St. Gabriel's Library, Au A Marketing Plan of Thai Confectionery in China by Mr. Visarut Yuchuchaimongkol A Final Report of the Three-Credit Course CE 6998 Project Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Science in Computer and Engineering Management Assumption University November 2003 Project Title A Marketing Plan of Thai Confectionery in China Name Mr. Visarut Yuchuchaimongkol Project Advisor Dr. Chamnong Jungthirapanich Academic Year November 2003 The Graduate School of Assumption University has approved this final report of the three-credit course, CE 6998 PROJECT, submitted in partial fulfillment of the requirements for the degree of Master of Science in Computer and Engineering Management. Approval Committee: (Dr. Chamnong Jungthirapanich) (Prof.Dr. Srisakdi Charmonman) Dean and Advisor Chairman (Assoc.Prof. Somchai Thayarnyong) CHE Representative November 2003 ABSTRACT This study analyses the market opportunities for Thai confectionery products to enter China. The study begins with the introduction of our business. Also the study will offer a literature review on marketing concept, Confectionery Industry review, Information of Republic of China, Overview of Shanghai City and Confectionery Industry review in China. The study identifies the problems and analyses product situation including background of products and also takes a closer look at the overall confectionery market situation in China, the consumption, manufacturing and distribution patterns and trends, the competitive landscape, and some of the existing opportunities in the market. Then the study analyses market situation by using SWOT analysis to identify the opportunity points that China market will grow, the weak points for entering this market are lower prices and complication of consumer behaviors. The positioning of the product is high quality, and high price. The target group is Shanghai people who are age between 13-30 years. The study will cover main parts of marketing plan including Product strategy which plan to design the products to suit consumers, Price Strategy will set the psychological pricing in order to compete with local companies, Distribution strategy will use intensive distribution channels to cover the market area, advertising strategy to make brand awareness of product, promotion strategy consumer and trade promotions to make trial use and increase sales volume, Publicity strategy will establish market events to create a good image, personnel selling strategy will assist distributor and customers to get our target and contingency plan will be set up to support master plan, The conclusion and recommendation will suggest that China market 1s complicated which we have to study and set plans before entering the market. ACKNOWLEDGEMENTS The writer is indebted to the following people and organizations, without them, this project would not have been possible. He wishes to express sincere gratitude to his advisor Dr. Chamnong Jungthirapanich for the patience, guidance, and the generous portion of time that he gave and the constant encouragement that has led the writer from the project inception to the project completion. His technical advice and assistance have been excellent. Grateful appreciation is extended to the Committee Members: Prof.Dr. Srisakdi Charmonman, Assoc.Prof. Somchai Thayarnyong for their constructive comments and advice throughout the research. Deepest appreciation is due to the writer's family for their inspiration and motivation to undertake this endeavor and have made the sacrifices required so that it could be successfully completed. Above all, he is forever grateful to his parents whose willingness to invest in his future has enabled the writer to achieve his educational goal. 11 TABLE OF CONTENTS Chapter ABSTRACT ACKNOWLEDGEMENTS 11 LIST OF FIGURES vi-vii LIST OF TABLES vm I. INTRODUCTION 1 1.1 General 1 II. LITERATURE REVIEW 4 2.1 Marketing Concepts and Tools 4 2.2 Confectionery Industry Review 40 2.3 Information of Republic of China 45 2.4 Overview of Shanghai City 53 2.5 Confectionery Industry Review in China 62 III. PROBLEMS DEFINITION I PRODUCT SITUATION 67 3.1 Background of Products 67 3.2 General Statistics and Main Types of Confectionery in the Market 73 3.3 China Confectionery Import Estimate 75 3.4 Key Market drivers in the Confectionery Industry 78 3.5 Confectionery Consumption Trends 80 3.6 Distribution Channels for Confectionery product in China 82 3.7 Trends and Structural Pattern in the Confectionery Distribution System 85 3.8 Imported VS Local Confectionery 87 111 Chapter IV. SWOT ANALYSIS I MARKET ANALYSIS 89 4.1 SWOT Analysis of Thai Sweet Company to China Market 89 4.2 Confectionery industry SWOT analysis in China Market 90 4.3 Position Strategy 92 4.4 Target Group 94 4.5 Competitive Analysis and Market Shares 95 V. MARKETINGPLAN 97 5.1 Product Strategies 97 5.2 Pricing Strategies 100 5.3 Distribution Strategies 101 5.4 Promotion Strategies 103 5.5 Advertising Strategies 106 5.6 Publicity Strategies 108 5.7 Personal Selling Strategies 109 5.8 Marketing Budget and Marketing Calendar 109 VI. EVALUATION OF MARKETING PLANS 111 6.1 Evaluation Plan 111 6.2 Contingency Plan 112 VII. CONCLUSIONS & RECOMMENDATIONS 121 7.1 Conclusions 121 7.2 Recommendations 122 7.3 Further Study for China Market 124 APPENDIX A COMPETITORS OF THAI SWEET CANDY 125 APPENDIX B MARKETING ACTIVITIES CALENDAR 127 IV Chapter APPENDIX C PRODUCT LINES UNDER THAI SWEET CANDY 128 APPENDIX D TRADE EXHIBITION IN CHINA 134 BIBLIOGRAPHY 137 v LIST OF FIGURES Figure Page 3.1 Wafer Products 69 3.2 Snack Products 69 3.3 Candy Products 70 3.4 Jelly Products 71 3.5 Chocolate Products 72 3.6 Market Share of the Top Five Countries Exporting Sugar confectionery to China in 1997 77 3.7 Market Share of the Top Five Countries Exporting Chocolate confectionery to China in 1997 78 3.8 Sales and Distribution Flowchart for Domestic Confectionery 87 4.1 Positioning Map 93 5.1 Sample of Labeling Application 99 5.2 Sales Promotion Chart 105 5.3 POP Display 106 6.1 Sample of Event Marketing in China 117 C.1 Content of Product Lists 128 C.2 Picture of Wafer and Snack Products 129 C.3 Candy Products 130 C.4 Candy & Chewy Products 131 C.5 Biscuit Stick, Bakery, Chocolate and Jelly Products 132 C.6 Water Jelly Products 133 D.1 Picture of Food Exhibition in Shanghai 134 Vl D.2 Picture of Grand Opening Day in Exhibition 134 D.3 Wedding Cake Competition 1 135 D.4 Wedding Cake Competition 2 135 D.5 Booth in the Exhibition 136 D.6 Chocolate Chinese Boat 136 Vll LIST OF TABLES Table Page 2.1 Ten Steps to Disciplined Marketing Planning 5 2.2 Shanghai's Monthly Average Temperature and Precipitation 56 3.1 China Imports of Sugar Confectionery (non-chocolate) by Country of Origin 76 3.2 China Imports of Chocolate Confectionery by Country of Origin 77 3.3 Comparative Analysis oflmported VS. Local Confectionery 88 4.1 Top 6 Best-selling Non-chocolate Confectionery Brands in China for 1997 95 4.2 Top 10 Best-selling Chocolate Confectionery Brands in China for 1997 96 5.1 The Product Pricing 101 A. I The Players in the Chocolate Confectionery Industry 125 A.2 The Players in the Non-chocolate Sugar Confectionery Industry 126 B.1 Marketing Activities Calendar For First Year Enter 127 vm I. INTRODUCTION 1.1 General Thai sweet Candy Co., ltd., is a leading Confectionery manufacturer and exporter in Thailand. The company was established with almost 30 years of experience in the Wafer, Biscuit Stick and Candy industry and is the public's number one choice in Thailand. Their products are well distributed throughout Thailand, currently holding a commanding market share. In addition, Thai Sweet Candy Co.,ltd has a significant volume of sales in the Asia-Pacific and the Middle East. Given high experience, they offer an extensive range of high quality products and the Company will also be able to develop Private Label projects. Currently the Company works under Private Label basis with a few Confectionery Giants from the Middle East and Japan. Due to our capability to adapt our products to the market's needs we offer a marketer a wide variety of colors, flavors, presentations, information to be printed etc. The overall picture of confectionery indicates a high competition. Emphasis is made on product quality and conception of new products. Advertisement plays an important role on product launching promotion. Packaging makes the product stand out and attracts consumers with its gift-like features suitable for different occasions. At present, product expansion focuses on biscuit, wafer, snack, candy and jelly. The Company invested in new machinery and in the import technology for its product development, capacity increases and efficiency thus responsive to market expansion. In line with Thai sweet Candy's policy of continuous expansion, the Company keeps on thinking of new products to offer the consumer particularly in the premium class in order to expand our market shares in the middle and upper class. 1 After careful research and analysis "Sanghai" brand coated wafer of Malt flavor. This flavor is in addition to the four flavors (Chocolate, vanilla, milk and strawberry) we have for the well known wafer "Sanghai" New products are being developed every now and then to add variety and cater to the consumers' diverse preferences and tastes. The Company is determined to manufacture premium grade products both for the domestic and international markets. Thai Sweet Candy Co.,ltd will redouble its effort to improve its products and a their positioning on Thailand's domestic market in preparation for a campaign to penetrate not only the Asian market but also European and American markets as well. The Company has already succeeded in entering other South Est.