Market Research Proposal: Hong Kong Organic Vegetable Market Analysis

This market research proposal investigates the potential for organic vegetables in Hong Kong. It begins with an executive summary and introduction, outlining research objectives and questions. The report analyzes the business environment using PESTEL analysis, assessing political, economic, social, technical, and legal factors. A market overview examines demand, supply, segmentation, and target customers, including an internal SWOT analysis. The research methodology details the design, sampling, data collection, and analysis methods employed. The findings suggest a viable market due to increasing health consciousness and a growing demand for nutritious foods. The proposal highlights the importance of understanding market dynamics, competition, and consumer behavior to successfully enter the Hong Kong organic vegetable market. The report concludes with a research timeline, budget, and references.

Assignment: Market Research

Executive summary
This market research proposal is aimed at analyzing the viability of Hong Kong as a suitable
market or organic vegetables. The market research will entail; describing the objectives and the
research questions it will also explore the Hong Kong market stating the various variables that
determine its viability. The research will also highlight the research methodologies employed.

Table of Contents
Executive summary.....................................................................................................................3
1. Introduction..............................................................................................................................5
1.1 Objectives of the research proposal.......................................................................................5
1.2 Research questions.................................................................................................................6
2. Business environment in Hong Kong......................................................................................6
2.1 PESTEL analysis...................................................................................................................6
3 Market Overview and Research................................................................................................8
3.1 Market demand and supply....................................................................................................8
3.2 Market segmentation.............................................................................................................9
3.3 Target customers....................................................................................................................9
3.4 Internal Analysis (SWOT).....................................................................................................9
4. Research methods..................................................................................................................11
4.1 Research design...................................................................................................................11
4.2 Sampling methods...............................................................................................................12
4.3 Data collection.....................................................................................................................12
4.3 Data Analysis method..........................................................................................................12
Conclusion.................................................................................................................................12
Research timeline.......................................................................................................................13
Budget........................................................................................................................................13
References..................................................................................................................................15

1. Introduction
With the upsurge of diseases related to junk foods and unhealthily living, more people have
started to consider a more nutritious alternative in order to escape the grasp of some of these
lifestyle diseases (Zhang & Hu, 2012). This has been one of the reasons why the organic
vegetables market is getting more and more popular amongst Australians, Europeans and North
Americans.
Several papers have clearly described the negative effects of junk foods to an individual’s health
(Datar & Nicosia, 2012). Hong Kong is a market with a substantial number of its locals still
engaging in fast foods dieting. However, the recent campaigns on healthy eating have opened the
eyes of a majority of the country’s population, which has in turn increased their uptake of
nutritious foods. In so doing, there is a potential market for organic vegetables in Hong Kong,
which this market research proposal will try to elaborate.
Market research proposal, is a useful tool or document aimed at analyzing a specific market by
looking at the various dynamics, thereby, allowing a business to be established with the least
amount of risks possible (Grüner, 2016).
1.1 Objectives of the research proposal
The main objective of this market research proposal is; to identify whether it is viable to move
into organic vegetable market in Hong Kong.
The market research will try to do an in depth analysis into the current organic vegetable market
currently existing in Hong Kong. The research will also try to analyze the current business
environment in Hong Kong, to ascertain whether it is conducive for doing business. Various
environmental analysis will be undertaken to confirm this point.

1.2 Research questions
The research questions this market research will be aimed to answer are as follows:
- Is the organic vegetable market in Hong Kong viable?
- Is the existing business environment contusive for doing business in Hong Kong?
- Is there enough demand for organic vegetables in Hong Kong?
2. Business environment in Hong Kong
There are two types of environmental analysis that can be done to ascertain the viability of a
market; PESTEL and SWOT analysis (McGee, 2014). The PESTEL analysis will be discussed in
this section, while the internal (SWOT) analysis will be discussed later in the proposal
2.1 PESTEL analysis
Political Environment
Hong Kong is known as an administrative region under China. It has remained politically stable
over the years, with very little political squabbles affecting its business climate. It has been seen
that, the political stability of the country has been fairly high, with the country being commended
for having very few incidents of corruption. If the political arena is to remain the way it is, then
the market can be considered viable, with very little if any political interruptions (Syvrais-
Gallant, 2017).
Economic Environment
Hong Kong is hailed as the third largest financial market globally, with a very strong trading
power. Some have even termed the country as the world’s freest economy (Chan, 2010). Having
survived the latest global financial slowdown, despite its high exposure, Hong Kong can
therefore be termed as an economically stable country, with a capacity to withstand financial
tremors. This is a market worth investing in, as the business will not be harshly exposed to
financial downtimes.

Social Environment
Hong Kong is a multicultural society with a high influx of foreigners. Most of the residents are
bilingual, speaking both Cantonese and English. The residents of Hong Kong have been very
welcoming to foreigners, and have been quite adaptive to the western culture (Kennett, Chan &
Ngan, 2016). From their current existing culture, it can be positively noted that, the introduction
of organic vegetables in their market will have no negative impact on their culture. The society is
in fact willing to embrace it as part of an initiative to improve their eating habits, from a junk
oriented eating, to a healthier diet.
Technical Environment
Hong Kong is a country known for its innovation and productivity. It is a country that embraces
research and development as seen by its formation of a productivity council, aimed at improving
its productivity in all spheres. This is a very positive aspect for our market, since it partially
guarantees the supply of quality raw products, essential for the survival of the organization. The
population in Hong Kong is also well educated, which is a good attribute in so far as accessing
human resource is concerned.
Legal environment
The legal policy framework in Hong Kong is known globally to be pro-investment. With quite a
simple tax system, and its transparency, the existing legal framework is meant to allow the ease
of doing business, more so to new market entrants. The system is not only favorable to the locals,
but also to multinational organization.
From the external environment analysis, it can be deduced that Hong Kong as a market is viable,
and quite appealing to the organization. Hong Kong has branded itself as a trade hub, and the
number of multinational organizations investing in the country, can be a seen as a good indicator
to assess the market responsiveness. (Qiu, Wang, Richard & Wang, 2017)

3 Market Overview and Research
Hong Kong has an estimated population of more than 7 million people according to latest
estimates by the United Nations. People in Hong Kong have started abolishing the junk food
culture, and have started embracing a more healthy diet. The market is also bound to deviate
from more meat products, especially red meat. This is mainly due to sensitization of the harmful
health repercussions caused by over consumption of red meat. This is more evident when reports
have indicated that globally, the consumption of organic foods have increased by over 200%
over the past decade (Winson, 2010). This is a good setup for a possible market hike for
consumption of organic vegetables.
So far, there are a number of companies already in the fresh vegetable market in Hong Kong.
Some of them include; eat fresh, Catch Grocery, Ceres Produce just to mention a few. The early
market positioning of the competitors might prove to be a challenge to the organization
establishment in Hong Kong.
3.1 Market demand and supply
Demand and supply are the key elements that dictate the performance of a specific market in so
far as pricing is concerned (Singh, 2013). In a perfect market, the demand and supply curve are
supposed to be in equilibrium. This is where the supply of goods is equal to the market demand
(Melvin & Boyes, 2013). With the existing population, there is still a big market to be explored.
The current players in the market are not able to meet the demand of the market. The possible
implication of this is that, the market prices are still relatively high. In the case of our
organization, we are projecting to have a supply of products from the available local farmers who
are known to produce quality products. In the instance of a supply shortage, we can supplement
from the neighboring Chinas’ mainland or even Thailand. We also have the alternative of getting
supplies from our international partners, albeit the costs being a little bit higher due to
transportation costs.

3.2 Market segmentation
According to (Jobber & Ellis-Chadwick, 2016), market segmentation is the classification of the
market/customers into different groups with regards to their shared characteristics. Market
segmentation can be subdivided into four segments. It can be done by using demographic,
psychological, geographical and behavioral, each as a distinct characteristic (Kotler & Keller,
2012). From the observation made, the market can be segmented in all these clusters; however
the most effective form of segmentation would be geographic and demographic. The reason for
this assumption is due to the nature of the product we are dealing with, and how effective it will
be to penetrate the market by using the two named modes of segmentation.
By adopting different pricing strategies for the different market segments, the organization is
bound to build a strong brand that resonates with the customers, and at the same time making
substantial profits (Sonderegger, 2011).
3.3 Target customers
The market provides a wide range of target customers. Since the organization comes under the
auspice of healthy living, then organization should try to penetrate each possible market niche by
promoting the strong organizational brand, and riding the healthy eating wave. High end market,
which is health conscious, should be given key consideration due to their willingness to buy. The
prices in this market should also be competitive, not too high to portray an image of taking
advantage. The low end market should also be give equal consideration. Most of the already
existing players have concentrated on the high-end market, neglecting those customers with low
incomes. This is a market that can be tapped and utilized to gain competitive advantage.
3.4 Internal Analysis (SWOT)
SWOT analysis is an important tool which enables the organization to assess its internal
capabilities to tackle a particular market (Phadermrod, Crowder & Wills, 2016). SWOT analysis
provides a structure of analyzing the strengths, weaknesses, opportunities and threats that the
company has. A proper marketing strategy will normally rely on SWOT analysis as a reference
of key information (Tripathi & Reddy, 2012).

With regards to the Hong Kong market, the following can be identified as our strengths;
The company has a strong international image, and is known in various countries as being one of
the best organic vegetables retailers. The quality of the products offered by the organization has
received recognition from different independent bodies, more so with the organization being ISO
certified. This will be a strong selling point when the organization decides to make an entrance
into the Hong Kong market.
Another significant position of strength the company may enjoy over its competitors is that, the
company already has an established supplier chain. In the instance that the local market cannot
meet the organizations supply demand, then we can resort to our international suppliers being
able to supply the market.
The company also has a stronger financial position as compared to the local competitors. Most of
the available market players have not been in the business for long thereby, having a weaker
financial portfolio as compared to our organization.
The fact that the organization has been in the business for a longer duration than the local
companies may prove to be a plus for the organization. The organization will have more
technical know how on running the enterprise as compared to the existing competitors.
Despite the numerous position of strength enjoyed by the company, it is important to note that
there are several areas of perceived weakness which should be considered before venturing into
the market.
One of the weaknesses that the organization has is that, they are going to enter the market
slightly later than the already existing players. This might leave the organization on a weaker
footing in so far as consolidating a substantial market base is concerned.
The organization is also disadvantaged by the fact that, they have no local supplier yet, to
distribute them with the necessary products, and in the quality they want. The existing market
players have already established their supplier base locally, which is actually a cheaper
alternative, as compared to having international suppliers.

Judging by the market trends in Hong Kong, there are various opportunities the company has
when venturing into the organic and vegetable market;
The market is still not saturated with players, and is yet to realize its full potential. Through the
adoption of innovative strategies, the organization has an opportunity to gain an upper hand in as
far as competitive advantage is concerned.
The organization also has an opportunity to capitalize on the fact that, it already has its
international suppliers, who will allow them to have a constant supply of produce all year round,
even when the local production of organic vegetables is low. When the competitors will be
facing a shortage, the organization will be having a consistent flow of supply.
The stable business environment, and embrace of the locals to western culture, also provides an
opportunity for the organization to venture into the market with very minimal resistance.
The existing or potential threats in the market are;
The biggest threat for the organization is the existing market players, who have already taken
root in the market. Another threat may arise from inconsistency from the local market to provide
quality organic vegetables when needed. Overreliance of the local suppliers might end up
proving to be a threat in case they fail to deliver as expected by the organization
From the SWOT analysis, we can judge the company as being in a fairly advantageous position to
venture into the Hong Kong market.
4. Research methods
This research was a market research proposal, aimed at, establishing the viability of Hong Kong,
as a potential organic vegetable market. During the research process, the following were the
research methodology employed;
4.1 Research design
The research deign employed was descriptive research. Descriptive research design, is aimed at
providing a clear picture of the phenomenon under study (McBurney & White, 2013).
Descriptive research was chosen since the purpose of the market research, was aimed at

describing the characteristics, and the viability of Hong Kong, as a potential market for organic
vegetables. Under descriptive research, the researcher opted to go for survey as the preferred
choice.
4.2 Sampling methods
The sampling technique used in this research was cluster sampling. As (Saunders, Lewis &
Thornhill, 2015) puts it, cluster sampling is where a researcher divides the population into
various clusters, and selecting only a few of the clusters to be represented in the study. Due to the
nature of the market research, this type of sampling technique was thought to be more
appropriate.
4.3 Data collection
There were various methods of data collection that were employed. The first one being
observation while the other one being a semi structured interview. Despite the fact that both
processes are time consuming, they were cost effective and able to present, and describe the
situation as it is in the field (Patton, 2015).
4.3 Data Analysis method
Data analysis as described by (Kothari, 2011) is the process of sorting, interpreting, and shaping
data in a manner that can be easily understood. The researcher opted to use qualitative method of
data analysis due to the nature of the data he had collected, which was majorly non numerical in
nature.
Conclusion
From the market research done, it has been established that Hong Kong can be a market worth
exploring. From an analytical perspective, the external environments that affect an organization
are favorable in Hong Kong, and indicative of a suitable business environment. From the SWOT
analysis, the organization has also been seen to be in an advantageous position should they
decide to venture into the Hong Kong organic vegetable market.

Research timeline
February March April May June July
Formulation of a research
plan
Formulation of research
questions
Choose research methods
Collection of secondary data
Preparation of data
collection tool
Collection of data
Analysis of data
Final compilation of the
market research proposal
Presentation of the proposal
Budget
Activity Cost $
Paperwork (editing and printing) 50
Transportation 1500
Accommodation 3000
Miscellaneous 500
total 5050

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