7/23/2019 Instant Noodles in Thai Market http://slidepdf.com/reader/full/instant-noodles-in-thai-market 1/12 P a g e |0Instant Noodles in Thai Market Preeyanuch Manomathaya 538 56237 29 M.A. in Labor Economics and Human Resource Management Chulalongkorn University July 2010
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Instant noodles are one of the essential food products in Thai market. The food was consumed
by Thais from every socioeconomic level and become popular in both urban and rural area. The demand
for instant noodles has been at the high level ever since it was firstly launched over 30 years ago as well
as its sales which have consistently expanded through times. Instant noodles are also widely called in
Thai “MaMa” after the strongest brand in Thai market. Some people have even claimed that the product’s
sales record is a unique economic indicator of Thailand so called “MaMa Index”. The report aims to
demonstrate the picture of Thai instant noodles market in term of price, competition and marketing as
the same time analyze if the product can truly be one of the country’s economics indicators.
I. Introduction
Many Thais claim that the sales record of instant noodles mirrors the economics situation in
Thailand as well as the Thais’ lifestyle. Some economists have paid high attention to the movement of the
products as well as the local reporters who publish many interviews and special columns on instant
noodles or so called by the given nickname “MaMa Index”, the index which seems to be a unique
economics indicator for Thai society.
My interest in the topic was stimulated by the observation that instant noodles have become
parts of Thais’ daily lives. In the middle of hamburger crisis, there was a report that the sales of instant
noodles in Thai market has expanded. During the FIFA World Cup period in May 2010 many journalists
expressed their interest on the sales of instant noodles which jumped 50% compares to the same period
last year.
1
With its cheap price, easiness to prepare and quantity that can satisfy the rambling stomach,instant noodles or so widely called in Thai “MaMa” can fulfill Thai consumers’ needs in every angle.
The paper will focus on instant noodles market situation, price, market competition and what the
leading companies do in order to increase their profits and contend against their competitors.
1 Saha Pathanapibul PLC’s executive interview, Komchadluek Newspaper ; Source
Thailand, not only produces instant noodles for domestic consumption, the country has exported
the growing amount of instant noodles each year, within the pass nine year export amount of instant
noodles increases by over 114%. From 2000, the country has exported over 198,099 tons of instant
noodles and with the implementing of ASEAN Free Trade Area (AFTA) earlier in 2009 together with the
faint signs of economic recovery in European and US markets, the export rate expanded to 29,321 tonsfrom the 2008 record of 26,817 tons. Kasikorn Research Center has expected the export amount of
instant noodles to neighboring countries in ASEAN such as Laos, Myanmar, Vietnam, and Cambodia to
increase by 23-25% this year.
Demestic Consumption and Export
2001‐2009
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
T o n s
Export
Domestic
Consumption
III. Prices
Due to the fact that instant noodle is one of the core consumer goods in Thai market, for a
decade its price has been controlled by Department of Internal Trade (DIT), Ministry of Commerce. The
bureau has set the maximum price of “pack” instant noodles at the maximum of Bt.8. At present instant
noodles’ prices flexibility are limited to be between Bt.5 to 8 per pack. In 2007 as the prices of raw
material for food manufacturing the global market had strongly fluctuated, instant noodles were
immediately put into the Priority Watch List (PWL) product which the DIT would need to closely monitor
the movement and check the prices every 2 weeks. 5 Although recently the product was moved down to
Watch List (WL) category, its price and promotion as well as production and distribution are still regularly
monitored.
5 MEAs Intelligence Unit, The Thailand Research Fund; Source
sample consumers in January 20099; 22.8% of sample consumers tend to switch brands and try new
flavors. The research shows that the loyalty of consumers to each brand is not very high. Thai consumers
tend to move around and try new flavor all the time. In response to this factor, the producers introduce
at least 1 new flavor each year to attract more consumers and at the same time, giving the new flavors
the market trial. Some survive the trial and become the classic flavors while some have very short life onshelf. The flavors of instant noodles in Thai market can be categorized into 2 groups; 1) Classic Flavor or
the favorite flavors of all time such as Tom Yum Kong (Spicy shrimp soup), Moo Sub (Minced pork soup)
and Tom Yum Moo Sub (Spicy minced pork soup) etc. 2) Neo Flavor or newly launched flavors such as
Sukiyaki, Kee Mao (Spicy stirred fried noodles) and BBQ Duck etc.
V.
Sales Promotion Activities
Apart from product differentiation, to compete with the competitors in Thai instant noodles
market, the producers also need to implement various marketing and sales promotion schemes. MaMa,
YumYum and WaiWai invest a large amount of money in marketing each year to keep their share in the
market and win further some shares for their rivals.
“Marketing Mix” is the important promotion technique that is widely used by the sated producers
in Thai market. The four elements of the technique are “The 4 Ps” which stands for Product, Price, Place
and Promotion. 10
9 Instant Noodles, 2010: Focus on Valued Added Products and Export, Kasikorn Research Center; Source
The first “P” is for Product, the producers as stated earlier have regularly differentiate their
products in form of size, packaging and flavor as to efficiently meet the consumers’ needs. Moreover the
producers have tried to end the criticism from the academicians that instant noodles are “Junk Food” with
high salt, fat and carbohydrate content by fortification with amino acids or addition of meat, egg and
vegetables to improve nutritive values.
The second “P” stands for Price; although price technique is not frequently used in the instant
noodles market. There is no direct increase or decrease in price of instant noodles in Thailand but the
producers often use the opportunity of launching new product with different packaging, sizes and
sometimes flavors to temporary increase the prices and boost their revenue.
The third “P” in the marketing mix is Place. Instant noodles producers in Thailand implement the
technique by increasing the distribution channels. The products were not sold only in hypermarket or
supermarket but in convenience stores and small retailers close to the consumer’s homes. According to
the survey done by Kasikorn Research Center on Instant noodles consumers’ behavior in January 2009,
38.9% of 1,025 samples choose to buy instant noodles from convenient store by buying less amount at
the time but more in frequency.
The last “P” is Promotion, three giant producers spend large amount of money in this section
each year. Above the line (ATL) marketing tactic or advertising through mass media such as Television
and Radio spots are heavily used as to create brand distinction and boost sales of freshly introduced
products. At the same time below the line (BTL) marketing is also used to reach more specific group of
consumers. The producers usually set some small booths in hypermarkets and superstores to generate
trials of newly launched products. The marketing technique which has been successfully used in Thai
instant noodles market for a long time is “sweepstakes” campaign. MaMa is well known of its gold
sweepstakes campaign which has been annually organized since 1998 while YumYum and WaiWai as well
regularly launched the sweepstake campaign with various types of winning prizes such as Cars, Vacation
package and cell phone.
Corporate Social Responsibility or CSR policy has been used as one of the marketing technique in
Thai instant noodles market. The producers used the tactic to build brand image as a trustable and social
responsible brand. The companies are taking part in education sponsorship as well as religious festival.MaMa has invested around Bt.300 million in 2008 in CSR campaign while WaiWai has recently announced
its latest CSR campaign worth over Bt.40 billion to support agricultural sectors.
Although instant noodles were claimed by many people as a unique economic indicator of Thai
economy or “MaMa Index”, the idea that the instant noodles which are the cheaper food will be
consumed more during the economic recession seems to be out of date.
Instant noodles can no longer be categorized as food for the “poor” or claimed to be sold very
well only during the economic crisis. With heavy promotion, long term brand building and product
development, instant noodles have become a part of Thais’ eating lifestyle. The products are consumed
by people from every class, gender and age. It has been among the top choices of food that consumer
will think about when they are hungry. Every household tends to have some instant noodles stocked in
the kitchen. Its popularity can be seen through the rocket high sales record of the products in some
important period such as recent world cup and during the political crisis and curfew earlier this year.
According to the market research done by Thai President Food, the biggest producers of the instantnoodles in Thailand, each Thai consumes 37 packs of instant noodles per year and within the next few
years the amount is expected to increase to 40 packs per person a year which will be very close to the
consumption record per capita of Japanese consumers where instant noodles were originated.
VII. Conclusion
Instant noodles have become an important part of Thai people’s lifestyle. The product is among
the top choice that people will think of when it comes to convenient food. The key to success of the
product is its affordable price, convenience, accessibility, wide variety of choices and acceptable flavor.
Although Thai instant noodles market cannot be counted as “perfectly competitive”, the government’s
price regulation policy and the fierce competition in the market which consists of a few competitors have
forced the producers to continuously develop their products, expand the distribution channels and come
up with a lot of promotion campaign which at the end beneficial for the consumers.
Assoc.Prof.Visith Chavasit Denpong Phromyothi, The Role of Instant Noodles in Thailand, Institute ofNutrition, Mahidol University, 2000
Saha Pathanapibul PLC’s executive interview, Komchadluek Newspaper;http://www.komchadluek.net/detail/20100618/63336/มามาขายกระฉดยอดพ งรับเคอรฟว-บอลโลก.html
Instant Noodles, 2010: Focus on Valued Added Products and Export, Kasikorn Research Center;http://www.kasikornresearch.com/EN/KEcon%20Analysis/Pages/ViewSummary.aspx?docid=24948
Department of Internal Trade (DIT), Ministry of Commerce;http://www.dit.go.th/Service/Pr/Gain/control/list_menu.asp
Instant Noodles, 2010: Focus on Valued Added Products and Export, Kasikorn Research Center;http://www.kasikornresearch.com/EN/KEcon%20Analysis/Pages/ViewSummary.aspx?docid=24948
The Marketing Mix, Business Studies, BBC;http://www.bbc.co.uk/schools/gcsebitesize/business/marketing/marketingmixrev1.shtml