EXECUTIVE SUMMARY

The most notable impact of globalization and international trade can be seen in the way business firms
operate in the modern world. Corporations seek to penetrate other national territories in the hope of boosting profit
and reputation. One of the growing markets in the global business arena is the snacks and foods market. This study
attempts to analyze if a United Kingdom-based crisps and snacks manufacturer can facilitate a successful business
operation in Hong Kong.

The first part of the report tackles the benefits of a global operation, factors that a firm

has to consider before going global as well as presents the three research questions. The remaining discussions
focus on information regarding the general characteristics of Hong Kong consumers that make them receptive to
foreign products including snacks and crisps, specific crisps and snacks products that gained the appreciation of
Hong Kong consumers, and the kind of entry strategies that are encouraged in the Hong Kong market. The paper
also explains the design and approach in conducting the research. The primary data collection method is through
available literature on the topic. The primary sources of information for the study include a report from the U.S.
Department of Agriculture and three published magazine articles. The researcher opts to use the exploratory
approach to save time and money. The paper also discusses how the existing literature can answer the concern of
the company by helping it to gain access to statistics and reports published by respective agencies and writers.
Finally, the research report elaborates on the scope of the report and its weaknesses for guidance to future
researchers.

INTRODUCTION AND BACKGROUND TO THE PROBLEM

The continued interest in and growth of international trade has driven numerous business organizations to
embark on a global operation. The (2007) cites that global markets have rendered extensive opportunities for
business firms to increase sales; boost capacity for investment and market share; gain access to a wide array of raw
materials and technology; and exploit manpower skills from other locations. Hence, going global has become the
key objective of most business organizations. However, the pursuit of a share in the global market entails extensive
research, preparation and capacity building across all levels of the business firm. According to (2006) cultural
differences, government laws and regulations, local business practices, and distinct needs and preferences of the
consumers in a particular market are some of the issues that have to be taken into consideration before penetrating a
global market.
The pursuit of a global business operation is presently a concern of Scenarios Crisps and Snacks, a United
Kingdom-based manufacturer of chips, crisps and snacks such as potato chips, tortillas, packaged fries snacks and
others. The company aims to penetrate the Hong Kong market following a massive success with the British
consumers. The immediate concern of the company is to determine if the Hong Kong consumers would welcome
crisps and snacks in their daily lifestyles. This report is an attempt to provide information regarding the status and

opportunities of the crisps and snacks market in Hong Kong by considering three areas general characteristics of
the consumers, dominant snacks and crisps products in the Hong Kong market, and entry strategy. Specifically, the
report tries to answer the following research questions:
u What are the characteristics of the Hong Kong consumers that would make them appreciate crisp and snack
food products?
u What specific crisp and snack items are highly accepted and patronized by Hong Kong consumers?
u What are some of the effective entry strategies that a business firm can utilize when it decides to enter the
Hong Kong crisp and snack market?
In order to answer the research questions, the report first discusses the general characteristics of Hong Kong
consumers as well as the type of consumers who are more appreciative of crisps and snacks food products. Second,
the report explains the specific preferences of Hong Kong consumers relative to snacks and also presents some
statistics on Hong Kongs consumption of certain food products. Finally, the report identifies some forms of entry
strategy that would work in Hong Kong by presenting specific examples.
The United States (U.S.) Department of Agriculture (2003) reports that as societies modernize, people are
forced to adopt hectic lifestyles that make them indulge in snacks between meals. Thus, the global world gives birth
to a breed of global consumers who have two similar characteristics changing and busy lifestyles that drive
increase in demand and consumption of snacks, and preference for new tastes and brands from other locations in the
world (). Hong Kong is a typical example of an urbanized society where people struggle to stay economically stable.
Hong Kong has one of the most developed economies and highest standards of living in Asia. In 2004 the countrys
per capita gross domestic product (GDP) was pegged at $23,680. The continuous economic prosperity of the country
is supplemented by many people who are increasingly adopting Western lifestyles (Hong Kong 2007). Scott
Reynolds, former United States Assistant Agricultural Officer in Hong Kong, once said that Hong Kong is generally a
very receptive market for exports from other developed countries like the United States. He further elaborates by
saying that Hong Kong is a fast-paced society marked by aggressive economic activities which makes it very similar
to many cities in the United States. Accordingly, the progressive economy and busy lifestyles of the Hong Kong
populace make fast foods and snack foods desirable as these products serve as quick meals for people who are
always on the go ( 1991). Hong Kong has a population that is one of the most urbanized, affluent and receptive to
new food products in the entire world. People in Hong Kong have diverse tastes and are willing to try new tastes and
various brands. In 2001, the country obtained snacks imports worth US$ 234 million (US$ 50 million from China,
US$ 33 million from Japan, US$ 21 million from South Korea and US$ 19 million from the United States (2003).
Furthermore, (2001) states that salty snacks such as potato chips and pretzels are very popular among young
people aged fifteen to twenty-four in Hong Kong. This is mainly due to the growing influence of Western countries to
the Hong Kong population (). Reynolds explains that most people in Hong Kong, particularly the younger generation,

have started to adapt the Western styles of living in the last ten to twenty years. This influence is evidenced by the
spread of many Western-based convenience stores like 7-Eleven operating on a 24/7 basis and giving unlimited
access to snacks and crisps products to young professionals and teenagers ( 1991). A report published by the
Foreign Agricultural Service in 1999 showed the attitudes of some Hong Kong inhabitants regarding salty snacks. The
study concluded that snack foods and salty snacks have generally been a highly lucrative business in Hong Kong due
to increasing customer demands, especially from young adults (2001).

Attribute

Salty Snacks

Percent of shoppers who have purchased crisps

and snack items
Age category with the most purchases
Purchase frequency
Most important reason for buying

50 percent

15 to 24 years old
3 to 4 times a week
Taste (50% response)

Percent of buyers eating products as snacks

81 percent

Percent of buyers eating products as a meal item

3 percent

Figure 1: Food Attitudes of Hong Kong Chinese Purchasing Salty Snacks ( 2001).

The Hong Kong market for crisps and snacks is dominated by potato chips, nuts and dried fruits (2003, ).
(2001) claims that the potato chip sector of the Hong Kong crisps and snacks market is in a boom. Potato chips were
valued at 30 percent of Hong Kong's total snack food consumption between 1997 and 1998 as revealed by the
Foreign Agricultural Service (). Dried meat and seafood snacks are also gaining popularity but local manufacturers fail
to suffice the growing consumer demand for these products ( 2003). Dried seafood and meat products established a
growth rate of around 15 to 20 percent growth in 1999 and are continuously gaining a large market share (2001).

Snack Foods

Historical Development

- Rapid growth over 5 years

Potato Chips

- Aggressive marketing by suppliers

- Foreign product dominates
- Other Asian products have done
well because of attractive packaging
and formulation to Asian tastes

- Substantial growth over 5 years

Dried Meat Products

- Local product dominates

- Other Asian products have done
well because of attractive packaging
and formulation to Asian tastes
- High growth over 5 years

Dried Seafood Products

- Local product dominates

- Other Asian sourced products
have done well because of
attractive packaging and
formulation to Asian tastes

Figure 2: Hong Kong Snack Food Market Brief (2001).

Japanese manufacturers and local producers are the leading providers of potato chips in Hong Kong while
exporters from the West dominate the dried fruits and nuts sector particularly pistachios as well as serve as
secondary producers of potato chips ( 2003). Moreover, most of Hong Kongs people still abide by the traditional
Chinese cultures preference for healthy foods like fruits. Thus, the fast-paced lifestyles in Hong Kong and the

inherent attribute of the people to welcome new products have given rise to a call for contemporary healthy snacks.
Today, Hong Kong consumers demand for high-quality, healthy snacks such as dried fruits, fat-free potato chips, lowfat crackers, protein and energy bars, low-fat cookies, low-fat tortillas, low-fat ice cream, frozen yogurt, dairy-free
cheese, healthy beverages, sauces and salad dressings (1997).
Hong Kong has a consumer-based economy that is an active participant in international trade. The
government does not implement strict quotas, tariffs and other restrictions on food products and beverages except
alcohol, soft drinks and tobacco. This attribute makes Hong Kong an attractive destination for multi-national
corporations and global exporters (1991). A study conducted by the Foreign Agricultural Service in 1999 found out
that twenty-one percent of Hong Kongs population becomes oriented with food products through advertising and
seventy percent thinks that attractive packaging and brand are important for a foreign or local food product to sell
(2001). One of the most successful strategies for gaining entry into the Hong Kong crisps and snack foods market is
through aggressive promotional activities that highlight the brand and attractive physical appeal of the products.
Potato chips, for instance, gained much popularity and acceptance because of active promotion by major suppliers
coupled with solid distribution channels such as supermarkets and convenience stores which are typical locations of
mothers and working professionals, and bars, nightclubs and Karaoke bars - locations that are frequented by young
people (2003). Another important strategy is through trade shows. Companies aiming to penetrate the snacks and
crisps market of Hong Kong should conceptualize trade shows that would showcase a diverse range of snack
products in appealing packages in order to entice Hong Kong consumers. Trade show is also a potent venue to
develop business affiliations with Hong Kong trading partners (1991).

RESEARCH APPROACH
Accordingly, snacking behavior provides fertile ground for examining situational influence in another culture to
determine whether situational analysis is useful beyond the HK market. The study method utilizes regression
procedure to characterize each snack product in terms of its suitability for every situational factor. Then, research on
HK snacking from a consumer behavior perspective is relatively scarce. Researchers have focused on consumer
demand or descriptive analyses of consumer spending patterns. Several studies show that consumers spend more
on packaged snack foods and less on fresh food (1994). Promotions contributing to the shift in consumption tout
confectionary snack food products and salty snacks as healthy, nutritious and high-energy alternatives to other
healthy types of snack food.

Since, the manufacturers of the product does not know if the certain crisp snacks which are based in United
Kingdom will have positive impact in Hong Kong and be successful within their market, it is just appropriate for the
crisp snacks manufacturers to undergo research investigation and find out assumptions pointing towards global
market communication of the product, and be able to look further on such management within brand value and its
identity respectively. The research approach proper for the market research is basically to gather first hand as well as
secondary information through such techniques such as case study and its useful analysis, the case pointing towards
the determination of characteristics of the Hong Kong consumers in terms of appreciating certain crisp and snack
food product, probably the survey questionnaire is essential for the study particularly, The Consumer Satisfaction
Survey, as it will help assess as to what specific crisp and snack items are to be accepted by the Hong Kong
consumers. Aside, there can be the utilization of effective entry strategies such as considering the related market in
lieu to location of business, and mostly, knowing the reality that competition is tough in the HK markets in such goods
and services. The manufacturers need to identify areas in which it outshines competitors and take advantage of those
strengths. The key principle will depend in selecting appropriate brand communication measures and its process hat
can contribute to the HK society as a whole rather than benefiting within a single area and or service units.

The first step is to conduct marketing and branding evaluation cycle enabling the organization to realize the
decisions made upon allocation of resources intended to generate branding stability to reach organization success.
(1992) The members of the strategic planning team can develop forecasts to determine whether a brand unit will
basically support promotions and market entrance in support to strategic brand management plan as the proper
information integrates value for analysis in terms of developing a strategic brand communication direction and
pursuing specific brand services. This will help the business to identify which markets will produce the strongest
brand communication impact to its partners and catered group respectively. (1992)
The Study for HK Market Demand
There will determine brand lines offering potential growth and will then look into the demand for certain
services like for instance, information on health status through the services being offered in finding opportunities and
challenges (2000) and explores the possibility of adding a patient service through examining its database to
determine the number of procedures it has performed or the number of patients admitted in a given brand
communication line. Thus, marketing information can be used to create a psychographic profile of consumers and
define such consumer concerns and needs; identify relevant traffic patterns and shopping habits of area consumers
and determine the media, methods and referral networks that can be used to reach a target market and develop a
strategy for promoting appropriate brand communication services. (2000) The business marketing staff may gather

some qualitative information on the selected group to find out their opinions on crisp and snacks foods from UK,
facilities and brand value image and how they make healthcare choices.
Measuring Product Market Profitability
There is cost system within the organization that enables financial managers to determine whether certain
brand communication have better margins than others and receive better service development that will help Walters
for example to, evaluate whether a marginal service could become profitable if the volume increased Aside, there
should analyze the service mix profile and come up with a profit and loss for growth upon upgrading brand processes
(1998). The manufacturers may choose to provide how to imply its branding power even if it's not profitable through
strategic brand management plan as non-profitability could be a service's contribution to positive reserves and yet
help enhance organizations brand image for future growth.

The development of a new communication channel for instance, may improve the flow of customer
satisfaction and give referrals for using the products. There should evaluate the strategic fit between the service and
the organization's mission. It then must develop better revenue and contribution forecasts as the management must
asses what brand communication affects the service and determine whether such project meets the brand
management objectives. ( 1998 )
Market and Brand Investment
To be successful with its brand management plan, Walters for instance, if entering to the HK market for their
crisp snacks needs to apply marketing skills to attract and retain customers as well as patients, public relations efforts
should be formulated and targeted to identify markets. Unduly restricted or limited marketing efforts can hinder the
success of brand communication management and its role in useful strategic brand planning (1991). Moreover,
despite the risk of stifling their marketing programs' effectiveness, many hospitals cut marketing budgets because
they do not see the area as a revenue generator, in order to counter this perception is to treat marketing as an
investment that should be tracked, measured and evaluated for reasonable returns as well as the need to pare down
their approaches to audience segments for the usage of specific brand and communication services. ( 1991)

The process involves identifying the concerns of a target group by customer service and or brand identity and
develop useful message to reach those individuals through appropriate media. For example, Walters firm can
develop a marketing campaign for creative product brand message that has connection to the HK consumers
probably, touching a bit of the country's culture. ( 1991) Furthermore, consistent marketing campaign, tied to the
strategic plan, should motivate potential consumers of the product as it increases in volume as cost effectiveness of
marketing strategies need have to undergo analysis. (1990) An integrated program of marketing and strategic
planning balances qualitative and quantitative analyses with sound use of reliable analytical techniques and careful
planning are markers of brand planning success. Thus, building strength of brand, there can develop global campaign
to coordinate efforts among various business partners, collection techniques and marketing strategies. ( 1990 p. 40)
Businesses with strong brands have much to lose as well as gain, as the stakes rise as the donors must decide when
and where to contribute and establish a reputation for competence in the minds of HK consumers. Furthermore, to
identify the issues it must deal with to ensure growth and development and then adopt a strong brand communication
system as there is a significant difference between brand strategy and mid to long-term management planning: the
brand strategy is drawn up based on future goals, while brand management planning is carried out based on the
current situation of the organization. (1993)

Henceforth, the brand strategy provides future image for crisp snacks business
to have better plan of action and criteria against which to judge actions, while mid to
long-term management planning covers better communication management indices
(1994 ) When services consist of solving different problems in different ways one earns
a good reputation. When services consist of solving the same problems in predictable
ways, one has the makings of a brand. In many areas where nonprofits are active there
are no widely accepted ways of delivering services (2000). This is exciting and
personally rewarding for those involved, it just doesn't necessarily lead to good
conditions for a brand name only when there is a well-established framework for
providing services can a true brand name even have a chance to emerge. (1994) A
growing number of nonprofits have a different problem: multiple brands. It is always
easier when there is one brand and it resides in the operating organization but forces
such as the fragmentation of funders and the needs of different populations can make it
essential to have multiple brands. ( 2000) Multiple brands are inevitable as long as the
scale of the programs remains small and the programs distinct enough the situation is

manageable, snacks business in HK will quickly develop an overload of brand names.

(1994 )

Moreover, such commercial relationships increase the likelihood that a charity's

independence from outside influences will be compromised and there will develop
strong perception among potential HK consumers (1984). Then, the commercial
endorsements will increase potential market growth and stability in achieving the
presented discussion, Consumer Satisfaction Survey can be one factor for gaining valid
and reliable research study. In competitive markets, the profit motive generates
incalculable human benefits by motivating businesses to outdo each other in providing
the public with higher quality goods and services at competitive prices.
Aside, brand identity is important in establishing a link between a customer and
the product, the understanding of brand, marketing strategy and determining role played
by the database. (1984) In addition, brand communication should establish results of
the marketing strategies. The creative expression of the brand should provide
personality across market mix and achieve consumer loyalty and adapt to the changing
environment (1993). Rethinking brand management and how it relates to its business
strategy. They must regain focus on differentiating the fundamental brand proposition
and must build a much stronger set of marketing and management capabilities and take
a much broader view of the goals for their products and businesses (1998). Brands
guaranteed quality and premier brands went beyond quality to deliver value and image
propositions. HK people no longer live in a world where great brand marketing make
successful organizations and even with a sound brand communication proposition,
there are significant challenges such as the following: (1998 )
u

Competing with one's own channel for control of the consumer relationship

Exploiting niche and data base marketing

Maintaining brand equity

Lowering product and marketing cost

Managing across supply chain

Creating customer and supplier information linkage

Moreover, the information technology will play a crucial role in developing brand
management communication as the organization may spend on technology, information
and value analysis in order to understand the underlying economics of intangible
products and make better decisions, measuring media and promotional effectiveness
and achieving greater value for brand and its communication ( 1997). Furthermore,
brand management has provided a useful set of tools to draw on and adapt to enable
them to be more focused, to create a stronger sense of brand value and direction, to
understand the external environment better and manage effectively the development of
snacks production ways. (1997 ) In reality, there is a wide range of perspectives, models
and tools which can be described under the heading of brand management plan and
some are in conflict with other brand communication approaches as it provides useful
work environment essence (1997) having brand-driven management results. (1997 )
RESEARCH DESIGN
Instrument development
The subjects represented various demographic characteristics in terms of age and background. The
questionnaire can be designed to elicit an understanding of situational factors that affect snacking behavior and
products that HK consumers chose to satisfy their snack needs. Three situational factors are to identified such as:
whether snacks are consumed at home or away from home
whether snacks are consumed in the morning or afternoon
whether the snacker will eat alone or with others.

Identification of snack foods

The research consultants felt that the list was an efficient representation of the results of the focus group
interviews and captured a broadly defined snack market. Furthermore, since this was the first empirical investigation

of situational influence in the HK snack market, a broadly defined market provided a more useful baseline for future
situational research that may investigate more narrowly defined sectors of the HK snack market.
Questionnaire Construction
The questionnaire required respondents to rate the appropriateness of the ten snacks in each of the eight situational
scenarios, using a five-point scale (1 - inappropriate, 5 - appropriate). The usage preference and usage likelihood
scales were not chosen because they tend to reflect current usage patterns that are not the focus of this study. The
questionnaire will include demographic questions to assess sample adequacy. The data are to be collected to provide
an opportunity to assess the nature of the sample.

The focus of research methodology will emphasize on Hong Kong consumer

perception of the crisp snack foods as the method of application involves the process of
survey questionnaires to be answered by certain respondents as the consumers are
adapting to the presence of fast moving consumer goods such as pastas, noodles and
personal supplies that are easily sold under the stores counter. Moreover, designing,
organizing and conducting a questionnaire survey is like running a business as it
requires good knowledge and skill and specific training although some people assume
that starting a business requires no special skills beyond a willingness to try.
The questionnaire is more than a list of questions. Rather, it is a scientific
instrument for measuring and collecting particular kinds of data and must be designed in
accordance with particular specifications and tailored to the specific aims of the
surveyor and by keeping potential consumers in mind, the surveyor is more likely to
determine those questions that will be most meaningful and useful.
Obtaining information
Once the problem has been defined and the decision to conduct
a survey finalized, the surveyor should next decide what survey method should be
used to obtain the desired information from the respondents. Although it is sometimes
possible to survey an entire population, generally this technique would result in an
unwieldy amount of data. To limit the population surveyed, a sample is drawn to reflect
the characteristics of the total population.

Research Sample

Research sampling assures the elements in the population the same chance of
being chosen for inclusion in the survey. If the sample is chosen at random and is
sufficiently large, it will represent all the groups in the population in approximately the
correct proportions. One advantage of random sampling is no advance knowledge of
the characteristics of the population is necessary. A disadvantage of the technique is
that a low percentage of returns could result in an accidental sample. There has to be
100 HK consumers in total that was selected randomly in various malls and stores in
wherein several of the crisp snack foods are present. The procedure calls for dividing
the population into two or more strata and then drawing a random sample from each
stratum that will depend on the number of samples selected to relate to the consumer
preferences data as they occur in the population, random sampling is applied in the
study as for the fact that achieving an equal number of samples is very difficult to reach
in the actual practice. Select the sample so its averages ages from ages 25-45 years
old for the known characteristics believed relevant to the research findings as it
resembles the population's frequency distribution. If the sample will be used to make a
percentage estimate of the population, a preliminary estimate of the approximate size of
this percentage is needed.

DATA ANALYSIS

The analysis of the procedure should be included at p<0.05, adjusted

R2, measures that will indicate strong relationship between the situation and snack
appropriateness ratings. The HK market with several competitors are attractive since
there exists ample opportunity for additional product or brand alternatives. Although
markets with many competitors are generally not attractive opportunities, the
methodology utilized by the study allows the marketer as well as the manufacturer to
assess the quality as well as the quantity of competition. The open-end questions give
respondents free latitude in making their responses. An example of such a question is
"What is the principal reason for your dislike of product A?" A drawback to their use is
that open-end questions may yield such a variety of responses that the task of
condensing and analyzing them is both time consuming and difficult to handle
statistically. Multiple choice questions allow respondents to choose from among several
possible answers and that the question outcome can be tabulated easily and interpreted

with greater precision than can answers to open-end questions. Multiple choice
questions may take any of several forms; arguably the most popular of these are
checklists and rating scales.

There is more to developing good questionnaires than just wording good

questions,
it
is
important
to
have
scheduled
a
desired
time.
Successful questionnairedevelopment includes identifying the specific problem,
understanding the subject matter and knowing the respondents, as
appropriate survey method, sample size, type of sampling and type of questions have
to be given adequate consideration. Survey research is a powerful tool that can help
technical communicators identify and elaborate on the theories and practices. In most
cases, the respondents want to know how the researchers are going to use the data
and to what ends. Since, the respondents' names are not important in most mailed
questionnaires, respondents should be told not to include their names on
the questionnaire. If names are requested, researchers should explain the purpose
and the procedure for ensuring confidentiality. Researchers decide to use open
questions and unstructured responses must then decide on the structure and scope of
the questions.
Survey Evaluation
Part of the evaluation is determining reliability and validity, as discussed earlier; however, other evaluation
activities should also be conducted. The follow-up procedure should be evaluated to determine whether it improved
response rates and whether it was worth its expense. The questionnaire itself also needs to be evaluated. Even with
pilot testing, problems can arise with question ambiguity, questionnaire length, unanswered questions, and misread
instructions. Documenting these problems immediately at the end of the study aids in revising thequestionnaire if it
is to be used again. The adequacy of the budget should be evaluated to determine which tasks required more or less
time and money than anticipated; these budget evaluations will be helpful for future research. The study also aims to
give a clear emphasis on the needed aspect of the topic in gathering coherent evidence for the validity of research
information and findings integrating HK consumer preferences, it is possible that the study would be inexpensive and
time-efficient. Thus, this study will use the descriptive approach. The purpose of employing this method is to describe
the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena. The
questionnaires will be of a non-threatening nature and can be completed within 30 minutes. The respondents will

grade each statement in the survey questionnaire using the Likert scaling wherein respondents will be given such
response choices. The results will then be tabulated and averaged to get the strengths and weaknesses of each
question in the survey.

LIMITATIONS

The research study relies solely on available information about the viability of the Hong Kong crisps and
snacks market to foreign companies. The data yielded by this study are entirely condensed from existing information
and does not include any opinion of people who are proficient with the topic. The researcher only wishes to present
relevant and published information about characteristics of Hong Kong consumers that make them enjoy snacks and
crisps products, dominant snacks in Hong Kong, and kinds of entry strategies that would entice the consumers. The
researcher attempts to minimize time and money in this research by utilizing the exploratory approach.