The viability of maxis venture in coffee industry in malaysia

Major Project: A Business
Development Proposal
The Viability of Maxis’ Venture into Coffee
Industry in Malaysia
Master of Business Administration
Cardiff Metropolitan University
SARA YEAP TH’ENG TH’ENG
0008VMVM0112
6/17/2013

i

EXECUTIVE SUMMARY

Maxis Berhad has been the market leader in Telecommunication industry in Malaysia for many
years and their continuous efforts in upgrading and maintaining its services delivering to its
customers had earned them numerous awards in recent years. Nevertheless, the intense rivalries
with partnership strategy emerged had starting taking a toll on Maxis’s performance; number
Postpaid and Prepaid subscribers had declined as well as the new number of subscriber too,
slowing down which resulted depleting in market share with only 3% ahead of Celcom, its
strongest rivalry.
On the contrary, food and drinks related businesses had been picking up real fast, gaining
countless profits. The current trend of FAFH (Food-Away-From-Home) had grown more than
17%, assisted the development of FAFH in Malaysia by generating more than RM16,312 million
as of 2007. Additionally, the raising income and rapid urbanization in Malaysia, particularly in
the state Kuala Lumpur, Penang and Johor had further increased the averagely household
expenditure on food statistics because of workload.
The initial objective of this development plan is to testify the high opportunity for Maxis to
venture into food & drinks industry, especially into coffee industry which populated the food &
drinks industry by more than 55%; while the second objective is research on the possibility of
increased Maxis subscriber pool via this café.
This plan had included the reviews of current market trends of food and drinks industry in
Malaysia, coffee industry in Malaysia, a closed-up study of consumer’s purchasing behavior in
café (coffeehouse) and eventually, the brand extension effects from different industry as seeing
Maxis operating a coffeehouse may confuses their consumers. All these reviews are
accompanied with research surveys and interviews which are represented in graphical charts.
Towards the end of this business development proposal, there will be marketing plan, operational
& organizational plan, implementation plan, contingency plan and ultimately, the financial plan
that covers the projection of few important statements namely annual sales, cash flows and
etcetera.

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Table of Contents
EXECUTIVE SUMMARY ......................................................................................................................... II
TABLE OF FIGURES ................................................................................................................................ VI
LIST OF TABLE ...................................................................................................................................... VII
CHAPTER 1 INTRODUCTION ................................................................................................................ 1
1.0

BACKGROUND & CONTEXT ................................................................................................... 1

1.0.1

The Organization................................................................................................................... 1

1.1.1

The Prestigous Memory Lanes ............................................................................................. 2

1.1.2

Their Breadwinners ............................................................................................................... 3

1.1.3

The Rivalry-edge................................................................................................................... 4

1.1.4

The Profit-Margin ................................................................................................................. 5

1.1

BUSINESS OPPORTUNITY ....................................................................................................... 6

1.2

THE PURPOSE AND RATIONALE ........................................................................................... 7

1.3.1
1.4

The Rationality...................................................................................................................... 7

TERMS OF REFERENCE ........................................................................................................... 9

1.4.1

Research Questions ............................................................................................................... 9

1.4.2

Research Objectives .............................................................................................................. 9

1.4.3

Research Framework............................................................................................................. 9

CHAPTER 2 BUSINESS REVIEW ......................................................................................................... 10
Factor 1: Market Trends of food and drinks industry in Malaysia ......................................................... 10
2.1.1

Franchising Division ........................................................................................................... 11

Factor 2: The effects of brand extension from different industry ........................................................... 12
Factor 3: Coffee Industry Market characteristics in malaysia ................................................................ 14
2.3.1

Coffee Influences in Malaysia ............................................................................................ 14

2.3.2

Coffee Industry Analysis in Malaysia ................................................................................. 16

Factor 4: Malaysians’ purchasing behavior in coffee industry which influenced by essential market
characteristics.......................................................................................................................................... 17
CHAPTER 3 RESIGN DESIGN............................................................................................................... 20
3.1

INFORMATION NEEDS SPECIFICATION ............................................................................ 20

3.2

RESEARCH METHODOLOGIES............................................................................................. 22

3.2.1

Sampling Unit .................................................................................................................... 22
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3.2.2

Sampling Size ..................................................................................................................... 22

3.2.3

Sampling Method ................................................................................................................ 23

3.2.2

Sampling Location .............................................................................................................. 23

3.2.4

Collection Method............................................................................................................... 23

3.2.5

Ethical Issue ........................................................................................................................ 24

3.3

QUESTIONNAIRE DESIGN ..................................................................................................... 24

CHAPTER 4 DATA ANALYSIS ............................................................................................................. 25
4.1

PRIMARY DATA ANALYSIS.................................................................................................. 25

4.1.1

Demographic ....................................................................................................................... 25

4.1.2

Consumer’s Purchasing Behavior ....................................................................................... 26

4.1.3

Products............................................................................................................................... 29

4.1.4

External Factors .................................................................................................................. 33

4.2

BUSINESS IMPLICATIONS..................................................................................................... 35

CHAPTER 5 BUSINESS MODEL........................................................................................................... 38
5.1

OVERVIEW ANALYSIS........................................................................................................... 38

5.2

CORE STRATEGY .................................................................................................................... 38

5.3

COMPETITIVE ADVANTAGES AND SUSTAINIBILITY .................................................... 41

5.3.1 SWOT Analysis ......................................................................................................................... 41
5.4

STRATEGIC GROWTH OPTIONS .......................................................................................... 42

5.5

PARTNERSHIP NETWORK ..................................................................................................... 43

5.6

THE BUSINESS CANVAS MODEL ........................................................................................ 44

CHAPTER 6 BUSINESS PLAN .............................................................................................................. 45
6.1

OBJECTIVES ............................................................................................................................. 45

6.2

MISSION .................................................................................................................................... 45

6.3

KEYS TO SUCCESS ................................................................................................................. 46

6.4

MARKETING PLAN ................................................................................................................. 46

6.4.1

Product ................................................................................................................................ 46

6.4.2

Price .................................................................................................................................... 47

6.4.3

Place .................................................................................................................................... 48

6.4.4

Promotion ............................................................................................................................ 49

6.4.5

Process ................................................................................................................................ 49

6.4.6

Physical Evidence ............................................................................................................... 49

6.4.7

People.................................................................................................................................. 50
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6.5

ORGANIZATIONAL/OPERATIONAL PLAN ........................................................................ 50

6.5.1

Organizational Plan ............................................................................................................. 50

6.5.2

Operational Plan.................................................................................................................. 51

6.6

FINANCIAL PLANNING .......................................................................................................... 53

6.6.1

Start-Up Cost ...................................................................................................................... 53

6.6.2

Projected Cash Flow ........................................................................................................... 54

6.6.3

Projected Balance Sheet ...................................................................................................... 54

6.6.4

Projected Profit and Loss Statement ................................................................................... 55

6.6.5

Annual Sales Forecast ......................................................................................................... 55

6.7

IMPLEMENTATION PLAN ..................................................................................................... 56

6.8

CRITICAL SUCCESS FACTOR ............................................................................................... 57

6.9

CONTINGENCY PLAN ............................................................................................................ 57

REFERENCES ........................................................................................................................................... 58
APPENDICES ............................................................................................................................................ 62
Appendix A ............................................................................................................................................. 62
Appendix B ............................................................................................................................................. 63
Appendix C ............................................................................................................................................. 64
Appendix D ............................................................................................................................................. 65
Appendix E ............................................................................................................................................. 66
Appendix F.............................................................................................................................................. 67
Appendix G ............................................................................................................................................. 68
Appendix H ............................................................................................................................................. 69
Appendix I .............................................................................................................................................. 70

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TABLE OF FIGURES
Figure 1.1 Maxis’s Corporate Structure.......................................................................................... 2
Figure 1.2 Maxis Significant Milestones ........................................................................................ 3
Figure 1.3 Maxis’s Customer Groups ............................................................................................. 4
Figure 1.4, Malaysia Wireless Market, Q212 ................................................................................. 4
Figure 1.5 Telcos EBITDA Margin Trend in Malaysia .................................................................. 5
Figure 1.6 Earnings Growth versus Dividend Yield ....................................................................... 6
Figure 1.7 Growing Trend of Restaurant and Cafes in Malaysia ................................................... 7
Figure 1.7 Postpaid Mobile Subscribers

Figure 1.8 Prepaid Mobile Subscribers....................... 8

Figure 2.1 Expenditure per Household on FAH and FAFH ......................................................... 10
Figure 2.2 Franchising Business Sector in Malaysia .................................................................... 12
Figure 2.3 Mean frequency of beverages consumed daily by population .................................... 15
Figure 2.4 Porter’s 5 Forces Analysis on Coffee Industry in Malaysia ........................................ 16
Figure 2.5 Health Benefits of Tea vs Coffee ................................................................................ 17
Figure 2.6 Top Five Must Have Physical Characteristics in Coffeehouse ................................... 19
Figure 3.1 Types of Research Design ........................................................................................... 22
Figure 4.1 Number of Maxis’s Subscriber .................................................................................... 25
Figure 4.2 Age Group ................................................................................................................... 25
Figure 4.3 Respondents’ Occupation ............................................................................................ 26
Figure 4.4 Income Level vs. Frequent Visit to Coffeehouses....................................................... 27
Figure 4.5 Purpose of Visiting the Coffeehouse ........................................................................... 27
Figure 4.6 Average amount of Time Spent in Coffeehouse ......................................................... 28
Figure 4.7 Willingness to try new Coffeehouse regardless of its Brand ...................................... 28
Figure 4.8 Promotions and Discounted rates as the factor to dine in Coffeehouse ...................... 29
Figure 4.9 Set Menus as the factor to dine in Coffeehouse .......................................................... 29
Figure 4.10 Visit Frequency on selected Coffeehouses ................................................................ 30
Figure 4.11 Preferred Drinks in Coffeehouse ............................................................................... 31
Figure 4.12 Beverages form preferred .......................................................................................... 31
Figure 4.13 Internal Factors Rating in Coffeehouses ................................................................... 32
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Figure 4.14 External Factors Rating in Coffeehouses .................................................................. 33
Figure 4.15 Will you visit the coffeehouse opened by Maxis? ..................................................... 33
Figure 4.16 Possibility of Converting to Maxis for Benefits ........................................................ 34
Figure 4.17 Possibility of Influencing Friends & Families into Maxis for Benefits .................... 34
Figure 5.1 Ansoff’s Growth Matrix .............................................................................................. 39
Figure 5.2 The Strategy Canvas of Styl-Fé ................................................................................... 42
Figure 5.3 The Business Canvas Model for Styl-Fé ..................................................................... 44
Figure 6.1 The marketing mix (7P model).................................................................................... 46
Figure 6.2 Nescafé Dolce Gusto Circolo & Capsules................................................................... 47
Figure 6.3 Styl-Fé Charges on Discussion Rooms ....................................................................... 48
Figure 6.4 Organizational Chart for Styl-Fé ................................................................................. 50
Figure 6.5 Styl-Fé’s Value Chain ................................................................................................. 51
Figure 6.7 Styl-Fé Implementation Plan (3 years) ........................................................................ 56

LIST OF TABLE
Table 1.1 Summary of Brand Extension Strategy ........................................................................ 14
Table 3.1Information Needs Matrix ............................................................................................. 21
Table 3.2 Total Sampling Size ...................................................................................................... 23
Table 3.3 Questionnaires design ................................................................................................... 24
Table 5.1 Business Strategy with Ansoff’s Matrix ....................................................................... 40
Table 5.2 Maxis SWOT Analysis ................................................................................................. 41
Table 5.3 ERRC Strategy Canvas for Styl-Fé .............................................................................. 43
Table 6.1 Start-Up Assets ............................................................................................................. 53
Table 6.2 Start-Up Expenses......................................................................................................... 53
Table 6.3 Projected Cash Flow ..................................................................................................... 54
Table 6.4 Projected Balance Sheet................................................................................................ 54
Table 6.5 Projected Profit and Loss .............................................................................................. 55
Table 6.6 Annual Sales Forecast ................................................................................................... 55
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MBA Business Development Proposal – Viability of Maxis’ Venture into Coffee Industry in Malaysia

CHAPTER 1

INTRODUCTION

1.0 BACKGROUND & CONTEXT

Maxis Berhad is the top notch wireless telecommunication service provider in Malaysia;
grabbing the most market share by having more than 14 million subscribers nationwide and with
the award of “Best Telecommunication Company” for consecutively few years which was
conceitedly established by Ananda Krishnan, an entrepreneur in 1993 (Maxis Berhad, 2012).
Maxis Berhad made its way to the main board of Bursa Malaysia in year 2009 and is currently
being listed as the first largest public listed company in Malaysia (Ang, 2011 &Bursa Malaysia
Berhad, 2012).
The head-quarter is situated within Maxis Tower in the heart of Kuala Lumpur adjacent to the
PETRONAS Twin Towers (KLCC). The focal point of their businesses are mainly on offering
mobile services (voice & SMS), mobile devices for individual consumers, SMEs to large
corporations in Malaysia (Wikipedia, 2012). An overview of products and services are listed as
follows:
i.

Monthly subscription plans buddle with selective mobile devices

ii.

Maxis Internet Broadband Service (4G/LTE)

iii.

Prepaid call plans (Hotlink)

iv.

International Roaming Services (partnering with multi-countries telecommunications
service provider)

1.0.1 The Organization
Maxis’s success is led by fellow directors for the past decades and the current chair-person and
chief Executive Officer positions are chaired by Raja Tan Sri Dato’ Seri Arshad bin Raja Tun
Uda and Sandip Das respectively with more than 20 years of experiences in managing highly
profiled organizations to each (The Board of Directions structure is presented in Appendix A).

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With their long-term strategic leadership skills, Maxis had prevailed and retained its market
share and profits through fierce competitions and fast-evolving technologies. While efforts and
resources are spent on maintaining and improving its existing products/services, Maxis once
again had proven its capability by being the first to bring in 4G LTE (abbreviated as Long-Term
Evolution) technology into Malaysia, recapturing the public interests and confidence towards
Maxis.
Maxis Berhad is co-operating with its co-operatives (subsidiaries) which each handles different
operations and tasks altogether. It is a large corporation which made up of 11 entities with 100%
owned by Maxis except for one subsidiary – Advanced Wireless Technologies SB which
embraced 75% of shares which is clearly depicted in figure 1.1.
Figure 1.1 Maxis’s Corporate Structure

Maxis Berhad

Maxis Mobile Sdn Bhd 100%

Maxis Mobile (L) Ltd 100%

Maxis Broandband Sdn
Bhd - 100%

Maxis Online Sdn Bhd 100%

Maxis International Shd
Bhd

Maxis Asia Access Pte Ltd
- 100%

Maxis Mobile Services
Sdn Bhd - 100%
Advanced Wireless
Technologies Sdn Bhd 75%

UMTS (Malaysia) Sdn Bhd
- 100%

Maxis Collections Sdn
Bhd - 100%
Maxis Multimedia Sdn
Bhd - 100%

Source: Maxis Annual Report, 2012

1.1.1 The Prestigous Memory Lanes
The establishment of Maxis had opened up a wide horizon of Malaysians towards sophisticated
technologies such as being the first to introduce GPRS, 3G, HSDPA and even 4G LTE which
allowed users to surf Internet and enjoy videos streaming up to 150 Mbps, building up a mega
network infrastructure that leads its competitors to tag along.

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Throughout these uproar years, Maxis managed to withstand the rough competitors in terms of
competing attractive price and packages (buddle plans & mobile devices) while continuously
improving their network coverage and services had absolutely earned them numerous awards
(see Appendix B for latest awards gained in year 2012). Figure 1.2 presents their most
remarkable milestones in their years of services.
Figure 1.2 Maxis Significant Milestones
Maxis was the pioneer that led Malaysian market in delivering innovative mobile products and
services
Maxis was the first mobile communications service provider to launch 3G services in
Malaysia which is known as Maxis 3G
In between year 2005 and 2006, Maxis made it to become among the world’s first to use
HSDPA, a high-speed mobile network of its 3G network. At the mean time, it diverted to
also provide wireless broadband services
Maxis was the first mobile operator that brought in Blackberry and Apple iPhone smart
phones to Malaysia

Maxis once again taken the lead to launch 4G LTE (Long Term Evolution) in July 2012

Source: Adapted from Maxis Annual Report, 2011 & 2012

1.1.2 Their Breadwinners
Presently, Maxis segregated their targeted customers into four main groups, to each focusing on
delivering different products and services (see figure 1.3). They are primarily the family and
friends, working adults, corporations such as partnering with companies on contract basis to
provide telecommunications services which include mobile packages and network cable
infrastructure solutions and lastly, the students with affordable prepaid plans.

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Figure 1.3 Maxis’s Customer Groups

•POSTPAID with
supplementary
lines

•Mobile Plans
•Portable
broadband plan,
product and
services
•Tablets Plans

Family and
Friends

Working
Adults

Corporations

Students

•Corporate Mobile
plans
•High speed
broadband plans
and services

•HOTLINK Youth
CLUB plan
•Broadband plan

Source: Adapted from Maxis Bhd Annual Report, 2010

1.1.3 The Rivalry-edge
There are only 3 key players in telecommunication industry in Malaysia as it is considered a very
niche market which requires sky-high cost in purchasing and maintaining high-tech equipments
such as communication towers, servers, switches and etcetera. They are nevertheless Celcom,
DiGi and the newest rival – U-Mobile. Albeit Maxis still detaining the highest market share as
depicted in figure 1.4, there is a possibility to be dominated soon by Celcom, sharing network
with DiGi as it is only differed by less than 2% (650) subscribers.
Figure 1.4, Malaysia Wireless Market, Q212
Operator

No. of Subscribers (mn)

Market Share (%)

Maxis Communications

12,696

36.3

Celcom

12,031

34.4

DiGi

10,304

29.3

Total

34,956

100.0

Source: Business Monitor International, 2013

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1.1.4 The Profit-Margin
The financial highlights in 2012 for Maxis are having a revenue of RM9 billion with revenue
growth of 1.9% YoY. With RM1.9 billion of Profit after Tax that was lower by RM671 million
(26.5%) for YoY (Maxis Berhad, 2012). The reason being was throwing in lump sum of funds in
expanding its network to 4G/LTE and losing its market share to its rivalries. Nevertheless, Maxis
still retaining RM2.1 billion of free cash flow with net debt to EBITDA ratio at 1.46 and net debt
to Equity ratio at 0.90 (Maxis Berhad, 2012), permitting cash flow for additional activities and in
time of crisis.
While comparing its EBITDA to its rivalries, although there were so hiccups in year 2010 and
2011, Maxis still managed to fair it well in year 2012 (see figure 1.5).
Figure 1.5 Telcos EBITDA Margin Trend in Malaysia

Source: Kenanga Research, 2012

Regardless of its performance in recent years, Maxis had paid up to RM3.0 billion of dividends
to its investors and shareholders as a form of appreciation (Maxis Berhad, 2012). It is also one of
their strategies by allowing more investors to buy their shares as a technique to ‘loan’ money
from the public for its product developments simultaneously. Figure 1.6 displayed a high yield
dividend payouts compared to its rivalries despite its earnings growth. This showed the
confidence and establishment of Maxis to their investors.

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Figure 1.6 Earnings Growth versus Dividend Yield

Source: Maybank IB, 2012

1.1

BUSINESS OPPORTUNITY

The food and drinks service industry is observed as the largest and continuous growing industry
in Malaysia with an average of 2% increased for successively 3 years, which made up to 55.9%
of contribution to Malaysia economic as at March, 2013(see Appendix C) (Department of
Statistics Malaysia, 2013). This percentage signifies that Malaysians averagely spent more than
50% of their monthly income just on meals itself while the rest goes to clothing, health, transport
and etcetera.
Malaysians hectic lifestyles specifically in urban areas had contributed the increased trend of
food-away-from-home (FAFH) by dining out frequently. According to Tan and Lee (2007),
food-at-home (FAH) practice had declined from 33.7% to 22.2% while FAFH had rose from
4.6% to 10.9% in contrast with less than 10 years. Predictably, FAFH will continue to rise at
1.5% to 2% every year.
Given that the growing trend of FAFH and increasingly fast-paced; cosmopolitan lifestyles of
Malaysians, more development of mega malls had emerged or upgraded to cater such needs.
Among of them are The Curve, Mid Valley, Sunway Pyramid, Centrepoint Bandar Utama Phase
2, Citta Mall in both urban and rural areas. This further advocated the amount of new restaurant
and cafes serving coffee specialty and food had increased terrifically over the years (see figure
1.7).
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Figure 1.7 Growing Trend of Restaurant and Cafes in Malaysia
250

No. of Outlet

200
Starbucks
150

Coffee Bean
Dome Café

100

Black Canyon
Papparich

50

Old Town
0
2009 2010 2011 2012 2013
Years
Source: Various Corporations’ Website (2013)

To summarize, the business opportunity derived from the three points below:
i.

Food and drinks industry is the largest contributor to Malaysia’s economy

ii.

Food-Away-From-Home (FAFH)’s demand continuously shift upwards, soliciting
supplies

iii.

1.2

The rapid development and expansions of restaurants and coffeehouses in Malaysia

THE PURPOSE AND RATIONALE

The purpose of the business development plan (BDP) is to identify and study the important key
areas to facilitate the feasibility of Maxis venturing into coffee industry; starting from the urban
area – Klang Valley. It will include an overview of the business with marketing strategy,
financial prospective, operations outline and exit strategy as well.
1.3.1 The Rationality
The rationality behind this BDP is to discover the possibility of diversifying into the fast growing
industry – food and drinks services narrowing down to coffee sector from telecommunication
industry for Maxis. Why Maxis, many will ask. It is no longer a bombshell to see market players
from different diligence joining the bandwagon of profitable F&B industry in Malaysia.

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Corporations like Renoma and SEED, are both seen actively operating their bars and café in the
heart of Kuala Lumpur.
Apart from alternative profit generating source, this BDP also seek to gain more Maxis
subscribers by simultaneously promoting their core products by venturing into coffee industry.
With attractive price, promotions and products from its rivalries, Maxis is seen losing its market
share gradually from both segments; Postpaid and Pre-paid users which presented in figure 1.7
and 1.8. If this situation continues, Maxis would suffer a detriment to their revenue, the trust
from shareholders and stakeholders soon.
Figure 1.7 Postpaid Mobile Subscribers

Figure 1.8 Prepaid Mobile Subscribers

Source: Business Monitor International (BMI), 2013

Additionally, BMI’s next 5 years forecast trend for Telecommunication industry in Malaysia also
stressed that the pattern of subscribers mostly would descend in urban areas due to market
saturation in mobility segment – Everyone will have at least one mobile line subscription at that
time!

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1.4 TERMS OF REFERENCE
1.4.1 Research Questions
The research questions for this PROJECT are listed as:
1. What are the current market trends in food & drinks industry in Malaysia?
2. What are the effects of brand extension in the context of business diversification for Maxis?
3. What are the market characteristics for coffee industry?
4. What are the influencing aspects of Malaysians purchasing behavior for coffee?
1.4.2 Research Objectives
To support the findings for the abovementioned research questions, the smart objectives are:
1. To analyze the current market trends in food & drinks industry in Malaysia, focusing into
Klang Valley
2. To learn the positive and negative effects of brand extension coming from different industry
3. To study the market characteristic that includes competitors’ analysis which will impact the
possibility of Maxis diversifying into coffee industry
4. To conduct a research on the influencing factors of Malaysians’ purchasing behavior towards
coffee
1.4.3 Research Framework
The entire research framework for this BDP covering the following factors:


Factor 1: Market Trends of food and drinks industry in Malaysia



Factor 2:: The effects of brand extension from different industry



Factor 3: Market characteristics in Coffee Industry



Factor 4: Malaysians’ purchasing behavior principally in coffee industry influenced by
essential market characteristics.

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CHAPTER 2

BUSINESS REVIEW

FACTOR 1: MARKET TRENDS OF FOOD AND DRINKS INDUSTRY IN MALAYSIA
As Malaysia advances to become a more developed country, hectic lifestyles had been engraved
into Malaysians particularly in the urban areas. This had cultivated their eating habit to be mostly
consumed outside, which in another word; food-away-from-home (FAFH). While food-at-home
(FAH) in contrast, had gradually became a burden to the career-minded mothers. Hence, the
comparison between are conducted in figure 2.1.
Figure 2.1 Expenditure per Household on FAH and FAFH

Source: Department of Statistics Malaysia, 2000

The household expenditure on FAH is seen steeping from 33.7% to 22.2% while FAFH rose
expectedly from 4.6% to 10.9% between year 1973 to 1999 (Department of Statistics Malaysia,
2000). The inputs from FAFH’s upward shift came from five main categories; dine-in restaurants
(including hotel coffeehouses), fast-food service outlets, food courts (hawker centers), coffee
shops and roadside hawkers. Each category has a clear cut on frequented income groups. For
instance, upper income groups usually prefer full range services, cozy and air-conditioned
ambience (Tan & Lee, 2007).
Given that the demand of FAFH grew vastly in Malaysia, the consumer food service market had
a 16% of increase in the consumer food service units to a total of 20,235 from year 1999 to 2003
(Euromonitor International, 2004). It assisted the development of FAFH industry in Malaysia by
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generating transactions of RM16, 312 million during the same period; grew from 22% to 39%
respectively. However, FAFH food service outlets had neglected health aspect in food
preparations, which later created awareness among the public to be more health conscious on
food selections. Tan & Lee (2007) produced a table consolidating responses from approximately
10,000 respondents and it concluded that 82% urban occupants compared to 59% from rural
occupants (see Appendix F)
While on the Malaysians’ average monthly household expenditure on food aspect, it increased
from RM1, 161 per month in 1999 to at least RM1, 937 in 2005; a survey conducted by Tey et
al. (2009). It is believed to grow constantly with the rising income and rapid urbanization in
Malaysia.
Additionally, the same researchers had concluded that the income elasticity of demand for FAFH
is relatively larger than income elasticity for FAH (Tey et al., 2009). Food Export Association
(US) on the other end provided a forecast on Malaysia’s foodservice market by envisaging from
an average growth of 6.5% per annum for the last 5 years, to be having a likely growth of 7-10%
per annum in the next 3 to 5 years; especially from the tourism industry (Food Export
Association of the Midwest USA, 2011).
2.1.1 Franchising Division
Looking into franchising division in Malaysia, Food & Beverage commanded one-third of the
market share at 31%, being the highest invested division by foreign investors that brought in
many foreign brands (see figure 2.2). Yet, it continues to be the best franchise prospect for
Malaysia today (Yeoh, 2009).

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Figure 2.2 Franchising Business Sector in Malaysia

Market Share (%)
Food & Drinks - 31%
Apparel & Accessories - 15%
Education - 11%
Services - 11%
Beauty & Health - 8%
Retail -4%
ICT - 4%
Others - 16%

Source: Ministry of Domestic Trade, Co-operatives and Consumerism, 2009

Many foreign investors seized this opportunity to bring their products into Malaysia especially
Taiwan and Korea thus the born of well-known ChaTime, Snow Fakes, Tong Pak Fu and more
dessert houses emerged in Malaysia F&B industry. Although similarity exists in their product
range, Malaysians particularly from urban areas were enthusiast and willing to spend on these
brands for the sake of being trendy (Food Export Association of the Midwest USA, 2011).
FACTOR 2: THE EFFECTS OF BRAND EXTENSION FROM DIFFERENT INDUSTRY
In today’s business aspect, brand is inevitably essential facet in determining the optimistic or
pessimistic outcome of a business. It plays an important role in delivering functional and
emotional values through products or services (Franzen & Bouwman, 2001). According to David
Aaker (1991) in his book of Managing Brand Equity, brand is defined as;
"A brand is a distinguishing name and/or symbol (such as logo, trademark, or package
design) intended to identify the goods or services of either one seller or a group of
sellers, and to differentiate those goods or services from those of competitors. A brand
thus signals to the customer the source of the product, and protects both the customer
and the producer from competitors who would attempt to provide products that appear to
be identical."

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A proper branding could discern the difference between similar products and competing brands
(Martinez & de Chernatony, 2004). Conversely, will consumers able to accept different products
emerge from the same brand which entirely differed from the original product?
Keller (1993) stated that “within the multidimensional brand images, direct associations are
seen with both products and aspects of the brand” thus through various methods of measuring
the dimensions of a brand’s image, brand extension is acceptable among the public (Aaker &
Keller, 1990). Brand extension strategy is perceived in reducing risk when launching new
products. It will also assist in reducing cost and efforts in communicating new products to the
public, simultaneously allows enhancing higher probability of success since consumers are
familiar with the particular brand’s history and strength (Tauber, 1981; Aaker, 1990; Aaker&
Keller, 1990). This has been one of the favorite diversification strategies followed in as many as
8 out of 10 new product launched (Ourusoff et al., 1992).
Many corporate utilized its well established image from existing brand to launch new products in
an entirely new market. Take the infamous Virgin Group for an example. It started off on
retailing and publishing of popular music; owned a radio channel. They took their brand
reputation and image as an opportunity to venture into new market and now they even owned air
lines, becoming a well reputed financial advisor and Cola producer (Randall, 2000).
Similarity of new products to the parent brand must exist to persuade greater success on brand
extensions (Aaker & Keller, 1990), however findings from Smith and Park (1992) proven
otherwise. Further findings from Wernerfelt (1988) demonstrated the importance of good
reputation from the parent brand as a supportive evaluation cue when unfamiliar brands are
presented publicly.
Many researchers conducted feasible tests on brand extension strategy which each concluded
different results from different hypothesis (see Appendix D).To consolidate and further
strengthen various findings, Dr Leif (2001); an Associate Professor and his researchers carried
out an experiment on factors namely; similarly, reputation, perceived risk and innovativeness as
the influencing factors on brand extensions’ acceptability on FMCG (Fast Moving Consumers
Good), durable goods and services brand. The results are as follows in table 1.1.

13 | P a g e

Table 1.1 Summary of Brand Extension Strategy
H1 – Consumer evaluates “similarity” more favorablyon

H2 – Consumer evaluates brand extensions more

FMCG, durable goods and service brand extensions

favorably when the parent brand has a strong

increases between the parent brand and the extension

“reputation”

category

The results is positive


H3 – Consumer evaluates brand extensions more

H4 – The more innovative consumers are, the more

favorably as the perceived risk of the new category

likely they are to evaluate brand extensions more

increases. For e.g.: a new car brand extended by a totally

favorably. This hypothesis emphasize on service

non relevant industry, the results is negative as it doesn’t

products such as telecommunication as it signifies

provide trust and confidence. While from telecom or car

innovativeness.

industry, extending its brand to durable goods and for
service products, the results are positive.

The results is partly positive


Source: Extracted from Dr Leif et al., 2001

To conclude, similarity perceived in the brand extensions from the parent brand is indeed a
crucial factor to be considered. However, if the brand extensions are being backed up by a
reputable and trustworthy parent brand, the likelihood of a successful brand extension is high.
Even so, bad brand extensions management could deteriorate parent brand image which could
confuse consumers, thus diluting the brand meaning which was established years ago.
FACTOR 3: COFFEE INDUSTRY MARKET CHARACTERISTICS IN MALAYSIA
2.3.1 Coffee Influences in Malaysia
Coffee is the most consumed beverages after water in the world with over 500 billion cups each
year and 15,000 cups every second! (Jeff, 2011). In Malaysia, the ideal hot preferences of
beverages are tea and coffee. They are consumed averagely 1.58 cups of coffee and 1.78 cups of
tea daily (see figure 2.3) (Norimah et al., 2008). Nevertheless, coffee is still the leading hot
beverage in Malaysia in value sales term (Euromonitor International, 2012)

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Figure 2.3 Mean frequency of beverages consumed daily by population

Source: Norimah, et al., 2008

The coffee industry in Malaysia has plenty room for growth with only 250 cups per capita
consumption in a year in comparison to the Western Europe countries and US that each has an
aveage of 500-600 cups per year (Kenanga Research, 2012). To accommodate to the high coffee
demand, Malaysia imports of coffee beans and related products continue to rise, reaching
600,000 tons of begs which each containing 60 kilograms of coffee beans from Indonesia,
Thailand and several other countries (Bernama Malaysia, 2008). Despite Malaysia’s increasing
domestic coffee bean output, it is still yet to meet the demand adequately. (Bernama Malaysia,
2008).
Old Town White Coffee (an origin white coffee manufacturer) started the café outlet chains in
year 2005 right when the coffee demand rose, grabbing this golden opportunity to boost its
profits while gaining market entries and acceptance in nationally and the region (White Coffee
Malaysia, 2013). Old Town White Coffee is a native product of Malaysia with 100 over years of
presence in Ipoh, Perak that is currently operating more than 180 outlets nationwide. They served
aromatic white coffee; consisted of Liberica, Arabica and Robusta coffee beans, roasted with
palm-oil margine and served with premium skim milk (White Coffee Malaysia, 2013).
The coffee segmentation in Malaysia is seen extended to not only targeting the adults, but also
the 17-21 age group.As coffee has been Malaysians’ daily diet, coffee sales are forecasted to
grow at CAGR(compound annual growth rate) of 8% in value constantly the next few years
(Euromonitor International, 2012). With face-paced lifestyles in the urban areas, instant coffee
has been the underlying reason contributed the coffee’s growth.
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2.3.2 Coffee Industry Analysis in Malaysia
Further study of coffee industry in Malaysia is presented in figure 2.4 with the used of Porter’s 5
forces analysis which consists of threat of substitues, bargaining powerof suppliers, threat of
new entrants, industry rivalry and bargaining power of consumers.
Figure 2.4 Porter’s 5 Forces Analysis on Coffee Industry in Malaysia
Threat of substitutes –
High

Bargaining power of
suppliers – Low

Threat of new entrants High

• Malaysians are getting
health conscious given
the susceptibility of
Malaysian drinkers to
prefer tea (Norimah et
al., 2008). Others
substitutes will be
available in milk shake
forms or desserts such as
Chatime, SweetChat,
Snowflake, etc from
Taiwan market.

• Coffee bean commodity
market is a mature open
market. Thus wide
ranges of suppliers are
available worldwide.

• There are a lot of
domestic players such as
Ipoh Old Town White
Coffee, Papparich,
Kluang Kopitiam have
entered into the coffee
market which sells
localized products with
affordable price.
(Euromonitor, 2012)

Industry rivalry – High
• Very competitive market
with international
acceptable brands such
as Starbucks, Coffee
Bean & Tea Leaf, Gloria
Jeans and domestics
players such as Old
Town, Papparich etc.
Both international and
domestics players had
unique marketing
strategies on their drinks
menu. Especially from
the domestic players
who are able to offer
local delicacies with
traditional hot coffee at
an affordable price.

Bargaining power of
consumers - High
• Unless the uniqueness of
the menu could attract
consumers’ loyalty,
otherwise consumers
will easily switch to
other competitors to
dine, given that plenty of
other

Source: Adapted from Eu, 2010

Strong substitutions are identified through the Porter’s 5 analysis; coffee could be potentially
replaced by tea as Malaysia consumers are gradually more health conscious over the years. There
are three types of tea; white, black and green. Each tea originated from different countries, for
instant – green tea is from Japan. Caffeine, a stimulant from plant product could be found in both
tea and coffee. It could exert its effect into human’s central nervous system and able to help us to
feel temporary more alert and less sleepy. Nevertheless, both coffee and tea have its own pros
and cons (see figure 2.5).

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Figure 2.5 Health Benefits of Tea vs Coffee

Source: Policy Expert (2007)

Despite older Malaysian consumers are heading towards healthier lifestyle by replacing coffee
consumption with tea, nevertheless BMI forecasted a 2.9% growth yearly for the next 4 years
among the youth generation in Malaysia. This creates a window of opportunity among the
coffeehouses by producing more innovative flavors for coffee and able to market it
comprehensively (Business Monitor International, 2012).

FACTOR 4: MALAYSIANS’ PURCHASING BEHAVIOR IN COFFEE INDUSTRY
WHICH INFLUENCED BY ESSENTIAL MARKET CHARACTERISTICS
As conferred in earlier discussion, the rising income and frantic lifestyle of Malaysians allowing
them dining out daily as they could afford to as well as time is the main factor. According to a
SWOT analysis extracted from Business International Monitor (2012) report on Malaysia drinks
industry, youth consumers in Malaysia are more incline to branding and tend to embrace new
international products easily instead of regarding them with suspicion because of the high cost
they paid, thus creating a new prospect for the international marketers (see Appendix G ).
17 | P a g e


Even so, youths are getting more educated today. Influenced by the changing lifestyle and
growing affluence; stirring up their behavior to be more price-sensitive, brand-conscious and
demanding as well that the services they received must be in satisfactory degree
(PriceWaterHouseCoopers, 2006). The business will risk losing their position and market share
to their intense competitors if they are not sensitive to their consumers needs. As such, this same
standard of services applied in coffee industry as well.
Unfortunately with the geographical landscape unsuitability, Malaysia has been unable to yield
from the export of second largest commodity in the world – beans (Diaz, 2009). Though
incapable to plant high-quality coffee beans as the landscape is more suitable towards rubbers
tree plantation (Rahman, 2010), they still strived in its own ‘kopi’ business – Kopitiam (known
as coffee shop or café) with lower-quality coffee beans production back in World War 2
(Feemelah.com, 2010).
During good old days, besides savoring freshly brewed coffee; Kopitiam also served as a hot
spot for socializing where they spent most day playing cards with each other, conversing,
listening to the radio as well as sipping their coffee with newspapers or magazine in their hands
(Wilson, 1967). Similar traits are also found in today’s 21st century where infiltration of branded
coffeehouses fashioned with lifestyles like Starbucks and Coffee bean & the Tea Leaf had
greatly increased of the expectations to a coffeehouse from consumers.
Consumers today seek not only eminence coffee but also the packaged external factors such as
ambience; substantial food choices that match their beverage offerings in which are perceived as
an added value to coffeehouses. Singapore was the first in Asia that carved the trend of fulfilling
modern desires by shaping the ‘new age’ coffeehouse with modern pursue such as WiFi
connectivity, fancy interior designs that provided homely feel dining in with air conditioning and
soothing background music while retaining the classic food menus and ‘kopi’ (Toyad, 2012).
Toyad (2012) also stated that modern consumers would not mind paying extra to enjoy their
meals provided the attributes of the coffeehouse matches their desires.
An exploration study by Waxman (2006) related to social and physical factors influencing place
attachment in coffee shop in which she regarded as ‘third places’ have much emphasis and
impacts on neighborhood gathering places that enhanced the lives of people. The term ‘third
18 | P a g e


place’ derived from the amount of time spent in daily routines of people besides home and work;
the cafes. Her findings advocated that the top five physical characteristics of the ideal and most
frequented coffeehouses in shown in figure 2.6 posed from the most important to the fifth
important.
Figure 2.6 Top Five Must Have Physical Characteristics in Coffeehouse

Cleanliness

Aroma

Adequte
Lighting

Comfortable
furniture

A vew to the
outside

Source: Waxman (2006)

Whereas for the social aspects, Waxman’s (2006) findings further revealed social benefits
attained through coffeehouses included the opportunity for people to linger, to feel a sense of
ownership and establish a territoriality, feeling of trust, respect, and anonymity, the
opportunity for productivity and personal growth and the supportive systems to patrons
from the staff (customer service). These attributes are not often portrayed in a coffeehouse but it
is achievable. It is believed that besides innovative product development in this era, the physical
and social attributes discussed above are able to further actualize what consumers are continually
willing and looking to trade up with (Business Monitor International, 2012). Apart from that,
promotions such as free samples, ‘buy-one-get-one-free’ concept and points collecting system
are proven to be effective marketing tool among the Malaysians (Osman et al., 2011).

19 | P a g e


CHAPTER 3
3.1

RESIGN DESIGN

INFORMATION NEEDS SPECIFICATION

Despite excessive business reviews on existing case studies and research works from others
which is known as secondary data collection, real time and up to date information from the urban
earners are essential to determine this project’s feasibility. The data collective method is
referring to primary data collection which aims to gather raw data from the public through
survey, interviews or observations; structure and development them into useful information.
The specification of information needed for this project derived from two methods of collection
– quantitative and qualitative. Quantitative research involves the use of data collected from the
distribution of questionnaire surveys which questions posted like who, what, when, when, how
much, how many and how. Quantitative data analysis typically presented in graphical form,
consisting statistically numerical form such as averages, ratios or ranges (UKAid, 2010).
Qualitative research on the other handis concerned with opinions, experiences and feelings of
individuals producing valuable subjective data. The data from qualitative research could be used
to develop concepts and theories that assist us to understand the social world, closing the gap of
uncertainties in developing marketing strategies (Hancock, 2002).
The information needs specification is illustrated as a matrix shown in table 3.1 with quantitative
and qualitative methods across primary and secondary data collection technique

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Table 3.1Information Needs Matrix
Data Needs

Primary

Quantitative



Secondary
Questionnaire surveys that



The statistics of spending expenditure

included product features,

on Food-Away-From-Home in

consumers’ purchasing behavior

Malaysia

and external factors which are



Financial stability from Maxis



Research papers and reports on

stated in figure 2.5
Qualitative



Focus group interviews (Maxis

Malaysia’s market trend in foodservice

and non-maxis subscribers)

industry:the willingness to spend on
food


Research papers on
consumers’purchasing behaviors in
coffeehouses/cafes



Case studies on international and
domestic competitors in coffee industry



Research papers on market
characteristics on existing coffeehouses
they deployed to attract consumers



Research papers and pilot studies on
the effective of brand extension which
includes advantages and risks.

Source: Adopted from previous project; (Yeap, 2012)

There are various types of research designs available (see figure 3.1), but to each cater for
different purposes. This project is aimed to achieve and analyze the truthful responses from
Malaysian consumers onto Maxis’s choice of venturing into coffee industry with branding
extension strategy. Hence, this project belongs to descriptive research which will be
accompanied by questionnaire survey and focus group interviews when it required.

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Figure 3.1 Types of Research Design

Source: Prof. Kombrabail, 2009

3.2

RESEARCH METHODOLOGIES

This section contains the in-depth elaboration on the research design, sampling method, who is
the targeted respondents, where and how the questionnaire survey would be distributed; lastly a
sample of questionnaire design is provided as well.
3.2.1

Sampling Unit

The sampling unit would be distributing to two groups of respondents- Maxis and non-Maxis
users with no specified gender. It would be further split into five different age groups with the
possibility of frequent dining out due to increase in gross income and frantic lifestyles, thus
expenditure on food increased as well.
The purpose of categorizing the respondents into Maxis and non-Maxis subscribers is to obtain a
clear-cut statistics on the ability to convince non-Maxis subscribers to switch to Maxis line via
the benefits of the new café house could offer.
3.2.2 Sampling Size
There would a total 300 sampling size which is approximation to signify the population of 3000
respondents. A breakdown of total sampling size for this project is listed clearly in table 3.2.
Bearing in mind that sampling error tends to occur commonly which includes damaged surveys
22 | P a g e


or irrelevant answers increased with a complex sample design (Brogan, 2009). Thus, at least 2%
of sampling error is taken into account with highest confidence level of 95% which left
approximately 294 accurate sampling units.
Table 3.2 Total Sampling Size
Consumers

Age
15 -19
20 – 24
25 – 29
30 – 40
40 – above

Total Sampling Size
(Estimation)

Maxis user
30
30
30
30
30

Non Maxis user
30
30
30
30
30
300 ~ 3000

3.2.3 Sampling Method
Whereas non-probability sampling method would be carried out through convenience and quota
sampling since mobile device with subscription line is necessity among majority Malaysians who
holds at least one mobile device nowadays. The distribution method would be via social media,
internet and electronic mail with survey questions attainable from Google Drive for
environmental friendly purposes.
In addition, simple interviews are to be conducted via focus group method with approximately
10 interviewees to gain valuable opinions and expression related to the purposed business
concept.
3.2.2 Sampling Location
The sampling hub would be focusing in Klang Valley as it is the central of urbanization where
sales volume is measured the highest in Malaysia. Places that includes Subang Jaya, Petaling
Jaya, Cheras, Ampang and Kuala Lumpur. These locations are filled most with shopping
malls, thus accuracy is higher in answering the questionnaire and interviews.
3.2.4 Collection Method
Given that survey questions are published through the cutting-edge cloud technology (Google
Drive), gathered data would be analyzed and presented in graphical approach embedded in

23 | P a g e


Google Drive, therefore it would translate them into useful information to progress on this
project
3.2.5 Ethical Issue
In this project, unethical issue such as creating bias questions that would mislead respondents to
‘forcefully’ answer in accordance to one’s favor to obtain positive answers should be avoided.
This is to strengthen the accuracy and honesty level on whether or not; this project is feasible
through public’s perceptions. Besides that, all facts and figures should be referenced accordingly
to avoid false information which could harm the business.
3.3

QUESTIONNAIRE DESIGN

According to Burgess (2011), relevant questions should be sorted and grouped into sections to
maintain the questions flow smoothly to one and another, guiding respondents comfortably
throughout the whole process. Hence, the questionnaire design for this project were arranged into
four sections with each pertaining different set of questions in which is listed in table 3.3.
Questions were given in open format choices, closed format choices with single or multiple
options, rating and Likert scale format. The questionnaire could be found in Appendix I).
Table 3.3 Questionnaires design
Section A

Questions on respondents demographics – age,income level, occupation

Section B

Questions on measuring consumer’s purchasing behavior

Section C

Consists of questions on measuring on products’ features impact on consumers

Section D

Questions on measuring the external factors that could lead to differ buying decision


24 | P a g e


CHAPTER 4
4.1

DATA ANALYSIS

PRIMARY DATA ANALYSIS

The data collected from the questionnaire distribution and brief interview answers would be lay
out and discussed in this chapter. They would be arranged in graphical manner followed by
concise descriptions. Unfortunately through the process of distributing and collecting the
questionnaire, some answers were found irrelevant or left unanswered. Hence, only a total of 278
usable questionnaires collected; producing confidence level of approximately 90% upon the
answers. Nevertheless, these data are still valid for this BDP as the total cumulated
questionnaires are more than 70% returned successfully.
4.1.1 Demographic
Figure 4.1 Number of Maxis’s Subscriber

What is your age group?

Are you a Maxis's mobile subscriber?

40 years
old &
above
7%

No
50%

15- 19
years old
4%
20 - 24
years old
25%

Yes
50%
30 - 40
years old
31%

25 - 29
years old
33%

Figure 4.2 Age Group
Source: Questionnaire Collection

In this questionnaire, half of them are Maxis’s subscribers while half of them are not. They are
subscribed to DiGi, Celcom and UMobile; in this case, second highest subscribers belong to
Celcom. While on the age group, most of the respondents are working adults; aging from 20 - 40
years old; each forming a percentage of 25%, 33% and 31% respectively.

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Figure 4.3 Respondents’ Occupation

Column1
Others
Students
Banking Officer
Insurance Agent
Accountant/Auditor
IT
Educators
Engineers
Sales personnel
0.00%

25.90%
25.90%
0.72%
0.72%
4.32%
26.62%
4.32%
5.76%
5.76%
5.00%

10.00%

15.00%

20.00%

25.00%

30.00%


Most of the respondents were from Information Technology and Education background forming
26% for each for the entire population of this questionnaire. Whereas, there is also a 26% of
students took part in this questionnaire as well. Students’ outputs to this questionnaire helped to
further recognize their spending patterns on food and coffee as most of them have zero income.
4.1.2 Consumer’s Purchasing Behavior
Looking at the visit frequency based on five different income groups from figure 4.3, majority of
respondents would dine 3 to 5 times in a monthly basis. The highest frequented income group
falls on RM11,999 – RM29,999 with approximately 50 of them. With such level of income
group, it is assumed that most of them are students who took part in this questionnaire. Some of
them even frequented coffeehouses for more than 10 times monthly. Personal approach to asking
the purpose of their visits is mostly dealt with studies, discussions and gathering. For the rest of
the income groups, averagely they would dine 3 – 5 times in the coffeehouse, hence creating a
common place to dine in their daily lives.

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Figure 4.4 Income Level vs. Frequent Visit to Coffeehouses

Income Level vs Frequent Visit to Coffeehouses
60
50

RM 11,999 and below

40

RM12,000 – RM29,999

30

RM30,000 – RM49,999

20

RM50,000 – RM69,999

10

RM70,000 and above

0
1 -2 times per month

3-5 times

More than 10 times


The ultimate purpose of visiting the coffeehouses was mainly for coffee which stood at 29%
while the second purpose would be for gathering, having a percentage of 28.25(see figure 4.5).
As per interview, nowadays coffeehouses fulfilled their needs of providing environment and
services catered for gathering, permitting them to stay longer for a nice long catch-up with their
peers.
This is followed up by a percentage of 21.93%, having meals is the purpose of them visiting the
coffeehouse; mainly is Papparich, Old Town White Coffee, Station 1 and etcetera. Minority
respondents would choose coffeehouse for leisure and work purpose in which obtained 5.2%.
Yet, the respondents did mention on noise level and lack of privacy for discussion and work.
Figure 4.5 Purpose of Visiting the Coffeehouse

Purpose of visiting the coffee/café house
21.93%

Meals

29.00%

Coffee

28.25%

Gathering

15.61%

Leisure
Other
0.00%

5.20%
5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%


27 | P a g e


More than half of the respondents (53%) spent averagely of 1 hour in the coffeehouses, mainly
for quick meals (see figure 4.6). While 32% of them would spent 2 hours, chit-chatting or having
longer meals in the coffeehouses. Those respondents who spent averagely 3 hours and above
(9% and 6% consecutively) usually are sales personnel and students, completing their tasks with
the facilities (WiFi) provided.
Figure 4.6 Average amount of Time Spent in Coffeehouse

How much time you spent averagely
in the coffee/café house at each
visit?
3 hours
Around 3
hours
9%

and
above
6%

1 hour
53%

Around 2
hours
32%


According to figure 4.7, it is somewhat optimistic that 140 of the respondents were considered as
‘early adopters’ with the willingness to try new coffeehouse regardless of its brand. In contrast,
there were 112 of them are hesitated with the brand factor. These groups of respondents are
relatively brand conscious and skeptical to try new product without knowing the root of it
beforehand.
Figure 4.7 Willingness to try new Coffeehouse regardless of its Brand

Willingness to try new Coffeehouse regardless of its Brand
Maybe

112
26

No

140

Yes
0

20

40

60

80

100

120

140

160


28 | P a g e


When such question relating to whether promotion and discounted rates are one of the factors
they look for in the coffeehouse, 184 of respondents answered yes which posed the majority
responds. However, there are 72 of them answered maybe with the concern in quality of food
and drinks they served apart from the promotions. A small group of 22 respondents are not keen
in promotions and discounted rates.
Figure 4.8 Promotions and Discounted rates as the factor to dine in Coffeehouse

Will promotions and discounted rates be the
factors you dined in a restaurant?
Maybe

72

No

22

Yes

184


4.1.3 Products
Similar responses received when the respondents were asked on set menu. From figure 4.9, there
were 42.45% of them agreed it was an essential element should be found in a coffeehouse while
40.29% of them are on neutral based. Whereas, for 17.27% of the respondents; set menus are not
one of the factors they anticipated in coffeehouses.
Figure 4.9 Set Menus as the factor to dine in Coffeehouse

Will set menus lunch/dinner is one of the factors you
chose to eat at the coffee/café house?
Maybe
No
Yes

Maybe, 40.29%
No, 17.27%
Yes, 42.45%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00%

29 | P a g e


Through this question, coffee consumer preferred traits towards the coffeehouses could be
identified via the visit frequency towards a particular café. From figure 4.10, Starbucks posed the
most frequented café in comparison to its rivalry at 31.7%. It is followed by Papparich (12.9%),
others coffeehouses (Quan’s ice cream house, Station 1, Kluang Kopitiam)(10.8%), Old Town
White Coffee (9.4%), Coffee Bean (8.6%) and Gloria Jean’s (5.8%). When asked most of the
respondents, why would they prefer Starbucks over others and they stated few important
elements that captured their interests; product innovation, location, drinks customization,
Starbucks’ merchandise and lastly, good marketing promotional tool through Starbucks’ card
member with buy 10 drinks, free 1 drink. Whereas feedbacks on Coffee Bean, it is more pricey
and less promotions to interact with its consumers.
Papparich and Old Town White Coffee are local coffeehouses which received ideal responses
that they served good food and drinks with reasonable prices. However, consumers nowadays
deeply western influenced with brand conscious, also location for convenience is play a vital role
as well. On the contrary, the least frequented coffeehouse is Gloria Jean’s with the highest
percentage of 66.9%. Comments received were because of Gloria Jean’s stall concept which
operates more towards a booth concept with only limited seats and long table restrict them to
hang out longer.
Figure 4.10 Visit Frequency on selected Coffeehouses

Which Coffee/café house you visit the most?
80.0%
70.0%

Frequency

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

Starbucks

Coffee Bean

Papparich

Old Town

Gloria Jeans

Others..

Least Frequent

17.3%

38.1%

25.2%

14.4%

66.9%

35.3%

Less Frequent

12.2%

19.4%

24.5%

23.0%

9.4%

19.4%

Average

21.6%

18.0%

22.3%

27.3%

12.2%

24.5%

More Frequent

17.3%

15.8%

15.1%

25.9%

5.8%

10.1%

Most Frequent

31.7%

8.6%

12.9%

9.4%

5.8%

10.8%


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Generally the respondents would go for coffee beverages in coffee house which consists of 37%
(see figure 4.11), it is then followed by chocolate beverages (17%) then tea beverages as their
third choice at 16%. It is still seen consumers prefer coffee over tea despites the benefits tea had
over coffee. While figure 4.12 tells us that they prefer hot beverages over the cold beverages at
50% compared to 32%. In this case, ice-blended drinks are not so in favor at 14%. Reason being
that ice-blended drinks are just too sweet and posed a health concern to them.
Figure 4.11 Preferred Drinks in Coffeehouse

What do you usually consume in
the coffee/cafe house?
Chocolate
Beverages
17%

Others
3%

Others
4%
IceBlended
14%

Coffee
Beverages
37%

Fresh Fruits
Beverages
12%

Green Tea
Beverages
Sky Juice
10%
5%

Which do you prefer?

Tea
Beverages
16%

Hot
Beverages
50%
Cold
Beverages
32%

Figure 4.12 Beverages form preferred

The internal factors depicted in figure 4.13, the consumers considered beverages selection and
interior designs are the most important elements should be possessed by a coffeehouse which
both had a percentage of 87.1 and 74.8 respectively. A good interior design is able to create
comfortable ambience for the consumer as discussed in chapter 2. As for the foods selections
element, 71.2% of them agreed that indeed an important facet to attract consumers to dine in
with more choices.
Set menus and product innovations are not so imperative to be expected in a coffeehouse with a
percentage of 62.6 and 51.8 from the respondents, but via personal experience; set menus are
able gain more consumers who worked around the shopping complexes while product innovation
is seen prevalent strategy for Starbucks. Merchandise products on the other hand, received a less
important response from them with percentage of 50.4%. Therefore to sum up what a café should

31 | P a g e


focus on, it would be from beverages selections, interior design, foods selection, set menus,
product innovations and lastly, merchandize products.
Figure 4.13 Internal Factors Rating in Coffeehouses

Internal Factors you look for in coffee/café house
140.0%
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
Interior Design

Beverages
Selection

Foods
Selection

Set Menus

Products
Innovation

Merchadise

Less Important

2.2%

3.6%

7.2%

7.2%

17.3%

50.4%

Neutral

23.0%

34.5%

36.7%

38.1%

33.8%

11.5%

Most Important

74.8%

87.1%

71.2%

62.6%

51.8%

17.3%


As seen in figure 4.14, all external factors were rated as very important with an average of 80%
and above for all of them. The most important element is the quality of beverages and foods
(95%); coffee should be served fresh and evenly and foods should be in accordance to health
chart, when asked during interview. This is followed by customer service (90.6%). As discussed
in chapter 2, consumers nowadays are more educated and demanding, agreeable to pay more if
they are served well including floor service.
Surprisingly, price factor came in fourth as the most important external factor. This tells us that
above all, Malaysian’ consumers are willing to pay if they received satisfactory services and
atmosphere.
While atmosphere and noise level are being taken into account too with each having 85.6% and
84.2% to its own as students and business men feedbacks were too many distractions if one
coffeehouse is too crowded and space is vital to them. Since most coffeehouses come with WiFi
facilities, however it still received a 79.1% on the importance of it.

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Figure 4.14 External Factors Rating in Coffeehouses

External Factors you look for in coffee/café house
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
Atmosphere

Price

Noise Level

Quality

Customer
Service

Facilities

Less Important

1.4%

1.4%

1.4%

0.7%

1.4%

7.2%

Neutral

12.9%

14.4%

13.7%

4.3%

7.9%

13.7%

Most Important

85.6%

84.2%

84.9%

95.0%

90.6%

79.1%


4.1.4 External Factors
When this questionnaire finally revealed its objective of these findings, 79% of them responded
well towards Maxis venturing into coffee house (see figure 4.15). However, 21% of the
respondents did not respond well with different industry especially from telecommunication.
They stated that Maxis should just stay focused on improving its core products than diversifying
its resources to others. Having said that, these small groups of respondents had some
dissastisfactions and disputes on services received from Maxis.
Figure 4.15 Will you visit the coffeehouse opened by Maxis?

Will you visit the coffee/café house
opened by Maxis?

No
21%

Yes
79%


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To further understand the possibility of non-Maxis subscribers converting to Maxis, the 140 nonMaxis respondents’ feedbacks were taken to examine against the question posted in figure 4.16.
58.6% of them replying yes of the possibility converting their line to Maxis if a promotion from
the future coffeehouse under Maxis is able to provide cheaper mobile package through
accumulative system points. However, there is also a high percentage of 41.4% of respondents
did not find the needful to convert through the series of hassles despite the promotions.
Figure 4.16 Possibility of Converting to Maxis for Benefits
If Maxis offers its existing services such as getting free calls or launching its
accumulative system points to redeem certain mobile devices, particularly for
Maxis users; will you switch over to Maxis’s line if you’re a non-maxis just to
obtain the bene

No

41.4%

Yes

0.0%

58.6%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%


The next question evaluates the influence of peers’ pressure in Malaysian consumers into
indirectly promoting Maxis through word-of-mouth approach. Fortunately through figure 4.17,
71.9% of respondents agreed into inviting their friends and families into the same bandwagon for
lavish benefits whereas 28.1% of them found it irrelevant.
Figure 4.17 Possibility of Influencing Friends & Families into Maxis for Benefits

In regards to question above; If you are a Maxis user, will you influence
your friends and family into joining the bandwagon with you to obtain the
benefits?
No
Yes

28.1%
71.9%


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4.2

BUSINESS IMPLICATIONS

Thorough analysis from business reviews and primary data collection had revealed certain facts
that are proven realistic. This section would be discussed based on the BDP research framework:
1. Factor 1: Market Trends of food and drinks industry in Malaysia
From observation and personal interviews with a few of working adults on what is their
daily food source. 70% of them answers were dining out due to traffic congestions and
fatigue from heavy workload, causing working mothers to rather pack home food from
outside OR eat out with family; except for weekends whereby they will try their best to
cook.
60% from the 10 interviewees replied that more than 50% of their incomes are purely
spent on food. This comprises dried food and frozen food as monthly groceries basis.
Also from the questionnaire, a trend of frequent dining out can be seen with 71.2% of
them dined in coffeehouses between 5-10 times (see figure 4.4). This is only a statistic in
coffeehouses and not included in road side hawker stall, restaurants and food court.
Besides that, packing food home also considered as eating out.
2. Factor 2: The effects of brand extension from different industry
Business reviews on existing case studies divulged the likelihood of extending its parent
brand into different industry such as RENOMA and SEED corporations in Malaysia.
Both corporations’ food prints started from apparel industry but recently, they had
successfully branched out their own bar & cafés using the same brand name. Besides the
downfalls brand extension failures, it appears as strong brand image plays vital role in
consumer’s behavior towards it.
Figure 4.15 – 4.17 provided direct responses to how consumers’ reaction towards Maxis’
diversification approach. Apparently, it received good responses due to its own
impressive brand name in Malaysia. However, a small percentage of them strongly
disagree with Maxis venturing into an entirely different industry against its origins;
especially dealing with foods & drinks.
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3. Factor 3: Market characteristics in Coffee Industry
Kenanga Research (2012) stated that despite hot tea beverages benefits overweight
coffee’s benefits, coffee industry in Malaysia still has plenty room to grow in terms of
sales value. It is indeed true that from figure 4.11 above, coffee beverages are being
consumed the most in coffeehouses with approximately 37% out of 278 respondents.
Also, 50% of them preferred hot beverages in comparison with chill and ice-blended ones
which results are tally with Norimah et al. (2008) studies (see figure 4.12).
On top of that, adolences such as students had opened up a new market horizon to focus
in coffee industry; primarily café/coffeehouses (Euromonitor International, 2012). Survey
results (figure 4.4) shown us income group RM11,999 and below whose mostly are
students; holding highest percentage in visiting the coffeehouses for more than 10 times
category.
4. Factor 4: Malaysians’ purchasing behavior principally in coffee industry influenced
by essential market characteristics.
In Waxman’s (2006) study, she revealed that the top five physical and social
characteristics in coffeehouse are prominent to the growing business particularly in
coffeehouses (refer to chapter 2 discussion). Since this is not a research based project but
rather focused onto reality café concept, the five characteristics of each in physical and
social aspects had been classified into atmosphere (also known as ambience), noise level,
price, quality, customer service and lastly facilities.
The responses obtained from the survey further proven Waxman’s research that indeed,
consumers are always seeking the best from the atmosphere, comfortableness and the
sense of attachment through it. As per discussion, long hours’ consumers are generally
students and business men who longed for privacy and quiet ambience in the
coffeehouses as another option for them to work besides office and library. Therefore,
using Waxman’s framework; comfortable sofas should be taken into consideration to
fulfill their needs.

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Price on the other hand, is not longer a major concern on price setting as long as the
marketing concept meets the demand. As stated by Toyad (2012), majority of Malaysian
consumers are willing to pay extra if they feel worthwhile and it is also proven from the
survey in figure 4.14, price factor only came in fourth whereby quality, customer service
and atmosphere are their main priorities.
Up to this point, analysis based on four factors above given a heads-up and supportability on this
BDP possibility; which is proven FEASIBLE. Nevertheless, aspects in financial, operations and
concept wise would be discussed meticulously latter.

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CHAPTER 5
5.1

BUSINESS MODEL

OVERVIEW ANALYSIS

This section of the report discusses relevant business models that would assist in identifying
business and marketing strategies thus making utmost feasible decision for the business.
Albeit Maxis has been able to retain its leadership in wireless telecommunication industry in
Malaysia for sometime in terms of market share and network coverage, but recent analysis and
statistical results from BMI (2013) indicated a plunge in both postpaid and prepaid segment
which showcased in chapter 1. With many partnership relationships emerged from its strong
competitors; Celcom – Telekom Malaysia & Celcom – DiGi, Maxis would be experiencing a
series of challenges retaining its market position.
As conferred in previous chapters, food and drinks industry in Malaysia posed a substantially
opportunity for Maxis to tap into it with its existing strong brand image. Yet, there are many
unforeseen risks and uncertainties come with it. Consequently, business models at this stage
assist in revealing opportunity and risks. Furthermore, it could help business planning stages to
identify resources needed.
5.2

CORE STRATEGY

The core strategy of this entire BDP would be based on a Ansoff’s Growth Matrix which was
developed by the infamous Igor Ansoff (1957). Ansoff’s matrix (in short) is portrayed by four
main areas in which eachquadrant signifies where the business is and what type of risk is
involved once the business has moved to another quadrant (Simister, 2011).

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Figure 5.1 Ansoff’s Growth Matrix

Source: Usha CV Haley, Strategic Management in the Asia Pacific, pg. 249

As shown in figure 5.1, if Maxis were to venture into a total new market with new product which
does not associate which its existing products; the risk is much higher. In the case of this BDP,
Maxis would be employing the diversification strategy into coffee industry.
Diversification strategy is a normal practice in today’s world but there are often risks and impact
to the growth in its core business as resources are also diversified to focus on different portfolio
(Hargreaves, 2009). Why diversification when there are many alternatives to generate revenues
according to Ansoff’s matrix? See table 5.1 for justifications.

39 | P a g e




Market Penetration





Most subscribers from Maxis
derived from the urban areas,
particularly from Peninsular
Malaysia
The current efforts are seen from
Maxis is to develop its market in
west Malaysia and rural area
With fierce competitors, market
penetration strategy could not
sustain as the rest are following
in term of pricing schema,
bundling package.
U-Mobile and Unifi landline are
indirect competitors whereby
their booths are also seen in all
exhibitions participated by
Maxis.








Product Development

Market
Development



Diversification

Table 5.1 Business Strategy with Ansoff’s Matrix



Growing trend in food & drinks industry
Most people spent their time outside in a
coffeehouse
Spreading future risks between parent
products and new product
Generating another source of profit
Market is getting saturated but product
differentiation is the key of success
Maxis had joined the bandwagon by
offering fiber optic cable and wireless
solution for best data network.
Maxis is doing well and gaining
reputation as being the fastest and
reliable data network service provider;
competing head-to-head with Unifi, but
soon the market becomes too saturated
and left little space to grow in the future
as most households already subscribed to
a data network plan accordingly in the
next 5 years (BMI, 2013).

Source: Author

Based on Maxis’s annual report (2012), they are currently expanding their network coverage in
rural areas including West Malaysia, renting some of its services to UMobile to retain its
revenues. Additionally, they are doing great in their broadband data network products among the
corporations and wireless dongle promotions. Yet, the market would become saturated when
more than 90% of nationalities holding a network enabled device unless Maxis continue to
concentrate on market penetration strategy on new price schema and product bundling (Business
Monitor International, 2013). Therefore, venturing into coffeehouses could be beneficial to
Maxis as follows (Cheembo, 2009):


Better risk control as no longer being reliant on a single market



Provide movement away from declining activities



Spread risk by avoiding having all eggs in one basket



Stretching corporate parenting capabilities into markets and products

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5.3

COMPETITIVE ADVANTAGES AND SUSTAINIBILITY

It is imperative to analyze Maxis’s capability and competences to discuss its readiness to venture
into coffee industry.
5.3.1 SWOT Analysis
SWOT analysis is one of the many strategic planning tools to assist in aligning an organization
with the world through its internal factors (Strength & Weakness) and external factors
(Opportunity & Threat) (ABARIS Consulting, 2001).
Table 5.2 Maxis SWOT Analysis

Strength







Opportunity




Weakness


Strong brand image to easily gain trust and
acceptance from public
Good network coverage is able to reduce cost
in advertisement via SMS services
Partnership with Astro further reduce cost in
TV ads
Existing partnership with iPhone and Samsung
dealers facilitate further reduction through
accumulative system points for redemption
Financial stability with RM2.1 billion cash flow
as at 2012 (Maxis Annual Report, 2012)



Lack of expertise in engaging and managing
coffeehouse
Market saturation in food & drinks industry.
Have to niche to gain competitive advantages

Threat

FAFH statistics is expectedly rise 5% every year
Vast demand in coffee industry
Willingness to pay extra for services provided




Financial crisis and economical issues
Strong existing international and domestic
brands to compete with (Eg. Starbucks, Coffee
Beans, Old Town White Coffee)

Source: Author

Table 5.2 exemplified many qualities Maxis carrying with many opportunities seen in Food &
Drinks industry to tap into. Although from different industry but Maxis could use its
broadcasting strength to save enormous promoting and advertising costs. The weaknesses
identified will be lack of skills in managing coffeehouse especially on the standard operating
procedure (SOP) primarily on coffee preparation. Additionally, strong competitors from
international and domestic brands such as Starbucks and Old Town White Coffee posed a
difficult market entrance; unless unique strategies are thought off to draw Maxis apart from its
rivalries using Blue Ocean Strategy (BOS) model.

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5.4

STRATEGIC GROWTH OPTIONS

Blue Ocean Strategy (BOS) tool would be used to evaluate what are the strategic growth options
for Maxis in comparison to its rivalries in coffee industry with strategy canvas tool and action
framework which comprises of ‘Eliminate-Reduce-Raise-Create’ (ERRC) grid from BOS. These
tools are able to signify the potential areas where customer value could be eliminated or created
through comparing the competing factors (Chan & Mauborgne, 2005).
From personal observations and interview sessions, the eleven competing factors are formed
shown in figure 5.2. Styl-Fé is the brand name for the new coffeehouse from Maxis which
represents “Lifestyle” café. As Styl-Fé is focusing on lifestyle alone, the following strategy
canvas is plotted; creating value curves.
Figure 5.2 The Strategy Canvas of Styl-Fé
12

Axis Title

10
8
6
4

Starbucks

2

Old Town

0

Styl-Fé

Value Curves

Source: Author

The identified value curves are served as competitive advantages for Styl-Fé. Starbucks and Old
Town White Coffee are used as Styl-Fé strongest rivalries with the most rating in figure 4.10.
The competing factors would be grouped into ERRC grid, formulating the focused strategies in
figure 5.3.

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Table 5.3 ERRC Strategy Canvas for Styl-Fé

Eliminate

Raise





Reduce




Price
Waiting time
Staffing (Baristas)

Hygiene
Facilities
Ambience and
soothing music
Drinks Customization

Create



Privacy room
Entertainment room
(Pool, TV, Xbox)

Source: Author

From figure 5.3, Styl-Fé would reduce the total waiting time as consumers themselves are the
barista; preparing drinks up to each individual preference, reducing staffing cost to employ
barista and hence, price to purchase drinks and foods are reduced. Hygienic issue, facilities
provided, ambience and drinks customization are factors Styl-Fé aimed to raise, giving 100%
satisfaction services to consumers.
In addition, creating partitions could provide ease of learning, working and private discussion
among students and businessmen in the café. While creating entertainment room is intended for
every consumer for relaxation purposes or bonding time with their mates.
5.5

PARTNERSHIP NETWORK

The suggested business partner to engage in assisting and establishing Styl-Fé successfully is
Nescafé from Nestle. Reason being is Nescafé is world’s largest direct purchases of coffee and
had been very well ascertained since 1938. It could certainly fill the gaps of lack of coffee
expertise for Maxis.
Nestle has wide range of products mostly targeting household consumers but their beverage
products itself generate more than 22% of the company’s total revenue. Their global coffee
market, explicitly Nescafé; is segregated into three segments which are instant coffee,
roast/ground coffee and chicory.

43 | P a g e


5.6

THE BUSINESS CANVAS MODEL

Key Partners
Coffee supplier such as Nescafé
to provide us Nescafé Dolce
Gusto Carrilo machines and its
16 different flavors capsules
Interior designers to design an
unique and cozy environment
inside Styl-Fé
Pastry supplier such as the
infamous Shangri-la Lemon
Garden café to provide us
freshly baked cakes and
pastries
Suppliers for other sustainable
products such as sofas, tables
and chairs, kitchen utensils and
cutleries
Botanical Gardens to provide
us plants to grow in Style-Fe
Promotional partnership with
Astro to advertise Styl-Fé at
minimal cost
Collaborating with sales
department for mobile devices
& packages price reductions
upon redemption

Key Activities
Establishing first Maxis’s
coffeehouse named as StyleFe in Klang Valley
Developing outdoor home
lifestyle concept into
coffeehouses
Collaborating with Nescafé
to iron out coffee supplies
To attract non-Maxis
subscribers to enjoy Maxis’
lavish benefits via Styl-Fé

Key Resources
External: Interior Designers
Financial: Bank Loans,
shareholders & stakeholders
Internal: Strategic, Sales &
Marketing Team

Value Propositions
To provide best customizability
by giving the flexibility to
prepare own coffee with
Nescafé Dolce Gusto Carrilo
machine with chosen capsule
flavor. They can adjust water
and milk level to their taste.
Sugar and syrup would be
provided on shelf.
To provide best outdoor home
experiences by introducing
room concept for discussions
and privacy purposes and enjoy
their coffee simultaneously.
To be the first coffeehouse to
cater for entertainment needs
such as Pool, TV and Xbox
experience
To establish loyalty program like
point systems for discounted
rates Nescafé Machines or
boxes of capsules. Additionally,
accumulate premier points to
redeem mobile devices or
subscription Maxis plans

Cost Structure
Fixed costs of salaries, premise rent, coffee machines rental and other
utilities
Promotions/Marketing Campaigns

Customer Relationship
Dedicated personal
assistance (self service)
A simple CRM Mobile
application and website
which helps to keep track
birthday and accumulated
points for discounted
items after each purchase
by them.
Customer education on
our promotions and
activities through mobile
application or website
Channels
Promotions through
Maxis’s existing channel:
SMS and MMS services
Media advertisements
through Astro’s
partnership
Website
Word-of-mouth
promotion via consumers

Customer Segments
Mass market: Targeting
children to adults to
senior citizens who like
coffee and other
beverages
Also, partitioned rooms
are targeting
businessmen and
students for privacy
purposes

Revenue Streams
Sales of coffee, other beverages and pastry in coffee shop
Sales of merchandize items
Sales from entertainment: Pool table

Figure 5.3 The Business Canvas Model for Styl-Fé

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CHAPTER 6

BUSINESS PLAN

This section of this report will cover the business planning for Styl-Fé which includes marketing
planning, financial planning, organizational and operational planning and lastly, the
contingency plan as exit plan.
6.1

OBJECTIVES

Styl-Fé is a project from Maxis aimed to venture into coffee industry with the objectives to
expand its business as well as gaining more mobile subscriptions via promotions set up in StylFé. They also believed the potential of establishing coffeehouse in Klang Valley is vast with the
upcoming youths and young adults who prefer services over the price they pay. With this
mindset, Styl-Fé hoped to achieve their first year of milestones as follows:


Becoming the ‘Best New Coffeehouse Concept in Klang Valley” by local restaurant
guide



Turn in profits within the first 6 months of operations



Mobile subscribers pool increased with the influenced of Styl-Fé in house point
accumulation system

6.2

MISSION

Styl-Fé’s mission is to push outdoor home lifestyle café into coffeehouse; providing best efforts
in up-keeping its promises to deliver unique environment to allow consumers to socialize
comfortably and at ease with their friends and families while enjoying the best quality of
customized flavored-coffee and pastries in town. Additionally, great ambiences with best
facilities are able to facilitate stress by providing peace of mind to hectic working adults.
Ultimately, Styl-Fé will continue seek to increase consumers’ satisfactions while in turn
returning attractive dividends to its shareholders and stakeholders.

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6.3

KEYS TO SUCCESS

The keys to success for Styl-Fé will be:
1. Interior store designs that are visually and mentally attractive to consumers, as well as
designed for fast and efficient operations
2. Creating good impressions on services and products, thus inviting more consumers
through positive word-of-mouth.
3. Continuous good marketing strategies to build a solid base of loyal customers, as well as
maximizing profits margins and increased number of Maxis subscribers in Malaysia
6.4

MARKETING PLAN

Styl-Fé marketing plan would be conveyed by 7Ps marketing mix model displayed in figure
6.1
Figure 6.1 The marketing mix (7P model)

Source: Marketing-Made-Simple.com

6.4.1 Product
As suggested, Styl-Fé will be partnering with Nescafé to provide the latest Nescafé Dolce Gusto
Circolo (DGC) coffee machines for operations. There are 16 types of different coffee flavors
ranging from coffee, tea and chocolate which could be served hot and cold. So far, there is no
coffeehouse in Malaysia serves Nescafé products in their menus but rather developing their own
signature coffee. Partnership with Nescafé is able to iron out coffee supplier issue as it takes care
of consumers’ concern on the coffee whereabouts. Moreover, it provides more resources to focus
on other area where competitors overlooked.

46 | P a g e

The viability of maxis venture in coffee industry in malaysia

The viability of maxis venture in coffee industry in malaysia

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