OLD TOWN WHITE COFFEE:OLD TOWN WHITE COFFEE:INTERNATIONAL STRATEGYINTERNATIONAL STRATEGY

GROUP MEMBERS:

NOOR ASILAH NORDINLINDA NASARUDDIN SIA

NOOR ASIKIN AB RAHMANNUR AMALINA MAT JUSOH

MOHAMED ARIFF ABDUL RAHMAN1

PRESENTATION OUTLINEPRESENTATION OUTLINE

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ISSUES:ISSUES:

“ To expand the business into the International”

REASONS:In Malaysia, Old Town White Coffee already have 171 outlets of its café chain in less than 7 years. Old Town White Coffee already expand their market into neighbors countries such as Singapore and Indonesia.Future project to target market in China and Iran.

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Old Town White Coffee market in Malaysia is expect that the café chain operation to hit saturation at some point, probably beyond the next three years. With 58.5% of its Malaysian branches crowded around the Klang Valley, market saturation is inevitably setting in. For the last two years, average incremental store sales growth has dropped to single digits reflecting the diminishing new customer pool OldTown has to tap on.

Sources: MayBank IB Research4

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All the stores of OLDTOWN White Coffee were located at high traffic, high visible locations in each Asia market. That the market entry strategies have found to be used by OLDTOWN White Coffee in managing their foreign franchisees when expanding into Asia include master franchising and company owned-stores.

The marketing approach is essential to gain a competitive advantage for OLDTOWN White Coffee in the foreign market. The construct included market entry, site location, and market positioning.

The reason for OLDTOWN White Coffee to choose master franchise as its form of franchising is because of that the master franchising was the most popular mode of entry into distant and cultural dissimilar market such as Asia. 6

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INTERNATIONAL EXPANSIONINTERNATIONAL EXPANSION

WHERE TO EXPAND???

8भा�रत में� आपका� स्वा�गत है�भा�रत में� आपका� स्वा�गत है� – – WELCOME TO INDIAWELCOME TO INDIA

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WHY INDIA?????WHY INDIA?????

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WHY INDIA?????WHY INDIA?????

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PRODUCTION OF COFFEE IN MAJOR

STATES/DISTRICTS OF INDIA

COFFEE CONSUMPTION IN INDIA (DOMESTIC)

Sources: Retrieved from www.indiacoffee.org

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WHY INDIA?????WHY INDIA?????

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WHY INDIA?????WHY INDIA?????

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CONSUMER ATTITUDES TOWARDS CONSUMER ATTITUDES TOWARDS COFFEE DRINKING IN INDIACOFFEE DRINKING IN INDIA

Sources: Retrieved from www.indiacoffee.org

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CONSUMER ATTITUDES TOWARDS CONSUMER ATTITUDES TOWARDS COFFEE DRINKING IN INDIACOFFEE DRINKING IN INDIA

Sources: Retrieved from www.indiacoffee.org

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CONSUMER PREFERENCES SURVEYCONSUMER PREFERENCES SURVEY

Sources: Comparative Study of Coffee Market in India

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WHY INDIA?????WHY INDIA?????

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WHY INDIA?????WHY INDIA?????

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WHY INDIA?????WHY INDIA?????

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WHY INDIA?????WHY INDIA?????

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WHY INDIA?????WHY INDIA?????

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INTERNATIONAL INTERNATIONAL STRATEGYSTRATEGYThe International Strategy for OTWC

is MULTIDOMESTIC

REASON:

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ENTRY MODEENTRY MODE

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SUGGESTION: SUGGESTION: Open a Roasting Plant and Coffee Open a Roasting Plant and Coffee ShopShopA small scale Roasting Plant will

be set up in India- Teams have the responsibility in the daily production and distribution operations. Production team will produce the

coffee

Distribution team will manage the inventory

Distribution team also manage the distribution of products and equipments to the retail location 2

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ADVANTAGES OF FDI TO ADVANTAGES OF FDI TO OTWCOTWC1. Cost Advantages: Take advantage of certain resources

which may be available in abundance in another geography or location for a much cheaper.

Ability to tap the potential of a cheap and skilled labour

The MNCs can utilize the host country's natural resources and harvest such resources efficiently and manage to keep their costs low and thus increase their price competency. 2

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Advantages (Con’t)”Advantages (Con’t)”

2. New Markets: FDI provides foreign investors with access

to new markets as these foreign investors can produce and markets their products and services in the domestic market of these hosts' countries.

3. International Relations: International relations between countries

tend to improve when there exists a good amount of trade and investment flow which can be of strategic importance to the home country. 2

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Advantages (Con’t):Advantages (Con’t):4. Exposure to other countries: Exposure can also be attributed to the fact that as

the number of countries the company operates in, that much more it becomes diversified, so diversification leads to the company having minimized its operational risks

For example: MNC operates in 20 countries During the course of the financial year due to some

region-specific risk, 4 countries suffer heavy losses

Company will not suffer Profits from the other 16 countries may more

than offset the losses from these 4 countries Diversification helps protect the interests of

the shareholders of the foreign investing entity.

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MARKETING STRATEGIESMARKETING STRATEGIES

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Customize the menu to meet tastes and preferences of Indians.◦‘Tea-drinking’ population – addition

more tea beverages.◦More cream in the coffee.◦Spices in the tea and coffee,

especially ginger and black clove.◦Favourite fruit flavours in Mango

(India’s national fruits).

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PRODUCTPRODUCT STRATEGY STRATEGY

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Packaging◦Packaging colour – green,yellow,brown

– colourful spirit of Indians.Branding

◦Brand logo – will be remained as same as Malaysia outlets.

Raw Materials◦Coffee beans and tea will be bought

from local Indian farmers – support local agriculture economy, save money in transportation and tariffs and gain tax benefits.

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PRODUCTPRODUCT STRATEGY STRATEGY

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PRICINGPRICING STRATEGY STRATEGY

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Cost of production◦Start-up price RM3.70 /Rs 55 per

drink◦Concept of zone pricing to make the

coffee affordable to the target audience.

◦Promotional pricing OTWC prices will be 20% lower than local

competitors such as Barrista Coffee Company.

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PRICINGPRICING STRATEGY STRATEGY

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Promotion strategy is set up to attract the customer intention toward product and persuade a quick purchase of the product in order to gain a short term profit or encourage the brand switching for the customers.

The promotion for the OLDTOWN must be very focused on the markets. For example:

Billboard advertising- should be located at highly traffic areas to increase customers awareness and further leading Indian consumers to the store locations.

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PROMOTIONPROMOTION

STRATEGYSTRATEGY

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OTWC brochure and promotional coupons- will also be sent from one areas to another's and from house to house.

Company website, email address and hotline of OTWC -should also be provided and might need to print together with the above advertising and promotional strategies in order to make convenience for the target customers in getting the information.

OTWC committed to giving back to communities - by sponsor scholarship for the local students and this will give OTWC positive publicity.

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PROMOTIONPROMOTION

STRATEGYSTRATEGY

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Product placement or movie theater advertising

- As everyone knows, India has produced a largest number of films in each year. There about 15 million people see films in India everyday and therefore product placement or movie theater advertising are goods way that can be used to increase reach and exposure among India’s citizen if OTWC can appear in the script or program setting.

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PROMOTIONPROMOTION

STRATEGYSTRATEGY

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Place includes company activities that make the product available to target consumers.

According to Kotler ( 2010), the distribution decisions are often interdependent with the other marketing mix variable. An organization distribution strategy is determined by the two major factors including coverage and control. This mean that the coverage of the selling areas must be largest enough in term of population, demand or purchasing power of customers.

Both proposed locations of OTWC shops will be at the highly urban locations in Mumbai and New Delhi.

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PLACEPLACE STRATEGY STRATEGY

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This two cities was chosen because the location are strategic and are home to many call centers where the younger spenders work.

Besides, many collages and University are also located here which allow OTWC to target the young generations.

The cities are also major hot spots for tourists, who recognize a multinational brand such as OTWC.

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PLACEPLACE STRATEGY STRATEGY

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The OTWC in Mumbai will be located at Nariman Point near Churchgate and Gateway to India which is major tourist spot.

Nariman Point and the nearby area is very modern and developed.

The roads are in good conditions to maintain easy access to the location.

The OTWC in New Delhi will be located in Connought Place which is the large commercial shopping area in New Delhi.

Since the New Delhi is the nearest big city to the world famous Taj Mahal as a popular place for tourists from all over the world.

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PLACEPLACE STRATEGY STRATEGY

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