1.

MARKET STRATEGY

1.1. Segmentation and Targeting There are many factors in the macro-environment that will affect the decisions of the marketing plan. Tax changes, new laws, reduce in subsidies, demographic change and government policy changes are all examples of macro change. To help analyse these factors we can categorize them using the PEST model. The various Political, Economic, Social and Technological factors that we needs to consider and research in order to enter the restaurant business in a new environment may be depicted as follows:-

1.1.1. Political Factors Political environment refers to all those things pertaining to and carry out by the government that affect the economy and business scenario in general. Government regulations and policies that impact the business environment the most may include tax policies, environmental laws and regulations, trade restrictions, commercial tariffs, and infrastructure and development policies. The degree of political stability also has a huge impact upon business environment and the economy in general. What we are most concern about is the increase in the electricity tariff in this country. With the increase in electricity tariff, this will eventually increase the price in the goods and expenses in running the cafe. This will have an impact in the balance sheet in the long term. The consequences are that there might be an increase in the price of the product. Other than that, political factors in Malaysia are very stable and there are no drastic changes that will have an impact on the businesses.

1.1.2. Economical Factors Economic environment refers mostly to the macroeconomic factors. These factors may have a high impact upon the business environment. The most we can do is to modify our business growth strategies and various commercial and financial policies accordingly to make the most of the present economic situation. These economic factors may include the currency exchange rate, interest rate, economic growth rate, and rate of inflation. What we are most

concern about is the ongoing issues on the increase of oil price and also in the inflation rate. The inflation rate in Malaysia was last reported at 3.2 percent in April of 2011. Inflation rate will determines the rate of compensation of employees and directly affects price of the cafe's products. Again, the proportion between the inflation rate with wages and prices is directly interrelated. With the increasing and unstable inflation rate, it will affect the purchasing power of the consumer. Purchasing power drops as the inflation rate increases. Apart from that, the increasing trend of the fuel price will also have an impact to the business in the future.

Table 1: Malaysia Inflation Rate, 2003 to 2011. 2003 Inflation Rate (%) Percent Change (%) 1.90 2004 1.10 -42.11 2005 1.30 18.18 2006 3.00 130.77 2007 3.80 26.67 2008 2.00 -47.37 2009 5.40 170.00 2010 0.60 -88.89 2011 (Jan) 1.70 183.33

Source: Department of Statistics Malaysia Table 2: Malaysia RON97 Fuel Price, 2000 to 2011 2000 RON97 Fuel Price (RM) RON97 Fuel Price (RM) 1.2 2006 1.92 2001 1.3 2007 2002 1.33 2008 2003 1.35 2009 2.05 2004 1.42 2010 2.1 2005 1.52 2011 2.9

Source: Malaysia-Kini.Com Online

1.1.3 Social Factors Social environment refers to the social, religious and cultural aspects of the business environment that may be affected by, and may react to, the businesss strategies either positively or negatively. These may include demographic aspects like age distribution, population growth rate, employment and income statistics, education and career trends, and overall general attitude. These factors may have a huge impact upon the businesss operations. The demographic of the people in the chosen business environment may affect the marketing decisions.

Table 3: Basic Population Characteristics in Selangor By Administrative Districts, 2010.

Population Household District 2009 ('000) Gombak Klang 673.2 823.2 (%) 13.4 16.4 4.7 4.0 29.6 2.7 3.0 22.5 3.8 100.0 2010 ('000) 681.3 832.6 242.1 202.0 1508.9 138.2 151.7 1149.6 196.1 5102.5 (%) 13.4 16.3 4.7 4.0 29.6 2.7 3.0 22.5 3.8 100.0 ('000) 179.8 208.2 54.3 45.9 438.0 30.9 40.1 325.1 51.8 1374.1 (%) 13.1 15.2 4.0 3.3 31.9 2.2 2.9 23.7 3.8 100.0 3.8 4.0 4.5 4.4 3.4 4.5 3.8 3.5 3.8 3.7 Average population per household Area

Population Density 2009 (sq. Km.) 628 636 885 1232 501 1056 612 840 1764 8154.0 (per sq. km.) 1072 1294 270 162 2974 129 243 1346 109 617 2010 (per sq. km.) 1085 1309 274 164 3012 131 248 1369 111 626

Average Sex Median Anual Ratio Age Population Growth 2010 2010 Rate (%) 1.2 1.1 1.4 1.4 1.3 1.2 1.9 1.6 1.7 1.4 102 109 105 105 100 101 113 102 105 103 (years) 29.3 30.4 28.7 28.1 30.1 27.5 29.7 29.8 28.6 29.7

Kuala Langat 238.8 Kuala 199.2 Selangor 1490.0 Petaling Sabak 136.5 Bernam 148.8 Sepang Ulu Langat Hulu Selangor TOTAL 1131.0 192.8 5033.5

Source: Department of Statistics Malaysia

Source De a tme t of Statistics Mala s ia

Table 5: Number of Employed Persons by Occupation, Selangor, 2005-2009. Number ('000) Year Total 1 2005 2006 2007 2008 2009 Note:
1

Category of Occupation1 2 175.9 183.2 195.3 195.9 218.2 3 294.0 321.7 328.5 371.3 377.1 4 259.7 253.2 274.3 269 285.1 5 233.4 269.5 293.5 298.8 296.9 6 44.8 41.8 33.9 31.3 34.4 7 170.4 163.6 157.7 154.4 143 8 300.4 282.9 283.3 305.1 251.6 9 243.7 224.4 226.8 216.3 204.0

1985.9 2017.7 2064.2 2092.0 2095.3

263.7 277.4 270.9 249.9 285.1

Occupation is classified according to the Malaysia Standard Classification of Occupation (MASCO) 198.

Category of occupation is as follows: 1. 2. 3. 4. 5. Legislators, senior officials and managers Professionals Technicians and associate professionals Clerical workers Service workers and shop and market sales workers 6. 7. 8. 9. Skilled agricultural and fishery workers Craft and related trade workers Plant and machined-operators and assemblers Elementary occupations

Demographic variables are the most popular bases for segmenting customer groups because they often linked with customers needs and easy to measure. The first variables will be analyzed of the demographic segmentation will be the location. Location is very important in determining the success of the business. The Cafe is located in Bandar Baru Bangi which is in the Ulu Langat district. From the data in Table 3, we observe that the number of population in this district is quite high compare to other district. It also has a high growth rate of 1.6% annually. Apart from that, Bandar Baru Bangi is a newly developed town area close with universities, offices are and residential area which is a very strategic location. The second variable that will be analyzed of the demographic segmentation will be age. Age is an important criterion as it assists in identifying type of product or services that are purchase by various age and life cycle. Based on our observation and the data in Table 3, we found that the range of age for the cafes customer is from 25 to 45 years old. Since the cafes product price is slightly higher than the ordinary restaurant, we targeted customers in the range that possibly have a stable and fixed income. The next variable would be income. Income possesses an indicator to the power of purchasing of consumers. Based on the data we get, people that would likely to dine in our cafe is someone with the average annual income between RM48,000 RM96,000. This is relevant to the price that we offer in our Cafe. In terms of occupation, the cafe is mainly visited by legislators, senior officials, managers, professionals who is in the range of the income and has interest from the cafe. From our observation and data in Table 4, the number of the people in those occupations is high enough in Selangor to cater the market.

1.1.4 Technological Factors Technological environment refers to the technical aspects of the business environment and may include the level of automation available in the current times, technical facilities and infrastructure, rate of technological progress and research and development activities. These factors may assume decisive proportions and may impact the cost, quality and scope of innovation for a

product, service or commercial utility. However, the technological factor that is relevant to our business currently is the technology of information and communications. With the available and fast growing mass media, it directly has a positive, yet also a negative impact to the business. The positive impact is that it will helps in term of the promotions of the Cafe through advertising. The negative impact is that, any negative feedbacks would quickly be spread in the mass media.

TARGET MARKET AND SEGMENTATION

Geographic Region City or Metro Size Density Demographic Age Family Size Income Occupation Family Life Cycle Generation Social Class Behavioural Occasions Attitude Towards Products/Service

Ulu Langat, Sepang, Kuala Langat 800,000 to 1,200,000 Urban 25 to 45 2 to 5 RM48,000 RM96,000 Legislators, Senior Officials, Managers, Professionals. Young, Single; Married, Youngest Children above 6 Generation Y, Generation X Upper Middle Class, Middle Class, Lower Middle Class. Special Occasion Enthusiastic, Positive