Tekrum Marketing Plan for Malaysia

I. Content

II. List of Tables

III. List of Figures

IV. List of Abbreviation

1. Introduction & Mission Statement
1.1. Introduction
1.2. Mission Statement

2. Current Market Position (Internal Audit)
2.1. Product
2.2. Place
2.3. Price
2.4. Promotion

3. Market Overview (External Audit)
3.1. General Market Overview
3.2. Information about Malaysia
3.3. Asia-Pacific Market Value
3.4. Asia-Pacific Market Volume
3.5. Market Segmentation
3.6. Market Share
3.7. Competitors in Malaysia
3.8. Distribution
3.9. Market Value Forecast
3.10. Market Volume Forecast
3.11. Flavour Preference Asia
3.12. Western Products & Quality Products in Malaysia
3.13. PESTEL-Analysis of Malaysian Market
3.14. Porter’s Five Forces of the Malay’ Biscuit Market

4. SWOT Analysis
4.1. Strengths and Weaknesses of Tekrum
4.2. Threats and Opportunities of Tekrum
4.3. SWOT-Analysis of Tekrum
4.4. Key Issues and Opportunities for Tekrum
4.5. SWOT Analysis of Kraft Foods
4.6. SWOT Analysis of Munchy’s

5. Assumptions

6. Marketing Objectives

7. Strategy
7.1. Brief description of Strategy
7.2. Target Markets
7.3. Positioning Statement
7.4. Branding Strategy
7.5. Product strategy
7.6. Pricing strategy
7.7. Place Strategy
7.8. Promotional Strategy

8. Estimated Costs Year 1

9. Control & Evaluation

V. Bibliography

VI. Appendix
1. Internal Marketing Audit
2. Per capita consumption of Sweets in Germany 2008
3. Cost estimate from net-n-net

II. List of Tables

Table 1: High-Class Pastry Product Range

Table 2: Information about the Malaysian Market

Table 3: Asia-Pacific Market Value: 2002-2006

Table 4: Asia-Pacific Market Volume: 2002-2006

Table 5: Asia-Pacific Biscuits Market Segmentation

Table 6: Asia-Pacific Biscuits Market Share: 2006

Table 7: Main Competitors in the Asia Pacific Market

Table 8: Asia-Pacific Biscuits Distribution: 2006

Table 9: Asia-Pacific Biscuits Market Value Forecast: 2009-2011

Table 10: Asia-Pacific Biscuits Market Volume Forecast: 2009-2011

Table 11: PESTEL-Analysis

Table 12: Porters Five Forces in Detail

Table 13: Strengths & Weaknesses of Tekrum

Table 14: Opportunities & Threats of Tekrum

Table 15: SWOT Analysis of Tekrum

Table 16: Key Issues and Opportunities for Tekrum

Table 17: SWOT Analysis of Kraft Foods

Table 18: SWOT Analysis of Munchy's

Table 19: Tekrum's Types of Discount Pricing

Table 20: Promotion Strategy of Tekrum

Table 21: Estimated Costs Year 1

III. List of Figures

Figure 1: Boston Matrix for Tekrum biscuits

Figure 2: Top 10 confectionery manufacturers 2008

Figure 3: Distribution Channels of Tekrum biscuits

Figure 4: Price per 100 g Confectionery

Figure 5: Asia-Pacific Market Value: 2002-2006

Figure 6: Asia-Pacific Market Volume: 2002-2006

Figure 7: Asia-Pacific Biscuits Market Segmentation

Figure 8: Asia-Pacific Biscuits Market Share: 2006

Figure 9: Competitors' Prices

Figure 10: Asia-Pacific Biscuits Distribution: 2006

Figure 11: Asia-Pacific Biscuits Market Value Forecast: 2009-2011

Figure 12: Asia-Pacific Biscuits Market Volume Forecast: 2009-2011

Figure 13: Porter's five Forces for the Malaysian' biscuit industry

Figure 14: SWOT Analysis

Figure 15: Product Lifecycle

Figure 17: Pull Strategy

Figure 16: Product surrounding

IV. List of Abbreviation

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1. Introduction & Mission Statement

1.1. Introduction

Tekrum is a brand for high-class pastry and confectionery products. The company was founded 1897 in Ravensburg which is in the south of Germany. Until 2005 the company was owned by the Krum family and was then sold caused of family reasons to Griesson de Beukelaer which is one of the leading organizations in the European confectionery market. However Tekrum is still a brand on its own and therefore the focus of this marketing plan is on the Tekrum products, especially on their traditionally baked high-class pastry. The products are mainly available in the Swabian region of Germany (around Ravensburg) and sporadically in some other parts of Germany as well as in Italy and Austria.

According to the research the Asian appetite for biscuits is growing and the biscuit market in Asia is increasing rapidly. Butter-based cookies are the favored biscuits. Due to the on-going expansion of Griesson de Beukelaer they want to use Tekrum high-class pastry products to enter the Asian market because the most butter-based biscuits are in the Tekrum product range. They want to begin distributing their products in Malaysia to see how it is going. If they will succeed they will start distributing other products of GdB and it is possible that an own sales office or even a production is opened in Malaysia.

They have chosen Malaysia because it is “the heart” of the South-East Asian market and distances to the Southeast-Asian countries around are almost the same. Moreover the relations between Germany and Malaysia are very good. If the success in this region is ensured they then want to spread their business to central Asia.

1.2. Mission Statement

“ A mission statement is intended to: Highlight the role of the business, its distinctive competence, future direction and motivate the employees. ” (McDonald, 2008)

What does Tekrum - Tekrum makes delicious high-class biscuits that are baked with love. Biscuits put always a smile in one’s face and are therefore a part of our life: they give us a moment of happiness and sweeten our daily life.

Consumers inspire Tekrum - To make today delicious Tekrum begins with its customers. They listen, they watch and they learn. They lend their customers always an ear!

Tekrum’s reach - Tekrum believes it can make a delicious difference - everywhere! They are constantly looking for new ideas to improve its business and the relationship to the customers.

Distinctive Competence - The high-class quality of the biscuits for a reasonable price and the exclusive design of the packaging differentiate the Tekrum biscuits from others.

How Tekrum grows - Tekrum focuses on creating sustainability and profitable growth. These focuses follow its strategy:

- Build a high performing company
- Exploit sales capabilities
- Drive down costs ... without compromising quality

2. Current Market Position (Internal Audit)

According to McDonald (2008, p. 38-42) the information for the current market position can be extracted from the marketing audit (see Appendix: 1. Internal Marketing Audit)

2.1. Product

The product range of Tekrum includes different types of high-class pastry as well as different types of ice-cream wafers, named “Décor on Ice”.

Products in the high-class pastry range are as follows:

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Table 1: High-Class Pastry Product Range, Source: Griesson-de-Beukelaer

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Figure 1: Boston Matrix for Tekrum biscuits (based on an educated guess)

The Boston Matrix classifies a firm’s products according to their cash usage and generation (McDonald, 2008).

Product Details:

The biscuits are packed in a handy packaging with exclusive design. The name of the biscuits, the manufacturer and the ingredients are printed on the packaging. One package includes 100 g of biscuits. Even if the package is opened it keeps the biscuits fresh for some days. According to a survey of Tekrum the biscuits are not too sweet; they are enjoyable.

The main competitors of Tekrum are Bahlsen, Continental Bakeries, Lambertz and Borggreve. Moreover there are several small companies as well as no-brand products of supermarket chains like Kaufland or Edeka.

Tekrum sales total 2008 was 29,000,000 € which is about 16.6 % of the whole production of GdB.

The market share of Tekrum products itself was 1.66 %.

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Figure 2: Top 10 confectionery manufacturers 2008, Source: Griesson-de-Beukelaer

All high-class confectionery products of Tekrum are positioned in the premium segment of the market (see Appendix: 1. Internal Marketing Audit).

2.2. Place

Tekrum products are available in well-known middle and upper class supermarket chains and department stores (usually not by discounter chains) as well as through online-retailers and industrial suppliers.

Therefore the main distribution channels are specialist retailers (40 %) food wholesalers (25 %) and central purchasing of supermarket chains (25%) to distribute the products. Moreover Tekrum runs three factory outlets (10 %) in the area of Ravensburg mostly selling products of second quality for a lower price and in larger amounts.

Sometimes special corporations with discounters are made.

The main distribution area of Tekrum biscuits is the southern region of Germany. Furthermore the biscuits are offered by some stores around Germany as well as in Italy and Austria.

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Figure 3: Distribution Channels of Tekrum biscuits

2.3. Price

The biscuits are sold on an average of 1.40 € per 100 g packaging. This price is adapted on the prices of similar biscuits of other brands. Moreover the pricing strategy follows the product lifecycle and the product portfolio.

The price reflects the good quality and gives a feeling of exclusivity for a reasonable amount of money.

Customers get a 2 % discount if they pay within 10 days (Discount Pricing, Kotler & Armstrong, 2008, p. 312)

For markets outside Germany the prices are adjusted. (International Pricing, Kotler & Armstrong, 2008, p. 320)

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Figure 4: Price per 100 g Confectionery

2.4. Promotion

For the regional market hardly advertisement is necessary because the brand Tekrum is aware in the region where the most consumers are (pull-marketing, cf. Kotler & Armstrong, 2008, p. 415).

For the rest of Germany a TV commercial was shown on a big TV channel from time to time (http://www.philmusik.com/html/tekrum.html).

Furthermore the internet is used to present the products via the website of Griesson de Beukelaer (http://www.griesson-debeukelar.de) and offer further information.

Last but not least public relations (regional newspapers) are used to create and expand the local brand awareness. Sponsoring is as well done for local activities in and around Ravensburg for example city runs.

3. Market Overview (External Audit)

3.1. General Market Overview

The global Biscuits market grew by 2.9% in 2006 to reach a value of $23.9 billion. Europe is the leading region in the global market, with a 47.3% share of the market by value (Confectionery- News, 2006).

Despite the current financial crisis the biscuit market is still booming. GdB states that 2008 “was the year of the biscuits” (SWR, 2009).

The number of products within this sector has expanded substantially, with hypermarkets now stocking an average of 15 different items and supermarkets an average of nine, says a report from Esmerk¹. Specialist retailers form the most lucrative distribution channel, with a 37.4% share of the global market by value (Confectionery-News, 2006).

According to a report on food women are the main purchasers of biscuits (Confectionery-News, 2006).

In 2011, the market is forecast to have a value of $27.4 billion, an increase of 14.4% since 2006 (Confectionery-News, 2006).

3.2. Information about Malaysia

The market Tekrum wants to implement their biscuits is Malaysia. Not able to find enough information about Malaysia itself I assume that Malaysia will be similar with the rest of the Asian-Pacific region.

The biscuits (sweet biscuits) market consists of American cookies, assortment cookies, butterbased cookies, chocolate cookies, cream-filled cookies, plain cookies and wafer cookies (Datamonitor, 2006).

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Table 2: Information about the Malaysian Market, Source: Department of Statistics Malaysia, 2009 & Datamonitor, 2006

3.3. Asia-Pacific Market Value

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Table 3: Asia-Pacific Market Value: 2002-2006, Source: Datamonitor, 2006

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Figure 5: Asia-Pacific Market Value: 2002-2006, Source: Datamonitor, 2006

3.4. Asia-Pacific Market Volume

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Table 4: Asia-Pacific Market Volume: 2002-2006, Source: Datamonitor, 2006

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Figure 6: Asia-Pacific Market Volume: 2002-2006, Source: Datamonitor, 2006

3.5. Market Segmentation

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Table 5: Asia-Pacific Biscuits Market Segmentation, Source: Datamonitor, 2006

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Figure 7: Asia-Pacific Biscuits Market Segmentation, Source: Datamonitor, 2006

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¹ Esmerk: Supplyer of business information