Explain International Engineering Management?
TNA Pty. Ltd is the international leader in the food processing and packaging industry, which supplies solutions as well as a single system to all their customers worldwide. TNA business emphasizes on developing the innovative equipment for packaging. The consumer packaging industry is increasing or growing all over the world at the rapid pace, as economies of many countries have strengthened their buying power (Gillespie, Jeannet, and Hennessey 2009). Organized retail design and convenience packs will set the company apart.
As the company is planning to expand in the various Asian market, it is important to analyse the market. To do so, five countries are selected such as India, China, Singapore, Japan, and Saudi Arabia. Benefits and challenges in these countries will be analysed so that it become easier for TNA to expand their business in these market. TNA had faced various challenges when they grew their business in different countries, which relates to lack of technical compatibility among the system of TNA and snack food packaging industry (Gillespie, Jeannet, Hennessey 2009). In this report, the best market will be selected for TNA, and by that recommendation will be provided, that relates to enhancing sales and marketing in these regions.
Packing for the convenience- Big opportunities that have increased through the convenience trend is rapidly used in case of ready meals. Huge organizations having the technological strength like Uflex Ltd, retort purchase, MTR Foods, has created the high position in Indian market. The different technological development towards the ready meals in India has resulted in the development of shelf ready packs of the meal (Gillespie, Jeannet, Hennessey 2009). It is referred as the milestone of sorts, by applying the facility of the cold chain within the retail stores are again less. Through this increasing trend, the process of packaging is expected to increase through the technology ladder, like hot filling methods, a form-fill seal within the flexible packaging, and aseptic packaging.
Managed retail design- through the shift in the old-fashioned retailing at small-scale to get organized at large stores, product manufacturers have tried to modernize the packs. For example, milk has changed from loosely sold towards the flexible plastic pillow packs, and currently, used as the premium liquid cartons (Gillespie, Jeannet, Hennessey 2009).
Exploiting the flexibility- As the huge chunk of the Indian consumers, hold less purchasing power has continued to increase the demand for the less unit price; therefore, the small sized pack's prevalence are in the form of 1 to 10-gram sachets. It is noted that in India flexible packaging has successfully exploited on this trend, which gives them low cost (ADVANTAGE INDIA - CONSUMER GOODS PACKAGING TRENDS 2011).
Import dependence- Around 80% of the material is mainly used in the packaging of cold type blister, and it’s imported.
The requirement of new technology- In India, around 40% of the floriculture and horticulture is mainly wasted, due to the lack of cold chains and logistics. Nevertheless, the proper packaging can help in addressing the innovation through enhancing the shelf life of these items by modified atmosphere packaging.
Mismatch of standards- BIS standards that are mainly used by the Indian packaging industry is not up to the standards set by the developed nations (ADVANTAGE INDIA - CONSUMER GOODS PACKAGING TRENDS 2011).
Loss of export- Due to the relevant technology and mismatch of standard in food packaging, the export industry has suffered a lot. For instance, in the Middle East, the export of raw meat fail in earning the potential revenue, due to the lack of the services of value addition to packaging and processing (ADVANTAGE INDIA - CONSUMER GOODS PACKAGING TRENDS 2011).
Local players that continuously lead the sale of packaging- local companies hold the firm presence within the area. Packaging firms manufacture various pack types for the different categories, having few local manufacturers offering services like packaging, moulding, and labelling, to stay competitive (Malaysian Association of Standard Users 2013).
The innovation of product by emphasizing over close improvement- in the year 2015, the product innovation has emphasized over close improvement. It is mainly prevalent in personal care and home care, in which enhanced closure is used for offering consumers with the safety features as well as added convenience.
Demands of customers for the consistent product often drive the sales of massive pack format size are attaining momentum in the ongoing packaged food as well as beauty and personal care, in which sale hit through the sensitivity of consumer cost (Malaysian Association of Standard Users 2013). This trend was, later on, introduce around 6% of the goods and service tax in the year 2015, which drive the demand for the affordable items,
As per the Malaysian investment development authority of 2012, the sector is highly dominated by the small and medium sized companies. Despite the key percentage as compared with the large-scale companies, they are highly insufficient in producing the logical volume of results and also face challenges in complying with the standards of food and hygiene (Talib, Ali and Idris 2013). Other emerging problems that has increased the concern is related to the food processing sector is highly efficient through the increase in overhead cost. Steps were taken for resolving the issues, food small and medium size companies primarily tend to react over the unplanned cutting of cost and even fail in viewing the significance of applying the sustainability acts in operation (Talib, Ali and Idris 2013). Failure in organizing the sustainability components like water and energy can potentially lead towards the increased overhead price of SME and come up with a negative effect on social and environment.
The problems related to food hygiene as well as a lack of sustainability could be explored in the core design of the food industry. Surrounded by various issues, SME often tends towards overlooking or either ignoring the significance of referring the sustainability and hygiene at the time of designing (Talib, Ali and Idris 2013). Failure in making consideration helps in producing the factory design like various errors, which emerge as manufacturing issue, once the factory is constructed.
The popularity of American convenience, as well as fast foods in the Singapore, favours the application of these existing chain system of procurement that can source the food ingredients from America.
The food procedure of America are considered as the reliable source of huge volume and even hold consistent quality food items in the key food processors. American items are modern and correctly presented in the key supermarkets (Lamb, Hair and McDaniel 2010). American products are also considered as high quality.
Singapore is the key regional hub for the agriculture and food re-export, mainly the processed food (Dong 2016).
There is an increasing and ongoing trend in Singapore for the healthy eating. Whether it is justified or not, but the fast food is often related to the eating empty calories as well as junk food.
In the case of meat processed food item, Singapore market face TBT, and SPS issues (Dong 2016).
American food items are referred as costly, as compared with the similar type of products, from both the traditional and regional food supplying countries, such as European Union, Australia, and New Zealand.
Singapore is price sensitive when the case comes to purchasing food items. The price sensitivity is offered by ASEAN countries and China for enhancing the Singapore market share (Dong 2016).
The ASEAN Economic community was started in the year 2015; the primary goal is to transform the ASEAN in the single market as well as production base market for promoting the free trade movement and capital among the member state of ASEAN (Dong 2016).
Singapore is the most competitive market. Competitive items are not so costly and are equally used as American products.
Food ingredients coming from the regions has less cost, due to the free trade area of ASEAN (Dong 2016). The AFTA also cover common effective preferential tariff provision, for initiating the free flow of goods among member state.
It is predicted that the packaged food sale will continue to increase in the market of Japan, as customer continue to seek for the convenient food solutions amidst lifestyle and demographic changes. Along with this, manufacturers will also contribute towards sustaining the reduction in the category of the mature staple. Regarding sale, the largest packaged type of food in Japan is the chilled processed foods, such as chilled meats and chilled ready meals (Packaged Food Sales in Japan 2015). It also includes bakery products and dried processed foods, including instant noodle and rice. With the spread of eating habits of West among the customers, staples such as rice have continuously reduced in term of sale. It has negatively impacted the highest category within the dried processed food (Packaged Food Sales in Japan 2015). On the other side, ready to eat a meal, along with innovative, portable as well as convenient foods are creating headway.
Japan is the third largest economy in the world after America and China. It is also considered as the important market for various global packaged food manufacturers. Along with that, Japan is considered as the fourth largest food importer of the world, which depends on other countries, for its 60% of the food (Packaged Food Sales in Japan 2015). At one side, the traditional taste and menu, primarily guide the average consumption habit of Japan, other Asian and western countries ethnic cuisine is making headway in the Japanese market. Nevertheless, high-end food, as well as beverage market of Japan, continues to come across many significant issues, which results from lasting anaemic growth of the economy and aging population (Packaged Food Sales in Japan 2015). These factors have accentuated the trends, which goes towards the healthy, functional, nutritious, as well as value for money items. Despite all these issues, consumers in Japan are interested in accepting the increased cost of quality, convenience, and safety. The key supermarket chain within Japan is coming up with a large private label that is offering new as well as innovative food products (Packaged Food Sales in Japan 2015).
The packed food market in Saudi Arabia is expected to increase by 2022, from the present position (Lee and Okos 2011). Factors that had contributed to the growth are, increase in the consumer convenience, an increase in the disposable consumer income, and change in consumer behaviour. Packaged food plays a significant role in the international food market (Saudi Arabia Canned Food Packaging Market 2017). Packaged food can be easily preserved for the months in a similar way to the actual form. Packaged food also continues to trend towards the little options in case of frozen meat and chilled food. While providing the benefits related with long shelf life as well as low price, packed food suffers from the poor perception of consumers about its quality and healthiness (Saudi Arabia Canned Food Packaging Market 2017). The food packaged at Saudi Arabia market is highly segmented according to the core material, like plastic, glass, metal and paper, and forms of the food product, like fruits, readymade meals, seafood, and vegetables.
Easy to use closures going good- in the context of increasing demand for the convenience, closures are providing easy resealing, closing as well as dispensing are viewing the excellent performance in Saudi Arabia.
The rate of recycling is small- Due to little consumer awareness about the environmental problems in Saudi Arabia, the system of recycling is underdeveloped (Saudi Arabia Canned Food Packaging Market 2017).
Huge range of pack and sizes are provided- there is a growing focus towards addressing the needs of consumers and demands in various areas of food packaging goods, and due to that consumers have become quite demanding (Aly and Baker 2013). There is an increasing emphasis on the packaging for the retailer’s shelf differentiation (Saudi Arabia Canned Food Packaging Market 2017). The same has resulted in various diverse trends of packaging, along with polarization of pack size that can be seen in areas like cat and dog food.
Recommendation on which of these markets would provide the best option for TNA
It is recommended that India and Singapore can prove to be the best market of TNA to expand its business. Below are the reasons for selecting these countries:
The Indian packaging industry is rapidly changing in the past three few years. From the time, when the items were sold mostly in losing packets, and pack closure is usually a struggle, the packaged and processing food industry has transformed, and rapidly shifted from losing towards the packaged food, and has even seen tremendous improvement in the quality of pack (Alam 2010). The increase in the income of consumers is also considered as the primary enabler, that has helped in empowering afford, as too costly, but with the high quality of the products. India has 393 billion containers, and the packaging market is also huge, which is calculated to present around 10% of the international market, in the context of unit volume (Heneghan 2016). It is also considered as one of the highest growing markets all over the world, which has increased by 11% between the years 2005-2010. India also enjoys flexible packaging, which is followed by the great packs of rigid plastic, paper, and glass. Liquid cartons and metals are relatively in less quantity and have viewed a rapid growth in past few years (Zain, Anas, Hassan, Lehar and Shamsuddin 2012).
The retail sale value for the packaged food has increased up to 3% in 2016 that has also slightly reduced as compared with the average review period. Even the slowdown is attributed towards the growing maturity of packaged food goods in Singapore. However, the wellness and healthy packaged food have to continue towards the robust present value growth, and these efforts are made by health promotion board for initiating the healthy lifestyle and healthy eating. These efforts include the suggestions for consumers to minimize the intake of sugar (Shamsudin, Yodfiatfinda, Mohamed, Yusop and Radam 2011). Food packed market has also come up with reduced fat packaged items, and the same will reduce the fat milk, with around 47% of the value share in the year 2016. Providing semi skimmed and fat-free milk, Singapore is quite famous for offering health food packaged. Even there is a high awareness about food packaging, and high-quality products are provided to the customers. These products are available in the major supermarkets as well as hypermarkets (Smith 2011). TNA has an advantage in these markets, as they can even offer attractive offers to the customers. These factors have also increased the retail sales value in Singapore (McDonald 2012).
It is expected that the packaged food will increase up to 3% CAGR in 2017, and it is forecasted that the sales will increase in 2021. In both the markets, the growth will be stable. The synergy among the health promotional board yearly campaign for promoting a healthy lifestyle and the drive from producers to continue to achieve symbol of healthier choice will make sure that stable growth is attained in all categories of food packaging industry (Shankar, Carpenter and Farley 2012).
The marketing strategy of TNA helps the company in providing information about the ongoing changes happening in different components of company’s business environment (Schermerhorn 2009). It also facilitates, the organization in entering the market of Singapore, which will support in attaining the goals of the company in both effective as well as efficient way. The marketing strategy of TNA will cover up few important features like:
The new variety of the products will aim towards providing high quality as well as low-fat items so that customers can experience the high level of energy.
TNA will also enhance the product and service sales by 10% in the coming years, by mainly emphasizing over working professionals, who are between the ages of 24-35 years (Russell 2010).
TNA will also develop the focused customer plan in the next few months, for the purpose of increasing the brand image and increase the margin of sale.
TNA will also spread the awareness about its products by health advertisements along with the active promotion (Russell 2010).
TNA will also create the schemes and strategies, which could be implemented for improving the profit margin in the Singapore emerging market by 7% in the coming years.
TNA will also enhance the acceptance of packaged products for female customers, which can make the energetic and enthusiastic (Russell 2010).
The food packaged marketing world in healthy and sanitized. Various brands like Real, Saint, Minute Maid, etc. has taken the western code like breakfast, purity, physical fitness and compensation. TNA in India will target the westernized, affluent audiences, for whom healthy lifestyle is essential (Reid and Bojanic 2009).
Risk associated with these two potential markets
In India huge part of floriculture and horticulture is mainly wasted, due to the lack of cold chains and logistics. Nevertheless, the proper packaging can help in addressing the innovation through enhancing the shelf life of these items by modified atmosphere packaging. BIS standards that are mainly used by the Indian packaging industry is not up to the standards set by the developed nations. Due to the relevant technology and mismatch of standard in food packaging, the export industry has suffered a lot. There is an increasing and ongoing trend in Singapore for the healthy eating (Peng 2012). Whether it is justified or not, but the fast food is often related to the eating empty calories as well as junk food. Singapore is price sensitive when the case comes to purchasing food items. Singapore is the most competitive market. Competitive items are not so costly and are equally used as American products. Food ingredients coming from the regions has less cost, due to the free trade area of ASEAN (Marich 2009). The AFTA also cover common effective preferential tariff provision, for initiating the free flow of goods among member state (Martinez and Wolverton 2009).
Benefits and challenges related to five Asian countries is analysed in the report, so that it become easier for TNA to expand their business in these market. TNA had faced various challenges when they grew their business in different countries, which relates to lack of technical compatibility among the system of TNA and snack food packaging industry. In this report recommendation is provided, that relates to enhancing sales and marketing in these regions.
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