It is important that Vigour emphasizes on designing a marketing mix that contributes to creating competitive advantages and awareness in Singapore.
It is essential that Vigour pay attention to different preferences between Norway and Singapore when it comes to product design, and that minor changes might be necessary.
Additionally, it is critical that Vigour does not overprice their products while simultaneously setting a price that covers their costs.
The recommended focused differentiation strategy requires that Vigour should call attention to the product’s benefits through promotion. Furthermore, it is important that Vigour aim the promotion activities at a narrow target segment and not the whole market.
When it comes to webshop, it seems that the Singaporean market is not yet ready.
Therefore it would be more beneficial for Vigour to get their products in a known retail outlet at the present time. However, the trend is showing a growing increase in Internet users, which suggest that Vigour should consider a webshop as a supplement to the distribution strategy.
113 Budget Proposal
Due to lack of information regarding Vigour’s financial costs and the costs of different promotional activities, it will be difficult to make an adequate budget proposal. However, according to Solberg (2006), Norwegian businesses use between 60-80% on marketing activities directed towards channel members, in terms of a push strategy.
As mentioned, Vigour’s marketing budget in Singapore is S$326,000. We will in this section, propose rough estimates as to how Vigour should allocate their financial resources over a period of two years.
These estimates are based on research conducted on 52 Norwegian businesses, regarding allocation of marketing budget in export. (Solberg, 2006)
Proposed Marketing Budget S$
This is not an exhaustive marketing budget, but rather a reflection of what other Norwegian exporters have allocated to promotional activities. However, the proposed budget does not solely reflect marketing expenses, but also the export expenses, showed under the post “other”.
114 Limitations to the project
Some limitations might have affected the content of this project. We will in the following section discuss limitations in availability of information.
Firstly, not all the necessary information concerning Vigour has been available for our perusal. This might have affected the validity of the analysis and recommendations.
Secondly, in regards to the in-depth interviews, there were attempts to contact key persons in the industry in order to gain a thorough understanding of distribution channels in the health supplement industry. However, we experienced difficulties when trying to establish contact with them when most of them never responded to our enquires. We therefore had to make some assumptions.
Thirdly, when deciding on an entry mode we encountered some difficulties in finding valid information regarding financial cost differences between the different contractual arrangements. Attempts were made in order to derive this information, but proved to be unsuccessful. Therefore, certain assumptions have been made in order to give a final recommendation.
Lastly, it is important to bear in mind that changes in Vigour’s internal and external environment in the future could affect the appropriateness of the recommendations.
Chapter 8 –
Recommendations
115 Chapter 8
Recommendations
Firstly, it is recommended that Vigour enters the Singaporean market. They should focus on a niche market within the Singaporean health supplement industry. Furthermore, the most attractive segment has been identified as single men and women between the age of 20-29.
Nevertheless, more thorough research should be conducted.
Secondly, Vigour should apply a focused differentiation strategy when entering the Singaporean market.
Thirdly, the most suitable entry mode for Vigour, at the present time, will be to use an importer, while establishing efficient channel management. This will enable Vigour to push the products through the distribution channel.
Lastly, the marketing mix needs to be designed in a way that creates competitive advantages and awareness. A webshop might work as a supplement to the distribution strategy.
It is anticipated that Vigour spends a period of two years to implement this strategic recommendation.
i
Bibliography
i Bibliography
Literature
Fransesco, Anne Marie and Gold, Barry Allen. 2005. International Organizational Behaviour: 2nd Edition. Shelstad, Jeff. Publisher: Pearson Prentice Hall
Hitt, Michael A., Ireland, R. Duane and Hoskisson, Robert E. 2007. Strategic Management:
Competitiveness and Globalization: Concepts 7th Edition. Calhoun, Jack W. Publisher:
Thomson, South Western.
Keh, Hean Tat and Chiang, Jeongwen. 2004. Strategic Asian Marketing – An Essential Guide For Managers, Prentice Hall.
Solberg, Carl Arthur. 2006. Internasjonal Markedsføring 7th Edition. Universitetsforlaget AS.
Zikmund, William G. 2003. "Business Research Methods 7th Edition." Calhoun, Jack W.
Publisher: Thomson, South Western.
Articles
Ng, Beoy Kui. 2002. "The Changing Role of Ethnic Chinese SMEs in Economic
Restructuring in Singapore: From "Two-Legged" Policy to "Three-Legged" Strategy, in Leo, Suryadinata, Ed. Ethnic Chinese in Singapore and Malaysia." Times Academic Press 255-275.
ii Internet
A
http://www.acra.gov.sg
http://www.amway.com
http://app.mewr.gov.sg
http://app.nea.gov.sg
http://asiarisk.com
http://www.a-star.edu.sg
http://www.austradehealth.gov.au
B
http://www.brandsworld.com.sg
http://business.asiaone.com
http://www.businessdictionary.com
iii http://www.businessmonitor.com
C
http://www.cerebos.com
https://www.cia.gov
http://www.consumerlab.com
http://www.customs.gov.sg
D
http://www.dynamicbusinessplan.com
E
http://en.wikipedia.org
F
http://www.faunpharma.com
http://findarticles.com
iv G
http://www.gnc.com
H
http://www.hpb.gov.sg
http://www.hsa.gov.sg
I
http://infopedia.nlb.gov.sg
http://www.innovasjonnorge.no
L
http://www.leeds.ac.uk
http://www.littlespeck.com
M
http://www.marketlineinfo.com
http://www.mof.gov.sg
v http://www.muis.gov.sg
N
http://www.naturesfarm.com
http://news.bbc.co.uk
http://www.nordforsk.org
http://www.norway.org.sg
P
http://www.portal.euromonitor.com
http://www.prlog.org
R
http://www.regjeringen.no
http://rikvin.com
vi S
http://www.siiaonline.org
http://www.spring.gov.sg
http://statutes.agc.gov.sg
W
http://www.wwlegal.com
Appendices
Appendix
Chapter 1
Appendix 1a: Country Profile Appendix 1b: World Bank Appendix 1c: TradeNet®
Appendix 1d: Registration Procedure
Appendix 1e: HSIAS (The Health Supplements Industry Association of Singapore) Appendix 1f: IADSA (International Alliance of DietaryFood Supplement Associations) Appendix 1g: Enquiry Form
Chapter 2
Appendix 2a: Questionnaire
Chapter 3
Appendix 3a: SPSS Output
Appendix 3b: Interview, NTUC Health Care Pharmacy
Chapter 4
Appendix 4a: Vigour’s business model Appendix 4b: ACE
Chapter 5
Appendix 5a: GDP and economic indicators
Appendix 5b: Consumer expenditure, Sales and forecast of sales Appendix 5c: Competing companies in Singapore
Chapter 6
Appendix 6a: Vigour’s Detox product Appendix 6b: Example of packaging Appendix 6c: Avalon detox product Appendix 6d: Examples of value packages
Appendix 1a: Country Profile
Country profile
Government type: parliamentary republic
Independence: 9 August 1965 (from Malaysian Federation)
Legal system: based on English common law; has not accepted compulsory ICJ jurisdiction
Currency: Singapore dollar (SGD)
Population: 4,553,009 (July 2007 est.)
Population growth rate: 1.275% (2007 est.)
Age structure: 0-14 years: 15.2%
15-64 years: 76.3%
65 years and over: 8.5% (2007 est.)
Total fertility rate: 1.07 children born/woman (2007 est.)
Life expectancy: total population: 81.8 years
Ethnic groups: Chinese 76.8%, Malay 13.9%, Indian 7.9%, other 1.4% (2000 census)
Appendix 1a: Country Profile
Religions: Buddhist 42.5%, Muslim 14.9%, Taoist 8.5%, Hindu 4%, Catholic 4.8%, other Christian 9.8%, other 0.7%, none 14.8% (2000 census)
Languages: Mandarin 35%, English 23%, Malay 14.1%, Hokkien 11.4%, Cantonese 5.7%, Teochew 4.9%, Tamil 3.2%, other Chinese dialects 1.8%, other 0.9% (2000 census)
Industries: electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences, entrepot trade
Natural resources: fish, deepwater ports
Import: $396 billion (2007 est.)
Imports-partners: Malaysia 13%, US 12.7%, China 11.4%, Japan 8.3%, Taiwan 6.4%, Indonesia 6.2%, South Korea 4.4% (2006)
Current account balance: $41.39 billion (2007 est.)
Internet users: 1.717 million (2006)
Source:
Appendix 1b: World Bank
Source:
Appendix 1c: TradeNet®
TradeNet®
The TradeNet® System is a nation-wide Electronic Data Interchange (EDI) System which allows the various parties from the public and the private sectors to exchange structured trade message and information electronically. The major Government agencies which are using the System for the exchange of trade and shipping messages with the private sector are the Singapore Customs and various others which exercise control on the import, export and transhipment of goods.
The TradeNet® System has integrated the import, export and transhipment documentation processing procedures. It reduces the cost and turnaround time for the preparation,
submission and processing of trade and shipping documents and expedites the clearance of the cargo.
Appendix 1d: Registration Procedure
Source:
Appendix 1e: HSIAS
(The Health Supplements Industry Association of Singapore)
Our role is to represent the views of the health supplements industry in Singapore, and ensure that the process of shaping policies and regulations that affect health supplements is
comprehensive and all relevant aspects are fully represented.
We are the single point of contact, speaking on behalf of health supplement companies in Singapore and representing over 90% of the health supplement products marketed here.
We have developed channels for regular dialogue with the relevant authorities responsible for food and health supplement regulations.
We also try to keep the industry alerted to developments and trends at both international and national levels.
As the Singapore health supplements industry develops further, we will become more involved with the international and regional platforms for dialogue and agreement on the industry's needs.
Already HSIAS is involved with the process, now underway, to find an appropriate harmonised ASEAN set of health supplement regulations.
HSIAS has several sub-committees which develop & provide position statements and reference material for all members of the industry to use in understanding any proposed regulations or scientific developments that may affect the industry.
Source: http://www.hsias.org/ “About us”
Appendix 1e: HSIAS
(The Health Supplements Industry Association of Singapore)
Source: HSIAS (can be downloaded at http://www.hsias.org/joinus/index.htm)
Appendix 1f: IADSA
(International Alliance of DietaryFood Supplement Associations)
Since its creation in 1998, IADSA has developed into an alliance of more than 50 dietary supplement associations spread over 6 continents. There are at present more than 9,500 companies who are part of the IADSA member associations. IADSA serves this worldwide network of associations and companies by:
• Providing a fast flow of regulatory and policy information on dietary supplements, ensuring that there is an awareness and understanding of new developments
• Co-ordinating strategy and action on global regulatory issues, particularly in relation to Codex Alimentarius initiatives on vitamin and mineral supplements, additives and health claims
• Widening and deepening the network of associations around the world by helping the establishment of new dietary supplement associations and supporting existing national associations
• Organising global and regional events to promote dialogue on the scientific and regulatory issues underpinning the dietary supplement market
The effectiveness of IADSA as an organisation is based on its ability to communicate information and ideas around the globe to regulators, consumer organisations, scientific bodies and national associations and companies.
Source: http://www.iadsa.org/ “About IADSA”
Appendix 1g: Enquiry Form
Source:
Appendix 2a: Questionnaire
Appendix 2a: Questionnaire
Appendix 2a: Questionnaire
Appendix 2a: uestionnaire
Q
Appendix – 3a
SPSS output
Singaporean Resident 228 78,6 78,6 78,6
Non-Singaporean
Divorced/Widowed 6 2,1 2,1 100,0
Valid
Total 289 99,7 100,0
Missing 99,0 1 ,3
Total 290 100,0
Appendix 3a
5. Occupation
Frequency Percent Valid Percent
Cumulative Percent
Managerial/Professional 61 21,0 21,1 21,1
Clerical/Administrative 36 12,4 12,5 33,6
Manual 5 1,7 1,7 35,3
7. How many times a week do you exercise?
Frequency Percent Valid Percent
8. Have you ever used food supplements?
Frequency Percent Valid Percent
Appendix 3a
Appendix 3a
10. Do you believe that food supplements, positive effect?
Frequency Percent Valid Percent
11. How many days during a week do you use food supplements?
Frequency Percent Valid Percent
Appendix 3a
Appendix 3a
13. Did you know that there exists a food supplement that contains seaweed?
Frequency Percent Valid Percent
14. Do you believe seaweed in general is healthy to consume?
Frequency Percent Valid Percent
15. Have you tried food supplements containing seaweed?
Frequency Percent Valid Percent
16. Would you be interested in buying food supplements containing seaweed?
Frequency Percent Valid Percent
Appendix 3a
17. If you were to buy, how much would you be willing to spend?
Frequency Percent Valid Percent
Appendix 3a
19. Do you percieve imported food supplements to be of better quality?
Frequency Percent Valid Percent
Appendix 3a
Appendix 3a
Appendix 3a
21e. Other
Frequency Percent Valid Percent
Cumulative Percent
No 285 98,3 99,0 99,0
Yes 3 1,0 1,0 100,0
Valid
Total 288 99,3 100,0
Missing 99,0 2 ,7
Total 290 100,0
Appendix 3a
Appendix 3a
Appendix 3a
Appendix 3a
Appendix 3b: Interview, NTUC Health Care Pharmacy
1. How would you explain the Singaporean health supplements industry with particular reference to the distribution channel’s design? What are the trends?
Health supplement in Singapore are mainly imported in by distributors and sold to
Pharmacies and Health stores. Some Health stores eg GNC and Nature’s Farm import their own products. Some distributors brought their products from overseas in bulk and packed under their own brand. Some imports finished products from overseas. Few get their products manufactured in Singapore.
The current trends of health supplements are towards supplement eg Vit C and Multivitamins and supplement for more mature adults eg EPO, fish oil and glucosamine.
2. What is the most common type of retail-outlet for health supplements in Singapore?
Mostly sold in Pharmacy and Health stores.
3. Would you say that the competition between producers is concentrated or fragmented in the health supplement industry in Singapore?
It is concentrated for a range of supplements but may be fragmented for specific products eg collagen or cordycept.
4. Do NTUC Healthcare Pharmacy import health supplements directly from the producer, or through an agent? How is the distribution channel designed?
We bought most of our health supplement from local distributors.
5. Health Science Authority provides guidelines for health supplements in Singapore. Who conducts the quality checking in your distribution channel regarding health supplements?
The distributor or brand owner should conduct quality check.
6. With regards to time, how long is the process of getting imported products from the manufacturer in to the retail outlets?
Can’t answer that as we bought most of the products from local distributors.
7. How do the producers of health supplements attempt to get the health food stores, pharmacies, supermarkets, etc, to stock and sell their health supplements?
Different stores have different requirements. In NTUC Healthcare, the distributors need to produce Certificate of analysis to assure us of the correct product ingredients and Good Manufacturing Practise certificate from the manufacturer. They also need to submit their marketing plan of the product.
Appendix 3b: Interview, NTUC Health Care Pharmacy
8. Which factors are important to emphasize on, for producers of health supplements, in order to stay competitive in this particular industry?
Quality and efficacy of the products and the marketing plan.
9. Will relationship building between producer and retailer be of any importance in this industry?
If so, to what extent?
Yes, so that the retailer is assured that there is someone taking care of movement of the products.
10. Do you think online purchasing is or would be a future trend in this industry? Why?
Not in Singapore as we are a small country. It is convenient for the consumers to go to any pharmacy of health stores to buy. At the same time, they can have their queries answered.
11. Feel free to add anything that you believe is important for us to know regarding the health supplement industry in Singapore.
Appendix 4a: Vigour’s business model
Source:
Appendix 4b: ACEMODEL
Appendix 5a: GDP and economic indicators
Source: PERC (POLITICAL & ECONOMIC RISK CONSULTANCY LTD.)
Appendix 5b: Consumer expenditure, Sales and forecast of sales
Source:
Appendix 5c: Competing companies in Singapore
The market share in retail value is showed by %.
Company Market Share in Retail Value
International Engagement
Degree of Specialization
1. Cerebos 5.9 International Industry
2. Amway 3.9 Global Conglomerate
3. GNC 3.9 Global Industry
4. Bayer 3.6 Global Conglomerate
5. NU Skin Enterp. 3.4 Global Conglomerate
6. Best World Int. 3.1 International Industry
7. Kordels 2.6 Global Niche
8. Blackmores 1.6 International Industry
9. Vita Health Asia 1.5 Local Industry
10. Creative Network 1.1 International Industry
11. 21st Century 1.0 International Industry
12. Huamao Agencies
0.9 Local Niche
13.Eu Yan Sang 0.9 International Niche
14. Viva Life Science
0.5 International Industry
15. Ocean Health 0.4 International Industry
Source: Euromonitor International: Country Sector Briefing. Vitamins and Dietary Supplements. January 2008.
Appendix 6a: Vigour’s Detox product
Appendix 6b: Example of package
Appendix 6c: Avalon Detox
Appendix 6d: Example of value packages