our behalf
- Initially set up trading business in Singapore in order to study the market and then after several years, move into own production in this city.
It is believed that third method would be most appropriate for this country in that initially, there is no real market knowledge about this place. Thus, through trading business, it is possible to gain a better idea of how business is conducted and market efficiencies derived. This could, in the long run, lead to proper identification and assessment of business opportunities when the production unit is developed. Sales and marketing strategies need first be developed before a full fledged unit could be established. There are aspects of funding, infra-structure, planning, capital formation, personnel and resource mobilization which need to be addressed to.
The trading business would be established with the help of local Singaporean business men, preferably in the same trade. They would train personnel, and help create a viable market for the business on a long term basis. The distribution channel would be initially dependent on depot trading and selling of goods through established agency trading houses having strong marketing infra structure.
Summary of Preliminary Marketing Plan
It is believed that most marketing based companies do chalk out detailed marketing strategies to be pursued during the course of the year or for forward planning in subsequent years. While a great deal of planning, organising and caring does take place in these exercises, the main aspect that needs to be considered would be in terms of an effective and efficient one, that could consider most outcomes, even factors that may look far fetched and unrealistic at this time, including a good exit strategy with minimal losses to potential investors. An exit strategy is necessary since market conditions may become uncertain and the best way to franchisee may be total sell off of the business. Yet with an optimistic note, it could be said that the current scenario is suitable for new business houses and, with favourable business conditions, it is expected that the business would do well. However, with business uncertainties writ large even in domestic business, with limited number of variables, the business risks and vagaries in international marketing is indeed phenomenal which calls for a great deal of sound decision making and wise choices of alternatives.
Preliminary Marketing Plan
The main aspects that a preliminary marketing plan (PMP) should envisage would be in terms of the following facts:
- What entry strategies are to be adopted?
- Finance that needs to be earmarked and how finance is to be structured.
- Marketing strategies.
- Marketing mix and how it is to be implemented.
- Planning and execution for space, personnel, workforce, vehicles for selling and distributing products and other infrastructure.
- Break-even and profit planning and execution – budget proposals, etc.
- How should the unit be managed – stand alone unit or franchisee business with local partners.
- Sharing of profits and revenues – agreements.
- Conformance with local laws and food health standards in Singapore – any license that is needed and regulations to be followed.
As has been mentioned, the entry strategy would be in terms of franchising with local partners who have experience in the business and knowledge of the local ice cream market standings. There are many aspects that need to be considered in the PMP and the main among these would be in terms of pricing, distribution, profit planning, meeting customer and client requirements and demand, product mix and its implementation. “Product mix is a combination of products manufactured or traded by the same business house to reinforce their presence in the market, increase market share and increase the turnover for more profitability.” (Product mix n.d.).
But, in the case of this company it could be in terms of providing business opportunities for creating a group of regular customers and clients who would switch brands and begin to purchase the new brand of ice cream products due to lower prices and higher quality. It would be in terms of becoming more competitive and increasing customer base. Thus, more customers would mean better business and chances for early break-even for this company. It also needs to control costs.
Whether the business needs to go for segmented and targeted marketing is also a part of this business plan. This is important since general marketing and targeted marketing differ in their thrust areas and objectives. “The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities.”(Ward 2009).
By identifying the customers and catering to their needs, it is possible to create good demand for future and to have a good market presence and to increase the profitability and revenue.
The most important aspect about global business as compared to local business is the degree of risk and responsibility that it entails. Global business is always a high risk venture since ownership are not able to exercise due controls that could be possible in domestic business. Moreover, there are real country specific risks, in terms of language, culture, business environment and adherence to local and country laws, for any business. Public and local support and patronage is necessary for business to prosper, especially in highly competitive food industry.
However, there are benefits in terms of higher returns, outlets for good quality products and inward flow of foreign currency remittances. But, the business needs to take care of all eventualities and see to it that business could be reinforced with sound judgment and robust strategies directed for long term. These are critical aspects and need to be kept in mind. For one thing, the business environment in international business could be more volatile. Secondly, it is also possible that uncalculated risks, like currency falls, outbreak of war, political crisis etc may occur. The uncontrollable factors need to be made controllable, as far as practicable under the given set of circumstances, and perhaps this would be a key element as a precursor of growth and prosperity in foreign lands. “That means training and preparing current management, or developing a plan to bring in new management to take over later.” (Goldberg 2004). The initial years for this ice cream business would indeed be testing and challenging and how the company sustains such risks and challenges would largely contribute to its overall growth and future success story
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