B

Company Backgrounds
Giant Hypermarket
The Giant store was a simple grocery store grocery store in one of the suburbs of Kuala
Lumpur. It was founded by the Teng family in year 1944. Giant Hypermarket is owned by Giant
Capital Holdings (GCH) and it is one of the largest hypermarkets in Malaysia. It's headquarter is
located at Shah Alam, Selangor. Meanwhile Sabah-Sarawak-Brunei Regional headquarter is
located in Kolombong Outlet, Kota Kinabalu. The first Giant Hypermarket store was opened in
Shah Alam, Selangor in 1999. The company had grown to operate a total of 86 hypermarkets
(2012) in Malaysia with its outlet size ranging from the 350,000 square feet (33,000 m2)
hypermarket in Shah Alam to the 11,000 square feet (1,000 m2) supermarket in Bangsar, Kuala
Lumpur in 2006.
Apart from this, the chain also includes 6 stores in Singapore and 17 hypermarkets in
Indonesia. Giant hypermarkets offer a wide range of local merchandise, such as fresh local fruits,
vegetables, and seafood within a wet market environment. The key people to the success of Giant
Hypermarket are the owner itself who is Teng Family themselves, and Dato' John Coyle.
Giant brand offers its consumers with consistent quality and the best value product for
money on the shelf. Their most products are obtained and developed locally in view of
Malaysia's abundance in terms of raw material and also manufacturing facilities. Giant brand
features distinctive yellow and green packaging which will be instantly recognizable and also
dependable. All of their products are backed by quality guarantee and the prizes are
competitively in the category. All Giant Brand products are available in all Giant hypermarkets
and supermarkets. which is the CEO of this company

99 Speedmart
It all started in 1987, The germ of 99 Speedmart was sown in the form of a traditional
mom and pop sundry store called Pasar Raya Hiap Hoe by the founder Mr. Lee Thiam Wah in
Tepi Sungai, Klang. This meek beginning has allowed Mr. Lee to gain personal knowledge and
insights into the sundry retail market through personal interactions with customers and suppliers.
In 1992, the very first store that bore the name 99 opens in Klang Utama. Pasar Mini
99, represented the very first step Mr. Lee takes to realize his vision of building an integrated
chain of mini-marts. With sheer dedication and hard work, Mr. Lee expanded Pasar Mini 99 to
eight other outlets in Klang ala chain store format.
During the period somewhere in the end of 1999, Amidst the growing popularity of Pasar
Mini 99, 99 Speedmart name was launched with new store opening at Batu Belah, Klang with an
intensive expansion strategy geared to help the chain increase market penetration and share. It
also represents more than just a rebranding exercise and entails the introduction of a fresh
approach in interior as well as exterior set up to enhance the visibility of the shop and the
comfort of shopping.
In the year 2002, a new head office and distribution centre was completed in October
2002 at a cost of RM6.5 million. This warehouse is an 80,000 square feet facility, complete with
centralizes stacking, storage and warehousing capabilities.
After 11 years of operating, they had almost 450 branches and 3 distribution centre
around the Peninsular Malaysia.

Price comparison
Product

Price (Giant)

Price (99 speed-mart)

Ajax Floor Cleaner (2.6L)

12.99

13.95

Naturel cooking oil (3kg)

19.89

22.9

Jasmine Basmathi King (5kg)

37.99

35.9

Carbonated drinks(Pepsi/Revive/7-

22.99

22.95

Heaven & Earth (1.5L)

2.5

3.95

Dutch Lady low fat milk

6.29

5.9

100-Plus (1,5L)

2.49

2.99

Campbells' Cream of Chicken (300g)

4.49

3.8

Ayam Brand Processed Peas

2.39

2.4

Milo (5kg)

17.99

16.95

Sam Remo Vermicelli (500g)

4.99

4.39

Maggi Tom Yam (5 packs)

4.79

4.65

TOTAL

139.79

140.73

Up/Kickapoo/Mountain Dew)( 24 x 325ml)

Table 1.0

Giant vs 99 Speedmart

Giant

99 Speedmart

Graph 1.0
The price comparison shown in Table 1.0 shows a difference of RM 1 between Giant and
99 Speedmart, Where Giant at RM 139.79 and 99 Speedmart at RM 140.73. This goes to show
that there is not much of difference. While the total price might be almost same, but buying the
items individually is more expensive by average of RM 1 5 in Giant compared to buying in 99
Speedmart.
But while pricing is a big factor in influencing where customers shop there are a few
other criteria that are seen as major deal changers for many people. The survey that was carried
out shows peoples reaction as to what they expect when given a choice on which market to shop
in.
Our survey was in order to get insights of why people would prefer a mini mart over a
supermarket or vice versa. It was conducted in a very general and straightforward way with no
linking to neither

Survey

Price elasticity of demand

Price elasticity of demand is a measurement which calculate the responsiveness of
consumers demand towards the price change of a product or market. When taking other factors
such as environment and substitutes or varieties of product into account, those factors can affect
the price elasticity of demand. This is because when theres more substitute for a product or
market, the price elasticity of demand will be more elastic.
This has a lot in common with 99 Speedmart and Giant Hypermarket/Supermarket
because the market is sensitive towards the pricing of the product by the two market, especially
99 Speedmart. In terms of variety of products and the environment, Giant obviously has the
upper hand when it is compared to 99 Speedmart, this makes the pricing of product for 99
Speedmart much more sensitive to consumer demand. For example, consumer has a choice to go
to Giant for more alternative products and better environment, why would they want to go to 99

Speedmart to shop for groceries? Coupled with the fact that their target market is of the low
income group, the pricing of products for 99 Speedmart has a very high elasticity and sensitivity.
Since 99 Speedmart has achieved economies of scale (they have 3 distribution centers in
Malaysia), the adjustments of price for products shouldn't be a problem for them.
On the other hand, Giant has a lower sensitivity than 99 Speedmart when it comes to the
Price elasticity of Demand. This is because Giant has advantages such as varieties of products,
better environment and better public awareness that attracts demand. For example, even if the
price of a product in Giant is slightly more expensive than 99 Speedmart, people would still go
there to shop because of a better environment and more product choices. Therefore, as Giant has
a lot of advantages over 99 Speedmart to attract consumers, Giants price elasticity of demand
should be less elastic than that of 99 Speedmart.
Conclusively, the Price elasticity of demand should be much more sensitive in 99
Speedmart that that of Giant hypermarkets/supermarkets because of the many factors of demand
that Giant has over 99 Speedmart.

Income elasticity for Demand

Income elasticity of demand measures the responsiveness of consumer demand towards a
product when their income changes. Both 99 Speedmart and Giant targeted low income or low to
middle income demographics respectively, it is safe to assumed that 99 Speedmart and Giant
sells both inferior goods and normal goods, while Giant hypermarket sometimes sells luxury
goods such as wine to consumers.
Since both 99 Speedmart and Giant sells normal good, it can be assumed that as when
the income of their target market increased, the demand for their products also increased. This is
especially true in the case of 99 Speedmart, where they concentrated on selling products (normal
goods) that have high turnover rates such as necessities to increase consumer demand.
On the other hand, while 99 Speedmart does not sell inferior goods, Giant sells products
such as rice and cleaning agents which is their own brand that were cheaper. The products that

contained the Giants brand are considered to be of lower grade and quality by the public, and
therefore considered as inferior products. The Giant brand products are usually bought by the
poor who cant afford to buy the standard products that has more expensive price tags. However,
when their income increased, their desire to buy a better quality product will lead them to quit
buying the Giant brand product which are considered inferior. This is accordance to the income
elasticity of demand theory where when income of an individual increased, the demand for
inferior product will decrease.
99 Speedmart does not sell luxury goods due to their aim to attract lower income
consumers. Giant on the other hand sells luxury products such as wines in some outlets. As
luxury goods are expensive, theyre usually bought by the people from a higher income
background. Usually, when the product is more expensive, the more demand it gets from rich
consumers.
Conclusively, Giant and 99 Speedmart sold products were usually that of normal goods to
maximize their profit as the majority of their customers demand towards normal goods.

Factors of Demand
Location
Location are one of the main factors which influenced demand from consumers to a
particular supermarket or minimarts. According to a survey done to 20 people, 13 of the people
cited location as a pivoting factors for them to decide which market they are going. This is
because the majority prefers the location of the supermarket or market to be nearer to their home
as it is more convenient. Other factors of consideration included that the majority of the
interviewees preferred to save petrol and avoid traffic jams while travelling to their preferred
destination, therefore, distance of the market from consumers home matters a lot and will affect
the preferred choice of the consumers in choosing a suitable shopping destination.

As 99 Speedmart cannot compete with Giants products in terms of varieties, 99

Speedmart survival were dependent on their store locations. This is because consumers would
not have preferred to choose a mini-mart which is farther away from their home than the
supermarket, as the pricing would more or less similar to one another with the lack of variety as
another issue. Therefore, placement of Speedmart were usually placed in residential areas or
somewhere near the residential area as it is the most logical solution to ensure their survival in a
competition against supermarkets. On the other hand, while location are important to Giant
supermarkets, it is not prioritized as much as 99 Speedmart because it has a greater variety of
products which was enough to attract customers.
Variety of goods and Price of goods
On the other hand, as mentioned before, variety of goods and the pricing also contributed
as one of the leading factors besides location in determining the demand of the market.
According to the survey, the price of the products is the deciding factor in contributing demand
to a particular market store, on the other hand, the variety of products were chosen as one of the
leading factors as well. Surprisingly, the data collected showed that almost half the products sold
in 99 Speedmart were cheaper than those sold in Giant with other products slightly expensive.

This was astounding because supermarkets usually buy their products in bulk (lesser
cost), making their products usually cheaper than most supermarkets as well as having achieved
economies of scale as they are an established brand. This gives 99 Speedmart an edge in their
competition against Giant supermarkets in attracting customers.
However, in terms of variety in products, Giant supermarkets have the upper hand when
compared with 99 Speedmart. Consumers will have more choice to select with cheaper
substitutes available to satisfy their wants and needs. For example, Giant sells more brands of
rice than 99 Speedmart. Not only that, Giant also offers cheaper alternatives such as the Giant
branded Local Rice and Thai Rice. As it is not possible for 99 speedmart to compete with Giant
in terms of variety of k, it would have to rely on other factors to attract demand to their stores.

Advertisements and Public Awareness

Public awareness is another factor that increases demand. This is because the more well
established the brand is, the more demand it has for that brand. In this case, Giant is a wellknown brand amongst people in Malaysia because of the numerous advertisements and
campaigns theyve done. According to the Giants website, they promoted their brand by creating
community events and undergoes corporate social responsibility such as blood donation and
giving out promotion flyers to maximize public awareness on their brand. On the other hand, 99
Speedmart were less advertised, which leads to lesser people to know about the brand. While 99
Speedmart did some CSR as according to their webpage, its efforts are not as well-known as
Giants. Therefore, public awareness of the Giant brand are more prominent, therefore giving
them the edge over 99 Speedmart.
Other factors cited by people in the survey also included availability of goods, better
customer service and quality of goods.

Target Market:
So for Giant Hypermarket their main target was focusing on Middle income family
house, 60 to 70 % population of Malaysia with the household income of Rm 3000 till Rm 4000.
The middle income family mostly had minimum one car and minimum one or two child who are
studying, most of them will have the price conscious on all the product. That type of consumer
products offer from Giant was based on convenience, reasonable price, widespread distribution
and mass promotion by producer just like their slogan "Everyday Low Price, Big Variety and
Great Value Most of the product from giant access to more premium and international products,
you can purchase some of the products that one can be found on Japan or Korea.
Giant also provide a very good services to their customers, they buying everyday
groceries just for produce fresh foods under one roof and in a hygienic environment. Giant also

allow customers to get their money back if they regret for their purchase .For the pricing
strategy Giant was using lower price product , by putting lower price on selected product can be
used as a hero products to attract consumers to their outlet to purchase other product. As example
, Giant sell the price of natural cooking oil with the price of RM19.89 and the price is much more
lower around 3 ringgit if compare with 99speed market so it will attract the customers come to
their outlet. For the place and location Giant will prefer open near around housing area such as
condo , apartments , flat and terraced houses , so that is more convenience for their customer. For
increasing their demand, Giant have spending more money on advertising comparing to 99 speed
market. We can found out many Giant advertising at newspapers or magazine.
As for 99 Speedmart they are more focusing on Low income group, family house that
earn less that 2000 per month. 99 speed market are not a hypermarket they belong to
convenience stores like 7- eleven, their outlet are much smaller than Giant but they got more
outlet if compare with Giant. In Malaysia there was around 175 outlet, most of their outlet was
open around LRT station, bus station or housing area. For 99 Speedmart there is some
disadvantage for them, they got less stock ability if compare with Giant so they will be always
run out of stocks .This will cost them for losing many profit as their customer will purchase from
other place. The reason why 99 Speedmart got lower stock level was because they lack of place
for putting their extra stock so they will not order many at one time.
Other than that, 99 Speedmart also got different price from every outlet and the price of
their product will keep on changing along with their cost, so it was very unfair for consumer. 99
Speedmart also got their own advantage , the product of them are more fresh because their
turnover is much more time and the price of their product was cheaper and lower .99 speed
market also got more than 100 trucks or lorries for quick delivery and their logistic are very good
and professional. And also because of their location customer can save up their petrol fee and
parking fee when they want to purchase groceries. Also at 99 Speedmart customer doesn't have
to go through by long queue for paying, customer can just grab and pay. Therefore, this was fits
with their slogan Near and Save.
Promotional Strategy:
For Giant their main promotional strategy are using daily specials and weekend specials
promotion. Everyday giant will select up to 20 different product and giving promotion for the

selected product. Customers are allow to get the flyers in the stores to check out the lower price
offers. At the weekend specials, they will have a lucky draw section for those family who
purchase more than an amount. For retail outlet they with a promotion idea of Purchase with
Purchase (PWP). They will separate out a Purchase with Purchase lane, so that all the products at
that lane when you buy one you can get one for free. It will be easier for that type of consumer
who searching of low price product.
Giant also come with a 2% discount for customers who pay with Citibank giant credit
card .This will be more encourage customers using Citibank credit card when doing payment .On
the other hand , Giant also provide value voucher for letting consumer redeem online for free.
Other than that, when at festival Giant will also have sales and will be opening for 24 hour,
Example Chinese New year or Hari Raya. But for 99 Speedmart they got less promotion because
most of their product are sold cheaper if compare with Giant. The few promotion that can only
be found was maybe during big festival like Chinese New year or Deepavali. And also for 99
Speedmart every month they do have many event of sample give away such as Nestle sample,
Maggie sample or ice-cream. This will allow them to attract more customer to visit their outlet.

Conclusion
There is no doubt that Giant and 99 Speedmart are well known in their target categories.
In every company they have their pros and cons, which makes it harder to say which is the best.
But in this matter, Giant is by far one of the best because it has more promotion, better services
and also variety of goods. Not to forget they have also achieved economics of scale, which
allows them to reduce the price so that it can be sold faster and also the location is very near to
residential area. Where else, 99 Speedmart can also try to make more promotion and also do
some advertising. They also can try to come up because they almost there to achieve Economies
of scale. But end of the day, it is this in the hands of the consumers to choose whether where they
want to shop, and what they want to buy.