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COLLEGE OF BUSINESS
SECOND SEMESTER 2009/2010 SESSION
BPMM 2023
MARKETING MANAGEMENT
MARKETING PLAN :
Gardenia Bakeries (KL) Sdn. Bhd.
PREPARED FOR :
DR. NURSIHA ALIAS
PREPARED BY :
KONG PEI LING 126800
CHEAH KAH WAI 128794
NG LAY HONG 128803
LIM PEI SIAN 128807
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SUBMISSION DATE: 15th MARCH 2010
NO. TITLES PAGES
1.0 Executive Summary 42.0 Situation Analysis 72.1 Market Summary 7
Target Markets2.1.1 Market Demographics 8
Demographics Environment Economic Environment Natural Environment Technological Environment Political Environment
2.1.2 Market Needs 11 Price Quality
2.1.3 Market Trends 122.1.4 Market Growth 13
2.2 SWOT Analysis 142.2.1 Strengths 142.2.2 Weaknessess 152.2.3 Opportunities 162.2.4 Threats 18
2.3 Competition 192.4 Product Offering 222.5 Keys to Success 232.6 Critical Issues 233.0 Marketing Strategy 243.1 Mission 253.2 Marketing Objectives 253.3 Financial Objectives 253.4 Target Markets 263.5 Positioning 263.6 Strategies 273.7 Marketing Mix 28
3.7.1 Product 28
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3.7.2 Pricing 303.7.3 Promotion 313.7.4 Place 33
3.8 Marketing Research 354.0 Financials 354.1 Break-Even Analysis 364.2 Sales Forecast 384.3 Expenses Forecast 405.0 Marketing Control 415.1 Contingency Plan 435.2 Recommendation 445.3 Conclusion 455.4 Appendix and References 46
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1.0 Executive Summary
Gardenia is a strong brand in Malaysia. Gardenia has produced a lot of
kinds of breads such as the latest one-Butterscotch, Breakthru, Delicia, Twiggies
and many others. In order to satisfied different level of customer, every Gardenia
product has its own special features. For example, Gardenia Breakthru breads is
not only bread, but consumers have the perception that it is a healthy food. It
contains 38% less carbohydrates, 7.3x more dietary fibre, 15% less calories, 59%
more proteins, low gylcaemic index (42), low gylcaemic load (6.5), prebiotic
properties, low fat, no trans fat and no added sugar.
The price of Gardenia breads is low and almost the same as others
competitors. In fact, the pricing of Gardenia bread is controlled by the government.
This is because of the ingredient of the bread, flour, which is one of the products
that are under the control of the government in Malaysia.
Gardenia makes widespread distribution either in urban or rural area to
make sure everyone can have their breads. As all of us know, Gardenia baked
products are well known by everyone. Gardenia has over 20000 outlets throughout
Peninsular Malaysia. Their wide varieties of products are available in almost all
hypermarkets, supermarkets and even neighbourhoods stores. Here, Gardenia
seeks for market share through intensive distribution, a strategy in which they
stock their products in as many outlets as possible. Their breads and cakes can be
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conveniently obtained by consumers wherever and whenever consumers want
them.
Gardenia implements mass promotions. For instance, it uses mass media
such as television to promote its products and to introduce new products to the
customers while ensuring customers to remember about their existing products.
Gardenia has used advertising strategies to promote its products. Among the
various alternatives media, television advertising and newspaper are mostly used
by Gardenia. In short, major advertisement of Gardenia’s bread have established
Gardenia slogans as part of its popular culture, such as “It’s fresh! It’s good! So
good…you can even eat it on its own! ”.
Brief History
In 1969, an American named Horatio Sye Slocumm was sent by
International Executive Service Corporation (IESC) to East Malaysia to start a
bakery. Mr. Slocumm brought with him 35 years of baking experience with one of
America’s leading chain of bakeries. Gardenia was born.
Gardenia Bakeries (KL) Sdn Bhd rolled the first loaf of bread off its line in
1986. Within a short period of four years, it became the bread market leader with
an astounding 99 percent brand recall rate and 80 percent top-of-mind recall.
Gardenia’s range of products grew and evolved through the years,
becoming better and better with each step. Leveraging on its brand strength,
Gardenia produces variety of baked products to satisfy consumer’s demands.
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Gardenia has four factories which locate at Shah Alam, Subang, Puchong
and another one. The factory at Puchong is specified in producing new products.
Gardenia has over 20,000 outlets throughout Malaysia, excluding Sabah
and Sarawak. It does not have any outlets at Sabah and Sarawak. In addition,
Gardenia owns more than 500 delivery vans in Peninsular Malaysia.
Lastly, these are the details for Gardenia Bakeries.
Toll-free line: 1800-88-3228.
Address: Lot 3, Jalan Pelabur 23/1, 40300 Shah Alam, Selangor
Darul Ehsan, Malaysia.
Phone number: 03-55423228
Fax number: 03-55423213
Email address: [email protected]
Website: http://www.gardenia.com.my/
Achievement
2001: Best supplier 2001 (Category: Bread), Dairy Farm Giant Retail
2002: Quality Management Systems ISO 9001, SIRIM QAS International Sdn Bhd
2002, 2003/2004, 2005: Superbrands Awards for 3 consecutive terms,
Superbrands Malaysia
2006: Superbrands Consumers’Choice Award, Superbrands Malaysia
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2004: National Award for Creativity and Innovative, Malaysian design Technology
centre
2005: MS 1480: 1999- Food Safety according to Hazard Analysis and Critical
Control Point (HACCP) System, SIRIM QAS International Sdn Bhd
2005: Universal Integrated System- ISI2020, Research Institute of Standards in
Islam
2006, 2007: Low Glycaemic Diabetic-Friendly, Diet friendly Seal, Glycemic
Research Institute, Washington D.C.
2007: Highly Commended Product Award, Malaysian Institute of Food Technology
(MIFT)
2.0 Situation Analysis
Gardenia Bakeries (KL) Sdn.Bhd rolled the first loaf of bread off its line in
1986. Within four short year, it become the bread market leader. Gardenia has for
many years been at the forefront of producing fresh, tasty and yet nutritious bread.
Gardenia’s flagship bread has improved through the years, becoming better and
better each step of the way. Today ,it is known as Original Classic and is enriched
with 14 vitamins and minerals. To meet the changing expectation of today’s
customers, Gardenia is constantly adopting industry innovations, new baking
techniques and product development.
2.1 Market Summary
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Gardenia possesses good information about the market and knows a great
deal about the common attributes of the most prized customer. This information
will be leveraged to better understand who is served, what is their specific needs
are, and how Gardenia can better communicate with them.
Target Market
The target markets of Gardenia Bakeries Sdn. Bhd are customer market,
reseller market, and also government market. The customer market consists of
individual and household while reseller market consists of retailer, supermarket
(Carrefour & Tesco), and convenience stores (7-Eleven and stores at petrol
station) and finally the government market which includes the hospitals.
2.1.1 Market Demographics
The profile of the typical Gardenia customer consists of the following :
demographic environment, economic environment, natural environment,
technological environment, political environment.
Demographics Environment
Demography is the study of human populations in terms of age, density,
gender, location, occupation, race, size and other statistics. Basically,
demographic environment has major implications for business. This is because the
demographic environment involves people, who play an important role in making
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up the markets. Generally, populations are becoming more educated. The rising
number of educated people will increase the demand for quality products
especially when health is highly concerned nowadays. Therefore, Gardenia has
come out with Gardenia Breakthru, a health-conscious product. Gardenia
Breakthru is formulated with beta-glucan that can help to lower cholesterol levels
and stabilize blood glucose levels.
Economic Environment
The economic environment consists of factors that affect consumer purchasing
power and spending patterns. Consumers at different income levels will have
different spending patterns. For upper-class and middle-class consumers, they
have a better standard of living. They are willing to go for the good quality
products. Consequently, although food, such as bread, is just daily basic needs,
they tend to select more sophisticated products. For instance, consumers with
higher income will choose more expensive bread with special features such as
Toastem. On the other hand, the underclass consumers usually make further
consideration before buying to reduce their expenses when purchasing. So, they
may possibly buy normal white bread as their daily meal. Thus, the economic
forces will also affect a company’s marketing plans.
Natural Environment
The natural environment involves the natural resources that are needed as
inputs by marketers or that are affected by marketing activities. Nowadays, the
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world environmental pollutions have reached an alarming level. Hence, marketers
should be aware of several trends in the natural environment especially the
deteriorating pollution. For example, manufacturing company like Gardenia
commonly produce toxics gases and chemical wastes during their daily
production. They also use non-biodegradable plastic bags as packaging materials.
All activities leads to the pollution of the environment. So, to be environmentally
responsible, the company should develop better solutions to reduce pollutions.
However, it needs vast fund to do so causing the company to face financial
burdens and indirectly posing threat to the company.
Technological Environment
Technological environment consists of the forces that create new technologies,
new products and marketing opportunities. The recent technology boom has
created a new digital age. For example, the explosive growth in computer,
telecommunications and information has had a major impact on the ways
companies deliver value to their customers. For Gardenia, they apply computer
systems to manage its operation such as tracking inventories, recording
accounting transactions, and storing customer’s profiles. The usage of information
technology has smoothened and fastens the process of the commercial activities.
This enables the company to become more competitive as well. Thus, in this
contemporary, if manufacturing company such as Gardenia ignores latest
technologies, their business may decline.
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Political Environment
The political environment composed of laws, government agencies, and
pressure groups that influence or limit various organizations and individuals in a
given society. Basically, marketing decisions are strongly affected by the
developments in the political and legal environment. The increasing emphasis on
ethics and socially responsible actions encourages for-profit organizations to
implement their social obligations. For instance, Gardenia has made positive
response and they take this responsibility by supplying bread free of charge to old
folk homes, disabled people centres and other charitable organizations. By doing
so, a better public image of the company can be built. Indirectly, this also help the
company to gain exposure to more marketing opportunities.
2.1.2 Market Needs
Gardenia has produced a lot of kinds of breads such as the latest one-
Butterscotch, Breakthru, Delicia, Twiggies and many others. Every product has its
own special features.
Price
The price of Gardenia breads is low and almost the same as others competitors.
One of the examples is the white breads of Gardenia (jumbo size) which have
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more slices but at a cheaper price.
Quality
For the company’s designing marketing plans, marketing management takes other
company groups into account. For example, Gardenia Bakeries Sdn. Bhd makes
Research and Development to be the top of Malaysia’s favourite bread, and also
innovators. Gardenia invests heavily in R&D. Its latest product, Gardenia
Breakthru, demonstrates its commitment to giving only the very best to their
customers. Gardenia Breakthru passed extensive clinical tests at the Glycemic
Research Institute in Washington D.C. and are certified Diabetic-Friendly and Diet-
Friendly. This latest result reaffirms Gardenia Breakthru’s extraordinary qualities.
2.1.3 Market Trends
Nowadays consumers are generally health conscious and prefer
bread with nutrients and less sweet.Gardenia Malaysian believes strongly in
ensuring that our consumers enjoy the finest quality and freshest bread
daily. We take our Gardenia Assurance very seriously and consumers of
Gardenia products are aware of our commitment to the highest quality, food
safety and freshness.
To cater to Malaysians' changing demands and lifestyle needs,
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Gardenia's marketing and R&D teams are constantly researching and
exploring new product innovations. For example, we were the first in
Malaysia to identify an unmet demand in the market for low glycemic index
bread to meet the special dietary needs of diabetics as well as for weight
management. Even though awareness of glycemic index and its correlation
to our blood sugar level (low glycemic index foods result in slow release of
sugar in the blood and is hence diabetic-friendly) is still in the infancy and as
such, low glycemic products are still considered a niche market, figures
show that diabetes in Singapore is unfortunately on the upward trend and
this is a group of people whose needs are not sufficiently addressed.
For example, for Gardenia Breakthru breads, it is not only a bread, but
consumers have the perception that it is a healthy food. It is consists with Beta
Glucan which helps to lower cholesterol, this has been clinically tested and
certified Diet Friendly by the Gylcemic Research Institute, Washington D.C
because it has Low Adipose Tissue Fat-Storing Capacity and will assist our body
in having better control over obesity. It is also certified as Diabetic Friendly which
helps to maintain stable blood sugar level that typically follows a meal. It is also
have 38% less carbohydrates, 7.3x more dietary fibre, 15% less calories, 59%
more proteins, low gylcaemic index (42), low gylcaemic load (6.5), prebiotic
properties, low fat, no trans fat and no added sugar too.
The market trend are showing continued growth in all direction of healthy
lifestyle.
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2.1.4 Market Growth
The increases in the cost of raw materials and energy have been
remarkable this year. What strategy did Gardenia International utilize to
reduce the impacts of these costs on profitability? How successful have you
been in implementing such measures? Have you had to increase the prices
of your products this year?
Over the past two years, there have been continual upward price
pressures especially for flour and fuel, which we have tried to absorb
initially. This has led to a great increase in the costs of operations and
therefore a review of the pricing of the products.
As the market leader in the bread category however, Gardenia is
mindful of the fact that many Malaysian depend on us for their daily bread
and as such, we have tried to contain the price increase to so as to minimize
the impact of the rising inflationary costs amongst our fellow Malaysian.
2.2 SWOT Analysis
The following SWOT analysis captures the key strengths and weaknesses within
the company and describes the opportunities and threats facing Gardenia.
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2.2.1 Strengths
The strengths of Gardenia in Malaysia are that it has brand strength in
marketing. Gardenia has built up a very strong brand in Malaysia, it almost generic
to the product categories. Since Malaysian is mind-set, when they think about
bread, they think about Gardenia. As we can seen its product is being sell in whole
Malaysia, which is nationwide. Everyone can get it easily from grocery shop,
minimarket, supermarket and hypermarket. Besides that, Gardenia also has the
strength in product innovation, as we can seen that it continuously introducing new
product and keep bringing more choices to the customers. Moreover, Gardenia, in
their move to develop health bread has teamed up with a group of a researchers
attached to a medical faculty from a local university, to formulate bread using
special functional ingredients.
On the other hand, Gardenia is involved in social work. Every day, it deliver
complimentary fresh bread to over 45 charitable organizations like old folks home,
orphanages and centers for the disabled, eight of which have been on Gardenia’s
delivering list since 1991.
To continue maintain this strength, Gardenia should do more promotion
through media such as newspaper, radio and television. The advertisement should
contain creative and funny element so it could easily attract more customer. To
make the product fully nationwide, Gardenia should increase more and more
retailer in the future in order to reach its product to every Malaysian.
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2.2.2 Weaknesses
The weakness of Gardenia is about its packing. Until now, the baked products
that produce by Gardenia are still weak in its packing, which is not enough
attractive. Conversely, the packing of High 5 Bread is more attractive if compare
with Gardenia. Here are some sample and comparison between Gardenia and
High 5 according to the packing.
By looking to the pictures above, it is obviously that the packing of High 5 are more
attractive than Gardenia. The packing of High 5 is more attractive with its colorful
plastic bag and the vivid design.
To overcome this problem, Gardenia should put more effort on the packing.
For example, Gardenia can distribute survey form to the public by asking them
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what kind of packing could more attractive. After that, Gardenia could hire some
designer to design the packing that they desired. Why packing is so important? It
is because for first buyers who never know about the product, they will buy the
product based on the packing. That is why Gardenia should improve its packing in
order to gain competitive advantage.
2.2.3 Opportunities
Increase awareness of health and fitness
Nowadays, the number of Malaysian suffer from diabetes are increasing day
by day. Gardenia is working closely with the National Diabetes Institute (NADI) on
the “Fight Against Diabetes” programme, a major educational drive to bring public
awareness on the prevention and management of diabetes. And now Malaysian
has more knowledge in nutrient and they are emphasize the nutrient contains in
food and the calories of food. Before they going to buy the food in package they
will look at the label of contains nutrient in the package to help them choose food
which is more wisely. They will watch for these key terms and know what they
mean.
"Free" has the least amount of a nutrient.
"Very Low" and "Low" have a little more.
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"Reduced" or "Less" always means the food has 25 percent less of that
nutrient than the reference (or standard) version of the food.
Malaysian people are more concern to the calories, fat, cholesterol and so forth
they taking in the food daily. For example, they try to eat food less salt, sugar and
oil to keep them healthy. Thus, Gardenia will keep working hard to produce more
healthy bread in order to fulfill consumer’s need.
Increase number of working youth
Increasing numbers of working youth in Malaysia cause an increasing demand
in convenience for everything for life. For example incensement for demand for
fast-food (KFC, Pizza Hut and Mc Donald) instant drink( soft drink, Milo, Soya and
so on), online shopping and so on. This is because they are too busy in working.
For this reason, Gardenia hopes to bring a convenient and healthy meal for these
busy groups. No matter how busy is the life, craving for healthy food is a need.
While busy with life, Gardenia is always standby to provide a convenient and
healthy meal.
2.2.4 Threats
Threats that facing by Gardenia is:
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Future / potential competition from an already
established market participant
There are few bakeries companies which compete with each other in
Malaysia. Besides the strong competitor, High 5, Gardenia is compete with some
smaller bakeries which is family owned, structured and are usually started as a
single shop before extending to more outlets. These family bakeries however, do
not only emphasize on the bread products, but also produce higher margin
delicacies such as cakes and cookies. These bakeries operate in the city where
the flow of people is high and most importantly, where the more affordable working
group is. Among the few local confectionary retail chain shops are the King’s
Confectionary, which started in 1973 in Kuala Lumpur and now with 49 retail
outlets, the Season’s Confectionary and Bakery, the Angel Cake House etc..
Threat matrix
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Probability of occurrence
High Low
2.3 Competition
Strong Competition
Two national local bakeries, which cater to various regions, namely Gardenia
and Stanson Bakeris, were dominated the Malaysian bread industry at present.
These two companies hold approximately 76% of the retail market in 2002. They
compete between themselves through prices, product characteristic, distribution
choices, and even communication. Investment in advertising in incredibly high and
the market segmentation never ended.
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Competitors develop
superior new product line.
Major prolonged economic
depression.
Decrease Malaysian people
eating bread.
Higher cost Legislation to reduce foreign
product.
Seriousness
Low
High
Stanson Bakeries ( High 5 Bread)
Stanson Bakeries and its marketing unit are subsidiary companies of the
Stanson Group under the Silver Bird Group Bhd. The Stanson Bakeries
manufactures the European variety of breads, namely High 5. The group, which
started in 1999, is currently contributing about RM46 million, close to 90% of Silver
Bird’s turnover in year 2004. The Stanson Bakeries, has 250 trucks plying the
peninsula’s North-South expressway 24hours a day, to reach their outlets
overnight, on a daily basis. Their strong distribution network has enabled the
company to supply more than 8000 retail outlets throughout the country in the year
2004.
High 5 breads are made from the finest selected ingredients and baked to a
unique European recipe, High 5 has the balance of 5 main nutrients with no
artificial preservatives that our body needs that give us the energy, growth and
good health to live a full life. Wholesome, well-balanced and nutritious, that's the
secret recipe of High 5 bread. High 5 bread is freshly baked everyday from state-
of-the-art single largest stand-alone bakery line in ASEAN using a unique
European Recipe that makes your favorite bread softer, tastier and healthier. It
contains all of the five essential nutrients from each of the five important nutritional
groups - carbohydrates, protein, calcium, vitamins and irons. It also has folic acid,
which is recommended for vitality and growth of our body, especially for expecting
mothers and babies; and is cholesterol and bromated free for good health. The
High 5 Promise - Soft & Tasty high quality bread which emphasizes good health
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and nutrition. High 5 bread is produced by integrating state-of-the-art food
processing technologies with professional management techniques. High 5 cares
to give you the best in bread, beginning with our Unique European Recipe, so from
taste to texture, consumer can tell the difference in every bite. That's why every
High 5 bread has essential nutrients that contribute to a healthy, well-balanced
and nutritious diet for the whole family
A bread museum called the High 5 Bread Town is built by The Silver Group in
their RM100 million new plant premises. It present the history of bread making that
spans more than 500 years ago, from Ancient Egypt, through the Iron Age, the
Roman and Viking periods, right through the industrial revolution of the present
day. It uses colorful murals and interactive displays with sound to give lively hands-
on experience to visitors. It is claimed to be is the first of its kind in the world. It
even portrays bread in futuristic years, in the form of pallets and pills to be taken
during a spaceship expedition. It is fascinating with ideas being so well
transformed for educational purposes.
In October 2004, Stanson Bakeries announced their official acquisition of
licensee for the manufacture and distribution of Roman Meal breads from The
Roman Meal Company in the US (best known globally for their nutritional and
health bread over the century). The following is the list of the product by Stanson
Bakeries :
High 5 Cream Roll ( flavors : chocolate, vanilla and corn)
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High 5 Double Cream Roll ( flavors : chocolate & vanilla, espresso & cream,
Blueberry & cream, apple & cream)
High 5 Fruit Roll (flavors : raisin & cherry, raisin,apricot & walnut)
High 5 Filled Bun ( flavors : ikan bilis, spicy tuna, classic sardine, coconut, red
bean, kaya and chocolate)
High 5 High Grain
High 5 Roti Kok
2.4 Product offering
The first loaf of bread was rolled by Gardenia in 1986.Through the years,
Gardenia leveraged on its product strength and until now, it produces a variety of
baked products to satisfy customer’s demand. The following are the products that
produce by Gardenia:
Gardenia Twiggies ( flavors : cream dream and choc-a-lot)
Gardenia Toast’em (flavors : raisin oatmeal and apricot raisin wheatgrain)
Gardenia Summerset Cottage Wholegrain Fibremeal
Gardenia Squiggles (flavors : funky strawberry and choco-malto)
Gardenia Quick Bites (flavors : double chocolate and banana)
Gardenia Classic and Classic Jumbo
Gardenia Muffin Cip Coklat
Gardenia Frankfurter Rolls
Gardenia Delicia Soft Roll ( flavors : milky chocolate, coffee cinnamon, butter
toffee and black sesame)
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Gardenia Delicia Sambal Bilis
Gardenia Delicia Pandan Butterscotch Bread
Gardenia Delicia Hazelnut Choco Spread
Gardenia Delicia Cream Roll ( flavors : vanilla, kaya,jagung and chocolate)
Gardenia Delicia Coffee Caramel Bread
Gardenia Delicia Chocolate Spread
Gardenia Delicia Choco chip Raisin
Gardenia Delicia Butterscotch
Gardenia Breakthru Formula Mutliwholegrain Fibremeal
Gardenia Bonanza Big Saver & Big Value
2.5 Keys to Success
“So good you can even eat it on its own.” The phrase is synonymous with
Gardenia.
Gardenia moved with their demands as consumers getting more conscious
about nutrition over the years. It started manufacturing loaves with no trans fat, no
cholesterol and chockfull of vitamins. More than that, they make that extra healthy
choice plan to see on its nutrition labels. As an understanding manufacturer,
Gardenia is continuously to fulfill customer’s need.
2.6 Critical Issues
In year 2008, there was a critical issue that rose between QAF Limited and LB
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(Lian Bee) Confectionery Sdn. Bhd., pursuant to section 45 and 46 of the Trade
Marks Act 1976 for an order that the Trade Mark Registration No: 01005742 for
“Squiggles” in Class 30 in the name of QAF Limited be expunged and removed
from the Register of Trade Marks Malaysia would be success or not. Before this,
QAF Limited and Gardenia entered into a Licensing Agreement dated 12.9.1996
whereby QAF Ltd granted Gardenia Bakeries the right to use trade marks on
bread and bakery products produced using the Gardenia Bakery System. This
includes the registered trade mark “Squiggles”. In this case, the court held that LB
(Lian Bee) Confectionery Sdn.Bhd. is dismissed with costs and the application by
the company is failed. As a conclusion, the trade mark “Squiggles” is still
belonging with Gardenia Bakeries.
3.0 Marketing Strategy
The key to the marketing strategy of Gardenia is focus on satisfied consumers’
demand by introducing the different kinds of product, eating healthy life style and
also the Halal status of Gardenia in Malaysia. Gardenia's range of products grew
and evolved through the years, becoming better and better with each step.
Leveraging on its brand strength, Gardenia now produces a variety of baked
products to satisfy consumers’ demands. Gardenia also stress about the eating
healthy life style by introducing the Gardenia Breakthru bread with the statement--
eat well and stay well with Gardenia Breakthru, the diabetic-friendly bread that’s
better for you. While for the Halal status of Gardenia bread, a special Halal
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Committee is formed to scrutinise every aspect of the Halal regulations and to
ensure that all requirements are stringently adhered to. As an added measure to
control and safeguard of Halal status, Gardenia has appointed an independent
consultant whom Gardenia could refer to in ‘syariah’ related matters.
3.1 Mission
Gardenia as a food company that manufactures a wide variety of breads has
the mission of becoming "The Premier Company in the Baking Industry." Being a
consumer-focused and branded food company, Gardenia is singularly driven and
aligned behind delivering superior consumer value through providing consumers
with superior brands. The main objective is to project that Gardenia trademark
means value and it is respected all over Asia. By delivering uncompromising
excellence in product quality and service, Gardenia consistently drive the market
forward, setting standards for the industry to follow. At Gardenia, the science of
baking an art is made.
3.2 Marketing Objectives
First, to ensure the aroma and taste of the bread are consistently being
maintained on the shelf. Second, while exploring new market, current customer
loyalty is retained. Third, within four short years, Gardenia became the bread
market leader with an astounding 99 percent brand recall rate and 80 percent top-
of-mind recall.
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3.3 Financial Objectives
First, maintain a significant research and development budget to spur future
product development. Secondly, continue heavy promotion to further increase the
company’s profit margins.
3.4 Target Markets
The target markets of Gardenia Bakeries Sdn. Bhd are customer market and
reseller market. The customer market consists of individual and household.
Usually the customer market will buy only in small quantity but with a large number
of customers, a great sell could be achieved. While for the reseller market consists
of retailer, supermarket (Carrefour & Tesco), and convenience stores (7-Eleven
and stores at petrol station). The reseller market usually characterise as an assist
to the customer market. They help to distributed product and make it available
anytime anyway.
3.5 Positioning
Competitors are those who serve the target market with similar products and
services against whom a company must gain strategic advantage. Now, Gardenia
Bakeries Sdn. Bhd. has 70% share market in the bread’s industrial and it is a
leader in this industry. This is because Gardenia has positioned their offerings
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strongly against competitor’s offerings in the minds of the consumers. For
example, it has its own song to make consumers remember its bread which is “So
good...You can even eat it on its own”. As we know, the demographic environment
involves people, who play an important role in making up the markets.
Generally, populations are becoming more educated. The rising number of
educated people will increase the demand for quality products especially when
health is highly concerned nowadays. Therefore, Gardenia also comes out with
Gardenia Breakthru, a health-conscious product that strongly positioned in the
markets. Gardenia Breakthru is formulated with beta-glucan that can help to lower
cholesterol levels and stabilize blood glucose levels.
3.6 Strategies
There are a few strategies that have been use by Gardenia to penetrating its
own bread market. Generally, Gardenia focuses on three aspects to delivery its
product value to the customer where as marketing intermediaries, suppliers and
public.
Marketing intermediaries help the company to promote, sell, and distribute its
goods to final buyers. There are a lot of marketing intermediaries like reseller, the
physical distribution firms and the marketing service agencies. Gardenia uses
intermediaries’ distributions and also direct selling method to offer its product to
the final buyers. The company uses the resellers to distribute its products in order
to make sure that their products can be delivered to the customers. Its start its
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bread delivering operation at 4 a.m. every working day so that customers are able
to get its breads early in the morning. The customer can get the products easily in
any retails without going to the main warehouse. Gardenia also uses the physical
distribution firms to help them to stock and move goods from their main warehouse
to final buyers, wholesalers and retailers. For supplier’s aspect, Gardenia knows
that suppliers form an important link in the company’s overall customer value
delivery system. They provide the resources required by the company to produce
its goods and services. So that Gardenia put an important insight to the supplied
resources. For example, due to the short-lasting validity of flour, Gardenia prefers
to purchase its resources from the local suppliers to ensure that the resources
received are fresh. While for publics, a public is any group of people that has an
actual or potential interest in or impact on an organization’s ability to achieve its
objective. In order to achieve its objective, Gardenia is using different public media
for different motive. For example it uses television to promote and also to ensure
consumers remember about Gardenia’s products, be it new products or existing
products. Gardenia also encourage to having a factory visit where Gardenia called
it ‘Bread Time Story Tour’. The free factory visit has attracted over 25,000 visitors
annually since 1991. More specifically, Gardenia even owns a theme song that we
familiar heard from the broadcasting of advertisement.
3.7 Marketing Mix
Gardenia marketing mix consists of the following approaches to product,
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pricing, distribution, and promotion.
3.7.1 Product
Product is anything that can be offered to a market for attention, acquisition,
use, or consumption that might satisfy a want or need while service is any activity
or benefit that one party can offer to another that is essentially intangible and does
not result in the ownership of anything. Products that are marketed are divided into
two, which are consumer products (convenience product, shopping product,
specialty product and unsought product) and industrial products (materials and
parts, capital items and supplies and services).
Gardenia has produced a lot of kinds of breads such as the latest one-
Butterscotch, Breakthru, Delicia, Twiggies and many others. Every product has its
own special features. This is because of the customer buying behaviour;
customers who make frequent purchase, little planning, little comparison and low
shopping effort before make purchasing. Price; the price of Gardenia breads is low
and almost the same as others competitors. One of the examples is the white
breads of Gardenia (jumbo size) which have more slices but at a cheaper price.
Distribution; Gardenia make widespread distribution either in urban or rural area to
make sure everyone can have their breads, and also promotions; Gardenia
implements mass promotions. For instance, it uses Mass Media such as television
to promote its products and to introduce new products to the customers while
ensuring customers to remember about their existing products by using radios..
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Referring to the product level, the core benefit represents what the buyer is
really buying. The core benefit provided by Gardenia Bakeries is to make their
consumers have the feeling that what they are consuming is not only bread, but
the experience. For example, for Gardenia Breakthru breads, it is not only a bread,
but consumers have the perception that it is a healthy food. It is consists with Beta
Glucan which helps to lower cholesterol, this has been clinically tested and
certified Diet Friendly by the Gylcemic Research Institute, Washington D.C
because it has Low Adipose Tissue Fat-Storing Capacity and will assist our body
in having better control over obesity. It is also certified as Diabetic Friendly which
helps to maintain stable blood sugar level that typically follows a meal. It is also
have 38% less carbohydrates, 7.3x more dietary fibre, 15% less calories, 59%
more proteins, low gylcaemic index (42), low gylcaemic load (6.5), prebiotic
properties, low fat, no trans fat and no added sugar too.
The actual product represents the design, brand name, and packaging that
deliver the core benefit to the customer. For this company, the actual products are
all kinds of Gardenia breads.
3.7.2 Pricing
Price refers to the amount of money charge for a product or service. It is the
sum of all the value that consumers give in order to gain the benefits of having or
using the product and services. Price has been the major factor that influences
buyer choice and it remains as one of the most important element that determine a
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firm’s market share and profitability. Besides, price is the only element in the
marketing mix that produces revenue and it is also a part of a company’s overall
proposition. More importantly, it plays a key role in creating customer value and
building customer relationships.
Theoretically, price competition is the number one problem faced by many
marketing executives. Yet, we get to know in our interview that Gardenia did not
compete by using their price, they make customer feel worth by providing bread
with high quality. It also focused on the product differentiation, such as creating
new products in order to attract customers.
In fact, the pricing of Gardenia bread is controlled by the government. This
is because of the ingredient of the bread, flour, which is one of the products that
are under the control of the government in Malaysia. The producers are unable to
change the price as they like and they must follow the price fixed by government.
Despite of this limitation, Gardenia will also consider several major aspects when
setting the price. The first aspect that is taken into consideration is the product
cost. They will ensure that the price set is able to give profit to the company and at
the same time, maximizing customer satisfaction. Gardenia will also consider
about the overall marketing strategy and market demand. The price for Gardenia
bread must be reasonable and affordable by everyone and it must also the same
regardless of what location the bread is sold in Malaysia.
3.7.3 Promotion
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Promotion is one of the four key aspects of the marketing mix. Gardenia
realizes that a good promotion is vitally important to create growth for the
company. In the early years, a lot of efforts have been put into the promotion of the
bread, but once consumers have accepted it they will be loyalty to the product.
Promotion includes advertising, sales promotion, personal selling, publicity and
public relation. Advertising consists of paid personal communication through
various media with the purpose of promoting the products and is used by
marketers to reach target markets with messages designed to appeal to business
firms, profit organizations, or ultimate consumers.
Gardenia has used advertising strategies to promote its products. Among
the various alternatives media, radio commercial, television and newspaper are
mostly used by Gardenia. Radio is the most common medium used to remind
existing customers about Gardenia products while television advertising is usually
used to promote new products. The advantage of television advertising is that
marketers are able to reach local and national markets. Television advertising
offers the advantages of mass coverage, powerful impact on viewers, repetition of
messages, flexibility and prestige. That is all the reason why Gardenia chooses
television to advertise their products. Newspapers act as an effective way to
countdown new product for Gardenia because it can reach specific target market.
In short, major advertisement of Gardenia’s bread have established Gardenia
slogans as part of its popular culture, such as “It’s fresh! It’s good!”.
Besides that, sales promotion is one of the ways Gardenia use in
promotion. In October 2003, a marketing drive was launched to promote an
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existing product of Gardenia. Consumers were required to collect four empty
packaging of the Gardenia bread to redeem one free loaf Gardenia bread. The
campaigns were successful in recreating awareness for these products and have
lead to significantly increased sales.
In addition, Gardenia is also using publicity and public relation. It has been
actively involved in charitable causes. For example, Gardenia delivers
complimentary fresh bread to over 45 charitable organizations like old folk’s
homes, orphanages and centres for the disabled each day and these charitable
organizations have been on Gardenia’s delivery list since 1991 while the Twiggies
Wagon has been dispensing free Twiggies to schoolchildren during special events
and functions since 2002. Moreover, as a responsible corporate citizen, Gardenia
also helps in fighting the obesity epidemic in Malaysia. It is working closely with
the National Diabetes Institute (NADI) on the “Fight Against Diabetes” programme,
a major educational drive to bring public awareness on the prevention and
management of diabetes. Another example is that Gardenia has opened their
factory doors to the public in order for them to share their journey, aspirations and
progress with customers since 1991. Now, they welcome over 25,000 visitors
annually and take them on a personal tour of Gardenia bread factory absolutely
free of charge. The visitors will be given free sample of bread during the factory
tour.
3.7.4 Place
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Currently, Gardenia Bakeries (KL) Sdn Bhd has covered the domestic markets
all around the Peninsular Malaysia. However, Gardenia’s baked products are only
available in Peninsular Malaysia. This is because the delivering process to East
Malaysia is time-consuming and the products are no longer fresh. Hence, East
Malaysia which includes Sabah and Sarawak are not within Gardenia Bakeries’
distributed areas.
As all of us know, Gardenia baked products are well known by everyone.
Gardenia has over 20000 outlets throughout Peninsular Malaysia. Their wide
varieties of products are available in almost all hypermarkets, supermarkets and
even neighborhood stores. Here, as we can notice, Gardenia seeks for market
share through intensive distribution, a strategy in which they stock their products in
as many outlets as possible. Their breads and cakes can be conveniently obtained
by consumers wherever and whenever consumers want them.
Actually, their success in manufacturing products and making them available
to final customers requires building and managing a continuously evolving value
delivery network. What is value delivery network? It is a network that made up of
the company, suppliers, distributors, and ultimately customers who collaborate with
each other to improve the performance of the entire system. This network consists
of both ‘upstream’ and ‘downstream’ partners. Upstream partners are the set of
firms that supply the raw materials, components, parts, information, finances, and
expertise in order to create a product. On the other hand, the downstream
marketing channels or distribution channels partners are made up of such as
wholesalers and retailers.
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For Gardenia Bakeries, they work closely with their upstream partners such as
flour suppliers to avoid problem of shortage of raw materials, which will critically
affect their daily production. Normally, to maintain good relationship, a win-win
situation must be created. For instance, Gardenia will always make payments to
their suppliers on time. Besides that, Gardenia also forges marketing channels,
especially retailers, such as hypermarkets, supermarkets and convenience stores,
to act as intermediaries to help distributing their baked products available for
consumption by the final consumers. In a final word, all firms are unable to deliver
value to customers by themselves. Instead, they must cooperate with other firms
in a larger value delivery network. Of course, by doing so, they will be able to
attain the goal of creating superior customer value.
3.8 Marketing Research
Gardenia prides itself in being the leader in its field by introducing several firsts
in the bread industry. Gardenia is the first in the country to use a unique
automated G-lock on the packaging to seal its bread products and retain
freshness. This plastic clip is placed on the "neck" of the bread package with the
"Best Before" date and retail price printed on it. Gardenia breads also packed in
colourful and informative packaging displayed in an upright fashion unlike the
conventional flat display. With this new marketing research, Gardenia will achieve
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the market penetrating status. In addition, adhering to the international policy of
keeping only fresh stocks on the store shelves, Gardenia deliver freshly-baked
breads to the stores on the same day they are produced. With an extensive
distribution network, Gardenia delivers everyday, seven days a week. For the
unsold breads, it will be pulled out from store shelves and replaced with only newly
baked ones during every day of delivery.
4.0 Financials
This section will offer the financial overview of Gardenia Company related to
marketing activities. Gardenia will address break-even analysis, sales
forecasts, expanse forecast, and indicates how these activities link to the
marketing strategy.
The marketing plan is built in these truths:
1. The marketing budget is based on a percentage of sales value, currently
the value is set at 25%.
2. Building a strong brand and brand loyalty is a critical to the success of
Gardenia Company.
3. The understanding of the need for strong branding and emphasis on
marketing gives us a competitive edge over others bread market.
4.1 Break-Even Analysis
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Year 2006 2007 2008 Average
Revenue (RM) 330,662,232 383,411,553 472,896,480 395,656,755
Variable Cost(RM) 218,680,453 257,605,123 324,577,200 266,954,259
Fixed Cost(RM) 46,803,668 50,615,867 60,134,777 52,518,104
Total Cost(RM) 265,484,121 308,220,990 384,711,977 319,472,363
We use the three years average consideration to estimate the Gardenia
break-even point:
= 161,445,140
Assumed that Gardenia Company has average 100 million of unit sales,
= RM1.29 per unit
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= 40,711,709
Table: Break-even Analysis
--------------------------------------------------------------------------------------------------
Break-even Analysis:Average Yearly Units Break-even 40,711,709 Average Yearly Revenue Break-even RM 161,445,140
Assumption: --------------------------------------------------------------------------------------------------Average Per-Unit Revenue RM 3.96Average Per-Unit Variable Cost RM 2.67Estimated Monthly Fixed Cost RM 52,518,104
Gardenia Company is capable of supporting high gross margins.
Variable costs in relationship to per-unit revenues are low. Fixed costs to
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produce Gardenia products equal almost RM52, 518,104. Fixed cost
include payment of debt, facilities lease cost, and other costs that Gardenia
must maintain on a monthly basis. These costs are fixed and aren’t
impacted by an increase or a decrease in sales.
Based on the graph above, we can notice that the break-even analysis
for these three years indicates that RM161, 445,140 with 40,711,709 unit
sales will be required in yearly sales revenue to reach the break-even point.
Gardenia will make profit if the company reach above the break-even point
or loss money when below the break-even point.
Such break-even analysis helps Gardenia by showing the unit volume
needed to cover the costs. If production capacity cannot attain this level of
output, then Gardenia should not launch this product. However, the unit
break-even volume is well within Gardenia’s capacity.
4.2 Sales Forecast
Gardenia feels that the sales forecast figures are conservative. Based
on the past trend views, the revenue of sales had almost 16% growth rate
from RM331 million to RM383 million in year 2007. It continues increase
by 23.34% to RM473 million in year 2008. We have an idea sales will
growth from year to year. Thus, we can predict a growth rate of 25% in
sales for the next four years which is year 2012. It will steadily increase
sales if the advertising budget allows.
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Based on the Gardenia’s income statement from year 2006 to 2008,
the overall performance of Gardenia Company is quiet good that shows
the increases of the net income especially in year 2008 which had
increased by 28.23% compare with the year 2007. Cost of goods sold was
increasing within years 2006 to 2008 which increased by 17.8% in year
2007 and 26% in year 2008. As a result, the gross profit of Gardenia was
declining based on its sales of each year that gives 33.87% in year 2006
to 31.36% in year 2008 but the company still having the increasing of
gross profit. The gross profit was increasing in year 2007 by 12.35% and
17.89% in year 2008. Operating profit was increasing by 15.41% in year
2007 and 28.09% in year 2008.
However, the company should more concern about the proportion of
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the net income gained by its sales which had declined from 7.77% to
7.21%. It may be caused by the increases of marketing and distribution
expense in these three years that had contributed the largest percentage
in company expenses especially in year 2007 which is almost 24% of the
its sales. Therefore, Gardenia should control the expenses of the company
to earn more profit for the future years, 2012.
4.3 Expenses Forecast
Based on the Gardenia’s income statement from year 2006 to 2008, the
total expenses are shown as below:
2006 2007 20082006-2007
(%)2007-2008
(%)
Administrative expense
7,438,655
8,142,244
9,944,788 9.46 22.14
Marketing and distribution expenses
82,335,562
91,234,568
104,093,079 10.81 14.09
Other expenses 666,333
736,678
887,934 10.56 20.53
Total expenses 90,440,550
100,113,490
114,925,801 10.70 14.80
Revenue 330,662,232 383,411,553 472,896,480
Total expenses on sales (%) 27 26 24Marketing and distribution expenses on sales (%) 25 24 22
Gardenia had contributed their expanses wisely which had shown the
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decreased in the proportion of total expenses from 27% to 24% based on the
sales each year. According from year 2006 to 2007, total expenses had
increased by 10.7% and continue increased by 14.8% in year 2008.
The marketing budget will consistently approximately around 25% of sales.
One of the strongest strengths is marketing and brand building capabilities,
and the aggressive marketing budget is a reflection of the importance to
attribute in marketing activities.
5.0 Marketing control
We must evaluate Gardenia marketing efforts continually to ensure its
performance is on track against Gardenia’s objectives.
Objective 1: Produce high quality products
Gardenia tends to produce the best quality products for their customer.
They will maintain their quality through:
i. JAKIM Certification
All Gardenia products are certified Halal by JAKIM. Regular factory
inspections are conducted by officers from JAKIM to monitor and
ensure that the overall operations are following the guidelines set by
them.
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ii. PPIM
Gardenia works closely with Persatuan Pengguna Islam Malaysia
(PPIM) for the interest of Muslim consumers. PPIM determines
Gardenia's status as a Muslim Friendly Organization(MFO).
iii. ISI 2020
Gardenia’s close collaboration with PPIM has also resulted in
significant accolades like the ISI 2020 certification by the Research
Institute of Standards in Islam (RISIS). This certification
acknowledges Gardenia’s corporate and management philosophies,
principles, cultures and practices that reflect the Islamic principles
which are universally accepted and profoundly outlined by RISIS in
the system.
Objective 2: To build loyal customer
Produce good quality products to customer and Gardenia are require a
more personal relationship with customer. Every relationship takes on
additional significance as the sales potential of each customer increase.
Satisfied customer needs will make them rebuy Gardenia product when
they are familiar with the product.
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Objective 3: Fulfill customers satisfaction
Gardenia should always alert the latest the changes of the product in the
market. After determine the kind of the products, they should update their
product according to the market trend to attract a large number of
customers.
5.1 Contingency plan
1. Decrease in Sales
If the sales number decline, Gardenia must take the step send an
offer product that is related to what they bought. Offer a discount
for them who purchase in a big amount.
2. Ineffectiveness of promotion strategic
If the promotion strategic fail to attract more customers and
increase sales performance, the way that Gardenia can use is
arrange all the promotion strategic. They can send out the
brochures to the masses about their product. This will encourage
them to buy our product
.
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3. Retaining customers
Customers evaluate every aspect of the product. This includes
time of purchase, product disposition, the purchase experience
and so on. This results in the consumer’s satisfaction or
dissatisfaction with the product and purchase decision. They must
do researches about customer’s taste to get feedback from
customers and putting the feedback into action.
5.2 RECOMMENDATION
Promotion
Gardenia should continue their heavy promotion to further increase the
company’s profit margins. It is suggested that Gardenia perform online
marketing and publish their advertisement through online networking. Due
to a very high demand of bread by the students in the universities, Gardenia
can take this opportunity to increase its volume of sales by conducting a
campaign on its products and implementing Gardenia Campus Plan. This is
an innovative idea to attract more business and support from the students
and staffs by entitling the holders to special discount on purchase. Besides
that, Gardenia can introduce a new bonus-link system where every
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purchase are recorded into the purchasers’ account using member cards
and frequent purchasers are given varieties sample of breads and other
baked products for free. This encourages bread consumers to purchase
Gardenia products and indirectly promote the new products of Gardenia.
Place
For place, it is recommended that Gardenia expands their baked
products’ markets to more places. For instance, they can consider
distributing their breads and cakes to East Malaysia. To do so, Gardenia
can expand their business to Sabah and Sarawak by setting up their own
manufacturing factory over there. Thus, not only residents from West
Malaysia but that of East Malaysia will also have the opportunities to
purchase fresh baked products daily.
5.3 CONCLUSION
After investigate from Gardenia Company, we discovered that this small
medium company, Gardenia, has been obtaining the excellent respond from
its customers in the Gardenia’s products. With the help of a variety of
promotion sales and effective pricing strategies, Gardenia is able to have its
own market of its products in Peninsular Malaysia. Furthermore, Gardenia
has a strong team work in carrying out all the activities and tasks to achieve
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these satisfying results. In the past few years, Gardenia has been building
and maintaining its image in this selling market. Owing to the good quality
of Gardenia’s bread, Gardenia obtains a strong and reliable supports from
customers. Gardenia’s wide variety of products successfully captures value
from customers in return. Hence, Gardenia may continue its current
marketing plan.
5.4 Appendix and References
References:
1. www.silverbird.com.my
2. www.iem.org.my/AFETD/bul0503.pdf
3. www.gardenia.com.my
4. www.mahkamah.gov.my/judgment/hc/latesthc/
D5_IP_24-94-08andD5_IP_25-7-08.pdf
5. www.halal.gov.my
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