Study on UK's Fish
...r 1 Economic Factors 1.1 GDP GDP is a main factor of the whole economy in every country. The GDP of UK is not very high because of the UK is already a developed country in the world and has stable economy and strong infrastructure. Table 1: GDP 2000 2005 2010 GDP % 2.2% 2.0% 2.5%(projected) Source: www.adamsmith.org 1.2 Inflation rate Inflation rate of UK is staying stable currently. Not like 10 or 15 years ago, the inflation rate was pretty high at that moment. And now, the government has been controlling the inflation rate around 3%. Table 2: Inflation rate 2000 2005 2010 Inflation rate % 2.9% 3.2% 3.0%(projected) Source: www.moneyextra.com/glossary 1.3 Interest rate The interest rate of UK was higher in 2000 than 2005; maybe government wants to stimulate their people to consume more than saving. Table 3: Interest rate 2000 2005 2010 Interest rate % 6.0% 4.75% 5.5%(projected) Source: www.moneyextra.com 1.4 Average income Generally speaking, the present average income is comparatively higher than few years ago in UK and it still keep increasing with almost 2% per year. Table 4: Average income Average weekly income 2000 2005 2010 Per person 217 ponds 230ponds 250 ponds(projected) Sourcehttp://www.statistics.gov.uk 1.5Total country income GNP GNP is also an important role in the economy of every country. And it is standing at the fifth place of all countries. Table 5: GNP 2000 2005 2010 GNP billion $ $1,544 $1,599 $1,650(projected) Source:www.scaruffi.com/politics/gnp.html 1.6 Exchange rate 1 pound: 1.44 euro Here I would like to display a table which over the last year. Table 6: Exchange rate Exchange rate Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Average rate to Euro 1.44 1.47 1.48 1.50 1.48 1.50 1.50 1.49 1.46 1.44 1.43 1.43 Source: www.x-rates.com 1.7 Type of economic system The UK, a leading trading power and financial center, is one of the quartets of trillion dollar economies of Western Europe. Over the past two decades the government has greatly reduced public ownership and contained the growth of social welfare programs. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with only 1% of the labor force. The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial nation. Services, particularly banking, insurance, and business services, account by far for the largest proportion of GDP while industry continues to decline in importance. GDP growth slipped in 2001-03 as the global downturn, the high value of the pound, and the bursting of the "new economy" bubble hurt manufacturing and exports. Still, the economy is one of the strongest in Europe; inflation, interest rates, and unemployment remain low. The relatively good economic performance has complicated the BLAIR government's efforts to make a case for Britain to join the European Economic and Monetary Union (EMU). Critics point out, however, that the economy is doing well outside of EMU, and they point to public opinion polls that continue to show a majority of Britons opposed to the euro. Meantime, the government has been speeding up the improvement of education, transport, and health services, at a cost in higher taxes. The war in March-April 2003 between a US-led coalition and Iraq, together with the subsequent problems of restoring the economy and the polity, involve a heavy commitment of British military forces. 1.8 Purchase power parity At present, the pond is very strong currency in the whole world, so you may buy more staff with your ponds in another country. Dollars are presently worth far more in America, than they are in England when changed into pounds at the current exchange rate. Hence, the real value of wages to an American is much higher than the real wages of a person in UK. For example, if a DVD in the United States costs $15.00 and the same DVD costs 12.00 pounds in the UK, the purchase power parity would expect a GBP/USD exchange rate of 1.2500 ($15/12 = 1.2500 USD/GBP). Conversely, if the current spot exchange rate is instead 1.8000 USD/DBP, so that the Pound is overvalued and the USD undervalued. Furthermore, they would expect the USD/GBP exchange rate to trend toward the 1.2500 equilibrium levels. At this moment, the current spot exchange rate is 1.8995. 1.9 Unemployment rate 2000, 2005, 2010 This is a table shows that the unemployment rate in UK as a % of work age population. Table 7: Unemployment rate Great Britain Average for 2000 Average for 2004 Average for 2010 Males Females Males Females Males Females 4.4% 1.5% 3.8% 1.3% 4.0% 1.5% Source: http://www.ealing.gov.uk All of the areas have a higher unemployment rate for males than females. The labor market in Britain has undergone very significant changes under the long tenure of the Conservative government and this has been reflected in the very low unemployment rates compared to the other major EU countries. 1.10 Labor participation rate The all percentage is calculated from working age population: Table 8: Labor participation rate 2000 2005 2010 Labor participation rate % 75% 76% 78%(projected) Source:www.dti.gov.uk 1.11 General production (Import & export rate) in 2000, 2005, 2010 Table9: General production (Import & export rate) General production 2000 2005 2010 Import rate of General production 8.00% 8.50% 8.80% Export rate of General production 7.00% 7.30% 7.60% Source: http://www.archive.official-documents.co.uk From table above, we can see that the import rate of general production takes up about 8 to 9 percent. Export rate of general production takes up about 7 percent. 1.12 Specific fish products (Import & export rate) in 2000, 2005, 2010 From the table below, we can see that Demersal Fish and Salmon or Trout are most popular both in export and import. Frozen Fillets do not have more demand in the UK market. Herring presents a decline trend in the market, which declined from13.42% in year 2000 to 3.88% in year 2010 in export cell. Table10: Specific fish products (Import & export rate) Year Export rate in Quantity Import rate in Quantity Export rate in Value Import rate in Value Frozen Fillets 2,000 0.39% 0.45% 8.15% 9.31% 2,005 6.06% 6.92% 7.37% 8.42% 2,010 18.84% 21.54% 8.14% 9.30% Demersal Fish 2,000 43.45% 49.66% 34.64% 39.59% 2,005 65.70% 75.08% 39.91% 45.61% 2,010 23.52% 26.88% 45.19% 51.65% Herring 2,000 13.42% 15.34% 2.37% 2.71% 2,005 2.08% 2.38% 0.46% 0.52% 2,010 3.88% 4.44% 0.46% 0.53% Salmon or Trout 2,000 22.12% 25.28% 31.67% 36.20% 2,005 16.83% 19.24% 30.99% 35.41% 2,010 31.67% 36.20% 25.20% 28.81% Semi-Preserved 2,000 10.17% 11.62% 9.39% 10.73% 2,005 2.80% 3.20% 10.43% 11.92% 2,010 5.16% 5.90% 10.08% 11.52% Prepared 2,000 10.45% 11.94% 13.79% 15.76% 2,005 6.53% 7.47% 10.85% 12.40% 2,010 16.93% 19.35% 10.92% 12.48% Source: Department for Environment Food and Rural Affairs http://statistics.defra.gov.uk 1.13 VAT There are 2 main rates for VAT in UK, which are zero and 17, 5%, but there are also few supplies are charged at 5%. The VAT for food and some drinks in UK is 0%, so blue fish belong to the zero-rated supplies group. In general, for the EU law, VAT must be charged on food and medicine at least at a reduced rate of 5%. 1.14 Average prices of fish Table11: Average prices of fish Average Annual Prices of Fish Fish classification 1990 1995 1996 1997 1998 1999 2000 Demersal Fish £ per tonne (liveweight) 962 911 936 870 920 991 1,090 Pelagic Fish £ per tonne (liveweight) 121 133 175 210 270 166 185 can/glass (average) 73 80 105 126 162 100 111 Source: Department for Environment Food and Rural Affairs http://statistics.defra.gov.uk 1.15 Brand consideration Blue Fish is considering as needed because the fisheries in UK already can not meet the demand of UK consumers. Besides, the North Sea and other waters are almost empty with fishing for years. The Blue Fish brand awareness will be increase among consumers in UK market. 1.16 Self service/supporting rate for fish Self service in UK can be considered as zero. With the increasing living rhythm, People trend to buy fish products instead of fishing by themselves. There are small amount of people out of the whole population like to fish for fun, but still not for eating. Summary Until year 2010, economy of UK presents a good picture. GDP is stable increasing and inflation rate is decreasing. There is no VAT for our product if we do Blue Fish in United Kingdom. Therefore the price will be cheaper then it in other country. Besides, among EU countries, there are no import tariffs for fish product. The fish price in UK is not elastic, while keeping increasing from year to year. Chapter 2 Social Cultural Factors The first thing to say while analysing the UK on a socio cultural aspect is that Britain is the foundation of the Anglo-Saxon culture which remains very strong in countries like the US, Canada, Australia, New Zealand and South Africa. 2.1 Religion in the UK: Nowadays, most people consider themselves as non religious but there are still 37% of Christians, 3.5% of Muslims, 1.5% of Hindu and 0.8% of Jews. Regarding the fish consumption, the Christian still follow the tradition that they shouldn’t eat meet or eggs on Fridays and most of the Hindus don’t eat meat at all. 2.2 UK according to Hofstede’s cultural dimensions The relation to power distance in Great Britain is small, people are following a strict hierarchy and submit themselves to precise codes and rules but only when they are convinced that it is for the good of all. The notion of efficiency by structure and rigour is very strong in the Anglo-Saxon culture. Like most of the Northern European nations, the dimension of individualism is one of the key concepts of the relations between people. In the UK more than anywhere else, British people are known as to be very polite and respectful of each others, on the personal as on the propriety aspect. This value is reflected as well on the political point of view by the fact that the social policy in Britain is very limited, people are responsible for their own condition and the state doesn’t help or interfere. The uncertainty avoidance is weak in the UK, people tend to naturally communicate in a way that they are not scared of ambiguity. They manage to avoid it without having to draw specific rules, by being direct and to the point in any circumstances. To complete the description, it is important to underline that Britain is a masculine or Career Success orientate country. People work hard to earn good money and be well recognised socially. Money is considered as the basic of the quality of life, it doesn’t matter how long or hard people have to work, their main achievement is the salary they will get at the end of the month and the way they can use it to consume and affirm themselves socially. To apply those findings to the Blue Fish products, every household has his own way of consuming in food more than anything else. The diversity brought by the immigrants from the ex British colonies is influencing people in eating “exotic” food like Indian spices, Caribbean dishes or Chinese food where fish is part of it. Nevertheless, people of the UK still consume a lot of there national dish, the fish and chips but it is more considered as a snacking food than a house made dish. Therefore, it would be interesting for us to target those snack restaurants as well on our marketing and distribution campaign. 2.3 Socio economical classes The structure of the UK socio-economic classes is 4.5% of upper class people, 12.5% of upper middle class, 36% of middle class, 25% of lower middle class, 9% of low class and 13% of people living under the poverty threshold. The structure of the family in the UK is a household of 4 people, it is influenced by the fact that low class people tend to have more children that higher class people and that the birth rate of the immigrants of first and second generation is higher than the national average. We cannot really talk of heavy and light classes in the use of fish for the UK because, even if fish has been considered as an expensive product, the diversity of species, production and ways of conservation made now possible for almost everybody to afford it. Then, if we look at it in a cultural point of view, it tends to be the most favored classes that consume it the most, not for a question of price but for a question of tradition. 2.4 Media influence on cooking TV: On the public channel BBC, no less than one cooking show a day, Ready Steady Cook during the week, showing people how to cook nice and fast for a reasonable budget. During the week end, Saturday’s kitchen is really popular, with a chef taking doing an entire menu to give idea for family dinners. Magazines: There are over forty cooking magazines available in the UK, locals and also coming from other countries like the US or France. The two main British ones are Bon Appétit and Cooking at home, that are published monthly and sold at more than 100 000 units each. 2.5 Influence of green movements British people became recently sensible to the protection of the environment. After being a huge industrial country until the late 70’s, where no laws or educational campaign where made about the environment, people are starting to be more and more interested in protecting their country. The people actually members of organizations like Greenpeace or World Life Found are not even representing 1% of the population but most of the people care about their environment and quality of life. Applying this fact to Blue Fish products, people are not that much in the trend of organical and biologic food, they do care about natural resources so the fact that the fish Blue Fish sells aren’t from Britain’s coast could be a positive point for us. 2.6 Attitude towards local brands and foreign brands British people are quite internationally oriented, they focus more on prices and quality than on origin. On a product like fish, the origin of it doesn’t really matter except on high prices fishes like smoked salmon for example, where most British people will buy Scottish one. 2.7 Fish advertisement on TV A product like fish is almost not represented on British TV, only one ad regarding fish stayed in the memories and was realized in 2001. John West Salmon, ad where a fisherman is attacking a bear to get the best, freshest salmon you can find. This ad worked well more because of its originality than because of the product. Otherwise, fish commercials are not common on TV and most of them are quite the same. 2.8 Rate of organic products The UK is the country where the BSE (bovine spongiform encephalopathy or mad cow disease) scandal had the most profound impact on consumer attitude, as the disease originated in the UK. During the height of the BSE crisis, the Soil Association reports of 12,000 incoming calls per week by concerned consumers. This is certainly the single most powerful event to have influenced the organic industry anywhere and certainly largely responsible for the upsurge of the organic industry in the UK. The following paragraphs give a summary of results of a study on consumer behavior and attitudes, which was commissioned by the Soil Association and conducted by MORI in June 1999. Not surprisingly, of the 641 organic consumers sampled more than half (53%) state as the main reason why they buy organic health/better for me, while the absence of chemicals/pesticides is perceived by 48% as imported. A high percentage of organic consumers (43%) believe that organic foodstuff tastes batter, and for one third the absence of genetically modified organisms (GMO’s) is cited as the overriding reason to buy organic. Environmental concerns are only for 25% a major incentive, the same percentage of consumers who cite animal welfare as a reason to buy organic. Interestingly, the main reasons that would consumers animate to buy more organic foodstuffs are decrease in price and increase in availability and range (57% and 56% respectively), while UK or locally produced would only motivate 16% to buy more organic food. Better information is important for 21% in a decision to increase purchases of organic foodstuff. According to the study, there is much support in the general public (83%) for organic farmers receiving grant support, and 20% believe the amounts should be increased. There is an interesting disparity in awareness of where organic food is available and where organic food is actually bought. Sixty-eight percent of all consumers believe that they are most likely to find organic food in specialist organic food shops. However, leading the preferred outlets for actually buying organic foods are the multiples Tesco (39%) and Saintbury’s (33%), followed by ASDA (14%), Safeway (12%), and then the independent specialist organic food shops (10%), with Waitrose the next important outlet (9%). In conclusion, consumers are primary influenced by health and food safety issues when buying organic food. Environmental concerns and animal welfare are an important reason for one quarter of the organic consumers. The main obstacles for further increase of organic sales are price, availability and product range. The main retail outlets are the multiples, with Tesco and Saintbury’s leading the pack. In a more general view, interest in food and food safety as a topic in the public debate has risen substantially. As an example, the Soil Association has been mentioned in more than 1,000 articles in the first three months of 1999 alone. Cookery programs and new magazines have sprung up and countless other press articles have been published. 2.9 Is Fish considered as healthy? Yes, fish is considered as healthy in the United Kingdom. The government is promoting the consumption of fish for instance by a fishreport, about the benefits of eating fish, on the website of the government. Also a really famous chef in the UK, Jamie Oliver is recommending the consumption of more fish, especially oily fish. 2.10 The use of fish per capita The use of fish per capita in the UK is 18 kg. 2.11 Three matrixes of Rusconmodel Extend of involvement Consumers in the UK are rather high involved when buying fish. It is not a regular/ daily purchase. Food safety, price and health impact is really important. Importance of brand equity It is important to set up a good brand in the UK. If you’re brand is known and the consumer knows that you are certified for selling good organic food, they will be loyal to your brand. Consumers in the UK are showing a dissonance reducing behaviour concerning fish. They are highly involved and there are small differences in brand equities, like price, country of origin and certifications. Communication and buying behaviour The purchase of fish is an intensive buying behaviour. You should start with affection. Because fish is not a daily purchase you first have to convince the costumer to eat more fish, for instance because all the benefits it have for you health. If you do have the interest of the consumer, the consumer will gather information and finally buying the fish. Motivation Buyers need informational motivation to be convinced. Many consumers have very little idea about agricultural practice, but there is a significant demand for more information. In particular people want access to clear information about different production systems and what they mean in terms of the issues that matter to them, such as animal welfare, environmental protection, chemical inputs and veterinary medicines. So there have to be more promotion on fish and there have to be more information provided. 2.12 Places where fish is bought In the UK you are able to buy fish on many different places.There are regular streetmarkets where you can buy fresh fish. Also the most supermarkets provide fish. On the internet is also the availability to buy fish, ( www.martins-seafresh.co.uk ) 2.13 Lifestyle 2.14 Percentage of vegetarians In the UK there is three percent of the population vegetarian. Summary Consumers are primary influenced by health and food safety issues when buying organic food. Environmental concerns and animal welfare are an important reason for one quarter of the organic consumers. Fish is considered as healthy in the UK and the government supports this. BlueFish has to provide the customer al lot of information to convince the customer to purchase our fish. Chapter 3 Consumer Behavior 3.1 What kind of fish is consumed most? The consumption of fish in the UK has been increased in over the past decade due to health and diet concerns had become more important to the consumers. People tended to eat less meat and more fish. But people have different tastes about what kind of fish that they eat, but there is always the most favorite one that many ones would like to. In The UK, the nation favorite fish is Cod, which is counted about 31 percent of the total amount of fish and shellfish (estimated by 115.000 tones). Not just that, a research recently of The Geographical _The Magazine concludes that one third of the World’s cod is consumed in UK. There is also many kinds of fish are used, and the following after Cod is Haddock, about 18 percent. Salmon is the third most consumed one with around 10 percent of the market share for the UK demand of fish. http://www.seafish.org/ 3.2 In which way of fish delivery is preferred? The retail fish and fish product market can be divided into three main segments: fresh and chilled fish, frozen fish and canned fish. In these three groups, fresh and chilled fish is the largest sector, with sales increased by 4.9 percent, caused by the improved availability of the farmed fish in supermarket and wider choice of species in those stores. For this segment, salmon becomes the most popular one in sales. Frozen fish is also a strong performer in the market place, accounting for about 36 percent of all sales in 2003. Recovering the growth after the big declining in 2003, now frozen fish is taking back the market share and keeps growing. The third part playing in the retail fish and fish product market is canned fish, which is representing 25 percent of the total sales, being the smallest sector in the market. The reason for this is people now prefer the product that is as fresh as possible to keep the nature nutrition in the product at the highest level as they can. 3.3 Preference of biological/ genetically changed products Actually, people always prefer the natural fish, so do in the UK. Sometimes the touches of human into the biology genetics are really helpful to improve the quality, the advantage of using that product. But for the general thoughts, the consumers still concern more about the nature being of the fish they eat. That’s why they don’t really prefer the biological/ genetically changed fish. Summary Any fish company should understand clearly the demands in the market place to supply the right needed products, which will lead to the highest sales that the company could do. With an opening market for fish like this in the UK, the kinds of fish should be considered to sell the most is Cod, Haddock and Salmon. Beside the species of fish, the delivery way is also important to record: the strongest consumed one is fresh and chilled fish, the second is frozen and the last one is canned fish. The biological or genetically changed fish may not be the more preferred than the natural fish. Chapter 4 Technical Environment 4.1 Infrastructure Railways and Roads There is a broad system of railways, amounting to 17,186 km of track.16,726 km of this uses the standard gauge and then remaining uses a broad gauge mainly in Northern Ireland. Highways in the UK amount to 371913 km, of which 3,358 are expressways. Ports and Harbors Below you will also find a list of the ports and harbors in the UK. Aberdeen, Belfast, Bristol, Cardiff, Dover, Falmouth, Felixstowe, Glasgow, Grangemouth, Hull, Leith, Liverpool, London, Manchester, Peterhead, Plymouth, Portsmouth, Ramsgate, Scapa Flow, Southampton, Sullom Voe, Teesport, Tyne. Airports Although there are a total of 471 airports in the United Kingdom, below are the main ones. Of those 471 airports, 334 have paved runways. 4.2 Costs and Methods of Transportation It is very uncommon to find a supplier and customer that are in a 100 km radius, which causes the transportation costs to be an important factor in this business. The transportation costs are usually quite high as well. If there is a reasonable amount of fish available, the transportation costs kept to a minimal but the consultant as they manipulate the sale outlets in delivering to the closest customer. This sounds obvious, but is hardly practiced. 4.4 Penetration of TV and Internet Television Watching TV is one of the UK’s favourite passtimes, so not owning a TV is very rare. In the table below you can see that there is a general upward trend, with some fluctuations in 2000 and 2003. In the UK the digital TV is becoming the standard option. It has a lot of advantages over the cable TV, but as you can expect the older generation are more skeptical about the change. Per 100 Households 1997 1998 1999 2000 2001 2002 2003 2004 Possession of colour TV set 97.48 98.04 98.26 98.18 98.60 98.78 98.40 99.10 Internet It is commonly known that internet is one of the fastest growing markets in the world. 10 years ago, most people were still dialing in their now considered slow connection. The story has changed rapidly, where a high speed cable connection is not uncommon in the average household. More and more businesses are also using the internet as medium for information within the company as well as a selling point to potential buyers. It is obviously a very easy, cheap medium for spreading information across the world. As you can see in the table below, 52 % of the population (12.9 million) now has access to the internet from their home. This is a huge difference when you compare it to the 8% that had internet access just 6 years ago in 1998. Below you will find the trend of internet penetration in the UK. When people use the internet for buying products, the majority uses it to purchase holidays, accommodation or travel. Table that shows the percentage of the population of people that have internet access over the period 1998-2004 4.6 Genetically Modified Foods Genetic modification of food products (GMO), unlike biotechnology, is a relatively new process. These two terms are often used interchangeably, but they have a different origin. In is only in the last few decades that we have been able to manipulate directly the DNA of organisms. It seems that inhabitants of the UK are, however quite skeptical on GMO. It has been told that 75% of the grocery shoppers do not want to buy genetically engineered food. Still, organic food is the fastest growing sector in the food market. Britain is one of the world leaders in the advancing of this technology, but still has a long way to in convincing the people that there are no risks to their health. This has to be proven as well of course. There are numerous comities which have set various standards to which the GMO have to comply before they can be sold to the public. There are many benefits for the consumer as well as the producer. As for the consumer, food products could become a lot cheaper, induced with a lot more nutritional value and also catered to people with allergic problems. These advantages are also linked to the producer, who would be able to produce cheaper and at a larger level. One of the issues of debate is that we could start fighting world hunger. However, the disadvantages are looked at first, such as the health issue, and the ethical side. This debate will continue to hold back the realization of producers to replace the real food with cheaper genetically modified products. One of the EU policies is to label the genetically modified products clearly. This is to warn the potential buyers, as to the origin of the food. Genetically modifying fish is a very delicate thing to do, and is not sold in supermarkets yet. The genetically modified fish can be made larger, more nutritional, and cheaper. 4.7 Yakult The Japanese drink named Yakult was launched in the UK in 1996. It was introduced to the Republic of Ireland in 2005 however. It is sold nationwide, when the product has been voted in the top 100 products in the store Sainsbury’s. Now more than 300,000 bottles are sold everyday. Although only large supermarkets sold the product, now there are may independent shops who sell it as well. The drink is now also delivered to ones house, and is offered in company canteens. The drink has now developed itself as a household name in the UK. Summary UK is an extremely well developed country in logistics and communication infrastructures. With over 350000 km of highway, 400 airports, and a huge amount of harbours (UK being an island), the entire country is easy to circulate in. The transportation cost are quite expensive and therefore the logistic plan as to be well prepared to try to reduce the distances to cover to reach the customers. The entire population is now equipped with digital TV and the internet usage is growing very fast and just passed the 50% of the population. The debate regarding genetically modified food is really actual and even if it has been proved that there is no danger for the heath, question of ethics remain. The EU specified that this kind of food should be strictly labelled and so far most of the grocery shoppers don’t buy it. GM fishes are not yet commercialized in UK’s supermarkets. Part 3 Market Data Chapter 1 Market Factors 1.1 whole fish market The turnover of fishing in UK is displayed as a table as below: Table 1: turnover of fishing in UK Years 1995 1996 1997 1998 1999 2000 2001 2002 2003 On Fish(million pounds) 1,790 1,961 1,947 2,009 2,063 2,152 2,284 2,375 2,395 Fish as a % of Food 3.6% 3.7% 3.6% 3.6% 3.6% 3.7% 3.8% 3.9% 3.7% Source: http://statistics.defra.gov.uk Imports and Exports Table 2: Imports and Exports 1995 1996 1997 1998 1999 2000 2001 2002 2003 Imports (‘000 tones) 484.7 533.2 503.2 532.8 552.0 546.7 625.6 621.4 631.0 Exports (‘000 tones) 362.1 310.4 299.8 346.1 351.4 364.9 384.6 389.1 479.4 Source: http://statistics.defra.gov.uk The fishing turnover in UK has been stable from 3.6% to 3.7% of food in the past 10 years, but their fish consumer expenditure was increasing generally during the same time, probably it is due to their good consumption also kept increasing in the past years, so their fish turnover as a percentage of food still stay at the same level, however, the turnover of fish was increased stably. So we believe that the turnover of fish in UK will keep going up as before. After a specific research, we also would like to mention the imports and exports of fishing in UK, Because from 1995 to 2003, the all figures of imports has been kept a higher level than exports, it is quite obvious that UK is a potential place for foreign company to penetrate into their market. 1.2 submarkets (glass, frozen, fresh, etc.), tendencies: 2004-2006 According to the information below, I would like to make a table for the percentage of fresh, chilled and etc. to show their turnover as a percentage from 1998 to 2003. Table 3: submarkets Years 1998 1999 2000 2001 2002 2003 Fresh, Chilled or Frozen 37.1% 40.1% 49.1% 46.8% 46.6% 56.1% Semi-preserved 4.4% 4.5% 4.4% 4.1% 4.0% 4.6% Prepared or Preserved 2.8% 3.3% 3.2% 2.5% 2.5% 2.4% Source: http://statistics.defra.gov.uk The trend in these submarkets, we can see that the percentage in the past 6 years, the turnover was enlarged step by step; therefore, we think that the Fresh, Chilled or Frozen will extend to a larger turnover definitely. Conversely, the Prepared or Preserved turnover will not be able to improve in recent years. 1.3 Submarkets (main fish pieces: Cod, Haddock, Herring, etc.), tendencies: 2004-2006 Table 4: main fish pieces Quantity (‘000 tones) Years 1999 2000 2001 2002 2003 Cod 46.8 37.0 28.1 25.7 15.5 % 9.2% 8.0% 6.1% 5.6% 3.5% Haddock 71.3 50.3 42.3 51.9 40.7 % 14.1% 10% 9.2% 11.1% 9.2% Herring 45.3 39.5 43.8 42.5 55.2 % 8.9% 8.5% 9.6% 9.1% 12.4% Total Fishing Market 506.5 464.7 458.3 465.6 444.6 Value (pounds million) Years 1999 2000 2001 2003 2004 Code 62.6 50.6 37.4 35.0 22.7 % 13.5% 12.0% 8.8% 8.4% 5.8% Haddock 59.3 51.2 36.3 34.6 27.5 % 12.8% 12.1% 8.6% 8.3% 7.0% Herring 5.1 4.1 10.4 6.9 7.0 % 1.1% 1.0% 2.5% 1.7% 1.8% Total Fishing Market 464.1 422.1 423.7 414.7 391.6 Source: http://statistics.defra.gov.uk The figures for each kind of fish in our table were decreased in the recent years dramatically. In our opinion, this result might be affected by the taste of people in UK; perhaps some people changed their taste to other food like beef, chicken or the price of fish was generally rising so that the people can not afford fish. Thus, maybe those kind of fish will not popular as much as before in UK. Chapter 2 Business Definition From the table 5, we can see that the group of Families with young kids in B2C field takes up 52% of the market and Retailer Chains in B2B take up 53%. In B2C, from biggest group to smallest group is families with young kids, empty nests and single, the percentage is 52%, 30% and 18%. The figure shows that families with kids buy fish in a large amount or very often and they are more than half percentage among the customer segmentations. In B2B, from bigger group to smaller group is retailer chains, Ambulatory retailers, fish shops and Food Service, the percentage is 53%, 26%, 19% and 2%. The retailer chains rank in the first among all the places which sells fish. This figure indicates that customers are more willing to buy fish in supermarket. In the classification of the fish, In glass fish ranks first and then Freshly Cooled Fish, the percentage is 60.99%, 21.99% and 17.02% is for the Deep Frozen Fish. These show that most of customers can afford the In Glass Fish or prefer it. Chapter 3 Suppliers and Competitors 3.1 General Information Seafood Marketing International PLC Seafood Marketing International PLC, also known as Seamark, started from the development of a family business in 1976. The current owners of the family business are known as the Iqbal bros. They have now grown out to be one of UK’s largest wholesale fish and shrimp business. Seamark have control over sophisticated factories with modern equipment, which are specifically designed to maintain a high level of quality and hygiene. They have a cold storage area which has a high-tech mobile tracking system and its temperature is all maintained by a central computer system. The home base of this company is still Manchester, although they now have expanded by building a cold storage in New Jersey, U.S.A. and a fully equipped factory with cooking facilities in Bangladesh. Young’s Bluecrest Seafood Limited Young’s Bluecrest Seafood Ltd. Was formed in 1999 when a merger took place between Young’s and Bluecrest Seafood. Young’s seafood was however established over 200 years ago. This merger resulted in a combination of two things: money amounting to 350 million, and an organization between the 2 companies which provided some key strengths. These strengths include category and consumer insight, global sourcing, operational excellence and some of UK’s leading seafood brands. Below you will see a tree-diagram of the business structure and fish markets they operate in. Young’s Bluecrest Seafood Ltd. actually produces 6 different brands in the UK, namely Young’s, Bluecrest, Ross, King Frost, Scotpak and Macfisheries. Young’s Bluecrest Seafood Ltd. is a leading food manufacturer, and the largest producer of Seafood in the UK. They supply to most the seafood sectors in the UK, like supermarkets, pubs and restaurants, supermarkets and even schools and hospitals. Addresses Seafood Marketing International PLC As we said earlier, the company now has 3 locations, although their home base is in Manchester. Below you can see the exact addresses of each location. Head Office Seamark House Edge Lane, Droylsden, Manchester M43, 6BB (UK) Chittagong Factory Seafood Marketing Ltd. CDA Plot no. 50, Fouzdarhat Industrial Estate Sagorika Rd.Chitagong 4129 Bangladesh US Office Seamark (USA) Inc. 31, Tyler Ave., Apt, 3201 Iselin, NJ 08830 U.S.A. Manchester Factory 1, Whitworth street, Openshaw, Manchester M11 2DW (UK) Young’s Bluecrest Seafood Limited In total Young’s Bluecrest Seafood Ltd. has 9 locations, which are depicted on the map. Below is the address of the head office. Young's Bluecrest Seafood Limited Ross House Wickham Road Grimsby North East Lincolnshire DN31 3SW Tel: (01472) 585858 Fax: (01472) 585859 Brands and Promotion Young’s Bluecrest Seafood Limited The logos below represent the different brands that are produced by the company Young’s Bluecrest Seafood Ltd. In the past they have had advertisements on TV, magazines, radio and newspapers. They have recently started a new campaign, with the ‘Young’s make fish the dish of the day’. This ad campaign is made to come on TV during the key selling periods in the autumn and Christmas periods. There last ad campaign increased their sales with 8%. They expect the same increase with their new campaign. Since 2001, they have increased their sales with 68% hitting the 170 pound milestone. These brands provide a range of products from frozen prawns and scampi, authentic battered fish, restaurant style fish cakes, fish fingers for the kids, Mussels in a Creamy Garlic Sauce, Salmon Pasta Bake, Prawns in a tasty Red Thai Sauce and old favorites such as Scampi to fresh fish from around the world to the supermarkets’ wet fish counters. As their products suggest, they have a very wide market to sell to. Their marketing strategy is customized to this market range. As they provide meals for the simplest taste pallet, like fish fingers, as well as fresh fish for the finest meals they must market accordingly. They sell these in different supermarket chains accordingly as well. They do sell most of their products in the deep freezer section of most large supermarket chains and promote their products as being quality, easy to prepare and affordable. Seafood Marketing International PLC Seafood Marketing International has many different products which they have bought out under their company name. However, they have also realized that this approach will put them at a disadvantage and they will not be producing at an optimized output. There most common brand was Tiger Prawn but have now launched a new brand called Mr. Prawn. Furthermore they sell under brands such as Lilly, Seagold and Classic. They have done many exhibitions at industry trade shows, like the recent cooking demonstration which they did at the Brussels’s Seafood show. The marketing strategy that Seafood Marketing International PLC has adapted is a specialized one as their product line of prawns and squid allow them to do so. They bring the most specialized meals as well, that are more orientated on an oriental style. They also get their products from the Asian straights, and have adapted their products to oriental recipes, although they also offer fresh products similar to Young’s Bluecrest Seafood Ltd. They promote this angle or traditionalism and quality. SWOT Analysis Young’s Bluecrest Seafood Limited Strengths Right products, Reliability Direct Delivery Capability Management is professional and committed Cost advantages Strong brand names Weaknesses Non-exclusive access to natural resources Lack of international market and clture knowledge Opportunities Could develop new products Profit margins will be good Could extend overseas Threats Emergence of substitute products Environmental threat It was not possible to find the company’s annual report and price list thus impossible to calculate the ratios. We apologize for this. Young’s Bluecrest Seafood Limited Website http://www.youngsbluecrest.co.uk/youngs.asp Seafood Marketing International PLC http://www.seamark.co.uk/ Chapter 4 Distribution Channels 4.1 Distribution channels in general Producer Direct Marketing: Wholesaler: Importer: Retailer: -Farm Gate Sales -Specialized -Specialized -Specialized -Internet -Conventional -Conventional -health -Local Markets -Food store -Organic -supermarket -Conventional -supermarket 4.2 Supermarkets in UK Table 8 Supermarkets in UK Name number of supermarkets Somerfield 1277 Tesco 775 Safeway supermarket 480 Sainsbury’s 517 Marks & Spencer 297 Asda 258 Morrisons 119 Total retail sales of fish and fish products amounted to 350,100 tonnes in 2000 - a 3.9% decrease compared to 1993. In terms of value, sales were £1.65bn in 2000 - a 7.9% increase during the same period, due to raw material price increases and the growth of value-added fish products. The drive for convenience in relation to fish can be seen in consumer preference for ready-to-cook fish products at the expense of fresh/chilled wet fish. With a 40.7% volume share in 1999. Frozen fish products accounted for the largest single share of retail fish sales. Fresh/chilled wet fish saw the greatest proportionate decline in actual volume sales between 1993 and 1999, resulting in overall volume share falling slightly from 28% in 1993 to 26.5% in 1999. In terms of distribution channels, sales via retailers accounted for 61.3% of fresh and frozen fish product sales volumes in 1999. Both the retail and catering sectors experienced falling sales volumes. The catering sector is particularly susceptible to fluctuations in the economic cycle. A few treadmill species dominate both the catering and retail sectors, particularly in the case of the former. Fish and chip shops alone use over 28,000 tonnes of cod per annum. Within the retail fresh fish sector, easy-to-handle and ready-to-use formats, such as steaks and portions, have been gaining share. This is reflected by the 19.5% volume increase in retail sales of steaks and portions between 1995 and 1999, for example. By contrast, sales of whole fresh fish fell by 30.6% during the same period. In overall terms, a higher proportion of UK households purchase frozen or canned fish products than fresh fish in an average 4 week period. For both frozen fish products and canned fish respectively, 42% of UK households purchase them in an average 4 week period, compared to 29.1% buying fresh fish (wet, smoked including shellfish). The relatively low incidence of purchase for fresh fish is due to a combination of factors associated with time pressures and lack of confidence in preparation and handling. Consumer research quoted by the trade shows that a third of housewives do not like boning and filleting. Many housewives do not like bones, while others agree fish is too expensive or do not like the smell of raw fish. Value-added chilled fish products comprising ready-meal-type products such as fish and chips, pies/bakes/crumbles, pasta and encroute products have been the only major growth area of fish sales, as have chilled ready-meals in general. Lifestyles associated with long working hours, increasing numbers of people living, eating and snacking on their own as well as declining cooking skills and an endless demand for more exotic food, have all contributed to the growing popularity of chilled ready-meals. The development of the sector has been spearheaded by retailer labels, which in turn are produced by major food companies such as Northern Foods, Hazlewood Foods and Geest. Frozen fish products remain the largest segment of the retail fish and fish products sector. This contrasts with most other major European countries, where fresh fish is the single most important segment. Sales growth in frozen fish products has, to some extent, been stifled by competition from other frozen convenience products as well as chilled dishes. Coated fish products and fish fingers are the most impo...