Case Study Company Hup Seng Perusahaan Makanan Marketing Essay

Hup Seng Perusahaan Makanan (M) Sdn Bhd value proposition is in producing Cap Ping Pong Cream Crackers. They have been in the biscuit manufacturing industry since 1958 and claimed to be a leading biscuit manufacturer in Malaysia. Currently their business activities spans across Asia, Africa, Oceania, Europe and North America. Since embarking on the journey, Hup Seng Perusahaan Makanan (M) Sdn Bhd has received numerous awards in terms of food quality and food hygiene which helps to build a strong platform of confidence among the customers. Among the awards also include the HALAL certification which allows their biscuit products to cater to the Islamic Malay population throughout its business activities.

Their business transactions are conducted via Business to Business (B2B) activities. Their key customers are wholesalers and retailers that could absorb in a large volume with wide distribution influence in the particular market. The intention is so that, the reliability of the distribution within the target market are consistent and the price are reduced to as minimal as possible for the end consumers. As Trond and Kjell (2009) points out, “Value-creation in transactions is best managed by seeking mutual transparency, adaptations, appropriate logistical planning, and the efficient flow and processing of information between parties”. Hup Seng target market in general is of those in the lower and middle income group. However, over the years, the focus has simply been retaining the existing consumer base and not so much on generating new users.

Consumer’s Profile Table

Wholesaler

Retailer

Shopping Objectives

Bulk purchase for weekly family supply

Convenience shopping to top-up supply

Consumer’s Profile

Loyal low income bargain hunters

Loyal medium income looking for best value & convenience

Age Group

10 – 60 years old

10 – 60 years old

Ethnic Group

Malay / Chinese / Others

Malay / Chinese / Others

Household Income

RM 1500 & below

RM 1500 & above

Basket Size

RM 100 & below

RM 100 & above

Frequency of Visit

Once Weekly

Twice Weekly

Price Strategy

Low Price and Great Value

Best Value for Money

Table 1 Consumer’s Profile Table

Source: Personal Communication

CONTENTS

Hup Seng Perusahaan Makanan (M) Sdn Bhd lack in generating new users over the years. And to add salt to injury, the packaging design for all their product line has not change over the years. Even if the design has changed, it has not been noticeable enough to attract the younger generation of teenagers and mums. Moreover, their years of success in practical packaging, may have also been an obstacle for them to reach out to a newer market. Their cream cracker biscuit has always been packed in either a large tin container or a large plastic pack. In terms of convenience, Hup Seng still has much to explore.

The reason the author decided to evaluate Hup Seng Perusahaan Makanan (M) Sdn Bhd is because despite relying only on existing customer base and non-differentiated design over the years, the company is still stable and remain competitive in the market. Hence, the author strongly believes that the company must still offer value to its consumers and decided to look into the strategic options that are currently being applied within the organization. To quote from Vincent (2004), “Value proposition emerges from the identified market gaps discovered during opportunity scoping”.

Figure 1 Strategic Options

Source: David

Based on the strategic options in figure 1, in the author’s opinion, Hup Seng Perusahaan Makanan (M) Sdn Bhd meets the criteria for at least 6 out of the 11 strategic options. The 6 strategic options include: [1] Product Attribute Benefits; [2] Niche Specialist; [3] Value; [4] Quality; [5] Brand Familiarity; and [6] Emotional / Self Expressive Benefits. The details of the following strategic options shall be duly discussed in this report.

Product Attribute Benefits

Hup Seng’s Cap Ping Pong Cream Crackers has been known for its richness in taste when eating it on its own especially among the younger kids and the older adults. There has also been an established eating culture among the society to dunk the cream cracker into a cup of coffee and then eat it during breakfast or tea time. The taste has been recognized and accepted as a healthy breakfast diet generally among the consumers.

Niche Specialist

Hup Seng Perusahaan Makanan (M) Sdn Bhd focuses much on the one part of their product line which is the Cap Ping Pong Cream Crackers. The Cream Crackers are virtually everywhere in any typical coffee shop which many elderly folks frequent. In fact, their presences are very strong in small independent shops which lower income group commonly purchases their daily household products. Their passion for the business is so that the cream crackers are available to all.

Value

The Cap Ping Pong Cream Crackers commonly known as the ‘any men’s food’ has positioned itself all this years so that it is able to cater to the lower and medium income group which happens to be the largest population in the market. They have successfully created a low cost culture among the consumers and effectively managing their prices over the years with not much obvious increase despite the rise in raw materials. Robert and Graig (1997) explained that, “Perceived customer value is the overall benefit derived from the product, however the customer defines it, at the price the customer is willing to pay”. Therefore, Hup Seng continues to provide confidence among the consumers ensuring that they can always have the best for value purchases.

Quality

Many consumers of crackers prefer Cap Ping Pong Cream Crackers because it does not crumble easily even when it is dunk in the coffee, it does not break off till nibbled off. The saltish crunchy in the mouth is construe by the consumer as a good quality cracker which value for money. Mark (2008) states that, “it is imperative that you are able to convey how your product or service is uniquely position to provide the customer the precise outcome they are seeking to achieve with your product or service”.

Brand Familiarity

Hup Seng’s Cap Ping Pong Cream Crackers has been a familiar brand among the elderly as the best match when having a casual coffee drink with friends and family. The awareness of the brand is strong among the older generations whom have come accustomed to its taste. Moreover, the brand Cap Ping Pong has been established over the years and has gained recognition as a mature brand. Therefore, there exists a strong base of loyal consumers that provides Hup Seng with competitive advantage. According to Dennis (1998), “Ultimately, customers that feel good about the brand and feel they have a say in the delivery of the brand experience become advocates for the brand”.

Emotional / Self Expressive

The emotional benefits stemmed among the loyal consumers by Hup Seng are built through experience of indulging the Cap Ping Pong Cream Crackers over the years. It provides consumers with a healthy and warmth feeling when consuming the cream crackers with friends and family. The pleasant and satisfaction feel while consuming the cream cracker is the emotional benefits that Hup Seng has consistently been targeting.

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The author strongly believes that the current strategic options are still manageable to meet the existing loyal customer base. However, in order to reach out to the younger generations, some of the current strategic options can be further explored to improve its competitive edge as a sustainable strategy for Hup Seng. The author will detail the value of Hup Seng using SWOT analysis in further in the report (refer to appendices).

CONCLUSION

Based on the author’s critical evaluation, the author strongly believes that despite Hup Seng Perusahaan Makanan (M) Sdn Bhd has been neglectful in their innovation in bringing in new products or having a strong branding among the newer generations, they have been consistently focused in preserving their existing customer based whom valued their fundamental offering such as low value with good quality. In the process of maintaining and meeting the existing consumer needs, they have been very cautious in varying their designs or repositioning their brands. However, to remain competitive in the future market, in the author’s opinion, Hup Seng could take a bold move by changing designs progressively and rebranding themselves without fear of losing their current loyal consumers. As Lyndon & Sally (1998) points out,” While the perspectives on what constitutes an attractive market are known to differ, the linkage between market attractiveness and business success is widely recognized”.