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Runcit Malaysia Magazine Issue 6

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Tinjauan Runcit

Runcit Malaysia Has Turned One! How time flies! Runcit Malaysia magazine celebrated its first year of publication in June. And what a challenging, yet fulfilling, year it has been for all of us involved in the project! It doesn’t seem that long ago when we first started planning for the magazine. The trials we faced were daunting, as Runcit Malaysia was breaking new ground – the first improvement

magazine for the traditional retail trade. Expectations ran high and we had to ensure we could deliver what we had promised. Many days – and quite a few nights – were filled with brainstorming sessions, meetings with prospective partners, interviewing retailers and marketers, strategic planning by the marketing and editorial departments, etc. All this with the intention of meeting the real needs of our target readers – the many traditional retail outlet operators. After the pilot issue was circulated, we started receiving a lot of feedback from various parties within the industry. The feedback allowed us to further improve the magazine. The magazine’s launch, officiated by Deputy Minister of Domestic Trade and Consumer Affairs YB Datuk S Veerasingam in March this year, also made a lasting impact on the retail industry. The event also saw the launch of Runcit Malaysia’s official website (www.runcit.com.my), where you can find the English version of the magazine. Although the magazine is already well-accepted and held in high regard, we are determined to continue improving it. For this reason, we are constantly seeking more collaboration with institutions like Bank Negara, the Federation of Manufacturers of Malaysia and the General Insurance Association of Malaysia (PIAM). These are authorities whose expertise can help improve the business of the retail trade. The latest improvements to the magazine are the addition of two new sections – CAKAP-CAKAP RUNCIT, in which retailers share their ideas, comments and grouses; and, KATEGORI RUNCIT, where there is useful information on product categories. We hope you’ll enjoy this sixth issue. We also need a favour from you – tell your fellow retailers about Runcit Malaysia and how they, like you, can benefit from reading it. Selamat Hari Raya and Happy Deepavali!

WILLIAM KHOO Executive Director,

Infovantage Sdn Bhd [email protected]


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Rencana Runcit

PACKAGING FOR BETTER BUSINESS Did you know that there is more to product packaging than its basic function as an outer casing? In this issue,

we will give you an insight into the world of packaging – from the many types of material used, to the significance of the symbols that appear on the packs.

In the old days, biscuits were often sold in tins and most beverages came in bottles. If, for some reason, the biscuit tin was dented or the glass bottle chipped, consumers would not buy them. They would then become rejected goods. That is an example of the importance of packaging. No matter how novel the product and how superior its benefits, if the outer casing does not instil confidence in consumers that the product is well protected, they will not buy it. This is one major reason why manufacturers place a huge emphasis on choosing the type of material which would be best for their products. This requires that they take into consideration the material’s characteristics and technological capabilities.

Glass These days, glass is facing stiff competition from other materials, especially plastics and plastic-based laminates. Glass is thus redefining itself. Manufacturers are re-inventing and creating new uses for glass. Today it has become a popular choice for premium products like olive oil and wine. Tins and Cans The amount of shelf space devoted to canned products is evidence of its popularity as a packaging medium. Many beverages are still found in tins and cans, and it remains the top choice for liquid soups, and many other pre-cooked foods like baked beans, tomato puree, sardines and tuna.


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Paper This material commonly forms the primary packaging medium for many product categories. The advantages of paper include being cheap, lightweight, having a good printable surface that allows many opportunities for design and colour.

THE TETRA PAK STORY

Tetra Pak has greatly influenced the retail industry in Malaysian with its innovative paper carton packaging for liquid foods and beverages. The company’s aseptic processing technology entails exposing the product to extreme heat and then cooling it rapidly. This ultra-high temperature (UHT) treatment destroys germs and other dangerous micro-organisms that might be present in the product, while retaining its nutritional value, taste and overall goodness. Unopened, the product can be stored for 9 months to a year without refrigeration and will stay fresh and safe for consumption. This process does not require the use of any preservative whatsoever.

Plastics Plastics are the future of packaging. All you have to do is look around your shop, and you will be amazed at the amount of plastic products on your shelves.

According to Lim Kok Boon, the President of the Malaysian Plastics Manufacturers Association (MPMA), there is a clear trend where other forms of packaging are being replaced with plastics. He says the popularity of plastics can be attributed to its convenience and the versatility it offers to both brand owners and end-users. “Packaging must provide filing speed, give the product an original look and allow its brand identity to stand out, facilitate distribution, enhance shelf-life, and provide efficiency in terms of stacking and visibility. Plastic packaging can meet all these requirements,” Lim remarks.

He adds that plastics can also be combined with other materials like paper, and metal to create new packaging forms like laminates, such as that used widely for 3-in-1 sachets and SUPs. “From the consumers’ side, they look for packaging which is tamper-proof, easy to open and close, lightweight, non-breakable and child-safe,” he says. Lim adds that the growing demand for ready-to-eat, single-serve, out-of-home meals has also contributed to the growth of plastics. “Consumers are even more particular when it comes to food packaging. The packaging must be water-resistant and must form a water vapour barrier to prevent moisture build up.” According to Lim, the popularity of plastics is such that its growth cuts across virtually all categories. The Evolution Continues The history of packaging is one of replacement, innovation and evolution. The end goal is to make products more marketable. Why are manufacturers investing time and money towards this end? It’s because good packaging sells products. The evolution of packaging can be seen in the examples of inter-material substitution, which has made many products more viable in terms of consumption convenience, portability and pricing.


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In the past, you had to buy Milo in tins and mix it with either condensed milk or milk and sugar. Now, it is available in 3-in-1 sachets. The same goes for coffee, tea, and even cereals. All you have to do is add hot water. Beverages, however, are not the only products to benefit from technological innovations. One of the first instant foods to hit the market was instant packet noodles. Then came instant cup noodles. Today, the list of instant foods, from soups to pizzas, which only require hot water or a few minutes in the microwave oven is endless. As manufacturers continue to explore new packaging materials to better cater to consumers’ needs, retailers like you will stand to benefit as well.

WHAT’S ON THE PACK

Designs that Sell Packaging is like a product salesman. It is the first thing that consumers come in touch with and it must be attractive enough for them to want to buy. That’s the reason manufacturers go to great lengths to ensure the packaging of their products conveys the brand message in the strongest possible terms.

In order to achieve such powerful communication via packaging, manufacturers engage the expertise of design experts like BrandCare Sdn Bhd, a creative agency specializing in label and packaging designs. Established in September 2000 by designer Shawn Ng, BrandCare provides creative solutions for fast-moving consumer goods. Many of its designs for multinational companies have been used in overseas markets. “Before we propose a packaging design for a product, we must

decide what will best carry the message. We look at the colours and the graphics, and combine them to communicate image and identity,” says Ng. He explains: “Good packaging design must deliver one key thing – communication. This is why we tell our clients that your product is a piece of communication. You can have many designs, but if the communication is not there, you have failed to reach the consumer as they have failed to understand your message.” Ng said communication means brand identity, product quality and product benefits. “You also have to commit the consumer to buy, so you must convincingly communicate that the product can do this and that, for example, that it is enriched with vitamins, and so forth.” Does packaging design translate into increased sales? Ng says that BrandCare has a track record of clients who have enjoyed better sales after making packaging changes. “For example, the sale of Sunkist fruit juice improved with a change in packaging because we portrayed the wholesome image and freshness of the product on the pack.” As the marketplace becomes more competitive, brand owners have to constantly ensure their product packaging keeps pace with changing consumer lifestyles. Ng stresses that as an important product facet, packaging should be given a facelift every 2 to 3 years. “Companies like P&G and Unilever employ this strategy. A brand owner cannot merely rely on marketing and promotions to lift sales,” he concludes.


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Food Labelling

Nutrition labelling and product claims enable food manufacturers to emphasise the nutritional value of their products and give consumers the opportunity to make better food choices. However, there are manufacturers who make false claims to promote their products. Which is why both consumers and retailers have the right to question whether what is stated on the label is true. According to Nik Shabnam Nik Mohd Salleh, Deputy Director of the Food Safety and Quality Division of the Ministry of Health, everyone involved in the manufacturing and selling of a product should be aware of the laws governing nutrition labelling and claims under the amendments to the Food Regulations 1985.

What is nutrition labelling? Nutrition labels give details of the nutrient levels found in food products. Under the Amendments to the Food Regulations 1985, products which must carry nutrition labels include cereal and bread, milk products, flour confection (eg pastries, cakes, biscuits), canned foods (eg meat, fish and vegetables), salad dressing and mayonnaise, soft drinks, fruit cordial/squash and soybean drink. Nutrients that must be declared on the labels are energy, protein, carbohydrates and fat. Total sugars must be stated only for ready-to-drink beverages like soft drinks, fruit and vegetable juices, and malted and flavoured milk. What about health claims? Only certain types of nutritional claims can be made under the law. Nik Shabnam stresses that claims suggesting that a particular food can prevent, improve or cure diseases, disorders or other bodily functions are not permitted.” Enforcement Nik Shabnam says the government enforces compliance with the law by examining the labels and doing analyses to see if the claims stated are true. Under the Food Regulation 1985, violations will incur a fine of not more than RM5,000 or imprisonment for not more than three years or both.

Types of claims Explanation Example of permitted claims

Nutrient content claim Describes level of a nutrient in a food product.

“Source of” “High in” “Low in”

Nutrient comparative claim Compares energy or nutrient levels between different versions of the same type of food.

“Reduced” “Increased” “Extra” “Light” “Fewer” “More than” “Less than”.

Nutrient function claim Describes role of the nutrient in growth, development and normal functions of the body. Should not imply that the nutrient cures, treats or protects from diseases.

“Calcium aids in the development of strong bones and teeth.”

“Protein helps build and repair body tissue.”

“Iron is a factor in red blood cell formation.”

Claims that the products are enriched, vitaminised, supplemented, strengthened, fortified

Amounts of these nutrients must be declared on the label and must comply with all the regulations on nutrition labelling and claims.

“Enriched with” “Fortified with”


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The Halal Mark Religious considerations also play a part on what appears on product packaging. This is why almost all food products in your shop would have the Halal logo printed on the packaging. Muslims are forbidden from consuming products which are not certified Halal or deemed lawful under Islam. These include food, non-food products and even investments.

Before being allowed to print the Halal logo on its packaging, a manufacturer must satisfy JAKIM‘s requirements on raw ingredients, mode of preparation, and utensils and equipment used to create the finished product. JAKIM (Jabatan Kemajuan Islam Malaysia) is the government agency in charge of implementing Halal certification. As the majority of Malaysians are Muslims, the demand for Halal products is huge. Besides the local market, the export potential of Halal food products is tremendous, which is why the government aims to make Malaysia a global centre for Halal food production. It allocated RM10 million in Budget 2005 to meet this goal. For you, the retailer, this means you will soon have a larger variety of Halal products to sell to your Muslim consumers. To gain and retain their trust, ensure all the products you sell to them carry the Halal logo.

Bar Code – Key to Modernisation

Almost every product in your store has a bar code printed on the packaging. However, many of you do not realise that it can go a long way to improve your retail operations. Datuk Paul Low, Chairman of ECR Malaysia and Vice-President of the Federation of Malaysian Manufacturers (FMM), says that many traditional retailers treat bar codes as part of the packaging label and, thus, gain no value from it. He explains that, just by having a bar code reader linked to a computer or cash register, you can make your operation more efficient more efficient in terms of avoiding price inaccuracies and saving on labour in terms of price marking and changes. Bar codes are also useful in inventory management. When you scan the bar code on a product, the information will be recorded electronically, thus making it easier for you to track how much of any product you have sold, which

products are more popular than others and the amount of stocks remaining. Bar code information can even be shared with salesmen, dealers and distributors so much so that the manufacturers even will ultimately know how much of their products have been sold. This will enable them to ensure that you have the sufficient stocks in the variants and SKUs that your consumers require. Datuk Low says that because operational efficiency and good inventory control are essential, traditional retailers who want to modernise will find that utilising bar codes is a small investment that will bring big returns.

GS1 barcodes can be recognised worldwide. GS1 is a global coding standard which can identify products and facilitate communication between every trading partner in the supply chain – from manufacturer to retailer. The standardised item numbering is represented in the bar code for fast and accurate input of data into a computer system. GS1 is managed here by GS1 Malaysia, under the aegis of the Federation of Malaysian Manufacturers.


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Other Common Packaging Symbols Made In Malaysia

The product is made locally. The government encourages consumers to buy locally-made goods as they are of good

quality and on par with imported alternatives. These goods are also cheaper.

Recycle

This means the packaging can be recycled. Environmentally-conscious consumers prefer to buy products with this symbol on the

packaging, knowing that once disposed off, the packaging will not be harmful to the environment.

Although many Malaysians are not as environmentally conscious as consumers in more developed countries, there is an increasing awareness to buy products with recyclable packaging.

Do Not Litter

Most manufacturers today have this symbol printed on the packaging. The objective is to encourage consumers to be more civic conscious and to dispose of

packaging in a proper manner.

By Stephen Tan & Jothi Jeyasingham – Runcit Malaysia

ADVICE FROM RUNCIT MALAYSIA

The two most important things you should know about packaging is handling and merchandising.

1. Handle your packaging well because broken, torn, dented, and tampered packaging will deter consumers from buying.

2. Effective merchandising always helps you sell better. Let good packaging stand-out on the shelf

and communicate product desirability. Identify these types of packaging and display prominently.


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THE RETAILERS TAKE ON PACKAGING Runcit Malaysia conducted a survey on the extent to which packaging influences sales. A total of 477 retailers responded to the survey. This is what we found.

How do your consumer’s view packaging?


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How do you view packaging?


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Survey by Runcit Media Sdn Bhd (July 11-19, 2006)


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Teknologi Runcit

Handle Well, Sell Well As we showed you in the last issue, liquid foods and beverages packed in Tetra Pak cartons have a long shelf life without any need for preservatives because of the unique UHT (Ultra High Temperature) process and the aseptic packaging system. However good handling will ensure that Tetra Pak cartons look attractive and its benefits are preserved. For with mishandling you risk having unattractive merchandise. Over stacking and throwing the carton around will cause damages to the package and contents inside. The following pictorial guide will show you how to handle Tetra Pak carton drinks so they remain in optimum condition for the specific shelf life stipulated.

Handling

1. Do not throw cartons. The cartons might be accidentally dropped, causing damages to the package and contents inside.

2. Store in cool dry place, avoid moisture and direct heat.

3. Do not over stack.

4. Avoid heavy loads on top of trays.


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5. Do not stand or sit on the trays.

6. Unload layer by layer to avoid hanging edges. Merchandising

1. Open the tray by pulling the shrink wrap along the perforations. Do not use a scissor or pen knife.

2. Ensure the highest row of displayed packages is within easy reach.

3. If displaying full tray, tear off the front flap.


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4. Stack the packages neatly to avoid bulges and dented corners.

5. Display according to variants of products.

Please refer to the chart below for maximum stacking level.

By Jothi Jeyasingham – Runcit Malaysia A collaboration with Tetra Pak (Malaysia) Sdn Bhd


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Tokoh Runcit

More Than a Mini-Market Haji Sahabudin bin Muhamed Gani has single-handedly turned a traditional sundry shop into something much bigger, and with a lot more choices, for his shoppers. Don’t let the name Pasar Mini Saburthan fool you. It looks nothing like an ordinary mini market. In fact, it resembles a hypermarket, although on a much smaller scale.

Two shops in one The unconventional mini-market, the brainchild of Haji Sahabudin, boasts wide aisles, rows of neatly displayed products and two types of shop-fronts – a smaller traditional sundry shop and a bigger cash-and-carry section. You can find groceries, dairy products, toiletries, cosmetics, toys, stationery – and even hardware and pesticides – in his shop. India-born Sahabudin, who moved to Changkat Jering, Taiping, in 1952, explains his rather unusual concept: “I cater to shoppers with all kinds of preferences and budgets. By having these two sections, I make it easier for all types of shoppers.”

The sundry shop at the back caters to those who want to buy just a few items. They come in, pay for their goods and leave. They can even haggle ‘kampung’ style, since most of his customers are kampung folk. “Sometimes, I give a 10 sen or 20 sen discount when they ask for it,” he says. “The bigger section is for those who want to buy in larger quantities. They can take their time browsing and choosing the products they want.” Sahabudin had a humble beginning. The sundry shop business was actually started by his father. “When my brothers and I were young, we stayed with our father and helped out in the shop,” he reminisces. “After moving


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out my father’s house, all my younger brothers started their own sundry shops. My older brother and I decided to jointly build our business in Changkat Jering town. That was in 1952. “A couple of years ago, we were forced to move our business to our current location because the Government took over the land where our shop stood. Everything was demolished and that stretch of land is now a highway.”

Fortunately, that turned out to be a blessing in disguise. It gave Sahabudin the opportunity to look for a better location. “I wanted a place where there are no traffic jams, no parking problems and no loading problems. And I found it here and we’ve been running the shop for 18 months,” he says of his current location in Banggol Pasir, just outside Changkat Jering. In fact, there is so much space around the shop that he is planning to lease out part of it to stall operators.

The recipe for success

Although he only attended primary school (until Standard 4) and has no formal training in the retail business, Sahabudin is remarkably shrewd in running his business. The many other sundry shops in the area don’t bother him at all. “I can compete with them because my prices are relatively lower than theirs,” he says confidently. His method of displaying his products is also different from other traditional outlets. “I’ve been fascinated with running my own business since I was a child. So I was very observant. I noticed that most old shops had narrow aisles, making it hard for shoppers to walk and workers to move stocks. That’s why I made my aisles wide.”

On how he decides what brands to sell, Sahabudin says it all depends on the demand from shoppers. “I sell what shoppers want and quality goods that are quite well-known in the market. I also find out what products are fast-selling and re-stock regularly. As a shop owner, you must know what to sell at least one month ahead. “For instance, one month before Puasa month, I would have stocked up all the goods that people usually buy during that month. You can’t wait until you are already in Puasa month to do all that. It would be too late and you’ll have no stock to sell. This is even more crucial here as almost all my shoppers are Muslim. “I’ve heard that many shops don’t have enough sugar to sell. I don’t have this problem. That’s because I plan months ahead.” Sahabudin also makes extra income by leasing out certain hotspots in his shop to suppliers and by using the subsidies given by some suppliers. “Some suppliers come in and request to have their products put at the front of the shop. I ask them, ‘what’s in it for me?’, so they give me RM100 per month for two months. And because some of them supply products at a lower price, I can sell lower to my customers, too. This helps boost sales.”

Old methods work too

While some of his approaches are undeniably modern, he still holds true to some old practices. “Most of my shoppers are kampung folk, so I have to do business the way they are used to. For instance, I still hang a lot of my confectionary up high because that will catch their eye. If I don’t, they won’t see it and won’t buy it. When I arrange my beans and nuts the supermarket way, nobody seems to want to buy them! It’s very peculiar, but that’s how things are here.” Sahabudin also allows his shoppers to buy on credit. “We have to. Some customers have been buying from me for decades.”


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His business is family-oriented as well. His four children and two children-in-law are helping him full time. And although some of his children have taken IT courses, he has no plans to use new technology, like computers, to improve his business, at least for the time being. “I prefer my own style. I don’t need a computer to record my sales collection. I don’t find it hard to do it myself everyday. It’s just part of the job.” Business is certainly brisk at Pasar Mini Saburthan, but Sahabudin remains modest: “We can’t expect to make a quick buck. We’ve been operating in this new location for less than two years. We’ll probably have to wait three to four years to see any real profit.” Well, we wish Sahabudin all the best!

By Adeline Wong – Runcit Malaysia


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Perspektif Runcit

MOVE WITH THE TIMES The president of the Perak Grocery Shops Guild believes the willingness to embrace change in the form of technology will ensure the survival of the traditional trade.

Why are traditional retailers so afraid of embracing technology? This is what the President of the Perak Grocery Shops Guild, James Lee Kim Seng, wants to know. To overcome their apprehension of technology, Lee tries to give guild members hands-on experience in using equipment that will help them modernize. “Last year, I brought in someone to demonstrate how to operate a teller-machine. This year, we had a demonstration on how to use a point-of-sale system. I got some members to try handling the system and after the demonstration, there were about three to four retailers who expressed an interest in it.”

Every year, the guild brings in experts to conduct seminars for members. He, however, lamented the fact that not many were quick to seize on these educational opportunities. “We had a seminar last week, but only 70 of our 1,000-plus members attended!” “The biggest challenge today is survival. Modern retailers have the advantage of technology to support them, but the small players – the traditional trade – don’t. So how are they going to survive?” He said it was not the modern trade that posed the greatest threat to the tradition trade, but small retailers themselves because they were unwilling to change things which are within their control. “We should ask ourselves, ‘Have we done all the things to help ourselves?’. If you don’t use technology and you don’t modernize, your business will die.” Lee said this is why a business improvement magazine like Runcit Malaysia will be very beneficial to the traditional trade. “Aside from guilds like ours, there are hardly any other channels through which traditional retailers can gain valuable knowledge, which is why the introduction of this magazine is so timely.” “I believe we are both pursuing the same goal – to educate the traditional trade. Hopefully we can forge a closer working relationship in future to create training programmes for the benefit of traditional retailers.”

The Perak Sundry Shop’s Guild was formed in 1921 and has 1,004 members, comprising sundry goods wholesalers, retailers, and mini-market and convenience store owners. The guild also offers scholarships to children of members. ADDRESS: No.40, Jalan Yang Kalsom, Tingkat 1 Belakang, 30250, Ipoh, Perak. TEL: 06-2540 643 / 2540 832 FAX: 06-2540 643

By Jothi Jeyasingham – Runcit Malaysia


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Reader’s Digest Trusted Brands

BRANDS CONSUMERS TRUST

Trusted brands can grow your business. Trust is the key ingredient between consumers and the products they pick. The Reader’s Digest Trusted Brands consumer survey recognises brands that won consumer’s votes for six core qualities:

Trustworthiness Credibility of image. Quality Value Understanding of consumer’s needs Ability to innovate

Below are the Platinum Award Winners recognised for true outstanding achievement and for scoring at least double that of their nearest rival. While the Gold Award Winners are brands whose performance rated significantly above others in their category.

Trusted Brands Award Winners

Category Brands

Water/Mineral water Spritzer

Rice Jasmine

Jati

Cereals Nestlé

Kellogg’s

Quaker Oats

Beer Carlsberg

Biscuits Danone

Jacob’s

Cognac/Whisky & alcoholic drinks Chivas Regal

Hennesy

Martell

Juices MARIGOLD Peel Fresh

Sunquick

Cooking oil Buruh

Knife

Red Eagle

Seri Murni


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Trusted Brands Award Winners

Category Brands

Carbonated drinks Coca-cola

100 Plus

F&N

Pepsi

Milk Dutch Lady

F&N

HL Milk

Nestlé

Tea BOH

Lipton

Skin care Johnson & Johnson

Olay

Mobile service provider Maxis

Celcom

Digi

Hair colouring L’Oreal

Wella

Seasoning products Adabi

Maggi

Vitamin/Health supplement Amway Nutrilite

Reader’s Digest Trusted Brands awards are based on responses from 7,000 consumers in Malaysia, Singapore, Honk Kong, Indonesia, Taiwan, Thailand, India and the Philippines. The responses were obtained through questionnaires and telephone interviews conducted by Nielsen Media Research.

By Jothi Jeyasingham – Runcit Malaysia


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Kedai Runcit (Operations)

What To Do When Stocks Arrive This new series on stock management will help guide you to manage your stocks – from the moment they arrive, to storage, price marking and stocktaking.

How well you manage your stocks will determine how smoothly your business will run. So, you need to set up a systematic way to handle your stocks the minute they are delivered to you.

Receiving Stocks Since most traditional retail outlets use the shop entrance to unload stocks, make sure you clear the items quickly so that traffic flow into your shop is not hampered. If you have the manpower, then assign a responsible staff member to be in charge of receiving and checking newly-arrived stocks. Otherwise, do it yourself, because this is an important task.

Checking Stocks Make sure you have your receiving book, the delivery order (DO) or invoice of the supplier, as well as your purchase order (PO) to the supplier. Then follow the following procedures:

Check the boxes or containers before you even open them. The number and the condition of boxes should be stated in the DO.

Check the supplier’s DO against your PO. Open the boxes or containers. Sort the goods according to size, colour, etc. Check the number of goods received against the number stated on the DO. Look out for expiry dates on

food items.


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Inspect the quality of goods received if there’s a need to check material quality and workmanship. If everything is in place, you or your designated receiving clerk can sign the DO. Be very careful, though.

Once your DO is signed, your supplier will not entertain any complaints of discrepancies. If something is wrong with the delivery, it is best to reject the DO at once, instead of accepting it first and

waiting for an exchange in the next delivery. The time and effort needed to get the replacement goods may be not worth your while.

Trade Returns While policies on trade returns will vary from one supplier to another, most suppliers have standard procedures for this. The salesman will issue a Trade Returns Advice from the supplier to record all the items to be returned and the condition they are in. The supplier then approves this document and assigns a transporter to collect the goods. If the manufacturer uses a closed-market system, in which the distribution of goods is handled by a team of key wholesalers, trade returns are done more easily. In such a case, the goods are usually exchanged on-the-spot by the salesmen or returned to the supplier. This usually applies to big quantities of goods. If your supplier doesn’t have a standard policy on trade returns, you should initiate your own. Here are some recommendations:

Note down items that you want to return on a Returns Form (see sample). Write down clearly the number of items to be returned.

Give the reasons for the returns. Make sure the form is signed and countersigned by someone in authority. The stocks that are to be returned at a later date should be kept in the storeroom and not tampered with. When the salesman returns for the goods, make sure he signs and receives a duplicate of the Returns

Form. You should file the original form properly. * Note: In Part 2 of the series, we will talk about the storage of goods. Watch out for the next issue.



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Kedai Runcit (Merchandising)

Effective Space Management By maximising display space, you can increase sales and profitability Mrs Tan wanted to buy her favourite dishwashing detergent. But the moment she stepped into ABC Mini Mart, she was overwhelmed by the clutter in the shop. Display stands jutted out all over the place, and the shelves were cramped with unrelated items. In the end, after wasting a good 10 minutes, she found what she wanted. But she’s not going back there again! What seems to be the problem here? Bad space management. If you want to maximise your sales, you have to make good use of display space and arrange your goods accordingly. This applies to shops of all sizes. Here are some tips on good space management:

Make use of air space Use air space to maximise display space. Use a dispenser to display or hang items. This approach is commonly used because it is very effective and catches the attention of shoppers quickly.

Build display stands of suitable sizes One size doesn’t fit all. Have display stands built according to sizes required. Then display the right products and place them strategically, according to the traffic flow in your shop. This prevents cramped conditions, which can irritate shoppers.


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Plan a good store layout For traditional retail shops with space constraints, opt for the grid layout. The long aisles will help guide shoppers. Allow enough space in each aisle so that two shoppers can pass each other comfortably.

Arrange shelves logically Have a logical shelving arrangement. A planogram, which is a drawing that shows how products are placed on shelves and displays, is extremely useful. Your supplier can help you create an effective planogram.

Determine space allocation How much space you give a certain product depends very much on its popularity (or market share). Get the figures from your suppliers. If none are available, use your experience in determining how well a particular product sells. As a general rule, you should give 50% of shelf space to a product with 50% market share.


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Show your products Make sure all your products are both visible and accessible to shoppers. Products should be clearly visible as soon as shoppers enter the shop and walk down the aisles. Let them feel and touch the products.

Shopper traffic flow Studies have shown that shoppers generally move in an anti-clockwise direction. By putting your entrance and most valuable products on the right side of the shop, you will encourage shoppers to move naturally and to reach for the products they see as they walk in. Remember: A little shelving adjustment can do wonders to your shop. When space is managed properly, your shop will look tidy and inviting. It’s certainly a boost for your image!

Smart Tips on Space Management

Do not overstock Carry only the most popular items Re-order stocks when they are low – not when they are completely sold out Replace slow-moving stocks with fast-moving items. Attend to trade returns promptly.

By Chow Nyuk Loong & Adeline Wong – Runcit Malaysia


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Insurans Runcit

WHAT YOU NEED TO KNOW ABOUT FIRE INSURANCE

Imagine what would happen if your shop caught fire! Besides endangering lives, the damage to your premises and goods would be huge. In short, your business operations could be crippled. Therefore, as a responsible and cautious retailer, you should buy a fire insurance policy. It is the best protection you can give your business, no matter how small it is. A general fire insurance policy will protect you against loss and damage caused by a fire, lightning or explosion to property, machinery and stock. Some businesses, however, may have additional needs. For example, Fire Consequential Loss Insurance covers the additional expenditure you will incur to resume business quickly after a loss. Other perils which can be included to the basic fire insurance policy:

Floods Storms Bursting or overflowing water tanks or pipes Impact damage Riot, strike, malicious damage Explosions Earthquakes or volcanic eruptions Electrical installation faults Damage caused by falling trees or branches Sprinkler leakage

Note: The additional premium to be paid depends on the types of perils selected.

Buy a fire insurance policy that suits your needs: 1. Shop around to find out what each insurer can offer a small business owner like you. 2. Find out what the policy covers and whether it adequately meets your needs. 3. Discuss your needs clearly with your insurer to ensure that adequate coverage can be worked out.

Do’s And Don’ts When Buying Fire Insurance

Do’s 1. Deal with an insurance company you can trust, one that has a reputable claims service and prompt

documentation. 2. Disclose fully all important facts and information in the insurance proposal form. 3. Read and understand all the terms and conditions of the policy before signing. 4. Be punctual in the payment of premiums. Your policy may be cancelled if payment is not received within

the stipulated time.

Don’ts 1. Do not sign a blank proposal form. 2. Do not hide true details or information required in the proposal form. 3. Do not over- or under-insure your property, stock and machinery. 4. Do not be pressured into buying additional policies you do not require.


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You have under-insured your property if you have:

Based it on the current market value instead of on the cost of replacing it. Not done an inventory of all property related to the business when renewing your insurance. Not reported any improvements / renovations to your property when renewing your insurance.

How to make a claim in the event of a fire: 1. Notify your insurance company as soon as possible by telephone, but always follow-up with a written

notification. 2. Collect all information and documents to substantiate your claims (invoices, bills, payment vouchers, etc.) 3. Send all documents and your completed claims forms early to your insurance company. An unreasonable

delay may prejudice your case. 4. Provide truthful information and submit genuine claims. If fraud is discovered, the insurance company can

reject the claim. 5. Co-operate fully with claims investigators or loss adjusters sent by the insurance company. Their job is to

advise you what to do immediately and tell you what further information is required. Note: As a responsible policy-holder, you should take all necessary precautions to prevent a fire. [Please refer to the centrespread on fire prevention.]

For queries or complaints, please contact PIAM’s Complaints Action Bureau at: 3

rd Floor, Wisma PIAM, 150, Jalan Tun Sambanthan, 50470 Kuala Lumpur.

Tel:03-2274 7395/9 Fax:03-2274 5910

A collaboration with Persatuan Insurans Am Malaysia (PIAM), the national trade association

of licensed direct and reinsurance companies for general insurance in Malaysia. For more information, please visit www.piam.org.my


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Insurans Runcit

How to Prevent Fires in Your Shop As terrifying as they are, fires are often preventable. Usually, it is carelessness that causes fires. Here are some tips to help you prevent fires in your shop.

Tip 1 Practise good housekeeping. Make sure your shop is clean and tidy at all times. Keep all aisles free of boxes and papers. Remove waste regularly.

Tip 2 Store or dispose of combustible and flammable materials such as oil, kerosene and flammable sprays properly. Keep these materials away from any heat source.

Tip 3 Use electrical wires, plugs and extension cords carefully. Don’t attach too many plugs into one electrical outlet as it can overheat and cause sparks. Repair or replace all broken electrical cords. Don’t run cords under rugs or across the doorway where they can be easily damaged.


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Tip 4 Equip your shop with fire extinguishers, smoke detectors and sprinklers. Have the equipment inspected regularly to ensure they are in good working condition.

Tip 5 Check appliances and equipment immediately if there is a strange burning smell in the shop. Don’t ignore it!

Tip 6 Train your workers in fire safety and prevention. They should know how to call the Fire Department, use fire extinguishers properly and know the easiest exit paths. Conduct regular fire drills.


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Fire Safety Checklist

Draw up an emergency plan on how to evacuate the shop, who to call and each worker’s responsibilities, in case a fire occurs. Put it down in writing.

Train your workers in fire prevention and fire fighting. Identify and eliminate fire risks. Make sure you have the number of the nearest Fire Department. Alternatively, you can call 994 to

reach the Fire Department.

Tip 7 Adhere to fire safety laws, regular inspections and maintenance schedules. Observe “No Smoking” regulations strictly.

Tip 8 Conduct a routine inspection before you close the shop in the evening to ensure you are leaving everything in a safe condition.



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Sudut Runcit

FOCUS ON TOP CATEGORIES

To maximise your sales, you should know which are the top-selling categories in the provision shops you are competing against. Compare your sales growth with that of other provision shops. If the percentage of your sales growth is lower, then you should find out which are the most lucrative categories in the traditional retail trade, and manage these categories well. To get an idea of the sales potential of each category in the provision shop trade, look at the Grouping and Sales Rank of each category. The sales potential of each category is also indicated by the Percentage Share of Total Peninsular Malaysia Pay more attention to categories with high sales ranking and high percentage share of total (Peninsular Malaysia).

30 Top Categories (June 2005-May 2006) Sales Rank Category % Sales from traditional trade sector

1 Rice 78

2 Carbonated soft drinks 63

3 Detergents 55

4 Health drinks 49

5 Sweetened condensed milk 68

6 Infant formula 29

7 Insecticide 66

8 Cooking oil 52

9 Fruit juices 50

10 Toothpaste 51

11 Canned fish 70

12 Instant noodles 49

13 Confectionery & lozenges 46

14 Asian packet drinks 49

15 Shampoo 35

16 Biscuits 35

17 Self-care products 32

18 Baby diapers 27


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Sales Rank Category % Sales from traditional trade sector

19 Sanitary protection products 43

20 Full cream milk powder 40

21 Dishwash 60

22 Snacks 39

23 Tea 64

24 Liquid milk 32

25 Skin moisturisers 22

26 Battery 53

27 Instant coffee 46

28 Mineral water 43

29 Analgesic 61

30 Hair conditioner 42

By Stephen Tan – Runcit Malaysia

A collaboration with ACNielsen (Malaysia) Sdn Bhd

Getting to know ACNielsen

ACNielsen is the world’s leading marketing information company, with bases in more than 100 countries. The company provides measurement and analyses of marketplace dynamics, consumer attitudes and behaviour to its clients – manufacturers. This entails the collection of consumer sales data of fast-moving consumer goods (FMCG) from retail stores of all types and sizes. This Retail Measurement Service helps manufacturers gauge product penetration, overall performance, distribution, promotion effectiveness and price sensitivity. ACNielsen (Malaysia) monitors the entire FMCG market – of over 70 FMCG categories (food and non-food) – and covers more than 5,000 retail outlets in Peninsular Malaysia and East Malaysia.

Partnering The Traditional Trade ACNielsen would like to invite you to join its panel of traditional retailers and participate in its National Retail Audit, an initiative in which it collects data on FMCG from retail outlets. This data will improve current research information for the benefit of manufacturers, distributors and even you, the retailer. All the information obtained from your shop will be kept strictly confidential and will not be reported separately. As a gesture of appreciation for your co-operation, AC Nielsen will extend to you a token monetary sum.


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On March 2004, ACNielsen Malaysia implemented the Hand Held Terminal (HHT), an electronic data collection device, to replace its manual paper collection method, which had been in use for over 20 years. With the HHT, AC Nielsen’s 118 retail auditors can collect data with speed and efficiency. This reduces the amount of time they will have to spend in your shop.

To join AC Nielsen’s panel of retailers and to participate in its National Retail Audit, call: 03-7956 2311.

Benefits of Hand Held Terminal (HHT):

Improves stock-check efficiency

Faster delivery speed

Improves communication Cost effective

Eliminates human errors


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Kategori Runcit

THE POWER OF CATEGORY MANAGEMENT I used to walk into a supermarket or hypermarket and automatically head towards the aisles that stocked the products I wanted. In most instances, the brands that I thought I wanted were conveniently placed together and displayed in a manner that made it so easy for me to take my pick. It was just as easy to locate the other complementary products, seeing that the retailer had placed them close by.

The shopping experience seemed all so natural. Later, I came to realize that it resulted from careful planning on the retailers’ part. They had used their knowledge of me as a consumer, and of the products they were selling, to maximise the chances of me making the purchase they intended. If the retailers could ‘guide’ my actions, they could do likewise with thousands of other consumers who walked through their doors everyday. Such is the power of category management. It is the heart of your business because this single concept will help you increase sales for every single product category in your retail outlet. In simple terms, category management starts with understanding consumer behaviour in your shop and then placing the products in a manner that is compatible with the consumers’ tendencies. These boil down to four important actions.

1. Understand consumer needs and tendencies. 2. Offer the right products to fulfill these needs. 3. Present these products in an eye-catching way that consumers will not

miss. 4. Your ultimate goal to compel them to buy.

'MOMENTS OF TRUTH' More than 70% of purchase decisions are made after the consumers get to the store. This is why Procter & Gamble (P&G) focuses strongly on influencing consumers at points that it calls ‘moments of truth’. 1

st ‘moment of truth’. This is when consumers stand at the shelf and decide whether to buy a P&G brand,

based on how they perceive the product’s performance, quality and value. P&G wins that moment with effective product packaging, excellent merchandising, innovative promotions, and so on. 2

nd ‘moment of truth’. This happens when the consumer uses the product. The product itself has to deliver

satisfaction while the packaging adds value by protecting the product and making usage more convenient. Recognising that both ‘moments of truth’ are cornerstones to brand success, P&G works with retailers to enhance their category management skills while also educating consumers on how to best meet their haircare needs.

Source: www.instoremarketer.org


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Complementary Products

CREATING A CATEGORY SECTION If a consumer wanted to buy cooking oil, it means that they are planning to cook. You should ask what other related items might they need? Why not put canned and dry food, sauces and seasoning products nearby? This would not only make it convenient for the consumer but would also trigger extra sales. This does not apply only to cooking oil. When planning where and how to merchandise any product, try to create a category section in which the related products can also be conveniently found. TIP: DEVELOP AN ‘IN-STORE SERVICE PLAN’

Identify the consumers Pick the right assortment of products for the category. Determine how best to present the products. Develop the right pricing and promotion plan for the products in the category Develop appropriate in-store service offerings (eg incentives, value-buys, etc).

Category management is so important that Runcit Malaysia magazine will be featuring two product categories in every issue, starting here with Cultured Milk and Medicated Shampoo. We hope the articles will improve your understanding all the categories that are important to the traditional trade, so you can sell better.



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Kategori Runcit

CULTURED MILK – AN ESTABLISHED HEALTH DRINK Cultured milk is a very marketable and popular product, and has attracted many players into the field. Of the numerous brands, VITAGEN stands out as the leader, with a 60 percent share of the market. A huge proportion of cultured milk consumers are children. So, it is little wonder that manufacturers have wooed the young market with below-the-line marketing activities like school campaigns. VITAGEN is a classic example, having made important inroads into kindergartens and schools.

This, however, does not mean that VITAGEN is only for children. In fact, cultured milk is also actively promoted among adults because numerous studies have shown that the probiotics found in cultured milk promotes a healthy digestive system and can prevent gastrointestinal diseases.

Cultured Milk Promotes Good Health Did you know that you need good bacteria to survive? There are over 400 different types of bacteria in our intestines. Ideally, a healthy colon should have 85 percent good bacteria and less than 15 percent harmful bacteria. Thus, to stay healthy, you need to maintain a balance between good and harmful bacteria.

Advantages of a healthy balance:

Harmful bacteria, which produce toxic by-products in our intestines, are killed. Prevents constipation and diarrhoea. Produces vitamin B complex, which is essential for maintaining good appetite and normal food digestion. Guards against diseases like dysentery and cholera. Relieves bloating, flatulence, excessive gas and bad breath.


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The fastest and easiest way to maintain a healthy balance is to drink cultured milk which contains good bacteria called Lactobacillus acidophilus (LB). A small bottle of cultured milk has a LB culture count of more than 10 billion.

Storing and Handling Cultured Milk For cultured milk products to reach your consumers in the best condition, you must ensure proper refrigeration so that the quality of the product is not compromised. Ask your supplier for a dedicated fridge, which they will provide and maintain. This is ideal, as it will keep your cultured milk products separate from other foods. If you store cultured milk products in your own fridge, do not put other strong-smelling food inside. As a rule, store raw meat on the lowest shelf to avoid its juices from dripping on products below it. If possible, place cultured milk at children’s eye-level, so that they can see and reach it easily.

Important tips:

Do not crowd fridge with too many items, cultured milk needs ventilation and good circulation of cool air. Do not switch off your fridge at night to save on electricity, for it would only compromise the quality of the

cultured milk products and even the other items stored in the fridge. Ideally it should be stored at 4 degrees and below.

Once out of the fridge or opened, cultured milk products can last not more than 2 to 3 hours in room temperature.


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Sahabat Runcit

MALAYSIA’S FAVOURED CULTURED MILK DRINK VITAGEN’s success story began when Malaysia Milk chairman Thio Keng Poon was introduced to cultured milk in Japan in 1975. Realising the enormous health benefits of the drink, he decided to manufacture a similar product for Malaysians. Since its introduction 29 years ago, VITAGEN has enjoyed tremendous success because of the company’s aggressive marketing and advertising activities. Today, VITAGEN is a highly visible brand available everywhere in the country. VITAGEN is now the brand of choice of cultured milk consumers, which is why it needs to be widely distributed. Malaysia Milk has its own fleet of refrigerated delivery vans to do this, and well-trained District Sales Agents to help retailers with merchandising. The traditional trade is a very important retail channel for VITAGEN. For this reason, Malaysia Milk wants to enlist your retail outlet to sell VITAGEN. Call this number to see how your can benefit by being a Malaysia Milk partner: Toll-free 1800 88 5587


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Kategori Runcit

DANDRUFF SHAMPOO SELLS! Do you have a dandruff problem? If you do, then you must be one of the millions of people worldwide who suffer from dandruff. Yes, dandruff is one of the most common scalp conditions known today. The good news is that dandruff can be fought and even prevented, with the right shampoo.

What Is Dandruff? Its a chronic skin condition affecting the scalp, resulting in rapid flaking of the skin. Everybody sheds the skin on his or her head, but when you have dandruff, your scalp speeds up the usual rate of shedding dead skin. The result is noticeable flakes or dandruff.

Who Gets Dandruff Dandruff usually begins at puberty and is common throughout adolescence and young adulthood, and peaks around age 40. But older adults are not immune, and for a lot of people, the problem can be lifelong. The common causes of dandruff are stress, diet, hormones, very oily skin, and climate.


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Dandruff Prevention Tips:

Do not alternate use of an anti-dandruff shampoo with a cosmetic shampoo. The dandruff is likely to reoccur. Regular use of an anti-dandruff shampoo like Head & Shoulders will help prevent its reappearance.

Wash hair regularly. Build up of scalp oils can aggravate the condition. Head & Shoulders can be used everyday.

Its important to use an anti-dandruff shampoo that contains conditioning ingredients. Conditioning ingredients in Head & Shoulders coat the hair strand to lubricate and soften it.

An itchy scalp can be a cause of dandruff even if you don’t notice flakes on your shoulders. An anti-dandruff shampoo may help reduce the itching.

Wash scalp gently but thoroughly. Do not forget any part of the scalp, such as behind the ears and the nape of the neck.

Source: Alison Krige, Senior Scientist – Scientific Communications Manager,

Research & Development Procter & Gamble

ABOUT HEAD & SHOULDERS: Over 90 million people in over 45 countries use Head & Shoulders, the world leader in dandruff prevention for more than 35 years now.

One of the top selling shampoo brands. (Medicated and non-medicated) The number one selling anti-dandruff shampoo. Fastest growing anti-dandruff shampoo. ( 133% increase in sales value from

2004 to 2005, and a 160% increase in volume sales from 2004 to 2005.) Zinc Pyrithione (ZPT) is the active flake fighting ingredient found in Head &

Shoulders. Its a dandruff fighting agent which eliminates the Malassezia fungus (Dandruff).

The Medicated Shampoo Market:

The medicated shampoo market is growing, as consumers become more aware of the need for medicated shampoos, especially anti-dandruff shampoos. Source: ACNielsen Marketing Information Digest 2006


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Traditional trade is still a significant sales channel for shampoos in general. Source: ACNielsen Shopper Trends 2005

By Jothi Jeyasingam – Runcit Malaysia A collaboration with Procter & Gamble (Malaysia) Sdn Bhd


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Media Runcit

A SMART PARTNERSHIP Recognising the importance of the traditional trade, Runcit Media Sdn Bhd is fully committed to forging smart partnerships with retailers, like you, in the interest of achieving mutual growth and success. Since 1988, Runcit Media has been successfully attracting shoppers for urban, sub-urban and rural retailers with innovative POS (point-of-sale) media. From a distance, eye-catching and attention-grabbing RAPs (retail advertising panels) make the outlets hard to miss. Once shoppers step inside, the company’s other strategically-placed in-store POS media get to work immediately to promote better sales. Today, Runcit Media supports more than 7,000 traditional retail outlets… and the numbers are increasing! You, too, can join the growing panel of participating retailers.

Join & Benefit!

No Joining Fee. Just call and we’ll send a Field Supervisor (FS) to discuss further with you.

Hassle-free Process. We will apply for all the required permits and licenses on your behalf.

Free installation. You can trust our FS to install our media professionally.

Free maintenance. Always concerned about your shop’s image, we will regularly check on our media at your shop and repair, repaint or replace those items that need it.


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Operational Support. The FS readily help improve merchandising and offer suggestions on other areas of

store operations.

Runcit Malaysia magazine. Runcit Media publishes the country’s ONLY educational magazine that’s dedicated to the traditional trade. Currently, this quarterly publication is given free-of-charge to retailers on the company’s panel.

Expert Advice. Runcit Media welcomes questions from retailers which are answered by sales and

marketing experts through the Bicara Pak Runcit column in Runcit Malaysia magazine and the www.runcit.com.my website.

Speak Up. Besides inviting retailers to have their say in Runcit Malaysia magazine, the company also

conducts regular, medium and large-scale surveys to check how retailers may be performing, their problems and difficulties, or simply what they think of a particular issue. Such information is shared with manufacturers and the authorities to foster better understanding and support for the traditional trade.

For enquiries, please contact:

1. Raymond Khoo (National Field Manager): 019 266 5615

2. Chua Soah Sen (Sales Operation Executive): 03-7957 1718

3. Thong Kang Hee (Operation Executive): 019 359 2128

4. Eric Low (Field Operation Executive): 019 357 4304



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Halaman Pak Runcit

Congratulations to the retailers whose questions have been selected for publication below. Your prizes are on the way! To the rest of you, keep

your questions coming. We’ll try our level best to answer them.

I have only been in business for a few years, but I am disappointed with the way suppliers treat us. They seldom service us, so I have to go to the city to buy my goods. This means my products now cost more than if I had bought them from suppliers. – K/R Nik Tie, Kuantan The area of coverage and call frequency of suppliers (Brand Owners, Distributors and Appointed Key Wholesalers) is usually dictated by the size and the location of the outlet. Such suppliers mainly deal with credit accounts, and the salesman will visit the outlet weekly, fortnightly, monthly or once every six weeks. If your outlet falls under this category and the salesman concerned has not been visiting you regularly, you should contact his office immediately. You will find the phone number on the invoice. However, if your supplier is a Van Operator or Wholesaler, the situation could be slightly different as they do not follow a fixed area or schedule. Also, their transactions are conducted strictly on a cash basis. These suppliers are usually not locally based and will travel to where there is business to be conducted. Quite often, they will only visit a place every two or three months. Some of them may charge you a higher price. What is worse is that your supplies could be disrupted, resulting in much inconvenience for your shoppers. The collection of trade returns is another issue which you will have to seriously consider. The next time you replenish your stocks, make sure it is from a reputable supplier. Also, try to find out the call frequency of the salesman.

I do not buy on credit as I don’t like owing people money. I always buy in cash, but I find that I frequently have to replenish my stocks. What should I do? – K/R Che Jan Ibrahim – Kota Bahru Cash transactions are only recommended when a business is small, as it will save you a lot of time maintaining your records. However, when your business increases to a sizeable volume, this is not a wise move as your cash in hand may not be sufficient to cover all your purchases. Even if cash availability is not an issue, the money is better deployed in other areas, for example, expanding your business, up-grading your store or increasing your range of products. In any business, we have to be prudent in how we utilise our cash to avoid being caught in a tight cash-flow situation. Buying on credit is a good way to circumvent this problem. Your current practice of buying in cash and in small quantities has to be reviewed, because being out of stock on a regular basis is not good for business. As a consequence of this, your business will suffer as regular customers may end up patronising your rivals’ shops. We recommend that you buy most of your goods on credit and restrict cash transactions only to a few selected items which are slow moving. And remember not to carry a high inventory of such items. We wish you all the best.


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Why are Chinese retailers selling at cheaper prices? Do suppliers charge shop owners a low price if they are of the same race? – K/R Ahmad – Masjid Tanah, Malacca First of all, we would like to share with you the different types of price structures that are commonly used by the FMCG industry for the traditional trade. 1. The two-tier pricing system, which is the most common, is structured to cater for:

a. Retailers: These are outlets which buy in small quantities.

b. Wholesalers: Outlets which buy in bulk and resell to retailers. The size of the purchase is not the only criteria, as dealers are also expected to have their own vans and infrastructure to do the distribution work.

c. Recommended Consumer Price (RCP): This is the price recommended by the supplier. As long as it is not higher than what is indicated, it is acceptable. There are also instances when retailers sell lower than what has been recommended. This is also acceptable, as long as it is not below their cost. For retailers who sell below the RCP, it usually means a lower profit margin.

1. The one-tier price structure is known as the List Price (or Retail Price).

All retailers who buy in small quantities will qualify for this price. The official price list may or may not have the RCP. A discount is usually given and the quantum very much depends on the category of outlet and its volume purchase.

Who qualifies for what price in the official Price List is not dictated by ethnic group, but is based solely on the outlet’s classification and purchase volume. The final price structure may also vary from one company to another and the difference is usually reflected in the types of products, e.g, beauty products or semi-cosmetics. A difference in the RCP, it could arise from the following:

a. The classification of outlets could be different, thus affecting the purchase price.

b. One retailer could be buying from the Brand Owner, Distributor or Appointed Key Wholesaler, while the other could be buying from a Wholesaler or Van Operator.

Our recommendations are certainly not to encourage you to start a price war, but to seriously review your current operations. Consider the steps you have to take to give your business a competitive advantage. We wish you every success.

By Chow Nyuk Loong – Runcit Malaysia


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Cakap-Cakap Runcit

Do you want to share your ideas with fellow traditional retailers? If you do, then Cakap-Cakap Runcit is just the place to do it. In this issue, four traditional retailers

share ideas on business improvement.

1. Loyalty Programme Introduced After a hypermarket opened in Ipoh, Chong Chee Choong, proprietor of Kedai Ubat Yoon San Tong, realised he needed to do something to compete with it. He decided to launch a loyalty programme for his shoppers. “With this programme, I can build better rapport with my regular and attract more customers. I give one point for every ringgit spent, and you need to spend at least RM5 to earn the points. Shoppers appreciate that I reward loyal customers. Since I cannot compete with the hypermarket, I had to devise this loyalty programme. More importantly, it’s also my way of saying ‘thank you’ to shoppers who have supported me,” he says.

Chong Chee Choong, Kedai Ubat Yoon San Tong, Tanjung Rambutan, Perak

2. Special Packaging For Customers

Lim Liang Ho, who runs Kedai Runcit Ho Mei, has a unique way to catch shoppers’ attention. She packs her products in various styles of packages. “I pack rice, groundnuts, red beans and other items that can be packed according to weight – 500g, 1kg, 2kg, etc. I’ve been doing this for two years. The special packages make my products attractive and they have become a trademark of my shop. Whenever someone sees such a package, he or she will immediately know that it comes from my shop. I think it is important to make your business stand out from the rest.” Lim Liang Ho, Kedai Runcit Ho Mei, Kuantan, Pahang

3. Untouched By Change Kedai Runcit Kheng Hong Chan has been in business for a century, but it seems untouched by the changes that have taken place around it. Proprietor Sim Hoe Seng says: “I’m the 4

th generation at the

shop. I took over from my father


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Write to Cakap-Cakap Runcit If you wish to share your views with us, please call Chua Soah Sen at 03-7957 1718

or ask a Media Runcit Field Service Personnel for help.

in 1945 and we still use traditional methods to run the business. For example, we still use the abacus instead of a cash register. Even our workers have been with us for decades. We can still survive with our existing shoppers. We can’t compete with supermarkets, so we have modified our business by offering a range of products that supermarkets don’t carry.” Sim Hoe Seng, Kedai Runcit Kheng Hon Chan, Bukit Mertajam, Pulau Pinang

4. Praise For Runcit Malaysia Magazine Kedai Runcit Poh Huat has been a partner of Runcit Media for 10 years. Its proprietor, Lim Soon Beng, was thrilled when Runcit Malaysia magazine was launched. “I enjoy reading the magazine very much. I’ve learnt a lot from it and even took part in the surveys conducted by Runcit Media for the magazine. All traditional retailers should support the magazine as it offers a lot of tips and information on the retail business. Traditional shops are here to stay because we have loyal customers in our areas. With more knowledge gained from reading Runcit Malaysia, we can even do better.”

Lim Soon Beng, Kedai Runcit Poh Huat, Alma, Pulau Pinang

Edited by Adeline Wong – Runcit Malaysia


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Feng Shui Runcit

Hide cleaning equipment All cleaning equipment – brooms and dust pans – is deemed to symbolize bad luck, and must be kept out of sight of the entire office or shop, and especially the main door. The connotation here is that the presence of the broom in the vicinity of the foyer area sweeps out all your good fortune. Brooms are thus regarded as anathema to feng shui. Keep them inside cleaning cupboards or storerooms. Likewise the waste bin should be kept out of sight too and preferably covered. Place your wastepaper basket under your table where it is not visible from the main door, or the door into your private office (if you have one).

Wastepaper bins are believed to take away good fortune, so should be kept out of sight.

Article courtesy of Lilian Too, World of Feng Shui

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