SEM 1 ACADEMIC SESSION 2014/2015

CBEB1106 – PRINCIPLES OF MARKETING

GROUP ASSIGNMENT

GIANT : A RETAILING SUCCCESS STORY

Prepared by: AIMI NADIA BINTI AZIMI (CEA 140003)

CHIA POI YIN (CEA 140018)

MUHAMMAD FAIZ HAIKAL BIN NORIHANAFI (CEA 140086)

YVONNE LEE (CEA 140150)

MUHAMMAD AZRAD SYAZWAN BIN ALI (CEA 110060)

Supervised by: DR. YUSNIZA BINTI KAMARULZAMAN

Date of submission: 15 December 2014

Table of Contents INTRODUCTION ...... 2

MARKETING ENVIRONMENT ...... 3

MICROENVIRONMENT ...... 3

MACROENVIRONMENT ...... 5

SWOT ANALYSIS ...... 6

MARKETING MIX ...... 10

PRODUCT ...... 10

PRICE ...... 11

PLACE ...... 12

PROMOTION ...... 13

CUSTOMER DRIVEN MARKETING STRATEGY ...... 13

SEGMENTATION ...... 13

TARGETING...... 15

DIFFERENTIATION AND POSITIONING ...... 15

REFERENCES ...... 17

INTRODUCTION Giant store brand was established by Teng's Family as a simple grocery of Sentul, in 1944. In 1960s, Giant opened a shop in Lorong Kurau, Bangsar. Teng's Minimarket headquater was established at Bangsar in Kuala Lumpur in 1974. The first Giant supermarket is opened at Kelana Jaya. Dairy Farm Group of Hong Kong acquired Giant in 1998 through GCH Retail (M) Sdn Bhd when it entered the Malaysian market. GCH is the subsidiaries of Hong Kong-based Dairy Farm International Holdings Ltd and claims the nearby operations of Giant, Cold Storage, Guardian and 7eleven. Dairy Farm obtained 90% of Giant Group in . In 2000, the first Giant Hypermarket store opened in at IMM Jurong and Dairy Farm gained the 10% stake in Giant TMC Berhad.

Giant, perceived as a pioneer in the low-cost retail segment, makes up an extensive part of GCH's operations in Malaysia. Giant is one of the biggest retail organizations in Malaysia. There are around 128 outlets spread throughout all over Malaysia, Singapore and, . The organization had developed to an aggregate of 86 in Malaysia. It incorporates 6 stores in Singapore and 17 hypermarkets in Indonesia. On 2007, Giant Hypermarket Malaysia opened their 100th outlets in Bandar Kinrara, Puchong. Then they penetrated into Darussalam on March 22, 2008, the first Giant Hypermarket in Brunei was opened at Tasek Rimba, Mukim Gadong An in the Brunei Muara District close to the Rimba Housing Estate. This expended to the Seri Q-Lap Mall in Kiulap and the recently opened Times Square Shopping Centre in Berakas near the international air terminal. By the end of June 2011, Giant has 38 hypermarkets and 76 grocery stores in Indonesia. By 2013, they have opened an aggregate to 128 stores across the region. There are around 1300 little and-medium enterprise tenants and traders operating in all Giant shopping centres, profiting from the tremendous client activity.

In Malaysia, Giant is synonymous with everyday low prices, big variety and great value and recognised for offering the most vibrant, comfortable and complete shopping environment with their mission "Great Value, Big Variety and Low Prices". They offer low costs of items, huge mixture of product and extraordinary worth value for customers. Plus, they do their things in least expensive way with the goal that they will have the capacity to pass on the savings to the customers. They also offer an extensive variety of local merchandise, for example, fresh local foods grown from the ground, vegetables, and seafood within a wet market environment. As the pioneer, Giant sets the pace and standards for the industry with innovative marketing strategy, store design and product pricing. To support Malaysian- made products, especially those manufactured by SMEs, Giant organizes special promotional events locally and abroad. Among the campaigns which have been launched include 'Buy Malaysian-made Campaign' and the Taste of Malaysia Campaign. In Malaysia, the "Produk Malaysia, Citarasa Kita", series has been highly successfully in helping SME producers to reach Giant's millions of customers throughout the country. Giant has been equally successful in helping to promote these products through the Taste of Malaysia campaign in countries such as Hong Kong, Singapore and Indonesia, where its subsidiaries operate.

For the buyer, Giant has tossed its weight completely behind the Malaysian Government's system to make savvy customers of Malaysians through persistent promoting developments, which bail them search out the best esteem bargains. Giant worked together with the Government to dispatch various campaigns, for example, Price subsidy campaign for Fresh Produce. This programme was the first in this sort of industry.

MARKETING ENVIRONMENT

MICROENVIRONMENT

Competitors

In order to gain success, Giant Hypermarket provide greater customer value and satisfaction than its competitors do and gain strategic advantage by positioning their offerings strongly against the competitors’ offerings in the minds of consumers. Facing the strong competitors like Mydin, Tesco, Milimewah and Chua Kah Seng in the retailing industry, Giant Hypermarket develop its strategy by offering a big variety of products at the very low prices everyday to provide great customer value. To implement Giant’s strategic plan, Giant Hypermarket also identify stores to takeover like Likasmart in and have its staffs to survey the competitors’ prices at the major supermarket outlets. Giant’s 85 branches are also strategically spread throughout the whole Malaysia while its competitors, Tesco and only pay attention to major cities. These are the strategic that attract customer to visit to Giant Hypermarket.

Supplier

Giant Hypermarket build good relationship with the suppliers as suppliers play important role in the company’s overall customer value delivery system by providing resources needed by Giant Hypermarket. As an example, Giant made a deal with their supplier to provide them with free products when they purchased more for the opening day of their store in Kolombong. The free products are then sold at the price of only RM0.10 on their opening day as their promotion strategy which attracts a large number of customers to visit to their store, purchase the products, and indirectly also buy other products there.

The company All company departments under Giant Hypermarket such as top management, finance, research and development (R&D), operations and other departments work and corporate well together. Top management of Giant Hypermarket sets Giant’s mission, “To provide the biggest on savings and value across fresh, groceries and general merchandise along with the right shopping experience to our customers every time” while the marketing departments make decision and carry out the strategy “ Everyday low prices, big variety, great value”. However, the marketing department couldn’t promise us the low prices without operation departments to deliver the low costs. Giant marketing team also advertised their product through newspaper, bilboards space and brochures. This strategies is said as a success for Giant as more and more customer come to their stores after seing that advertisement.

Customers

Giant Hypermarket aim to serve their target customers in a better way and build strong relationship with them by studying their needs. Thus, Giant collaborate with the government to organize campaigns such as a price subdisy campaign for Fresh Produce product which effectively brought prices of daily essentials and consumables products to a lower price. As the low price leading hypermarket chain in Malaysia, this efforts of Giant that were the first in the industry greatly brings satisfaction to customers.

MACROENVIRONMENT

Political Factor

Political factor can greatly influence the performance of an organization or a business. The Malaysia’s government strongly encourage the retailers includes Giant to create job opportunity in Malaysia in order to increase the average income level of Malaysia and also to improve the living standard in Malaysia. When Giant Hypermarket operates in Malaysia, it increase the job opportunity and indirectly, the demand of their products increases although creating job opportunity is not the part of the vision and mission of Giant Hypermarket. So far, Giant Hypermarket has employ 1,000 workers in Sabah and 10,000 workers in the whole Malaysia. Employee working in Giant enjoy benefits like comprehensive medical care and 10% discount when purchasing products from Giant Hypermarket. Besides, Giant Hypermarket need to access the political environment in Malaysia although it is owned by the Dairy Farm International Holdings Limited, an Asian retailer company which its headquarters is in Hong Kong. Giant Hypermarket need to handle well and avoid any unwanted political pressures that can interfere the running of the business and cause loss to the company and be aware of the political issue.

Economic Factor

Giant Hypermarket aware of the income distribution and average income level in Malaysia as it can determine the consumer purchasing power. Giant Hypermarket also pay attention to trends and consumer spending patterns. Thus, with the decline of economic in Malaysia, Giant Hypermarket offers variety of products with low prices everyday in order to attract consumer to buy goods in Giant Hypermarket rather than the competitors.

Social Factor

In order to maintain success in the retailing industry, Giant Hypermarket collects data regarding the communities and offers products that can always meet the preferences and lifestyles of the consumers.

Technological Factor

Technological factor is important as technology advance can lower down the cost of production and decrease the time taken to complete the specific task and thus increase the efficiency of the operation of Giant Hypermarket. Giant Hypermarket creates their own official website at www.giant.com.my where consumers can easily get the details about the latest promotion from time to time and the information about background and milestones of Giant Hypermarket. Consumer can also gives opinion on improving the service and products offered by Giant Hypermarket for the best quality and convenience through the feedback form online.

Environmental Factor

Giant Hypermarket concerns about the global environmental issues and tries to minimize the wasted products and increase social conscience and awareness among the consumers. It plans to replace the plastic bag with paper bag in future to save the environment.

SWOT ANALYSIS SWOT is an analysis to identify the company's strength(s), weakness (w), opportunities (o) and threats (t). The reason the analysis been conduct is because to help the company to understand the current and potential environment that the product is marketed .Here we will identify their strength, weakness, opportunities and weakness.

Strength

As we all know, Giant is the largest retailer company that we had in Malaysia. Giant has about 85 branches all over Malaysia that make them known very well in Malaysia. By having so many branches, they have achieved one of the largest supermarket chains in Malaysia. With that, they may capture the market share and can take out theirs competitors. They also put their branches across the countries unlike Tesco and Aeon which just put their branches in major cities only. This way they can attract more customers in Malaysia as their target customers mainly from middle to lower class customers. They also offers a big variety of products at very low prices as compare to their close competitors like Mydin, Tesco, Milimewah and Chua Kah Seng in the retailing industry. Their low prices are not only for a certain period, but it take place everyday at every Giant's outlet. Giant have introduced their own home brand for daily use products like cooking oil, soap and others which is good in order to increase customer valuation to their products and as to promote their brand name to the customer. This is also good for market positioning and it provide great customer value.

Every departments under Giant Hypermarket such as top management, finance, research and development (R&D), operations and other departments work and corporate well together. Giant has a good marketing team to promote their brand name among the people. As their primary tool of marketing, the marketing team buys the billboards space, do advertisement in newspapers, delivering the flyers and brochures. This method is useful and proven when Giant introduce their first stores in Sabah. More and more customer has come to the stores after they use that marketing strategies compared to before they do that.

Another Giant’s strength is make a good relationship with their suppliers. They know that to be a successful retailer company, they must have a good relationship with their suppliers. This is because if we have good relationship with suppliers, they will give us the best quality product they have and will deliver it to us in time and might also be able to get a discount from the suppliers or a free gift. For example, Giant make a deal with the suppliers to provide them free gift if they bought many product on their opening day in Kolombong.

Weakness

Although Giant is a large retail company, they also experiencing high turnover rate with their employee especially on the operating department. The employee will quit the job after working there for one or two month. This will give Giant a problem which is to find a new employee. After that, it will take time to train the new employee.

Besides that, they also need to have high maintenance on certain supermarket like in Kolombong. Their image on customer’s eyes will be decrease if they do not do the maintenance properly. As evidence, Giant’s store in Karamunsing has bad maintenance which lead to smelly store. Giant company led to lack of efficiency in bureaucracy. Giant use centralized decision making which means every decision, anything happen or anything they do, they need to report or tell it to the management team in . As in their marketing, they also experiencing the high cost in promoting their brand especially in Sabah where they need to do many advertising to get the attention of the customer.

They also facing pricing problem. They usually use shelf type pricing which price for the product will be at the shelf. The problem is the pricing can get confuse for the price for the products because the price list on their shelf are outdated and the worker often put the price at the wrong place. A couple of incident had occurred which when a customer saw the price for a product is different but when they reached the counter, the salesperson charge at different price. This will made the customer afraid to buy the product and can cause the customer run to another retailer shop because of the pricing tag.

Opportunities

Opportunities is a favorable situations that a firm should capitalize on in order to make profits. As Giants have already well established in the market, they already have loyal customers. Giant’s product is focused on household product. Household are now increasing so everyone will increase their buying quantities and this will increase the demand for Giant’s products which is good for Giant. So Giant should be aware of the income distribution and average income level in Malaysia as it can determine the consumer purchasing power.

Other opportunities for now is Giant is an already know retailer company so they need to increase their branches to the new place in Malaysia as what they have been plan which is to increase their branches up to 40 stores throughout Sabah, and Brunei. In Sabah, they have identify stores to takeover like Likasmart and have its staffs to survey the competitors prices at the major supermarket outlets. This strategy can boost their market share and attract more new customer or other company’s customer and can take out their competitors.

They also can increase the variety of products for their house brand. They will attract many customers and maintain the old customers as they can get everything they need in Giant’s stores and for the low prices. Customers do not need to go to other retail’s shop to buy products as Giant can provide all of it. By doing that, Giant will get more customers and customer will be loyal to them.

Technological advancement can also acts as opportunities to Giant as improvement in technology means improvement in lowering cost of production. Technology may lower the cost of production, decrease the time taken to complete a specific task and increase the efficiency of Giant's daily operations as well as marketing promotion strategies.

Threats

Threats is unfavorable situations that the firm should beware in order to minimize any loses. With the fluctuations or much uncertainties in Malaysian economics, Giant Hypermarket should pay attention to trends and consumer spending patterns. Thus, with the decline of economics in Malaysia, Giant Hypermarket may offers products with low prices everyday in order to attract consumers to keep spending at Giant rather than the competitors.

Giant also face a stiff competition within the retailing industry. There are so many retailing companies that can be a threat for Giant such as Tesco, Aeon, Jusco and others companies in Malaysia. Other companies can be a threat to Giant is if the competitors do some promotion or do something innovative products that can attract Giant’s customer, which will be a big problem if Giant does not do something.

Another threats that been faced by Giant is although Giant has their own home brand, that brand is not the most preferable by their customers. Their customer more prefer to other popular brand. Survey had been made in Sabah for this situation. People in Sabah cannot accept the ‘Giant’ brand because of many reasons. This situation could be the poison to Giant because if the customers cannot consider their brand, they may experience decrease in sell due to many customer had gone to other retail shop.

Last threats faced by Giant are online shopping which is become popular among the people right now. Now, we are living in an IT world which means we will use computer to do our daily task. Almost every day we will use computer and do not have enough time to go shopping for some goods. So we almost do everything by using computer such as pays the bills, transfer money, and others. There are many alternatives of online shopping such as