Introducing

Crabex

The Finest Crab Exporting Company

There are basically two kinds of mud crabs in Bangladesh: the king mud crab (Scylla serrata) and the rare green mud crab (S. paramamosain). Crabex would go for the king crab for its fast growth and flavor and for its high demand in the international market.

Submitted to

Ms. Tanzina Haque (FCMA)

Assistant Professor

Department of Accounting and Information Systems

University of Dhaka

Submitted by

Safwan Bin Musa

Id: 11221002

Term Paper: Fall Semester, 2012

Marketing Management (EMBA)

Executive Summery

At the beginning of the establishing a company, businessmen gather information and scan the

environment to justify the probability of success that the business will survive. My project is

about to set up a crab exporting company and for that I am required to gather information,

scan the environment, analyze the different factors regarding the business and designing a

marketing plan to understand the feasibility of the project. First of all, crab is a well

demandable food product in the western countries and as a sea side country Bangladesh has a

good opportunity to catch the market although there is not enough response regarding this

product in the local business sector. In this report I have analyzed the total world demand,

production, process, various geographical issue regarding this business establishment in

Bangladesh. I have also done the PEST analysis, competitor analysis – both inside and outside

the country, a brief marketing plan and distribution process. It is a compact marketing analysis

report about crab exporting business which is almost new in the country.

Table of Contents

Content Page No

Preface 1

The Product 2

Market Analysis 2

Industry Analysis 3

PEST Analysis 5

Competitor Analysis 6

Marketing Plan 7

Conclusion 10

Preface: The Target

My business establishment marketing analysis is on setting up a crab fattening and exporting

company - Crabex. The core activities of my business will be fattening and exporting crabs. It is

a lucrative business which has a great potential ahead. Scylla serrata (mud crab) is an

economically important crab species found in the estuaries and mangroves of Africa, Australia

and Asia. These crabs have a huge demand in South Asian countries where they are often

bought alive in the markets.

There are basically two kinds of mud crabs in Bangladesh, the king mud crab (Scylla serrata) and

the rare green mud crab (S. paramamosain). My company will go for the king crab for its fast

growth and flavor and for its high demand in the international market. Crabex will produce

crablets of mud crab (Scylla Serreta) and culture them. Primary focus will be placed on the

breeding and rearing processes to ensure the highest quality using the most efficient system

possible.

As the country’s first commercial crab producer, the company will produce crabs in a controlled

process to ensure quality, both in size and health and supply them to the Global market. This

business falls under the seafood industry. The company will be utilizing aquaculture technology

to farm crabs. Full control over the process will allow production of quality crabs and supply at

a competitive price. This will make Crabex unique in producing disease free crabs in a standard

size, which is the main requirement of the importers. The company is mainly targeting the Asian

market comprising of China, Malaysia, Singapore, Taiwan, Hong Kong etc.

The growth rate of worldwide aquaculture is very rapid while the contribution to the total from

wild fisheries has been essentially flat for the last decade. The rapid increase in the demand for

sea food has created a new market for seafood products like shrimp, lobster, crab etc. Statistics

say that Malaysia alone imports 2 tons of crab every day. This indicates a growing market for

the company. In fact, the demand of Crabs in the international market is so high that

Bangladeshi exporters can hardly meet it.

Crabex is starting operations with a target production of 5,000 KGs of crabs every month,

20,000 KGs every Quarter and within 5 years of operations, is aiming to capture 15% of the

Bangladeshi export market which stands at 1200 tons per year (EPB export data 2010-11). The

company will reach this goal by increasing production by 33.33% annually.

The Product

There are basically two kinds of mud crabs in Bangladesh, the king mud crab (Scylla serrata) and

the rare green mud crab (S. paramamosain). The company chose the king crab for its fast

growth and flavor and for its high demand in the international market.

Crabex will produce crablets of mud crab (Scylla Serreta) and culture them. Primary focus will

be placed on the breeding and rearing processes to ensure the highest quality using the most

efficient system possible.

The company will offer high quality mud crabs live. The company will also provide the local

crab farmers with crablets. All the offerings will be healthy, high quality and disease free. Live

mud crabs will be offered in batches of 100kgs in both 400 and 500 grams per piece categories.

The crablets are focused towards the local crab farmers. High quality, disease free and uniform

crablets will be Crabex’s specialty.

Market Analysis

In 2011, the total world production of fisheries product was 132.2 million tons of which

aquaculture contributed 41.9 million tons or about 31% of the total world seafood production.

The growth rate of worldwide aquaculture is very rapid (> 10% per year for most species) while

the contribution to the total from wild fisheries has been essentially flat for the last decade. The

rapid increase in the demand for sea food has created a new market for seafood products like

shrimp, lobster, crab etc. Statistics say that Malaysia alone imports 2 tons of crab every day.

This indicates a growing market for the company. In fact, the demand of Crabs in the

international market is so high that Bangladeshi exporters can hardly meet it.

The company’s segment definition, most value for products is based on geography. Crabex is

not intending to reach the global market as a whole, but rather the markets that offer the

greatest value in return. That is why the company is offering three different types of products.

They are targeted towards different geographical locations. The product with the most demand

is live crab, but The Company is only targeting the Asian crab market with this though the US

and EU is a huge market as well. But due to problems such as Flight schedules and time

involved, the product can not reach the market. Crabex is planning to get around the problem

by freezing the product and offering it to the market. Crabex won’t face any internal

competition here, but the international market has strong competitors.

The company’s secondary product is targeted towards the crab farmers in the country. The

market currently consists of only the crablets found from nature. Introduction of bred crablets

with better adaptability, strength and uniform size will create a lucrative option for the farmers.

In the case of the crablets, the company is only supplying the market with the excess crablets

from the breeding farm.

The major factors that will have an effect on the market are the increase in global aquaculture,

festivals in the East Asian countries, stagnant fishing industry etc. Oriental festivals create a

significant seasonal demand in the market.

Industry Analysis

The growth rate of worldwide aquaculture is very rapid (more than 10% per year for most

species) while the contribution to the total from wild fisheries has been essentially flat for the

last decade. The rapid increase in the demand for sea food has created a new market for

seafood products like shrimp, lobster, crab etc. Statistics say that Malaysia alone imports 2 tons

of crab every day. This indicates a growing market for the company in coming years. After 3 to 5

years crab industry would become one of the most important and feasible industry for

Bangladesh. Though the industry is growing slowly but it is projected as a highly prospective

sector in terms of exporting. Existing Shrimps & Lobsters exporters are already showing interest

in exporting Crabs. Eventually it proves the responses of the exporters to the escalating

demand and potential high profitability of this sector.

In Bangladesh, the trend of crab exporters is to simply gather the crabs from nature and export

the ones that meet the weight criteria. Only about 10% of the total export is fattened crabs

from different farms. But even so, they do not practice any scientific method in doing so. The

crablets they use are collected from nature and there is always a scarcity.

As the company is targeting the world crab market, the competition will also be global. The

major competition would be from countries like China, Indonesia, Philippines and India. These

countries have a set distribution chain and are exporting at a much larger scale. Even after using

scientific methods to fatten crabs, they too are dependent on nature for their crablets, making

it the major bottleneck in producing crabs.

In the current scenario, there is no existing crab farming company that directly

exports abroad. The whole operation is carried out partially step by step with the help of

intermediaries. As the country’s first commercial crab fattener and exporter, Crabex will have a

competitive advantage over competitors. From fattening to exporting the product, the whole

process is controlled. This results in a lesser mortality rate, uniform size and overall better size

and quality of the product. The product pricing is very competitive and the company is dealing

directly with the importers. Furthermore, geography of Bangladesh allows the culture of a

better species of crabs, which is widely appreciated by consumers. This eliminates all the

advantages the competitors have over Crabex products.

The company’s segment definition, most value for products is based on geography.

Crabex is not intending to reach the global market as a whole, but rather the markets that offer

the greatest value in return. That is why the company is offering two different types of products

to two different segments. They are targeted towards different geographical locations. The

product with the most demand is live crab, but The company is only targeting the Asian crab

market with this though the US and EU is a huge market as crabexll. But due to problems such

as Flight schedules and time involved, the product cannot reach the market.

PEST Analysis

Political Factors

Government is providing ample tax incentive in this business sector. So there is no concern of tax payment regarding crab export.

Employment laws will definitely be favorable in terms of dealing with the employees.

As I planned to do fattening process in scientific way so there won’t be any environmental issues.

Political unrest of our country might be a serious problem as far as the transportation and other processing of shipment are concerned.

Social Factor

As crabex are not selling product inside

of Bangladesh so crabex don’t have any

social or cultural barrier; however, the

fact is that the demand of crab in our

local market is increasing. People from

different classes are willing to taste

crab as sea food item.

Economic Factors

As the company is taking loan at

initial stage, so crabex need to be

concerned about the interest rate.

As crabex is a part of international business, the exchange rate and inflation rate have a definite impact on the business.

As the fluctuation of inflation rate is high in our country so it could cause negative effect on the business.

Technological Factor

Basically my business is not mainly dependent on technology. Crabex don’t heavily depend on the technology part as far as fattening is concerned.

However, in case of processing and transporting the company would be depending on technology; so farther improvement in these sectors might increase efficiency and profitability as well.

Competitor analysis

Competition for Crabex comes from two very different aspects; domestic and international.

Domestic Competition: In Bangladesh, the trend of crab exporters is to simply gather the

crabs from nature and export the ones that meet the weight criteria. Only about 10% of the

total export is fattened crabs from different farms. But even so, they do not practice any

scientific method in doing so. The crablets they use are collected from nature and there is

always a scarcity.

International Competition: As the company is targeting the world crab market, the

competition will also be global. The major competition would be from countries like China,

Indonesia, Philippines and India. These countries have a set distribution chain and are exporting

at a much larger scale. Even after using scientific methods to fatten crabs, they too are

dependent on nature for their crablets, making it the major bottleneck in producing crabs.

Competitive Advantage: Crabex’s main advantage lies in the fact that the company has its

own breeding facility. From hatching to exporting the product, the whole process is controlled.

This results in a lesser mortally rate, uniform size and overall better size and quality of the

product. The product pricing is very competitive and the company is dealing directly with the

importers. Furthermore, geography of Bangladesh allows the culture of a better species of

crabs, which is widely appreciated by consumers. This eliminates all the advantages the

competitors have over Crabex products.

List of competitors

Domestic International

Gazi Trading, Dhaka Dong gang city tongyu foodstuff co. ltd.,

China

Noyon Traders, Dhaka Zhoushan Yixin Sea food co. ltd, China

Shawon Traders, Dhaka Sai International Trading, India

Meghna Traders, Dhaka Coastal catch Exim, India

Ashik International, Dhaka Kantang Sea food, Thailand

Iqbal Traders, Dhaka Asia Firstline SDN BHD, Malaysia

Marketing plan

Market Segmentation : Crabex will follow geographical segmentation and focuses on

countries of East Asia including China, Japan, Taiwan, Korea, Hong Kong, and Malaysia as its

target market. In these countries, the company will focus on differentiation as its basic

competitive advantage. This advantage arises from the ability of the company to consistently

provide high quality homogenous crabs at a very competitive price.

Pricing Approach: In other words, Crabex will follow competition-based pricing approach.

The demand for mud crabs is found to be so high that this strategy will successfully capture a

certain share of the market without compromising the price. Crabex’s pricing strategy will vary

according to the price charged by the competitors. But the margin will be higher for Crabex as it

doesn’t have to go through the intermediaries. This can be made because the company will

have it’s own production firm where the company will produce crabs and through a scientific

process, fatten them and finally sell them to it’s clients without any intermediaries like agents,

suppliers etc.

Promotion: In order to allocate promotion budget, Crabex will abide by percentage-of-sales

method. A promotion budget of 20 percent of sales has been allocated for promotion budget.

As sales increases, the company will attract new clients and capture new markets.

Consequently, additional promotional activities will be carried out which would increase the

promotional budget.

Integrated Direct Marketing: Since the customers of Crabex consist of buyers, the

business will adopt integrated direct marketing in order to promote its crabs. The

business will send brochures through fax and e-mails, have its own website where

orders can be taken online, and contact its clients through telephone or e-mails to

maintain a profitable client-producer relationship. In addition, Crabex’s crabs will be

advertised over internet through international web portals like www.alibaba.com and

www.ecplaza.net. Crabex will also give advertisement in the journals and brochures of

different sea food business related publications and web portals of the targeted

countries.

Collaboration: Crabex will also collaborate with the local shrimp companies in order to

use the existing marketing channels to attract buyers.

Trade Exhibitions: As a business promotion tool, Crabex will attend trade exhibitions

organized by Export Promotion Bureau and of possible, it will try to sponsor such events

both at home and abroad. Bangladesh Export Promotion Bureau publishes a directory of

exporters to foreign countries. Crabex will collaborate with BEPB to get listed in the

directory which will help attract more buyers.

Advertisement: To attract the foreign customers who are the main target customers,

crabex have to take their attention by doing advertisements which are eye catching and

out of the box. For that crabex can make several strategies. For the advertisement

campaign Crabex can easily sponsor sits in the airport which will have the company logo

on them.

Sponsorship: Crabex can also sponsor waiting lounge in the airport. The company can

give free souvenirs like key chains, waist bags where my logo and company name will be

written on them to the travelers. These strategies are must because at first all foreign

buyers will be unaware about my company and its product. By doing these the company

can grab their attention that there is a company which is not like other traditional old

fashioned crab agencies, Crabex know how to do business and how to attract the

customers.

Crabex can also contact with the local as well as international traveling companies to

promote the product, like the company can repaint their traveling transportations with

company logo and color. Crabex can post bill boards and also paint some small sized

food items in the major travelling sites with company logo and color to attract the

customers.

Different Approach: Finally Crabex can do a totally different advertising approach

which has not yet used by any other firms in the crab and sea food industry. Crabex will

create a huge logo on the main firm site which can be only seen from the sky. The

traveler on the plane can notice that. This will not only be a key catching advertising but

also an effective one as well. Many well established companies are using this advertising

strategy and they all have succeeded with it. This is a little bit costly advertisement but

Crabex will have a sufficient budget to back it up.

Crabex’s main customers are foreign buyers. To do promotions this things Crabex have to

consider it. That’s way the promotional budget has to be a little more for the first year. Buyers

are professional and Crabex also has to be professional as well, otherwise they will not come

rather they will go to the other existing crab agencies.

Distribution Channel: The existing distribution channel consists of three intermediaries each

of which gets a very small portion of the selling price as profit. The intermediaries include

fishermen who catch crablets, arotder (wholesaler), bapari (middleman), and finally exporter

who make the bulk of the profit. On the other hand, Crabex has a competitive edge regarding

distribution channel by undertaking direct marketing channel which eliminates all the

intermediaries. It has its own hatchery as well as distribution system so that the business can

deliver the crabs directly hand it over to the buyers.

Conclusion

Crabex has the opportunity to deliver a good return rate which is high compared to any

other venture with minimal risk. The land choosing should be ideal, with route to the port

city of Bangladesh. The process will be fully controlled, offering the highest of quality. The

products offered will be of the highest of standards and competitive with the other

products in the market in terms of price. Such a product can never fail to create its own

market. This venture will create a new trend in the market generating high profit with

utilizing the unutilized resources that are still remaining idle.

BibliographyKotler, Keller, Koshy, Jha. Marketing Management . Prentice Hall.Chapter 3- Gathering Information and Scaning the Environment.