GDM 203 : Strategic Marketing

Bee Cheng Hiang's Destination to Vietnam

Prepared for :

Lecturer Ms MagdaleneKong

Prepared by :

Aye Thandar Myint

Khin Sandy Aung

Subash Chandaar

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Content Page

1.

executive summary 3

2. INTRODUCTION 3

2.1 COMPANY BACKGROUND 32.2 MISSION STATEMENT 32.3 OBJECTIVES 4

3. SITUATIONAL ANALYSIS 4

3.1 INDUSTRY ANALYSIS 43.2 PEST ANALYSIS 53.3 PORTFOLIO ANALYSIS 63.4 CUSTOMER ANALYSIS 73.5 COMPETITORS' ANALYSIS 7

4. CURRENT MARKETING MIX 8

4.1 PRODUCT 84.2 PRICE 94.3 PLACE 94.4 PROMOTION 9

5. FOCUSED MARKET 10

5.1 SEGMENTATION 105.2 TARGETING 115.3 POSITIONING 11

6. RECOMMENDED MARKETING MIX 12

6.1 PRODUCT 136.2 PRICE 136.3 PLACE 146.4 PROMOTION 14

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7. REFERENCE LIST 15

1. Executive Summary

We see great opportunities for Bee Cheng Hiang in expanding

into Vietnam market. Bakkwa (meat jerky) is not something new

Vietnam yet, we believe that BCH can leverage on its brand

name across Asia through value strategies such as product

leadership to take on the market leadership position in a

short period of time. Very few Muslims are habitants of

Vietnam and so, it is in the least of our worries that BCH

will not do well due to its culture. We have learnt that more

and more urban living people are becoming brand conscious and

that is where, we believe, BCH can differentiate itself from

existing companies in the market as BCH is a recognized Asian

brand. Throughout the report, we will be analyzing the current

situation of the country along with potential competitors in

the market and based on that, we will suggest segmentation and

targeting strategies to BCH along with marketing mix

strategies to achieve market share and profitability in near

future.

2. Introduction

2.1 Company Background

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Bee Cheng Hiang was first established as a small road side

stall in 1933 by a Singaporean (Bee Cheng Hiang, 2012). The

very first product of Bee Cheng Hiang was bakkwa (barbecued

meat) and it is still very popular nowadays. Back in the days,

BCH was claimed to be successful during festive periods where

bakkwa was used as a gift or special delicacy to consume. BCH

has actively participated in events like Singapore Food

Carnival endorsed by Tourist Promotion Board of Singapore

since its inception. Today, BCH has more than 200 outlets

across 8 countries (Singapore, Malaysia, China, Taiwan, Hong

Kong, Philippines, Indonesia and South Korea) and has

established itself as the market leader in barbecued meat

industry (Bee Cheng Hiang, 2012). The company is now named Bee

Cheng Hiang Hup Chong Foodstuffs Pte Ltd with the parent

company residing in Singapore and a subsidiary in Hong Kong

for food processing (One Source, 2012).

2.2 Mission Statement

BCH's mission statement is simple yet, ambitious. Its mission

is "To be the leader in the retailing, franchising and

distribution of bakkwa. We shall work relentlessly towards our

corporate vision to be Asia's leading food company in the

international arena." (Bee Cheng Hiang, 2012). BCH aims to

become Asia's leading food company through providing quality

products, expanding into new markets with efficient management

and at the same time, continuously improving on its products

to not just meet but exceed customers' expectations.

2.3 Objectives

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Our objective for BCH is to become a market leader in bakkwa

market in Vietnam within a year time. The goal may sound too

ambitious and unrealistic to accomplish in a timely manner,

however, we feel that it is achievable through product

innovation and customer satisfaction in the new environment.

3. Situational Analysis

3.1 Industry Analysis

We define the industry, where bakkwa (meat jerky) is in, as

sweet and savory snacks market, and will take a look at the

industry landscape in Vietnam. According to Sweet and Savory Snacks

in Vietnam report (Euromonitor International, 2011), the market

has posted a growth rate of 17% and reached VND (Vietnam Dong)

5.3 trillion in terms of value sales. It is also mentioned

that unit prices are increasing due to high inflation rate and

manufacturing costs. It is forecasted that sweet and savory

snacks market is expected see a 6% CAGR growth in the next

year (2012).

The industry landscape is looking good as the analysts say

that the indulgence food and sweet snacks will rise in demand

in Vietnam due to higher disposable income and improved living

standards of the residents. The Sweet and Savory Snacks in Vietnam

report (Euromonitor International, 2011) also stated that

younger generation favor chips and snacks while adult

consumers choose traditional snacks such as meat jerky and

nuts. Although the industry is seemed to be growing, the

category which consists of meat jerky, squid snacks etc. is

reaching maturity as expansion to rural areas was difficult to

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do so due to undeveloped retail network and people in those

areas did not have much disposable income for such food.

However, "other sweet and savory snacks" category (which

includes jerky, scratching and dried snacks) is very popular

and well-known among residents as it has been around for so

many years, and it still comes in as second in terms of volume

sales in Vietnam, albeit hitting maturity. (see the table

below).

The prospects of the market left the business people with a

mixed feeling as although the sweet and savory snacks market's

potential is positive, it still depends on product categories.

Analysts conclude that there is still a huge potential for the

market to grow, however, due to rising awareness of health and

wellness, the consumers could cut down the intake of sweet

snacks such as chips/crisps and fruit snacks as a result. This

gives a dim of hope for already matured products like meat

jerky and dry snacks to grow in market share.

3.2 PEST Analysis

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We will analyze the macro environmental issues using PEST

analysis. Nonetheless, our group assume that political and

technological factors are not relevant to this industry and

thus, we will not be addressing those issues below.

Economic Analysis

Vietnam's economy, according to Vietnam Country Analysis report

(Datamonitor, 2011), is still on the verge of recovery and GDP

growth has shown positive sign in 2010. Vietnam has regained

good relationship with WTO and since been doing economic

reforms by allowing investors to come into Vietnam. The

country's GDP is mainly dependent on exports as it was

accounted 64% in 2010. The GDP per capita, adjusted to

Purchasing Power Parity, was $ 3,300 in 2010, as stated on

World Factbook for Vietnam (CIA, 2012).

Social-Cultural Analysis

Due to initiatives taken by government, Vietnam has seen a

sharp fall in poverty rate and a minimal fall in unemployment

rate over the past few years. Since the country is still

developing, it will not be facing the problem of aging

population and rising social expenditure in near future and in

fact, the median age is even below 30 years which indicates a

young population as mentioned in Vietnam Country Analysis report

(Datamonitor, 2011). According to consensus 1999 data, 80% of

the residents are of no religion, 9% Buddhists, 7% Catholic

and others with 4%. And according to Vietnam: Country Pulse report

(Euromonitor International, 2012), the urban dwellers have

habit of gift-giving in times like Tet (Vietnamese Lunar New

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Year). Also, food hygiene and safety is becoming a big issue

in Vietnam and Health Ministry of Vietnam is strongly

investing in hygiene programs.

3.3 Portfolio Analysis

We will use the matrix developed by Boston Consulting Group to

analyze how BCH will fare in sweet and savory snacks market.

In the diagram taken from The BCG Growth-Share Matrix (NetMBA,

2010), we see that BCH falls under Star (see the red dot)

category due to following reasons. Firstly, there are only a

few competitors in Bakkwa market, namely Fragrance Foodstuffs,

Lim Chee Guan, Kim Hwa Guan etc. However, Bee Cheng Hiang is

the market dominator with 40 retail outlets while Fragrance

Foodstuff Pte Ltd has 21 outlets in Singapore, as stated in

Fragrance (2007), Lim Chee Guan and Kim Hwa Guan with 2

outlets each. From here, we can deduct that BCH has greater

market share over its competitors due to big difference in the

number of outlets alone. Secondly, according to Sweet and Savory

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Snacks in Singapore report (Euromonitor International, 2011), the

category where bakkwa (meat jerky) is in (other sweet and

savory snacks), is expected to grow at a rate of 3% in 2011.

Therefore, the market is not stagnant and is on the rise. With

these two factors, we can place BCH in star category in

Singapore market.

3.4 Customer Analysis

Here we will do a bit of customer analysis in the current

market. The current customers of meat-jerky-like food are

adult consumers so, we can assume they are in their thirties.

We can still consider 'twenty-something's and teens as our

potential customers as they also tend to consume other types

of sweet and savory snacks. The Consumer Lifestyles in Vietnam report

(Euromonitor International, 2010) mentioned that food

expenditure is accounted 40% for a 70's born Vietnamese.

Therefore, we can assume that our current customers have

spending power as well as willingness to spend on food

products. When it comes to usage situation, meat jerky is

usually consumed any time of the year though the sales figures

go up during festive season like Lunar New Year. According to

Vietnam: Country Pulse report (Euromonitor International, 2012),

the customers feel more convenient buying from street vendors

than at designated locations unless they think the food is not

safe. For snacks like jerky, the customers usually buy when

they feel like eating them and maybe during festive period to

give them as gifts to superiors. The Vietnam: Country Pulse report

(Euromonitor International, 2012) also mentioned that the

office workers choose premium foods as Tet (Vietnamese Lunar

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New Year) gifts to their bosses. The reason why the customers

choose the snacks is mainly due to food safety and beautiful

packaging (this would make a good gift). For those who can

afford, food safety has become a priority and nice packaging

is of a trend among Vietnamese consumers.

3.5 Competitors' Analysis

Due to some constraints in defining the market, we could

manage to list two close competitors in Vietnam which we

think, share the similar business model as BCH. Firstly, there

is Fragrance Foodstuff Pte Ltd which has some franchise

chains in Ho Chi Minh City. Barbecue meat, Flosses and Moon

cakes are the main selling products of Fragrance Foodstuff. As

for Vietnam market, FG Foodstuff is the main franchisee

covering Vietnam for Fragrance Foodstuff bak kwa (BBQ meat). (

Fragrance , 2007)

Next, there is Vissan Limited company, a member company of

Saigon Trading Group, is considered to be another competitor

of Bee Cheng Hiang's in Vietnam. Vissan is a local Vietnam

company and favored by local people due to good quality

products with cheap price. The company head office is in Ho

Chi Minh City and two more branches are in Ha Noi and Da

Nang. VISSAN’s business comprises both the processing and

trading of fresh frozen meat and meat-related foods. The

sterilized sausage sausage, pork sausage, beef, shrimp of all

types, such as cold sausage cheese sausages, cocktail sausages

and sausage meat, shrimp or pork silk borax, smoked ham are

the most popular products among busy family. (Vissan, 2009)

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4. Current Marketing Mix

4.1 Product

The main products of Bee Cheng Hiang involve Bakkwa (barbecued

Meat), Meat Floss, Chinese sausage, mooncakes and snacks

(cuttlefish)  which are made with the core focus on quality.

The actual product of Bee Cheng Hiang is its brand name, level

of quality and packaging. The Bee Chen Haing products are

consistent and reliable as it spends on research and

development to maintain the quality of product and also to

develop and introduce new products and creative packge design.

The food technologists regularly check the quality standard

whether it comes to nutrition or hygiene and make examination

of quality assurance before delivery. BCH's product philosophy

is uses 100% natural ingredient. The packaging is uniform,

hygienic, highly attractive and creative. The augmented

products for Bee Cheng Hiang are delivery, credit payment, e-

shopping and supporting service. It has free delivery to a

single location per order for customers who buy S$50 or more

(one-time purchase). In 2012, the recently added item to

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bakkwa range is the traditional sliced pork which tastes like

bacon with tough meat and good sweetness. It is second most

expensive item next to pork belly. Bee Cheng Hiang is

consistently investing in R&D to come up with innovative

products and at the same time, maintain the health

requirements standards like no MSG usage and less coloring.

4.2 Price

The price is consistent and uniform in peak-off season with

going-off rate and use pure-competition pricing in peak

season. The pricing scheme adopted by Bee Cheng Hiang is

Premium Pricing as it establishes premium product positioning

and high product quality to specific customers who have enough

wallet share and are brand/quality oriented. The prices of

barbecue and floss are above S$45 for 1 kg and chicken sausage

price is S$13.2 for four pairs.  Price adjustments are made in

accordance with quantity by providing discounts and seasonal

discount are also used to clear stocks and increase sales.

4.3 Place

Bee Cheng Hiang has more than 170 retail outlets located

across 8 countries, namely, Singapore (40), Malaysia (19),

China (77), Hong Kong (13), Taiwan (41), Indonesia (6), South

Korea (11) and Philippines (1). BCH distributes its products

via online and 30 offline retail outlets and 10 franchise

operating outlets in local market. Bee Cheng Hiang business-

format franchise incorporates the Bee Cheng Hiang trademark

and products. During peak season period, Bee Cheng Hiang tries

to push up the sales through pushcart outlets and sometimes

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participate in outlet sponsorship events. It also participates

actively in events like the Singapore Food Carnival by putting

up temproary stalls.

4.4 Promotion

Bee Cheng Hiang uses various kinds of marketing promotion

tools such as  rebate,  sample, coupons, direct discount,

price off in weekend, special offer, and public relations etc.

It also adopt communication tools such as mobile, television

and social media platform like Facebook for advertising

purposes. Bee Cheng Hiang participates in events organized by

Tourist Promotion Board of Singapore to promote its products.

In addition, it makes direct marketing such as e-commerce,

online marketing and personal selling. 

5. Focused Market

5.1 Segmentation

There are three factors when it comes to segmentation of the

customers; geographic, demographic and psychographic. Since it

is difficult to penetrate into rural areas of Vietnam due to

poor distribution network and less spending power, we choose

to focus on people living in two big cities, Ho Chi Minh City

and Hanoi as BCH's customers. According to World Factbook for

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Vietnam (CIA, 2012), the urban population is about 30% of the

total population which is around 91.5 million.

As we can see from the table taken from the Vietnam Country

Analysis report (Datamonitor, 2011), the total population of 20-

44 age segment made up about 35 million and so, we can assume

that more than 9 million people will be regarded as urban

population that BCH can identify as its potential customers in

HCMH and Hanoi. The reasons why we identify this particular

segment as BCH's potential customers are that many of them are

office workers who have moderate spending power and can afford

to buy BCH's products. They also share similar psychographic

nature like gift-giving behavior to their superiors during

festive seasons as well as take good care about food hygiene.

5.2 Targeting

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Based on the segmentation results, we can recommend BCH to

target the urban dwellers who are mainly office workers, with

age ranging from 20 to 44 years old and share similar behavior

in nature.

According to this VALS framework (Strategic Business Insights,

2012), we can more or less identify them as "Achievers"

because they are believed to be motivated, high on resources

and favor established, prestige brands. This is in line with

BCH's brand image and so, BCH can attract those customers with

its well-known 'bakkwa' and other jerky products.

5.3 Positioning

BCH positions itself as the only choice for simply delicious

snacks solutions (Bee Cheng Hiang, 2012). BCH injects its

brand personality in three ways; trustworthy, appreciative and

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innovative. BCH guarantees the customers that its products are

of high standard and consistent quality. It is also

appreciative of its customers who have encouraged them with

long-term support and as a token of appreciation, BCH promises

to constantly innovate its products, processes and services to

serve better to the customers. When it comes to entering

Vietnam market, it is important that BCH chooses a franchise

carefully which will guarantee to carry the values that BCH

endorses. Because at the end of the day, it is not 'bakkwa'

that sells but the Bee Cheng Hiang brand name with its

hygienic foods and beautiful packaging which the customers

will reflect upon to make the purchase.

6. Recommended Marketing Mix Strategy

Before recommending the marketing mix strategy that BCH should

exercise in Vietnam market, we will use Ansoff's Market

Phase 1

Phase 2

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Expansion Grid to check what BCH can do in near future. We

have come up with two phase strategy for BCH in this case,

where in phase 1, BCH is to focus on market development

strategy by entering the Vietnam market with existing products

like bakkwa of different kinds. We expect that phase 1 will

last at least a year in this case. However, from the industry

analysis, we have learnt that the market growth is already

stagnant in Vietnam so, to achieve market leadership, we

suggest BCH to go into phase 2 where BCH would come up with

new product categories which have good market attractiveness.

We believe that only after BCH is able to ride on growing

market, it can become the market leader in Vietnam and use

market penetration method onwards there. Based on the analysis

stemmed from Ansoff's market expansion grid, we recommend BCH

the following marketing mix strategy.

6.1 Product

Phase 1: Though well known for its meat jerkey, Bee Cheng

Hiang will introduce its wide range of edibles like as follows

during the Phase 1 of its establishment:

Barbequed meat (bakkawa): Sliced pork/Chicken/Beef, Minced

pork, Chilli pork, Pork/Chicken coin,Gourmet bakkwa/fusion and

Chiziban(The traditional bakkwa is given a modern twist in the

form of chips/crackers).

Floss: Pork/Chicken/Fish floss, Chilli crispy pork/chicken

floss, Keispee frostee, Wasabi crispy pork floss, Sesame

seaweed krispee frostee, Mini crunchies.

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Others: Golden floss roll, Puff rice seaweed roll, Hosay, Pork

rib soup, Abalone, Prawn roll, Chicken/Pork

sausage.           

 

With an attractive and hygienic package design and a one

hundred percent natural ingredient, Bee Cheng Hiang is surely

to make an impact in the Vietnam market as the Vietnamese like

colourful packaging. The augmented products of Bee Cheng Hiang

such as delivery, credit payment, e-shopping and supporting

service will also be taken into the Vietnam market as the

cities hold quiet a lot of educated and working class people

who do not have enough time to shop directly. Since people

above the age of 30 prefer most of its products, one core

product that Bee Cheng Hiang can clearly depend upon is its

Chiziban, which attracts more of the youngsters as Vietnam has

a major population of young people who like to consume chips

and crackers.

Phase 2: Using its Research & Development and already existing

information on purchase behaviour and customer requirements

obtained from Phase 1, Bee Cheng Hiang will come up with new

products which suit the Vietnamese market according to their

tastes.

 

6.2 Price

Being a consistent and reliable brand, Bee Cheng Hiang is

known for its quality and premium pricing throughout the

South-East Asia. The price of a regular sausage from the local

brand Vissan is around SGD$ 1.5 whereas the one from Bee Chen

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Hiang is around SGD$ 3-4. Hence the prices are high compared

to the local market just like Fragrance but since the target

market in the prime cities of Vietnam have a high share of

disposable income and perceived brand value, BCH should not

cut down the prices as it will affect its brand image

eventually.

 

6.3 Place

BCH should still adopt its retail strategies in HCMC and Hanoi

markets by encouraging the franchisee to open up many outlets

in a short period and exercise online retailing as a follow-

up. Also, during festive periods, BCH can set up road side

stalls to increase the distribution network and reap in more

profits.

 

6.4 Promotion

Phase 1: Bee Cheng Haing will use the same promotional tools

such as  rebate,  sample, coupons , direct discount, price off

in weekend, special offer, and public relation.

Phase 2: It can put up several temporary stalls during

festival times like the Vietnamese Lunar New Year and others

to promote gifting ideas like coupons as the brand will have

an already existing image among the people.

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7. Reference List

Euromonitor (2011), Sweet and Savory Snacks in Vietnam. Available at:

(Accessed through SMU domain) (Accessed: 23th May 2012)

Euromonitor (2012), Vietnam: Country Pulse. Available at: (Accessed

through SMU domain) (Accessed: 23th May 2012)

Datamonitor (2011) Vietnam country analysis report, Available at :

(Accessed through SMU domain) (Accessed : 24th May 2012).

CIA (2011), Vietnam, Available at:

https://www.cia.gov/library/publications/the-world-factbook/ge

os/vm.html (Accessed : 24th May 2012).

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Euromonitor (2012), Vietnam: Country Pulse, Available at: (Accessed

through SMU domain) (Accessed : 24th May 2012).

Euromonitor (2011), Sweet and Savory Snacks in Singapore. Available at:

(Accessed through SMU domain) (Accessed: 24th May 2012)

OneSource (2012), Bee Cheng Hiang Hup Chong Foodstuff Pte Ltd,

Available at: (Accessed through SMU domain) (Accessed : 24th

May 2012).

Strategic Business Insights (2012), VALS framework. Available at:

http://strategicbusinessinsights.com/vals/ustypes/experiencers

.shtml (Accessed : 24th May 2012).

NetMBA (2010), The BCG Growth-Share Matrix. Available at:

http://www.netmba.com/strategy/matrix/bcg/ (Accessed : 24th

May 2012).

Bee Cheng Hiang (2012), Our History, Available at:

http://www.bch.com.sg/ourhistory.htm (Accessed : 24th May

2012).

Fragrance Foodstuff (2007) Fragrance Foodstuff Singapore Pte Ltd,

Available at, http://www.fragrance.com.sg/index.php/Our

%20Retail# (Accessed: 27th May 2012)

Vissan Homepage (2009) Vissan Vietnam, Available at:

http://www.vissan.com.vn/en/index.php (Accessed: 27th May

2012)

Porky Bernice (2012), Bee Cheng Hiang, Available at:

http://www.slideboom.com/presentations/86139/PORKY-BERNICE-

%3AD (Accessed: 27th May 2012)

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JunHong (2012), Executive Summary of Bee Cheng Hiang, Available at:

http://sjhportfolio.wordpress.com/excutive-summary/ (Accessed:

27th May 2012)

Tutor2u (2012), Ansoff's product/market growth matrix, Available at:

http://tutor2u.net/business/strategy/ansoff_matrix.htm

(Accessed: 27th May 2012)

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