Secret Recipe

11 November 2016

This report is done under the subject of HBM222 Marketing Planning, a report on marketing plan for Secret recipe. Marketing plan included information and background about Secret recipe, the process of strategy marketing, consisted of a target markets and a marketing mix. It’s also included time-related details such as expected costs and revenues for the strategy. . In this report, there were 6 main sections or parts.

The first part was introduction and situation analysis, provided some background about Secret recipe and contained an appropriate analysis of Secret Recipe including the SWOT analysis, macro environment analysis, and industry environment, critical success factors (CSF) and so on. The second part was Secret Recipe marketing objectives. This section provided an outline of Secret Recipe mission and objectives. The corporate objective of Secret Recipe is to provide to have annual turnover between 15%-20%.

Cash flow is to be positive every year. Other issues are corporate financial objectives, corporate non financial objectives gap analysis and rationales. The third part, we identified and analyzed possible strategic choices or options that, typically, involve a selection of particular target markets and segment markets into 3 segments, which are fun, family and health. Besides, we have proposed 1 new segment, convenience segment. Then we developed the major marketing mix components, the 4Ps (products, promotion, price, place).

Generally, the strategy also included a positioning statement and described the desired image that the marketing mix will be designed to elaborate and reinforce. We recommended new products development in the existing segments and also the new segments. The new products in this strategic marketing plan is not only to change and satisfy the needs of the consumers but also to achieve the company’s mission of targeting long term profit and sales by providing high quality and healthy food products to the consumers. In the fourth section, we provided yearly budget form year 2005 to 2008.

Specific budget are provided for major items of costs, such as manufacturing, promotion, raw material and services. For the fifth section, we provided monthly plan for the year 2009. We applied Product Life Cycle for the estimated time when the actions needed to be started and completed. We also included who will in charge of each time frame in each implementation plan for each product segment. Finally, in the last part of this report, we have identified whether planned activities are being accomplished successfully, and whether financial and other objectives, such as some market share, new product, performances are being achieved.

Secret Recipe needs to maintain its current good performance which has been achieved from its famous cakes and fusion food. Good quality and product distinction are always the two main criteria for it to achieve its business success. Other product categories such as beverages must have these criteria so that all products of Secret Recipe can penetrate into consumers’ taste and preferences. Certainly, a good and healthy budget is necessary for Secret Recipe to continue on its road to another business summit. 2. 0 Situation Analysis 2. 1 Business Definition and Scope 2. 1. 1 Corporate Overview

In 1997, Secret Recipe was officially launched as a household lifestyle cafe. Nowadays Secret Recipe has effectively establish its brand name in the international market which range to Malaysia, Singapore, Indonesia, Thailand, China and Philippines by the good quality of its cakes, fusion food and distinctive service. Secret recipe is a largest cafe chain in Malaysia with Halal certification awarded by Jabatan Kemajuan Islam Malaysia (JAKIM), Secret Recipe is committed to continue to adhere to the standards of preparation of all food in the restaurant in accordance to the regulatory guidelines.

Customers can always enjoy in confidence from more than 20 types of fusion food, 40 cake creations and pastries, with a flavorful range of ice cream and beverages offered in all Secret Recipe outlets. Secret Recipe promises to give the best satisfaction to all its valuable customers. StatesNo. of outlets Kuala Lumpur46 Selangor48 Perak5 Penang9 Johor11 Melaka 4 Negeri Sembilan5 Kelantan2 Kedah5 Pahang 3 Sabah 2 Sarawak2 Terengganu1 Currently, Secret Recipe has 143 outlets and they hope to open more than 160 outlets of Secret Recipe throughout the Asia.

In the past 5 years, Secret Recipe has registered an impressive double-digit growth. In a short period of ten years, Secret Recipe has experienced a rapid growth of over 150 cafes throughout the region. Secret Recipe has earned numerous accolades every year for its performance. Secret Recipe continuously strives to surpass its own accomplishments and to be recognized as a leader in the industry. 2. 1. 2 Nature of Markets 2. 1. 3 Secret’s Recipe Products There are some major products of Secret Recipe. The table below illustrates the brands under each Product Line. Width of Product Mix

Depth of Product LineKids’ MenuFusion Menu Food Kid’s burger, Kid’s Fish and Chips, Kkid’s Spaghetti Bolognese. Japanese Soba, Roasted Chicken with Turmeric Sauce, Prawn Macaroni with Cheese, Pan-grilled Dory with Lobster Sauce, Thai Style Fried Rice, Tom Yum Spaghetti, Irish Lamb Stew, Curry Seafood Laksa, Thai Style Noodles, Spaghetti Meatballs, Lasagna (Pasta), Fish and Chips, Caribbean Style Seabass (Fish and Lamb), Grilled Black Pepper Chicken, Grilled Mushroom Chicken. Width of Product Mix Depth of Product LineHealthy MenuBrowniesChocolate cakes and CreamCheese Cakes

Hi-fibre cream cheese, Sugar free moist chocolate, Trans fat free peach cream. Garden Salad, Vegetarian SobaApple cheese slice, Brownies walnut, Carrot slice, Prune slice, Super supreme. Black forest, Chocolate chip walnut, Chocolate fudge, Chocolate indulgence, Chocolate strawberry, Mango delight, Moist chocolate cake, Tiramisu, White chocolate macadamia. Apple crumble cheese, baked cheese, Blueberry cheese, Cappuccino cheese, Caramel cream cheese, Cheese choc, chocolate cheese, Classic cheese, Espresso cheese, Lemon cheese, Marble cheese, New York cheese, Oreo cheese, Raspberry cheese, Yogurt cheese.

Width of Product Mix Depth of Product LineBeverages Orange Juice, Green Apple juice, Cappuccino, Espresso Macchiato, Mocha, Cafe latte, Pepsi, 7-up, Organic Tea, Secret Recipe sky juice, Ice lemon tea, 2. 1. 4 Competitors Nowadays, Secret Recipe is an international lifestyle cafe that provides many choices in beverages, meals and desserts to its customers. There are few potential competitors that could affect the business of Secret Recipe. Secret Recipe’s major competitors in Kuching are Starbucks and The Junk which is almost provides same products.

However, Secret Recipe has its own power compares to another lifestyle cafes in Sarawak since others do not provide wide range of products as Secret Recipe does. 2. 1. 5 Customers Customers of Secret Recipe could enjoy its delicious cakes by directly approaching the nearest Secret Recipe cafe. Moreover, the member of Secret Card owners can enjoy the discount privilege that is provided by Secret Recipe. There are four group of consumer, and these are shown in the table below: SegmentDemographic ProfileCore EssenceProducts Fun & LeisureKids, teenagersKids and teenagers are fond of ice-cream, cake and junk food.

Kids’ meal, side order such as French fries, Cheese Cakes, Brownies, Orange Juice, Green Apple Juice, Soft Drink, Coffee beverages. Health Health-conscious customers, aged customersSociety concern more on health issues nowadays. Vegetarian Soba, Garden Salad, Hi Fibre Cream Cheese, Trans Fat Free Peach Cream Cake, Sugar Free Moist Chocolate. FamilyFamilies with childrenFamily can enjoy leisure time together while having their meals. Fish and Chips, Pasta, Thai Style Noodles, Grilled Black Pepper, Chicken soup, and other fusion food. 2. 2 Macro Environment Analysis . 2. 1 Political and Legal As Secret Recipe is expanding internationally, trade restrictions, tariffs, tax policies and employment laws that related to their business countries have influence upon Secret Recipe. For instance, tax policies will affect on the cost of the raw materials in making their products. As Malaysia is a Muslim country, Secret Recipe has a legal regulation of Halal Certification by Jabatan Kemajuan Islam Malaysia (JAKIM) which ensures that all meals and beverages are safe to be consumed by Muslim people. 2. 2. 2 Economic

Economic is getting well and stable in Malaysia since economic crisis and Malaysian people tend to spend more in their meals and drinks. Malaysia’s unemployment rate fell sharply from 3. 4% in the June quarter to 3. 1% in the third stanza which considered as low. As Malaysia has stable economy, it can ensure the business will not be affected. However, the inflation rate and consumer price index will influence the cost of the raw materials which may be increase. The risk should be taking into account to avoid losing. This is because raw material is one of the factors that will influence the industry. 2. 2. Social-cultural The social and cultural influences on business vary from country to country. Social factors include the demographic and cultural aspects of the external environment. These factors affect customers’ needs and the size of the potential market. In Malaysia, many employees avoid to cook by themselves. They tend to have their meals outside as it could save their time. It is very common for us to see people spending their time with colleagues, friends or even with family for meals. This is the culture of Malaysians since years ago and has proven that those people have higher standard of living.

As a result Secret Recipe is the best choice for them, as different consumers could have different kind of needs and wants at the same time and place which is Secret Recipe. The consumer spending pattern is changing as more and more people are going to cafe instead of going to local food stall (known as “kopitiam”) especially for teenagers. They would like to spend more to have higher quality of foods and drinks in comfortable environment. However, there is large amount of market share having a piece of cake or food and drink in the open air food stall (known as “kopitiam”) as it is cheaper compared to restaurant or cafe.

As a result, majority of people who are going to Secret Recipe is the middle or high status society adults. 2. 2. 4 Technological As Secret Recipe is an international cafe that operated in many countries in Asia, it needs high technology to have their information flow and share among each outlet. Moreover, the information gathered also need to be analyzed before presented to the manager by using computer technology. Another technology such as electronic mixer is used to make sure the ingredients for baking cake and pastries are mixed well in a correct timing.

As well as Wincool Refrigerator (WCR) that is used by Secret Recipe is to allow Secret Recipe to offer the highest standard quality products by keeping the raw materials and cakes fresh. Nuova Simonelli’s blender also helps in blending coffee or fruits. Moreover its computerized baking oven and electric stove also allow the company to create unique computerized curved in baking and cooking which make the cakes, pastries and foods taste greats. With the helps of those different kind of machines, and of course its own secret recipe, it will be able to standardize their products especially cakes to customers all over their cafes. . 2. 5 Natural environment including Ecological Factors Concerning about health issue, Secret Recipe proudly invites consumers to its restaurant as it serve healthy yet yummy dishes, beverages and desserts. It makes sure that all products are safe to be consumed by anyone at any ages. Moreover, Secret Recipe also maintains the nutrition of their products’ balance. This can be transparently seen from their main dishes, Pan-Grilled Dory with Lobster Sauce. Fish are loaded with omega-3 for children and if you are pregnant, for your unborn child.

However, as global warming is getting concern, Secret Recipe participates in giving consideration towards environment. The take-away cake is wrapped nicely with a cardboard box. It is very safe for environment as it is recyclable. 2. 3. Industry Environment 2. 3. 1 Market Industry Review 2. 3. 1. 1 Current Market Status Comparing to another food outlets like The Junk and Starbucks that are currently available in Sarawak, Secret Recipe can be considered as unique cafe. It provides numerous of menu, from local to international dishes as well as desserts such as cakes, pies, brownies which it is well-known of.

This kind of condition describes how wide its target market is. Generally, Secret Recipe’s market is targeted to white-collar which has medium to higher income. However, today’s teenager seemed not to be very concern on how much is needed to spend on what they are consuming. This is good news for cafe like Secret Recipe as the price of menus are not longer become the obstacle. Moreover, this condition will result in wider market for this industry. 2. 3. 1. 2 Forecasting Future Market Condition The chart above is about the GDP of Malaysia from year 2001 to 2006. In 2001 and 2003 Malaysia GDP had expansion.

During 2004 small contraction was happened, however, in the early 2005 it starts to increase. This condition tells that the economy growth in Malaysia is relatively stable; it increase and remain stable, though when contraction was happened it was followed by the expansion of increase in the GDP growth. Overall, we can conclude that the economy growth in Malaysia is constant which mean to say that future market condition will not really affected as the economy growth was not fluctuating. As the result, Secret Recipe’s future market will not be affected by the changes of economy growth.

Technology advance is one of Secret Recipe’s successful keys to be granted by numerous of awards. However, technology also could lower the barrier of industry as advance machines are affordable by Competitors. This will enable them to come out with better method and taste of cakes in short period of time. Providentially, Secret Recipe always comes out with effective and efficient strategic to satisfy their customers, for example by improving its kitchen technology. As well as welcomed and served by friendly staffs with great smiles, also one of the keys.

If this condition is keep on effectively, in the future, Secret Recipe will not need to be anxious on other competitors for its future market even though those competitors are international recognition. 2. 3. 2 Competitive Review 2. 3. 2. 1 The Competitive View of Secret Recipe CharacteristicsSecret RecipeThe JunkStarbucks Geographic Market that CompeteHome-grown cafe of Malaysia, but its business starts to spread to Singapore, Thailand, and Indonesia. Local restaurant which offer similar products and services with Secret Recipe. International cafe. Established Year199720031971

Customer BaseModerate to high income customers. Moderate to high income customers. Moderate to high income customers. Competitive StrategyDifferentiation strategy. Secret Recipe focuses more on cake menus and differentiates its cakes from its competitors. Differentiation strategy. The Junk differentiates its atmosphere by adopting the ancient theme. It focuses on western food menus. Differentiation strategy. Starbucks focuses on coffees and provide variety of coffee beverages. Varieties of CakeMore than 40Approximately 10 Approximately 15 WIFI ServiceNot availableNot availableAvailable

PriceModerate to high priceModerate to high priceHigh price Current Market PerformanceMajor in cakes. Major in meals. Major in beverages. CapabilitiesWell-known in Asia countries. Popular among local customers. Therefore, some local customers are loyal towards The Junk. Well-known internationally. VulnerabilitySecret Recipe has wide market but it takes time for it to segment its market. Only target the local customers. Starbucks target market scope is narrow as it targets more on the coffee lovers. Move that we would make effective retaliationSecret Card has been established to reward the frequent consumers.

For the customers who apply this card, they can enjoy the benefits such as 10% discount off total bill, receive discount vouchers and etc. The Junk Restaurant seldom creates promotion. Starbucks creates a promotion package called ‘Starbucks Gift Certificates’. When we think of something to get for our friends’ birthday or reward our customers and employees, Starbucks Gift Certificates make great gift for all occasions. 2. 3. 2. 2 Porter’s 5 Forces Model 1The threat of entry of new competitors (moderate): Secret Recipe needs not to scare about the new entrants as they have good image and reputation throughout Malaysia.

Besides, one of its strengths is that it is a nationwide cafe as compared to other food outlets in Sarawak such as The Junk Restaurant. The nationwide characteristic of Secret Recipe adds up the barrier of entry to the other local cafes. However, when Secret Recipe is compared to the international cafes like Starbucks, the threat of new entrant will be relatively high. If a new competitor provides the same food as Secret Recipe, it may face difficulties. Moreover, if the price offering is cheaper than Secret Recipe, it is definitely a bad news for Secret Recipe. The threat of substitute products or services (high): There are lots of substitute products and services for Secret Recipe in Sarawak. For example, Starbucks and The Junk sell cakes and pies which are also available in the menu of Secret Recipe. Besides, the prices of products in these three food outlets are more to moderate and high. As a result, consumers need not to hesitate by comparing the prices before they go to one of the cafes. Customer may easily shift their taste and go the other food outlet if there are many substitutes. In this situation, product demand is affected by the price change.

Therefore, Secret Recipe need to set its product prices carefully. 3The bargaining power of customers (low): Due to the variety of food offered in Secret Recipe, it has quite a large number of consumers. Although some of its products are quite similar to Starbucks’ products, but it differentiate its menu by providing fusion food which cannot be seen in the Starbucks’ menu. Therefore, we can conclude that Secret Recipe has low bargaining power of customers. 4The bargaining power of suppliers (high): The suppliers of Secret Recipe in Sarawak are only the local suppliers.

Therefore, it cannot bargain too much with them. Besides, the supplier’s factories are located within a district, the freight costs are low. Subsequently, the business costs of Secret Recipe become lower as they have local suppliers. 5The rivalry among existing firms in the industry(moderate): Consequently, Secret Recipe has a moderate rivalry among existing firms. Although the threat of substitute products and services as well as the bargaining power of suppliers are high, it still have a particular group of customers which have good impression towards the variety and differentiated food provided.

Moreover, Secret Recipe imposes barrier to entry among the new entrants as it is popular throughout Malaysia. 2. 3. 3 Distribution Channels Secret recipe cakes and cafe itself is the manufacturer who assembles all the different types of cakes, food and drinks. It act as retailer to sell the cakes and food within the same outlet and finally sells it to the same users. 2. 3. 4 Customers Secret Recipe’s marketers need to identify the roles of customers in the buying process. Although only the buyer can make an actual purchase, but initiators, influencers, deciders, and users can affect the sales and profits of Secret Recipe as well.

As cakes contribute most to the sales in Secret Recipe, we take an example in the cakes buying process. Most cakes have been segmented as having fun and leisure characteristics. The kids and teens are the initiators because they can be easily fascinated by the appearances of the cakes. The influencers in this situation are either friend or parents. After receive some advices or opinions from the influencers, they act as deciders to decide which cakes to buy. The buyers will be parents who have the financial abilities or teens who have taken money from parents.

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