MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

2011

GROUP 12

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

GROUP MEMBERS: 1. 2. 3. 4. 5. Nguyn Th Hoi An - 0851050032 L H Dung - 0851050035 Cao Phm Thi H - 0851050066 Nguyn Th Thu Trang - 0851050028 | Hong Th Thu Trang 0851050029

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

Introduction
In Vietnamese, the term mai age is commonly used to indicate the teenage, which proves the popularity of mai the Vietnamese-style savory dried fruit among Vietnamese young people. However, up to now, the international reputation of o mai seems still only limited to foreign visitors who come to our country. Therefore, in our marketing project, we decide choose it as our export product with the ambition to introduce and spread the love toward this unique Vietnamese snack to foreign friends. With the best quality products from the well-established Hong Lam company, Singapore is our targeted export market after some analysis about the economic condition, cultural factors and trade policy of the country.

I.
1.

Economic audit:
Overview

Singapore is the 14th largest exporter and the 15th largest importer in the world. The country has the highest trade to GDP ratio in the world at 407.9 percent, signifying the importance of trade to its economy. The country is currently the only Asian country to have AAA credit ratings from all three major credit rating agencies Standard & Poors, Moodys and Fitch. Singapore has a highly developed and successful free-market economy. It enjoys a remarkably open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries. The economy depends heavily on exports, particularly in consumer electronics, information technology products, pharmaceuticals, and on a growing financial services sector. Real GDP growth averaged 7.1% between 2004 and 2007. The economy contracted 1.3% in 2009 as a result of the global financial crisis, but rebounded nearly 14.7% in 2010, on the strength of renewed exports. Over the longer term, the government hopes to establish a new growth path that focuses on raising productivity, which has sunk to 1% growth per year in the last decade. Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue efforts to establish Singapore as Southeast Asia's financial and high-tech hub.

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

GDP (purchasing power parity) $291.9 billion (2010 est.) $255.1 billion (2009 est.) note: data are in 2010 US dollars$257 billion (2008 est.) GDP - real growth rate 14.5% (2010 est.) -0.8% (2009 est.) 1.5% (2008 est.) GDP - composition by sector Agriculture: 0% Industry: 28.3% Services: 71.7% (2010 est.) Total value of imports: US$310.4 billion Primary imports - commodities: machinery and equipment, mineral fuels, chemicals, foodstuffs, consumer goods Primary imports partners: US (14.7 of total imports), Malaysia (11.6 percent), China (10.5 percent), Japan (7.6 percent), Indonesia (5.8 percent), South Korea (5.7 percent) 2. Market size and past development trends of the confectionery and snack industry

Imports of sugar confectionery amounted to 14,951 tonnes valued at Cdn$ 51.1 million in 2007. Imports are made for both local consumption and re-export purposes (see Table below).

Singapore's Trade and Consumption of Sugar Confectionery 2005 to 2007

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

2005 (Tonnes)

2006 (Tonnes)

2007 (Tonnes)

Imports

13,188

1,3546

14,951

Re-exports

(3,393)

(3,263)

(4,593)

Consumption

9,795

10,283

10,358

Source: Singapore External Trade Statistics

Singapore is currently consuming about 10,000 tonnes of imported sugar confectionery per annum, which comprises the bulk of items being consumed in Singapore. Singapore only has a small industry involved in the production of the retail packed sugar confectionery items that are covered by this report. Per capita consumption in 2007 amounted to about 2.3 kilograms (provisional figure), up from 0.9 kilograms in 2002. Some key points to note are as follows:

In recent years, sugar confectionery consumption has been growing at less than 5% per

annum on a volume basis. Trade sources comment that, on a value basis, the market has seen higher growth rates. This higher value growth has resulted from consumers upgrading to branded products that are higher margin products, e.g. breath-fresheners.

The product mix in the market has continued to evolve over the past 5 years. Aggressive

advertising and promotion has boosted the position of the following in the market:

2011 o

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

Branded products as opposed to generic products, especially the multinational

brands; and
o

Functional products and products with some form of claim on benefits, especially

breath-fresheners.

The range of products existing in Singapore is very wide today. It includes chewy soft

sweets, medicated products, lollipops, breath-fresheners, toffees, hard boiled sweets, and traditional Chinese sweets/candies etc. There are also a very large number of brands and packaging sizes.

Sugar confectionery has long been a popular item amongst Singaporean adults and

children. Teenagers with discretionary spending power and young adults are reported to be the most dynamic consumers in the market today. Children's products tend to have some consumption resistance because Singapore mothers are health conscious and so tend to discourage their children from regular consumption of sugar confectionery.

Trade sources estimate the Singapore market for sugar confectionery to be worth between

Cdn$ 120 million and Cdn$ 160 million at retail level. Obtaining an accurate estimate is very difficult because of the highly fragmented market structure and fragmented distribution channels and large number of suppliers.

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

II.
1.

Cultural audit:
Overview:

Singapore is a cosmopolitan society where people live harmoniously and interaction among different races is commonly seen. Its culture is best described as a melting pot of mainly Chinese, British, Malay, and Indian cultures, a reflection of its immigrant history. The pattern of Singapore stems from the inherent cultural diversity of the island. Each racial group has its own distinctive religion and there are colorful festivals of special significance all year round. Although the festivals are special to certain races, it is nonetheless enjoyed by all. In Singapore, food is also readily and widely available. There are lots of cuisines to offer. We have, Chinese, Indian, Malay, Indonesian and Western, Italian, Peranakan, Spanish, French, Thai and even Fusion. It is very common to savor other culture's food and some of the food can be very intriguing. Indian foods are relatively spicier, whereas Chinese food is less spicier and the

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

Chinese enjoy seafood. Malay cooking uses coconut milk as their main ingredient that makes their food very tasty. 2. Language:

Many Singaporeans though not all, are bilingual. Most speak English and another language, most commonly Mandarin Chinese, Malay, Tamil or Singapore Collonial English(Singlish). English is the first language of Singapore. The standard form of English spoken in Singapore is Singapore Standard English, which uses British spellings and grammar. However, there is also a local dialect of English, Singlish, that is unique to Singapore, though it has close affinities with the Malaysian dialect known as Manglish. Singapore is a multi-lingual nation and Singaporeans speak different languages as their first language. In 2005, 50% of Singaporeans speak Mandarin at home. 32% speak English at home and 12% speak Malay while 3% speak Tamil at home. Singaporeans who do not speak English as their home language normally speak it as their second language. Language most frequently spoken at home (%) [4] Language English Mandarin Chinese Other Chinese Languages Malay Tamil 3. Religion: 1990 2000 2005 18.8 23.7 39.6 14.3 2.9 23.0 35.0 23.8 14.1 3.2 29.4 36.0 18.2 13.2 3.1

Residents of Singapore practice a whole range of religions, depending on their background or individual choice. The Chinese population in Singapore has a good number of Buddhists, Christians, and Catholics. The Malay population is predominantly Muslim, while the Indians in Singapore are largely Hindus. There are also a number of free-thinkers/atheists in Singapore and the country does not propagate any official religion. However, the country does uphold the

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

values and ethical standards of Confucianism. Singapore consumers general profile:

4.

Singaporean consumers are increasingly leading hectic lifestyles, and often do not have sufficient time to prepare fresh cooked meals. As a result, consumers are looking at purchasing processed and packaged foods which require limited preparation. Due to growing Western influence in the country, a number of households are purchasing foods common to the West such as pasta and roast beef. Households are also consuming more cereals and breads for breakfast instead of traditional breakfast options (i.e. rice porridge). More consumers are also adopting the practice of eating a dessert after a meal and as a result, overall spending on sugar and confectionary products increased by 44% in 2010. Carbohydrates are a staple item in Singapore cuisine; as a result, bread and cereal products were the most purchased food items in 2010, making up 21% of total food spending. Meat and seafood each comprised 17% of total food spending, while vegetables made up 13% and dairy products accounted for 11% of total food expenditure. Singaporean consumers are purchasing an increasing number of luxury goods, and are willing to pay more for imported premium food products. As a result, sales of premium and luxury goods increased by 18% between 2006 and 2010. While Singapore consumers are willing to pay a premium for the above food options, they re still price sensitive and value conscious. How price sensitive Singapore consumers are depends heavily on the type of product. The majority of consumers would not pay a premium on necessities, while products that have a unique selling proposition that can be marketed to consumers are more likely to succeed being sold at a premium. 5. Consumer behavior of the young generation:

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

Singapores teenagers are extremely altruistic, caring deeply about the environment, their

community and global humanitarian issues. Accordingly, they prefer brands which align with their personal value systems. o o o o o o o They appear to care less about fame and fortune than their predecessors, and to care more

about enjoying their work. Generation Z are green crusaders -the majority of teens identified helping the

environment as a key concern when selecting their future employers. They have a deep connection with Singapore and its characteristics - they seek to Flavor platforms and medium that they can mould they do not have set patterns for understand and comment on national issues, and they are proud of Singapores sense of security. viewing/ listening. Therefore advertisers should look past traditional prime time. They prefer humor in advertising above other characteristics. Having a sense of community is paramount to Singapores teenagers: They gravitate Singapore teens are informed purchasers the majority of teens want to know when

towards media channels which provide a sense of LIVE community.

something is being promoted to them and they will do their research on a product they have seen on TV before they purchase it. o More than three-quarters (91%) of Singapore teens surveyed like advertising - not only Advertising is successful 59% of teens acknowledge that

tolerating it, but welcoming it.

advertising makes them purchase products. More than three-quarters (82%) of teens will go to a website for further information about a product after watching an advertisement on TV.

III.

Trade Barriers:

Singapore is essentially a free port for imported confectionery and snacks. Although Goods & Service Tax of 7% has to be paid by the importer before imported products can enter Singapore customs territory, no import duties are levied on imported confectionery and snacks. All imports of processed food products, including confectionery and snacks, must comply with prevailing requirements as laid down by the Sale of Food Act and its Regulations. There is free

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

entry for processed food products that can comply with local food regulations, which are enforced by the Agri-Food and Veterinary Authority (AVA). All imported processed food products may be subject to inspection. Samples may be taken for laboratory analysis. An import permit issued by the AVA is required for every consignment of processed food products imported, including confectionery and snacks. Traders who import processed food products, including confectionery and snacks, are required to register their business, together with all required documentation, with the Food Control Division of the AVA, failing which their application for an import permit will be rejected. Under a recent change in the regulatory environment to deal with frauds in the area of organic food and drinks, the AVA has recently issued a directive to importers and declaring agents advising them that:

Imported food products that are to be retailed as organic in Singapore must be

declared as organic and be fully supported by appropriate organic certification documents issued by an accredited overseas certification agency.

Food products labelled as organic foods, organically produced or words of similar

meanings are required to meet the standards established by the Codex Alimentarius Commission for organically produced foods. This is relevant to confectionery and snacks because Singapore is importing some organic brands of confectionery and snacks from North America. Transportation: Singapore is a major international transportation hub in Asia, positioned on many sea and air trade routes. The Port of Singapore, managed by port operators PSA International andJurong Port, was the world's second busiest port in 2005 in terms of shipping tonnage handled, at 1.15 billion gross tons, and in terms of containerised traffic, at 23.2 million twenty-foot equivalent units (TEUs). It is also the world's second busiest in terms of cargo tonnage, coming

2011

MARKET REASEARCH: VIETNAMESE DRIED FRUIT TO SINGAPORE MARKET

behind Shanghai with 423 million tons handled. In addition, the port is the world's busiest for transshipment traffic and the world's biggest ship refuelling centre. With all these advantages, we decide to choose sea freight as our main method to transport our products to Singapore.

Conclusion
As a country with a developed economy, high living standard and youthful population, Singapore is truly a potential market for our product, which suits very well with the taste of dynamic and modern young people. Due to the increasing popularity of the Internet and social networks, we decide to use a combined promotional mix with focus on online and multi-media advertising.