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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Executive Summary

company that has been in existents since 1991. Munchy’s is a company

During their 21 years years in

existence, they have have grown through through natural growth, growth, mergers, and and acquisitions. acquisitions.

This has

allowed Munchy’s to be the leading biscuits maker in Malaysia. Malaysia. Being the leading biscuits maker has allowed Munchy’s to introduce a diverse diverse selection of foods. However in recent years Munchy’s has been reluctant to adapt to current market trends.

The company was focusing on producing new versions of existing products to make them more convenient. However Munchy’s was ignoring that other companies were creating similar products that were cheaper and also healthier products. Recently, Munchy’s realized this trend and began creating healthier foods such as 100-calorie snack packs, low carbohydrate foods, and low fat foods. foods. With these new products, Munchy’s has been able to serve people that have chosen to adapt to a healthy eating life style. The new OATKRUNCH that Munchy’s have be introduce will solidify Munchy’s as a company that is willing to support those that have adopted and create awareness that healthy eating life style more important now days. Munchy’s is expecting the new OATKRUNCH to become one of the leading healthy snacks, by increase sales through the target age woman 18 to 45 in the market by 2013.

PREPARED BY NAGANANTHYINI A/P NAGASERAS

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Company Background It all started in 1991, in a small peaceful town down south of Malaysia. Our biscuits connoisseurs grew up on the heavenly smells of freshly-baked handmade biscuits that constantly filled their father’s biscuits factory. Affectionately known as their second home, it

was there that they lived, ate, slept, studied and played. During school holidays, they helped make and pack biscuits, would quite happily follow Dad everywhere. While growing up in a biscuits factory sounds like a child’s dream come true, life wasn’t always all fun and games (unlike a Munchy’s biscuit that’s fun and games, all day and all night long!). Many biscuits and

wafer burnt, broken and bruised along the way. But their hard work paid off, as they amassed secrets learnt from their forefathers (to be used in the future with the birth of Munchy’s) to

make the perfect homemade biscuits – handmade with cheeky fun, laughter and above all love.

Company History Munchy’s is Malaysia’s No.1 homegrown biscuit brand*, specializing in wafers, wafer sticks and biscuits. Since its birth in 1991, Munchy’s has grown to become the nation’s No.1 wafer

producer and No.2 biscuit producer both in terms of volume and value, while whi le boasting state-ofthe-art manufacturing facilities in Batu Pahat, Johor, Malaysia. In line with its mission to fill all kinds of fun-eating snacks in every home, Munchy’s products can now be found in approximately 60 countries. Its main products include OatKrunch, Mini Crackers, Lite Cream Crackers, Lexus Sandwich Biscuits, Muzic Wafers, Munchini Wafer Sticks, Sugar Crackers, Muzic Nuss Wafers, Choco-O Mocha chip Cookies, and Captain Munch Milk and Chocolate Cookies. In 1996, Munchy’s iconic factory was built in Johor, Malaysia, with 120,000 sq ft real estate and

fully-automated wafer technologies. This multi-million dollar investment allowed them to churn out yummiest to feed even more tummies. Considered the most advanced fully-automated wafer plant in South East Asia (till today), three new products were revealed- Muzic Wafers, Munchini Wafer Rolls and Lexus Biscuits – much to the joy of many.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Company Background It all started in 1991, in a small peaceful town down south of Malaysia. Our biscuits connoisseurs grew up on the heavenly smells of freshly-baked handmade biscuits that constantly filled their father’s biscuits factory. Affectionately known as their second home, it

was there that they lived, ate, slept, studied and played. During school holidays, they helped make and pack biscuits, would quite happily follow Dad everywhere. While growing up in a biscuits factory sounds like a child’s dream come true, life wasn’t always all fun and games (unlike a Munchy’s biscuit that’s fun and games, all day and all night long!). Many biscuits and

wafer burnt, broken and bruised along the way. But their hard work paid off, as they amassed secrets learnt from their forefathers (to be used in the future with the birth of Munchy’s) to

make the perfect homemade biscuits – handmade with cheeky fun, laughter and above all love.

Company History Munchy’s is Malaysia’s No.1 homegrown biscuit brand*, specializing in wafers, wafer sticks and biscuits. Since its birth in 1991, Munchy’s has grown to become the nation’s No.1 wafer

producer and No.2 biscuit producer both in terms of volume and value, while whi le boasting state-ofthe-art manufacturing facilities in Batu Pahat, Johor, Malaysia. In line with its mission to fill all kinds of fun-eating snacks in every home, Munchy’s products can now be found in approximately 60 countries. Its main products include OatKrunch, Mini Crackers, Lite Cream Crackers, Lexus Sandwich Biscuits, Muzic Wafers, Munchini Wafer Sticks, Sugar Crackers, Muzic Nuss Wafers, Choco-O Mocha chip Cookies, and Captain Munch Milk and Chocolate Cookies. In 1996, Munchy’s iconic factory was built in Johor, Malaysia, with 120,000 sq ft real estate and

fully-automated wafer technologies. This multi-million dollar investment allowed them to churn out yummiest to feed even more tummies. Considered the most advanced fully-automated wafer plant in South East Asia (till today), three new products were revealed- Muzic Wafers, Munchini Wafer Rolls and Lexus Biscuits – much to the joy of many.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Today, Munchy’s boasts an even more astounding production plant and warehouse facility that

covers more than 400.000 sq ft in Batu Pahat, Johor, Malaysia. The built-up area of these facilities amounts to more than 300,000 sq ft and is outfitted with: 

2 wafer plants with the capacity to manufacture up to 510 tons per month.

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4 biscuit plants which can produce up to 2,630 tons per month.

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4 wafer stick, machines with 16 production lines that have the capacity to produce up to 210 tons per month.

Also, a 120,000 sq ft warehouse was built and operates according to international warehousing standards. All Munchy’s products are manufactured solely under the brand name of Munchy’s with a record of 70 SKUs (Stock-Keeping Units) under their belt.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE MARKET ANALYSIS Biscuit making is a conventional activity in many parts of the country. Despite the advent of modern, large capacity and automatic biscuit making plants, large section of people especially in semi-urban and rural areas still prefer fresh biscuits from local bakery as they are cheap and offer many varieties. These manufacturers are able to cater to some typical local palate as well. Thus, they are able to with stand competition from organized sector units.

Biscuits are eaten by all type of people across the board round the year. They are, thus, mass consumption items with number of varieties and shapes. The market is scattered. There are some dominant national and regional brands. Biscuits can be manufactured at a location which is close to the market.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE PEST ANALYSIS

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POLITICAL Halal certification

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SOCIAL healthy eating habits

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ECONOMY Financial crisis Consumers confidence TECHNOLOGY Logistics and supply chain

POLITICAL With the Government of Malaysia focusing on turning the nation into an international “Halal” Hub, at Munchy’s, we’re proud to say that we have always recognized the importance of

manufacturing only Halal products. And this dedication to preserving the sanctity of our product is reflected by our Halal status which we first received more than 10 years ago. At In addition to this demand characteristic, Halal certified products are very important because around 60% of Malaysia's population is Muslim and these consumers are growing in numbers and seeing rising disposable household and personal incomes. Munchy’s, we take our Halal status very seriously and believe it to be a privilege that comes with responsibility. This is why we have a dedicated committee that deals with all things Halal. The Committee of the Munchy’s Company is made up of representatives from each key section that contributes to the

making of our products. We believe the presence of the Halal Committee further enhances our commitment to meeting Halal requirements for good OatKrunch biscuits, in terms of hygiene, sanitation and safety that stated in Syariah Law (law of Islam). Amongst the KPIs set by the Halal Committee of Munchy’s Company are planning to issue guidelines that reduce the risk of H alal,

enhance Halal awareness within the organization, among the target woman age 18 to 45, customers of OatKrunch biscuits by 2013 and actively participate in Halal seminars and trade fairs MIHAS 2009 (Malaysia International Halal Showcase) is one of the event in which we successfully participated this year, and as the years progress, we will definitely be part of similar venerated activities to promote healthy product to the target customers by 2013. PREPARED BY NAGANANTHYINI A/P NAGASERAS

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE

ECONOMY Malaysia struggled economically during the 1997-1998 Asian financial crisis and applied several valuable lessons to its economic management strategies that contributed to the economy’s

resilience to the 2008-2009 global financial crisis. After contracting 1.7% in 2009, Malaysia’s GDP grew 7.2% in 2010 (Appendices 1). In Malaysia, consumer confidence improved to 108.7 in the third quarter of 2011 from 107.9 in the second quarter of 2011. Generally consumer confidence is high when the unemployment rate is low (Appendices 2) and GDP growth is high. Measures of average consumer confidence can be useful indicators of how much consumers are likely to spend (Appendices 3). This predicament presents several opportunities and several threats to OatKrunch biscuits. The general decrease in consumer spending will cause consumers to be more conscious of their grocery bills. But their frugal approach to food and eating out in particular, will prompt them to consider more reasonably priced biscuits, providing a valuable opportunity for OatKrunch biscuits to increase sales by 2013.

SOCIAL In today’s ever growing consumer society more people are relying on well established brands. It

is the reputation that Munchy’s provides and their Malaysian made guarantee that healthy conscious woman customer is more inclined to trust the OatKrunch biscuits. With people more concerned with health and interested in healthy eating habits, products with high nutrition content or a product that is deemed “healthy” is becoming ever more popular. The concept of maintaining a healthy and nutritious diet is well entrenched in the minds of the majority of the Malaysians. Malay, Indian and Chinese herbal medicine, and wellness traditions, are wellestablished in the nation. Most Malaysians have some knowledge of them, which is usually "passed down through the generations". While this is officially reported, the very rapid socioeconomic growth of the past 3 decades has brought about significant changes to the lives of the PREPARED BY NAGANANTHYINI A/P NAGASERAS

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE population. The impact of modern living is already evident in the major cities of Malaysia. New OatKrunch packaging of products make them more aware about the product that exciting are also more appealing to a target customer by 2013.

TECHNOLOGY In today’s competitive environment, Munchy’s Company can cut the cost from where ever it

can be reduced. Logistics and supply chain should be designed so that warehouse charges could be the minimum. If storage charges are reduced, then automatically our profits are increased. If storage charges are low then may be does not have to clear the stock rapidly, we can wait for update in technology. Together with the increase of Internet users, this has led to increase sales and opportunities and create awareness for OatKrunch to offer promotions to the woman age 18 to 45 consumers and channel their business in a wide range with lower cost by 2013. For example, customers generally visit products website if they need directions about the detailed nutrition information and have events so the customers know the venue, location and so on.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE SWOT ANALYSIS

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STRENGHTS Focus on fast growing sector Consumer needs Distribution channels Well liked brand OPPORTUNITIES In-store promotions Packaging changes Product improvements

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WEAKNESSES Expensive ingredients, lowering cost of product

THREATS competition of other brands new company Newer and more exciting biscuits

Strengths 

Focusing on fast growing sectors such as snacks, beverages, and convenient meals.

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Addressing consumer needs for health and wellness.

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Expanding their presence in faster growing distribution channels.

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Established and well liked brand

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Munchy’s Company is strong and continually developing

Weaknesses 

product will be made with more expensive ingredients as all healthy foods are, therefore, we will not be lowering the cost of our product

Opportunities 

In-store promotions, such as taste-tests, or small promotional packs to the target consumers so that it will create awareness and

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Packaging changes which is more attractive to the target woman age 18 to 45

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Munchy’s have great opportunities to improve the product according to the customer

preferences PREPARED BY NAGANANTHYINI A/P NAGASERAS

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Threats 

A threat that we face is the competition of other brands, such as IKO. .Just as we want to generate a new group of consumers, we want to keep our current consumers as well. IKO is the only other brand that has an oat biscuit in the market.

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Although they are a relatively new company, their sales are quickly increasing along with their recognition. Therefore, we will be competing with company that has already developed recognition and has had its new product similar to ours on the market .

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Newer and more exciting biscuits entering the marketing


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Customer Analysis Consumers are choosing to buy oat crackers more and more. Customers enjoy the adaptability of the oat biscuits and in the current economic climate. Whilst oat biscuits are popular amongst customers because it is ever more concerned on the healthy conscious that valuable with the following below: -

Value for money

-

Variety

-

Piece of mind

-

Guarantees

-

Health

-

Accessibility

It is with these factors in mind that Munchy ’s will strive to meet customer satisfaction through the implementation of different more flavors’ and varieties, nutritional recognition, and value for money, Munchy’s will prove themselves better than their competitors.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Competitive Analysis

Company Munchy’s

Product

Price

OatKrunch

Promotion/ Product

Distribution/Place

Original oat biscuits

i.e.: 99 Speed mart, 7

since 1991

Eleven, Supermarket,

-

More cheaper than

All Hypermarket, and

competitors

small grocery shops

-

Small packets (6 pieces) -

OatKrunch Dark Chocolate

-

convenient

Place: All over

packaging

Malaysia

Reputation as value for money

RM 4.30 180g

Attractive and

-

Create awareness

-

Promote the products

-

OatKrunch Chuncky Organic Hazelnut

Big packets (small pack with 3 pieces) RM 8.90 500g

-

OatKrunch Strawberry & Blackcurrant


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE YLF

IKO

Manufacturing Sdn Bhd

Original oat biscuits

i.e.: 99 Speed mart,

since 1987

Supermarket, and All

-

Hypermarket

100% satisfaction guarantee or 100%

RM 9.75 -

Assorted Oat Calcium

490g

refund -

Cracker

expensive than

Place: All over Malaysia

other competitors -

various of oat crackers

RM 3.90 178g -

Oat Cal Cracker

RM 3.90 -

Sesame Oat Cal Cracker

178g

RM 3.90 Julie’s

Pumpkin Oat Cal Cracker

178g -

Julie's Oat RM 4.90 200g

Simple and


memorable


packaging

All Hypermarket, and small grocery shops

-

Place: All over

Oat 25 Strawberry

Malaysia RM 4.90 210g

-

Rich Tea Oat


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Kraft

Jacobs

20g (1 sachet) RM 6.69

-


food and beverage


Company in the

All Hypermarket, and

world which has

small grocery shops

offered consumers

Oatmeal

20g (1 sachet)

Oatmeal with Apple

delicious and

Place: All over

wholesome foods

Malaysia

for more than 100

RM 6.69 -

The second largest

years.

-

Promote synonymous with quality and

20g (1 sachet) RM 6.69 -

Oatmeal with Apricot


wholesome nutritious goodness

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Target market and Segmentation Consumer Market Segmentation

o

Demographic Segmentation

Demographics are generally describing the gender, age, ethnicity, education and income of the most likely people to purchase a particular product (Yankelovich & Meer 2006, p.124). With regard to Munchy’s OatKrunch, their current targeted demographic is middle to 18 to 45 age women who are the main person within the home who controls the family’s food consumption

and are conscious of eating and providing healthy food for their family. With this in mind, OatKrunch new demographic market should include working adults also who are conscious of their health and enjoy healthy snack foods. This will create a stronger customer loyalty base as they grow older.

o

Psychographic Segmentation

Psychographic segmentation revolves around the lifestyles, personality and motivations of potential customers. Due to the dramatic increase of the awareness and desire for healthy, nutritious biscuits, the general public has made lifestyles changes within the last few years’ reference to introduce and more concern a health conscious lifestyle. This is good for OatKrunch as they are a healthy alternative to some other biscuits which have unacceptable flavours and ingredients. There is also evidence to suggest that consumers generally associate healthy foods with poor taste (Raughunathan, Naylor & Hoyer 2006). Therefore, Munchy’s needs to adopt a push advertising and marketing approach to ensure the target woman age 18 to 45 are aware of OATKRUNCH nutritional value and their good taste.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE o

Behavioral Segmentation

Behavioural

segmentation

regards

changeable

behaviours

rather

than

consumers’

characteristics. As its name suggests, behavioural segmentation concerns the tendencies, behaviours and actual purchases/consumption of products. Variables accounted for in behavioural segmentation include benefit expectations, price sensitivity, brand loyalty, occasions and volume usage. Munchy’s are in a fairly good position regarding behavioural segmentation. As such a well established company spanning many decades, they are seen as a company that encourages and maintains brand loyalty from its customers. OatKrunch are a well-known and accepted base product for a biscuits that health conscious, and could often be considered by most of its consumers as a purchase made out of habit and brand loyalty.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Current and Prospective Target Market

The current target market for the original OATKRUNCH is children. The original OATKRUNCH biscuits have previously focused on and promoted the new colors for the flavors which would generate new interest amongst children, who would in turn convince their parents to buy the new biscuits. We have created an entirely new target market for our OATKRUNCH. Our marketing communications will be primarily directed toward women ages 18-45 that are health conscious, yet still enjoy consuming sweets. The target market lives in the urban part of the city and resides in the middle to upper middle income range. Our target audience enjoys recreational activities for exercise, such as swimming, biking, jogging, or power walking. The psychographics of our target audience are the desire to be healthy and fit, yet have a difficult time eliminating those sweet indulgences they crave and desire. They probably have a pattern for low self control and/or self discipline in regards to what foods they consume. The target market will purchase our new product for themselves and possibly their spouses. As a result of the increasing problem of obesity amongst children, we have made our children our secondary target market.

We will be focusing our efforts towards the primary target market. Their behavioral patterns include white-knuckling through their health, which eventually results in a binge of high fat foods and then a feeling of guilt for losing self control. This product requires low involvement decision making, because it is not a large purchase. However, it may give our target consumers a food they can indulge in without the feeling of guilt afterwards. More than likely, our target market will eat only one serving, which is three OatKrunch biscuits, at a time. This is just enough to give them their “fix” and satisfy their cravings. PREPARED BY NAGANANTHYINI A/P NAGASERAS

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Key competitors are Iko, Kraft and Julie’s. Julie’s also high ranked brand in the market, but they are currently the only other company with Oat biscuits on the market. We want to ensure that our current consumers continue to remain loyal to us, without switching over to our largest competitor, IKO and KRAFT. In addition, we also hope that our perspective target audience for the new product remains loyal to us alone, especially when most consumers do not associate us with healthy biscuits yet. Although we are currently the top oat biscuits maker, we have earned a reputation for great tasting but more fattening calories (Figure 1) compare to other oat biscuits. It is difficult to separate ourselves from the current image we have, but significant promotion may help our target audience to notice us and choose our product amongst the competition.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Marketing Strategy

Mission Statement We want our consumers to consider us as their primary snack food. We want our customers to know that we have their wants and needs in mind along with working to create products that will outfit to their health conscious lifestyles. To maintain and add to the good will that Munchy’s OAT KRUNCH possess within the community and the customers while continually improving the image and the product to reflect customer preferences.

Objectives Munchy’s has been very successful with its products. Now is the time to become more

competitive in other areas by becoming more attractive to potential customers. Munchy’s now plans to focus on better-for-you-products with less marketing to children. Since the weight loss trend is targeting more awareness of oat intake, instead of wheat products, we are choosing to shift some of our weight towards the healthy market. The OatKrunch will help broaden our market ability in the biscuit industry.

Marketing Objectives 

Promoting the OatKrunch packaging by using new colors to help it stand out against the original OatKrunch by 2013.

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Promoting a healthier product to health conscious consumers.

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To create a strong consumer awareness towards OatKrunch biscuits by 2013.

Financial Objectives 

Increase sales by marketing the OatKrunch biscuits to women ages 18-45 by 2013.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Marketing Strategy/Tactics To reach our target audience, which consists of health conscious women ages 18-45, our campaign will focus on reach rather than frequency. With and unlimited budget, we believe that running advertisements in magazines and TV will eff ectively reach our target audience. We will supplement the campaign with consumer promotions.

Customer demand Customer demand is a crucial factor which is driven by tastes, income and availability of others similar products at a different price (mentioned later in the potential substitutes section). For a lot of consumers, value and price are highly related: ‘’the higher the price, the higher the value’’. Consequently, Munchy’s intention to position OatKrunch as a unique, innovative and

attractive product gives it a certain control over OatKrunch price. To be able to implement higher pricing though, the minimization of the non-monetary costs to customers should also be include along with awareness of the product (notably by advertising) and value (benefits).

The product lifecycle The Munchy’s company should take advantage also to the fact that the OatKrunch product and the earlier in its lifecycle the higher the price can usually be. It ensures a high profit margin as the early adopters buy the product and the firm seeks to recover up development costs quickly and it also brings a certain prestige to the product.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Potential substitutes Munchy’s is constrained by the monopolistic market in which it competes. The main

characteristic however is product differentiation.

Product development When Munchy’s company finds and develops a new product idea. During product development, sales are zero and the company's investment costs mount. • Introduction

In this stage, slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction. • Growth

In this stage, OatKrunch product can create strong awareness and increase sales and profits.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Marketing Mix Product 

Packaging

While the packaging for the original OATKRUNCH is white and red, the packaging for the OATKRUNCH will be (red with white) and (blue with white) to promote a fresher image to our already successful brand of OATKRUNCH. We choose the color blue because it triggers the thought of a healthy lifestyle. We choose the keep the color (red with white) in honor of the original OATKRUNCH, but added the (blue with white) color to distinguish the new OatKrunch product from the original. We also plan to include a zip lock seal on the OatKrunch biscuits package to lock in the freshness for a longer time period.

Place As OatKrunch have been a household product, the geographic segmentation becomes quite diverse. Female 18 to 45 year olds are likely to buy OatKrunch as they are a popular ingredient in baking recipes as well as a household product (The “Baby Boomer” generation). The children

of the Baby Boomer generation, Generation X (born between 1965 and 1980; 45 to 31 year olds) are likely to have grown up with OatKrunch as a typical snack biscuits in their household and are expected to hold loving childhood memories of the snack; perhaps even prompting them to purchase OatKrunch to inspire similar caring memories in their own children. Therefore it is recommended that marketing strategies be concentrated on localities with residents area that more concern about health conscious surround Malaysia, target age woman 18 to 45 or where parents aged between 45 and 31 years with young children reside do purchase OatKrunch biscuits because it is more to healthy product which is easy to consume everywhere they want as a breakfast in morning rather than consume unhealthy foods.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Price Munchy’s pricing is currently considered an “odd-even pricing”, with the price being RM 4.30

for a 180g for small OatKrunch packet and for the big packet of OatKrunch is RM8.90 for a 500g which is more value of money, cheaper and good quality compare to other competitors This pricing strategy is appropriate as it is in line with the direct competitors who are positioned closely on the shelves which makes it easy for customers to notice the price differences. Throughout time, the pricing strategy and price in general will change to reflect the market and its changes. It is important for management to ensure they have appropriate systems in place to ensure they are always aware of the current pricing situation within the wider community.



Profit-oriented approach: Target profit

One of the central objectives of this project being to become the market leader in functional biscuits, Munchy’s is willing to stay among the top competitors, if not becoming the greater, by achieving a certain target profit. This could be obtained by establish a price that will largely cover variable and fixed costs while bringing tremendous profits.

Promotion To create awareness of the “OatKrunch”, Munchy’s has implemented a push and pull strategy

to maximize initial roll out. The push strategy will begin with a packaging makeover and implementation of new flavors (blackcurrant, original hazelnut, and dark chocolate) and lunch time “OatKrunch snack pack” which will include 6 pieces of OatKrunch biscuits. This will then is

introduced and store level, with training and merchandising from our Munchy ’s sale representatives. Once the product has been introduced at store level, in store promotions and taste testing will be organized with these stores to maximize base interest. At these taste tests, promotional packets of the “new OatKrunch” and its coinciding flavors’ will be handed out.

Each promotional packet will include two biscuits.


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The pull strategy will then reflect this through various advertising campaigns. Two new advertising designs have been proposed for Television, Radio, Magazine, and Internet. This blend of published and visual/aural media will help to create further interest in the product. To the optimize this awareness and to assist with our Magazine campaign, a proposal has been put forth to several weekly issued magazines to include promotional Oat ’s packets in a sample bag which customers will receive when purchasing the magazine.

This combination of our push and pull strategy will then lead the way for further promotional developments to be implemented over the next one year, to optimize customer and client awareness of Oat biscuits.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Situational Analysis Internal Environment o

Positioning

OatKrunch biscuits will position itself within the market as one of Malaysian’s favourite cookies. OatKrunch will be seen as a product that is continually growing and developing into other avenues; such as the “OatKrunch Snack Pack” (ref. Promotion) which will appeal to a whole new

generation of target women 18-45 consumers. Throughout all the changes it will maintain its trademark delicious and much tastier.

o

Distribution

OatKrunch biscuits main method of distribution is through large hypermarket chains including Tesco, Giant, and Carrefour; – these supermarkets such as 7 Eleven, 99 Speed mart, K&K, and small grocery shops are situated in almost every town in populated Malaysia – covering a wide range of locations. In order to give the whole of Malaysia, access to the great tasting cookies that OatKrunch are, it is recommended that an online ordering system be established to the . This provides convenience, remote access to OatKrunch and possibly a more inexpensive option for those who wish to purchase OatKrunch biscuits in bulk whenever there is out of stock.

o

Promotional

Magazines We will run advertisements in five major magazines throughout Malaysia. These magazines include Redbook, Shape, Cosmopolitan, People, and O-The Oprah Magazine. These magazines were chosen because of the diverse group of women they can reach.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Television Television spots for broadcast and cable networks will appear throughout the Malaysia on various stations to reach our target. These networks through ASTRO include (TV1, 2, 3, and NTV 7) Zee, AXN, AFC and MTV. Mostly the target consumers were watching these stations during the weekends and during holidays so it would help us to advertise our product.

Communication Strategy Consumers are extremely health conscious today and we want them to know it is possible to abide by their diets without depriving themselves of the sweet delicacies they crave. This is the message we will convey to our target market. In order to reach our audience, we market our new product through print and electronic media.

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Print Media

One form of media we would use would be through magazine advertisements. The advertisements would be placed in magazines that are directed towards the same demographics of our target audience which will help to create awareness and increase sales. Magazines have longer shelf life and are, therefore, a consistent reminder of our product and its benefits each time the magazine is read through

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Electronic Media

Another form of media we would use would be through television and our website. Although it is the most expensive form, it is also most effective. Television commercials are the fastest and easiest way to reach our target audience. Advertisements will run during programs that are watched by those with the same demographics as our target customers to create awareness and help to increase sales by 2013. Our website will feature information about all of our products, particularly the OatKrunch that are health conscious.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE IMPLEMENTATION AND CONTROL Implementation Beginning Nov 2010 Tactic Nov ■ 1. New packaging, flavours and snack selection to be launched 2. Sales representatives to provide in store training to retailers and merchandising 3. Television and radio ads to begin airing on both prime and midday programs 4. In store demonstrations and taste tests 5. Internet advertisement to be launched on Munchy’ s affiliated sites. ■ 6. Magazine advertisement and promotional packets exported

Dec

Jan

Feb Mar Apr

May Jun Jul

Aug Sep

Oct Nov

Dec

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Continue of 2013

Tactic 1. New packaging, flavours and snack selection to be launched 2. Sales representative s to provide in store training to retailers and merchandising 3. Television and radio ads to begin airing on both prime and midday programs 4. In store demonstration s and taste tests 5. Internet advertisement to be launched on Munchy’s affiliated sites. 6. Magazine advertisement and promotional packets exported

Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec ■

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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Media Schedule We will advertise year round, but placing a larger emphasis on the months of January, February, September, October, and December because festive season and school holidays. First, January and February are the months in which people begin and try to maintain their New Year’s Resolution. Promoting a snack which contains healthy ingredients will help those dieters to stick to their resolutions easier and for a longer period of time. Second, we choose January and February because those are the months in which people begin to eat unhealthy foods because Chinese New Year and to make a healthy lifestyle back consumer more concern on the diets and health conscious. This is one circumstance in which people white-knuckle through their diets. As a result, they are more likely to give up because they just cannot curb the sweet tooth. We choose September and October because that is around Hari Raya Puasa and Hari Raya Aidilfitri, and we will promote our OatKrunch product, and offer single serving packages to be given to test or taste so that they purchased during festival. Finally, we choose December because the holidays are a very difficult time for consumers who are trying to watch their weight. Our product will assist dieters in creating holiday desserts that are concern towards health conscious, which will lower the likelihood of gaining weight during the holidays rather than eat unhealthy food.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Control and evaluate In order to control, evaluate and monitor the target customer’s opinion on the OATKRUNCH, we will be distributing Consumer Surveys. These will help provide us with the necessary feedback in determining the strengths and weaknesses of our product, along with any modifications that are necessary. Sampling stations will be set up throughout food retailers, allowing consumers to taste our OATKRUNCH product with various flavours. The demonstrator will distribute the surveys to the samplers, explaining that they will receive a coupon for RM (Ringgit) off if they complete and turn in the survey. We hope this incentive will encourage consumers to take a few minutes and fill out the survey .In addition this surveys can be located on the website, inside packages of our OATKRUNCH product. All completed surveys will be rewarded with and incentive of 2 coupons for the next package of OATKRUNCH purchased by giving the coupons to the cashier in located sample outlet .


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Financial Information It will cost Munchy’s Foods 5 million to develop the formula for the OATKRUNCH biscuits. There is an increase cost of production of around RM4.30 and RM8.90 per package .The majority of this difference is due to more expensive ingredients.

Sales Forecast Munchy’s Foods Inc. is projecting first year sales to be around 2 million packages with most of

those being sold in the first 18 months of the year. The reason that Munchy’s Foods Inc. is expecting greater sales in the first 18 months of the year is that once the product hits the shelves, it will take time for all the consumers to hear about the product. They are expecting sales to increase in the 2013 by 2 million packages for a total of 7 million packages. The reason for the increase in sales is that by 2009, all stores should be carrying the Fat Free BITE and through our aggressive marketing campaign most people would have heard about the Fat Free BITE and they will desire to buy the product. By the end of the first quarter of 2009, Negisco Foods Inc. forecasts that the Fat Free BITE would have sold enough packages to earn a profit. In order to evaluate and monitor the public’s opinion on the Fat Free BITE, we will be

distributing Consumer Surveys. These will help provide us with the necessary feedback in determining the strengths and weaknesses of our product, along with any modifications that are necessary. Sampling stations will be set up throughout food retailers, allowing consumers to taste our new product. The demonstrator will d istribute the surveys to the samplers, explaining that they will receive a coupon for dollar off if they complete and turn in the survey. We hope this incentive will encourage consumers to take a few minutes and fill out the survey .In addition; surveys can be located on the website, inside packages of our new product. All completed surveys will be rewarded with and incentive of Rs 2 coupon for the next package of Fat Free BITE purchased.


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE BUDGET

Promotional Activity

Cost

Launch Product

RM100,000

TV Advertisement

Quantity

Est. RM350,000*

Face book

free

In Store Displays

RM5,000**

Packaging

RM50,000^

Magazine

RM10,000

Promotional OatKrunch Packets RM12

Total

1

RM100,000

2 ad designs

RM700,000

1

RM

150 stores 2 periodically

0

RM750,000*** RM100,000

5 different mag

RM 50,000

75, 000

RM900,000

Website

RM100,000

1

RM150,000

Events

RM 50,000

5 events /year

RM350,000

Total

RM 3,100,000

*Nationally (Television Advertising Costs – Primer 2010) **wages (RM17/hr, for 6hrs/day for 10 days) + set up costs (RM5000/store outlet) *** Rounded up for convenience and unexpected costs ^change of design cost ^^Most cost is included in the TV advertisements and packaging


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REFERENCES


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1. http://www.tradingeconomics.com/malaysia/unemployment-rate

2. http://www.munchys.com/Index.aspx

3. http://www.redtick.com.my/productdetail.php?prodid=45



6. http://www.fatsecret.com/Diary.aspx?pa=fjrd&rid=761747

7. http://blog.securities.com/2011/04/malaysia-gdp-hits-high-2010/

8. http://www.sirim.my/f_corp/july04.pdf

9. http://www.malaysiahalalfoods.com/

10. http://www.ats.agr.gc.ca/ase/5842-eng.htm

11. Raghunathan, R. Naylor, Hoyer, W 2006, ‘the unhealthy = tasty intuition and its effect s

on taste inferences, enjoyment and choice of food products’, Journal of Marketing, vol.

70 iss. 4 pp. 174


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APPENDICES


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Appendices 1

Country 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Malaysia

5

8.6

0.3

4.2

5.2

7.1

5.2

5.9

6.3

4.6

-1.7

7.2

Appendices 2


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INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Appendices 3


Page 36

INTI INTENATIONAL COLLEGE SUBANG (IICS) MKT 305 MARKETING PLANNING IN PRACTICE Figure 1

Description: IKO Assorted Oat Calcium Cracker (Competitor of Munchy’s) Nutrition Amount

100g/Serving

22.3g/Serving

Calories

512 kcal

114 kcal

Total Fat

26.6g

5.9g

Saturated Fat

13.5g

3.0g

Trans Fat

0g

0g

Cholesterol

0mg

0mg

Sodium

403.2mg

89.9mg

Total Carbohydrate

59.7g

13.3g

Dietary Fibre

9.0g

2.0g

Sugar

14.6g

3.2g

Protien

9.0g

2.0g

Vitamin A

0%

0%

Vitamin C

0%

0%

Calcium

7%

7%

Iron

4%

4%

Ingredients Whole meal Flour, Vegetable Oil (Palm Oil), Oats, Sugar, Rolled Oats, Glucose Syrup, Sesame, Evaporated Creamer, Pumpkin Seed, Calcium Carbonate, Raising Agent [Sodium Bicarbonate (E500)], Seaweed and Salt. (Allegry Alert) Contains: Gluten (Wheat and Oats), Milk and Soybean product. May Contain traces o f nuts.


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OatKrunch Strawberry & Blackcurrant, OatKrunch Chuncky Organic Hazelnut and OatKrunch Dark Chocolate

Nutrition of OatKrunch ( 100g /serving) Calcium 16%

Iron 9%

Dietary Fibre 13%

Dietary Fibre Sugar

Protien 13%

Protien

Sugar 49%

Calcium Iron

Nutrition of OatKrunch ( 30g /serving) Dietary Fibre 8%

Iron 19%

Sugar 31%

Calcium 34%

Dietary Fibre Sugar Protien Calcium Iron

Protien 8%


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Competitors Nutrition’s

IKO Assorted Oat Calcium Cracker 9.0%

7.0%

4.0%

Calcium Iron Dietary Fibre

9.0%

14.6%

Sugar Protien

Nutrition of Julie's Oat 25 Strawberry 1.0%

2.0%

0.0% 1.0%

4.0%

Calcium Iron Dietary Fibre Sugar Protien


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Competitors Website’s


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Start Marketing Planning in Practice

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