1 IntroductionTai Chong Kok is a soleproprietorship (Refer to Appendix A). It is opened in 1935 by Mr Ham Kai Chee,before passing down to the second generation in 1970 to continue the familylegacy. In 2012, the business is taken over by the third generation, Mr HamWeng Seng.
Since the start of business, Tai Chong Kok has been located in SagoStreet at Chinatown. Over the years, the business has expanded to five outletsin Singapore. The other four outlets are located in Jurong, Yishun, Ubi andChangi Airport.Tai Chong Kok is a bakery shopwhich focused on selling traditional Chinese pastries. It is famous for itsmooncake and new year cake, which makes Mid-Autumn Festival and Chinese NewYear the busiest period for Tai Chong Kok. Throughout the rest of the year, itwill sell a variety of pastries such as wife cake, almond cookies and egg tarts(Tai Chong Kok, n.
d.).These pastries are handmade from Tai Chong Kok’s traditional recipes. Inaddition, Tai Chong Kok is particular about product quality, therefore itinsists on using premium ingredients and bakes their pastries daily. Thesepastries are made in the factory at Admiralty before transferring to therespective outlets for sale.In regards to services, it will be direct when customers visit theoutlets. The employees promote the products to customers, answer to theirenquiries and assist them in the payment process.
Whereas for indirectservices, Tai Chong Kok provides telephone, email and online enquiry servicesfor their customers if they have any questions about their products.Furthermore, the address and map of their outlets are shown on the website,which helps the customers to locate them easily (Tai Chong Kok, n.d.). 2 BusinesspositioningThe following depicts the business positioning strategy byTai Chong Kok. This is done by identifying the target segments, its competitorsand the area which Tai Chong Kok has an advantage. The research is done throughan interview with Ms Maria Ng, the operations manager of Tai Chong Kok.
Otherthan the interview, there are also certain secondary research from websites andacademic journals to support the points identified.2.1 TargetmarketAccordingto Ms Maria Ng, the target market for Tai Chong Kok is the traditionalmooncakes lovers. Most of these customers are aged 40 years and above. There isno fixed income level since it can range from low to high. These customersreturn to Tai Chong Kok every year during the Mid-Autumn Festival to purchasemooncakes.
They are used to the mooncakes baked by Tai Chong Kok, which detersthem from purchasing from other brands. There are also a few loyal customerswhich belong to the younger age group. They buy mooncakes from Tai Chong Kokdue to personal preference, or they are purchasing for the elderlies at home.
2.2 Competitors AnalysisThecompetitor of Tai Chong Kok is Gin Thye Cake Maker. Gin Thye Cake Maker is abakery shop which specialises in making traditional Chinese pastries. Asindicated by Gin Thye (2015), it has been operating since 1964 and is now runby the second generation, Mr Laurence Lim.
Over the years, Gin Thye Cake Makerhas grown to a well-known household name. It continues to expand itself byinvesting in the research and development of new products (Gin Thye Food Concepts Pte Ltd, 2017). 2.2.1 ProductDuring the Mid-Autumn Festival, Gin Thye CakeMaker offers traditional mooncakes to its customers. It has the traditionalbrown skin mooncakes, which contains many different types of fillings suchwhite lotus paste, assorted nuts and green tea. These mooncakes are handmade byGin Thye Cake Maker. Another product which Gin Thye Cake Maker has is the SnowSkin Durian Mooncake, which is introduced to reach out to a larger market.
Ithas become one of the most popular product for Gin Thye during the Mid-Autumn Festival(Gin Thye Food Concepts Pte Ltd, 2017).2.2.2 PriceGinThye Cake Maker uses competition pricing as their pricing strategy. This meansthe price of its products are set in comparison with its competitors (Intelligence Node, 2016). When comparing with Tai ChongKok, Gin Thye Cake Maker tends to charge its mooncakes at a slightly higherprice.
Gin Thye Cake Maker is able to do so since it offers extra features suchas online purchase system and picture displays on the websites, which smoothsthe buying process by allowing customers to purchase or view the mooncakesonline before going down to the physical store.2.2.3 PromotionThrough direct marketing, Gin Thye Cake Maker sell mooncakes tocustomers directly.
During Mid-Autumn Festival, it participates in Mid-Autumnmooncake fairs in many shopping malls (SGNewsMan, 2017).This allows Gin Thye Cake Maker to promote their mooncakes through setting up ofcounters there. It can display the wide range of mooncake products it has onthe counters to attract customers over.
Customers are allowed to taste themooncakes before making any buying decision. Another form of promotion Gin Thye Cake Makeruse is online marketing. It has a website which presents its mooncake productsto customers. Customers are well-informed since the price and pictures of themooncakes are clearly stated on the website (Gin Thye Food Concepts Pte Ltd, 2017).In addition, it has a webpage which will update the customers on the variouspromotions offered by Gin Thye Cake Maker (Gin Thye Food Concepts Pte Ltd, 2017).Other than having a website, Gin Thye Cake Maker also uses social media topromote its mooncakes to customers. It publicises itself through Facebook andInstagram. An example is the Facebook post by Gin Thye Cake Maker, which informcustomers about the special price offered for its Snow Skin Durian Mooncake.
Itwill be sold at $30 per box, which is half the usual price of $68 (Gin Thye Cake Maker, 2017).2.2.4 PlaceGinThye Cake Maker can be found at Sembawang and Bukit Batok. These are the twooutlets which Gin Thye Cake Maker has and the customers can visit to purchasemooncakes during the Mid-Autumn Festival.
Otherwise, for customers who find itinconvenient, they can visit any nearby shopping malls which Gin Thye CakeMaker has their mooncake booth at. For customers who are unable to make theirway down to the outlets or booth, they can purchase the mooncakes online fromGin Thye Cake Maker website. 2.3 Existingcompetition (SWOT Analysis)2.3.1 StrengthsThestrength of Tai Chong Kok is being authentic.
It has its own traditionalmooncake recipes, which is passed down from the first generation. From themooncake skin to paste fillings, they are made from scratch at Tai Chong Kok. Inaddition, Tai Chong Kok continues to use its classic mooncake boxes and brownpaper bags, even when many businesses have begun to move towards creatingfanciful packaging (DP Information Group, 2015). The originality helps Tai ChongKok to grow into a household brand, with many loyal customers returning everyyear to purchase the mooncakes. Therefore, Tai Chong Kok does not require mucheffort in promoting itself since it can rely on branding to promote itself.2.
3.2 WeaknessThe weakness of Tai ChongKok is lack of social media promotion. Over the years, Tai Chong Kok has grownto a household name.
This is not enough if Tai Chong Kok wants to attract theyounger generation since they will be the next customers of Tai Chong Kok. Theyounger generation tends to be tech-savvy and spend most of their time onsocial media (Duffett, 2017). Therefore, it is important forTai Chong Kok to promote on social media to reach out to them. However, TaiChong Kok depends only on Facebook, which is insufficient as there are manyother social media platforms used by the younger generation. 2.3.3 OpportunitiesTherise in cultural tourism creates an opportunity for Tai Chong Kok (Jovicic, 2016).
Nowadays, many tourists travelto experience the culture of another country. They visit the heritage sites andparticipate in the festival events. Mid-Autumn Festival is one of the festivalscelebrated by the Chinese in Singapore.
During the month of September andOctober, there will be decorations and events around Chinatown to celebrate theMid-Autumn Festival. Being both a heritage and festival celebration sites, Chinatownattracts tourists over to experience the festive season in Singapore. Since mooncakesare one of the food eaten during the festival, the tourists will be encouragedto try. 2.3.4 ThreatsOver the years, many hotelshave begun to sell mooncakes during the Mid-Autumn Festivals.
This increasescompetition for Tai Chong Kok as there is more mooncake merchandiser in thecurrent market. In addition, these hotels introduced more unique flavours fortheir mooncakes in order to attract more customers. For example, they offerflavours such as chocolate, durian, coffee and many more.
However, according toMr Ham Weng Seng, he does not have any plans for developing new uniquemooncakes (Quek, 2015). This is disadvantageous for TaiChong Kok as they are losing the market for those who are seeking new products.2.4 Competitor AdvantageTai Chong Kok has anadvantage over its competitors through product differentiation. According toTai Chong Kok’s operations manager, the mooncakes bake by Tai Chong Kok has nopreservatives added. Therefore, it has to bake the mooncakes daily in order tokeep it fresh for the customers. Although the mooncakes are unable to be keptlong, many customers are still willing to purchase from Tai Chong Kok aspreservatives tend to be view as unhealthy (Zugravu, Pogurschi, Patrascu, Iacob, & Nicolae, 2017).
This is an advantage for TaiChong Kok over its competitor.2.5 Marketingand promotion strategy2.5.1 ProductThemain product of Tai Chong Kok is the traditional mooncakes. The mooncake recipeshave been passed down since the first generation and they are mostly handmadeby the staff in Tai Chong Kok. From plain lotus paste to mixed nuts, there area variety of fillings which customers can choose from(Refer to Appendix B). Thesefillings are wrapped either in the original brown mooncake skin or snow skin,which are both available in Tai Chong Kok.
Mooncakes are sold during theMid-Autumn Festival only. Throughout the rest of the year, Tai Chong Kok willonly sell traditional Chinese pastries. 2.5.2 PriceTaiChong Kok uses product line pricing for its mooncakes. In Tai Chong Kok, itoffers different types of mooncake flavours. Each flavour is set at a differentprice.
For example, there is a difference in the price between plain lotus seedfillings and lotus seed fillings with egg yolk.2.5.3 PromotionTaiChong Kok uses direct marketing as their promotion strategy. It sells mooncakesdirectly to customers, rather than relying on the retailers. Other thanpurchasing the mooncakes from the outlets, Tai Chong Kok will also have roadshowsbeing set up around in Singapore. An example is Takashimaya Square in Orchard,which is one of the shopping malls Tai Chong Kok sets up the roadshow duringMid-Autumn Festival (Refer to Appendix C).
TaiChong Kok also uses online marketing to promote their products. It has aFacebook page, which provides a platform for Tai Chong Kok to update theircustomers when there are any upcoming events. The Facebook page also enablescustomers to enquire or comment on its products. In addition, Tai Chong Kok hasits own website which customers can visit for information about thecompany.
2.5.4 PlaceTai Chong Kok has fiveoutlets in Singapore. Customers can visit any of these retail outlets topurchase mooncakes during the Mid-Autumn Festival. They are located inChinatown, Ubi, Jurong, Yishun and Changi Airport Terminal 3 (Tai Chong Kok, n.d.).
These outlets are spread outproportionately across Singapore, which makes Tai Chong Kok accessible for itscustomers. 2.6 RecommendationSincethere is an increasing demand for cultural tourism, Tai Chong Kok can use thisopportunity to work with Singapore Tourism Board (STB) to publicise itsproducts to the tourists. For example, STB can produce a promotional videoabout the cultures and festivals in Singapore. The video can include Tai ChongKok in when it shows the celebration of Mid-Autumn Festivals in Singapore.
3 Existingand future development strategyThefollowing paragraphs will discuss the existing and future developmentstrategies by Tai Chong Kok. Secondary research is done by using a videouploaded by SPRING Singapore. The video is an interview with Mr Ham Weng Seng,the owner of Tai Chong Kok. It explains how Tai Chong Kok tries to expanditself by including new technologies in their production process. Websites andacademic journals are also used to aid in explanations. Primary researchthrough interviewing the operations manager helps to identify the new marketTai Chong Kok is looking at in the future. 3.
1 Market development3.1.1 Existingstrategy – Investing in new machinesTai Chong Kok has been making mooncakes byhand since the start of its operation, which requires large manpower and longworking hours. This increases the chances of human error, which leads toinconsistency in the appearance and taste of the mooncakes. According to Mr HamWeng Seng, Tai Chong Kok will face situations such as having uneven and jaggedmooncakes being baked as a result of mistakes made. To solve this problem, hedecides to work with the Food Innovation and Resource Centre (FIRC). FIRC is an organisation which beginsoperating in 2007, through collaboration between Singapore Polytechnic andSPRING Singapore. It aims to provide advice for the food industries, allowingthem to gain technical skills in managing new product and process development (Food Innovation and Resource Centre, 2016).
FIRC assist Tai Chong Kok by sending a consultant over to identify the workareas that require improvement. After which, Tai Chong Kok uses the SPRINGSingapore’s Capability Grant (CDG) to purchase machines which helps to solvethe problem. According to Mr Ham Weng Seng, the new production machines help tokeep errors and inconsistencies at a minimum level (SPRING Singapore, 2016).Through the investment on new machines, itimproves Tai Chong Kok’s mooncake quality. This helps to increase satisfactionamong the loyal customers, which leads to word-of-mouth as they spread it totheir friends and families. These people can be the new customers of Tai ChongKok, who may turn to Tai Chong Kok for the purchase of mooncakes.
In addition, the new technologies help TaiChong Kok to increase the production capacity while reducing manpower costs (SPRING Singapore, 2016).This leads to the rise in profits earned, allowing the company to expandfurther by opening more outlets to improve accessibility. Tai Chong Kok hasexpanded from two to five outlets, which helps to attract new markets acrossSingapore (Food Innovation & Resource Centre, 2016).This pushes Tai Chong Kok to a higher position, making it capable to diversifyinto the overseas market. To make this happen, Tai Chong Kok will continue towork with FIRC in managing the product packaging. It plans to invest in avacuum seal packaging machine to prolong the shelf life and enhance the exportappeal. 3.1.
2 FutureStrategy – Attracting the young generationsBasedon the interview with Ms Maria Ng, Tai Chong Kok is looking at attracting the younggenerations. They have no knowledge about the traditional food, which resultsin many traditional bakeries had closed down since they do not visit them.Therefore, Tai Chong Kok is hoping to attract the young generation by educatingthem. It welcomes students to conduct interviews, where Tai Chong Kok can usethe opportunity to teach them about the traditional Chinese pastries.Furthermore, it allows the students to visit the factory, whereby they canlearn about the production process and taste the mooncakes. Ms Maria Ng noticesyoungsters don’t consume traditional food because they have never try it in thefirst place.
She finds it important to give youngsters a chance to experience.When this traditional food appeals to the youngsters, they will definitelyreturn to purchase it. 3.2 Recommendation3.2.1 Engagein more social media platformsAlthoughallowing students to conduct interviews and visit the factory is a good way toinvolve the young generations, it is also important for Tai Chong Kok to use moresocial media platforms.
Since social media is widely used by the youngsters forinformation, Tai Chong Kok can make use of it to educate them about itsbusiness and cultures. Other than Facebook, Tai Chong Kok should also use otherplatforms such as Twitter, Instagram and Youtube (Duffett, 2017). It can post about the promotionson Twitter and Instagram. Whereas for Youtube, Tai Chong Kok may upload videoswhich advertise about its mooncakes during the Mid-Autumn Festival. Throughpromotion on social media, it can attract the youngsters over to purchase themooncakes. 3.2.2 Creating a membership systemTaiChong Kok can create a membership system for the customers, which turns theminto loyal customers as they sign up for it.
With the membership, customers cancollect points when they purchase the traditional pastries during the rest ofthe year. On special occasions such as Chinese New Year and Mid-AutumnFestival, the points can be used for further promotions or discounts. Forexample, the membership system allows customers to collect 5 points for every$1 spent.
For every 300 points, customers can redeem a free plain lotus fillingmooncake from Tai Chong Kok. This membership system will encourage the loyalcustomers to purchase more frequently throughout the rest of the year. Inaddition, the membership system can attract the new markets to sign up, whichbuilds up Tai Chong Kok’s existing customer base.3.
3 ConclusionInconclusion, Tai Chong Kok has been involved in development plans to bring thecompany to a higher level. It invests in new machines, which improves thequality and production capacity while coping with limited manpower. Moreover,Tai Chong Kok is reaching out to overseas countries and young generations astheir new markets. This can be done by increasing the investments in newmachines and engaging the youngster through education respectively.
Recommendations such as utilising more social media platforms and creatingmembership system are suggested for Tai Chong Kok to increase and attract thenew markets.