Ayam Kampung.com: 4.0 Market Analysis

4.1 Market Segmentation

Market segmentation is very useful in order to expand and gain profit to the company because we can satisfy the needs of customer better. As one of the company that produces ayam kampung in Malaysia, Ayam Kampung.com has spotted three different market segments that we will sell to:

4.1.1 Grocery store

Our first market segment is the grocery store. This kind of store is very common at any housing area like at the urban area, sub urban area and village. The people at the area will regularly go to the grocery store to buy some item that they need. So, the people in this area will recognize our products little by little.

4.1.2 Supermarket

Our second segment is the supermarket. This is very familiar and very well known place to go by customer because it served various kind of item from wet goods to dry goods, household and so fort. Small and medium industries; through Federal Agriculture Marketing Authority (FAMA), like to introduce their products through supermarket such as Tesco and Giant. They will act like a retailer to our products. Therefore, our products will be known in a larger area.

4.1.3 Wholesale market

Our third segment is the wholesale market. This place is very suitable for wholesaler because they can get many items with the reasonable price. Customers prefer to come to this place especially during festive season because they can save a lot. Wholesale market can be our retail place to distribute our products.

4.1.4 Others

This segment is including individuality and also promotion. We can be closed to customer because we face to face with them and know what they needs.

Pie Chart 1 : Chicken market segment

We divided our market segment into four categories. Supermarket and wholesale market are 30% each and grocery stores and others are 20% each.

4.2 Target Market Segment Strategy

Good strategy of the target market will bring our company to success. Since Malaysian people consists of different races and different age, marketing of ayam kampong should suitable with the market needs, market trends and market growth. People need protein a lot according to food nutrition beside the carbohydrate. So, it is suitable for people to eat chicken because it contains protein that we need but they must think carefully because the chicken in the market now consist of chickens that have been injected with hormone. They must choose ayam kampong because they are free from hormone. That’s why we need good strategies to make the people choose our product. The quality of this type of chickens also the main factor people want to buy it.

Other than that, to support this strategy, we will attend industry trade shows and agriculture shows. This strategy will allow us to form partnerships with people and organizations that can help the company establish the highest level of product performance and customer service. It is expected that customers such caterers, especially those serving high-end corporate and private events, and upscale restaurants seek high-quality specialty chicken at reasonable prices. Other than that, businessmen or businesswomen will see this as the chance to cooperate with our company.

4.2.1 Market Needs

Since Malaysian like to eat chicken, there are a lot of chicken products in the market. Usually these chicken products used the chickens that have been injected with hormone. It can contribute to health problems. Our market is made up of consumers who consist of many races and many different ages. It is important for us as the chicken’s supplier to produce chicken that not contribute to health problems to human. That’s why our company target is to produce ayam kampong that more healthy and have high quality as the product. We realize that the importance of health to mankind. Our market now needs something different for the chicken products.

Other than that, chicken eggs are also important products that have been used by Malaysian in their dishes. So, ayam kampong eggs are suitable for them to use it in the dishes. It is because these types of eggs are pure and original. The desire of the quality will cause people need to choose the best one for their life. Their eggs also have high protein. Then, it is suitable also to children since they need a lot of protein for their growth.

4.2.2 Market Trends

Nowadays, most Malaysians emphasis about eat healthy food. So, our product is the best way towards healthy food because chickens that we produced is free from chemical substances like hormone injection, chemical based foods and have a proper health care for our product. This is to ensure that our product is always fresh and safe to eat. At Ayam Kampung.com, we have a motto that ‘Customer Satisfaction Is Our Main Goal’.

Moreover, our chicken is feed with Habbatus Sauda that is the herbal to avoid disease infection. The next market trends for our product are to supply the Halal and Toyyibah (means clean in Arabic) food product that based from chicken. This is support our government plan to be the world Halal-hub. Muslims are compulsory to seek for Halal product as been emphasised in Al-Quran. As we know, most of Malaysians are Muslims and our product has the Halal certificate from JAKIM (Jabatan Kemajuan Islam Malaysia) and Husbandary Practice certificate from Jabatan Perkhidmatan Haiwan Malaysia. Current market trends also shown that the consumer tends to prefer chicken eggs that have Omega 3 nutrient than the ordinary one. Furthermore, the market trend shows that most Malaysian eat chicken as their main food.

4.2.3 Market Growth

The growth in our product market is increasing slightly by time. As we gain trust from our customer, we also receive many orders from restaurant, supermarket and from individuals. The order that we receive is increasing extensively when festive season comes especially during Hari Raya Aidilfitri and Hari Raya korban. As for the record, the number of product that we sell is plotted on the graph below. This graph show for the September-December 2010 market growth:

Graph 1: Ayam Kampung.com selling

Based on the graph, our market for every type of product is increasing. In the month of December, the amount of chicken sell is the highest because of the various functions held such as wedding ceremonies and others.

Our market also have extend to other states like Selangor, Perak, Kuala Lumpur, Negeri Sembilan, Penang, Kedah, Pahang, Terengganu and Malacca. On future, we have a plan to extend our product to all states in Malaysia including Sabah and Sarawak. On Jan 2011, we have received a tender to supply our product to Giant and Tesco in Seri Manjung, Perak.

4.3 Industry Analysis

Industry analysis is a market strategy tool used by business to determine if they want to enter a product or service market. Company management must carefully analyze several aspects of the industry to determine if they can make a profit selling goods and services in the market. Analyzing economic factors, supply and demand, competitors, future conditions and government regulations will help management decide whether to enter an industry or invest money elsewhere.

4.3.1 Industry Participants

4.3.1.1 Frozen Chicken

Bekalan Sri Saga
32 Lintasan Perajurit Enam
Ipoh Perak
Tel: 605-5468284
Hua Lyeong Creameries
152E Jalan Kota
34000 Taiping
Tel: 605-8074620
Wah Seng
No. 8 Market Terrace
Ipoh
Tel: 605-2540267
Pu Sang Frozen Food Co.
No. 5 Jalan Jelf Ipoh
Tel: 605-2535098
Ipoh Frozen Food Co.
86, Jalan Sultan Idris Shah
Ipoh
Tel: 605-2532896
Syarikat Perniagaan Intan
Lot 12643 Jalan Changkat Jong
36000 Teluk Intan
Tel: 605-6211442
Rajni Daging Beku
Perindustrian Menglembu 2
Menglembu Light Industry
Tel: 605-5482712
605-5472561

4.3.1.2 Eggs

Yong Kim Wong
891 Queen Street
Pasir Pinji Ipoh Perak
Tel: 605-3214161
Teng Shoy Kau
40 Kg. Chengkal
35600 Sungkai Perak
Tel: 605-4387330
6019-5565019
Ng Joo Sang
37B Jalan Besar
Simpang Empat Semanggol
34400 Bagan Serai
Tel: 605-8901470
4. Lim Leng Chua
Syarikat Lean Hong
48 Batu 5 Jalan Baru
34200 Parit Buntar
Tel: 605-7161557
Yu Seng
Ayer Tawar Perak
Tel: 05-6725516, 016-5414335
Penternakan & Pembekal Ayam Joo Long
86, Jalan Raya, Serdang
09800 Kedah
Tel:0-604-4077423

4.3.1.3 Chick

Leong Hup Poultry Farm Sdn. Bhd
Lot 29 & 30
Gopeng Industrial Park
Gopeng Perak
Tel:603-7822818
Dinding Broiler Breeder Farm Sdn. Bhd.
Batu Undan Segari
Lumut Perak
Tel:605-6917532
Evergreen Breeding Farm Sdn. Bhd.
Lot 2263 Batu 10 Jalan Trong
34850 Changkat Jering
Taiping Perak
Tel: 605-5075613
D.B.E Breeding Farm Sdn. Bhd.
Lot 5461
Jalan Ladang Mara
32010 Simpang Tiga
Tel: 605-6914650
Linggi Poultry Farm (M) Sdn Bhd
Lot 658 Kampung Bekut
Mukim Pulau Kamiri
31100 Sg Siput(U), Perak
Tel: 605-5971960/1962

4.3.2 Distribution Patterns

4.3.2.1 Frozen Chicken.

4.3.2.1.1 Frozen Chicken Packaging

The package allows to extend products shelf life, keeping its traditional look :

Figure 1: Chicken packaging in flow pack wrapper (HFFS) with modified atmosphere (MAP) using BDF shrink barrier film

Cost effective Modified Atmosphere package

4.3.2.1.2 Poultry Processing Comparison

The sequence Ayam Kampung.com of processed chicken	Poultry Processing Practices in Malaysia
Only selected only healthy chickens for slaughter	Regardless of the type and condition of the diseased poultry, including chickens were slaughtered and performing for the benefit of
Without Stunning	Using Stunning (Stunning is the process of chickens immunized with electric shocks before slaughter)
Intestine removed before the next	Intestine filled with chicken droppings are not removed until the process is completed
Chicken doused with water to clean the droppings and feathers attached to the blood	Blood and stool can contaminate the left until the chicken meat
Chickens placed in a clean hot water to soften furs	Chicken hot water included in the condensed contaminated by poultry faeces and blood
Water temperature is controlled at 600C so that water does not penetrate the chicken meat	Industry standards set temperature 700C to 750C. At high temperatures, this water filled with excrement and blood can penetrate the chicken meat
Chickens placed in ice water without chemicals and chlorine	Chicken into the water ice is mixed with chlorine to look fresh chicken for a few days, when sold in the market.
The process is not done because the water pushed against the laws to cheat the scales	Techniques "induce water" (the pushing of water) into the chicken body to gain weight and make money by cheating
Once processed chicken cut and washed thoroughly before packaging and stored in cold rooms with temperatures 210 C so that the chicken is free from bacteria and are always fresh and not harmful to human health.	Chicken is sent to the sales center, wet markets, supermarkets, retail stores and night markets
Chickens are transported to markets by truck refrigerated cool to cold chain is not broken	Normally, chickens are transported by trucks and vans with no freezing facilities, again, the chicken is contaminated with bacteria

4.3.2.2 Ayam Kampung.com Eggs

Figure 2 : Packaging Of Shell Eggs

4.3.2.2.1 Packaging Of Shell Eggs

Nature has given the egg a natural package - the shell. Despite its relative strength, the egg is an extremely fragile product and even with the best handling methods, serious losses can result from shell damage. Economical marketing generally requires that eggs be protected by the adoption of specialized packaging and handling procedures.

Functions of packaging

Packaging is an important component in delivering quality eggs to buyers. It embraces both the art and science of preparing products for storage, transport and eventually sale. Packaging protects the eggs from:

micro-organisms, such as bacteria;
natural predators;
loss of moisture;
tainting;
temperatures that cause deterioration; and
possible crushing while being handled, stored or transported.

Proper handling and storage, as seen in the previous chapter, help control moisture loss, but appropriate packaging may also help prevent it. Eggs also need to breathe, hence the packaging material used must allow for the entrance of oxygen. The material used must be clean and odorless so as to prevent possible contamination and tainting. Authentic egg packaging materials can be reused, but careful attention must be paid to possible damage, odors and cleanliness. The packaging must be made to withstand handling, storage and transport methods of the most diverse kind and to protect the eggs against temperatures that cause deterioration and humidity.

Many factors must be taken into consideration for packaging eggs. It is important to obtain information regarding the necessary requirements for a particular market, such as:

quality maintenance;
storage facilities;
type of transport;
distance to be traveled;
climatic conditions;
time involved; and
costs.

4.3.2.2.2 Storage Of Eggs

The storage of shell eggs during the main laying season, in order to conserve them for consumption when they are scarce, has been practiced for many centuries.

For the successful storage of eggs, the following conditions must be met.

The eggs placed in storage must be clean; they must not be washed or wet.
Packaging material used should be new, clean and odorless.
Loss of water due to evaporation should be reduced to a minimum.
The storage room must be free from tainting products and materials and should be cleaned regularly with odorless detergent sanitizers.
The storage room must be kept at a constant temperature and humidity must be checked.
There should be air circulation in the storage room.
Eggs should be stored so that they are allowed to breathe.

If all of the above requirements are to be met, refrigerated storage is necessary.

Cold storage of eggs

In the tropics, eggs can deteriorate very quickly unless they are stored at low temperatures. The ideal temperature for storage in such climates is 13°C or lower (usually between 10° and 13° C). Here refrigeration is a necessity for successful commercial storage; however, it may be unavailable or the costs too high.

The most important factors in successful cold storage are as follows.

The selection and packaging of eggs.
The equipment and preparation of the cold store.
Proper temperature, humidity and air circulation.
Periodic testing for quality.
The gradual adjustment of eggs to higher temperatures when removed from storage.

Economics of cold storage

There is a tendency to underestimate the difficulties involved in providing good cold storage facilities and to recommend their installation without adequate investigation of their cost and potential economic return. The following factors should be considered when contemplating cold storage.

Refrigeration is a complex and highly technical business.
Capital investment and operating costs must be estimated.
Potential available business must be appraised.

4.3.2.2.3 Transport Of Eggs

For the successful transport of shell eggs three essential requirements must be met.

1. The containers and packaging materials must be such that the eggs are well protected against mechanical damage.

2. Care should be taken at all stages of handling and transport. Workers handling eggs should be instructed so that they appreciate the need for careful handling. The provision of convenient loading platforms at packing stations, loading depots and railing stations, and handling aids, such as hand trucks and lifts, are of great help.

3. The eggs must be protected at all times against exposure to temperatures that cause deterioration in quality as well as contamination, especially tainting.

The permissible range of temperatures during loading and transport depends on the local climatic conditions and the duration of the journey.

4.3.2.3 Chick High Quality

Figure 3 : Box for Chick Packaging

Figure 3 : Chick High Quality Packaging

4.3.2.4 Chicken manure fertilizer.

Chicken manure can be used for any soil and any planting, but you can use it the most rationally in vegetable-growing especially hothouse for both vegetation and bearing. Using granular and powder chicken manure you can decrease to use of mineral fertilizers.

Factory dry and press the chicken broilers drop and we have chicken manure size 8x10 mm. It is convenient for packaging, transportation, long term storage, dosing and dissolving.

Universal, put in soil in Spring, Autumn as 5-10% water grout. Dissolved completely 1 hour (can be dissolved completely in soil). Recommended to put granular chicken manure in planting hole – 40 g in hole. It does not burn the seeds or roots (no more ammoniac acid, but it does have nitrogen more than in any granular humus).

4.3.3 Competition and Buying Patterns

Our competitor such as Ayam A1 Company, Ayammas and HPA, they provide services of selling their product to their customer by bulk or grocery. Based on observation and analysis of our finds, customers who buy a product from the company are mainly bought in bulk because they did not provide specifically for the central purchasing for the people who want to buy chicken in retail or grocery.

Usually the buyer comes from a group of people or organizations who book in bulk or lots. they are less stressed individuals or private buyers because they only target their products to the middle to gain a lot, but when a product to the middlemen, the price was going up and will charge users.

For our company, the buyer comes from all ages and groups. Many consumers who buy our products consist of individual and group users. This is because our products more accessible for our company's strategy with the opening of our Chicken Shop where people can get the quality and cheaper price of chicken without the middlemen price.

For group buyers, they are come from large supermarket such as Tesco, Giant and Econsave, where they are more concerned about the product line of healthy, clean and high quality. For export trade, our products are also got good response and demand from Muslim countries like Brunei, Indonesia and countries in the Middle East. This situation encouraged by the awareness of the importance of health and halal food.

4.3.4 Main Competitor

4.3.4.1 About Main competitors

Ayam A1 Food Corporation Sdn. Bhd. ( A1FC ) formerly known as Bintang Lapan Sdn. Bhd, was incorporated on 1st August 1984. The company commenced its business operations in 1985 with its broiler slaughtering plant located in Sungai Buloh, Selangor and subsequently changed its name to the present name on 5th March 1996. The company is a wholly-owned subsidiary of Leong Hup Holdings Berhad (LHHB) - a public listed company in the main board of Kuala Lumpur Stock Exchange (KLSE). LHHB is one of the largest integrated poultry producer group in Malaysia, with its wide range of business activities in the breeding, rearing, slaughtering, processing and retailing of chickens and eggs.

Ayam A1 consists of the following group of companies-
1) Ayam A1 Food Corporation Sdn. Bhd.(124091-M)
2) Ayam A1 Food Processing Sdn. Bhd.(185160-U)
3) Ayam A1 Chicken Shop Sdn. Bhd.(174309-P)

Ayam A1 Food Corporation Sdn. Bhd. produces fresh chicken, chicken parts and chicken special cuts at its plant located in Sungai Buloh, Selangor. All its products are certified "Halal" by the Islamic Development Department of Malaysia and bear the "Veterinary Health Mark" issued by the Department of Veterinary Services for compliance to all veterinary inspection regulations and quality requirements. Ayam A1's products are widely distributed to hypermarkets, supermarkets, food wholesale distributors, restaurants, convenience stores as well as to all Ayam A1 chicken shops in Malaysia. Meanwhile, Ayam A1 Food Processing Sdn. Bhd. is also principally involved in the production of further processed products such as chicken nuggets, chicken frankfurter, chicken drummets and etc.

4.3.4.2 Different Product And Services Ayam Kampung.Com And Ayam A1.

Matter	Ayam Kampung.com	Ayam A1
Chicken types.	Use only the finest types of organic chicken.	Use only regular chicken.
Slaughtering method	Using manual and automatic machines means to maintain the sanctity of the slaughter and the accuracy in accordance with Islamic Shari'a.	Using machine to slaughter the chicken. The operator working this section mostly non Muslim.
Certification / Standards.	1) Moody International for ISO 9001:2000 and in compliance with HACCP Food Safety Standards. 2) Poultry halal certification from Jabatan Kemajuan Islam Malaysia. 3) Halal certification of Halal Products Organization (HPO) 2011 4) Monitored by the Ulama Council Malaysia	1) Certified "Halal" by the Islamic Development Department of Malaysia. 2) Veterinary Health Mark" issued by the Department of Veterinary Services 3) ISO 9001:2000 standards.
Product.	1) Whole organic chicken 2) Omega egg 3) Marinated Chicken 4) Chicken parts 5) Bone-in, Nugget & Chunky Meat 6) Chicken manure fertilizer 7) Feather / feather-based handicraft 8) Chick	1) Whole organic chicken 2) Egg 3) Chicken parts 4) Bone-in, Nugget & Chunky Meat
Chicken Shops	1) Ayam Kampung.com operates a total of 4 outlets and 1 kiosk in Malaysia, selling fresh food and others. 2) Will open up a restaurant with the concept of healthy food in Klang Valley	1) Only have 3 shops in Malaysia. 2) The chicken shop concept is fast food restaurant.
Vaccine And Antibiotic	1) No use of hormone or chemical substance, fed herbal extract rich in antioxidants and anticancer substances such as ginger, turmeric, pandan and other 2) Use vitamin like C and calcium for chicken to grow stronger.	3) Use of antibiotics, hormones, bet agonist, and sabutamol.
Services And Delivery	1) Supply fresh chicken and other product to the supermarket, shops and retail market 2) Mobile in chicken shop, we provide the very best of our product to your place or home (only in Klang Valley) 3) Club card, we introduce to you in how to save your money, we provide these services to help you save money and enjoy your favorite foods with each purchase of the club card will give you a discount of up to 20% on all our products.	1) Supply fresh chicken and other product to the supermarket, shops and retail market
Poultry farms	1) Away from the noise and bustle of the city, located in a safe and clean places 2) Chicken coop using modern technology with the features of nutrition and cooling systems are controlled fully automatically.	1) Chicken coop is in place is not fixed, sometimes located close to town or home. 2) Use only ordinary chicken coop 3) Sometimes poultry farm subcontract to another person, so the quality sometimes not good.
Other	1) Company is wholly by owned Malays and Muslim	1) Company is wholly owned by non Muslim

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4.0 Market Analysis

4.3.2.2.3 Transport Of Eggs