Marketing Management for Ipoh Town- Malaysia

Assignment Question

As a Consultancy Company you have recently signed a contract with a new client to conduct a market research and provide suitable and feasible consultancy report. The aim of this project is to provide a strategic plan (based on all analyses) in order to make your client’s company as one of the market leader within 5 years. The plan may include product/service development, promotion strategy, pricing strategy, location strategy, market entry branding strategy and other aspects you think necessary.

POSSIBLE SOLUTION

EXECUTIVE SUMMARY

This report was carried out to conduct market research for Ipoh town and recommend strategic plan based on analysis in making Ipoh town a market leader in 5 years .The research report draws attention that Ipoh town is new in the restaurant business and its not yet available in every corner in Malaysia also its presence is not heavily known among most people in Malaysia.

Further investigation shows that Ipoh town competitor are doing well and Ipoh town has potential to excel better in the market following standard procedure in making availability varieties of food and offering better prices than its competitor. The research involves doing a market survey  where  100 respondent answered the questionnaires this further help to show the eating pattern of the respondent and the price they are willing to pay for a quality meal at the restaurant ,It also show the period where most respondent in that area prefer to visit the restaurant and the type of service they will like to be offered in the restaurant.

This will further help Ipoh town decide how to structure its availability of products (food)   ensuring great  prices on quality meal that  meets the budget of the target customer and offering service that  the customer wants in order to retain customer loyalty .Pestel Analysis and Industrial analysis was conducted to ensure that all requirement to make Ipoh town a market leader are in place also looking on the strength weakness opportunity and threat (SWOT Analysis) that may arise in the process. It is recommended that  Ipoh town has a very good opportunity in becoming market leader but firstly  looking into ensuring there is availability of varieties of food in which customer can choose from when they dine at the restaurant ,increase promotion campaign allowing for more people to know the benefits and offering of Ipoh town ,and the  pricing of the meal have to meet the budget of the target customer using the market research analysis we can tell the budget that a customer can afford a quality meal and Ipoh town should integrate  the customer loyalty point service into all their restaurant since majority of the respondent in the research already stated they will want this service to be available in the restaurant .

1.0  INTRODUCTION

Ipoh town restaurant is located in Ipoh Malaysia  and many says no coffee beats that from Ipoh. The restaurant has  3 different concept which include the Ipoh Town Kopitian which is a traditional coffee shop serving toast coffee, eggs and are typical Malaysia style delicacies .The IPO Food room concept gives customer dining experience where locally made cuisines are readily available, while the Ipoh town experience concept draws closer the best local Ipoh's famous food and beverages also showing culture and memories of Ipoh in the style design of the restaurant .

Ipoh town objective include providing unforgettable dining for their customer ,providing services that exceed customer expectation and also expanding throughout  Malaysia and overseas emphasizing on quality of food available in the restaurant.

The research report shows the Industrial analysis ,PESTEL and SWOT analysis of Ipoh town comparing it with the competitor and a Market research is conducted explaining the response from the target customer and respondent .This allow for a proper analysis of the situation and making appropriate conclusion and recommendation for Ipoh town  in allowing it achieve the desired goals in becoming  a market leader in few years.

2.0  PESTEL ANALYSIS

PESTEL analysis is one of the most useful and structured tools to analysis following external factors: Political factors, Economic factors, Social factors, Technological factors, Environmental factors and Legal factors. To set future strategy Ipoh Town coffee shop should consider external factors those always impacting business operation. According to Barry Haynes, Nick Nunnington (2010), it is useful to start by identifying external factors that may have an impact on that future strategy.

2.1 Political factors

Policies and regulations which are set by government authorities are considered Political Factors. Political Government of Malaysia has always support businesses to grow in Malaysia and they have never imposed any political pressure on organizations. The political condition is very stable in Malaysia. This political stability has ensured for many local and multinational corporate to do their investment and running business operation smoothly. It also implies positive factors for Ipoh Town to expand their investment and expansion activities in Malaysian market. Sometimes there are protest happening in Malaysia by opposition parties but it doesn’t impacting to the business continuity. Peaceful protest is also necessary in a politically stable society in order to express public opinion and this is actually a channel for people to send their message to the government.

2.2 Economic factors

Malaysia is a middle-income country and is a developing economy in Asia. Malaysia is attempting to achieve high-income status by 2020 and in order to achieve that Malaysia moving further by attracting investments in Islamic finance, high technology industries, biotechnology, and services.

The Gross Domestic Product (GDP) per capita in Malaysia was 6764.51 USD in 2012. The GDP per Capita in Malaysia is equivalent to 55 percent of the world's average. The Gross Domestic Product (GDP) in Malaysia expanded 4.30 percent in the second quarter of 2013 over the same quarter of the previous year.

Figure 1.0 GDP per capita of Malaysia

GDP Annual Growth Rate in Malaysia is reported by the Department of Statistics Malaysia. From 2000 until 2013, Malaysia GDP Annual Growth Rate averaged 4.6%.

Figure 2.0 Annual growth rate of Malaysia GDP

During the economy downturn and global financial crisis 2008 to 2009, Malaysia managed to make a turnaround. Since the beginning of 2010, the Malaysian economy has enjoyed a robust recovery (Singh 2011). A continuously growing per capita GDP indicating that the economy conditions in Malaysia are healthy and suitable to support an expanding market size in food industry. The government has a long term plan for the economy of the country in 2020 which is known as the Economic Transformation Program (ETP) in order to make Malaysia as a high income economic country. The program will lift Malaysia’s Gross National Income by 2020, and raise per capita income. Based on this government’s target it can be easily concluded that the economy condition in the near future will be good for business expansion for Ipoh Town.

2.3 Social factors

"Social factors include the demographic and cultural aspects of the external environment. Companies need to have a clear understanding of the society and the population to which their products and services are directed" (Hannagan, 2005). In term of social factors, the average salary in Malaysia is low in comparison with neighboring Singapore and Brunei but the living cost in Malaysia is the lowest. Living in Malaysia is relatively comfortable in the region (Richmond 2007). There is an increasing Westernization and the living pace of the modern life is changing the cultures systems among these countries. So business expansion for Ipoh Town in Malaysia should consider social cultures while making strategic decisions to avoid possible conflicts. Malaysian young generations likes to read books and they spend lots of time in book shops and libraries. So Ipoh Town can easily consider opening coffee shop in those places. Malaysian by nature love to drink a lot and they drink mostly local drinks. So a local coffee shop with international standard must be a good choice for Malaysians.

2.4 Technological factors

"Technological changes have a major impact on most company and can have an effect on the competitive edge of a company and make it more or less cost-effective compared to its competitors" (Hannagan, 2005). Technology has created a society which expects instant results. A faster exchange of information and materials can benefit businesses as they are able to respond promptly to changes within their operating environment (learnmarketing.net 2009). Malaysia has advantages in attracting business activities because it has a good transportation network that enable rapid and low cost good transportation. Malaysia also has very good communication technology which is very important for any business. Technologies will allow Ipoh Town to offer the higher standard quality products. Now a day’s coffee shops in Malaysia provide wireless Internet connection to most stores. Customers can enjoy the benefits of broadband connection and they can use their laptop, smart phone and any other WiFi enabled devices very easily.

2.5 Environmental factors

Environmental issues are mainly recycling, waste disposal, energy consumption, water, pollution monitoring, etc. Climate changing is also an environmental factor that companies need to consider. Companies in are aware and they are proactively handling these areas in order to be socially responsible and it is very important for companies to save on energy to save water and proper waste disposal. Malaysia’s economy is natural resource driven, so environmental factors are very important or development. The government and many none governmental organizations have invested great efforts and resources to increase the public environmental awareness to protect the country. Ipoh Town may consider of using energy saving equipments, save water, recycling in stores, cups made with green technology which can dispose easily and also reusable cups.

2.6 Legal factors

Malaysia’s legal system is based on English common law which was former colonies or territories of England. Malaysia also has a secondary legal system concurrently affecting certain sections of the law, such as Islamic Shariah law and customary law. Islamic law is applied to Muslims. Approximately 65% of the populations in this country are Muslims and this Islamic law is applicable for them in terms of family matters and religion issues (Palumbo-Liu, Robbins & Tanoukhi 2011). Malaysia has a very strict law in terms of Halal and Haram foods. Ipoh Town has to be very careful in this regards. Because of this complex legal system, an organization needs to recruit legal service professional to monitor the organization’s business behaviors and operational activities in order to make sure that Ipoh Town business operation and activities are strictly within the constraints of the legal systems.

2.7 PESTEL analysis Conclusion

Even though Malaysia is considered a middle income country and economy is much behind from its neighboring country Singapore but this country has fast growing pace. The government targeted that by 2020 this country will be a developed high income country and for that lot of program initiated such as ETP, TalentCorp etc. After examined above PESTEL analysis, it shows that the legal system and social and system could be complex but the healthy political and technological factors provide great business opportunities. After considering the PESTEL analysis, there is a good market in Malaysia for Ipoh Town coffee for their strategic expansion and business growth.

3.0  INDUSTRY ANALYSIS

Industry analysis is basically done in order to make proper understanding of the business in which the company or certain brand is dealing, the brand or the companies often are dependent even if it is manufacturing sector. The sector here is food and beverages industry which have variety of suppliers for the product which are actually demanded by the customers. So this analysis will help Ipoh Town in understanding the dimension of the business industry. Factors which are been playing a major role to cater the needs Ipoh Town are discussed below.

Rivalry among existing competitor

Any industry which is competing for the same target market and for the sake of better profitability is a rival in the same industry. Starbucks, Old Town Coffee, Coffee Bean these are some existing competitors for Ipoh Town. As there are lot of rival in this industry so research and development with proper understanding of the customer is necessary in order to achieve success. Weakness needs to be eliminated so that the target market share could be achieved. Promotion strategies, marketing plan and strategic location are all been given importance among the competitor. Differentiation in the product or services needs to be done in order to be better than your rival.

Threat of new entrants

Research and development is such a process which needs to be continued in every time period of any brand or company. The threat is always there, the process of eliminating it and reaching to the target is the beauty of the business. Although the threat is been minimized by various aspect consideration, some brand needs market awareness, promotion, differentiation, service quality. Considering all the factors which can make the customer attracted to another brand and eliminating those factors helps in reducing with the perspective of the new business. Every product which is introduced new to the market, takes time to reach its customer. Even the business has growth in many countries but the response might be different in new market platform. New businesses take time to reach to the point of growth in the product life cycle, so other competitor can take advantage by reducing the existing problem and solving them in appropriate manner.

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