Capital Rice Co.

, Ltd Background
Thailand is a major exporter of
agricultural products and ranks as the number one
rice exporter in the world. In 1990, Capital ice
Co. !td., one of Thailand"s largest rice exporters,
became interested in producing organic rice, the
first and onl# product produced in Thailand
The $TC %roup
1
started its trading business in agricultural products in 19&' with
the establishments in the rice milling industr# for o(er 10 #ears, had joined forces to start
a tapioca business, beginning with warehousing and graduall# expanding into the large
purchasing and trading centre of rice for export.
19&& was a milestone for the $TC %roup as Capital ice Co., !td., was then
established to operate its rice export business. $ince then, the compan# has enjo#ed
satisfactor# growth and now is one of the largest rice exporting enterprises in Thailand.
The complexities of the global rice trade, especiall# with regard to maintaining
)ualit# standards, ha(e encouraged Capital ice Co. to consistentl# impro(e the )ualit#
of its rice. In response to e(er growing completion in the market place, the compan#
in(ested in the construction of a '&* bin+,&,000 ton rice silo as well as a spacious
warehouse with a storage capacit# of -00,000 ton, which brought Capital ice Co.,
recognition as one of the pioneers in the use of silo storage s#stems. .oe a constant
suppl# of first )ualit# rice, ad(anced e)uipment and modern facilities ha(e been
introduced, and a large wharf is used, which can con(enientl# accommodate a large
ocean* going (essel for direct and speed# loading.
1
/ppendix /, 0age 1
1
1ualit#, experience, honest# and prompt ser(ice are the major assets of the
compan#. /s the result of the compan#"s concern to impro(e the )ualit# of rice, the 2est
3xporter /ward for /gricultural products was conferred on Capital ice in the #ear 194&.
5(er the #ears the $TC %roup has not onl# increased its production capacit# and the
range of its ser(ice, but it has also expanded its presence in the international markets. The
corporate philosoph# is6
2e responsible to customers.
Treat the staffs as the most important resources.
ecogni7e our obligation to make a contribution to societ#


Country Analysis: Singapore
$ingapore was founded as a 2ritish trading colon# in 1419. It joined the 8ala#sian
.ederation in 199- but separated two #ears later and became independent. It subse)uentl#
became one of the world:s most prosperous countries with strong international trading
links ;its port is one of the worlds busiest in terms of tonnage handled< and with per
capita %=0 e)ual to that of the leading nations of >estern 3urope
Geographic Environment:

,
/ppendix 2, 0age -
,
$ingapore, which geographic coordinates is 1,, ?, 10- '4 3, located in $outheastern
/sia@ it is the islands between 8ala#sia and Indonesia. Its total area e)ual 99,.& s) km
and more than 94A is land. It has no land boundaries therefore it eas# for our compan#
ship the product to $ingapore b# ship which needs
lower cost than other such as airplane The climate is
nearl# the same as other /sian countries6 tropical@
hot, humid, rain#@ two distinct monsoon seasons *
?ortheastern monsoon from =ecember to 8arch
and $outhwestern monsoon from Bune to $eptember@
inter*monsoon * fre)uent afternoon and earl#
e(ening thunderstorms. /ccording to the land use6 arable land: 1.9'A @ permanent
crops: 0A @ other: 94.-9A ;,001< we can see that it Cs a one of ad(antages for our
compan# when we export rice to $ingapore, because the land use for arable just 1.9'A
out of 100A and additionall# lowland@ gentl# undulating central plateau contains water
catchments area and nature preser(e.
Cultural Environment:
!

$ingapore ha(e ',',D,&,0 ;Bul#
,00D est.< man# kinds of religion
2uddhist ',.DA, 8uslim 1'.9A, Taoist
4.DA, Eindu 'A, Catholic '.4A, other
Christian 9.4A, other 0.&A, none
1'.4A ;,000 census<.2eside that
$ingapore is combine from a lot of
ethnic groups Chinese &9.4A, 8ala# 1-.9A, Indian &.9A, other 1.'A ;,000 census<.
-
/ppendix 2, 0age '
-
2ecause of most of $ingapore citi7en is come from China which ha(e rice is the main
food for dail# meal. 8ore o(er 8ala#sian, Indian and other also use rice for their meal
;although it"s not the main food<. Therefore, this is also another ad(antage that encourage
we export rice to $ingapore. /bout literac#, $ingapore citi7en that from 1D #ears old and
o(er can read and write ;total population: 9,.DA<
Economic Environment:
"
>hen we are dealing with anal#7ing the economic en(ironment of our target
market, $ingapore, the impact of following factors should be considered6
1. Population:
0opulation is the most important item to consider when we are going to market a
product. It shows both the market si7e and its potential. $ingapore, which is not a big
nation but a small island countr#, has population of ',',D,&,0 ;Bul# ,00D est.<. This
figure shows that our market is not a wide one. 2ecause it is not a wide market, we can
sa# that there will be fewer competitors compared to other /sian markets such as China.
/nd less number of competitors brings larger opportunities to us.
2. Income:
Income is another factor determining the purchasing power of the consumers. It
shows how potential the target market is. 2ased on the facts found, $ingapore has the
purchasing power parit# or %=0 of F1,0.9 billion ;,00' est.<, with %=0 per capita of
F,&,400 ;,00' est.<.It is e(en said that this %=0 per capita is e)ual to those of 2ig ' >est
3uropean countr#. It is also listed in the top countries with high %=0. Thus, we can sa#
that although our market is not a big one, but it is trul# a potential one with strong
purchasing power or high income le(el.
3. Consumption Patterns:
'
/ppendix 2, 0age 9
'
eflecting the information found on consumption patterns of $ingaporeans in
,00', it is known that ,-.'A is spent on food sector, -.9A on clothing, and ,1.-A on
housing and so on. In the .ood sector, 10.- A is for uncooked food, including rice at the
percentage of 1.9, which is highest among the uncooked food products. Thus, we can
assume that percentage spent on rice is relati(el# high compared to other uncooked food
products. This means we ha(e high opportunities to make sales according to their
consumption patterns.
4. Economic Stability:
/ccording to the information searched, it is known that $ingapore has a highl#
de(eloped and successful free market econom# with a remarkabl# open and corruption*
free en(ironment and stable prices condition. It was once in recession stage b# downturn
of global econom# and the impact of $/$
D
in ,00-. /fter that, the countr# is
determined to lead to (igorous growth in ,00', with real %=0 rising b# 4 percent, b# far
the econom#:s best performance since ,000. 2ut, it has a slight rate of inflation of 1.&A
which is not affecting the economic stabilit# se(erel#. .rom these facts, we can sa# that
the econom# is (er# well performing with loads of opportunities pro(ided for in(estors of
both local and foreign.
5. Infrastructure:
2ased on the facts found, $ingapore"s communication s#stem is well working
with excellent ser(ice of telephone s#stem network. It also has different means of
transportation, such as b# air, b# car or b# ships where b# water wa# is mostl# used since
$ingapore is a port for trades between other countries around. It also has a high le(el of
energ# production and consumption, amounting to o(er -0 billion k>h. 2# rel#ing on
these facts, we can conclude that $ingapore has a (er# well*built infrastructure with
efficient means of communication, eas# access of transportation and reliable energ#
suppl#.
6. Social Deelopment:
D
/ppendix 2, 0age 4
D
To define the social de(elopment, we will consider the 0h#sical 1ualit# of !ife
Index $ingapore b# looking at these - factors6
1< !ife expectanc# at birth * 41.9, #rs for total population
,< Infant mortalit# rate * ,.,9 deaths+1,000 li(e births for total
-< !iterac# rate G 9,.DA of total population
.rom these facts, we can see that $ingaporeans" life expectanc# is high, infant
mortalit# rate is low with high literac# rate. Thus, we can conclude that $ingaporeans
ha(e high 0h#sical )ualit# of life or in other words, the# ha(e high li(ing standards.
!. "e#ional Economic Inte#ration:
$ingapore is a participant in man# international organi7ations around the world,
including /$3/?
9
and /03C
&
. Thus, Thailand, also one of the members of these
organi7ations, has some positi(e relationships with $ingapore based on their membership
agreements. Therefore, we can sa# that these conditions pro(ide us with fa(orable
economic preferences to get into the market without high le(el of difficult#.
/ccording to the abo(e discussion of impact of each factor, we can conclude that
the economic en(ironment of $ingapore is pro(iding us with positi(e conditions to enter
the market without restraints and restrictions.
#olitical Environment:
$
To anal#7e the effect on political en(ironment, we will consider these following
determinants6
1. Intellectual Property "i#$ts
/s it is mentioned abo(e in 3conomic $tabilit#, it is said that $ingapore has a
remarkabl# open and corruption*free en(ironment. The statement shows that in(estors no
need to fear about Intellectual 0ropert# ights or lack of safet# for ownership of propert#
as in China.
2. Political ris%
9
/ppendix 2, 0age 9
&
/ppendix 2, 0age 9
4
/ppendix 2, 0age 1,
9
There is low le(el of political risk in $ingapore since it has highl#*stable political
conditions. Thus, in(estors no need to worr# about ownership risk, operating risk or
transfer risk. Though the# are not completel# gone, but still exist in some low le(el, it is
not ha(ing significant impact on compan#"s opportunities.
3. &e#al 'ifferences
In $ingapore, 3nglish common law s#stem is applied ad the formal legal s#stem.
.or Thailand, the# also use Ci(il law s#stem based on the fact of codification. 2ut the
contents of the code are (aried as the major legal s#stem of the world. $o, we can see
there is a major difference between two countries" legal s#stem, which we must aware of
when we are going to enter its market.
4. (ra'e )arriers
$ince our home countr# and host countr# are members of /$3/? organi7ation,
trade barriers such as the degree of impact of tariff and trade sanction are low. /$3/?
members agreed upon to reduce tariff on imported goods of other member countries.
Thus, this will be an ad(antage for us in entering this market.
Thus, due to these factors" degree of impact, we can sa# that the influence of
0olitical en(ironment on our business is at the moderate le(el. /n#how, we can achie(e
our goal b# making use of opportunities a(ailable for us within the market as based on
ad(antage of being an /$3/? member.
Entry Strategy
Capital ice Co. should use H=irect 3xportingI strateg# to enter to $ingapore
market. Capital ice Co. makes direct contact with compan# which is an agenc#
compan# is located in $ingapore. The agenc# compan# can be /wards Consolidations
$er(ices 0te !td
9
. Capital ice Co. and Consolidations $er(ices 0te !td should sign the
business contract with duration of - #ears to flexible in an# change in policies, economies
in both countries. 8oreo(er, Capital ice Co. should use foreign sales representati(es
rather than foreign distributors because foreign sales representati(es do not take title on
the products, the# just earn the commission and foreign distributors take title on the
products, earn profit. 2# that wa#, Capital ice Co. can control the selling price also the
market distribution, etc., ather, sales representati(es should ha(e the contracts with
9
http6++www.awards.com.sg+
&
companies that define their commissions, assigned territories, length of agreements and
other detail.
Capital ice Co. can use man# communication tools to interact with intermediaries and
customers such as internet, ad(ertising, sales promotion, etc.
$ince the distance between Thailand and $ingapore are not so far, Capital ice
Co. can use the boat instead of airplane or other transportations to reduce the cost.
8oreo(er, the organic rice can keep for a long time, so the speed of transportation is not
importance. /s the result, Capital ice Co. can reduce the cost to achie(e economies of
scale.
Reason o% choosing &'irect E(porting)
The reason that Capital ice Compan# chooses H=irect 3xportingI to enter
$ingapore market instead of other methods is that Compan# belie(es that using local
trading compan#, =ashmesh $ingapore 0te !td, as an intermediar# is the best decision,
because it is an expert in doing business in $ingapore market and the# also know (er#
well about $ingapore culture.
S*+, Analysis
$>5T can help #ou unco(er opportunities that #ou are well placed to take
ad(antage of. /nd b# understanding #our weaknesses, #ou can manage and eliminate
threats that would otherwise catch #ou unawares. 8ore than this, b# looking at #ourself
and #our competitors using the $>5T framework, #ou can start to craft a strateg# that
helps #ou distinguish #ourself from #our competitors, so that #ou can compete
successfull# in #our market.
4
Strengths :
The organic rice
10
of Capital ice Co. is the onl# organic rice in Thailand that has
been approach b# I.5/8
11
The partners
1,
are all skills in their field, possessing long #ears of experience in
price production, rice trading and distribution.
The partners are complementar#.
Concerns with the regard to health and en(ironmental con(ersation are well taken
care of.
The high degree of skills and the special production conditions re)uired as an
affecti(e barrier to entr# for potential competitors.
*eaknesses:
Eigh de(elopment and start*up costs, with regard to J=, production and market
The product is a commodit# and cannot be ph#sicall# differentiated, which can
easil# lead to confusion.
Capital ice Co."s limited human resource might make it difficult to cope with the
potential big surge in turno(er
$ince the price of organic rice is higher than normal rice, so it just emphasi7es on
the narrow t#pes of customers who has a(eragehigh income and concern about
the health.
+pportunities:
/s $ingapore is a small countr# with high population densit#, land to produce is
(er# scarce, so that the demand exceeds suppl#. It leads to the market gap that the
compan# can exploit.
10
/ppendix C, 0age 14
11
/ppendix C, 0age 14
1,
/ppendix C, 0age 19
9
The econom# in $ingapore is growing rapidl#. $o, the li(ing standard of people
also increases. Eence, the# concern more about the health. This is a good
opportunit# for Capital ice Co. to sell organic rice in $ingapore.
,hreats:
The concept of organic rice is (er# new with man# people, so that difficulties will
arise in their acceptance b# go(ernment and consumers
The production processes depend on natural factors that cannot easil# be
controlled, including the outbreak of epidemics.
5rganic rice could be a temporar# fashion ;e(en though this is unlikel#<
Competitor-s Analysis
.n ,hailand: ,hanyaluck .nternational Co., Ltd
/!
Stren#t$s:
Than#aluck International Co., !td has experience in export organic rice to man#
countries such as $ingapore, Canada, China, 3urope, Eong Kong, ect.
It bu#s organic rice directl# from the farmers, so that it can achie(e the resources
with the lowest cost.
*ea%nesses:
The website about the compan# and products is not enough information.
8oreo(er, customers cannot order products online through internet.
The brand e)uit# of Than#aluck International Co., !td in $ingapore market is not
high. Therefore, it is (er# difficult to compete with $ingapore"s companies or
Capital ice Co.,
.n Singapore: See 0o Chan #te Ltd
/"
Stren#t$s:
$ee Eo Chan 0te !td is one of the leaders in rice market in $ingapore
1-
/ppendix =, 0age ,0
1'
/ppendix =, 0age ,,
10
It was operated in 19-0s, so it has a lot of experience in selling rice and the
customers in $ingapore belie(e )ualit# of its products.
>ell*organi7ation in distribution channel b# pro(iding the network of sellers in all
pro(inces of $ingapore and achie(e a wide rage of customers.
Created Eome =irect ser(ice which pro(ide free deli(er# and ensure the
customers that the# will alwa#s get the freshest products deli(ered right to their
doorstep
*ea%nesses:
$ee Eo Chan 0te !td has to import organic rice from Thailand and resell in
$ingapore market. /s the result, the cost would be high due to the transportation,
tax expenses, etc.,
$ince the cost that spent for organic rice was so high, the compan# just imported a
limited )uantit# that was not enough to suppl# for its customers in $ingapore.
1arketing Strategy
,arget 1arket
To anal#7e whether out target market has fa(orable characteristics or not, we will
consider factors based on these dimensions6
1. Demo#rap$ic perspectie:
.rom the facts that we found, we can see that our target market, $ingapore, has
(er# well*de(eloping characteristics. The population is around ' million with growth rate
of 1.D9A
1D
. /nd from the statistics, we can see that among different ethnic groups,
Chinese, 8ala#sians and Indian are the majorit#. 0eople deri(ed from these cultures
include rice in their main and common food. /lso ha(ing higher birth rate o(er death rate
assures population growth. /nd result of higher population, food consumption will
1D
/ppendix 2, 0age '
11
increase with proportionate rise in rice consumption sector. Thus, to conclude,
demographic factors of $ingapore pro(ide us with fa(orable conditions and opportunities.
2. +eo#rap$ic perspectie:
$ingapore is located in $outheast /sia and it constitutes islands between 8ala#sia
and Indonesia. It has an area of 99,.& s) km
19
in total, of which 94,.& s) km
1&
is land. Its
climate is composed of hot and humid weather, but it is also rain# most of the time. Its
terrain is classified as low*land. .ish and deep water ports are onl# natural resource
a(ailable for $ingaporeans. /mong the land used area, 0A is for permanent crops,
meaning the# ha(e (er# low emphasis on agriculture and plantation. Thus, rice and other
crops are mostl# or almost entirel#, imported.
3. Psyc$o#rap$ic perspectie:
2ecause majorit# of people in $ingapore are 2uddhists
14
, the# do not ha(e much
cultural differences with other /sian countries or Thailand. Thus, we belie(e there will
not be much difficult# in dealing with $ingaporeans. /nd the statistics shows that the#
ha(e high literac# rate, meaning people are most likel# to be open*minded. $o, we can
assume that the# are willing and open for foreign goods. .rom these facts, conclusion can
be made that there are less obstacles regarding culture difference and against*foreign*
goods*actions in entering the market.
#roduct Strategy
,b-ectie6
To be able meet world wide standard health issues
To fulfill customers satisfaction at the highest possible extent
19
/ppendix 2, 0age -
1&
/ppendix 2, 0age -
14
/ppendix b, 0age D
1,
1. Pro'uct type:
The compan#"s main exporting product is rice, and has a lot (ariet# of product
t#pes. 2ut, in entering $ingapore market, we focus onl# one t#pe of product, 5rganic
rice. /nd we will target onl# this product to get penetrated into this particular market.
2. .uality issues:
Capital ice Compan# puts a great focus on )ualit# of the product to satisf# its
customers. The global rice trade is (er# complex, especiall# regarding the differences
between standard and )ualit# of the rice accepted b# different countries. This has
prompted Capital ice to make constant impro(ements and to mo(e consistentl# into the
)ualit# sector.
.irst grown in the highlands of northern Thailand at the (illage of 8ea*lo# in the
Tung*!or (alle#, where fertile soil and rainfall are abundant, the organic rice produced b#
Capital ice is of premium )ualit# and meets all 3L standards
19
. To guarantee the finest
)ualit#, the complicated production process re)uires intensi(e care, as well as close
cooperation between Thailand"s =epartment of /griculture and the 2oagircoop
,0
, an
Italian independent organic sur(e# institution.
To pro(ide a consistent suppl# of premium )ualit# rice, the compan# also has
applied the most ad(anced e)uipment and most modern facilities in the production lines.
This includes a spacious wharf which can con(enientl# accommodate large ocean*going
(essels for direct and speed# shipment.
3. Desi#n an' Pac%a#in#:
The compan# pro(ides its goods in colorful and attracti(e packaging. 2ut,
packaging not onl# pro(ides attracti(eness, but also the
con(enience of customers b# offering different si7es.
0ackage si7e (aries from D0kg pack,
,Dkg pack, 10kg pack and upto Dkg pack. $ince the products
ha(e to be deli(ered from one source to another and
19
/ppendix 3, 0age ,'
1-
sometimes, e(en for long*time transportations, the packaging also ser(es as protection for
the product inside.
4. )ran'in#:
Capital ice Compan# uses and distribute its products under its common name
HCap iceI. 2ut, for the organic rice, the# produce it under two names, Thai*Thai and
Ear(est, where the former is used for domestic market and the latter is for foreign
markets.
The firm uses this brand name so that it can particulari7e its product"s characteristics and
relates them to an attracti(e and clearl# identifiable brand image. 5nce a brand has been
brought to customers" attention, selling costs diminish because6
* /d(ertising attracts custom to the firm"s own brand rather than to attract class of
product generall#
* =istributors and retailers are more willing to handle the goods on account of known
demand for the firm"s particular branded output.
2ecause we are selling our products to foreign customers (ia a long chain of distributors,
sale intermediaries and retailers, we need to ensure that our product retains its uni)ue
brand identit# right up to the moment of dales to final consumers.
,0
#rice Strategy:
,b-ectie6
To be competiti(e among ri(al firms within the market
To achie(e significant market share of at least ,0A in the end of #ear ,009
,0
efer to HTrade marks and 2randingI , International marketing6 $trateg#, planning, market entr# J
implementation
1'
To get customer awareness
To offer at reasonable and competiti(e price
Pricin# strate#y applie'
The compan# applies H0enetration pricing strateg#I
,1
in entering the $ingaporean
market. 2ecause the# are totall# new in this market en(ironment and competition is reall#
strong in this particular market, the# must set their market entering price at relati(el# low
le(el. 5therwise, the compan# will fail in getting customer awareness as well as re)uired
market share. This strateg# is suitable when we are able to produce large number of
output which )uickl# leads to economies of scale and unit product cost reduces.
.actors forcing to appl# this pricing strateg# can be classified into e/ternal factors and
internal factors.
E/ternal factors
8arket price G this is the factor that has the greatest impact on our price and it is
the price le(el determined b# the firms within the industr#. 8arket price ma# not
be the same e(er# da#, but it change according to other changes such as change in
go(ernment policies, change in demand, etc,.
3xchange rate G since we dealing with exporting goods between two countries,
the change in exchange rate of these currencies also reflect significant effect on
our price le(el.
%o(ernment policies G regulation and deregulation of go(ernment policies of both
home and host countries can (ar# our price le(el. In some cases, the# can also
bring about difficulties, as well as opportunities regarding compan# operations
8arket demand G demand is mostl# reflected b# both population large and
customers" desires. Change in demand can be brought out b# change in trend of
customers" beha(iors and their consumption patterns. !ower demand will drag
down our price le(el. Thus, demand must be considered a factor ha(ing great
influence on product price.
,1
The strateg# that firm combines a low price with aggressi(e ad(ertising in order to gain larger share of
the market.
1D
Internal factors
0roduct )ualit# G to set high )ualit#, we need to ha(e skilled force, ad(anced
technolog# and standardi7ed raw materials, which will draw up our cost le(el
high enough, which in turn force us to set our price high. Thus, )ualit# le(el of
the product has a direct effect on its price.
!abor factor G in case that workers demand high salar# and pa#ments due to
social problems, there will be an increase in our cost structure. Thus, we must also
set our price high to co(er the cost. Eence, this is also an influencing factor o(er
price,
Determinin# Price
In setting up a price, the compan# practices Hcost plus methodI. Eere, we find out
all the costs incurred for a unit product and add our desired profit amount per unit to cost
to get unit product price. The desired profit amount is determined b# appl#ing Hmark*up
on costI which is in terms of percentage. 2ut, this percentage amount of mark*up desired
will be (aried according to the situation the compan# faces. If it needs to lower its
product price, the# will reduce this percentage and if the# demand high profit le(el, the#
will use high mark*up on cost percentage.
=irect material cost per unit $F , ; in terms of $ingapore dollar <
=irect labor cost per unit ,
.actor# o(erhead cost per unit6
Ltilities 1
ent 1
Insurance .9
8aintenance .9
**************************************** *******
Total cost of production per unit $F&.1,
$elling price M cost per unit N mark*up on cost
M $F &.1, N ,.1- ;-0A mark*up on cost<
M $F 9.,D
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I0C,(E"1S applie'
The compan# applies two t#pes of incoterms or export deli(er# s#stems in the
business. /nd the cost structure (aries with each incoterm and price also (aries. In each
business transaction, different incoterms are fa(ored b# different customers. Two t#pes of
deli(er# s#stem that the compan# applies are 6
Cost and freight ;C.<
,,
* where the compan# pa#s for all the expenses
concerning transportation, but these exclude Hinsurance costI.
Cost, Insurance and freight ; CI. <
,-
G where the compan# pa#s for all expenses of
transportation , plus insurance.
'istri2ution Strategy:
,b-ectie:
To pro(ideO product a(ailabilit# in the market
To ha(e an eas# entering to the market
To make products reach to customers in eas# wa#
'< To get eas# access to market information
In entering $ingapore market, we need to set up specific channels of distribution
which will support our marketing strategies to be effecti(e. In this case, we are exporting
Thai organic rice to $ingapore, where we ha(e little market knowledge and experience.
Thus, we choose to allocate one $ingaporean compan# as our long*term wholesaler. This
firm must be one that has reliable financing conditions and market knowledge. Through
this firm, we can distribute and push our products into the markets.
>hen dealing with this wholesaler, we are not going to let it take title o(er our
products. Thus, this wholesaler does not need to bu# goods from us, but help us distribute
our products b# earning commission fees. 2# appl#ing this strateg#, we still ha(e control
o(er our products price and do not lack information regarding its condition in the market.
/lso it means this wholesaler is not full# authori7ed to e(er# function regarding our
,,
The exporter pa#s all the transport charges ; excluding insurance, which is the customer"s obligation<
re)uired to deli(er good b# sea to a named destination.
,-
The same as C. but includes the re)uirement that the exporter and not the customer insure the goods to
their final destination.
1&
products and mostl# control remains in our authorit#. This particular wholesaler will
again sell our products to wholesalers and retailers, such as super markets and other mini*
markets. Then, our products will reach to customers or end*users though these retailers.
.ollowing is a diagram showing channels of distribution applied6
#romotion Strategy:
,b-ectie:
To make our products well*known
To ha(e a good start in entering this market
To maintain good relationships with both customers and sales intermediaries such
as wholesalers and retailers.
1. Discount strate#y:
To appl# promotion in entering this market for our product 5rganic rice, we
consider market factors. $ingapore rice industr# is a competiti(e market with a lot of
competitors both from Thailand and other countries as well. $ince we are new to this
particular market, we need ha(e effecti(e promotion strateg# to make our product known
b# the customers in the market. /lso to ha(e a significant share in market is an essential
goal. Thus, the compan# decided to offer discounts for first operating months. =uring this
period, price will be lowered as a special offer for customers.
>holesaler
;Consolidations
$er(ices 0te !td
in $ingapore<
Capital ice
Compan#
; in Thailand<
etailer 1
;super
market <
etailer ,
; mini
market<
>holesaler
Customers
or
3nd*users
;$ingapore<
etailers
14
2. ,fferin# priile#e to sales interme'iaries:
.or the wholesaler, commission percentage will be high if it can make our sales
reach to specific amount, such as 1 million $ingapore dollars. This will be an incenti(e
and moti(ation behind the wholesaler to push our products into the market and to
increase the sales amount. Lsing this t#pe of promotion strateg# enables us to ha(e
control o(er sales as well as price le(el.
3. 2pplyin# Internet me'ia:
The compan# has its own website
,'
, where information concerning the compan#
itself, its products, market price and other useful details are gi(en. /lso this website
pro(ides opportunities to an#one who interested in doing business with Capital ice
Compan#. This is easil# can be done through registering at their website b# gi(ing #our
necessar# information. /nd to make a contact will be an eas# process. This is (er# useful
for those firms abroad who want to become sale intermediaries of the compan# in their
home countr#. The# can ha(e eas# access to compan# information (ia internet where no
ph#sical contact is needed and time is sa(ed.
4. 1aintainin# Public relation:
Capital ice Compan# does a lot of donations and goods offering to public as to
maintain good relationship and to keep up positi(e image of the compan#. These
donations include offering rice to Tsunami (ictims, pro(iding funds for en(ironmental
issue problems and so on. These make compan# be in high position from customers"
perspecti(e and also can help to retain customers" lo#alt#. /lso ha(ing good image
supports them to ac)uire long*term relationships with other firms that the# ha(e to deal
with, such as suppliers and wholesalers.
,'
http6++www.capitalrice.com
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Challenges and Solution
C$allen#e: Capital ice Co. isn"t well*known in the international business to business
and internal factor within Thailand ha(e a strong problem such as bird flu. $ingapore
%o(ernment isn"t acceptable our product, lead to decrease recognition
Solution: 3xhibition, trade show, pro(ide information and open opportunit# to introduce
the product that can expand products to other countr#
C$allen#e: $ingapore consumer use high standard li(ing of life and choose of the best
product so it is hard to enter into the target market.
Solution: Creating compan#"s reputation and recognition b# increasing a good )ualit#
of organic rice, build the trust for the international business that we should be acceptable
for world wide.
C$allen#e: 8an# competitors@ Thai rice need to engage into this market. 2ut $ingapore
is hard to penetrate and high*tariff markets because $ingapore is the most efficient
seaport and ha(e man# port facilities to import from other countries that wh# our
compan# fight for market share.
Solution: $ingapore contacts a participant in man# international organi7ations around the
world, including /$3/? and /03C. Thus, Thailand is also one of the members of these
organi7ations, so Thailand has positi(e relationship with $ingapore. >e use an ad(antage
to get into the market share.
,pportunities:
Countr# of origin effect6 Thailand is a major exporter of agricultural products and
was ranked in the top rank for rice exporter in the world. This means we ha(e
,0
opportunit# to get sale (olume from organic rice that shows a better )ualit# than
other countr#.
5ur compan# gets the 2est 3xporter /ward for /gricultural products and also
expands its presence in the international markets that it is going to be a high
opportunit# for us to export in $ingapore
,1