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Airpork case study report

Analysis of marketing strategy and


recommendations of future growth

Kartic Kapur
11/1/2012





1. Executive Summary
This report was commissioned to examine the factors that influenced growth of Australian pork
limiteds export to Singapore from 1999 to 2001 and to analyse the effectiveness of the marketing
campaign launched in May 2001. The report also intends to recommends ways to fuel further
growth in future.
The research draws attention to the fact that Australian porks product image was built by its
success in Japan prior to the time period identified for analysis. This, along with its presence due to
investment in pilot cold chain process led to Australia emerging as natural choice for pork imports
when Nipah virus outbreak in Malaysia and Indonesia lead to the imports being banned from those
countries.
The advertising campaign launched in 2001 was successful in launching the Airpork brand as brand
of choice for young consumers who preferred shopping in supermarkets. This campaign was also
successful in dispelling the belief that frozen meat is not fresh and is unhealthier compared to fresh
meat.
It is recommended:
That Airpork conducts thorough analysis of potential competitors to position itself as brand
of choice.
That Airpork creates strategies and advertising to target different market segments.
That CAPE conducts and audit of processes for cold chain system.
2. Table of Contents

1. Executive Summary ......................................................................................................................... 2
2. Table of Contents ............................................................................................................................ 3
3. Introduction .................................................................................................................................... 4
4. Analysis of growth from 1998 to 2001 ............................................................................................ 5
Analysis of two Ps: Product and Presence ......................................................................................... 5
Product ............................................................................................................................................ 5
Presence .......................................................................................................................................... 5
External factors at play in the market................................................................................................. 6
5. Benefit analysis of advertising campaign since 2001 ...................................................................... 7
Needs and Wants analysis .................................................................................................................. 7
SWOT Analysis..................................................................................................................................... 8
6. Proposal for further growth ............................................................................................................ 9
Target Competitors ............................................................................................................................. 9
Target different segments of the market ........................................................................................... 9
Process and logistics ......................................................................................................................... 11
Summary of recommendations ........................................................................................................ 11
7. Conclusion ..................................................................................................................................... 12
8. Self Assessment............................................................................................................................. 13


3. Introduction
The Airpork brand is unique in the sense that it was created and marketed after tremendous success
enjoyed by Australian Pork Limited from 1999 to 2001. Many have argued that the marketing effort
was a waste as the sale was already at all time high and the commodity was self selling. This report
looks at the reasons for the success till 2001 and then goes on to use marketing concepts to analyse
the success of marketing campaign launched in 2001.
The report proves that the marketing effort was needed for long term sustainability of the Airpork
brand and sales in Singapore. This analysis is then used to put together proposals for future growth
in the region.
4. Analysis of growth from 1998 to 2001
Australian pork exports to Singapore increased from 60,000 kg in 1998 to 28.8m kg in 2001. This was
achieved because of range of external factors and unique market conditions prevalent in the Asian
pork industry. This report lists some of these factors and aims to analyse them in order to get a
better idea of situations that can influence the business in future. The next two sections would then
build upon the learning from the past in order to audit the effectiveness of the marketing campaign
that followed and to formulate strategies in order to make the Australian pork exports to Singapore
sustainable.
Analysis of two Ps: Product and Presence
Product
It has been identified that although Australian pork did not command a big share of the Singaporean
pork industry, Australian pork industry had built rMBA in other Asian countries, particularly Japan.
After the advent of foot and mouth disease in Japan and then in Taiwan and South Korea,
subsequently, Australia was chosen as a country of choice for pork exports. Japanese consumers
rated Australian pork highly because of bright meat and snow white fat, high quality feed grain,
clean and green image. Australian livestock is also classified as high quality primarily because of it
being free from diseases.
Presence
Malaysia was initially supplying majority of pork exports to Singapore before the outbreak of Nipah
virus in Malaysia and Indonesia. Australias clean and green image combined with rMBA earned from
its exports to Japan during foot and mouth disease there, made it a natural choice for Singaporean
importers.
Singaporean Government initially banned Australian pork imports on the ground of hygiene in 1997.
This turned out to be blessing in disguise as it lead to Singapore govt and Australia pig research and
development corporation working on pilot project to export pork using new cold chain system. CAPE
established Australian pork industry quality programme (APIQ) and set up standards for supply chain
which were over and above Singaporean standards. All these factors lead to a superior supply chain
system being developed which met Singapore Governments hygiene standards.
The product and presence form major part of the marketing mix and has been summarised in the
table below. It can be easily noticed that even without the price and promotional factors, these two
Ps helped create a strong case for Australian pork industry.
Product Presence
Quality of Australian livestock (free from
diseases)
Japanese consumers rate Australian pork
highly because of bright meat and snow
white fat, high quality feed grain, clean
and green image
High health standards from Singapore
govt for supply chain of frozen pork
After initial ban in 1997, Singapore govt
and Australia pig research and
development corporation worked on
pilot project to export pork using new
cold chain system
CAPE established Australian pork
industry quality programme (APIQ) and
set up standards for supply chain which
were over and above Singaporean
standards


External factors at play in the market
Some external factors were at play in the market during the time of growth. These are summarised
below and can be seen as major contributors for the Australian pork industries success from 1999 to
2001:
World meat consumption has been increasing (pork dominates with 43%). It can be argued
that probably the demand was higher than supply during this time period.
Australian pork industry restructure strategy was formulated by the Australian government.
This resulted in $24 million being allocated for the industry. Confederation of Australian pork
exporters (CAPE) was formed from this fund.
Foot and mouth disease in Taiwan and Japan. Australian pork industry turned out to be a
major supplier to Japan even before 1999.
Nipah virus in 1998 in Malaysia led to ban on imports from there. Imports may not resume
because of geographical factors and its proximity to bat colonies (which was identified as
root cause).
rMBA enjoyed by Australian beef exporters with 23% of world export combined with
Australia being second largest exporter of lamb meat.

5. Benefit analysis of advertising campaign since 2001
Australian Pork Limited (APL) launched the Airpork brand in March 2000 and started a major
advertising campaign in May 2001 utilising television, newspapers, magazines and sides of
double-decker buses. The campaign aimed to focus on the following:
Change perception that fresh meat is superior
Differentiate Airpork from other frozen thawed pork
Communicate the message that fresh meat is air-freighted into Singapore daily
Some critics have their reservations on the effectiveness of this extravagant marketing
campaign considering the tremendous success enjoyed by APL prior to its launch. This section
uses needs and wants and SWOT analysis of the market to analyse the effectiveness of the
campaign. This report explains why the marketing campaign was successful for the long term
sustainability of APLs export to Singapore. The final section will then look at recommendations
for future growth.
Needs and Wants analysis
Consumer/Buyer group Needs Wants
Singapore Government Health and safety
Standards for supply
chain system
Hygiene awareness
for its citizens
Improve
infrastructure in
Singapore for cold
storage and
transportation
Traditional buyers or
consumers from older
generations
Part of daily diet
Free from disease
Fresh pork (as
compared to frozen)
Quality of the meat
Particular about
level/layer of fat in
different parts of pork
Premium quality meat
Young consumers Part of daily diet
Free from disease
Save time in shopping
Quality of the meat
Humane treatment of
animals
Clean and green
product
Premium quality meat

From the analysis above, the marketing campaign can be seen as successful in the following areas:
Traditionally there is an inherent preference for fresh meat to frozen supermarket products
in Singapore. As consumers are mostly driven by habit and consumption of fresh meat is
seen as healthier and tastier choice, once the impact of virus is forgotten, Indonesia can eat
into Australian share. The conclusion here is that the marketing campaign was needed to
change perception that fresh meat is superior.
Prior to Nipah virus outbreak Aus pork was perceived to have tainted or milky/beef taste.
The market campaign was successful in conducting a blind taste which revealed that they
actually preferred Australian pork thus building a premium quality image for Airpork.
Young shoppers who prefer supermarket brands, needed to be targeted. The campaign
communicates the message that fresh meat is air-freighted into Singapore daily. It also
aims to differentiate Airpork from other frozen thawed pork
SWOT Analysis

From the SWOT analysis, the market campaign can be seen as successfully tackling the following:
rMBA
o Although rMBA of Australian pork industry was good because of impact of foot and
mouth disease in Taiwan, South Korea and Japan plus Nipah virus in Malaysia and
Indonesia, the strong brand needed to be built for sustainability. Indonesia has
also grown in the same time period from 11 percent to 24 percent. Because of
inherent preference for fresh meat, Indonesia can outgrow Australian exports.
Other competitors like US and Canadian exporters can decide to position themselves as
competitor for Airpork. Unless Airpork builds rMBA in the market, other brands can easily
replace them in near future. Australia can build on its reputation for quality of its livestock.
From Ansoff Matrix, it can be argued that new market needed to be developed as although
the product existed prior to 1998 but it did not position itself in Singapore market. This
results in market development activity.
Situation
Analysis
Internal
Analysis
Strengths
Australian high standards
and perception of good
quality from Australia
Weaknesses
Cold Chain system issues,
bad brand awareness in
Singapore for Airpork from
study in dec 2000
External Analysis
Opportunities
Young generation prefer
supermarket brands, foot and
mouth disease and Nipah virus
in other exporter countries
Threats
Perception of premium quality
meat from US & Canada, re-
emergence of Indonesia
6. Proposal for further growth
The SWOT and Needs and Wants analysis in the previous section have highlighted potential areas
of improvement as well. This section makes some recommendations with regards to tackling
potential competitors, targeting various market segments and making improvement to process and
logistics. The results are summarised at the end of this section.
Target Competitors
Potential completion can emerge from North America and Indonesia in future. Given below are the
recommendations to tackle this challenge:
North American pork is perceived as high quality and demands a premium. It is
recommended that an analysis of the quality of the pork from North America be conducted
and Airpork needs to develop product line which can be positioned as a competitor of the
US and Canadian pork to be sold at a premium. This will lift the overall brand image of the
Australian pork.
It is also recommended to focus on growing market by targeting Indonesian pork which
demands 24 percent of the market still. This is mostly due to live exports and preference for
fresh meat. Two pronged approach can be:
o To increase awareness of hygiene issues related to wet markets
o Consider selling livestock to Singapore (after consideration of humane slaughtering
practices)
Target different segments of the market
Given below (on the next page) are different market segments to target and the recommendations
for each segment:

Work with govt to increase awareness of risks from
wet market
Consider selling livestock (if Singapore meets humane
slaughtering standards)
Consumers who prefer freshly
slaughtered pork
Further marketing for freshness of the meat
Improve the packaging to differentiate the brand from
other frozen meat (fresh green packaging)
Consumers who are concerned about
health standards
awareness campaign
Consumers who are concerned about
humane treatment of livestock
Target high end restaurants to buy and promote
premium quality Australian pork in order to lift brand
image
Singapore has a large luxury cruise industry which can
be targeted
Potential partners
Create a new discount brand
Discount shoppers
Create a premium brand extention
Upmarket Shoppers
Tie up with supermarket to offer free home delivery
of fresh meat
Internet Shoppers
Process and logistics
Since issues have been identified with Cold chain system and Singapore suffers from infrastructure
issues with regards to cold storage and transportation, it is recommended to:
Conduct an audit of the cold chain system. Stringent processes and checks are needed to
implement standards set by CAPE.
Put together a proposal to Singapore government for a joint investment to upgrade
infrastructure in Singapore (chiller space, refrigeration and de-boning rooms).
Summary of recommendations
The recommendations have been summarised below by categorising them into marketing mix and
multiplying it with strength of rMBA.
Marketing Mix (4 Ps)





X
Strength of Relational Market-
based Assets








Further
growth
in
future
Services we offer
Possibility of offering internet
shoppers for free home delivery
Fee structure
Extend brand to premium range and
create new brand for discount
shoppers
Availability
Increase availability in wet market
and restaurants. Improvements to
Cold chain system. Investment in
Singaporean storage infrastructure.
Promotional efforts
Continue tie up with celebrity chefs,
extend tie up with premium
restaurants and cruise ships

Existing client base
Joint marketing effort with big
supermarkets like Isetan and GIANT
Loyalty
Build loyalty with young shoppers
Awareness
Joint awareness campaign with
Singapore govt on hygiene issues of
wet markets. Quality of frozen food
Reputation / image
Tie up with high end restaurants in
promoting quality of Australian pork.
Fresh green packaging.
Word of mouth
Use social media tools for awareness
through word of mouth
Current activity From past activity

7. Conclusion
Although, the Australian pork limiteds exports to Singapore had grown from mere A$200,000 in
1998 to A$113 million Airpork brand in 2001, the report proves that this was mostly achieved
because of combination of unique market conditions and the quality of Australian livestock. It has
been proven with help of needs and wants analysis plus SWOT analysis that the marketing campaign
has been successful in building an Airpork brand which is sustainable and ready for future
challenges. The report also has shows a path to achieve future growth by targeting competitors,
improving logistics and by segmenting and strategies for targeting those market segments.
8. Self Assessment
The strengths of your submission
o The analysis of existing market situation and identifying that two Ps were
responsible for its success.
o The needs and wants analysis to identify success factors in marketing campaign.
o Market segmentation to suggest future growth areas.
The weaknesses
o Lack of references from other marketing books and theories
o Lack of independent research on other local factors that can probably influence
sales.
How the submission could possibly be improved (if you had more time or the chance to do it
again)
o Conduct research from independent sources to gain better understanding of local
conditions in Singapore instead of depending solely on the case study.
The grade you think that it deserves
o C+
What you would particularly like feedback on from the course facilitator.
o Whether right tools were identified for analysis of market conditions?
o If it was real business report, what other tools could I use to conduct further analysis
of the local market conditions?