Presentation on theme: "FAMA-UPM Program 4 Project 1"— Presentation transcript:
1FAMA-UPM Program 4 Project 1 Opportunities in Increasing the Export of Food Products Based on the Consumer Preferences in Middle East15 August 2008Pr Dr Mad Nasir ShamsuddinProf Dr Jinap SelamatDr Roselina KarimProf Madya Dr Jamil BojeiDr Rosli SalehDr Tan Chin PingMAHA 2008
3Market Size and Growth of The Malaysian Processed Food Exports to Middle East, 2002 – 2006
4SWOT Analysis Strength Malaysia has a good image as a modern Islamic country.Malaysian Halal Certification is perceived as more valid compared to non-Muslim countries.Malaysian products are perceived as safe and better quality vis-à-vis other ASEAN countries.Labour productivity is relatively high compared to other ASEAN countries.
5SWOT Analysis Weakness Problems faced dealing with Malaysian exporters – lack of professionalism, such as lack of follow-up, seriousness, lack of correspondence, and very slow in response. Very short-term perspective. SMI entrepreneurs lack legal/social/cultural environment in the importing countries.No consistent supply.Malaysia is weak in understanding and adapting local flavor.Sea transportation is not efficientBranding is not well established. Too many brands. Each entrepreneur markets its own brand. Do not have branding which is unique for the country.Although packaging is good, some products have the choices of color which are not attractive.Packaging does not guarantee long shelf-life.
6SWOT Analysis Weakness (cont..) Cost of production is high. Analysis from the survey indicates that the prices of products from Thailand are below the Malaysian cost of production. In general, the Malaysian products are about 20% more expensive.Malaysian food products.No strategic alliances like importers or distributors. No private agents to market the products due to the lack of entrepreneurial skills.Entrepreneurs do not have enough capital to effectively export their products.Not able to identify consumer needs in terms of taste and preferences.Almost all the local processed product type and categories do not follow market labeling requirements.Some of the ingredient list do not specify the percentage the ingredients, nutritional facts, serving size, customer service information.
7FAMA-UPM Program 4: Project 2 SWOT AnalysisOpportunities60% of the Saudi’s consumers are youth (< 35 years) and thus indicating a growing consumer markets and willing to try new products.Saudis’ consumers have purchasing power.GCC is a growing region. Average GCC (8%); Saudi Arabia (10%).Rising costs of production in EU & USA.Tourism industry in Malaysia contributes to developing awareness among Arab consumers who have been to Malaysia.Strong government supports for SME development in food processingStrong government support in halal products and halal-hub centreFAMA-UPM Program 4: Project 2
8FAMA-UPM Program 4: Project 2 SWOT AnalysisThreatsStiff Competition of the Malaysian food products from Thailand, Indonesia and the Philippines. The prices of the Malaysian products are generally higher due to the higher production costs.Subsidized tariffs for air transportation by Thailand.Chinese products invading the markets, translated into cheaper prices.With declining USD, the products from Malaysia are more expensive.Weak R&D that match SME requirementsFAMA-UPM Program 4: Project 2
10Overall Acceptability Ranking Based on Overall Acceptability of Products by Respondents in the MENoProduct NameCategoryOverall AcceptabilityWillingness to Buy1Sri KayaJam and Spread4.464.52Pineapple Jam4.164.593Starfruit Jam4.144.284Almond and Ginger CookiesCookies4.074.25Filled ChocolateChocolate4.014.316Black Pepper Tapioca ChipsSnack3.964.067Pink Guava JuiceBeverage3.924.18Roselle Jam4.399Coffee3.864.2410Sesame Ball3.8411Almond and Tiramisu Chocolate3.833.8712Butter Cookies3.8113Carambola Juice3.6914Tamarind Juice3.393.7415Sos Cili PadiSauce3.313.95
11Ranking Based on Overall Acceptability of Products by Respondents in The ME
12Analysis of Acceptance FAMA-UPM Program 4: Project 2
14FAMA-UPM Program 4: Project 2 Middle EastCookiesDMG Butter CookiesNoraini’s Ginger and AlmondChocolatesDazzle FilledBenns Almond TiramisuFAMA-UPM Program 4: Project 2
15FAMA-UPM Program 4: Project 2 Middle EastJam & SpreadsFAMA Chilli sauceSaucesFAMA SerikayaFAMA JamFAMA-UPM Program 4: Project 2
16FAMA-UPM Program 4: Project 2 Demographic – Consumer’s GenderFAMA-UPM Program 4: Project 216
17FAMA-UPM Program 4: Project 2 Demographic – Age of ConsumersFAMA-UPM Program 4: Project 217
18Demographic – Country of Origin FAMA-UPM Program 4: Project 218
19FAMA-UPM Program 4: Project 2 Demographic – OccupationFAMA-UPM Program 4: Project 219
20Consumer Acceptance - Snacks *Overall Acceptability denoted by appearance, aroma – Smell,flavor – Sweetness, texture – Body or viscosity and aftertaste. (5= Like Extremely and 1 = Dislike Extremely)** Overall Packaging denoted by packaging design, color, size of Pack and Overall (5=acceptable and 1=not acceptable)
22Consumer Acceptance - Beverages *Overall Acceptability denoted by appearance, aroma – Smell,flavor – Sweetness, texture – Body or viscosity and aftertaste. (5= Like Extremely and 1 = Dislike Extremely)** Overall Packaging denoted by packaging design, color, size of Pack and Overall (5=acceptable and 1=not acceptable)
25Consumer Acceptance - Cookies *Overall Acceptability denoted by appearance, aroma – Smell,flavor – Sweetness, texture – Body or viscosity and aftertaste. (5= Like Extremely and 1 = Dislike Extremely)** Overall Packaging denoted by packaging design, color, size of Pack and Overall (5=acceptable and 1=not acceptable)
27Consumer Acceptance - Chocolate *Overall Acceptability denoted by appearance, aroma – Smell,flavor – Sweetness, texture – Body or viscosity and aftertaste. (5= Like Extremely and 1 = Dislike Extremely)** Overall Packaging denoted by packaging design, color, size of Pack and Overall (5=acceptable and 1=not acceptable)
29Consumer Acceptance – Jam / Spread *Overall Acceptability denoted by appearance, aroma – Smell,flavor – Sweetness, texture – Body or viscosity and aftertaste. (5= Like Extremely and 1 = Dislike Extremely)** Overall Packaging denoted by packaging design, color, size of Pack and Overall (5=acceptable and 1=not acceptable)
32Consumer Acceptance – Sauce *Overall Acceptability denoted by appearance, aroma – Smell,flavor – Sweetness, texture – Body or viscosity and aftertaste. (5= Like Extremely and 1 = Dislike Extremely)** Overall Packaging denoted by packaging design, color, size of Pack and Overall (5=acceptable and 1=not acceptable)
34Preference Test in Jeddah Product CategoryType of productLocal brandCompetitor’s brandJamPineapple jamAgroMasHalwani BrosBeverageCoffeeAnggerik 3-in-1Nescafe 3-in-1CookiesButter cookiesDMG Royale DanishAmericanaGinger & almond cookiesNoraini’sJules DestrooperFAMA-UPM Program 4: Project 2
35Preference Test in Jeddah (cont..) AlmondCookiesVsCoffee 3 in 1Vs
36FAMA-UPM Program 4: Project 2 Preference Test in Jeddah (cont..)Agromas VS Halwani BrosPineapple JamDMG Royale Danish VS AmericanaButter CookiesFAMA-UPM Program 4: Project 2
37Paired Comparison Test for Preference of Malaysian Products Versus Competitors CategoryNo. of respondentsJamBeverageCookiesPineapple jamCoffee(3-in-1)Butter cookiesGinger & almond cookiesPrefer Malaysian product26AgroMas34Anggerik 3-in-17DMG Royale Danish10Noraini’sPrefer competitor’s productHalwani Bros27Nescafe 3-in-136Americana16Jules DestrooperTotal no. of respondents606142Min. no. to show sig. difference at P<0.0539302819Notes:No significant differenceSignificant difference
38FAMA-UPM Program 4: Project 2 Techno-Quality-Economic Matrix for Export Ready and Product Potential by Product CategoryFAMA-UPM Program 4: Project 2
39FAMA-UPM Program 4: Project 2 Techno-Quality-Economic Matrix for Export Ready and Product Potential by ProductFAMA-UPM Program 4: Project 2
40ME – Ready ME - Potential Bumi Hijau Black Pepper Jalen Chilli Nani Fried SesameKart Food Steamed BunMuslim Best Salsa SauceME - PotentialBlack Pepper & Spicy FlavouredFAMA40
42Way Forward No Strategy Action Plan Remarks 1. Identify relevant market segmentIntroduce food products that are more appealing to younger generation (e.g. trendy packaging)Target the promotion to younger generation (e.g. associated with sport activities, school children)The younger generation tends to be more open & willing to try new products2.Promote products which are produced by SMEs that have sufficient capacity to meet importer demandEncourage SMEs to collaborate, form a consortium to achieve the size needed to meet importers demand.Most SMEs are under capacity to venture into export markets
43Way Forward No Strategy Action Plan Remarks 3. Improve the professionalism of the Malaysian entrepreneursTraining in Entrepreneurship Development especially in export market promotion, ethics, and legal-cultural environmentLack of professionalism among Malaysian exporters (communication and promises)4.Develop structured human resource in terms of functionalityRestructure human resource to have staff that are competent (e.g. export activities should undertake by export manager, quality control personnel to ensure consistent product quality)Most SMEs do not have structured functions in the human resource set-up
44Way Forward No Strategy Action Plan Remarks 5. Upgrade processing technologyUpgrade the processing technology of SMEs through government incentive schemes (e.g. soft loan, tax deduction, technical support)About 50 % of SMEs surveyed still use manual or semi-automated processing technology.SMEs must utilize relevant processing technology in order to be competitive.6.Develop a systematic raw materials procurement systemEstablish contract farming for raw materials supplyTrain SMEs entrepreneurs in price forecastingSMEs are facing inconsistent supply and quality of raw materials as well as fluctuation of in the price
45Way Forward No Strategy Action Plan Remarks 7. Identify critical success factors of companies that are successful in exporting food productsTraining in Entrepreneurship Development especially in export market promotion, ethics, and legal-cultural environmentLack of professionalism among Malaysian exporters (communication and promises)8.Promote strategic alliance between SMEs and LEsPromote contract manufacturing between SMEs and LesPromote joint venture to reduce costJoint promotion between SMEs and distributors in importing countriesIn Thailand, food manufacturing SMEs aligned themselves with large Enterprises (LE) for exports market.
46Way Forward No Strategy Action Plan Remarks 9. Formulate Malaysian food brandingDevelop a ‘unified brand’ for all Malaysian food products produced by new SMEs playersFood products presently marketed by the individual brands. Global brand helps to reduce the advertisement and promotion cost.10.Identify a reliable private distribution agent for marketing purposesMATRADE must develop database on marketing agentsMATRADE should develop criteria in selecting reliable export agentPromotion by agents and product distribution was identified as the most serious marketing problem.
47Way Forward No Strategy Action Plan Remarks 11. Position SMEs food products as premium productsEnhanced joint promotional effort by manufacturers and distributors to support product positioningIn general the production costs of Malaysian food products is 20 % higher than Thailand and Indonesia12.Establish food products Distribution CentreEstablish a private trade representative in Dubai (as a gateway) by a consortium of SMEsNeed to establish a Distribution Center - acts as a distribution agent.MATRADE needs to identify reliable distributors/importers as agents.Strategic partnership as a pushing factor in marketing the products.
48Techno-Quality-Economic Matrix for Export Ready and Product Potential by Product
49FAMA-UPM Program 4: Project 2 Situational Analysis - CoffeeOpportunities (O)More preferable than established brandNext popular beverage in the after teaStrength (S)Overall acceptability score is highTreats (T)Compete with the established product in the marketWeakness (W)Lack of coffee flavour and aromaLack of bitterness (Jeddah)Low in viscosity (thin mouthfeel)FAMA-UPM Program 4: Project 2
50FAMA-UPM Program 4: Project 2 Action Plan - CoffeeStrategyProduct Improvement (flavor, aroma, viscosity)Improve product image to be at par with the established brand. (Incorporate health element ingredient such as Tongkat Ali and Conduct in-house promotion in foreign countries)Execute aggressive advertising and promotion (Participate in trade exhibition and Assign foreign agent for promotion)FAMA-UPM Program 4: Project 2
51Situational Analysis – Seri Kaya Opportunities (O)No similar product in the marketHighly acceptable by consumersStrength (S)Unique in tasteProcessing and packaging technology is readily availableBrand new productThe product is highly acceptedTreats (T)Existence of indirect competitorsWeakness (W)Unknown shelf lifeCritical food safety issueLack of HACCP /ISO22000 CertificationLack of coconut flavourLack of spreadabilityInappropriate labeling design- picture of coconut on the label is disproportionate with picture of other ingredients
52FAMA-UPM Program 4: Project 2 Action Plan – Seri KayaStrategyImplement product improvement (shelf life)Implement product improvement (flavor, spreadability)Improvement in product labelingDevelop food safety management system (establish effort to obtain the necessary certification)Develop preemptive strategy Apply for registered trademarkIntroduce product promotionFAMA-UPM Program 4: Project 2
53Situational Analysis – Pineapple Jam Opportunities (O)Preference of product equivalent to existing product.Product is highly accepted (in term overall acceptability and sensory attributes)Strength (S)Processing and packaging technology is readily availableAvailability of raw materialThe product is highly acceptedTreats (T)Compete with similar product in the marketWeakness (W)Lack of sournessProduct is too sweet
54FAMA-UPM Program 4: Project 2 Action Plan – Pineapple JamStrategyImplement product improvement (flavor) - optimum sourness and sweetnessExecute aggressive advertising and promotion (participate in trade exhibition, conduct in-house promotion in foreign countries and assign foreign agent for promotion)Implement product differentiationIncrease production for exportFAMA-UPM Program 4: Project 2
55Situational Analysis – Frozen Sesame Ball Opportunities (O)No similar product in the marketStrength (S)Brand new productHighly accepted by consumers in term of sensory attributesProcessing and packaging technology is readily availableTreats (T)NilWeakness (W)Consumers are unfamiliar with productPoor product uniformity (sesame seeds separated from the ball during frying)The filling is too sweetTexture is too chewyFluctuation of quality due to improper cold chain management
56FAMA-UPM Program 4: Project 2 Action Plan – Frozen Sesame BallStrategyDough ImprovementWiden the selection for the frozen snack in terms of fillingEducate consumers on the product usage conduct promotion through a) in store promotion, b) infomercial promotion and c) professional chef cooking TV series or website .Upgrade product safety (develop and implement food safety management system (GMP, ISO 2200, HACCP))Upgrade knowledge among staff dealing with cold chain management (conduct training in cold chain management)FAMA-UPM Program 4: Project 2
57Situational Analysis – Tapioca Chip Opportunities (O)High market potentialWillingness to buy is moderate (4.06 out of 5 scale for black pepper flavor)Strength (S)Sensory attributes of black pepper flavoured tapioca chips is quite acceptable (score out of 7 hedonic scale for black pepper flavor)Products with varieties of flavorsTreats (T)Compete with established snacks such as potato chips and extruded productsWeakness (W)Poor product quality (e.g.. broken into pieces)Lack of uniformity and consistency in terms of colour and shape.Shorter shelf life – rancidity, loss of crispinessLack of processing and packaging technologyLow quality of the lid opener as the opener easily broken and the strength of the metal lid is weak (easily torn apart).
58FAMA-UPM Program 4: Project 2 Action Plan – Frozen Sesame BallStrategyDevelop promotional program to introduce tapioca chips (conduct promotion through in store promotion and infomercial promotion)Need for product improvement (using reconstituted technology)Upgrade packaging technology (adopt nitrogen-filled packaging technology)Upgrade processing technology (promote automated processing machinery among SMEs)Improvement in product shelf life (up to 2 years)Improvement on product quality (training on handling during transportation)FAMA-UPM Program 4: Project 2