School Papers

1 Chee, before passing down to the second

1       Introduction

Tai Chong Kok is a sole
proprietorship (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 family
legacy. In 2012, the business is taken over by the third generation, Mr Ham
Weng Seng. Since the start of business, Tai Chong Kok has been located in Sago
Street at Chinatown. Over the years, the business has expanded to five outlets
in Singapore. The other four outlets are located in Jurong, Yishun, Ubi and
Changi Airport.

Tai Chong Kok is a bakery shop
which focused on selling traditional Chinese pastries. It is famous for its
mooncake and new year cake, which makes Mid-Autumn Festival and Chinese New
Year the busiest period for Tai Chong Kok. Throughout the rest of the year, it
will 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. In
addition, Tai Chong Kok is particular about product quality, therefore it
insists on using premium ingredients and bakes their pastries daily. These
pastries are made in the factory at Admiralty before transferring to the
respective outlets for sale.

In regards to services, it will be direct when customers visit the
outlets. The employees promote the products to customers, answer to their
enquiries and assist them in the payment process. Whereas for indirect
services, Tai Chong Kok provides telephone, email and online enquiry services
for 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       Business
positioning

The following depicts the business positioning strategy by
Tai Chong Kok. This is done by identifying the target segments, its competitors
and the area which Tai Chong Kok has an advantage. The research is done through
an interview with Ms Maria Ng, the operations manager of Tai Chong Kok. Other
than the interview, there are also certain secondary research from websites and
academic journals to support the points identified.

2.1     Target
market

According
to Ms Maria Ng, the target market for Tai Chong Kok is the traditional
mooncakes lovers. Most of these customers are aged 40 years and above. There is
no fixed income level since it can range from low to high. These customers
return to Tai Chong Kok every year during the Mid-Autumn Festival to purchase
mooncakes. They are used to the mooncakes baked by Tai Chong Kok, which deters
them from purchasing from other brands. There are also a few loyal customers
which belong to the younger age group. They buy mooncakes from Tai Chong Kok
due to personal preference, or they are purchasing for the elderlies at home.

2.2    
Competitors Analysis

The
competitor of Tai Chong Kok is Gin Thye Cake Maker. Gin Thye Cake Maker is a
bakery shop which specialises in making traditional Chinese pastries. As
indicated by Gin Thye (2015), it has been operating since 1964 and is now run
by the second generation, Mr Laurence Lim. Over the years, Gin Thye Cake Maker
has grown to a well-known household name. It continues to expand itself by
investing in the research and development of new products (Gin
Thye Food Concepts Pte Ltd, 2017).

2.2.1    Product

During the Mid-Autumn Festival, Gin Thye Cake
Maker offers traditional mooncakes to its customers. It has the traditional
brown skin mooncakes, which contains many different types of fillings such
white lotus paste, assorted nuts and green tea. These mooncakes are handmade by
Gin Thye Cake Maker. Another product which Gin Thye Cake Maker has is the Snow
Skin Durian Mooncake, which is introduced to reach out to a larger market. It
has 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    Price

Gin
Thye Cake Maker uses competition pricing as their pricing strategy. This means
the price of its products are set in comparison with its competitors (Intelligence
Node, 2016). When comparing with Tai Chong
Kok, Gin Thye Cake Maker tends to charge its mooncakes at a slightly higher
price. Gin Thye Cake Maker is able to do so since it offers extra features such
as online purchase system and picture displays on the websites, which smooths
the buying process by allowing customers to purchase or view the mooncakes
online before going down to the physical store.

2.2.3    Promotion

Through direct marketing, Gin Thye Cake Maker sell mooncakes to
customers directly. During Mid-Autumn Festival, it participates in Mid-Autumn
mooncake fairs in many shopping malls (SGNewsMan, 2017).
This allows Gin Thye Cake Maker to promote their mooncakes through setting up of
counters there. It can display the wide range of mooncake products it has on
the counters to attract customers over. Customers are allowed to taste the
mooncakes before making any buying decision.

 

Another form of promotion Gin Thye Cake Maker
use is online marketing. It has a website which presents its mooncake products
to customers. Customers are well-informed since the price and pictures of the
mooncakes 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 various
promotions 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 to
promote its mooncakes to customers. It publicises itself through Facebook and
Instagram. An example is the Facebook post by Gin Thye Cake Maker, which inform
customers about the special price offered for its Snow Skin Durian Mooncake. It
will be sold at $30 per box, which is half the usual price of $68 (Gin Thye Cake Maker, 2017).

2.2.4    Place

Gin
Thye Cake Maker can be found at Sembawang and Bukit Batok. These are the two
outlets which Gin Thye Cake Maker has and the customers can visit to purchase
mooncakes during the Mid-Autumn Festival. Otherwise, for customers who find it
inconvenient, they can visit any nearby shopping malls which Gin Thye Cake
Maker has their mooncake booth at. For customers who are unable to make their
way down to the outlets or booth, they can purchase the mooncakes online from
Gin Thye Cake Maker website.

2.3     Existing
competition (SWOT Analysis)

2.3.1    Strengths

The
strength of Tai Chong Kok is being authentic. It has its own traditional
mooncake recipes, which is passed down from the first generation. From the
mooncake skin to paste fillings, they are made from scratch at Tai Chong Kok. In
addition, Tai Chong Kok continues to use its classic mooncake boxes and brown
paper bags, even when many businesses have begun to move towards creating
fanciful packaging (DP
Information Group, 2015). The originality helps Tai Chong
Kok to grow into a household brand, with many loyal customers returning every
year to purchase the mooncakes. Therefore, Tai Chong Kok does not require much
effort in promoting itself since it can rely on branding to promote itself.

2.3.2    Weakness

The weakness of Tai Chong
Kok is lack of social media promotion. Over the years, Tai Chong Kok has grown
to a household name. This is not enough if Tai Chong Kok wants to attract the
younger generation since they will be the next customers of Tai Chong Kok. The
younger generation tends to be tech-savvy and spend most of their time on
social media (Duffett,
2017). Therefore, it is important for
Tai Chong Kok to promote on social media to reach out to them. However, Tai
Chong Kok depends only on Facebook, which is insufficient as there are many
other social media platforms used by the younger generation.

2.3.3    Opportunities

The
rise in cultural tourism creates an opportunity for Tai Chong Kok (Jovicic,
2016). Nowadays, many tourists travel
to experience the culture of another country. They visit the heritage sites and
participate in the festival events. Mid-Autumn Festival is one of the festivals
celebrated by the Chinese in Singapore. During the month of September and
October, there will be decorations and events around Chinatown to celebrate the
Mid-Autumn Festival. Being both a heritage and festival celebration sites, Chinatown
attracts tourists over to experience the festive season in Singapore. Since mooncakes
are one of the food eaten during the festival, the tourists will be encouraged
to try.

2.3.4    Threats

Over the years, many hotels
have begun to sell mooncakes during the Mid-Autumn Festivals. This increases
competition for Tai Chong Kok as there is more mooncake merchandiser in the
current market. In addition, these hotels introduced more unique flavours for
their mooncakes in order to attract more customers. For example, they offer
flavours such as chocolate, durian, coffee and many more. However, according to
Mr Ham Weng Seng, he does not have any plans for developing new unique
mooncakes (Quek,
2015). This is disadvantageous for Tai
Chong Kok as they are losing the market for those who are seeking new products.

2.4    
Competitor Advantage

Tai Chong Kok has an
advantage over its competitors through product differentiation. According to
Tai Chong Kok’s operations manager, the mooncakes bake by Tai Chong Kok has no
preservatives added. Therefore, it has to bake the mooncakes daily in order to
keep it fresh for the customers. Although the mooncakes are unable to be kept
long, many customers are still willing to purchase from Tai Chong Kok as
preservatives tend to be view as unhealthy (Zugravu,
Pogurschi, Patrascu, Iacob, & Nicolae, 2017). This is an advantage for Tai
Chong Kok over its competitor.

2.5     Marketing
and promotion strategy

2.5.1    Product

The
main product of Tai Chong Kok is the traditional mooncakes. The mooncake recipes
have been passed down since the first generation and they are mostly handmade
by the staff in Tai Chong Kok. From plain lotus paste to mixed nuts, there are
a variety of fillings which customers can choose from
(Refer to Appendix B). These
fillings are wrapped either in the original brown mooncake skin or snow skin,
which are both available in Tai Chong Kok. Mooncakes are sold during the
Mid-Autumn Festival only. Throughout the rest of the year, Tai Chong Kok will
only sell traditional Chinese pastries.

2.5.2    Price

Tai
Chong Kok uses product line pricing for its mooncakes. In Tai Chong Kok, it
offers different types of mooncake flavours. Each flavour is set at a different
price. For example, there is a difference in the price between plain lotus seed
fillings and lotus seed fillings with egg yolk.

2.5.3   
Promotion

Tai
Chong Kok uses direct marketing as their promotion strategy. It sells mooncakes
directly to customers, rather than relying on the retailers. Other than
purchasing the mooncakes from the outlets, Tai Chong Kok will also have roadshows
being 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 during
Mid-Autumn Festival (Refer to Appendix C).

Tai
Chong Kok also uses online marketing to promote their products. It has a
Facebook page, which provides a platform for Tai Chong Kok to update their
customers when there are any upcoming events. The Facebook page also enables
customers to enquire or comment on its products. In addition, Tai Chong Kok has
its own website which customers can visit for information about the
company. 

2.5.4   
Place

Tai Chong Kok has five
outlets in Singapore. Customers can visit any of these retail outlets to
purchase mooncakes during the Mid-Autumn Festival. They are located in
Chinatown, Ubi, Jurong, Yishun and Changi Airport Terminal 3 (Tai
Chong Kok, n.d.). These outlets are spread out
proportionately across Singapore, which makes Tai Chong Kok accessible for its
customers.

2.6     Recommendation

Since
there is an increasing demand for cultural tourism, Tai Chong Kok can use this
opportunity to work with Singapore Tourism Board (STB) to publicise its
products to the tourists. For example, STB can produce a promotional video
about the cultures and festivals in Singapore. The video can include Tai Chong
Kok in when it shows the celebration of Mid-Autumn Festivals in Singapore.

 

3       Existing
and future development strategy

The
following paragraphs will discuss the existing and future development
strategies by Tai Chong Kok. Secondary research is done by using a video
uploaded 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 expand
itself by including new technologies in their production process. Websites and
academic journals are also used to aid in explanations. Primary research
through interviewing the operations manager helps to identify the new market
Tai Chong Kok is looking at in the future.

3.1    
Market development

3.1.1    Existing
strategy – Investing in new machines

Tai Chong Kok has been making mooncakes by
hand since the start of its operation, which requires large manpower and long
working hours. This increases the chances of human error, which leads to
inconsistency in the appearance and taste of the mooncakes. According to Mr Ham
Weng Seng, Tai Chong Kok will face situations such as having uneven and jagged
mooncakes being baked as a result of mistakes made. To solve this problem, he
decides to work with the Food Innovation and Resource Centre (FIRC).

FIRC is an organisation which begins
operating in 2007, through collaboration between Singapore Polytechnic and
SPRING Singapore. It aims to provide advice for the food industries, allowing
them 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 work
areas that require improvement. After which, Tai Chong Kok uses the SPRING
Singapore’s Capability Grant (CDG) to purchase machines which helps to solve
the problem. According to Mr Ham Weng Seng, the new production machines help to
keep errors and inconsistencies at a minimum level (SPRING Singapore, 2016).

Through the investment on new machines, it
improves Tai Chong Kok’s mooncake quality. This helps to increase satisfaction
among the loyal customers, which leads to word-of-mouth as they spread it to
their friends and families. These people can be the new customers of Tai Chong
Kok, who may turn to Tai Chong Kok for the purchase of mooncakes.

In addition, the new technologies help Tai
Chong 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 expand
further by opening more outlets to improve accessibility. Tai Chong Kok has
expanded from two to five outlets, which helps to attract new markets across
Singapore (Food Innovation & Resource Centre, 2016).
This pushes Tai Chong Kok to a higher position, making it capable to diversify
into the overseas market. To make this happen, Tai Chong Kok will continue to
work with FIRC in managing the product packaging. It plans to invest in a
vacuum seal packaging machine to prolong the shelf life and enhance the export
appeal.

3.1.2    Future
Strategy – Attracting the young generations

Based
on the interview with Ms Maria Ng, Tai Chong Kok is looking at attracting the young
generations. They have no knowledge about the traditional food, which results
in many traditional bakeries had closed down since they do not visit them.
Therefore, Tai Chong Kok is hoping to attract the young generation by educating
them. It welcomes students to conduct interviews, where Tai Chong Kok can use
the opportunity to teach them about the traditional Chinese pastries.
Furthermore, it allows the students to visit the factory, whereby they can
learn about the production process and taste the mooncakes. Ms Maria Ng notices
youngsters don’t consume traditional food because they have never try it in the
first place. She finds it important to give youngsters a chance to experience.
When this traditional food appeals to the youngsters, they will definitely
return to purchase it.     

3.2    
Recommendation

3.2.1    Engage
in more social media platforms

Although
allowing students to conduct interviews and visit the factory is a good way to
involve the young generations, it is also important for Tai Chong Kok to use more
social media platforms. Since social media is widely used by the youngsters for
information, Tai Chong Kok can make use of it to educate them about its
business and cultures. Other than Facebook, Tai Chong Kok should also use other
platforms such as Twitter, Instagram and Youtube (Duffett,
2017). It can post about the promotions
on Twitter and Instagram. Whereas for Youtube, Tai Chong Kok may upload videos
which advertise about its mooncakes during the Mid-Autumn Festival. Through
promotion on social media, it can attract the youngsters over to purchase the
mooncakes.

3.2.2   
Creating a membership system

Tai
Chong Kok can create a membership system for the customers, which turns them
into loyal customers as they sign up for it. With the membership, customers can
collect points when they purchase the traditional pastries during the rest of
the year. On special occasions such as Chinese New Year and Mid-Autumn
Festival, the points can be used for further promotions or discounts. For
example, the membership system allows customers to collect 5 points for every
$1 spent. For every 300 points, customers can redeem a free plain lotus filling
mooncake from Tai Chong Kok. This membership system will encourage the loyal
customers to purchase more frequently throughout the rest of the year. In
addition, the membership system can attract the new markets to sign up, which
builds up Tai Chong Kok’s existing customer base.

3.3    
Conclusion

In
conclusion, Tai Chong Kok has been involved in development plans to bring the
company to a higher level. It invests in new machines, which improves the
quality and production capacity while coping with limited manpower. Moreover,
Tai Chong Kok is reaching out to overseas countries and young generations as
their new markets. This can be done by increasing the investments in new
machines and engaging the youngster through education respectively.
Recommendations such as utilising more social media platforms and creating
membership system are suggested for Tai Chong Kok to increase and attract the
new markets.