By IAN POH

IN a consumerist society overflowing with merchandise, competition abounds. In Goh Kai Kui's book, the solution is to entrench the brand name within the psyche of customers.

'Our core strategy begins with the customer. The question we ask ourselves is, when the consumer decides to buy something, why should he choose us over others?' says the 43-year-old CEO of food, beverage and consumer electronics group Goh Joo Hin, well known for its New Moon abalone. 'You don't buy a product just because you want to use it or eat it. You give it as a gift to yourself and your loved ones, and there is an element of emotion in each and every can.'

This is Goh Joo Hin's long-term marketing strategy. By associating its mainstay New Moon brand of seafood products with kinship and goodwill from the time it was introduced in 1998 by Mr Goh's father, the group works to gain the long-term loyalty of customers.

'Products and services don't have a life and can't speak for themselves. We must create a life in our product in order to differentiate it from others and keep people interested in buying it.' This 'life', by Mr Goh's estimate, takes an 'average of 10 years' to manifest. It is now 13 years since the brand building began and he feels that progress so far has been satisfactory. However, the portrayals need to stay consistent 'over a longer period of time' before New Moon can earn its place as a household brand.

'Personal feelings of emotional familiarity take time to crystallise. They have to be cultivated through consistent and persistent advertising, whether in the print or broadcast media, or by word of mouth.'

One key characteristic of Goh Joo Hin's strategy is to acknowledge the difficulty of building a consumer base on 'standalone' products, and use endorsements to grow awareness among targeted demographics. Since 1999, Kym Ng, Zoe Tay and Fann Wong have endorsed the company's New Moon products as well as another of its food brands, Mili. Home-grown artiste Stefanie Sun is the current ambassador of New Moon rice.

Endorsements

To appeal to Singaporean industriousness, top performers in national examinations have also been roped in to endorse New Moon's bird's nest and essence of chicken products.

Goh Joo Hin's principal activities are marketing, branding and the distributing of FMCG (fast moving consumer goods).

Besides food brands New Moon and Mili, introduced in 1998 and the 1980s respectively, the company has under its healthcare division the Borsch brand of traditional Chinese health supplements, introduced in 2005.

It established its presence in the consumer electronic goods market in 1998 by going into the distribution of such brands as Fuji Xerox, Philips and Siemens.

The company's infrastructural backbone lies in an extensive transportation network which sees it distributing its products to more than 3,000 retail outlets and supermarkets locally, and 17 countries worldwide.

The venture into consumer electronic goods distribution was facilitated by reduced operating costs made possible by tapping this pre-existing network.

Such diversification proved helpful in the face of ongoing challenges: While many businesses suffered in the midst of the 1997 Asian financial crisis, Goh Joo Hin emerged for the most part intact, incurring only roughly $30,000 in bad debts.

This - arising from trade in Singapore and US dollars - arose from dealings in the currency exchange market, and is a common risk encountered by importers and exporters of goods.

A key challenge faced involved instability in exchange rates. Imports would become dearer in the light of a weakening Sing dollar.

The company minimised the risk of exchange rate fluctuations by maximising the level of cash flow. By offering incentives to retailers in the form of larger discounts, it got in return from them quicker payments and subsequently a shorter period of exposure to exchange rate risk.

With the increased cash flow, the company was able to deal with increased costs. In 1997, it saw an increase in profit of 77 per cent over 1996.

Goh Joo Hin is sticking to its strategy of being 'light on assets' and 'high on cash flow' to ride out any future difficulties the current financial crisis may bring upon the region. 'We expect to face similar currency-related problems in the current crisis, and will tackle whatever arises with the same strategy,' says Mr Goh.

'This is what will keep the company safe. Cash flow, like oxygen, is essential to our survival. There could possibly be hundreds of similar but smaller businesses dropping out of the market due to a lack of this. That could explain why we got a bigger slice of the pie in the end.'

But for now, sales are still rolling in. There has actually been an increase in revenue in the past two months. Mr Goh's theory is that the company's unique and diversified business model - about 90 per cent of its products are essential foodstuff - plays an important role in the rise in sales even as more people opt to cook at home as they tighten their belts.

Product range

As a result, demand for FMCG rises. He ponders alternatively that if a family had set aside $1,000 for a holiday they decided not to take, splurging $40 of that saving on a can of abalone would be a relatively small expense.

The company feels that its range of products is too differentiated for it to have any direct rivals. In its opinion, anyone who is distributing FMCG products is an indirect competitor.

However, Mr Goh feels that it is better to focus directly on the company and where it wants to go in the long term, especially considering that Goh Joo Hin has price structures and resources which are dissimilar to other companies in its market.

This blueprint for concurrent expansion and diversification includes introducing a new type of 'ready to eat' rice under the New Moon brand, which is somewhat similar to the idea of instant noodles. Most immediately in the pipeline is essence of chicken with each bottle containing one abalone.

Business has been good: Mr Goh reveals that turnover hit $108 million in FY2007/08. Profits jumped 198 per cent from the previous year. And for the current year, up to October, sales and profit increased by 5 and 20 per cent respectively.

The encouraging signs notwithstanding, the company is watching the situation. The upcoming festive seasons of Christmas and Chinese New Year would be the next clear indicators of the trend.

'It isn't clear yet whether we are definitely protected from the current financial crisis,' says Mr Goh. 'As it originated in the US and the impact hasn't been fully felt, it's hard to tell whether and how much this will affect us. One advantage of this is that there would be reasonable time for us in Asia to plan ahead.'

This article was first published in The Business Times on 24 November, 2008.