This report investigates the market conditions in the United States to determine if our product is well accepted. Despite a recent economic crisis, we believe Bee Cheng Hiang has an opportunity to succeed in the US market. The report examines demand for our product by implementing STEEP, SWOT, and marketing analysis.
Based on our findings, we have identified several opportunities for Bee Cheng Hiang to succeed in the US market. For instance, given that the majority of Americans are Christians, they are likely to consume most types of meats. Additionally, Bee Cheng Hiang has the advantage of being the first entrant into the American market. Furthermore, Americans love meat and Chinese cuisine – both of which are specialties offered by Bee Cheng Hiang. Moreover, their products contain natural ingredients and no MSG – a feature that is highly valued by health-conscious consumers in America. Finally, most Americans are willing to spend on food and snacks.
Based on our report and analysis, we believe that Bee Cheng Hiang has a strong potential to thrive in the US market.
Introduction
Bee Cheng Hiang, founded in 1933, is now one of Singapore’s largest local businesses (Bee Cheng Hiang, 2013). Its most popular product is back (barbequed pork). Bee Cheng Hiang aims to be a leading food company that provides quality products and services to its markets. To achieve this goal, the management has developed plans for expanding into new global markets. One such market that would be suitable for Bee Cheng Hiang is North America. This report will discuss Bee Cheng Hiang’s exports to North America, specifically the USA.
STEEP Analysis
Social Factors
The United States is a large country consisting of fifty states with a population of 313,847,465 (July 2012 Est.), according to the Central Intelligence Agency (2013). The main language used in the United States is English, with 82.1% of the population using it as their first language. Meanwhile, 10.7% use Spanish and the remaining 7.2% speak other languages (Central Intelligence Agency, 2013). Marketing Bee Cheng Hiang products in both English and Chinese in Singapore would be advantageous because there would be no need to risk mistranslations.
Technological Factors
Technology is one of the most powerful forces in society today. Thanks to it, Bee Cheng Hiang can sell its products all over the world. The US, being one of the most technologically advanced countries in the world, has very efficient transportation methods. These include more than 15,000 airports, railways, roads and waterways with advanced vehicles used for transportation (Central Intelligence Agency, 2013). Additionally, technology has helped improve packaging and extend various food products’ shelf life. Bee Cheng Hiang can now vacuum seal their products to preserve and store them for longer periods of time.
Economic Factors
The United States has the largest and most technologically powerful economy in the world, with a GDP per capita of $49,800 according to the Central Intelligence Agency (2013). The US economy is market-oriented, giving business firms and private individuals the freedom to make most decisions. State governments mainly purchase necessary products and services from the private marketplace. Despite having a high GDP per capita, like many other countries around the world, the US is still recovering from the 2008 economic crisis. This may affect sales of Bee Cheng Hiang’s products as their main offerings are snacks which are not considered essential products.
Environmental Factors
Today, it is important to consider the impact of our actions on the environment, including how we cook and package our products. In the United States, unlike in Singapore, we experience four distinct seasons which can affect purchasing patterns and demand for Bee Cheng Hiang’s products.
Political Factors
With fifty different states in the United States, Bee Cheng Hiang must be aware of various trade laws when attempting to sell its products. Companies must also take into account political factors such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability when importing and selling their products.
The United States has a Free Trade Area” agreement with several countries, including Singapore (U.S. Department of State, 2013). The “United States-Singapore Free Trade Agreement” (USSFTA) aims to promote free trade between the two nations by reducing or eliminating tax tariffs. This encourages and improves competitiveness in import and export trades between the countries by lowering business costs (Singapore FTA network, 2012). Bee Cheng Hiang could benefit from this when entering the US market.
SWOT Analysis
Strengths:
Bee Cheng Hiang has a long history and is well-known in Singapore, Malaysia, and China. It is a leading player in Asia’s highly competitive food industry. Bee Cheng Hiang’s products contain 100% natural materials, with no MSG, preservatives or artificial coloring. Therefore, they are healthy to consume.
Weakness
Bee Cheng Hiang has a narrow product range consisting mainly of Bakkwa”, pork/chicken floss, and other Chinese snacks. As a result, shopping at Bee Cheng Hiang may limit consumers to only Chinese snacks. Additionally, due to the use of natural ingredients in their products, Bee Cheng Hiang’s prices may be slightly higher than those of competitors.
Opportunity
In America, over 70% of people identify as Christian, while approximately 15% are unaffiliated (Central Intelligence Agency, 2013). Since most Christians consume all types of meats, the products offered by Bee Cheng Hiang are viable in the US market. Furthermore, being the first to introduce this product in the United States provides Bee Cheng Hiang with an opportunity to capture a significant portion of the market share.
Threats
With competitors in Singapore and other parts of the world, new entrants from other countries entering the US market and providing similar products can pose a threat to Bee Cheng Hiang. Additionally, local businesses may also attempt to imitate and sell the same products that Bee Cheng Hiang provides.
Due to the prevalent ethnocentrism among Americans, they tend to favor buying products from local businesses. This preference may pose a threat to Bee Cheng Hiang.
Marketing Analysis
Bee Cheng Hiang’s main target audiences are people between the ages of 18-30 and 31-65. These groups make up 66.5% of the US population and have decent to high spending power. Individuals between the ages of 18-30 typically have relatively high disposable income and spending power, as they are young and mostly either unmarried or newly married. Additionally, they tend to enjoy snacking and are more willing to spend on snacks. The second segment of Bee Cheng Hiang’s target audience includes individuals aged 31-65.
This group of people consists of baby boomers” and individuals from “generation X”. They are now either parents or grandparents and tend to prioritize their families. Additionally, they have high spending power, making them more willing to purchase our products as gifts for loved ones and friends. In America, Italian food, Chinese food, and Thai food are among the most popular cuisines.
Because most Americans like or are open to Chinese food and the demand for meat is high in America, Bee Cheng Hiang’s products have the opportunity to do well in the US market. The chart below shows that, other than housing and transportation, food is another significant expenditure for Americans, costing an average of $6,133 per year.
An average of $3,465 is spent on food that is consumed at home, and $2,668 is spent on food consumed away from home according to the U.S. Department of Labor’s Bureau of Labor Statistics (2009). This chart shows that Americans are willing to spend money on food. Therefore, there would be a demand for Bee Cheng Hiang’s products in the US.
Marketing Strategy
Objectives
The objectives of the marketing strategy plan are to help Bee Cheng Hiang strategize and focus its resources on opportunities to increase sales and sustain a competitive advantage in the market. The marketing strategy will assist Bee Cheng Hiang in selecting its target market, determining market positioning, and identifying the company’s marketing mix to enter and penetrate the US market.
Target Market
Bee Cheng Hiang will segment its target market based on psychographic, demographic, and behavioral factors. The company’s products have always emphasized family, love, and suitability for people of all ages in terms of psychographic and demographic segmentation.
Thus, Bee Cheng Hiang’s products mainly target families aged between 31-65, who are mostly baby boomers and people under the generation X” category. These individuals value the importance of family love and bonding during festive seasons and other occasions. They buy the products to share or as gifts for their loved ones and friends (Gary Armstrong, 2013). The company also targets a smaller segment of younger individuals aged between 18-30 who buy the products for self-consumption.
Regarding behavioral segmentation, American families typically come together during special occasions such as Thanksgiving, Christmas, and New Year’s celebrations. During these gatherings with friends and family, they often snack and feast together while commemorating the occasion. Bee Cheng Hiang’s products are a perfect fit for these types of events and get-togethers because they promote family love and bonding between friends and family. Additionally, once purchased, they are ready to consume.
Market Positioning
Bee Cheng Hiang aims to project an image of love, friendship, and happiness in the minds of potential consumers when they consume its products. When entering the US market, Bee Cheng Hiang will position itself as a provider of perfect high-quality Chinese culture-based snacks for special occasions that promote family love and bonding. Additionally, it will be marketed as a perfect snack for casual consumption by individuals and families in the US. Although Bee Cheng Hiang’s products are priced slightly higher than its competitors’, this is because only top-quality ingredients are used. The slightly higher pricing projects an image of higher quality when compared to competing products.
Coupled with the uniqueness of this product from Chinese culture, the pricing reflects an exotic, high-quality product that symbolizes the importance and value of family and loved ones. Bee Cheng Hiang packages their products in red to symbolize good luck and family happiness while also providing positive energy during shopping or purchasing.
Marketing Mix
Product
Bee Cheng Hiang’s main selling product is the Bakkwa,” a Chinese jerky-like dried meat product. The “Bakkwa” is very popular as a gift among family, friends, and corporate employees in Singapore, not only during festive seasons like Chinese New Year but also throughout the year for gatherings. Bee Cheng Hiang also offers other types of Chinese snacks such as pork, chicken or beef floss.
Place
In Singapore, Bee Cheng Hiang has outlets scattered all around the island. These outlets can be found in shopping malls as well as various shop house stores near Chinatown and other locations. This strategy allows us to reach our target audience who frequently shop at these places. In the US, we plan to follow a similar strategy by opening outlets at shopping malls that are frequented by most people. This will help maximize exposure of our unique products to the people of the United States. Additionally, we will open some outlets in certain locations where we feel there would be demand for our products such as Chinatown.
Price:
Bee Cheng Hiang offers products made from 100% natural ingredients, ensuring high quality. As a result, their products are priced higher. In Singapore, Bee Cheng Hiang’s main selling product, Bakkwa,” costs $40-$50SGD per kg depending on the type of meat and flavor. However, in the US, due to the exotic and unique nature of Bee Cheng Hiang’s products, prices may be slightly marked up to take advantage of this uniqueness. This higher pricing also creates an impression of the high-quality that Bee Cheng Hiang provides for families.
Promotion
When entering the US market, a sales promotion strategy can be implemented to penetrate the market. This would raise awareness of our unique products and provide an incentive for consumers to give them a try. Advertising will also create product awareness for Bee Cheng Hiang’s products. These advertisements could be done in conjunction with the sales promotion to further spread awareness through word-of-mouth experiences.
Implementation and Control
Implementation
As suggested in the marketing strategy, outlets will first be opened in shopping malls and other designated areas that frequently target audiences. A sales promotion will be used initially, coupled with media advertising to penetrate the US market and create brand and product awareness.
The first step in penetrating the market is to create brand and product awareness before entering through advertising. Media advertising methods would include TV advertisements, reviews by food and culture magazines, and online advertisements on US-based food and culture related websites. These advertisements will be implemented one month before entering the US market to create awareness and generate hype following our entrance into the market. Upon entering the US market, continuous media advertising will be used to further create awareness of our products as well as support the sales promotion strategy that will be used in the first month of our outlet’s opening.
The second step would be to decide on and open outlets in the US. As the US is a very large country, we would first open outlets in New York, the capital of the United States. This is because New York has a saturated population with high spending power. We will open outlets at various ideal locations such as Manhattan Mall, which is home to many stores not local to the US. This would be an ideal choice for our outlets to start off with. Additionally, we will target locals and Chinese living in the US by opening outlets in New York’s Chinatown in Manhattan.
After opening outlets in various ideal locations, the final step would involve implementing a sales promotion strategy for the first month of our outlet’s opening. This is to create awareness and entice potential customers to try and purchase our products. The promotions we will use include direct discounts and coupons. We will also provide sampling for customers to try out Bee Cheng Hiang’s unique range of products that are new to the US market.
Control
Control measures will be implemented if our marketing plan proves ineffective. Upon entering the US market, we will record daily sales figures to track growth. As Bee Cheng Hiang expands globally, we recognize the importance of cultural control to ensure shared values among all members of the firm, including those from different cultures.
Conclusion
Although Bee Cheng Hiang is well established in Singapore, Malaysia, and China, it needs a market penetration strategy to expand globally and into the US. The US market has immense potential for Bee Cheng Hiang due to the similarity in psychographic aspects between Americans and Singaporeans. Both cultures value family and special occasions. However, entering an entirely new market outside of Asia presents a certain degree of uncertainty for Bee Cheng Hiang. There is no guarantee that products from Chinese origin will be accepted by American consumers. Therefore, Bee Cheng Hiang must review and develop solutions to address this weakness before entering the US market.
