franchise, prepare a conclusion for the report:
- Based On The Strategic Planing For Organic Valley Malaysia Franchise Prepare A Conclusion For The Report 1 (292.7 KiB) Viewed 11 times
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5 Marketing Strategies 5.1 Target Market & Positioning 5.1.4 Target market Gumber & Rina (2021) identified five different consumer groups for organic food markets based on their survey in Delhi, India. Their findings are summarized in Table 1 below. Although this survey was carried out in Delhi, it could be used as a good reference for Organic Valley Sdn. Bhd. Table 1 - Five groups of consumers in organic food market (Gumber & Rina, 2021) Consumer Description Demographic % of Consumers groups Monthly Income (RM)* Incognizant 11% Undergraduates, - Limited fundamental knowledge about organic food and farming. - Never purchase organic food Less than 2800 consumers Graduates, 'Low' income, majority male 21% Graduates, those - Did not believe organic food to be related to Indian tradition and culture. Less than 2800 consumers migrated from rural areas, 'Low' income, Majority male Felt obstacle in buying organic food 23% Undergraduates, Unconcerned consumers - Do not believe organic food to be beneficial for health, humanity, and environment. 2800 to 5600 graduate, post- graduate, majority female - Felt obstacle in buying organic food and considered it is just a status symbol. Conservatives 22% 2800 to 5600 Post-graduates, professionals, consumers Believed organic food to be produced using traditional and natural farming methods, and thus favourable for health, humanity, and environment. urban consumers, consumers migrated from abroad, majority female 5 Congruent 23% More Post-graduates, consumers No obstacle in buying organic food - Considered organic food to be healthy, nutritious and safe for families, environment and animals. Regular buyers of organic food. than professionals, urban 5600 consumers, consumers migrated from abroad, majority - No obstacle in buying organic food male *Note: The original incomes stated in the research paper were quoted in Indian Rupee. To increase clarity for discussion in this marketing plan, the value has been converted to Ringgit Malaysia (RM). 1 2 Critical 3 4
From the table above, it can be seen that consumers who purchased organic food in Delhi came from conservatives and congruent consumers (Groups 4 and 5 respectively). They comprised medium to high income group with monthly salary of RM 2800 and above. This is relatively high income in Delhi, India as the state's median monthly income in 2022 is INR 19,094 (RM 1100) (Singh, 2022). In addition, those who purchased organic food can be considered high achievers as they have post-graduate and professional qualifications. They also live in urban area, and may include expats. The study also found that both male and female were equally preferred organic food. Based on these findings, Organic Valley Sdn Bhd should primarily targeting its market in the following demographic and behavioural segmentations: 1. Demographic segmentation: Urban consumers in Klang Valley ● High income earners that earned much above the median monthly salary. Since the monthly median salary infor those who work in Kuala Lumpur was RM3037 (Mahidin, 2021), the expected consumer for Organic Valley Sdn Bhd should be above RM 5000. ● Those who has post-graduate and professional qualification. ● Expatriates 2. Behavioural segmentation: ● Consumers who believe the health benefits of organic food Consumers who trust the positive impacts of organic food to the environment, suppliers and society as a whole. 5.1.5 Positioning Based on the target markets above, Organic Valley Sdn Bhd will adopt concentrated strategy in marketing its products. The product will be premium and fresh organic food that entice high income earners. The products must have health benefits that may go beyond normal food. They also must have organic certification such as 'myOrganic' by Jabatan Pertanian Malaysia if they are produced in Malaysia.
To make the products more premium, each product categories should have a background story on how its contribute positively to the supply chain, society and the environment. For example, the organic coffee beans that sold at Starbucks has a story where they are produced from, and how they impact the local farmers (Conversation International, 2022). (Tentative: Add competitors positioning diagram from May) 5.2 Product Strategies Organic Valley Sdn Bhd plan to sell two product categories: 1. Dairy products produced by Organic Valley USA. 2. Meat Products produced locally in Malaysia. The dairy products produced by Organic Valley USA are popular among American consumers. Their annual sales for year ending 2020 was USD 1.2 billion (Cornall, 2021). Some example of their dairy products are milk, butter, cheese and cream. Due to their popularity in the United States, Organic Valley Sdn Bhd would also like to market this products in Malaysia. For a start, the imported dairy products would cater the expats consumers in Malaysia, particularly from USA who are fond with the brand. In addition, this milk should also attract local Malaysians who enjoy organic food. This is because one-third of fresh milk consumed by Malaysian in 2021 were imported milk (Zainul, 2022). On another hand, Organic Valley Sdn Bhd will sell meat products that are produced locally in Malaysia. Although Organic Valley USA also produces organic meat such as beef and chicken, their rearing and labor cost would be higher compared to Malaysia. In addition, there would be high logistic cost as well to transport the meat from USA to Malaysia. To develop local farms, Organic Valley Sdn Bhd would bring our expert colleagues from the USA for advice and support. Due to current chicken shortage in Malaysia (Adam, 2022), Organic Valley Sdn Bhd will focus on chicken farming first to capture the high demand of this products. To improve sales among the Islamic community in Malaysia, all sold products will have halal certification. For the imported dairy products by Organic Valley USA, most of them already have halal certification given by the Islamic Food and Nutrition Council of America
(IFANCA) (Chaudry, 2021). For meat products produced in Malaysia, Organic Valley Sdn Bhd will obtain Halal certification from the local authority JAKIM. 5.3 Pricing Strategies Although the organic food industry is relatively new, there are already a number of brands serving the Malaysian market. Therefore, to ensure our products remain competitive, their pricing will be based on the current competitors' retail prices. For example, a recent Google search indicated the price of 1 litre of UHT organic milk varies between RM 14.90 to RM 17.99 (see Figure 1 below). In this instance, we will aim to price our similar product at the high end boundary - RM 17.90. We opt for the high end pricing because to reflect that our products are premium and their quality are above other organic brands. However, we would not opt excessive pricing as study by Gschwandtner (2017) has shown that demand for organic food was elastic. Considering that we have to import these products from the United States, we will initially be selective on the product that we want to sells. We will make sure that the price that we set can cover all the costs. Some of these costs are production cost, logistic cost, marketing cost and overhead cost. Because of the advantage selling these product directly online, higher margins can be achieved with premium pricing that will still appeal to customer segments. To penetrate the market, Organic Valley Sdn Bhd will provide an introductory discount on all our products for the first three months. Once this period has ended, we will offer any new online customers for some discount on their first purchase. To promote customer spending, we will also offer discounted price if customers buying certain products in bulk.
5.4 Promotion Strategies Organic Valley Sdn Bhd will communicate that it offers the highest standard, premium quality organic food in the Malaysian market. This message will be communicated through the following methods listed below: 1. Organic Valley Sdn Bhd's website and social media platforms such as Facebook and Instagram. This online resources will provide rich information and offer consumers the opportunity to carry out online purchase. Significant amount of time and money will be invested in these online sites to provide customers with the perception of total professionalism of Organic Valley Sdn Bhd's products. 2. Advertisement placed in selected website or facebook pages Websites that will be beneficial for advertising Organic Valley Sdn Bhd will be cooking or food review websites. One example will be Malaysian Foodie (www.malaysianfoodie.com), which also has Facebook account with more than 76,000 'likes'. Another example is Kuali (www.kuali.com) that also has Facebook account with more than 17,000 'likes'. 5.5 Distribution Strategies Organic Valley Sdn Bhd will sell its products initially through its website. This will allow for higher margins. It also may use other popular online platforms in Malaysia such as Lazada and Shopee. By the end of the year, Organic Valley Sdn Bhd will approach some supermarkets to help sells its products. In addition, it will develop relationships with organic food restaurants to use its organic products, and also helps promoting them.