Eating-Out in Malaysia: Affordable and Diverse Options for Every Budget

As far as eating-out is concerned, Malaysia is one of the countries in the world where a family can afford to eat out almost every day of the week. Depending on one’s budget, the choice of eating places can range from posh hotels and chic sidewalk cafes to fast-food joints and hawker stalls. The variety of international and local cuisines available in almost all major commercial centers has influenced consumer’s desires, tastes and preferences. One thing that can be noticed about the Malaysian nowadays, they are more driven towards fast, easy and instant product.

This is noticeable more on the urban area where most people are having a very busy lifestyle. Malaysia’s consumer lifestyle has been evolving and changing due to rising of affluence and education levels. So this is the other factor that consumer today are concern towards fast, easy and instant product consumption. Malaysians are becoming more westernized, sophisticated and cosmopolitan.

Background of Study

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Although the fast growth in sales of instant food products has intrigued researchers’ interests, most existing research on the food industry has dealt with marketing strategies more than consumer’s behavior.

Without in depth understanding of consumer behavior for this product category, it is difficult to devise effective marketing strategies. Furthermore, there are numerous studies regarding consumer’s attitudes and purchase behaviors the food products. It is also to be remembered that well organized production process and innovative product are in vain, if the consumer doesn’t like it, then the product is not viable in the market. It is necessary to recognizing the consumer behavior at the product and it is important to know what strategies of marketing that the products need to apply in order to increase sales performance.

Availability of certain product itself also gives big impact to company sales performance. For deep understand of sales performance, it necessary to look out company products as well as marketing strategies that they used. The Pareto principle also known as the 80–20 rule, states that, for many events, roughly 80% of the effects come from 20% of the causes. However in business situations it can be define as “80% of your profits come from 20% of your product”. Based on researchers study, researchers only focus one roduct that most generate sales in the company which is instant coffee. 2. Background of Company Established on 30 September 1956, the Federal Agriculture Marketing Authority (FAMA) is a marketing agency established by the Government under the Ministry of Agriculture and Agro-based Industry. As the Government’s marketing arm for agricultural products, FAMA is responsible for various marketing activities. Amongst its responsibilities are to set targets and product standards, monitor performance, as well as develop marketing strategies for Malaysian agricultural products.

Moreover, it also runs the purposes to supervise, coordinate, regulate and develop the Malaysian agriculture produce, including import and export. FAMA organizes marketing activities, set targets and product standards, monitor performance, develop marketing strategies and tools as well as initiate innovative programs to promote Malaysian agricultural products. FAMA organizes promotional and national branding particularly for local agriculture produce producer and marketer to help them gain a market share in domestic and international markets.

It give the intention towards the efforts on developing agriculture produce and food products exporter and entrepreneur and developing Malaysia’s Best and OleMas and/or AgroMas brands.

Vision

To be the paramount leader in food marketing and agricultural produce. 2. MISSION Develop food marketing chain and agricultural produce that is efficient and effective to increase value to our clients.

Objectives

• Realizing Wawasan Negara and Dasar Pertanian Negara to make Malaysia as world food major producer through the efficiency and effectiveness for agriculture food product.
• Marketing infrastructure development ad supply chain system that is efficient and effective.
• Market developments on agricultural food produces and increase the demand of it internally and outside the country.
• Driving human resource capability in knowledge based agricultural marketing and latest technology.

Main Function

• Coordinate agriculture marketing activities whether which involves private party or department / government agency.
• Improve marketing system and expand also to develop new market for Malaysian agriculture results.
• Collaborate with private party and department/government agency to create agricultural marketing with efficient and effective.
• Develop management that is efficient in agro-industry over marketing activity or agricultural products processing, and
• Involve directly in agriculture industry especially in marketing activity or agricultural products processing.

Marketing Contract (AGROMAS)

Under the Federal Agriculture Marketing Authority (FAMA), there are two main brands that they market that are AgroMas and OLE MAS. AgroMas is brand that was developed by FAMA which responsible FAMA market that products. FAMA has introduced the "AgroMas" brand to promote agro products that have the potential for the domestic and export markets. FAMA had been using the AgroMas brand in assisting the development of agricultural products, particularly food products manufactured by SMIs, by expanding their markets, enhancing profitability of the enterprises and adding value to the selected fresh produce. Under the processed-food marketing division, FAMA focuses on the development of the product, the market and the entrepreneur.

This approach has helped the agro-based processed-food entrepreneurs to become FAMA vendors. The agricultural products carrying the AgroMas branding must conform to quality and standards set by FAMA and must undergo a stringent assessment procedure. Before the food products could adopt the AgroMas branding, FAMA would identify those with high market potential by carrying out assessment based on factors such as factory hygiene, customer’s feedback and capability of the product in meeting market demands.

Only after passing a stringent assessment procedure would FAMA committee decides whether the product is fit to bear the AgroMas label. Since last year, 2010, more and more new products under AgroMas brand name are developed as FAMA aims at boosting its sales through AgroMas brand, it has identified several unfailing marketing strategies. To date, there are some 34 agricultural products as well as SMIs that are using the AgroMas brand. For the global market, FAMA is collaborating with local companies with marketing network overseas.

There are several AgroMas food products have already penetrated the international market, among others in Singapore, Indonesia, Brunei, Indonesia, West Asian countries and the European Union. Apart from expanding geographically, FAMA is also increasing distribution of AgroMas food products that are in high demands. This is to make the products available more widely in the general consumer market. Presently AgroMas food products can only be found at selected supermarket such as Giant, Tesco, Carrefour, Mydin and their own FAMA AgroBazaar outlet stores.

Scope of Study

This study is being conducted in the area of Shah Alam to look at the factors that poor sales performance of AgroMas. This study will involve the customers of Agro products. This study also will involve 100 respondents and will be distribute.

Problem Statement

AgroMas seems to be a product of Malaysia that had been in the market for a very long time. They have the quality, great packaging, and as well strong brand name and among the finest taste of Malaysian brand. Under the processed-food marketing division, FAMA focuses on the development of the product, the market and the entrepreneur.

This is to assist towards the development of agricultural products, particularly food products manufactured by SMIs. As for the development of more products being introduced in the market, it is expecting increasing market growth from it as to promote agro products that have the potential for the domestic and export markets. However, the problem faced by AgroMas is that they are having poor sales performance. Agromas actually are target to increase their sales at least 20% per year but unfortunately their just able to archived average growth rate 13. 33% since 2008.

To know view and what problem that faced by AgroMas, we had personally interview En. Noor A’zizi Omar, the Economic Affairs Assistant Officer at FAMA Shah Alam and he had mention about this problem faced by AgroMas. He said that, one of the reasons why AgroMas sales performance is poor because ineffective of promotional mix. If not, of course AgroMas have been expand more markets and well known by more Malaysian consumers. He added that AgroMas team actually had produce TV commercials and billboard advertisement along certain highways but them still not having good sales performance. He also said, to measure sales performance there are involved 3 steps which are, first is based on order received, second is outflow of stock and lastly is when company received payment from customers.

As from the AgroMas annual sales graph attached above, it had showed slightly increases of sales throughout the past four (4) years from 2008 till 2011. But unfortunately, the slightly increasing sale of AgroMas products still can’t achieve their own sales target. It is because AgroMas already aimed the target that they must at least increase their sales in 20% per year. But the result showed all of the year the sales are increase less than 15%. That means that AgroMas not achieve their sales target and it comes to problem for them.

Thus, this study is to identify how to increase sales of AgroMas products. This might help AgroMas to come out with unique and effective strategies in the future.

Research Objective

1. To determine the relationship between promotion effectiveness and sales performance of Agromas.
2. To identify the relationship between availability of product and sales performance of Agromas.

Research Question

1. How does promotion effectiveness affect sales performance of Agromas?
2. How does availability of product by Agromas Products effect sales performance?

Theoretical Framework

Significance of Study

Significant to the Public This study is to determine what the factors for the customer to patron Agro Bazaar Kedai Rakyat in Shah Alam. This study can help identifies the main factors that contribute to the patronization of Agro Bazaar Kedai Rakyat. It also can identify the degree of public satisfaction through the service offered by Agro Bazaar Kedai Rakyat.

Significant to the Researcher In this study, researcher can apply all the knowledge that we had learned in the subject of Research Methodology and Retail Study. Researcher cans personally being exposed to the working environment before entering the real working condition. At certain time, the experience and knowledge that we gain can also be used in the future especially in solving problem.

Significant to the FAMA and AgroMas The main purpose of doing this research is to determine the patronization of Agro Bazaar Kedai Rakyat in Shah Alam. This research is important in order to identify what are the factors that lead to consumer patronization towards Agro Bazaar Kedai Rakyat in Shah Alam.

The outcome of the study will be useful to Agrobazaar in helping the improvement of the retail store. Results of the improvement effort also will benefit the public. In the long run, this study may be used as a reference for evaluating the customer satisfaction and patronization towards other local retail store.

Limitations of Study

• Availability of Data. The study is based on the data collected from the secondary sources. Therefore the accuracy of this study depends on the publish data.
• Time constraint. Time constraint has been encountered ever since the study has been started on the early semester. The progress of the work has not been done smoothly as the time spends must be divided between the tasks given by the company where the practical training is held as well as the time to complete the research.
• Lack of Experience. It is difficult to conduct a research due to the lack of experience since first time involved in conducting research. Although there are many problems, full of commitment is given to finish the research and to overcome such barriers.

Literature Review

Introduction

Literature review is a critical summary and an assessment of the current state of knowledge or current state of the art in a particular field. Literature review also can be define as the selection of available documents (both published and unpublished) on the topic, which contain information, ideas, data and evidence written from a particular standpoint to fulfill certain aims or express certain views on the nature of the topic and how it’s to be investigated, and the effective evaluation of these documents in relation to the research being proposed. 1. Sales Performance The first variable in this research is sale performance.

Managers and researchers are interested in how to develop more effective selling strategies for increased sales performance which can contribute to the creation of strong and long-lasting positive relationships with customers (Ghazaleh Moghareh Abed and Mohammad Haghighi, 2009). Researchers believe that these approaches can create more flexible, responsive partnerships, thereby improving the firm’s performance especially on sales. Furthermore, competition is stronger due to market globalization, and technology is continually becoming more advanced (Anderson, 1996; Wotruba, 1996).

Producing the best available product is not enough but it also has to be sold. If companies want to survive in their market, they must pay great attention to the availability of their products and marketing strategies. This makes it important for companies to understand what ‘things’ influence their sales of performance. Identification of the relative influence of these determines factors can be used to focus a company’s efforts on the areas that are most important, improving the sales performance.

To achieve and maintain good sales performance, therefore, retailers must pursue a retail strategy that aligns closely with customer merchandise preferences (Andrew J. Newman, Darshika Patel, 2004). When attempting to ascertain the reason for poor levels of sales performance, it is reasonable to assume that this may be due to ineffective positioning (Davies and Brooks, 1989), and a failure of the retailer’s positioning marketing strategy. This is an integrated management activity that takes in elements of the retail mix such as merchandising, store formats, sales staff interaction, promotional efforts (Walters and Laffy, 1996) and reputation.

These factors create a point of differentiation, separate retailers from the competition, and create the retail brand. It can be assume that because of the image brand of others food products such as Adabi, Babas, Maggie and etc; it can affect the sales performance of the AgroMas company. In the other hand, retail management strategies ensure that the most stylish merchandise is available in the stores at the right time, and thus maintains brand image in the minds of the customer (Newman and Cullen, 2002). Therefore it is one of the reasons why AgroMas facing poor sales erformance due to availability of their products in the markets. So it is important to place AgroMAs products at the right time, right price and the most importantly are at the right place or store therefore to increase their sales volume and sales performance.

Promotion Effectiveness

The second variable in this research is promotion effectiveness. This section will be discussed any data or previous study that relates to advertisement or promotion by target markets. Generally, promotion is communicating with the public in an attempt to influence them toward buying your products or services.

One of the ways to promote the product is through television program. The more that brand involving the program, the more positive the ad response (David w. Llyod and Kevin J. Clancy). In addition, the content had been easy to understand for the passive viewer who wants to feel good stories that are not to serious and too demanding critical thinking (Joyce M. Wolburg). By referring AgroMas case, in order to ensure the products are aware by customer, AgroMas create documentary about the AgroMas product which is most of the product is agriculture product.

As a result, the customer know how the product are be prepared by the AgroMas from the raw materials until finished goods. Besides that, physical attractiveness in an advertisement would influence purchase intention. Further, the influence of a physical attractiveness is also dependent on the product involvement of the consumers, familiarity with the products and the relative establishment of the strength of the advertised brands (Ian Phau, Linda Lam, 2000). Method that had been used by AgroMas in order to ensure the customer get knowledge about their product is involved in exhibition.

In addition, the visitors emphasise information gathering, particularly information about new products, so the objectives of improving the company's image and of gaining an edge on non-exhibitors would appear to be realistic non-selling objectives. From that exhibition, AgroMas can influence people who come to their booth to purchase their product especially instant coffee. That is the best way in order to do the promotion of their product.

Availability of Product

When a demand curve is matched with a supply curve, the result predicts both the price and quantity of goods sold in a competitive market (Rob Docters, Bert Schefers, Tracy Korman, Christine Durman, 2008). However when demand curve is not matched with supply curve it call shortage or surplus. Sometimes because of surplus of good it make some of retailers refuse to market or sell of products anymore, therefore it makes the particular products not available in the certain retails stores. Availability of certain products is from the impact of disturbances of past purchase patterns on brand loyalty and long term demands for products.

Even in days of plenty, brand loyalties were strongly influenced by the controlling factors of market structures and the constraints they imposed on the availability of products in the final market (Philip B. Schary, Boris W. Becker, 1993). According to AgroMAs case seems look that one of the factors their products availability is because of customers brand loyalty. Customers used to choose their brand loyalty such as Nestle compared to products that they don’t know at all. There is no consumer interest, by definition, in specific brands.

It is due to customers having learned about the product through promotion and experience, demand is responsive to degrees of product availability. Physical distribution is one of factors that effects on the market place thus, more effort in distribution leads to higher levels of sales (Philip B. Schary, Boris W. Becker, 1993). Increased numbers of outlets, increased inventory service by intermediaries or is it a result of increased perception of the product by consumers as a result of additional shelf-space allocation by the retailer (Rob Docters, Bert Schefers, Tracy Korman, Christine Durman, 2008).

Based on AgroMas situations, their physical distribution is so limited whereas they only supply the products to the certain wholesalers or retailers only. Therefore, it is difficult to find AgroMas’s products available in the markets. Moreover, the retailer seldom has the same degree of interest in the specific brand that his supplier does, because he is trying to solve a different problem: how to compete with other stores (Philip B. Schary, Boris W. Becker, 1993). That means, manufacturer can influence a retailer to stock his products by promotional effort to a far greater degree than by logistics offerings.

In many product classes, it appears that consumers are more store loyal than product loyal. This in turn shifts the struggle for influencing sales through availability from the consumer directly to the retailer as intermediate decision maker.

Research Methodology

Introduction

This chapter deals with the details that are critical in executing a meaningful and accurate report on this study. As business research covers a wide range of phenomena, not all areas will be discussed, however, general concepts or any relevant information and rationalization of chosen approaches will be. . Research Design The research of this study will use descriptive research which describes the characteristics of an existing phenomenon. Descriptive research falls under non-experimental research. It provides a broad picture of a phenomenon and focuses on events that occur in the present (Salkind, 2009). Therefore, the research will be conducted by using descriptive research in order to study the performance of poorsales for fama’s agromas products.

Sample Size

According to Sekaran and Bougie (2010), a sample should be big enough to help answer the research question accurately, but not so big that the process of sampling becomes uneconomical and inefficient. If the sample too small, it is not representative of the population and too large to overkill. Although, the less representative the sample is of the population, the more sampling error is present.

Therefore, in this study, the researchers decided to select 100 respondents because of feasibility reason since it is not easy to approach customers who are in the middle of shopping, and not to forget the publics around Shah Alam too.

Sampling Technique

The sampling technique that will be used in this study is simple random sampling under probability sampling strategies. Each customer of the population has an equal and independent chance of being selected to be part of the sample. Equal means there is no bias that one person will be chosen rather than another.

Then, an independent means the choice of the one person does not bias the researcher for or against the choice of another (Salkind, 2009).

Data Unit Analysis

The unit of analysis will be the individual (walk-in) customers and publics around Shah Alam.

Data Collection Procedures

Data collection procedure that will be used for this study is questionnaires. The advantages of using questionnaire are it is less expensive to be administered, almost 100 percent response rate ensured and convenience to the respondents to give their feedback.

The questionnaires will have cover to provide information regarding the topic that the study focuses. Questionnaires will be distributed to walk in customer specific retail shop which sells AgroMas products. The cover of questionnaires will be explaining the objectives of the study. The researcher will distribute the questionnaires to respondents and collect promptly once done within that day.

Survey Instrument

The instrument that will be use in this study is questionnaire. The items of questionnaires will be formulated according the research objectives and the research question in this study.

The questionnaires will be divided into four sections. Section A will be focus on respondents’ demographic background such as gender, race, age, religion, occupation and marital status. For section B, the item will be focus on the promotion effectiveness. For section C, questionnaires focus on availability of products. Lastly, Section D will be focus on sales performance. In addition, the research uses Nominal as a level of measurement for the questionnaires in section A and for other sections (B, C, D) researches using Interval.

In order to meet the purpose of this study, Likert Scale with the range of 1 to 5 points being used started 1-Strongly Disagree, 2-Disagree, 3- Neutral, 4-Agree, and 5-Strongly Agree. And not to forget the numerical scale on Section D where researcher uses the 10 scale of extremely satisfied and extremely dissatisfied.

Validity of Instrument

The questions will be validated in order to ensure the questionnaires that have been used for the method in this study are valid. The important of questionnaires will be tested for the face and content validity.

The questionnaires related the factor that influencing sales performance adopted from the past research. Afterward, the researcher will select panels of expertise from Faculty of Business Management to check for content and validity. The questionnaires will be checking by experts in the field to ensure the researchers did not get any mistake when conducting the questionnaire for this study. Thus, the questionnaires will be in line with the objectives for this research. The effectiveness of the questions is very important to maintain the validity of instrument. 9. Data Analysis Plan

Data analysis explains the techniques to analyze data obtained from the questionnaire. The statistic use is descriptive statistic. Data collected in the study will be analyzed using Statistical Packages for Social Science (SPSS) version 17. 0. The analysis in this study will involve descriptive statistical (frequencies and percentages) which include frequencies and mean, mode, and standard deviation.

References

1. Anderson, R. E. (1996), ‘‘Personal selling and sales management in the new millennium’’,Journal of Personal Selling and Sales Management, Vol. 16 No. 4, pp. 17-32.
2. Andrew J. Newman, Darshika Patel, (2004),"The marketing directions of two fashionretailers", European Journal of Marketing, Vol. 38 Iss: 7 pp. 770 - 789
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5. Ian Phau, Linda Lam, (2000), "Effects of "physical attractiveness" in the evaluation of print advertisements",
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8. Joyce M. Wolburg, (2001), "Misplaced marketing: Why television is the "wrong" environment for public service advertising campaigns", Journal of Consumer Marketing, Vol. 18 Iss: 6 pp. 471 - 473
9. Kotler, P. (1973-74). Atmospherics as a marketing tool. Journal of Retailing, 49 (November),48- 64
10. Salkind, N. J. (2009), Exploring Research. Ed. 7th.New Jersey: Pearson education. Philip B. Schary, Boris W. Becker, (1993),"Product availability and the management of demand", European Journal of Marketing, Vol. 10 Iss: 3 pp. 127 – 135.
11. Rob Docters, Bert Schefers, Tracy Korman, Christine Durman, (2008),"The neglecteddemand curve: how to build one and how to benefit", Journal of Business Strategy,Vol. 29 Iss: 5 pp. 19 – 25.
12. Sekaran, U. , and Bougie, R. (2009), Research Method for Business: A Skill BuildingApproach. Ed. 5th.
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