Case Study:
Cepuros Foods Malaysia
1. a)What determines the demand for Baik Sos cooking
sauces in Malaysia?
b)What are the differences between the factors
affecting demand for Baik Sos cooking sauces and the
demand for Baik Sos Salsa?
Q1: What determines the demand for Baik Sos cooking
sauces in Malaysia?
Psychological Cost
• Demand for halal food ingredient
• Healthy food culture
• Malaysian meals chain per day
Time Cost & Energy Cost
• Dual income household
• Busy lifestyle
• Travel lifestyle
Q1: What are the differences between the factors affecting demand for Baik Sos
cooking sauce and the demand for Baik Sos Salsa?
Baik Sos Cooking Sauce Baik Sos Salsa
• Social factors • Social factors
Target consumer – Consumers Target consumer – Consumers
that consume traditional main that consume snack meals
meals • Cultural factors – social classes,
• Cultural factors – social classes, income (households that
income (dual income) demanded competitive price)
• Price – super premium • Price – premium
• Packaging – High gloss design • Packaging – Vacuum sealed
2. Using a strengths, weaknesses, opportunities, threats
(SWOT) analysis, what was CFI-M’s situation in 2017?
Helpful Harmful
Internal Strength
- Long history in this industry, since 1987.
Weakness
- Limited target audience – higher-income
Environment - Strong relationships were established consumers
with local food manufacturers, - Premium price
distributors and food retailers. - low-sodium soy sause was the only
- Marketing strategy includes condiment permitted to carry Healthier
advertisements on the radio, digital Choices logo.
advertising, promotional prices, in-store - Less accessibility – Only Jaya Grocer and
sampling, producing videos and blog Village Grocer are selling their products
posting.
External Opportunity
- Malaysian cuisine are represented by a
Threat
- High consumer demand for halal – halal
Environme fusion of ethnic Malay, Chinese,
Indonesian, and Indian cuisines.
certification standards production uses
nt - Typical Malaysian food were strong, higher costs.
- Many strong competitors in this industry,
spicy and aromatic; usually eaten with
condiments. one of the example is Nestle (M) Bhd.
- Consumers’ increased exposure to
international health trends.
- High consumer demand for healthy
foods
3. Evaluate the possible growth strategies using the product/market
matrix concept for CFI-M’s salsa line. What is the difference in
operating income for the alternative strategies?
ANSOFF'S PRODUCT/ MARKET MATRIX
Growth Strategy – Diaz Idea
• Increase the marketing capacity through education
Existin Market Penetration Product Development
g N/A - 5 Salsa source
Market
Risk Increases
New Market Development Diversification
Market Develop new customer pool N/A
with education program
Risk Increases
ANSOFF'S PRODUCT/ MARKET MATRIX
Growth Strategy – Lee Idea
• Build stronger bond with existing customer
Existin Market Penetration Product Development
g - More activity with current - 5 Salsa source
Market customer and promote
awareness
Risk Increases
New Market Development Diversification
Market N/A N/A
Risk Increases
Operating Income
2019 (Forecast) Diaz Idea Lee Idea
Revenue 4,366,289 4,493,462 4,317,708
Variable Cost 2,656,452 2,656,452 2,656,452
Gross Profit 1,709,834 1,837,010 1,661,256
Fixed Cost
- Selling Expenses 550,153 800,000 694,267 (15% ^)
- G&A Expenses 493,391 500,000 493,391
Operating Profit 666,293 537,010 473,598
Diaz Idea – 100% Salsa sales increment with USD800k & USD500k as marketing investment. Diaz want mass
marketing.
Lee Idea – 30% Salsa sales increment with USD80k in selling expenses. Lee want better relationship with
existing customer. Lee do not want to do free work which potentially helping competitor to increase market
capacity.
4. How should CFI develop the salsa market in Malaysia?
How should CFI-M allocate its marketing investment?
How should CFI develop the salsa market in Malaysia?
• Firstly, the pricing of the Baik Sos Salsa is set as premium product. It allows
the households from middle- to upper-income to be able to enjoy the
products.
• suitable to Malaysian market due to Malaysia is an emerging and developing
country, most of the households are becoming more concerned about the food
quality instead of product price.
• Secondly, CFI may develop new distribution channels to reach target
customers.
• CFI may choose to have an online official store to sell its products since online
shopping is becoming more popular and ease to reach larger customer base
regardless wherever they are at any time.
• CFI may choose to distribute Baik Sos Salsa to the selected restaurants and selling to
the diners. It can help CFI to reach potential customers easily.
• Thirdly, CFI may promote the salsa products through product bundle pricing
• producing combo package by packing the different flavours of salsa with other Baik
Sos cooking sauces or original flavour of salsa and offering at a promotional price to
increase the brand awareness.
How should CFI-M allocate its marketing investment?
Advertising strategy Allocation of selling expenses Allocation of selling
expenses
Producing video & blog posting 10% 15%
Paid advertisements on radio 20% 15%
Digital advertising 15% (5% for banners & search ads; 30% (10% for banners & search
10% for video, mobile & social media ads; 20% for video, mobile &
advertising) social media advertising)
Price discounts & sampling 30% 25%
Better shelf positions and seasonal 25% 15%
displays
• Increasing budget for producing video and blog posting - engage the community with our chefs through
providing more useful cooking tips via video recording.
• Reducing budget for radio advertising - the audience of radio advertising is decreasing as current population is
more active in social media.
• Doubled-up budget for digital advertising - the potential customer base is more accessible to social media and
online browsers.
• A 5% decrease in price discounts and sampling - price discount can continue due to there is a lot of seasonal
sales activities in physical stores and online shopping platform. However, the budget in sampling promotion
should be reduced due to no sampling distribution needed for online store.
• Decreasing in budget for obtaining better shelf positions and seasonal displays - online presence of the
products is more cost effective than in-store presence.
