Table of Contents

1 INDUSTRY BACKGROUND 1

2 CORPORATION & SBU BACKGROUND 3

2.1 Corporation 3

2.2 Strategic Business Unit (SBU) 4

3 SBU SITUATION ANALYSIS 5

3.1 SBU Culture/ Resources/ Stakeholders/Performance 5

3.1.1 Culture 5

3.1.2 Resources 6

3.1.3 Stakeholders 7

3.2 3.2 SBU Customers 8

3.2.1 Geographic Segmentation 8

3.2.2 Demographic Segmentation 9

3.2.3 Psychological Segmentation 9

3.2.4 Psychographic Segmentation 10

3.2.5 Sociocultural Segmentation 10

3.3 SBU Competition 12

3.4 External Environment 15

3.4.1 Societal Environment 15

3.4.2 Industry Environment 15

3.5 TOWS Matrix 16

4 SBU Objectives and Goals 17

4.1 Mission: 17

4.2 Objectives: 17

4.3 Goals: 17

4.4 Product Life Cycle of Yeo’s Food SBU 18

4.5 Yeo’s Goals Strategy Mix 19

5 Recommendation Strategies 21

5.1 Market Strategies 21

5.1.1 Market Scope 21

5.1.2 Market Geography 21

5.1.3 Market Entry 21

5.1.4 Market commitment 22

5.2 Product Strategies 22

5.2.1 Product-positioning strategy 22

5.2.2 Product Design Strategy 23

5.2.3 New product strategy: Improvement/Modification 23

5.3 Pricing Strategies 24

5.3.1 Pricing Strategies 24

5.3.2 New product 24

5.3.3 Existing Products 25

5.4 Distribution Strategies 26

5.4.1 Indirect Channels 26

5.4.2 Channel control strategy 26

5.4.3 Distribution Scope 26

5.5 Promotion Strategies 27

5.5.1 Advertising 27

5.5.2 Public Relation 28

5.5.3 Sales Promotion 28

6 Implementation Program 29

7 Reference List 31
1 INDUSTRY BACKGROUND

Food industry in Malaysia is diverse with lots of varieties of mixture of foods with Asian tastes (Asia
Pacific Food Industry 2010). The companies in this industry are mainly Malaysian-owned (Asia Pacific Food
Industry 2010). Local businesses range from small, medium, family own to large, publicly held enterprises while
others are subsidiaries of foreign or multinational conglomerates (Asia Pacific Food Industry 2010).
In 2008, the food industry contributed around 10% of the country’s manufacturing output (MIDA n.d). It
is a growing industry where the production and sales are growing every year, numbers of competitors increasing,
and each player is aiming to increase their market share. According to a report by Global Direct, 60 percent of
food and drinks manufacturers will expect to increase their procurement spend over 2010, with a concern on
evaluating their supply base (Asia Pacific Food Industry 2010). Besides, this will increase the competition in the
market (Asia Pacific Food Industry 2010). The overall production for processed food and beverages products
industry on that similar year increased by 8%, due to the high demand domestically and internationally (Market
Watch Malaysia 2010). Exports of selected processed food and beverages products have increased by 35.4 % in
2008 (Asia Pacific Food Industry 2010). Although the export performance has increased for the past ten years,
Malaysia continues to be a net importer of food (Asia Pacific Food Industry 2010). In 2008, Malaysia's total food
exports amounted to RM17.9 billion, while imports totalled RM28 billion (Asia Pacific Food Industry 2010).
According to Tey (2008), the increased amounts of import of food products were due to the changes of Malaysian
diets, increased of expatriates and foreign students and the boost of tourism industry. According to the Malaysian
Industry Development Authority (MIDA), present global retail sales in food products are worth around US$3.5
trillion, and are expected to grow at an annual rate of 4.8 per cent to US$6.4 trillion by 2020 (Market Watch
Malaysia 2010).
During the worldwide recession of 2007-2008, it impacted Malaysia economic growth and the economy
in 2009 (Market Watch Malaysia 2010). By end of the year, the country emerged from the recession and recover
moderately by 2010 (Market Watch Malaysia 2010). Malaysia's food and drink industry continues to recover
from the slowdown experienced in 2009 with many of the leading industry players posting vigorous growth in
interim financials (Market Watch Malaysia 2010). Along the years, the industry has also to deal with increasing
cost of production, deals with reputation issues as there have been incidents of unsafe foods happen in the past
(Tey 2008). These outbreaks lead to consumer loss confidence, and increased regulations (Tey 2008). With
additional rules and regulations, above extra campaigns, Malaysia government has encouraged consumers to buy
Malaysian products, and urge retail sector to carry more locally produced foods and beverages (Market Watch
Malaysia 2010). This leads to government’s emphasis on the agriculture sector, the processed food and beverages
industry development.

The global Halal food market is on the major developments that has prospect rapid and sustained growth
(Market Watch Malaysia 2010). With the Halal food market currently accounting for as much as 12 percent of
global trade in agri-food products, this will generate growth opportunities throughout the agri-food industry
(MIDA n.d).  Malaysia has been globally recognized as the world’s Halal food hub and it’s the pioneer in this
industry. Hence, presently it faces stiff competition from both Muslim and non-Muslim nations, including
Brunei, Thailand, Philippines, Australia and New Zealand, United Kingdom and France (Kamaruddin and Jusoff
2009). In Malaysia itself with 60% of population being Muslim and if assumed expenditure on food as RM1 a
day, then the demand for Halal product is more than RM5 billion a year (Kamaruddin and Jusoff 2009). The
demand for Halal food is expected to expand progressively in view of the increasing trend among Muslims to
observe dietary obligations (Kamaruddin and Jusoff 2009). The Halal industry in Malaysia provides huge
opportunities for Malaysian manufacturers (Kamaruddin and Jusoff 2009).
The industry is growing and thriving for being self sufficient in food production (Siew and Tan 2007). A
mix of manufacturing, services and agricultures provides the stable economic foundation that resulting two-thirds
of Malaysia population achieving middle to upper levels income (Siew and Tan 2007). According to MIDA (n.d),
the country has seen a steady increase in the standard of living and with it, its purchasing power (per capita
income exceeds RM 19,739 or US$5681). The food consumption will continue to grow by 22.7% by 2013 and
soft drink sales to increase by 32.9% over the same period (MIDA n.d). The current development in the industry is
heading to product innovations which centre on health (MIDA n.d). A growing demand for premium food items
can be predicted, which indicated by the increasing living standards and purchasing power of the modern
Malaysian population (U.S. Department of Agriculture 2003).
Currently, food industry is still growing in Malaysia. The industry maturity guide which sample by John
R Castle (2008) as in exhibit A.

Industry Embryonic/Earl
Growth / Expanding Mature / Stable Declining / Aging
maturity y

Plateau / Growth equal

Growth rate Very high Very high None
to GNP or slower

Shake out / Increasing

Competition Increasing well-established Decreasing
actively

Market leaders /
None Emerging Fixed Less important
standards

Market goals Exposure Differentiate Leadership Survival

Market share/
Trial and error Build share Defend Acquire
strategy

Product range Limited Expanding Wide Limited

 Customer Loyalty None Growing Strong Eroding

Exhibit A: Industry Maturity guide

2 CORPORATION & SBU BACKGROUND

2.1 Corporation

Yeo Hiap Seng Corporation starts its business in Singapore first in 1935, before it established in Malaysia
on 1942. Yeo Hiap Seng Malaysia Sdn Bhd (Yeo’s) deals in the production, marketing and sales of food and
beverages products (Yeo Hiap Seng (M) Berhad n.d). Among earliest products produced then were soya sauce,
canned chicken curry and soya bean milk, Yeo’s is the pioneer for manufacturing canned chicken curry, bottled
soya bean drinks and tetra pack, a paper based packaging for drinks (Yeo Hiap Seng (M) Berhad n.d). Now it
produces a range of food, carbonated and non- carbonated drinks under the brands of Yeo’s, Fizzi, Goodtaste,
Soyrich and Cintan (Yeo Hiap Seng (M) Berhad n.d). Its series of food range include canned food: curries,
coconut milk, paste, beef rending and the like, whilst for drinks range includes sugarcane based drinks and
chrysanthemum tea (Yeo Hiap Seng (M) Berhad n.d). Due to its success in the market especially in the beverage
lines, it was overwhelmed to expand internationally by penetrating the U.S market in the early 90’s through
acquisition from local company named Chun King, which turned out to be a big management decision mistake
(Market Watch Malaysia 2010). Since then, it focuses its distribution network closer to home and, countries close
to Malaysia, before the restructuring of the management take over (Market Watch Malaysia 2010). Yeo’s has
been listed on the Kuala Lumpur Stock Exchange in 1975 (Market Watch Malaysia 2010). Its vision is to be
number one Asian food and beverage company in Malaysia (Yeo Hiap Seng (M) Berhad n.d). The mission is to
provide their customers high quality and best value products through the constant approach in innovation and
excellence (Yeo Hiap Seng (M) Berhad n.d).

The company use functional structure in order to manage its operation. It has functional line managers in
dominant organisational areas such as Finance division, Marketing, Sales, Management Information Systems
Technical, R&D, Products Human Resource, and Business Development Divisions (Yeo Hiap Seng (M) Berhad
n.d). The company assigned its Head Office Finance Division to oversee all financial matters relating to the group
which include financial and management accounting, budgetary and cost control (Yeo Hiap Seng (M) Berhad
n.d). It monitors the capital expenditure and business expansion programmes. The company also has it Corporate
Planning which function encompasses preparation of detailed feasibility studies relating to acquisitions, mergers,
financial restructuring or other issues that may affect company's future operations (Yeo Hiap Seng (M) Berhad
n.d). The Marketing Department is responsible for product management, Sales for distribution management which
manage the Fast Moving Consumer Goods (FMCG) sales distribution network all around Malaysia, MIS for
 information system management, Technical for production support, R&D in identifying opportunities and
improving its products, Product Division for management of product facilities in 5 locations, whilst Human
Resource and Business Development for its human capital and identifying market opportunities (Yeo Hiap Seng
(M) Berhad n.d). The functional structure support implementation of business and some corporate level strategies
with low levels of innovation (Yeo Hiap Seng (M) Berhad n.d).

The company involves in joint ventures deals as its international expansion (Yeo Hiap Seng (M) Berhad
n.d). It collaborates with World Grain Co. in Thailand to launch WY Co. Ltd., which introduces variety of teas,
fruit juices, and other noncarbonated soft drinks under the Eliza brand (Yeo Hiap Seng (M) Berhad n.d). The
company also initiated the Rengo International holding company joint venture in Hong Kong, which then
launched of instant noodles on the mainland (Yeo Hiap Seng (M) Berhad n.d). The deals allowed Yeo’s to operate
six food and beverage production facilities in China (Yeo Hiap Seng (M) Berhad n.d).

Presently, Yeo’s has direct manufacturing facilities in Singapore, Malaysia and China, where Malaysia is
the centre for global distribution for Indonesia, New Zealand, Australia Europe and US (Yeo Hiap Seng (M)
Berhad n.d). Yeo Hiap Seng subsidiaries companies are Bestcan Food Technological Industry Sdn. Bhd.; Esin
Canning Industry Sdn. Bhd.; Leong Sin Nam Farms Bhd.; Rengo International Investment Ltd; Sarawak Coconut
Enterprise Sdn. Bhd.; Senawang Edible Oil (Sendirian) Bhd.; WY Co. Ltd. (Thailand); Xiamen Rengo Food. Co.
Ltd. (China); Yeo Hiap Seng (Middle East) Co. Ltd. (Bahrain); Yeo Hiap Seng (Perak) Sdn. Bhd.; Yeo Hiap Seng
Trading Sdn. Bhd.; Yeo’s Beverage (International) Pte. Ltd. (Singapore), and PT YHS Indonesia.

2.2 Strategic Business Unit (SBU)

Under the brands of Yeo’s, the company produces food and beverages which distribute locally and
internationally. The strategic business unit form for Yeo’s consists of 3 levels: corporate headquarters, strategic
business units and finally its divisions. The divisions within each SBU are related in terms of markets and may
share its market competencies and tools.

Under food section, Yeo’s produces:

1. Canned food:

i. canned meat products with local taste blend of Curry chicken, kurma chicken, Vindaloo chicken,
Rendang chicken, Beef curry and mutton curry

ii. Canned seafood: Prawn sambal, cuttlefish in soya sauce, cuttlefish in curry, cuttlefish in sambal,
curry cockles, fish with salted black beans, and sardines in tomato sauce.

iii. Vegetable: Baked beans, processed peas, sweet corn in creamy style and whole kernel corn.

iv. Kaya, sweet coconut based spread for bread or flavouring purpose
 v. Sweet condensed milk, with Goodtaste lable.

2. Sauces: wide range of soya sauces, from thick dark, sweet, and liquefied soya sauce.

3. Noodles:

i. Cintan noodles, instant noodles with flavours of Curry, Assam laksa, Mushroom chicken, Tom
yam, Asam soto ayam, Goreng Ala Indo, Goreng Spicy, and Vegetarian

ii. Selera Chef, with local taste of kari laksa and mi sup, series of product with collaboration of
celebrity chef, Chef Wan.

iii. Cup-A-Mi, cup noodles in a pack.

iv. Grab Mi, noodle in cup packaging with different flavours of curry, vegetable and assam laksa.

v. Non-fried noodles, cholesterol free, with zero preservatives nor colouring for health conscious
consumers.

The Yeo’s food SBU has the geography scope which is within whole Malaysia (Yeo Hiap Seng (M)
Berhad n.d). The main sales offices are located in populated cities in Malaysia such as Alor Star, Ipoh, Johor
Bahru, Kota Kinabalu and Kuching (Yeo Hiap Seng (M) Berhad n.d). The increased competition due to saturation
of markets and competitive threats from overseas companies entering local market has forced YEOS to penetrate
overseas market. However, the distribution of food products to overseas is only undertaken by Singapore Yeo’s
Corporation (Yeo Hiap Seng (M) Berhad n.d).

In terms of strategic fit, Yeo’s food SBU has achieved corporate objective through the Management
Information System (MIS) (Yeo Hiap Seng (M) Berhad n.d). Besides, it is also assisted by its outstanding human
resource function which includes formulation and implementation. These specialties of Yeo’s food SBU has
driven it becomes profitable and contribute to sustainable operations of whole Yeo’s Corporation.

3 SBU SITUATION ANALYSIS

3.1 SBU Culture/ Resources/ Stakeholders/Performance

3.1.1 Culture

Yeo Hiap Seng (Malaysia) Berhad (Yeo’s) was one of the leading local food and beverage companies in
Malaysia with the vision of becoming the number one Asian food and beverage company in Malaysia. It has a
commitment towards community’s welfare which manufactures products by just using the freshest ingredients in
order to maintain the natural delicious taste and flavour (Yeo Hiap Seng (M) Berhad n.d.). The company clings to
strict hygiene standards and stringent quality control to ensure the high quality of all its products (Yeo Hiap Seng
(M) Berhad n.d.). Moreover, Yeo’s is also committed to continuous research and development to further improve
its products as well as keep abreast of the market trends in anticipating consumer needs and providing consumer
satisfaction (Yeo Hiap Seng (M) Berhad n.d.).

Everyone within the corporate was shared the value of having clear communication between members
and the society (Yeo Hiap Seng (M) Berhad n.d.). In this case, Yeo’s will explain reasons behind actions taken
and encourage feedback from others (Yeo Hiap Seng (M) Berhad n.d.). There will schedule regular
communications meeting to disseminate important company information (Yeo Hiap Seng (M) Berhad n.d.).

The discipline of Yeo’s is to be honest, ethical and adhering to rules, regulations, policies and standards which are
by follow company rules, regulations, policies, and industry and statutory standards (Yeo Hiap Seng (M) Berhad
n.d.). They also intend to be honest when managing and handling company goods and business; and do not abuse
one authority and position in the company (Yeo Hiap Seng (M) Berhad n.d.).

They also aim to be a high standard corporate which they strive to achieve best business practices (Yeo
Hiap Seng (M) Berhad n.d.). They will ensure product quality meets statutory requirements as well as market
needs (Yeo Hiap Seng (M) Berhad n.d.). YHS also actively seek ways to improve their current business practice;
and be accountable and responsible for their actions (Yeo Hiap Seng (M) Berhad n.d.).

Thus, with all these, Yeo’s is always thoughtful of a quality work environment that promotes new ideas,
empowerment, and teamwork besides promoting healthy and safety workplace that are in line with the
Occupational Safety Health Policy ergonomics standards and reduce workplace hazards by means of engineering
controls, administrative controls and employee training (Yeo Hiap Seng (M) Berhad n.d.).

3.1.2 Resources

Yeo’s management team is also shared equally between the brands of foods and beverages (Yeo Hiap
Seng (M) Berhad n.d.). The marketing professionals are assigned to develop appropriate marketing strategies for
the canned food, instant noodles, processed meat and sauces which some of them are market leaders (Yeo Hiap
Seng (M) Berhad n.d.). Yeo’s has the single most extensive Fast Moving Consumer Goods (FMCG) sales
distribution network in the country (Yeo Hiap Seng (M) Berhad n.d.). Teams of salesmen equipped with the latest
hand held computers as to provide personal services directly to customers are led by experienced Area Sales
Managers (Yeo Hiap Seng (M) Berhad n.d.). With the reason to optimise business opportunities, there is well
implementation on management information system (MIS) which up-to-date computer technology has been
utilised (Yeo Hiap Seng (M) Berhad n.d.). They have embarked on a major project to integrate their financial,
human resources, production, logistic, purchasing and sales functions at all branches (Yeo Hiap Seng (M) Berhad
n.d.). The technical department supports the engineering operations of our Group of Companies (Yeo Hiap Seng
(M) Berhad n.d.). Tasks involve planning, controlling and coordinating of all engineering operations relating to
maintenance of land, buildings, machinery and equipment as well as installation of new machines and equipment
for the production of foods and beverages (Yeo Hiap Seng (M) Berhad n.d.).

As one of the leader in the food and beverages industry in Malaysia, Yeo’s having one of the best
research and development teams in the country (Yeo Hiap Seng (M) Berhad n.d.). Their team of Food
Technologists and Chemists constantly update their knowledge through participation in national as well as
international seminars and courses in the development of food technology (Yeo Hiap Seng (M) Berhad n.d.). Day
to day activities include developing new or improved technical processes, new or improved products as well as
utilising different materials and raw ingredients (Yeo Hiap Seng (M) Berhad n.d.). The Quality Control and
Assurance function involves carrying out laboratory testing as well as advising the production function on quality
standard problems (Yeo Hiap Seng (M) Berhad n.d.).

The human resource department of Yeo’s is responsible for the formulation and implementation of
personnel policies; industrial relations; training development; as well as safety and employee welfare (Yeo Hiap
Seng (M) Berhad n.d.). The Business Development Department monitors relevant economic, financial and social
market and administrative trends with the main objective of identifying new market opportunities (Yeo Hiap Seng
(M) Berhad n.d.).

3.1.3 Stakeholders

The key stakeholders of Yeo’s are suppliers, employee, consumers, shareholders, communities and
directors. The interest of the communities towards Yeo Hiap Seng is that they will gain welfare in different aspect
by the on-going campaigns organised by Yeo’s under the commitment of being responsible to the communities
and environment by proactively promote the public interest which encouraging community growth and
development, and voluntarily eliminating practices that harm the public sphere (Yeo Hiap Seng (M) Berhad n.d.).
For example, Yeo’s will consistently contribute to various causes, such as, sponsorship to charity organizations,
orphanage, old folk home and education institutions. Moreover, the society is also concern about the Yeo’s
responsibility towards preserving the environment and utilization of resources in a sustainable manner (Yeo Hiap
Seng (M) Berhad n.d.).

On the other hand, the employees of Yeo’s have the interest on having quality work environment that
promotes new ideas, empowerment, and teamwork as well as having healthy and safety workplace that are in line
with the Occupational Safety Health Policy ergonomics standards (Yeo Hiap Seng (M) Berhad n.d.). Reduction
on workplace hazards also will be one of the concerns of the employees which by means of engineering controls,
administrative controls and employee training (Yeo Hiap Seng (M) Berhad n.d.). Besides, employees of Yeo’s
have the interest on what employee benefits actually given by Yeo’s, for instance; wages, salaries, paid annual
leave and sick leave, bonuses, and non-monetary benefits are accrued in the period in which the associated
services are rendered by employees of the group (Yeo Hiap Seng (M) Berhad n.d.). Further, there will be post
employment benefits relate to retirement benefits given to employees and are a non-contributory unfunded
retirement benefits scheme for employees who are eligible under a collective bargaining agreement (Yeo Hiap
Seng (M) Berhad n.d.).

Other than that, the directors of Yeo’s have the interests on the remunerations provided by Yeo’s (Yeo
Hiap Seng (M) Berhad n.d.). For the aspect of shareholders they have the interest on receive favourable dividends
generated from the profit of sales of foods and beverages. Further, they interested in having direct line of
communication through timely and through dissemination of information on the performance of Yeo’s and major
developments (Yeo Hiap Seng (M) Berhad n.d.). For the customers, they are interested on buying foods and
beverages products that are manufactured under hygiene standard using the freshest ingredients (Yeo Hiap Seng
(M) Berhad n.d.).

The suppliers of Yeo’s are those who supplied raw material or packaging material to the manufacturing
Yeo’s foods products. For example, Tong Seng Trading Co. (Pte) Ltd. has supplied the chilli powder, garlic
powder and so on to Yeo’s as for them to produce the seasoning of Cintan Instant noodles or Yeo’s Curry
Chicken (Yeo Hiap Seng (M) Berhad n.d.). So, the interest of these suppliers is on the long term supplier
relationship with Yeo’s which they aim to have a stable demand for their supplies from Yeo’s in order to generate
stable sales.

3.2 3.2 SBU Customers

3.2.1 Geographic Segmentation

Geographic segmentation divided into different geographical units such as region, city size, density of
area and climate. Customers in different areas display certain characteristics and behaviours in that particular
region. Organization can operate in one or a few geographic areas, or operate in all but pay attention to local
variations. Yeo’s operate in three major divisions which is consumer food and beverage in three major
geographical regions which is Malaysia, Singapore and Indonesia. Yeo’s food products are manufactured in the
Yeo Hiap Seng Malaysia factories located throughout Malaysia, Singapore and Indonesia. Yeo’s center its
attention on small market which reflecting small size of population, major metropolitan area and towns. In
additional, Yeo’s may produce its food products and distributed to urban, a suburban and rural area. This is
because a board density of area and population in Malaysia which consists of 27, 914 thousand of population,
Singapore consists of 4,837 thousand and Indonesia consists of 232, 517 thousand of population (World
Population Prospects: The 2008 Revision Population Database 2009) has a high potential to consume food
goods.
 Region Malaysia

City Size major metropolitan area, towns

Density of area Urban, suburban and rural area

3.2.2 Demographic Segmentation

Demographic segments are the most popular bases for differentiate customer groups where customer
wants, preferences and usage rates are often been identified. The market is divided into groups on the basis of
variables such as age, gender, marital status, income and occupation.

Age 18 and above ( got income)

Gender Female and Male

Marital Status Single, married, divorced, widowed

Income Low-high

Occupation Housewife, employed and unemployed, students

3.2.3 Psychological Segmentation

Psychological factors play an important role in determines the quantity and sort of the food consumed
(Zielinska 2006). Motives, attitudes and personality are considered as the main key factors of psychological
factors. Nowadays, majority of the women as well as men desire to be healthy, slim or conserve the youth. Hence,
consumers are increasingly seeking for low-fat, lean and additive free, low-salt and roughly 50% of the consumers
are looking for ‘diet’ products (Ryan 2006). Based on the research, consumers are willing to demand and pay
more for nutrition values, extra quality or safe food (Grunert 2005). Besides, instant noodles have becoming a
popular snack food in Asia (Grunert 2005).

Customers might make an impulse purchase on instant noodles. In addition, consumers are now living in
a time-starved society is seeking for convenience food. Therefore, the motivation of consumers to buy packed
food is due to its convenience and preparation speed (Zielinska 2006).
 Needs-Motivation Convenience, preparation speed, healthy, slim

Perception Low-risk

Learning-involvement Low-involvement

3.2.4 Psychographic Segmentation

Psychographic segmentation is a method of dividing the markets based on interests, activities, opinions,
behavioral patterns and lifestyles of customers (Thadani n.d.). The vast majority of people have busy lives
nowadays; they are busy for their work, studies, caring on kids and so forth. Due to time constraint, they probably
demand for fast food or canned food since it is convenience.

Lifestyles Time-starved society

3.2.5 Sociocultural Segmentation

Socio-cultural segmentation segments consumers on the basis of cultures, religions, subculture, social
class and family life cycle. Malaysian culture is a mixture of 3 different races which are Chinese, Malay and
Indian. Besides, the largest religion of Malaysia is Islam which approximately 60.4% of the population practiced
Islam, followed by Buddhism, 19.2%, Christianity, 9.1% and Hinduism, 6.3% (Culture & Religion of Malaysia
n.d.). Based on the research, Asia’s middle class is booming and the ADB report shows that the earnings of
middle class are between US$4 and US$10 a day and measured in international dollars (Idris 2010). Malaysia is
one of the largest middle class which means that Malaysian’s purchasing power is quite high compared to lower
class countries.

Cultures Malaysian

Religion Islam, Buddhism, Christian and Hinduism

Social Class Middle

 Total Revenue, Assets and Capital Expenditure (RM ‘000)

2005 2006 2007 2008 2009

Revenue 336,97 407,85 383,75 463,10 446,087

6 4 6 9

Growth Rate of 21.03% -5.91% 20.68% -3.68%

Revenue

Total Assets 401,27 446,05 358,73 334,79 332,304

6 5 2 2

Capital 18,556 16,139 4,332 1,989 3,741

Expenditure

(Yeo Hiap Seng (Malaysia) Berhad 2007)

From the figure above, there is inconsistency of total revenue in the past 5 years. According to the
growth rate of revenue, there is negatives growth rate in year 2007 and 2009. On 2007, the company facing a
decline of 5.91% in the revenue due to inflation, prices of raw material increase and severe restriction of
margins in the company policies and structure (Yeo Hiap Seng (Malaysia) Berhad 2007). Year 2009 was a
challenging year for Yeo’s as the world economy struggled to regain its footing which affected the price of
raw materials remained high and insensitivity of market competition. In additional, the Indonesian
government had legalize the import and sale of food or beverage products due to a legal action by third party
against Badan Pengawas Obat dan Makanan (“BPOM”) which had consequently cancelled 15 out of total 31
of Yeo’s products for sale in the country (Yeo Hiap Seng (Malaysia) Berhad 2009).
 3.3 SBU Competition
Food Current Promotional Current Pricing Competitive Sustainable Competitive Market Share Financial
SBU Strategy (eg: Key Message, Strategy Advantage Advantage Performance (eg:
Media tools; Unique Selling profit/loss; declining
Proposition) profits; trends; etc)

Yeo’s  “To be the no.1 Asian  New product  Offered different  Good relationship with 4% of the total In 2005, Yeo’s achieve
Malaysia Food and Beverage pricing strategy range of foods to production material market share in the total profit of RM
company in Malaysia” used for the provide wider supplier which ensure Malaysia food 6.324 million. Then it
 Sales Promotion and new developed choices to lower cost production. industry (2008). increases violently to
Advertising strategy are products by consumers.  Fast Moving Consumer RM 28.486 million in
the current promotional Yeo’s.  Sensitivity Goods (FMCG) sales 2007. However, this
tools that Yeo’s  The products towards the distribution network total profit has dropped
Malaysia used. price had changes of  one of the best research aggressively and lost
 Yeo’s leverages on increased seem consumers’ needs and development teams RM 1.463 million at
Malaysia role as the role the increases of and trends of in the country year 2008 due to
of world Halal the raw becoming a high economic downturn.
manufacturing hub. materials. health-conscious Fortunately, it recovers
 Yeo’s worked together product to achieve the total
with ntv7 on the TV manufacturer. For profit of RM 617
programme ‘Finding instance, Cintan thousand.
Angel’, a charity cholesterol free,
programme that helps non-fried noodles
less fortunate or disabled
individuals realise their
dreams.
 Food Current Promotional Current Pricing Competitive Sustainable Competitive Market Share Financial
SBU Strategy (eg: Key Message, Strategy Advantage Advantage Performance (eg:
Media tools; Unique Selling profit/loss; declining
Proposition) profits; trends; etc)
Competitor 1  “Good Food, Good Life”  Claimed as  Combined price  Nestle strategic priorities 29% of total  Based on the
 Sales Promotion playing price leadership with are focused on delivering market share in financial
Nestle Strategy: leadership role product shareholder value Malaysia food performance for the
Malaysia On a 12-bottles purchase in Malaysia differentiation through the achievement industry (2008). Nestle Malaysia, its
of 1.5ml, one bottle of market. from its of sustainable capital earn RM8.081
1.5ml was offered free to  Nestle has the competitors (no efficient and profitable million in year
consumers. Similarly, on highest market frills), hence offer long-term growth. 2005, RM9.197
6 bottles purchase of share, thus lead a unique  Has a good word-of- million in year
1.5ml, one 0.5ml bottle to the lower customers mouth regarding the 2006, RM10.649
was offered free. costs of experience. foods and beverages and million in year
Regarding the trade production.  Good quality of the healthy and nutrition 2007, RM18.039
promotion, the retailer the Nestle food foods to suit the market. million in year
was also given an product is the  Strong worldwide brand 2008 and
additional discount of most important recognition. RM10.428 million
4% during this sales competitive in year 2009.
promotion. advantages.
 Publicity  Total foodservice
Nestle pure life was breakfast sales are
launched in Karachi with expected to grow
a huge amount of from $46 billion in
-enthusiasm and positive 2006 to $85 billion
response shown by the in 2015. (trends)
local. This greatly helps
in creating awareness to
the brand and gave its
introduction a good start.
To increase sales and
build and image in the
mind of consumer
through advertising on
Television, Radio,
Newspaper, Bill Board.
 Food Current Promotional Current Pricing Competitive Sustainable Competitive Market Share Financial
SBU Strategy (eg: Key Message, Strategy Advantage Advantage Performance (eg:
Media tools; Unique Selling profit/loss; declining
Proposition) profits; trends; etc)
Competitor 2  “World of Good Taste” Adopted  Leading  Market leader of the 4.8% of market Mamee gain profit of
 “Mamee- The well loved Competition based manufacturers snack markets in share (2008). RM2.552 million in
Mamee blue monster” pricing strategy. and marketers of Malaysia. year 2005, RM2.971
 The company's snacks, instant  Strong-in-house million in year 2006,
concerted efforts to noodles and expertise in product however in year 2007
create brand awareness beverages, with development- only RM1.992 million
via aggressive 80% revenues continuous innovation to due to high cost of sales
advertising and from snacks and generate consumer and high expenses. In
promotions that will instant noodles. demand. year 2008, Mamee gain
continue to drive sales  Wide distribution RM3.009 million and
 “Bola Kampong e-card” to Australia, RM 5.0546million in
which is the movie ticket Singapore, year 2009 which are the
contest, has been Russia, Hong most earning compared
advertised through Kong and The to the past.
media as well as Mamee Netherlands
company website.  “New innovative
snacks”
development.

(Yeo Hiap Seng (M) Berhad n.d; Nestle Product (Malaysia) Sdn Bhd 2009; Mamee-Double Decker (Malaysia) Sdn Bhd 2010)
3.4 External Environment

3.4.1
Political

Economic

Social
Societal Environment

Technology
Environment

Legal

3.4.2






ti
p
m
’,M
d
v
P
lo
.h
y
w
b
ig
Malaysian National News Agency (June 23, 2010) reported that, according to Prime Minister

s
tre
fc
u
n
a
F
Y
B
H
T
L
S
fi
Datuk Seri Najib, Malaysia had been the forefront in developing standards for the Halal industry.
Malaysia consumer inflation rate has dropped from 3.5% in the year 2006 to 2.4% in the year of
2007 thus increase in customer purchasing power. (Department of Statistics Malaysia 2008).
Customers concern more about healthiness such as natural and organic foods (Tey 2008).
Agriculture-biotech emerged for growing more crops. (Biotechnology in Malaysia 2009).
Manufacturers and retailers are working to reduce waste and improve energy efficiency to create
higher awareness of green issue (Graiser and Scott 2004).
Graiser and Scott (2004) stated that government intent to cut waste, reduce consumption of
resources and minimize environmental damage.
Food Safety Act 1990 provides legal powers and offences in relation to public health and
consumer’s interest (Food Safety Act 1990).

Industry Environment

(Sample 5 2009)
 3.5 TOWS Matrix
Opportunities Threats
O1: Emergence of Halal market in worldwide with T1: Unstable economical performances.
the increasing on Muslim population. T2: Health conscious group does not prefer processed
O2: Consumers are heading towards health food.
conscious product. T3: Intensive competition environment. For instance:
O3: Emergence of time-starving society from other competitors like F&N and Nestle.

Strengths OS-Strategies TS-Strategies

S1: Yeo’s is Malaysian top brand under food O1S2: Maintain production efforts which focus on T1S1: To become cost leader in terms of productions.
categories. Halal food products. T2T3S3: Improve and modify food products to have
S2: Yeo’s had won Malaysian Halal Excellence O3S1: Widen food distribution throughout Malaysia high nutrition value.
Awards 2009 Best Halal Brand by International for consumers’ purchasing convenience.
Islamic Tourism and Halal Week 2009. O2S3: Position Yeo’s as Malaysian first choice
S3: Yeo’s understand Malaysian market very well brand.
especially their preference of food.

Weaknesses OW-Strategies TW- Strategies

W1: Lack of advertising, promotion and public O2W1W3: Using high nutrition value food products T2T3W2: Improve and modify food products to have
relation which is important to increase awareness in as the advertising issue in order to increase brand high nutrition value.
food industry. awareness. T3W1W3: Using public relations to advocate Yeo’s
W2: Low product differentiation as Yeo’s food O2W2: Improve and modify food products to have food image.
products are similar with those existed in market, high nutrition value.
W3: Weaker market image compared with large firm
such as Nestle.
4 SBU Objectives and Goals

4.1 Mission:

To become leading food producer in Malaysia food industry.

4.2 Objectives:

1. To become cost leader in food manufacturing.

2. To maintain the recognition from Malaysia Halal Association
3. To focus on product development.
4. Strengthen brand position.

4.3 Goals:

1. To reduce production cost by 20% by 2011.

2. To increase profit growth to 10% from current growth of -5.38% (year 2009) by 2012.
3. To improve food safety standard which match Halal food requirements and regulations along the SBU
operations.
4. To increase product differentiation in terms of greater nutrition value and dietary attributes in order to follow
consumers’ trend of being health conscious in 2011.
5. To position Yeo’s food products as Malaysian’s first choice brand which suit Malaysian’s taste and cultural
the most by 2015.
6. To increase market share from 4% (2009) to 8% by 2015.
4.4 Product Life Cycle of Yeo’s Food SBU

With the analysis on the performance of Yeo’s Food SBU, it is identified that it is on maturity stage of product life
cycle. This analysis is done for the convenience of developing strategies. Table below shows the efforts of food
SBU in past 1 to 5 years which position it at maturity stage.

Product  focus on product renovation and innovation (Yeo Hiap Seng (Malaysia) Berhad
Modification 2007).
 Executed a packaging facelift for its bestselling products-Cintan Brand (Yeo Hiap
Seng (Malaysia) Berhad 2007).
 Extension of Cintan noodles with the launch of “Grab Mi” (Yeo Hiap Seng
(Malaysia) Berhad 2007).
 New products that emphasis on adding value to the existing product line (Yeo Hiap
Seng (Malaysia) Berhad 2008).
 New product offerings
o Malaysia’s first nutritious instant noodle, Cintan Nutri Noodle
o New variants for Yeo’s Soy Milk (soy bean corn and rose)
o Strategic alliance with tea maker BOH Plantation > produce BOH The-O-
Ais in a ready to drink pack (Yeo Hiap Seng (Malaysia) Berhad 2009).

Profit  Profit slightly increases from RM373m in year 2004 to RM568m in 2008 and a drop
(highest of 4% which is RM536m in year 2009 due to economic downturn (Yeo Hiap Seng
profit) (Malaysia) Berhad 2009).

Promotion  Sponsoring-both public and private sectors that promote caring society, environment
(concentrate and healthy community (Yeo Hiap Seng (Malaysia) Berhad 2007).
on product  Future Development 2010- strengthen brand position in Malaysia through
positioning) advertising, promotions and PR (Yeo Hiap Seng (Malaysia) Berhad 2009).
Low cost  Established infrastructure, strategic price adjustment and cost management, able to
emphasis partly offset rising costs (Yeo Hiap Seng (Malaysia) Berhad 2008).
 Material Contracts > an agreement with its major shareholder and immediate holding
company (Yeo Hiap Seng (Malaysia) Berhad 2009).
 Fixed price contracts to establish determinable prices for raw materials and
commodities used (Yeo Hiap Seng (Malaysia) Berhad 2009).
Place  Launches its products in Indonesia in May 2006 in which appointed 31 distributors
(increase (Yeo Hiap Seng (Malaysia) Berhad 2006).
distribution  Products are widely distributed over 55 countries worldwide such as Hong Kong,
efforts) Malaysia, Singapore, the US and China (Yeo Hiap Seng (M) Berhad n.d.).
 4.5 Yeo’s Goals Strategy Mix
GOAL 1 GOAL 2 GOAL 3 GOAL 4 GOAL 5 GOAL 6

To reduce To increase To improve food To increase To position Yeo’s To increase

production cost profit growth to safety standard product food products as market share
by 20% by 2011. 10% from which match differentiation in Malaysian’s first from 4% (2009)
current growth Halal food terms of greater choice brand which to 8% by 2015.
of -5.38% (year requirements nutrition value suit Malaysian’s
2009) by 2012. and regulations and dietary taste and cultural
along the SBU attributes in the most by 2015.
operations. order to follow
consumers’
trend of being
health conscious
in 2011.
Product:

- Continue product X X
modifications and
reposition to match
customers' needs and
wants.
- Product differentiation in
terms of Halal features, X X
greater nutrition value and
dietary attributes

-To achieve lower cost of

production X X

X
 Pricing:
- survive in the competitive X
foods market and compete
with existing competitors
- attract consumers to notice X X
and buy this new product

- maintain or increase the X

profitability during the
inflationary period
-segment the current market X
from price conscious to
quality conscious

Distribution: X X X
- To maximise sales and X
gain economies of scale
- Gain customer X X
recognition
X
- Minimise distribution X X
costs
- Wide spread of products X
within Malaysia.
Promotion:
- Achieve low X X
promotion costs X
- Influence customer X X
perception on Yeo’s
- Build brand equity X X X
- Increase sales response. X X

X X

X X X
5 Recommendation Strategies

5.1 Market Strategies

5.1.1 Market Scope

It is recommended that Yeo’s to maintain its current total-market strategy throughout the next five years
which by selling different products in each of their strategic business unit directed toward different segments of
the market (Jain 2004). For example, Yeo’s is selling instant noodles, canned food and sauces that meeting the
requirements of all types of customers like children, adult and elderly. Since Yeo’s is already at maturity stage, it
is reasonable for Yeo’s to maintain its current total-market strategy as it can increase market share, increase
power in the processed food market as it serves the whole entire market and able to compete with competitors in
all segments. With the existing strong marketing professionals of Yeo’s, it can enhance the continuous
implementation of this strategy work in a more effective and efficient way by develop appropriate marketing
strategies for the different products offered.

5.1.2 Market Geography

It is suggested for Yeo’s Malaysia to continue adopting the national strategy for all their brands and
products which by just distribute and sell their products within Malaysia. For instance, the canned curry chicken
offered by Yeo’s Malaysia is just flowing in each state of Malaysia but not to overseas countries. The reason to
keep on carry out national strategy is that it can strengthen its brand name to increase market share; and
improvised in terms of product development within domestic market. Thus, it again can help to achieve the
proposed objective and goals. It is reasonable for Yeo’s to adopt this strategy as Yeo’s can make use of their
strong management team like marketing professionals and Fast Moving Consumer Goods (FMCG) sales
distribution network which can fulfil the requirement on resources needed in adopting this strategy.

5.1.3 Market Entry

Previously, Yeo’s has adopted the market entry strategy of first-in strategy for their canned curry chicken
which they are the first Malaysia processed food company who introduce canned curry chicken in Malaysia (Yeo
Hiap Seng (M) Berhad n.d.). Besides, they have adopt the early-entry strategy for their instant noodles which they
introduce their Cintan instant noodles after the introduction of MAGGIE instant noodles and Mamee instant
noodles in Malaysia. However, it is suggested that Yeo’s to continue adopt the early-entry strategy for their new
products as it can contribute significant profitability and has lower risk. Within this strategy, Yeo’s can make use
of the resources on fast distribution network, marketing professionals, management information system and so
forth.
5.1.4 Market commitment

As now the proposed objectives and goals for Yeo’s is to increase profit growth, reduce production cost
and increase market share it is suitable for Yeo’s to adopt a strong market commitment throughout the five years.
In this case Yeo’s have to utilise their strong resources on marketing team, management team and research and
development team on this strategy for the food SBU in order to implement it successfully by continue improve
their product which adapt to market needs. For example, Yeo’s could afford to implement its strong commitment
to the food SBU due to it had sustainable competitive advantage of Fast Moving Consumer Goods (FMCG) sales
distribution network in Malaysia, strong marketing professionals to implement effective promotional activities
and best research and development team in Malaysia. So, Yeo’s can defend its position in high competitive
environment in the food industry.

5.2 Product Strategies

5.2.1 Product-positioning strategy

In order to strengthen the brand position to become high quality and nutritious products as to fight with
the competitors in the competitive environment in food industry, Yeo’s is recommended to position its existing
products by product attributes which based on features or customer benefits. By positioning Yeo’s to a more
suitable market segment, it can receive a favorable reception and thus increase market shares. For example, Yeo’s
can position its existing canned baked beans by adding value on its ingredients which is by using high quality and
organic beans in producing it and so forth. The successful stage of this positioning strategy on canned food can be
shown in the following perceptual map.
 So, under the environment of increasing health consciousness of consumers, after being positioned, in the
case of canned baked beans, it swifts the current customer perception towards Yeo’s canned food from medium
high price and medium low dietary nutrition to high price high dietary nutrition. Thus, it can successfully help the
help Yeo’s to achieve the proposed objective of strengthen brand position; and achieve the goal of increase
product differentiation and increase market shares. In implementing this strategy, Yeo’s can make use of their
resources strong marketing professionals and best research and development teams to achieve this positioning by
doing research in the first two years and start to promote these value added products in the next three years as well
as ensure the production of the value added product is fulfils Halal requirement. The estimated budget of the
strategy is proposed to be RM 50,000.

5.2.2 Product Design Strategy

Yeo’s is recommended to continue offer standard products which offer same products to every customer
without customization on flavour or size according to individual requirements. For example, the flavour of Cintan
instant noodles is the same to be sold in all regions in Malaysia which customers has no right to customize the
taste based on their preference. In this case, Yeo’s can make use of their strong resources in producing standard
products which is the technical department will support the engineering operations of maintenance of machinery
and equipment as well as installation of new machines and equipment for the production of foods. By adopting
this strategy, it can yield cost benefits by just producing standard products that can save in cost per-unit; and able
to efficiently merchandise their products nationally.

5.2.3 New product strategy: Improvement/Modification

In order to achieve the objective of focusing on product development and being positioned to be the
Malaysia’s first choice brand that suit Malaysian’s taste and culture, Yeo’s is recommended to implement new
product strategy by modifying the existing products. For instance, Yeo’s can improve and modify its Cintan
instant noodles to be made by whole wheat flour instead of grain flour as whole wheat contains higher fiber and
nutrition than grain. In this case, in order to develop this product successfully, Yeo’s can make use of their
research and development team to research on the best whole wheat to be used to produce the new instant
noodles. Thus, this new instant noodles can increase product differentiation among competitors through adding in
nutrition value and dietary attributes.

Other than that, Yeo’s can modify the flavour of their instants noodles by meeting the taste of multi races
Malaysians. Hence, Yeo’s can introduce new flavour for their instant noodles like Sambal flavour, ginseng
chicken flavour and ox tail soup flavour after done their research through their research and development team on
the most preferable flavour of Malaysian. In this case, Yeo’s can achieve their goal of positioning as Malaysia’s
First Choice Brand which can suit Malaysia’s taste and culture. To implement this strategy, it is proposed to have
a research project on how to improve and modify the products in the first 3 years and start to produce and
introduce the product in the market in the following years. The estimated budget of the strategy is estimated to be
RM 200,000.

5.3 Pricing Strategies

5.3.1 Pricing Strategies

It is recommended to adopt pricing strategy that provides affordable prices to the customers in order to
increase market share. As Yeo’s has higher variable costs incurred compared to fixed cost which show in their
annual report of each year that is roughly RM 394,345,000 of variable costs and RM 151,122 of fixed costs in the
year of 2009, hence the operation of Yeo’s is highly price sensitive which a small increase in price adds much to
earnings (Yeo Hiap Seng (M) Berhad n.d.; Jain 2004).

5.3.2 New product

As there is a new brand and new products being proposed to be introduce in the market during coming
five years which fall in the Health conscious Halal food segment. Thus, new pricing strategy has to be assigned to
the introduction of new product category as to meet Yeo’s objectives, cover the costs incurred to increase
earnings, able to survive in competitive foods market and so on.

The recommended strategy is by using competition-based pricing strategy for the introduction of new
product to be able to survive in the competitive foods market and compete with existing competitors. In this
strategy, price will be set based upon prices of the similar competitor products (Nobilis 2008). The similar
competitor products are like MAGGI® TASTYLITE™ Atta Whole Wheat Instant Noodles®, Ayam Brand™
baked bean and so on. Initially, Yeo’s can analyse the characteristics of the instant noodles key market segment
and then determine the price to be set for the new instant noodles against competitors products. As there are loads
of close substitute on instant noodles and canned food from other brands, the demand for this manufactured food
products is quite elastic in the market (Tutor2u Limited n.d.). Moreover, the switching costs that incurred in
buying a pack of instant noodles is very low as consumers perceived low risk in buying a pack of noodles. Under
this circumstances, if the new product being introduced in the market at a lower price than the similar competitor
products, there will be a large probability that consumers will choose to the new and do not purchase the existing
one, or vice versa. So in this case, it is recommended to implement market penetration pricing which is set a
lowest possible initial price that lower than the competitor products as to attract potential customers away from
competitors (Jain 2004).

This market penetration strategy will be implementing for one year only as to penetrate the market by set
the price of new Yeo’s instant noodles slightly lower than the price of MAGGI® TASTYLITE™ Atta Whole
Wheat Instant Noodles® which is RM4.90 slightly cheaper than the MAGGI® new instant noodles of RM 5.70
(Nestle Products Sdn Bhd. 2010). With this slightly cheaper price, it can motivate and attract consumers to notice
and buy this new product which can boost the sales volume and increase market share. With the high demand of
Yeo’s new instant noodles, Yeo’s has to increase their production and thus some of the production costs will be
decreased. The lower costs per unit of the production of new instant noodles is due to getting discount in buying
raw materials and ingredients in larger quantities and marketing costs spread over more units. Hence, economies
of scale will be achieved and create high potential to become cost leader in manufactured foods market. In
implementing this strategy, Yeo’s has to have good relationship with their raw material suppliers in order to get
discount in buying raw material in bulk. Yeo’s also needs to have enough production capacity in order to produce
large amount of instant noodles. For instance, possess 15 noodles making machines in each factory. Overall, it can
help to achieve the goal of increase market share to 8% within 5 years, reduce production cost by 20% in the first
year and become cost leader in the manufactured food market.

After the one year implementation of market penetration pricing, it is recommended to increase their
price from RM 4.90 to RM 5.30 for the following years. The reason of increase the price is that as Yeo’s has
successfully penetrated the market by having improvement in market shares as well as being more possible to
become cost leader within the five years, it is the time for Yeo’s to aim for other achievement which include
increase their profit margin, cover their on-going promotional price and differentiate their product to position at
the right segment (i.e. quality conscious) as to avoid being drawn out from the market in the future. The
differentiation of their product through higher price will be successful as consumers will have a perception of
goods that have higher price is normally higher quality than others (Tsao, Pitt and Carauna 2005). So, Yeo’s new
instant noodles can be segmented in the category of high quality and healthy products. In other words, as people
are more health conscious nowadays, the increase in price will only caused a slightly decrease in demand by those
consumers who are not quality and health conscious but the profit will still grow as the increase in price will
generate larger revenue which can cover the loss in decreased demand and also the on-going promotional cost. In
this case, the higher price of Yeo’s instant noodles can increase the profit by approximately 5% with constant
costs and can successfully differentiate their product with other ordinary instant noodles like Mamee® Premium.
To conclude, the increase in price after the penetration pricing in the first year can achieve the objectives of
increase profit growth as well as strengthen brand position.

5.3.3 Existing Products

For the case of existing products, it is recommended that to slightly increase the price of existing food
products by 10%. For example, the price of a can of 425 gram baked bean will be charged at RM 2.60 instead of
RM 2.35 (Yeo Hiap Seng (M) Berhad n.d.; Jain 2004). This increase in price is mainly to maintain or increase the
profitability during the inflationary period and to segment the current market from price conscious to quality
conscious. The increase in the price of baked beans is still reasonable as the price of other quality competitor
brand of baked beans is around RM 2.60 to RM 2.80. Other than that, the increase in price can help Yeo’s to
segment their product to be in the category of quality product instead of lower price product. In this case, again
people will perceived high quality product is reasonable to have high price, so Yeo’s is predicted can successfully
segment their current served market to become quality conscious. By this, the increase in price of existing product
is predicted to be successful to achieve their objective of increase profitability and strengthen brand position as
there will be low probability to lose large number of sales as the prices are more or less the same with other
similar large brand and consumers will perceived higher price products equal to higher quality products.

5.4 Distribution Strategies

5.4.1 Indirect Channels

Yeo’s is encouraged to distribute its food products through numbers of intermediaries as they may
perform distribution tasks more efficiently than manufacture alone. It is recommended that Yeo’s should have 2
level of intermediaries which from manufacture to wholesaler and then retailer and lastly to the customers. For
introduction of Yeo’s new food products such as whole wheat instant noodles, it is suggested to use selective
distribution channels such as some super or hypermarket, some of the mini market and particular retail stores in a
small volume to test market sales in first two years after new product development as they are in introduction
stage. Third years onwards, Yeo’s products may reach growing stage; therefore, Yeo’s can build intensive
distribution so that Yeo’s new products are available in most of the retail outlets not only urban but also rural areas
in whole Malaysia.

5.4.2 Channel control strategy

Moreover, technological advance such as automobiles, highways and mass communication, it has made
mass retailing in food become more feasible. It is recommended for Yeo’s to adopt vertical marketing system by
forward integration in take over the tasks of wholesaler with additional “Inventory Automation System” to
distribute their products. This system will record down the past transaction between retailers; and then when those
retailers are running out of stock; it will automatically sending signal to the logistic team to remind them for stock
replacement of those retailers. By this, Yeo’s can enhance their market image and widen their distribution
coverage rapidly through this efficient distribution system. The development of this system is estimated to be RM
2,500 and implement in the next five years.

5.4.3 Distribution Scope

As to increase the market share of Yeo’s existing and new food products, it is suggested to continue
implementing intensive distribution strategy in the next five years which Yeo’s food products will be available at
all possible retail outlets in Malaysia. In this case, it maximises sales and then gains economies of scale; wider
customer recognition and brand awareness. Thus, the objective to reduce production costs, increase profit growth
and increase market share can be achieve successfully.

5.5 Promotion Strategies

5.5.1 Advertising

In order to promote Yeo’s food products have greater nutrition value and suit the taste of Malaysian,
repetitive advertising is suggested to be conducted. Yeo’s will provide informative advertising as to build Yeo’s
brand reposition among 80% of Malaysia consumers. Yeo’s will conduct mass media advertising consists of
television and radio commercial program, advertise in local newspapers and magazine, in store advertising placed
in retail stores and online advertising.

Commercial advertisement converged across countries and more or less stable over time. Yeo’s may
perform the same messages, sounds and effects for television and radio advertisement. For example, Yeo’s may
organise and sponsor certain TV shows like cooking programs as to show the way to prepare meals with Yeo’s
canned food and sauces in a healthy way. As soon as commercial break, Yeo’s will lead the commercial before
others commercial advertisements did like promote on the new flavour of instant noodles such as sambal instant
noodles perfectly match with Malaysian taste buds. In this case, awareness on the new product offered will be
created as there is frequent exposure of Yeo’s advertisement right after the cooking program. By this, customers
will be informed about the new product features along with product differentiation in terms of greater nutrition
value and dietary attributes through the cooking program and thus influence customers’ perception on Yeo’s
product from normal convenience goods to healthy and high quality convenience good. Hence, achieve the goal of
increase product differentiation and achieve Malaysia’s First Choice Brand. The commercial advertisements will
be held for one month in the first year for existing products and will held for 1 month after the introduction of new
products which could gain awareness from wide coverage of different types of customer, thus the cost per person
reached is low and achieved the objective of reduce costs.

The advertisement on newspaper and magazine will be published on “Flavours Magazines” and “The
Star” newspaper which published by Star Publication Malaysia Berhad. The newspaper and magazine
advertisement will be use throughout the five years in monthly basis. In store advertising such as point-of-
purchase displays which designated the messages will be displayed as to attract customer attention and awareness
in every of Yeo’s retail outlets, stores and supermarkets. Internet advertising will be presented in Yeo’s official
website and social utility website such as Facebook. Yeo’s may want to redesign Facebook appearance to more
informative utility but simple and easy to access. Online advertising are well cross borders which enable visitors
of Yeo’s website to know the position of Yeo’s food products are fulfill the Halal standard and value added food.
The store advertising and online advertisement will be carried out throughout the five years period.
 The whole advertising strategy is proposed to spend about RM500,000 on TV advertisement and
RM50,000 on other advertising methods. The implementation of the advertising strategy will make use of the
Yeo’s existing marketing professionals.

5.5.2 Public Relation

As to strengthen Yeo’s foods brand position and reduce cost of production, it is necessary for Yeo’s to
pinpoint the uniqueness and tastiness of Yeo’s food products and choose a low cost method to promote their
products. Thus, publicity is suitable for Yeo’s to do their promotion as it is known as a favourable low cost
promotional tools as well as it can generate potential positive impact on the products. Yeo’s can make use of their
current employees in human resource department to maintain the industrial relations through this strategy. Yeo’s
can utilise its website newspaper as one of publicity tools to endorse Yeo’s business and networks purposes such
as e-commerce where goods are sold directly to Yeo’s supplier, manufacturer and consumers as well as position
its brand to a wide range of customers. This enhances Yeo’s to generate value by acquiring sales leads from
website. Beside from that, press releases and news about Yeo’s brand like the achievement of wining Reader’s
Digest Trusted Brand Award which will be publish as a tool to updates Yeo’s current happening and create a
positive image like high quality and safety image for Yeo’s food products. Yeo’s can continue to perform
corporate social responsibility as to supporting charity events and public service activities. This will directly and
indirectly attract media attention and coverage. Thus, it will achieve the low promotion costs. This strategy will be
implemented throughout the five years period as well with the budget of RM 2,000 for newspaper publication.

5.5.3 Sales Promotion

It is suggested to implement sales promotion for the new products offered by Yeo’s like the new flavour
of Cintan instant noodles. The reason to implement this strategy to create immediate sales response on the new
product as to gain more profit and market share in order to cover the research and development cost of the new
product. Yeo’s will implement product giveaways, samples coupons, and discount during sales promotion in
every retail stores as to build Yeo’s food brand images that come to customer’s mind when deciding whether to
purchase Yeo’s particulars food products. Beside from that, during festival season there will be discount of 15%
for every food products sell in supermarkets in Malaysia. Sales promotion will be held right after the introduction
of new products which is February 2014 according to places for three months to gain public attention. The success
of those promotions will enhance Yeo’s to increase market shares and increase the profit growth. This strategy is
proposed to use up RM 10,000 and will make use of the existing marketing professionals of Yeo’s.
 6 Implementation Program
IMPLEMENTATION AND CONTROL TABLE
STRATEGY WHERE DATES HOW TO IMPLEMENT BUDGE CONTROL MECHANISM
T

Market  
1. Scope - Total Malaysia Ongoing Selling different products in each of N/A Carry out market survey to discover new segments,
Wide their strategic business unit directed gauge satisfaction level, human resources manager
toward different segments of the market need to ensure that there are sufficient workers, monitor
in Malaysia sales report.
2. Geography - National Malaysia Ongoing Distribute and sell their products within N/A Working closely with distrbution network to ensure the
Wide Malaysia products been distributed to every places in Malaysia.
3. Entry - Early Entry Malaysia Jan 14 - Enter the healthy instant noodles N/A Study public reaction, marketing of new services and
Wide Jun 14 market after few introduction of othe extra attention paid to new operations.
company
4. Commitment Malaysia Ongoing Continue improve their product which N/A Monitor sales to gauge market share, financial manager
Wide adapt to market needs. lookout for good investments, monitor competitor’s
actions.
Product  
1. Product Positioning Malaysia Ongoing Adding value to the existing products in RM Carrry out research on the current market requirement
Wide terms of ingredients. 50000 for high quality and nutrition products
2. Product Deisgn Malaysia Ongoing Offer same products to every customer N/A Working closely with the raw material supplier to ensure
-Standard Wide without customization on flavor, size or the products being manufactured in same quality.
others in Malaysia
3. New Product - Malaysia Jan-14 Modify and improve products in RM Marketing personnel carry out market survey to gauge
Improvement Wide flavours and ingredients. 200000 satisfaction level, monitor customer feedback, operation
manager ensure consistency of quality.
Pricing  
1. New Price - Penetration Malaysia Jan 14- New price will be set lower than N/A Analyse the pricing strategy of competitors
Wide Jan 15 competitors based upon prices of the
similar competitor products
- Increase Malaysia Jan-15 Slightly increase of the price of new N/A Analyse the consumer reaction towards the price of new
Wide product product.
2. Existing Price - Malaysia Jan 11 - Increase price of existing product for N/A Customer satisfaction survey, customer feedback,
Increase Wide Jan 12 10% monitor operation costs.
 STRATEGY WHERE DATES HOW TO IMPLEMENT BUDGE CONTROL MECHANISM
T
Distribution  
1. Channel Structure - Malaysia Ongoing Distribute its food products through N/A Monthly report from all channel are studied
Indirect Wide numbers of intermediaries like
wholesaler and retailer.
2. Distribution Scope Malaysia Ongoing Products will be available at all N/A Monthly report from all channel are studied
-Intensive Wide possible retail outlets in Malaysia.
3. Channel Control - Malaysia Ongoing Forward integration in take over the RM2,500 Monthly update and maintanance of the information
Corporate Channel Wide tasks of wholesaler. system
System
Promotion  
1. Advertising - TV and Malaysia Jan 11, Organizing and sponsoring certain TV 500000 Personnel: Marketing Professionals, Sales Manager.
radio Wide Jan 14 shows; products commercial during Gather information: Customer survery, market
commercial breaks. awareness survey. Monitor: Sales report, media reports,
customer feedbacks.
- Others Malaysia Jan 11 - Publish products advertisement on 50000  
Wide Jan 15 each tools
2. Public Relation Malaysia Ongoing Utilize website and newspaper to RM2,000  
Wide pulish press release and latest news
3. Sales Promotion Malaysia Feb 14 - Implement product giveaways, 10000  
Wide May14 samples coupons, and discount during
sales promotion in every retail stores
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