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Assignment 2 2010/11

Table of Contents

1.0 Executive Summary 3

2.0 Situational Analysis 4

2.1 Market Analysis 4

2.2 Macro-environmental Analysis 5

2.2.1 Economic Environment 5

2.2.2 Political and Legal Environment 6

2.2.3 Social and Cultural Environment 7

2.2.4 Technological Environment 7

2.3 Competitive Analysis 7

2.4 Customer Analysis 12

2.5 Distribution Channels Analysis 12

2.6 SWOT Analysis 13

3.0 Objective 14

3.1 Mission Statement 14

3.2 Corporate Objective 14

3.3 Marketing Objectives 14

3.4 Sales and Financial Objectives 14

3.5 Product Objectives 15

4.0 Marketing Strategy 15

5.0 Marketing Mix Strategy 15

5.1 Product Strategy 15

5.2 Pricing Strategy 16

5.3 Promotion Strategy 17

5.4 Place Strategy 18

5.5 Sales Force Strategy 18

5.6 Action Program 19

1 MKT 501 Marketing Management


6.0 Forecasts and Financials 20

6.1 Sales Forecast 20

6.2 Budgets & Projected Profit and Loss Statement 21

7.0 Control – Feedback 22

8.0 Reference 25



Marketing Plan 2011

Low End Market Segment

Home Peanut Garden Food Industries Pte. Ltd.

1.0 Executive Summary

Home Peanut Garden starts from a very humble traditional Chinese family business from

small operation side at a house-kitchen into an industrial lot with total area of 47, 318 square

feet. It is a specialist in bulk producing fried and roasted peanuts, beans and peas. Its biggest

targeted market segment is the wholesale and retail low end market which is a highly

competitive market. This market segment of Home Peanut Garden is experiencing gradual

decrease in market share from 35 percent in 2008 to 28 percent in 2011 due to the highly

competition. Nevertheless, by further exploiting Home Peanut Garden’s competitive

advantage of economies of scale, a significant profit and growth of market share is still

anticipated.

The purpose of this marketing plan is to outline the complete marketing strategy in

2011 for Home Peanut Garden to implement a series of tactics for its low end market segment

in order to turnaround the situation. As stated in the marketing strategy, Home Peanut Garden

is looking for a 5 percent growth of market share to achieve 33 percent of market share in this

low end market segment.

This marketing plan will firstly analysis the market circumstance in Malaysia,

including the analysis of other macro-environment factors such as economic environment,

political and legal environment, social and cultural environment, technological environment,

as well as the analysis of micro-environment factors such as competitive analysis, customer

analysis and distribution channels analysis. These are followed by a SWOT analysis which

pinpoints the strengths, weaknesses, opportunities as well as threat of Home Peanut Garden

in 2011.



As stated in the company’s mission statement:

Home Peanut Garden aims to be the long lasting leading processor and distributor of

top quality food stuff especially in peanut, bean and pea. It is committed to provide

quality products which consistently meet customer’s satisfaction and legal

requirements.

The targeted low end market segment worths RM 10 million. It consist of another

four major player including Sin Chian Hing, Thien Cheong, Nagajati and Juta.

An overall marketing strategy for Home Peanut Garden and more specific actions

program for each of the marketing mix tactics are outlined here. The actions programs

include using new plastic packaging with brand and contact information printed, increasing

the sales force personnel and telemarketers, creating pricing system to offer price quantity

discount and special event price, advertising in yellow pages, establishing company website,

forming a van sales service team, creating proper criteria for selection and evaluation of new

customers as well as training to sales forces team in technical knowledge.

A sales forecast which divides the sales revenue and unit sales by quarters, channels

and regions is presented here. It is followed by a budget for actions programs and a projected

profit and loss statement for the next three years from 2011 to 2013. Investment in marketing

will result the first year loss up to RM 150 500. However, Home Peanut Garden will reach

the break-even point before the end of 2012.

Home Peanut Garden plans stringent control to achieve the timely implementation of

this marketing plan by assigning person-in-charge for its action program with specific final

review date. Metrics to be monitored include overall sales volume, sales by channels, sales by

region, cost, return on sales and return on investment.

2.0 Situational Analysis

2.1 Market Analysis

The target markets of Home Peanut Garden products consist of three major market segments:

Low end market through wholesalers and retailers worth RM 10 million



Original equipment manufacturer worth RM 3 million

High end market through hypermarket, convenient chain shop, petrol station worth

RM 8 million

Home Peanut Garden is majoring in low end market segment with 28 percent of

market square. Those products in this market segment are bulk pack series product in a

cheaper packaging material which is available in 1kg, 2kg, 5kg and 20kg. This is a highly

competitive market in which Home Peanut Garden as the only one well established as well as

HACCP and ISO 9001 certified fried peanut, bean and pea manufacturer in Malaysia has to

compete with those small industries in this market segment. The business customers focus

mainly on the prices offered by the manufacturers. Although this market is treated by the

rapid growth of high end market due to the upgrade of the average life standard and education

level of local population, the low end market is still experience a steadily growth during these

recent years which due to the existence of 2.2 million foreign population in Malaysia labour

market (DOSM, 2009) and the major segment of low income of local population. However,

in the context of Home Peanut Garden, the market share in this market segment has decreased

from 32 percent in 2009 to 28 percent in 2010.

2.2 Macro-environmental Analysis

2.2.1 Economic Environment

The well progress of economic recovery of Malaysia in 2010 from the global economic crisis

and the global food crisis in 2008 has elevated the consumer confidence and increased the

consumer buying powder (DOSM, 2010). However, with a series of disasters and extreme

climate happens in all over the worlds throughout the year of 2010 has heavily affected the

harvested of peanut in the world major peanut exporter such as China, India, Argentina and

Vietnam. Adding with the prediction of the economist that the price of petroleum is raising

high in 2011 (OPEC, 2010), the raw material price is going up too as some of the raw

material will be sold to biofuel industries as price offered is getting higher (FAO, 2010). The

inflation will rise too.

The predicted economic conditions in 2011 present opportunities and treats to Home

Peanut Garden. As this market segment is a highly competitive market, price is the major

competitive advantage to gain market shares. The increasing of raw material prices will force



the competitors which most of them are small scale industries to increase their price

immediately. In contrast, Home Peanut Garden can maintain its price or do some offering

during this period as its keep a lot of raw material stock. However, the reality of inflation

may cause a totally decrease in the demand of the whole low end market that directly affect

the revenue of Home Peanut Garden in this market segment.

2.2.2 Political and Legal Environment

The political climate in Malaysia is getting warm as the neck-to-neck election result of the

National Election 2008. The Barisan Nasional Union eventually manage to form the federal

government but they lose two third majority voice in parliament and some of their state

government lose (The Star, 2008). Since then, the federal government under the leadership of

Prime Minister, Datuk Seri Najib Tun Razak strives hard to maintain its reputation and

support from people by introducing change in the government sector by introducing Key

Performance Index to increase the efficiency of government department. Thus the frequency

as well as the stringency of operations to examine the condition of food industries especially

manufacturing environment have increased.

Besides, government under the Ministry of Health also takes initiative to review the

Food Act 1983 and Food Regulation 1985 for updating and adding some regulation to suit the

current situation for the competitive of Malaysia food industry. For instance, the new Food

Hygiene Regulation 2009 has been gazette since March of 2009 (MOH, 2009). Under this

regulation, all food manufacturers in Malaysia are required to establish a complete

traceability system, food safety control documentation, follow some standard requirement of

the manufacturing environment and workers hygiene which are similar to the requirements in

HACCP and ISO 9001 implementation.

This legal and political action has brought opportunity to Home Peanut Garden as it

has achieved the certification of HACCP and ISO 9001 since 1997. That means Home Peanut

Garden is obeyed to the requirements in the new Food Hygiene Regulation while most of the

competitors are not getting ready yet to embrace the new regulation as they have not prepared

to invest a lot in implementing the system as it might affect their cost of manufacturing.



2.2.3 Social and Cultural Environment

Elevated education level of consumer nowadays has increased their awareness of healthy

lifestyle which including the consuming of healthy food (Sundram, 2007). The consumer will

seek for some nutritive and safety information of the product they buy. In this context, again

Home Peanut Garden stands a better situation among its competitors as it has established its

laboratory as well as its Quality Assurance Department with qualified quality assurance

personnel who always ready to provide this additional information to its customer. However,

for some customers, they might simply stop or avoid themselves from taking peanut as they

might perceive that eating peanut is not healthy. As such, this might be a treat for Home

Peanut Garden in gaining the market share.

2.2.4 Technological Environment

Technological advancement nowadays increases the usage of internet. This results in more

and more consumers or business customers searching for information of manufacturer

through internet. It could be a treat for Home Peanut Garden as it has not developed its

website to bring relevant info to its potential web visitors whereas some of its competitors

have had their website already.

2.3 Competitive Analysis

Figure 1 General Competitive Feature

Company Customer

Awareness

Product

Quality

Product

Availability

Technical

Assistance

Sales

Force

Home Peanut Garden G G G F F

Sin Chian Hing P F G P P

Thien Cheong E G F F G

Nagajati F G P G F

Juta F F G P F

Note: E = Excellent, G = Good, F = Fair, P = Poor



Figure 2 Market Share, Mind Share and Heart Share

Company Market Share (%) Mind Share (%) Heart Share (%)

2008 2009 2010 2008 2009 2010 2008 2009 2010

Home Peanut Garden 35 32 28 20 19 22 33 28 26

Sin Chian Hing 18 26 20 25 28 25 20 28 25

Thien Cheong 20 23 25 42 41 45 30 30 31

Nagajati 12 9 10 7 5 2 7 4 6

Juta 15 10 17 6 2 2 10 10 12

Figure 3 Product, Price, Promotion, Place (Distribution) Analysis

Company Product Price Promotion Place

Home Peanut Garden Peanut

- Shung Tong

Peanut

- Fried Peanut

- Coated Peanut

- Peanut Candy

Block

Bean

- Skinless Broad

Bean

- Skin Broad

Bean

- Coated Broad

Bean

Pea

- Green Pea

- Coated Green

Pea

- Chick Pea

- Coated Chick

- Demand-based

pricing.

- Slightly higher

than

wholesales

market

price.

- Telemarketers

- Direct Sales

Force

- Widely

Distributed

In Peninsular

Malaysia and

Several places

In East

Malaysia.



Pea

Sin Chian Hing Peanut

- Shung Tong

- Fried Peanut

- Coated Peanut

Tree Nut

- Cashew Nut

- Pistachio Nut

Bean

- Skinless Broad

Bean

- Skin Broad

Bean

- Coated Broad

Bean

Pea

- Green Pea

- Coated Green

Pea

- Coated Chick

Pea

- Demand-based

Pricing

- Follow

wholesales

market

price

- Telemarketers

- Website

- Direct Sales

Force

- Concentrate

In North part

Of Peninsular

Malaysia

Thien Cheong Peanut

- Shang Tong

Peanut

- Fried Peanut

- Coated Peanut

- Yellow Dhall

Bean

- Skinless Broad

Bean

- Skin Broad

- Competition-

based pricing

- Low cost

wholesale

price leader.

- Telemarketers

- Website

- Direct Sales

Force

- Van sales

- Widely

Distributed

In Peninsular

Malaysia and

East Malaysia



Bean

- Coated Broad

Bean

Pea

- Green Pea

- Coated Green

Pea

- Chick Pea

- Coated Chick

Pea

Nagajati Bean

- Broad Bean

- Coated Broad

Bean

Pea

- Green Pea

- Coated Green

Pea

- Demand-based

pricing.

- Follow

wholesales

market

price.

- Telemarketers

- Website

- Direct Sales

Force

- Distributed in

Several places

In Peninsular

Malaysia.

Juta Peanut

- Peanut cracker

- Shung Tong

Peanut

- Coated Peanut

Tree Nut

- Cashew Nut

- Coated

Cashew Nut

- Demand-based

pricing.

- Follow

wholesales

market

price.

- Telemarketers

- Website

- Direct Sales

Force

- Van Sales

- Distributed in

Several places

In Peninsular

Malaysia.

The low end market segment for the product of peanut, bean and pea snack has many

manufacturers competing for a RM 10 million markets in Malaysia. It is a highly competitive

market which there is no entry barrier by the new entrants and the price of the product is

normally following the wholesale market price. This industry is made up of a broad range of



competitors who have quite a numbers of years in manufacturing experiences. Most of them

are owned by Chinese businessmen who run the business in a very traditional style.

Home Peanut Garden has identified four main direct competitors in the low end

market segment who are:

Sin Chian Hing Food Industries Pte. Ltd.

Thien Cheong Pte. Ltd.

Nagajati Food Pte. Ltd.

Juta Food Industries Pte. Ltd.

Sin Chian Hing offers a wide range of product from peanut, tree nut, bean to pea. It

has its competitive advantage over Home Peanut Garden by offering cheaper price and

having its website as a promotion tool. However, it has average lower scoring in general

competitive feature and market share (figure 1) among those competitors as its market

concentrates at the north part of Peninsular Malaysia.

Thien Cheong also offers a wide range of product as Sin Chian Hing. It has excellent

customer awareness over Home Peanut Garden and other competitors (figure 1) as it is the

earliest established manufacturer since 1955 that have several decades of experience in this

low end market segment. Thien Cheong products have been widely distributed in whole

Malaysia but having lower market share comparing to Home Peanut Garden. Besides, Thien

Cheong also offers van sales (figure 3) service to serve its small retailers more directly.

Nagajati competes with Home Peanut Garden by offering bean and pea products

(figure3). As it involve in the manufacturing of other food categories such as glucose syrup,

its product range in peanut, bean and pea categories is very narrow and its products are just

available in several places. However, it has good technical skill in providing its specialized

quality product – coated green pea over Home Peanut Garden.

Juta which located in Melaka also offers few types of product (figure 3) and relatively

lower market share (figure 2) comparing to Home Peanut Garden. However, it competes with

Home Peanut Garden by having its attractive design of website, lower prices and van sales to

serve its small retailers more directly.



2.4 Customer Analysis

The manufacturers targets to bigger scale wholesalers as well as smaller scale retailers. These

targeted customers most of them are Chinese men business who put the price as priority and

quality as minority in their purchase decision making. Besides, most of them do not have

proper procurement plan and always ask for the delivery of products as immediate as possible

once the purchase order has been issued. They tend to maintain long term business-to-

business relationship which manufacturers as long as they are being offered good price in

their perception.

2.5 Distribution Channels Analysis

There is various available distribution channels with different various intermediaries involved

in this low end market segment. Some involve one intermediary and some involve multi

intermediaries. The intermediaries include retailers or wholesalers. Besides, some of them

also sales their products directly to consumers such as cash and carry corner in Home Peanut

Garden and retail store in Dataran Pahlwan Megamall in Melaka by Juta,

Figure 4 Competitors’ Distribution Channels

Company Distribution Channel Distribution

Method

Home Peanut Garden Producer Wholesalers Consumer

Producer Retailer Consumer

Producer Wholesalers Retailer Consumer

Producer Agent Retail Consumer

Producer Consumer

Lorry

Lorry

Lorry

Lorry/Ship*

Cash &

Carry

Sin Chian Hing Producer Wholesalers Consumer



Lorry

Van

Lorry/Van

Thien Cheong Producer Wholesalers Consumer Lorry





Producer Wholesalers Agent Retailer Consumer

Producer Consumer

Lorry/Van

Lorry

Lorry/Ship*

Cash &

Carry

Nagajati Producer Wholesalers Consumer



Lorry

Van

Lorry/Van

Juta Producer Wholesalers Consumer



Producer Consumer

Lorry

Van

Lorry/Van

Retail Store

Note: * Destination in East Malaysia

According to Figure 4 competitors’ distribution channels, Home Peanut Garden

employs various different distribution channels as Thien Cheong and both of them are

already entering the East Malaysia market. Juta has a competitive advantage of owning a

retail shop in a state famous shopping mall. Besides, Juta and Thien Cheong also establish

their van sales team to better serve their usually being ignored small scale retailers.

2.6 SWOT Analysis

Strength

Experienced Managing Director with over 20 years of experience of technical skill in

manufacturing.

HACCP and ISO 9001 certified company.

High volume of production output (advantage of economies of scale)

Higher capacity of storage.

Strategic location at the centre part of Peninsular Malaysia.

Weaknesses

Traditional Chinese family business with conservative style of management.

No company website.



No van sales to service the small retailers directly.

Higher products price.

Opportunities

Enforcement of Food Hygiene Regulation 2009 by the Ministry of Health

Increasing awareness of consumer towards food safety and food quality certification.

Threats

Global Food Crisis prediction in 2011 which may lead to rising price of raw material.

Rising price of petroleum which may lead to shortage of raw material.

Increasing competition.

3.0 Objective

3.1 Mission Statement

Home Peanut Garden aims to be the long lasting lead processor and distributor of top quality

food stuff especially in peanut, bean and pea. It is committed to provide quality products

which consistently meet customer’s satisfaction and legal requirements.

3.2 Corporate Objectives

Additional corporate objective for Home Peanut Garden are as follow:

Continuously increase the customer awareness of brand of the products.

Achieve continual improvement in the near future and future.

Continuously implement the customer oriented policy.

3.3 Marketing Objectives

Home Peanut Garden is looking for turning around the current gradually slighting down of

market share situation in the low end market segment which is from 35% in 2008 to 28% in

2010 (Figure 2). It aims to generate RM 3.3 million of annual revenue from this market

segment in 2011, which is equal to 33% of the total target market segment. Home Peanut

Garden is looking forwards a growth of 5% market share in this market segment (RM 0.5

million) after several years of recession or in other words to achieve 17.85% of sales growth.



3.4 Sales and Financial Objectives

Increase revenue by RM 0.5 million to achieve a turnover of RM 3.3 million in 2011.

Keep the product return below 2%

Reduce customer complain to not more than one case per month.

3.5 Product Objectives

Home Peanut Garden strives to gain continual improvement for its products and services in

this increasing competitive market segment. The goal is to be innovative in product costing

and quality controlling to create value added product with reasonable price to customers and

consumers.

4.0 Marketing Strategy

Overall, there is RM 21 million of wholesale and retail market for peanut, bean and pea

products locally, Home Peanut Garden aims to target on:

Low end market through wholesalers and retailers worth RM 10 million

Therefore, Home Peanut Garden targets to introduce and implement a series of market

turnaround strategy to stop the decreasing trend of market share in this market segment and

looking for a growth of 5% to achieve 33% of market share in 2011. In conjunction to this

targeted market segment, Home Peanut Garden will foster an even more rapport business-to-

business relationship with its wholesalers and retailers to become more responsive to this

market segment trend.

Home Peanut Garden positions itself in this market segment as a value added business

partner to its wholesalers and retailers with competitive price offering by further exploring its

competitive advantage of economies of scales. Home Peanut Garden will enhance its good

reputation and strive to maintain long-term business partnership with its well performed

wholesalers and retailers.

5.0 Marketing Mix Strategy

5.1 Product Strategy

Home Peanut Garden will continue to adopt its global sourcing strategy for a quality peanut,

bean and pea. Particularly, Home Peanut Garden will continue its very efforts to ensure the



peanut suppliers’ crops are conform to Malaysian Food Regulation 1985 which Aflatoxin

content is below 15 parts per billion (MOH, 2010)

Home Peanut Garden will enhance its product quality by adding the quality control

manpower to implement the stringent quality inspection from the aspect of product typical

characteristics such as colour, odor, texture, cook status and taste. Besides, investigation will

be carried out for every batch of product return to form the input for product quality

improvement.

In order to ensure the consumer get to buy the freshest and tastiest product, Home

Peanut Garden will enhance the technical knowledge and awareness of its wholesalers and

especially the small scale retailers regarding to the perfect condition of product storage as

well as the important of the implementation of First-in-first-out (FIFO) system in stock

rotation.

Besides, Home Peanut Garden will replace its plain plastic packaging with brand and

contact information printed plastic packaging as a step to clearly differentiate its products

from other competitors’ products to avoid any confusion of product quality issues and to

increase the brand awareness among the customers of Home Peanut Garden.

5.2 Pricing Strategy

Home Peanut Garden’s products price are currently can be defined as demand-based pricing

in this highly competitive market. Thus, the price elasticity of demand is very high which

means that the customers are sensitive to price change and most probably they will change

suppliers due to the amendments of products price. Since Home Peanut Garden is the only

producer who fully implements the HACCP and ISO 9001 system, the products prices

offered are slightly higher than its competitors.

As practiced by most business-to-business market suppliers, Home Peanut Garden

currently adopts the differential pricing strategy for different customers based on different

contract. In conjunction with the marketing objective to achieve 17.85% of growth in revenue

in this low end market segment in 2011, it is recommended that Home Peanut Garden offers



price quantity discount for new customers who sign up 12 months contract to create loyalty

and help manage demand fluctuation. The price of discount offered can be coped with the

advantage of economies of scales by running production in bulk.

In the context of customer with long-term business relationship, besides the price

quantity discount offering, it is recommended that Home Peanut Garden also offers special

event pricing during festive season as sales volume normally grows to more than doubles

during some Malaysian major festivals. However, this discount should only offer to those

who confirm the volume of festive purchasing three months earlier before the festival as for

facilitating the production planning and for widening the sales volume curve peak from one

month to three months for each festive season as well.

5.3 Promotion Strategy

Home Peanut Garden currently employs both push and pull promotion strategies. A push

strategy is approaching the targeted wholesalers and retailers through an employed direct

sales force and through telemarketers as well. On the other hand, pull strategy is the after

sales services from sales force to create demand which draws customers to the company.

These after sales services including the following of stock level in customers’ inventories and

arrangement of the transportation of returned product.

It is recommended that Home Peanut Garden strengthen its push marketing strategies

by increasing the sales force personnel and the telemarketers to provide better service and

timely response to the increasing number of customers.

Besides, Home Peanut Garden will employ Integrated Marketing Communication to

maximize the communication effect including advertising and personal selling. It is

recommended that Home Peanut Garden advertises its information as a peanut, bean and pea

snack producer in yellow page which is much referred by the searchers from targeted market.

Secondly, Home Peanut Garden is going to establish its company website which aims for all

segment markets. However, Chinese language version webpage will be integrated particularly

for this low end market segment.



Nevertheless, Home Peanut Garden will emphasize on personal selling as the major

effort to persuade customer to buy products. A newly design brochure which include a few

latest products and updated company profile will be distributed by the personal sales force.

Besides, the personal sales force may present the company profile, services and products by

using attractive power point presentation to some of the customer depending on the need of

the situation. Sample will be given out to customer actively to persuade them to sales the

product.

5.4 Place Strategy

The product of Home Peanut Garden in this low end market segment is currently widely

distributed in whole Peninsular Malaysia and several places in East Malaysia. Currently, its

distribution channels are mainly by wholesalers and retailers. To serve the small retailers in

better way, Home Peanut Garden will form a van sales service team to compete with its

competitors such as Thien Cheong and Juta. It is essential as its wholesalers cannot penetrate

into very single unit of small scale retailers. Besides, the van sales service can provide better

stock management on retail side by arranging the product on the shelf to make sure Home

Peanut Garden product is placed at sight capturing corner, the product is looked tidier and

cleaner as well as consumer get to buy its product in fresh condition.

In addition, Home Peanut Garden will re-evaluate its transportation efficiency

especially during festive season. It is recommended that Home Peanut Garden to outsources

part of its transportation service in order to reduce the constraint of delivery arrangement and

the inventory holding cost during festive season.

Besides, Home Peanut Garden will initial proper criteria for screening and selection

of new customers as this is become important to make sure its customer plays their role

efficiently and effectively in these increasing competition market segment. These criteria

include the conformance of payment terms, percentage of product return due to bad practice

of product storage condition and system as well as annual sales minimum.

5.5 Sales Force Strategy



Home Peanut Garden aims to make its sales force to become more effective and productive.

As stated in Sales Objective that Home Peanut Garden aims to increase the sales revenue by

RM 0.5 million in 2011, an effective and aggressive sales force team will be built by adding

two newly recruited sales representatives.

The group of four sales representatives will be restructured based on regional market

such as northern region which covers Perlis, Kedah, Penang and Perak, centre region which

covers Selangor and Kuala Lumpur, southern region which cover Negeri Sembilan, Melaka

and Johor as well as east coast region which cover Pahang, Kelantan and Terengganu.

The sales force team previously is just taking the role of order taker as they need to

cover the whole Peninsular Malaysia market by two personnel. Now, they are covering

regional market but are given additional new tasks as technical knowledge provider

especially the storage of product after given a series of intensive training program to them. In

addition, each sales representative is being empowered to plan for the sales strategy for its

covering region. They need to establish sales strategy for each region before the beginning of

the year 2011 and the sales strategy should be approved by the Marketing Manager.

5.6 Action Program

No Action Program Dec

Jan

Feb

Mar

A p

rM

ay

Jun

Jul

Au

g

Sep Oct

Nov

Dec

1Adding quality control manpower.

2

Use plastic packaging material with brand and contact information printed.

3Create pricing system to offer price quantity discount

to new customers who sign up 12 months contract.

4Create pricing system to offer special event pricing for

qualified current customers. 5 Increase the sale force personnel

and telemarketers. 6 Advertise in yellow pages.



7 Establish company website.

8Distribute new design and update brochure.

9 Form a van sales service team.

10Outsources part of the transportation service during

festive season.

11Create proper criteria for screening and selection

of new customer. 12 Intensive training to sales force

team in technical knowledge. 13 Establish sales strategy for each

region by sales representative.

6.0 Forecasts and Financials

6.1 Sales Forecast

Total sales revenue for all products that offered in this low end market segment by Home

Peanut Garden in 2011 is projected to RM 3.3 million, based on sales of 730 000 units

(kilograms) at an average wholesale or retail price of RM 4.25. Home Peanut Garden

anticipates first-quarter sales of RM 0.8 million, second-quarter sales of RM 0.4 million,

third-quarter sales of RM 1.5 million and fourth-quarter sales of RM 0.6 million. These

projections assume the accumulatively highest business sales in third-quarter as during the

Hari Raya Aidilfitri Festive season in the end of August which is celebrated by the majority

of population in Malaysia. By contrast, second-quarter is projected to lowest business sales as

there is no any festive season. Figures 5 shows unit sales forecasts by region and channel.

Figure 5 Sales Forecasts by Regions and Channels in 2011

By Region Unit Sales (kg)

Northern Region 140 000

Centre Region 280 000

Southern Region 150 000

East Coast Region 90 000

East Malaysia Region 70 000

Total 730 000

By Channel Unit Sales (kg)



Wholesalers 310 000

Retailers 260 000

Van Sales Service 90 000

Agent 70 000

Total 730 000

6.2 Budgets & Projected Profit and Loss Statement

Investment in improved product packaging, manpower, additional distribution channel as

well as communication channels will result to a first-year loss of up to RM 150 500.

However, Home Peanut Garden should reach the break-even point just before the end of the

second year, the realization of marketing strategy will enables Home Peanut Garden to

exploit the advantage of economies of scales by lowering the production costs as volume

increases. During the second year, it is recommended that Home Peanut Garden reduces the

wholesale or retail price and dramatically increase the sales volume. The three years

marketing budgets cover staff salary, advertising, promotion, sales material, distribution

expenses and training.

Figure 6 outline the marketing mix budget for three years.

Figure 6 Marketing Mix Budgets for the year of 2011, 2012 and 2013

Marketing Mix Strategy 2011 2012 2013

Staff Salary

Sales Force Personnel

Telemarketers

Advertising

Yellow Pages

Website

Promotion

Price quantity discount

Special event price

Sales Material

Brochure

Distribution Expenses

168 000

20 500

5 000

25 000

166 500

120 000

10 000

177 600

22 800

3 000

1 000

200 000

155 000

3 000

187 200

25 200

3 000

1 000

240 000

190 000

3 000



Van sales

Outsourcing transportation

Training

Sales training and support

85 000

25 000

25 000

100 000

50 000

25 000

120 000

75 000

25 000

Figure 7 Projected Profit and Loss Statement in the year of 2011, 2012 and 2013

Year

2011 2012 2013

Gross sales/ Turnover

Cost of good sold

Gross Profit

Expenses

Staff salary

Advertising

Promotion

Sales material

Distribution expenses

Training

Net profit before tax

Tax

Net profit after tax

3 330 000

(2 664 000)

666 000

(188 500)

(30 000)

(286 500)

(10 000)

(110 000)

(25 000)

16 000

(166 500)

(150 500)

4 000 000

(3 000 000)

1 000 000

(200 400)

(4 000)

(355 000)

(3 000)

(150 000)

(25 000)

262 600

(250 000)

12 600

4 800 000

(3 456 000)

1 344 000

(212 400)

(4 000)

(430 000)

(3 000)

(195 000)

(25 000)

474 600

(336 000)

138 600

7.0 Control – Feedback

As the economic environment is full of uncertainties due to the currently rising of the price of

petroleum as well as the predicted another global food crisis that may occur during the first



and second quarter in 2011, Home Peanut Garden will continually evaluate the marketing

macro-environment. In the context of marketing micro-environment, if a major competitor

initiates a price war, Home Peanut Garden will revise the marketing plan as an essential step

to maintain its leader position in this market share while retain a minimal acceptable level of

profitability.

In addition, each action program will be assigned to a person-in-charge who will be

responsible to the effectively implementation of the action program and a specific final

review date as shown in the Figure 8 below.

Figure 8 Action Program with Person-in-charge and Review Date

No Action Program Person-in-charge Review Date

1 Adding quality control manpower HR Manager Jan 2011

2 Use plastic packaging material with

brand and contact information printed

Procurement Manager Apr 2011

3 Create pricing system to offer price

quantity discount to new customer who

sign up 12 months contract

Marketing Manager Feb 2011

4 Create pricing system to offer special event

price for qualified current customer

Marketing Manager Jun 2011

5 Increase the sale force personnel and

telemarketers

HR Manager Jan 2011

6 Advertising in yellow pages Marketing Manager Aug 2011

7 Establish company website Management Team Apr 2011

8 Distribute new design and update brochure Sales representative Jul 2011

9 Form a van sales service team Marketing Manager Nov 2011

10 Outsources part of the transportation

service during festive season

Procurement Manager Sep 2011

11 Create proper criteria for screening and

selection of new customers.

Marketing Manager Apr 2011

12 Intensive training to sales force team in Marketing Manager Mar 2011



technical knowledge

13 Establish sales strategy for each region Sales Representative Feb 2011

Metrics to be monitored during the implementation of the above marketing mix

strategy include weekly, monthly and quarterly sales volume to gauge progress towards

revenue, weekly, monthly and quarterly cost to gauge progress towards the break-even point,

weekly, monthly and quarterly sales by region to gauge progress of regional sales strategy,

weekly, monthly and quarterly sales by channel to gauge progress in channel efficiency.

Besides, quarterly financial measures will include return on sales by channel and by region

and return on investment in marketing.

(5577 words)



8.0 Reference

DOSM – Department of Statistic Malaysia, 2010, ‘Gross domestic product/ gross national income

(updated 22/11/2010)’, The source of Malaysia official statistic, viewed 31 December 2010.

<http://blis.bernama.com/mainHome.do. >

DOSM – Department of Statistic Malaysia, 2009, ‘Malaysia reduces the number of foreign workers’,

Bernama Library and Infolink Services, viewed 31 December 2010,

<http://blis.bernama.com/mainHome.do. >

FAO – Food and Agricultural Organization, 2010, ‘FAO food price index’ , viewed 1 January 2011.

<http://www.fao.org/worldfoodsituation/wfs-home/en/>

MOH – Ministry of Health. 2009. ‘Food Act 1983: Food Hygiene Regulation 2009’. Viewed 2 January

2011. <http://fsq.moh.gov.my>

MOH – Ministry of Health. 2010. ‘Food Act 1983: Food Regulation 1985’. Viewed 2 January 2011.

<http://fsq.moh.gov.my>

OPEC – Organization of the Petroleum Exporting Countries, 2010. ‘Monthly Oil Market Report’ .

Austria. Viewed 2 January 2011.< http://www.opec.org/opec_web/static_files_project>

Sundram, K. 2007. Meeting the rising health awareness: The palm oil formula. Malaysian Palm Oil

Board , Kuala Lumpur.



The Star, 2008. ‘Malaysia decides 2008’. Viewed 2 January 2011.

<http://thestar.com.my/election/maps/>

http://www.sinchianhing.com/

http://www.thiencheong.com.my/

http://www.nagajati.com/

http://www.jutafood.com.my/


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