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Ltd. (China); Yeo Hiap Seng (Middle East) Co. Ltd. (Bahrain); Yeo Hiap Seng (Perak) Sdn. Bhd.; Yeo Hiap Seng
Trading Sdn. Bhd.; Yeo’s Beverage (International) Pte. Ltd. (Singapore), and PT YHS Indonesia.
2.2 Strategic Business Unit (SBU)
Under the brands of Yeo’s, the company produces food and beverages which distribute locally and
internationally. The strategic business unit form for Yeo’s consists of 3 levels: corporate headquarters, strategic
business units and finally its divisions. The divisions within each SBU are related in terms of markets and may
share its market competencies and tools.
Under food section, Yeo’s produces:
1. Canned food :
i. canned meat products with local taste blend of Curry chicken, kurma chicken, Vindaloo chicken, Rendang chicken, Beef curry and mutton curry
ii. Canned seafood: Prawn sambal, cuttlefish in soya sauce, cuttlefish in curry, cuttlefish in sambal, curry cockles, fish with salted black beans, and sardines in tomato sauce.
iii. Vegetable: Baked beans, processed peas, sweet corn in creamy style and whole kernel corn.
iv. Kaya, sweet coconut based spread for bread or flavouring purpose
v. Sweet condensed milk, with Goodtaste lable.
2. Sauces: wide range of soya sauces, from thick dark, sweet, and liquefied soya sauce .
3. Noodles:
i. Cintan noodles, instant noodles with flavours of Curry, Assam laksa, Mushroom chicken, Tom yam, Asam soto ayam, Goreng Ala Indo, Goreng Spicy, and Vegetarian
ii. Selera Chef, with local taste of kari laksa and mi sup, series of product with collaboration of celebrity chef, Chef Wan.
iii. Cup-A-Mi, cup noodles in a pack.
iv. Grab Mi, noodle in cup packaging with different flavours of curry, vegetable and assam laksa.
v. Non-fried noodles, cholesterol free, with zero preservatives nor colouring for health conscious consumers.
The Yeo’s food SBU has the geography scope which is within whole Malaysia (Yeo Hiap Seng (M)
Berhad n.d). The main sales offices are located in populated cities in Malaysia such as Alor Star, Ipoh, Johor
Bahru, Kota Kinabalu and Kuching (Yeo Hiap Seng (M) Berhad n.d). The increased competition due to saturation
of markets and competitive threats from overseas companies entering local market has forced YEOS to penetrate
overseas market. However, the distribution of food products to overseas is only undertaken by Singapore Yeo’s
Corporation (Yeo Hiap Seng (M) Berhad n.d).
In terms of strategic fit, Yeo’s food SBU has achieved corporate objective through the Management
Information System (MIS) (Yeo Hiap Seng (M) Berhad n.d). Besides, it is also assisted by its outstanding human
resource function which includes formulation and implementation. These specialties of Yeo’s food SBU has
driven it becomes profitable and contribute to sustainable operations of whole Yeo’s Corporation.
“To be the no.1 Asian Food and Beverage company in Malaysia”
Sales Promotion and Advertising strategy are the current promotional tools that Yeo’s Malaysia used.
Yeo’s leverages on Malaysia role as the role of world Halal manufacturing hub.
Yeo’s worked together with ntv7 on the TV programme ‘Finding Angel’, a charity programme that helps less fortunate or disabled individuals realise their dreams.
New product pricing strategy used for the new developed products by Yeo’s.
The products price had increased seem the increases of the raw materials.
Offered different range of foods to provide wider choices to consumers.
Sensitivity towards the changes of consumers’ needs and trends of becoming a high health-conscious product manufacturer. For instance, Cintan cholesterol free, non-fried noodles
Good relationship with production material supplier which ensure lower cost production.
Fast Moving Consumer Goods (FMCG) sales distribution network
one of the best research and development teams in the country
4% of the total market share in Malaysia food industry (2008).
In 2005, Yeo’s achieve the total profit of RM 6.324 million. Then it increases violently to RM 28.486 million in 2007. However, this total profit has dropped aggressively and lost RM 1.463 million at year 2008 due to economic downturn. Fortunately, it recovers to achieve the total profit of RM 617 thousand.
Food SBU
Current Promotional Strategy (eg: Key Message, Media tools; Unique Selling Proposition)
Strategy:On a 12-bottles purchase of 1.5ml, one bottle of 1.5ml was offered free to consumers. Similarly, on 6 bottles purchase of 1.5ml, one 0.5ml bottle was offered free. Regarding the trade promotion, the retailer was also given an additional discount of 4% during this sales promotion.
Publicity Nestle pure life was launched in Karachi with a huge amount of -enthusiasm and positive response shown by the local. This greatly helps in creating awareness to the brand and gave its introduction a good start. To increase sales and build and image in the mind of consumer through advertising on Television, Radio, Newspaper, Bill Board.
Claimed as playing price leadership role in Malaysia market.
Nestle has the highest market share, thus lead to the lower costs of production.
Combined price leadership with product differentiation from its competitors (no frills), hence offer a unique customers experience.
Good quality of the Nestle food product is the most important competitive advantages.
Nestle strategic priorities are focused on delivering shareholder value through the achievement of sustainable capital efficient and profitable long-term growth.
Has a good word-of-mouth regarding the foods and beverages and the healthy and nutrition foods to suit the market.
Strong worldwide brand recognition.
29% of total market share in Malaysia food industry (2008).
Based on the financial performance for the Nestle Malaysia, its earn RM8.081 million in year 2005, RM9.197 million in year 2006, RM10.649 million in year 2007, RM18.039 million in year 2008 and RM10.428 million in year 2009.
Total foodservice breakfast sales are expected to grow from $46 billion in 2006 to $85 billion in 2015. (trends)
Food SBU
Current Promotional Strategy (eg: Key Message, Media tools; Unique Selling Proposition)
concerted efforts to create brand awareness via aggressive advertising and promotions that will continue to drive sales
“Bola Kampong e-card” which is the movie ticket contest, has been advertised through media as well as Mamee company website.
Adopted Competition based pricing strategy.
Leading manufacturers and marketers of snacks, instant noodles and beverages, with 80% revenues from snacks and instant noodles.
Wide distribution to Australia, Singapore, Russia, Hong Kong and The Netherlands
“New innovative snacks” development.
Market leader of the snack markets in Malaysia.
Strong-in-house expertise in product development- continuous innovation to generate consumer demand.
4.8% of market share (2008).
Mamee gain profit of RM2.552 million in year 2005, RM2.971 million in year 2006, however in year 2007 only RM1.992 million due to high cost of sales and high expenses. In year 2008, Mamee gain RM3.009 million and RM 5.0546million in year 2009 which are the most earning compared to the past.
(Yeo Hiap Seng (M) Berhad n.d; Nestle Product (Malaysia) Sdn Bhd 2009; Mamee-Double Decker (Malaysia) Sdn Bhd 2010)
3.4 External Environment
3.4.1 Societal Environment
Political Malaysian National News Agency (June 23, 2010) reported that, according to Prime Minister Datuk Seri Najib, Malaysia had been the forefront in developing standards for the Halal industry.
Economic Malaysia consumer inflation rate has dropped from 3.5% in the year 2006 to 2.4% in the year of 2007 thus increase in customer purchasing power. (Department of Statistics Malaysia 2008).
Social Customers concern more about healthiness such as natural and organic foods (Tey 2008).
Technology Agriculture-biotech emerged for growing more crops. (Biotechnology in Malaysia 2009).
Environment Manufacturers and retailers are working to reduce waste and improve energy efficiency to create higher awareness of green issue (Graiser and Scott 2004).
Graiser and Scott (2004) stated that government intent to cut waste, reduce consumption of resources and minimize environmental damage.
Legal Food Safety Act 1990 provides legal powers and offences in relation to public health and consumer’s interest (Food Safety Act 1990).
3.4.2 Industry Environment
(Sample 5 2009)
Michael Porter's Five
forces.
The intensity of competitive rivalryHigh. Significant growth of Malaysia food industryLarge food manufacturers such as Nestle, F&N, Yeo’s, Mamee and so forth
Threat of substitutionsHighThere are a lots of close substitutes of processed food such as fresh food.
Threat of new entrantsLow.Malaysia is encouraging the emergence of food manufacturers by providing subsidiaries.
Buyer PowerHighLow switching cost for buyers.There are a lots of food choices in the market for buyers.
Supplier PowerLowSuppliers are fear of losing business with large food manufacturer.
O1: Emergence of Halal market in worldwide with the increasing on Muslim population.
O2: Consumers are heading towards health conscious product.
O3: Emergence of time-starving society
Threats
T1: Unstable economical performances.
T2: Health conscious group does not prefer processed food.
T3: Intensive competition environment. For instance: from other competitors like F&N and Nestle.
Strengths
S1: Yeo’s is Malaysian top brand under food categories.
S2: Yeo’s had won Malaysian Halal Excellence Awards 2009 Best Halal Brand by International Islamic Tourism and Halal Week 2009.
S3: Yeo’s understand Malaysian market very well especially their preference of food.
OS-Strategies
O1S2: Maintain production efforts which focus on Halal food products.
O3S1: Widen food distribution throughout Malaysia for consumers’ purchasing convenience.
O2S3: Position Yeo’s as Malaysian first choice brand.
TS-Strategies
T1S1: To become cost leader in terms of productions.
T2T3S3: Improve and modify food products to have high nutrition value.
Weaknesses
W1: Lack of advertising, promotion and public relation which is important to increase awareness in food industry.
W2: Low product differentiation as Yeo’s food products are similar with those existed in market,
W3: Weaker market image compared with large firm such as Nestle.
OW-Strategies
O2W1W3: Using high nutrition value food products as the advertising issue in order to increase brand awareness.
O2W2: Improve and modify food products to have high nutrition value.
TW- Strategies
T2T3W2: Improve and modify food products to have high nutrition value.
T3W1W3: Using public relations to advocate Yeo’s food image.
4 SBU Objectives and Goals
4.1 Mission:
To become leading food producer in Malaysia food industry.
4.2 Objectives:
1. To become cost leader in food manufacturing.
2. To maintain the recognition from Malaysia Halal Association
3. To focus on product development.
4. Strengthen brand position.
4.3 Goals:
1. To reduce production cost by 20% by 2011.
2. To increase profit growth to 10% from current growth of -5.38% (year 2009) by 2012.
3. To improve food safety standard which match Halal food requirements and regulations along the SBU
operations.
4. To increase product differentiation in terms of greater nutrition value and dietary attributes in order to follow
consumers’ trend of being health conscious in 2011.
5. To position Yeo’s food products as Malaysian’s first choice brand which suit Malaysian’s taste and cultural
the most by 2015.
6. To increase market share from 4% (2009) to 8% by 2015.
4.4 Product Life Cycle of Yeo’s Food SBU
With the analysis on the performance of Yeo’s Food SBU, it is identified that it is on maturity stage of product life
cycle. This analysis is done for the convenience of developing strategies. Table below shows the efforts of food
SBU in past 1 to 5 years which position it at maturity stage.
Product Modification
focus on product renovation and innovation (Yeo Hiap Seng (Malaysia) Berhad 2007).
Executed a packaging facelift for its bestselling products-Cintan Brand (Yeo Hiap Seng (Malaysia) Berhad 2007).
Extension of Cintan noodles with the launch of “Grab Mi” (Yeo Hiap Seng (Malaysia) Berhad 2007).
New products that emphasis on adding value to the existing product line (Yeo Hiap Seng (Malaysia) Berhad 2008).
New product offerings o Malaysia’s first nutritious instant noodle, Cintan Nutri Noodleo New variants for Yeo’s Soy Milk (soy bean corn and rose)o Strategic alliance with tea maker BOH Plantation > produce BOH The-O-
Ais in a ready to drink pack (Yeo Hiap Seng (Malaysia) Berhad 2009).
Profit (highest profit)
Profit slightly increases from RM373m in year 2004 to RM568m in 2008 and a drop of 4% which is RM536m in year 2009 due to economic downturn (Yeo Hiap Seng (Malaysia) Berhad 2009).
Promotion (concentrate on product positioning)
Sponsoring-both public and private sectors that promote caring society, environment and healthy community (Yeo Hiap Seng (Malaysia) Berhad 2007).
Future Development 2010- strengthen brand position in Malaysia through advertising, promotions and PR (Yeo Hiap Seng (Malaysia) Berhad 2009).
Low cost emphasis
Established infrastructure, strategic price adjustment and cost management, able to partly offset rising costs (Yeo Hiap Seng (Malaysia) Berhad 2008).
Material Contracts > an agreement with its major shareholder and immediate holding company (Yeo Hiap Seng (Malaysia) Berhad 2009).
Fixed price contracts to establish determinable prices for raw materials and commodities used (Yeo Hiap Seng (Malaysia) Berhad 2009).
Place (increase distribution efforts)
Launches its products in Indonesia in May 2006 in which appointed 31 distributors (Yeo Hiap Seng (Malaysia) Berhad 2006).
Products are widely distributed over 55 countries worldwide such as Hong Kong, Malaysia, Singapore, the US and China (Yeo Hiap Seng (M) Berhad n.d.).
4.5 Yeo’s Goals Strategy Mix
GOAL 1
To reduce production cost
by 20% by 2011.
GOAL 2
To increase profit growth to
10% from current growth of -5.38% (year 2009) by 2012.
GOAL 3
To improve food safety standard which match Halal food
requirements and regulations along the SBU
operations.
GOAL 4
To increase product
differentiation in terms of greater nutrition value
and dietary attributes in
order to follow consumers’
trend of being health conscious
in 2011.
GOAL 5
To position Yeo’s food products as Malaysian’s first
choice brand which suit Malaysian’s taste and cultural the most by 2015.
GOAL 6
To increase market share from 4% (2009) to 8% by 2015.
Product:
- Continue product modifications and reposition to match customers' needs and wants.
X X
- Product differentiation in terms of Halal features, greater nutrition value and dietary attributes
X X
-To achieve lower cost of production X
X
X
Pricing: - survive in the competitive
foods market and compete with existing competitors
X
- attract consumers to notice and buy this new product
X
- maintain or increase the profitability during the inflationary period
X
-segment the current market from price conscious to quality conscious
X
Distribution: - To maximise sales and
gain economies of scale
X X X
- Gain customer recognition
X X
- Minimise distribution costs
X X
- Wide spread of products within Malaysia.
X
Promotion: - Achieve low
promotion costsX X
- Influence customer perception on Yeo’s
X X
- Build brand equity X X X- Increase sales response. X X
X
X
X
X
X
X
X
X
X X
X
5 Recommendation Strategies
5.1 Market Strategies
5.1.1 Market Scope
It is recommended that Yeo’s to maintain its current total-market strategy throughout the next five years
which by selling different products in each of their strategic business unit directed toward different segments of
the market (Jain 2004). For example, Yeo’s is selling instant noodles, canned food and sauces that meeting the
requirements of all types of customers like children, adult and elderly. Since Yeo’s is already at maturity stage, it
is reasonable for Yeo’s to maintain its current total-market strategy as it can increase market share, increase
power in the processed food market as it serves the whole entire market and able to compete with competitors in
all segments. With the existing strong marketing professionals of Yeo’s, it can enhance the continuous
implementation of this strategy work in a more effective and efficient way by develop appropriate marketing
strategies for the different products offered.
5.1.2 Market Geography
It is suggested for Yeo’s Malaysia to continue adopting the national strategy for all their brands and
products which by just distribute and sell their products within Malaysia. For instance, the canned curry chicken
offered by Yeo’s Malaysia is just flowing in each state of Malaysia but not to overseas countries. The reason to
keep on carry out national strategy is that it can strengthen its brand name to increase market share; and
improvised in terms of product development within domestic market. Thus, it again can help to achieve the
proposed objective and goals. It is reasonable for Yeo’s to adopt this strategy as Yeo’s can make use of their
strong management team like marketing professionals and Fast Moving Consumer Goods (FMCG) sales
distribution network which can fulfil the requirement on resources needed in adopting this strategy.
5.1.3 Market Entry
Previously, Yeo’s has adopted the market entry strategy of first-in strategy for their canned curry chicken
which they are the first Malaysia processed food company who introduce canned curry chicken in Malaysia (Yeo
Hiap Seng (M) Berhad n.d.). Besides, they have adopt the early-entry strategy for their instant noodles which they
introduce their Cintan instant noodles after the introduction of MAGGIE instant noodles and Mamee instant
noodles in Malaysia. However, it is suggested that Yeo’s to continue adopt the early-entry strategy for their new
products as it can contribute significant profitability and has lower risk. Within this strategy, Yeo’s can make use
of the resources on fast distribution network, marketing professionals, management information system and so
forth.
5.1.4 Market commitment
As now the proposed objectives and goals for Yeo’s is to increase profit growth, reduce production cost
and increase market share it is suitable for Yeo’s to adopt a strong market commitment throughout the five years.
In this case Yeo’s have to utilise their strong resources on marketing team, management team and research and
development team on this strategy for the food SBU in order to implement it successfully by continue improve
their product which adapt to market needs. For example, Yeo’s could afford to implement its strong commitment
to the food SBU due to it had sustainable competitive advantage of Fast Moving Consumer Goods (FMCG) sales
distribution network in Malaysia, strong marketing professionals to implement effective promotional activities
and best research and development team in Malaysia. So, Yeo’s can defend its position in high competitive
environment in the food industry.
5.2 Product Strategies
5.2.1 Product-positioning strategy
In order to strengthen the brand position to become high quality and nutritious products as to fight with
the competitors in the competitive environment in food industry, Yeo’s is recommended to position its existing
products by product attributes which based on features or customer benefits. By positioning Yeo’s to a more
suitable market segment, it can receive a favorable reception and thus increase market shares. For example, Yeo’s
can position its existing canned baked beans by adding value on its ingredients which is by using high quality and
organic beans in producing it and so forth. The successful stage of this positioning strategy on canned food can be
shown in the following perceptual map.
So, under the environment of increasing health consciousness of consumers, after being positioned, in the
case of canned baked beans, it swifts the current customer perception towards Yeo’s canned food from medium
high price and medium low dietary nutrition to high price high dietary nutrition. Thus, it can successfully help the
help Yeo’s to achieve the proposed objective of strengthen brand position; and achieve the goal of increase
product differentiation and increase market shares. In implementing this strategy, Yeo’s can make use of their
resources strong marketing professionals and best research and development teams to achieve this positioning by
doing research in the first two years and start to promote these value added products in the next three years as well
as ensure the production of the value added product is fulfils Halal requirement. The estimated budget of the
strategy is proposed to be RM 50,000.
5.2.2 Product Design Strategy
Yeo’s is recommended to continue offer standard products which offer same products to every customer
without customization on flavour or size according to individual requirements. For example, the flavour of Cintan
instant noodles is the same to be sold in all regions in Malaysia which customers has no right to customize the
taste based on their preference. In this case, Yeo’s can make use of their strong resources in producing standard
products which is the technical department will support the engineering operations of maintenance of machinery
and equipment as well as installation of new machines and equipment for the production of foods. By adopting
this strategy, it can yield cost benefits by just producing standard products that can save in cost per-unit; and able
to efficiently merchandise their products nationally.
5.2.3 New product strategy: Improvement/Modification
In order to achieve the objective of focusing on product development and being positioned to be the
Malaysia’s first choice brand that suit Malaysian’s taste and culture, Yeo’s is recommended to implement new
product strategy by modifying the existing products. For instance, Yeo’s can improve and modify its Cintan
instant noodles to be made by whole wheat flour instead of grain flour as whole wheat contains higher fiber and
nutrition than grain. In this case, in order to develop this product successfully, Yeo’s can make use of their
research and development team to research on the best whole wheat to be used to produce the new instant
noodles. Thus, this new instant noodles can increase product differentiation among competitors through adding in
nutrition value and dietary attributes.
Other than that, Yeo’s can modify the flavour of their instants noodles by meeting the taste of multi races
Malaysians. Hence, Yeo’s can introduce new flavour for their instant noodles like Sambal flavour, ginseng
chicken flavour and ox tail soup flavour after done their research through their research and development team on
the most preferable flavour of Malaysian. In this case, Yeo’s can achieve their goal of positioning as Malaysia’s
First Choice Brand which can suit Malaysia’s taste and culture. To implement this strategy, it is proposed to have
a research project on how to improve and modify the products in the first 3 years and start to produce and
introduce the product in the market in the following years. The estimated budget of the strategy is estimated to be
RM 200,000.
5.3 Pricing Strategies
5.3.1 Pricing Strategies
It is recommended to adopt pricing strategy that provides affordable prices to the customers in order to
increase market share. As Yeo’s has higher variable costs incurred compared to fixed cost which show in their
annual report of each year that is roughly RM 394,345,000 of variable costs and RM 151,122 of fixed costs in the
year of 2009, hence the operation of Yeo’s is highly price sensitive which a small increase in price adds much to
earnings (Yeo Hiap Seng (M) Berhad n.d.; Jain 2004).
5.3.2 New product
As there is a new brand and new products being proposed to be introduce in the market during coming
five years which fall in the Health conscious Halal food segment. Thus, new pricing strategy has to be assigned to
the introduction of new product category as to meet Yeo’s objectives, cover the costs incurred to increase
earnings, able to survive in competitive foods market and so on.
The recommended strategy is by using competition-based pricing strategy for the introduction of new
product to be able to survive in the competitive foods market and compete with existing competitors. In this
strategy, price will be set based upon prices of the similar competitor products (Nobilis 2008). The similar
competitor products are like MAGGI® TASTYLITE™ Atta Whole Wheat Instant Noodles®, Ayam Brand™
baked bean and so on. Initially, Yeo’s can analyse the characteristics of the instant noodles key market segment
and then determine the price to be set for the new instant noodles against competitors products. As there are loads
of close substitute on instant noodles and canned food from other brands, the demand for this manufactured food
products is quite elastic in the market (Tutor2u Limited n.d.). Moreover, the switching costs that incurred in
buying a pack of instant noodles is very low as consumers perceived low risk in buying a pack of noodles. Under
this circumstances, if the new product being introduced in the market at a lower price than the similar competitor
products, there will be a large probability that consumers will choose to the new and do not purchase the existing
one, or vice versa. So in this case, it is recommended to implement market penetration pricing which is set a
lowest possible initial price that lower than the competitor products as to attract potential customers away from
competitors (Jain 2004).
This market penetration strategy will be implementing for one year only as to penetrate the market by set
the price of new Yeo’s instant noodles slightly lower than the price of MAGGI® TASTYLITE™ Atta Whole
Wheat Instant Noodles® which is RM4.90 slightly cheaper than the MAGGI® new instant noodles of RM 5.70
(Nestle Products Sdn Bhd. 2010). With this slightly cheaper price, it can motivate and attract consumers to notice
and buy this new product which can boost the sales volume and increase market share. With the high demand of
Yeo’s new instant noodles, Yeo’s has to increase their production and thus some of the production costs will be
decreased. The lower costs per unit of the production of new instant noodles is due to getting discount in buying
raw materials and ingredients in larger quantities and marketing costs spread over more units. Hence, economies
of scale will be achieved and create high potential to become cost leader in manufactured foods market. In
implementing this strategy, Yeo’s has to have good relationship with their raw material suppliers in order to get
discount in buying raw material in bulk. Yeo’s also needs to have enough production capacity in order to produce
large amount of instant noodles. For instance, possess 15 noodles making machines in each factory. Overall, it can
help to achieve the goal of increase market share to 8% within 5 years, reduce production cost by 20% in the first
year and become cost leader in the manufactured food market.
After the one year implementation of market penetration pricing, it is recommended to increase their
price from RM 4.90 to RM 5.30 for the following years. The reason of increase the price is that as Yeo’s has
successfully penetrated the market by having improvement in market shares as well as being more possible to
become cost leader within the five years, it is the time for Yeo’s to aim for other achievement which include
increase their profit margin, cover their on-going promotional price and differentiate their product to position at
the right segment (i.e. quality conscious) as to avoid being drawn out from the market in the future. The
differentiation of their product through higher price will be successful as consumers will have a perception of
goods that have higher price is normally higher quality than others (Tsao, Pitt and Carauna 2005). So, Yeo’s new
instant noodles can be segmented in the category of high quality and healthy products. In other words, as people
are more health conscious nowadays, the increase in price will only caused a slightly decrease in demand by those
consumers who are not quality and health conscious but the profit will still grow as the increase in price will
generate larger revenue which can cover the loss in decreased demand and also the on-going promotional cost. In
this case, the higher price of Yeo’s instant noodles can increase the profit by approximately 5% with constant
costs and can successfully differentiate their product with other ordinary instant noodles like Mamee® Premium.
To conclude, the increase in price after the penetration pricing in the first year can achieve the objectives of
increase profit growth as well as strengthen brand position.
5.3.3 Existing Products
For the case of existing products, it is recommended that to slightly increase the price of existing food
products by 10%. For example, the price of a can of 425 gram baked bean will be charged at RM 2.60 instead of
RM 2.35 (Yeo Hiap Seng (M) Berhad n.d.; Jain 2004). This increase in price is mainly to maintain or increase the
profitability during the inflationary period and to segment the current market from price conscious to quality
conscious. The increase in the price of baked beans is still reasonable as the price of other quality competitor
brand of baked beans is around RM 2.60 to RM 2.80. Other than that, the increase in price can help Yeo’s to
segment their product to be in the category of quality product instead of lower price product. In this case, again
people will perceived high quality product is reasonable to have high price, so Yeo’s is predicted can successfully
segment their current served market to become quality conscious. By this, the increase in price of existing product
is predicted to be successful to achieve their objective of increase profitability and strengthen brand position as
there will be low probability to lose large number of sales as the prices are more or less the same with other
similar large brand and consumers will perceived higher price products equal to higher quality products.
5.4 Distribution Strategies
5.4.1 Indirect Channels
Yeo’s is encouraged to distribute its food products through numbers of intermediaries as they may
perform distribution tasks more efficiently than manufacture alone. It is recommended that Yeo’s should have 2
level of intermediaries which from manufacture to wholesaler and then retailer and lastly to the customers. For
introduction of Yeo’s new food products such as whole wheat instant noodles, it is suggested to use selective
distribution channels such as some super or hypermarket, some of the mini market and particular retail stores in a
small volume to test market sales in first two years after new product development as they are in introduction
stage. Third years onwards, Yeo’s products may reach growing stage; therefore, Yeo’s can build intensive
distribution so that Yeo’s new products are available in most of the retail outlets not only urban but also rural areas
in whole Malaysia.
5.4.2 Channel control strategy
Moreover, technological advance such as automobiles, highways and mass communication, it has made
mass retailing in food become more feasible. It is recommended for Yeo’s to adopt vertical marketing system by
forward integration in take over the tasks of wholesaler with additional “Inventory Automation System” to
distribute their products. This system will record down the past transaction between retailers; and then when those
retailers are running out of stock; it will automatically sending signal to the logistic team to remind them for stock
replacement of those retailers. By this, Yeo’s can enhance their market image and widen their distribution
coverage rapidly through this efficient distribution system. The development of this system is estimated to be RM
2,500 and implement in the next five years.
5.4.3 Distribution Scope
As to increase the market share of Yeo’s existing and new food products, it is suggested to continue
implementing intensive distribution strategy in the next five years which Yeo’s food products will be available at
all possible retail outlets in Malaysia. In this case, it maximises sales and then gains economies of scale; wider
customer recognition and brand awareness. Thus, the objective to reduce production costs, increase profit growth
and increase market share can be achieve successfully.
5.5 Promotion Strategies
5.5.1 Advertising
In order to promote Yeo’s food products have greater nutrition value and suit the taste of Malaysian,
repetitive advertising is suggested to be conducted. Yeo’s will provide informative advertising as to build Yeo’s
brand reposition among 80% of Malaysia consumers. Yeo’s will conduct mass media advertising consists of
television and radio commercial program, advertise in local newspapers and magazine, in store advertising placed
in retail stores and online advertising.
Commercial advertisement converged across countries and more or less stable over time. Yeo’s may
perform the same messages, sounds and effects for television and radio advertisement. For example, Yeo’s may
organise and sponsor certain TV shows like cooking programs as to show the way to prepare meals with Yeo’s
canned food and sauces in a healthy way. As soon as commercial break, Yeo’s will lead the commercial before
others commercial advertisements did like promote on the new flavour of instant noodles such as sambal instant
noodles perfectly match with Malaysian taste buds. In this case, awareness on the new product offered will be
created as there is frequent exposure of Yeo’s advertisement right after the cooking program. By this, customers
will be informed about the new product features along with product differentiation in terms of greater nutrition
value and dietary attributes through the cooking program and thus influence customers’ perception on Yeo’s
product from normal convenience goods to healthy and high quality convenience good. Hence, achieve the goal of
increase product differentiation and achieve Malaysia’s First Choice Brand. The commercial advertisements will
be held for one month in the first year for existing products and will held for 1 month after the introduction of new
products which could gain awareness from wide coverage of different types of customer, thus the cost per person
reached is low and achieved the objective of reduce costs.
The advertisement on newspaper and magazine will be published on “Flavours Magazines” and “The
Star” newspaper which published by Star Publication Malaysia Berhad. The newspaper and magazine
advertisement will be use throughout the five years in monthly basis. In store advertising such as point-of-
purchase displays which designated the messages will be displayed as to attract customer attention and awareness
in every of Yeo’s retail outlets, stores and supermarkets. Internet advertising will be presented in Yeo’s official
website and social utility website such as Facebook. Yeo’s may want to redesign Facebook appearance to more
informative utility but simple and easy to access. Online advertising are well cross borders which enable visitors
of Yeo’s website to know the position of Yeo’s food products are fulfill the Halal standard and value added food.
The store advertising and online advertisement will be carried out throughout the five years period.
The whole advertising strategy is proposed to spend about RM500,000 on TV advertisement and
RM50,000 on other advertising methods. The implementation of the advertising strategy will make use of the
Yeo’s existing marketing professionals.
5.5.2 Public Relation
As to strengthen Yeo’s foods brand position and reduce cost of production, it is necessary for Yeo’s to
pinpoint the uniqueness and tastiness of Yeo’s food products and choose a low cost method to promote their
products. Thus, publicity is suitable for Yeo’s to do their promotion as it is known as a favourable low cost
promotional tools as well as it can generate potential positive impact on the products. Yeo’s can make use of their
current employees in human resource department to maintain the industrial relations through this strategy. Yeo’s
can utilise its website newspaper as one of publicity tools to endorse Yeo’s business and networks purposes such
as e-commerce where goods are sold directly to Yeo’s supplier, manufacturer and consumers as well as position
its brand to a wide range of customers. This enhances Yeo’s to generate value by acquiring sales leads from
website. Beside from that, press releases and news about Yeo’s brand like the achievement of wining Reader’s
Digest Trusted Brand Award which will be publish as a tool to updates Yeo’s current happening and create a
positive image like high quality and safety image for Yeo’s food products. Yeo’s can continue to perform
corporate social responsibility as to supporting charity events and public service activities. This will directly and
indirectly attract media attention and coverage. Thus, it will achieve the low promotion costs. This strategy will be
implemented throughout the five years period as well with the budget of RM 2,000 for newspaper publication.
5.5.3 Sales Promotion
It is suggested to implement sales promotion for the new products offered by Yeo’s like the new flavour
of Cintan instant noodles. The reason to implement this strategy to create immediate sales response on the new
product as to gain more profit and market share in order to cover the research and development cost of the new
product. Yeo’s will implement product giveaways, samples coupons, and discount during sales promotion in
every retail stores as to build Yeo’s food brand images that come to customer’s mind when deciding whether to
purchase Yeo’s particulars food products. Beside from that, during festival season there will be discount of 15%
for every food products sell in supermarkets in Malaysia. Sales promotion will be held right after the introduction
of new products which is February 2014 according to places for three months to gain public attention. The success
of those promotions will enhance Yeo’s to increase market shares and increase the profit growth. This strategy is
proposed to use up RM 10,000 and will make use of the existing marketing professionals of Yeo’s.
6 Implementation Program
IMPLEMENTATION AND CONTROL TABLESTRATEGY WHERE DATES HOW TO IMPLEMENT BUDGET CONTROL MECHANISM
Market 1. Scope - Total Malaysia
WideOngoing Selling different products in each of
their strategic business unit directed toward different segments of the market in Malaysia
N/A Carry out market survey to discover new segments, gauge satisfaction level, human resources manager need to ensure that there are sufficient workers, monitor sales report.
2. Geography - National Malaysia Wide
Ongoing Distribute and sell their products within Malaysia
N/A Working closely with distrbution network to ensure the products been distributed to every places in Malaysia.
3. Entry - Early Entry Malaysia Wide
Jan 14 - Jun 14
Enter the healthy instant noodles market after few introduction of othe company
N/A Study public reaction, marketing of new services and extra attention paid to new operations.
4. Commitment Malaysia Wide
Ongoing Continue improve their product which adapt to market needs.
N/A Monitor sales to gauge market share, financial manager lookout for good investments, monitor competitor’s actions.
Product 1. Product Positioning Malaysia
WideOngoing Adding value to the existing products in
terms of ingredients.RM
50000Carrry out research on the current market requirement for high quality and nutrition products
2. Product Deisgn -Standard
Malaysia Wide
Ongoing Offer same products to every customer without customization on flavor, size or others in Malaysia
N/A Working closely with the raw material supplier to ensure the products being manufactured in same quality.
3. New Product - Improvement
Malaysia Wide
Jan-14 Modify and improve products in flavours and ingredients.
RM 200000
Marketing personnel carry out market survey to gauge satisfaction level, monitor customer feedback, operation manager ensure consistency of quality.
Pricing 1. New Price - Penetration Malaysia
WideJan 14- Jan 15
New price will be set lower than competitors based upon prices of the similar competitor products
N/A Analyse the pricing strategy of competitors
- Increase Malaysia Wide
Jan-15 Slightly increase of the price of new product
N/A Analyse the consumer reaction towards the price of new product.