Entering the international market of malaysian coffee shop

Old Town White Coffee is the legend recipe since 1958 from an old town in Ipoh, Malaysia. In order to let everyone enjoy the aroma of coffee anytime and anywhere, Mr Goh Ching Mun and Mr Tan Say Yap formulated their own blend of 3-in-1 instant white coffee in 1999. They started by serving the finest coffee in a classic coffee shop and created a secret white coffee blend. By now, Old Town White Coffee has 1348 retail outlets in Malaysia, 550 retail outlets in Singapore and 2100 retail outlets in Hong Kong. Moreover, OldTown Kopitiam ( Coffee shop) is set up all over Malaysia, a present total of 166 outlets that provides customers with Delicious Asian Food and bread toast that is the best combination with Coffee. This research is all about the Company, Old Town White Coffee that have the potential to hit the western international market in Canada. (Our Business)

2.0 Situation Analysis

2.1 Situation Analysis

In this competitive environment, Old Town has to face with different external environment in order to penetrate into the international market. There are six factors that should be taken in account such as Technology, Culture, Demographic, Economic, Political and legal and competitor that will most likely affect the firm’s performance. In order to compete in Canada; Old Town must plan some marketing strategy for the Coffee to sustain perfectly by tracking on the changes, trends, developments and key uncertainties.

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Canada Economy in is the tenth largest economy according to the IMF global ranking about 1,556.035(Billion) in 2009 [1] (Report for Selected Countries and Subjects , 2010). The economy mainly runs by energy, agriculture, manufacturing and services. The inflation rate [2] might affect the OldTown profit. Work force [3] and distribution income might also affect the consumption of Coffee. Obviously, the larger the population [4] the better the economy turn out yet consumption would be higher. However, OldTown only target the age group [5] starting at 18. Among the territory in Canada, Ontario has the highest population around 13,167,894 which is the most strategy to start the business. Unfortunately, some expertise predicted beginning of the mid 2011 there would be a double recession because currently US facing $ 13,450 trillion debt yet Canada having $ 833,800,000,000 debt. Again, the economy crisis in US would affect the global economy, as US is the largest consumption country in the world. Hence, this prediction and fact might not be the right time for OldTown to penetrate the product to Canada. Nevertheless, research shows that even though people are facing debt, they just could not stop from consuming a cup of coffee that cost them $4. In fact, coffee has become their necessity goods.(Coffee Business Opportunity, 2009) Therefore, the economy might not be the strategic to start a business in Canada; however, the high consumption of coffee may make it be but there has been a lot of coffee company in the local market such as the international brand, Starbuck, Coffee bean etc.

In an era globalisation, technology has actually lowered the cost for the business, for instance with the innovation of world wide web Old Town can actually advertise their range of product and promotion through the company website http://www.oldtown.com.my/ and setting up a group in Facebook is one of the brilliant way to advocate all around the world. Moreover, Old town’s Mission and Vision state that they will follow the advancement of technology in order to create customer value in their products and services. Besides advertisement techonology, Old Town must always keep track on the innovation of coffee grain machine to produce the finest and aromatic Coffee. Therefore, there must be some changes from time to time. Development in technology is essential, in order to have a consistency Just in Time (JIT) and Total Quality Managment (TQM) indeed, as the business is booming into Canadaian Market, effective management is essential for the manager to keep track on the food quality, make sure quality food is served in the overseas market. To make sure the Company obtains the TQM, advance of technology plays an important role for the Manager to have a distance sport check on every single franchiser and employees. Besides that, in order to target more people, Old Town must follow the trends by fixingWi-Fi in every outlet. In fact, a high-end coffee shop is the favourite stop for those Businessmen to discuss some project and the wonderful place for people to socialise. Indeed, Old Town has the potential to get more business chances because besides providing aromatic Coffee, there is a wide range of tasty Asian Food in every outlet which is very special menu among the European Coffee house.

Drinking coffee seems like a kind of Culture in Canada. There is 63% of Canadians has the habit of drinking coffee as a daily basis who are over the age of 18. In fact, coffee business has bloomed in recent years as the rapid growth of coffee drinker average consume 2.6 cups per day. (The Canadian Tea and Coffee Industry, 2009) Coffee drinker culture in Canada actually gives Old Town the market to penetrate in Ontario.

Furthermore, during winter there are more Canadians craving for Coffee. Research shows that even though there was an economic crisis in 2009, Canada shows a positive increase in consumption of hot drinks. (Hot Drinks in Canada, 2010)

Additionally, Canada has a strong ethics culture that do not allow any bride or gift in a business thereby according to the Transparency international table, in 2009 Canada was in the eighth in the ranking index with the score of 8.7, yet the lower the corruption in the country the strongest attractiveness to the investors. Hence, the low corruption might not benefit OldTown from doing business because there would be a strict regulation to get the corruption in control within a country.

Besides focusing in business sector, Old town could build up the reputation even stronger if they involve in the Society welfare in Canada. For instance, Old Town Children Care Fund (OCAF) constructed on 14 June 2009 and they wish to furnish 100 children home for those misfortune children in Malaysia. (Our Business) In addition, Old Town should be aware of the salary distribution, makes sure that the staff are treated equally according to the ‘ Labour Act’ as labour right would be the big concern for the business, because your reputation will be affected badly once you make a wrong move in the society. Culture (Chapters in PDF , 2010).

There are several restrictions for investor while Legal and Political comes across. Canada is a country under Westminster style federal parliamentary democracy within a constitutional monarchy. They follow the English Common Law for all matters within the federal jurisdiction and all provinces and territories except Quebec which base on Civil Law. According to the global ranking for the Political condition, Canada ranked as number 11. Besides politic, Canadian Labour law should be aware of as human right is very important in Canada. There is Employment Standard Act ( an act of the Legislature of Ontario), Employment standard Act of British Columbia and Canadian Association of Administrators of Labour Legislation ( 1930 ) .

Other Legal Agreement such as Trade Agreement of 1989 (FTA) which represented a bilateral agreement between the world’s largest trading partners.

North American Free trade agreement (NAFTA), between United State, Canada and Mexico.

Since 1970- 1980, Canadians become more extensive in control and possible influence of the US multinationals that had operations in Canada. Thereby, Canadian government starts to restrict the direct investment by adopting some policies to reduce Canada to rely on US. However, these policies did not make any difference, yet Canadian competitive did not improve. Hence, Canadians who favoured free trade began to believe that Canada’s resources products would no longer sustain the nation.

Others factor that Old Town should take in concern such as other institution such as Starbuck, Coffee Bean, San Francisco Coffee, Gourment Coffee, Skinny Coffee and etc. As we know that Coffee is a legalised drug that sells like hot cakes especially in western country. A product that people willing to stand in line for 20 minutes by paying $4 to drink. Just imagine that billions of people is craving for coffee in their every days life and has become one of the necessary beverage for them. Nevertheless, everyone knew that Caffeine is acidic and harm our health, but the aromatic smell of the Coffee is too tempting and yet coffee has become the global necessity. As time pass by, more and more diseases will happen because of the consumption of Caffeine and this would be the main barrier. However, the discover of Ganoderma Lucidum ( Kings of hers by Chinese Emperor) which use in traditional China’ hers for more than 4000 years which blended in a coffee and form a healthy and delicious Coffee. Do not worry about the taste, aroma or texture, all would be fine and guarantee the same taste as you try. In order to sustain in the challenging market, OldTown ought to spend on some research and development in producing healthy coffee.

4.0 International marketing mix strategy

There is instant 3in1 or 2in1 coffee selling in the retail outlet, however there is Classic Dishes, Local Favourites and Sweet Delights and Hot & Cold Beverages in the OldTown outlet.

Instant Coffee

OldTown White Coffee 3-in-1 is a perfect smooth blend of the original white coffee. Rich, creamy and aromatic, it has a heightened lingering mouth feel. There is 15 sticks x 40g or 1 Carton (20 Packs) in a packet. If you wish to buy in a Box Pack, there is 10 Sticks x 40g=400g/ per box or 1 Carton (24 Boxes).

OldTown White Coffee 3-in-1 Blends Natural Cane Sugar is a satisfying blend with the great taste of natural cane sugar. Smooth, tasty and milky, it delivers medium strength coffee aromatics. There is 15 sticks x 36g or 1 Carton ( 20 Packs) in a packet. If you wish to buy in a Box Pack, there is 10 Sticks x 36=360g/ per box or 1 Carton (24 Boxes).

OldTown White Coffee 3-in-1 Hazelnut is a rich fragrant Hazelnut flavoured white coffee blend. Creamy, butty and unique, it leaves a tantalising mouth feel. There is 15 sticks x 40g or 1 Carton ( 20 Packs) in a packet. If you wish to buy in a Box Pack, there is 10 Sticks x 40g=400g/ per box or 1 Carton (24 Boxes).

OldTown White Coffee 3-in-1 Ice Cold is a refreshing ice blendd version of the original white coffee. Perfect as a thirst quencher! Best served cold or chilled. There is 15 sticks x 40g or 1 Carton ( 20 Packs) in a packet. If you wish to buy in a Box Pack, there is 10 Sticks x 40g=400g/ per box or 1 Carton (24 Boxes).

Oldtown White Coffee 2-in-1 No Sugar Added is a great alternative for the heath conscious. A full bodied white coffee minus the sugar. Want some sweetness? Our special packet comes with 15 free coffee sugar sticks to sweeten the beverage to your taste. There is 15 sticks x 25g or 1 Carton ( 20 Packs) in a packet. If you wish to buy in a Box Pack, there is 10 Sticks x 25g=250g/ per box or 1 Carton (24 Boxes).

OldTown 3-in1- White Milk Tea is flavourful combination of milk and tea. Aromatic and calming with a smooth creamy mouth feel. There is 13 sticks x 40g or 1 Carton ( 20 Packs) in a packet. If you wish to buy in a Box Pack, there is 8 Sticks x 40g=320 g/ per box or 1 Carton (24 Boxes).

Nan Yang White Coffee ‘O’ 20 sticks x 25g or 1 Carton ( 20 Packs) in a packet.

Nan Yang 2 in 1 Roasted White Coffee White coffee ‘o’ with sugar, roasted to perfection! Strong, dark palette with a nice bittersweet balance.

There is 15 sticks x 25g or 1 Carton ( 20 Packs) in a packet. If you wish to buy in a Box Pack, there is 10 Sticks x 25g=250g/ per box or 1 Carton (24 Boxes).

Nan YangRoasted White Coffee ( no sugar added) Distinctive and strong-just like the good old days! Sugar- free, thick and bold with full-bodied white ‘o’ aromatics.

OldTown White Coffee Enriched (50g) & (100g) 100% Pure Freeze Dried Coffee. A full flavoured white coffee with a high acidity that is rich and satisfying to the taste. 1 Tray=12bottles / 1 carton=2 trays

OldTown White Coffee Original ( 100g) 100% Pure Instant Coffee Spray Dried. A dry version of the perfectly blended creamy original white coffee. 1 Tray= 6bottles / 1 carton=2 trays

Outlet menu

Classic Dishes

OldTown Redang Chicken Rice

OldTown Ipoh Chicken Hor Fun

OldTown Ipoh Lum Mee

OldTown Prawn Meehoon and Mee

OldTown Asam Laksa

Ipoh Dry Curry Mee

Javanese Mee

Spring noodle with Chicken Ham & Egg

Spring noodle with Chicken Sausage & Egg

OldTown Curry Chicken Rice

OldTown Nasi Lemak Special

Hainaness Chicken Chop with Flavoured Rice

Homemade Miced Chicken with Flavoured Rice

Local Favourites and Sweet Delights

Kaya & Butter Toast

OldTown Egg Toast

Ice Fire Polo Bun

Chicken Ham & Cheese Polo Bun

Garlic Butter Toast

Tuna Toast

Curry Potato Toast

Strawberry Puree Thick Toast

Blueberry Puree Thick Toast

Omega Soft Boiled Eggs on Toast

French Fries Basket

Mini Spring Roll Basket

Cocktail Sausage Basket

Hommade Sticky Rice

OldTown Cofee Lava

Strawberry Mellow

Blueberry Mellow

Hot & Cold Beverages

OldTown White Coffee-Hot

OldTown White Coffee-Cold

Hazelnut White Coffee

Nan Yang Kopi ‘o’

Xi Mut Milk Tea

OldTown Iced Cold-White Coffee

OldTown Enriched Chocalate

Blackcurrant Yogurt Smoothies

Fresh Leman Tea

Organic Spirulina Orange Juice

Organic Wheat Grass Honey Juice

Lime Juice

Rose Float

Tropical Float

Pepsi Float

Revive Float

Take a compare between OldTown Coffee and Starbuck that is the international brand Coffee. Old Town is producing 11 types of instant coffee that Starbuck does not have.

Economy

Employment: http://www.statcan.gc.ca/daily-quotidien/100806/dq100806a-eng.htm

Income: http://www.statcan.gc.ca/daily-quotidien/100617/dq100617c-eng.htm

Culture

Coffee Trends: http://www.euromonitor.com/Hot_Drinks_in_Canada