This report is made in order to investigate the market conditions in the United States whether our product is well accepted in the US market or not. Recently, an economic crisis has occurred in the US since 2008, despite the great number of GDP. However, we believe that Bee Cheng Hiang will have the opportunity to do well in the US market. In this report, we try to investigate the US market demand for our product, Bee Cheng Hiang by implementing the STEEP, SWOT, and marketing analysis.
Based on what we found, we still found ways for Bee Cheng Hiang to have opportunities to do well in US markets. Various examples include the fact that most of Americans are Christians thus are viable to most types of meats, Bee Cheng Hiang being the first to enter America market, Most American’s love of meat and Chinese food as well as Bee Cheng Hiang’s products containing natural ingredients and no MSG and most American’s willingness to spend on food and snacks. Based on our report and our analysis, we believe it is possible for Bee Cheng Hiang to do well in the US market.
Bee Cheng Hiang was first founded in 1933 and is now amongst one of Singapore’s largest local businesses (Bee Cheng Hiang, 2013). Back (barbequed pork) is the most popular product of Bee Cheng Hiang. Bee Cheng Hiang aims to be a leading food company that provides quality products and services for the markets. In order to reach it, the management has made a few plans, and one of them is expanding into new markets globally. A new market that is suitable for Bee Cheng Hiang is North America. In this report, we will discuss the exports of Bee Cheng Hiang to North America, to be more specific, USA.
The United States is a large country consisting of fifty states with a population of 313,847,465 (July 2012 Est.). (Central Intelligence Agency, 2013) The main language used in the United States is English with 82.1% of the populating using English as their first language, 10.7% using Spanish while the remaining 7.2% speaking other languages (Central Intelligence Agency, 2013). Being marketed in both English and Chinese in Singapore, this would be an advantage when marketing, Bee Cheng Hiang would not need to risk mistranslating when trying to market our products.
Technology is one of the most powerful forces in society today. Because of it, Bee Cheng Hiang can sell its products all over the world. The US is one of the most technologically advanced countries in the world has very efficient transportation methods, which include more than 15,000 airports, railways, roads, as well with waterways with advanced vehicles used for transportation (Central Intelligence Agency, 2013). Technology has also helped improve packaging and extend various food products’ shelf life as Bee Cheng Hiang can now vacuum seal their products to preserve and store their products for longer periods of time.
The US is the country with the largest and most technologically powerful economy in the world, with a GDP per capita of $49,800 (Central Intelligence Agency, 2013). In the market-oriented US economy, business firms and private individuals have the freedom to make most decisions while the state governments buy need products and services mainly from the private marketplace. Despite the high GDP per capita, the US like many other countries in the world is still recovering from the 2008 economic crisis thus this may affect sales of the products Bee Cheng Hiang is offering as their main products are snacks and are not essential products.
Today, people care a lot about the environment, thus the way we cook and package our product must be very environmentally friendly. The US, unlike Singapore, experiences the four seasonal changes. This may affect purchasing patterns and fluctuations in demand for Bee Cheng Hiang’s products.
As there are fifty different states in the united states, there are different trade laws Bee Cheng Hiang has to look out for when trying to sell its products, thus when importing as well as selling its products, companies have to be aware of the political factors such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability.
The US has a “Free Trade Area” agreement with various countries including Singapore (U.S. Department of State, 2013), the “United States-Singapore Free Trade Agreement” (USSFTA) aims to allow free trade between the two countries by reducing or eliminating tax tariffs between the two nations, this encourages and improves competitiveness import and export trades between countries by lowering costs of doing business in the two countries (Singapore FTA network, 2012). This would be an advantage for Bee Cheng Hiang when entering the US market.
Bee Cheng Hiang has a long history and is well known in Singapore, Malaysia, and China. It is also a leading player in Asia’s highly competitive food industry. Also, Bee Cheng Hiang’s products contain 100% natural materials, no MSG, no preservatives, no artificial coloring, thus are healthy to consume.
Bee Cheng Hiang only has a narrow product range “Bakkwa”, pork/chicken floss, and various other Chinese snacks. Also, Bee Cheng Hiang’s products are mainly Chinese food from the Chinese culture, thus consumers may be limited to only Chinese snacks when shopping at Bee Cheng Hiang. Furthermore, because of the natural ingredients used to make Bee Cheng Hiang’s product, the price of its product may be slightly higher than its competitors.
In America, more than 70% people are Christian and about 15% people are unaffiliated (Central Intelligence Agency, 2013), as most Christians are open to all types of meats, the products Bee Cheng Hiang offer is actually viable in the US market Also, being the first to market this product in the United States, Bee Cheng Hiang has the opportunity to take and gain a majority of the market share.
Having competitors in Singapore as well as other parts of the world, new entrants from other countries entering the US market providing similar products can be a threat to Bee Cheng Hiang. Moreover, local businesses may also try to imitate and sell the same products Bee Cheng Hiang provides.
Because most Americans are known to be ethnocentric, they would actually be more likely to buy products from a local business, which may be threatening to Bee Cheng Hiang.
Bee Cheng Hiang’s main target audiences are people between age18-30 and 31~65 these people makeup 66.5% of the US population as well as have decent to high spending power. People between ages 18-30 have relatively high disposable income and spending power, they are young and mostly either unmarried or newly wedded. They also tend to love to snack and are more willing to spend on snacks. The second segment of the target audience includes people ages 31-65.
This group of people consist of “baby boomers” and people part of “generation X”, these people are now either parents or grandparents and tend to care more about their families as well as have high spending power, thus they would be more willing to buy our products to share with their family or as gifts to loved ones and friends. In America, some of the most popular food are Italian food, Chinese food, and Thai food.
Because most American people like or are open to Chinese food and the demand for meat is great in America, Bee Cheng Hiang’s product has the opportunity to do well in the US market. The chart below shows us that in America, other then housing and transportation, food is another large expenditure; it costs US consumers an average of $6,133 per year.
An average of $3,465 of that is spent on food that is consumed at home, and $2,668 of it is spent on food consumed away from home (U.S. Dept of Labor. U.S. Bureau of Labor Statistics, 2009). It can be concluded from this chart that the American people willing to spend the money to buy food and for this reason, there would be demand for Bee Cheng Hiang’s products in the US.
The Objectives of the marketing strategy plan is to help Bee Cheng Hiang strategize and focus its resources on opportunities to meet the goal of increasing sales as well as sustaining a competitive advantage in the market. The market strategy will help Bee Cheng Hiang choose its target market, market positioning as well as identify the company’s marketing mix in order to enter and penetrate the US market.
Bee Cheng Hiang’s target market will be segmented into psychographic, demographic, and behavioral segments. On the aspect of psychographic and demographic segmentation, Bee Cheng Hiang’s products have always emphasized family, love as well as the suitability of its products for people of all age groups.
Thus Bee Cheng Hiang’s products would mainly target families aged between 31- 65 who are mostly baby boomers and people under the “generation X” category who values the importance family love and bonding during festive seasons and other occasions and would buy the products to share or as gifts for their loved ones and friends (Gary Armstrong, 2013) whilst targeting the smaller segment of younger individuals aged between 18-30 who buys the products for self-consumption.
On the behavioral segmentation aspect, American families tend to gather during special occasions such as Thanksgiving, Christmas, and to celebrate New Year. During such gatherings with friends and families, they usually snack and feast together whilst celebrating the occasion. Bee Cheng Hiang’s products would fit perfectly on occasions and gatherings, as they promote family love, bonding between friends and family, and are ready to consume once purchased.
Bee Cheng Hiang aims to project an image of love, friendship, and happiness when consuming its products in the minds of potential consumers. When entering the US market, Bee Cheng Hiang would aim to position itself as a provider of perfect high-quality Chinese culture-based snacks for special occasions that promote family love and bonding as well as a perfect snack for casual consumption by individuals and families in the US. Bee Cheng Hiang’s products are priced slightly higher than its competitors, as the ingredients used are of top quality, and the slightly higher pricing projects an image of higher quality when compared to competing products.
Coupled with the uniqueness of this product from the Chinese culture, the pricing would reflect an exotic high-quality product that symbolizes the importance and value of family and loved ones. Bee Cheng Hiang’s products are packaged in red to symbolize good luck and family happiness and at the same time provide positive energy when shopping or purchasing its products.
Bee Cheng Hiang’s main selling product is the “Bakkwa,” a Chinese jerky-like dried meat product. The “Bakkwa” is a very popular choice of gift amongst family, friends, and even corporate employees in Singapore not only during festive seasons like the Chinese New Year but also during gatherings throughout the year. Bee Cheng Hiang also sells other types of Chinese snacks such as pork, chicken or beef floss
In Singapore, Bee Cheng Hiang’s outlets can be found scattered all around the island, from shopping malls to various shop house stores near Chinatown and other various locations to reach our target audiences who frequently shop at these places. In the US, we would follow a similar strategy, opening outlets at shopping malls that most people frequent to maximize exposure of our unique product to the people of the United States. We would also open some outlets at certain places in the US which we feel there would be demand for our products such as places like Chinatown.
Bee Cheng Hiang’s products are made from 100% natural ingredients and are of high quality thus higher pricing for its products. In Singapore, 1 kg of Bee Cheng Hiang’s main selling product the “Bakkwa” costs $40-$50SGD depending on the type of meat and flavors, in the US, however, because of the exoticness and uniqueness of Bee Cheng Hiang’s products, the costs of Bee Cheng Hiang’s products would be marked up slightly to take advantage of the uniqueness of the product. Also, the higher pricing would give an impression
of the high-quality products that Bee Cheng Hiang’s provides for them and their family.
When entering the US market, a sales promotion strategy can be implemented to penetrate the market. A sales promotion would raise awareness of our products as well as provide an incentive for consumers to give our products a try, as our product is unique to the US market. Advertising will also be done to create product awareness of Bee Cheng Hiang’s products. Furthermore, these advertisements could be done in conjunction with the sales promotion to further create awareness of the product through word of mouth of the promotion as well as experiences of the product.
Implementation and Control
As suggested in the marketing strategy, outlets would first be opened in shopping malls and other designated areas that target audiences frequently. A sales promotion would first be used coupled with media advertising to penetrate the US market and create brand and product awareness.
The first step when trying to penetrate the market would be to create brand and product awareness even before entering the market through advertising. Media advertising methods would include TV advertisements, advertisements, and reviews by food and culture magazines as well as online advertisements on US-based food and culture related websites. These would advertisements would be implemented a month before entering the US market to create awareness and aim to create hype following our entering of the market. Upon entering the US market, continuous media advertisements would use to further create awareness of our products as well as support the sales promotion strategy that would be used in the first month of our outlet’s opening.
The second step would be to decide and open outlets in the US, as the US is a very large country, outlets would first be opened in “New York”, the capital of the United States. This is because, in New York, there is a saturated population with high spending power. Outlets will be opened at various ideal locations such as in New York’s “Manhattan Mall” as it is a mall home to many stores not local to the US, this would be an ideal choice for our outlets to first start off as well as New York’s Chinatown in Manhattan to also target locals and Chinese living in the US.
After opening outlets at various ideal locations, the last step would involve a sales promotion strategy that will be implemented for the first month of our outlet’s opening to create awareness and entice potential customers to try and purchase the products offered. Various promotions used would be direct discounts as well as coupons. Sampling would also be provided for customers to try out Bee Cheng Hiang’s range of products, as they would be unique to the US market.
Control measures will be implemented in the case of the ineffectiveness of our marketing plan. Upon entering the US market, sales figures would be recorded daily to track sales growth. Also, because there would be employees of different cultures in the company as Bee Cheng Hiang expands globally, cultural control will also be practiced to ensure the establishment shared values among all members of the firm.
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 is a market with immense potential for Bee Cheng Hiang as the psychographic aspect of Americans is very similar to that of Singaporeans in the way that they value family and special occasions. However, because Bee Cheng Hiang is entering an entirely new market outside of Asia, there is a certain degree of uncertainty when trying to penetrate into the market and whether the products offered would be accepted as they are from Chinese origin. Thus, Bee Cheng Hiang has to review and develop solutions to address this weakness when entering the US market.