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Faculty of Business and Accountancy Graduate School of Business Master of Business Administration Semester 1 2019/ Tuesday Evening Class (Group 2)CQC 7004 Strategic MarketingMarketing PlanPrepared by: Tengku Marwan Bin Tengku Mansor Chong Siu Hou Syed Muhammad Syafiq Syed Mohammed Badrul Hisyam Bin ...

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Faculty of Business and Accountancy Graduate School of Business Master of Business Administration Semester 1 2019/2020 Tuesday Evening Class (Group 2)

CQC 7004 Strategic Marketing

Marketing Plan

Prepared by: Tengku Marwan Bin Tengku Mansor

CQC 170075

Chong Siu Hou

CQC 180004

Syed Muhammad Syafiq Syed Mohammed

CQC 180104

Badrul Hisyam Bin Abdullah

CQC 190025

Vani A/p Baskeran

CQC 190039

Muhammed Faez Bin Husain

CQC 190057

Prepared for: Dr . Ezlika Binti Mohd Ghazali

Table of Contents 1.

Nature of Business............................................................................................................2

2.

Introduction...................................................................................................................2-3

3.

Mission Statement …………………………………………………………………..….4

4.

Slogan …………………………………………………………………………………..4

5.

Objectives

6.

Situational Analysis 6.1 External Environmental ………………………………………………………………5 6.1.1 Competitive Environment 6.1.2 Economic Environment 6.1.3 Demographic Environment 6.1.4 Social and Cultural Environment 6.1.5 Political and Legal Environment 6.2. SWOT Analysis 6.2.1 Strength 6.2.2 Weakness 6.2.3 Opportunities 6.2.4 Threats …………………………………………………………………………...10

7. Marketing Strategies Target Markets & Positioning ………………………………………………...11 - 14 7.2 Products Strategies…………………………………………………………….1 7.3 Pricing Strategies 7.4 Promotion Strategies 7.5 Distribution Strategies 8. Budget ……………...………………………………………………………………20 – 23 9. Conclusion ………………………………………………………………………….22 - 24

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1. Nature of Business Organic Link is a private limited company run by 6 founders. The company focuses on establishing an organic food retail network in Malaysia that will benefit local customers who want to purchase ethical, healthy, and affordable organic food and ingredients. The company also aims to support the local agriculture industry in producing healthy plant-based and animal-based products while striking a balance in between conserving and sustaining the environment and meeting consumers’ food demand. The vision of Organic Link is to be the trusted and convenient neighbourhood organic food retailer. The company values Quality, Collaboration, and Integrity as the guiding principles. The company will relentlessly provide quality organic food supplies to our customers. Besides that, Organic Link aims to collaborate with local agriculture producers especially small size organic farmers as strategic partners, hence, the company will able to contribute back to the society in moving the overall economy. The company also aspires to deliver the best deal to both suppliers and customers as guided by the company’s integrity value. The company’s head office is based in Kuala Lumpur and the retail shops will be opened in major commercial areas near to residential area, service condominiums and apartments, and mixed developed areas with high resident population.

2. Introduction Malaysia is a food haven to most of the public. The cultural diversification of Malaysia has been the main driving factors on the varieties of delicacy. Hence, Malaysian predilection for food are well known. Besides that, advancements of Malaysia for the last decade in a socioeconomic perspective have significantly changed the dietary lifestyles of Malaysian [1] which includes consumption behaviour, purchasing habits, and eating patterns. Unfortunately, these have resulted inclining diet-related illness among the Malaysian public. Despite on the increasing health challenges, public awareness and concerns on health are a growing trend in recent years. According to the joint research conducted by Food Industry Asia and research firm, IGD, the majority of Malaysians are actively seeking alternatives to improve their consumption habits in order to maintain a healthy diet [2].

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Besides that, the Malaysian government is aggressively promoting to the public to adopt a balanced and healthy diet. Healthier diet is already commonly adopted among Malaysians. As the awareness on health increases, the public is demanding for better quality food products for their daily needs. However, researches show that Malaysian consumers have raised that healthy diet alternatives are limited in the country [2]. This reinforces the need for rethinking of the food, and consumer retailing grocery market available in Malaysia. Besides that, the changes in the psychographic of Malaysian such as lifestyle, tastes, and standard of living, people have started to have interest in organically produced foods due to rising concerns on agriculture practices which may have detrimental effects on the environment and people. However, the Malaysian market is still considered in the infant stage as compared with developed countries such as European countries. There is only limited information and knowledge on organic foods in Malaysia. Hence, there is a huge market potential of organic food retailing business in Malaysia.

Current Environmental Issues Feeding the worldwide population is a huge and long-term problem to deal in the modern society. To solve this issue, industrial agriculture is introduced. Industrial agriculture is used to focus on short-term food productivity in order to feed the global citizen. However, this practice has created numerous environmental and public health problems. There are two general type of agricultural practice which are plantation and animalbased agriculture. Plantation based agriculture focuses on harvesting crops for economic activities. This type of agriculture requires large areas of land to cultivate. In order to meet the economic quantity in order to meet the food demand, enterprises have turned to use commercial chemical fertilizers for rapid growth of plants or applying genetic modification crops to maximize production. As a result, industrialized agriculture depletes the nutrients in the soil and eventually, the synthetic fertilizers used in the industrialized agriculture often contain harmful chemicals which will then find its way to contaminate the land, water, and air. These residues may have long-term side effects on destroying the environment. On the other hand, animal-based agriculture also causes similar problems like plantation agriculture. For example, the common industry practice to raise animals is called concentrated animal feeding operations. In this practice, animals are kept in confinement and they are fed with grains. The conditions of the area to raise the animals is usually unsanitary 3

and compact. Such inhumane practice is the perfect ground to spread disease in the animal farms. To overcome this, operators of these farms will constantly feed their farm animals antibiotics to keep them away from disease.

3. Mission Statement Our mission is to offer holistic organic food through our supply chain from production to retailing and actively bring healthy and organic foods and products to our customer in their neighbourhood. We also advocate healthy and quality living to the customers by promoting organic foods as a primary diet.

4. Slogan Our slogan is “Healthy Body, Quality Living”. In line to our mission, we are inspired to advocate to everyone the right to eat quality and healthy foods.

5. Objectives The company is determined to provide the utmost quality organic food to our customers. We also aim to fully satisfy our customers’ demand of organic food supply. While we are a for-profit company, we also want to contribute our best to improve the current local organic agriculture. Our business objectives are as follows: 

To develop a national organic food retail chain



To provide quality and affordable organic food supply to customer



To contribute growth and development of the local organic agriculture



To advocate healthy and quality living

6. Situational Analysis To set organization objective, a situational analysis has to be carried out to study the external and internal condition of the organization. The situational analysis consist of several methods of analysis which is includes PESTEL and SWOT.

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6.1 External Environment An external environment refers to all the outside factors that influence the operation of a business. The external factors include competition; social, legal, economic, environment, demographic and technological changes.

6.1.1 Competitive Environment Regardless troublesome climate conditions, there’s more competition within the Malaysian organic market. Whereas there’s still room for advancement, more buyers are getting to be mindful of the wellbeing benefits of organic products. The mindfulness of organic product is especially solid in Malaysia and Singapore. This moreover applies to China, Taiwan and Hong Kong. In Thailand, the request for organic product item is littler, but it is getting superior. Japan and South Korea are the as it were Asian nations where the organic product showcase is still to some degree disliked, maybe since their conventional products are exceptionally great. Since organic product producers control the whole organic supply chain and have those certified organic benchmarks, organic product encompasses a major edge over their competition.

6.1.2 Economic Environment The organic food company will be deeply affected by Malaysia’s current economic environment. Malaysia’s last year was a tough year, but they were able to close it on a good note. The GDP recorded the strongest performance in the last quarter. It expanded by 4.5% better than expected. The solid was underpinned by growth in fixed investment and stable private consumption. According to researchers, Ringgit has become weaker and the price of oil has risen, which has contributed significantly to the growth. However, they are also saying that the net contribution by the external sector has become stable as the imports gained steam. That’s why the organic food industry can look to all these factors for a better results when they set up their business in Malaysia.

6.1.3 Demographic Environment Whereas the organic food market is continue to grow, the price remains weaken for numerous potential buyers. In expansion, the lager part of inquire about on organic markets has looked at the characteristics of buyers and what components, such as level of instruction, influence their probability of buying organic food. The sum and assortment of natural 5

nourishments obtained are influenced by both customer likings and the accessibility and reasonableness of organic foods. Whereas statistic variables appeared to impact whether a store carried organic foods, they did not impact the sum of organic food products.

6.1.4 Social and Cultural Environment Various social changes are being seen in Malaysia which can have impacts on the organic food purchase patterns. Since there’s an increment of the sense of prosperity mindfulness among people, they have to be exhaust on foods which have a positive prosperity effect on them. For example, one of the tea makers in Malaysia raised its share cost 34% with a bargain of MYR90 million with the introduction of their cutting edge item called Green Tea Latte with minute tea back in 2016. The company in addition outlined an equation to deliver a stick utilizing the green tea latte. They progressed this equation utilizing Facebook and other social media. The social drift in which there has been an expanded attracted in organic foods due to the rise of media scope on wellbeing, food security, and environmental dangers of pesticides. 6.1.5 Political and Legal Environment There are numerous political components which have the potential to influence organic products. One of the reasons is the obligation and charge rate in Malaysia. It has the capacity to influence the client investing conjointly the undertaking costs in Malaysia. As of late the Malaysia government has brought down the attracted level to boost up the economy. It would have a positive effect because it will offer assistance to bring much venture. Organic food retailers will be able to bring in speculation through credits. They will got to keep up the benchmarks that are implemented by Malaysian rules and directions. They will need to keep up the measures for processing, packing, sourcing, and manufacturing and distributing organic food to the market.

6.1.6 Technological Environment As there has been strongly mechanical development in Malaysia, it will offer assistance for organic food retailers to move online for their organic products shoppers favour online social organizing destinations like Facebook, Twitter and YouTube to be stage for their communication with the producers and others. Academicians and advertise analysts state this to be as one of the most fixings for a fruitful promoting strategy which allows the customers 6

to discover the most excellent offices additionally for creating viable communication between different parties.

6.2 SWOT Analysis We are able to characterize the qualities, shortcomings, openings and dangers of the natural generation deal by analysing the information from the eco-producers and the hypothetical inquiries.

6.2.1 Strengths a. Natural Environment Organic agriculture prevents natural resource degradation and the loss of land and productive potential via systemic approach and avoidance of agro-chemicals. In organic agriculture, nature both the instrument and the aim. Since organic farmers are not allowed to use synthetic substances such as fertilizers, pesticides and pharmaceuticals, they are required to restore the natural ecological balance in their farming. This is because ecosystem functions are their main productive "input". b. Interest in Organic farming Absorbed in organic agriculture strategies is developing, particularly in areas where the display cultivating framework has debased assets basic to agriculture production especially land. Non-production factors, such as farmer’s health, are also mentioned as a reason for shifting to organic management.

c. The act on Organic Agriculture To standardize the organic food products, the Ministry of Agriculture has taken the initiative by preparing a draft of Malaysia Standards – Guidelines for the Production, Processing, Labelling and marketing of Organically Produced Food. The proposed Malaysia Standards are based on Food and Agriculture Organization of United States / World Health Organization Codex Draft Guidelines for the production, processing, labelling and marketing of organically produced food. d. Certification logo of Organic products As in Malaysia, local and imported organic products are required to obtain organic certification from Malaysian Organic Scheme (Skim Organik Malaysia) under the crop 7

Quality Control Division of the Ministry of Agriculture. For those importers who repack their products locally can also get the Malaysia Organic mark by registering with Organic Alliance Malaysia, which collaborates with the Department of Agriculture for the processing and verification of imported organic goods. It makes a note that organic certifications are intentional and utilized basically by organic businesses to pick up accreditation; subsequently, numerous small-time farmers don’t get their products certified or enlisted since they feel it is pointless. 5.2.2 Weaknesses a. Inconsistency in supply In spite of the higher request from nearby markets, agriculturist may not commit to supply a settled whole of produce to outlet each month. For case, retail outlets inquire a predetermined sum of carrot each month, as requested by their clients. Wholesalers are standing up to challenges in getting supplies of carrots since agriculturists are not creating carrot all through the year due to application of strict crop rotation. Farmers in addition might not sure to supply a certain sum of products. Customers require ceaseless supply though makers appear incapable to meet the demand. Agriculturists specify arrive issues as their fundamental challenge to begin natural cultivating, particularly for those who do not have land. b. Labor Shortages Organic farmers in Cameron highland detailed that labor deficiencies as the biggest challenge. Since farming is labor intensive, they have a higher requirement for workers compared to ordinary cultivating strategies. Due to this fact, they depend intensely on foreign labor to handle the work. These workers are from Bangladesh, Sri Lanka and Indonesia. In Malaysia, foreign workers in the agricultural industry must be monitored by the government due to the immigration procedures and the requirement for working permits. c. Niche Market Organic foods are considered specialty items and sold in specialty markets. Right now not many consumers would purchase organic produce since the cost is 30-500 % higher than that of normal produce. There are however shoppers that are willing to purchase organic produce in Malaysia as they think it is worth buying. Changing ways of life and increased health awareness have influenced customers to consider buying healthy and nutritious items, including organic produce. People are more aware about chemicals being used in agriculture, and want to avoid them. 8

d. Procedure to receive organic certification One of the biggest issues of the certification is that it is amazingly costly. The process is also complex and lengthy, generally taking about 2-3 years to get certified. Organic farms need to be inspected every year by a certified supplier. As a result the farmers normally form associations and conglomerates to overcome this hurdle.

6.2.3 Opportunities a. Development of organic food Opportunities for the development of the organic food sector result from current societal trends such as health, environment, and quality creates new demand in the market. A new consumer class seems to be arising: as wealth and the level of education rises, people become increasingly concerned about environment, health, wellness, and food quality. The awareness of the long-term beneficial effects of consuming organic products is growing. A high consumer awareness and acceptance of organic farming is also considered a relevant opportunity for the organic food sector: consumers are more aware of and willing to buy organic products. b. Market Channel The organic market in Malaysia is driven by consumers, and the price is also driven by the market itself. There is no government intervention in organic marketing. In general, the market approaches are divided into three categories, which are, direct home-distribution, through organics retails/outlets and through organic farmers association. However, specialty organic retailers is not the largest marketplace for organic products in Malaysia as most of the consumers prefer to purchase organic foods from conventional supermarkets. c. Retail Network Malaysia’s retail food sector is also developing rapidly and high-end premium grocery stores are increasingly popular. Today, like-minded retailers are important sources of ingredients and products. Example at the Opika Organic Market and Restaurant, proprietor Selina Gan serves fresh food and sells eco-friendly household products and organic produce under her two-in-one retail concept. 5.2.4 Threats a. High market competition 9

The high competition in global markets (globalization, World Trade Organization [WTO], power of large food retailers) is considered the biggest threat for the organic food sector. In addition, the competition with emerging countries and large food retailers is considered a threat. National imports are expected to not be competitive with cheaper organic farming products from other international markets. In addition, the export capacity of some countries is low and producers...