PRINCIPLES AND PRACTICE OF MARKETING (MKT420)

REPORT ON MARKETING ENVIRONMENT

MASSIMO
BAKING COMPANY

PREPARED BY

NAME (STUDENT ID) : MOHD SHARILL REZA BIN ROSLI (2021352709)

FACULTY & PROGRAMME : IJAZAH SARJANA MUDA PENTADBIRAN

PENIAGAAN PENGURUSAN SUMBER MANUSIA
(BA243)

SEMESTER : SEMESTER 2

PREPARED FOR

PUAN NOR MARINI MOHTAR

SUBMISSION DATE

17 DEC 2021
 1. INTRODUCTION
 
o Outline the purpose of the report.

Nowadays there is so much competition available in the global market and there
are so many options available to consumers, it makes it difficult for consumers to choose
the best and easiest goods and services. With the need to understand the marketing
environment is important in helping marketers identify as well as identify in deciding
what customers need. In other words, without any understanding of the marketing
environment, the situation will become complicated for everyone involved in a company,
so that marketers miss out on what consumers need, thus resulting in losses. Marketers
need to be mindful of their marketing environment as it is important to marketers in
helping them a little bit about how to identify their consumer needs on how consumers
make decisions when buying a product. Yadav & Pavlou (2014) praise the consumer and
cultural aspects in which marketers are required to study and understand the different
cultures of different customers. Culture is a tremendous influence on the way buyers
behave, and it depends on income and social class.

o Business background

The Italian Baker Sdn Bhd is one of the companies doing business known as
Massimo) which is a chain of Malaysian bakeries based in Selangor wholly owned by
The Italian Baker Sdn Bhd, a subsidiary of Federal Flour Mills Berhad. There are several
variations of the bread packaged in 3 colors namely green, white and red based on the
Italian flag, and the way it is produced combines traditional and modern techniques.
Massimo Company has invested RM120 million in producing a fully automated bakery
plant in Pulau Indah, Selangor which produces 16,000 loaves and 24,000 loaves daily to
meet the needs of West Malaysia.
 o Information for the essential contents of the study.

Something that is very important and necessary for company management in

understanding the Importance of Marketing Environment wisely to plan business
operations such as planning the nature, features of new products and services in the
current market. It also assists in the planning of various marketing and promotional
strategies to match the company's offerings with the current marketing environment.

Focus should be given to the Importance of Marketing Environment as it can

control some factors such as budget and internal policies of the company but other
external and macro factors such as changes in government policy and political scenario
are not under management control and therefore, operational planning and business
strategy should be done according to factors of the evolving marketing environment.

The guideline for a company to understand the exact needs and requirements of
its existing and potential consumers or customers is the Marketing Environment i.e.
political influence, advances in technology, increasing market share of competitor brands,
and changes in government regulations and policies affecting on the tastes and
preferences of the customer.

Thus, giving Importance to the Marketing Environment helps a company retain its
loyal customer group while attracting new customers as there is a possibility that for loyal
customer groups leave their preferred brand and go for products and services offered by
competitors due to changing customer tastes.
 
 2. COMPANY INFORMATION
 
An overview of the company and may include:

 Background
The Italian Baker Sdn Bhd in 2011, a 100% owned subsidiary of FFM Bhd has
brought Italian interest for exceptional quality in the Malaysian market through the
Massimo brand. The company believes that not all breads are created equal, The Italian
Baker marries high quality flour from Federal Flour Mills with their traditional
techniques and aided by today’s modern technology as well as ensuring strict quality
control successfully produces healthy and delicious breads. Massimo’s bread flies the
uncompromising standard Italian flag that matches the green, white and red colors on
their packaging.

 Organizational Structure

 Products/Services
Loaves

Unlike in Malaysia, Italians like to dip their bread in good olive oil, but consumers in
Malaysia don’t mind like your favorite Massimo sandwich bread with rich, butter or jam.
And as the name suggests, it’s the perfect vehicle for your favorite sandwich.

Rolls

The perfect snack on the go, Massimo Cream Rolls are the best thing since the bread is thinly
sliced as well as filled with delicious Duetto cream dense with blueberry-vanilla, coffee-
vanilla or strawberry-vanilla cream, while Favorito offers a choice of chocolate core or cream
corn which is delicious to suit local tastes.

Cups

Using a taste concept like Massimo Chiffon’s warm mother’s cuisine in A Cup satisfies the
taste! Soft, fluffy and available in a variety of Malaysia’s favorite flavors, you’ll be
pleasantly surprised to learn that this nutritious snack is only made from eggs, flour and milk.

Example of products
 Business, marketing and operational strategy
1. Product

Several Factors should be considered to develop a product strategy- quality,

diversity, features, packaging, brand name and additional services. This element of
Marketing Strategy is a solution to customer needs. Companies should update their
unique product designs, names and features to stand out from other companies in a
competitive market. The product should or must follow the criteria that will make the
customer attracted to the product.

2. Pricing

For targeted customers, this Element of Marketing Strategy is necessary for

product value evaluation. The company’s pricing strategy will focus on list pricing, credit
terms, payment periods and discounts

When a company decides to choose a price penetration strategy, the company has
to set a lower price than other brands or competitors that exist in the market. The
company will be able to win market share based on the discounted price.
However, management should always be sensitive and concerned about the
possibility of retaliation from competitors in the form of unwanted price wars.

Skimming strategies require clear basic communication of differentiation and how

such differentiation allows for additional pricing.

For today’s buyers they are not interested in knowing the ‘price’ but prefer to know the
total cost involved in acquiring, consuming and disposing of the product. Today’s
customers are much smarter than ever before. Therefore, companies need to study ways
to address this problem proactively.
3. Place/distribution

Companies need to make some important decisions in following the Elements of

Marketing Strategy while developing its distribution plan. It’s important because
different places have different target customers or users. The company must decide:

Provides products to targeted customer segments through its channels, or it

requires a distribution partner to meet current customer needs.
Conducting distribution will be direct without involving middlemen / third
parties, or indirectly and if an indirect distribution strategy is adopted, the number
of middlemen / third parties must be selected (wholesalers, retailers etc.)
Traditional mortar and brick distribution network i.e. online distribution or a
combination of both. Certain online retailers like Amazon and many more are
available if an online distribution strategy is chosen. Companies can also develop
their official website online to sell products.

Modern customers place a high importance on ‘convenience’ as well as ‘easy

availability’. The selection of the right distribution channel requires the company to:

Firstly, to distribute perishable products is not a wise decision to involve many

middlemen or third parties if the product is perishable and the company needs to
consider the features and information of the product accurately.
Distribution strategies should be set accordingly by analysing market dynamics,
customer preferences and resources as well as own capabilities. If customers
value personalized service and prefer to shop from traditional stores rather than
online channels and firms also have sufficient resources to open their branches.
The strategies of companies that are competitors also need to be studied. A
comprehensive cost-benefit analysis of each channel and a comparison with its
own resources and capabilities will help the company develop an effective
distribution plan.
 4. Promotion

One of the most important elements in a Marketing Strategy is that companies can
combine promotional strategies above and below the line to achieve their marketing
objectives. The above online promotional options for companies are television, mass
media, radio and print advertising. The promotional options below the line are-
catalogues, trade shows and direct mail campaigns.

The promotional plan of Marketing Strategy requires the company to consider the
following factors:

Start by clearly defining a unique sales proposal and understanding why

customers need the product and how it differs from available alternatives.
Consider AIDA (awareness, interest, desire, action) while developing the message
in creating the content design of the message and the value of how the message is
created will help the customer in creating a clear image of the product offered.
Promotional strategies such as high -profile advertising or direct sales will be
appropriate if the company wants to reject the product. However, an attraction
strategy will require the development of a prestigious brand image that can attract
customers towards the products offered.
Emphasize to gather the following target market information- who will buy the
product? (Age, gender, income and social status), what is the level of price
sensitivity? And what is the mode of communication that the customer wants?
This information should be in the promotional plan.
Filter promotional options based on the information above and run a cost-benefit
analysis of selected promotional alternatives.
Finally, consider the budget constraints and budget allocations to the selected
promotional strategies according to their nature, importance and frequency.
3. IMPACTS OF MARKETING ENVIRONMENT 
 
 Company
Most company management will focus on different departments to achieve the goals
and objectives set by management. For example, the company’s top management set,
Goals, Objectives, Strategies and overall Policies for the company. The sales
department gives priority to sales promotion and sales. The distribution department
will ensure the availability of company departments in different malls and stores. The
research and smart departments will conduct studies as well as different market
surveys and other research work if required. With this, all these departments
collectively make the company, and this department has an impact on the marketing
department of the company to ensure the company is on the right track and orderly.

Suppliers
One of the important factors in a micro environment is the supplier. The supplier
actually becomes the link between the company and the customer value delivery
system as a whole. The supplier will or may assist the company in providing the
resources required by the company to produce its services and goods. If a supplier is
problematic it can seriously affect the company’s marketing strategy. So the market
managers of all successful companies and market leaders like Pepsi & Co, Toyota and
Houston Effler are always keeping a few precautions on suppliers. Companies
constantly look at supply availability, shortages, supply delays, labor strikes and other
factors related to the supply of materials to the company. Some companies like Toyota
also print a “Supplier Guide”.

Marketing Intermediaries
Elements of the micro environment also play an important role as marketing
intermediaries for companies in order to achieve their marketing strategies. This is a
company department that specializes in helping the company promote, sell and
distribute its goods to end customers, which affects the business in terms of carrying
cash. Examples of marketing intermediaries are overall sellers, retailers, marketing
services agencies and financial intermediaries.
Customers
The people who buy the goods and services produced by a particular company are the
customers as end users. There are purchase chains where different people are involved
and play an important role in making decisions before a purchase takes place. A good
marketer needs to understand the various influences of customers. Due to the rapidly
changing needs and wants of the customers it becomes a critical factor here. Changes
in customer preferences create threats as well as opportunities for a company. Only a
good knowledge of consumer behavior facilitates the design and production of goods
and services that customers need and want.

Keith Banks President of US Trust, who is the world’s leading CEO says that Bob
Lord AOL Network’s business strategy should be the driver as desired by customers.
IMB recently conducted a survey and survey of over 4,000 top-level executives where
IBM's Head of Strategy and Transformation Dr. Saul Berman has noted that customer
engagement not only takes place in sales and product development but is also involved
in strategy and recruitment.
4. RESPONSE TOWARDS MARKETING ENVIRONMENTS 
 
There are two approaches organizations can follow while responding to the
environmental forces of marketing forces. These are popularly known as reactive
marketing and proactive marketing:

There are two methods that become approaches and can be followed by
organizations when responding to the environmental forces of marketing forces. it is
better known as reactive marketing and proactive marketing:

1. Reactive Marketing

Reactive marketing sees the power of the marketing environment as difficult to

predict and completely uncontrollable. it is a passive approach, in which an organization
tries to adapt its marketing mix and programs according to changes in the environment.
Adjustments occur only after changes have taken place in the environment. Organizations
need to analyze environmental changes to find appropriate ways to avoid threats and take
advantage of new opportunities in the marketplace. Basically, they wait for the
environment to change and respond only after the change has taken place.

2. Proactive Marketing

An organization that adopts an environmental management perspective needs to

follow proactive marketing because this proactive marketing believes that although many
environmental forces such as demographics, economics, culture and natural factors
cannot be controlled, environmental forces such as politics, law and technology can be
influenced by correct and calculated steps. Proactive marketing uses political,
psychological, economic and public relations skills that influence environmental power
for the benefit of the organization. Political lobbying techniques, funding political parties
and elections, using publicity to shape public opinion and many more are used by
organizations to bring environmental power in their favor.
 5. RECOMMENDATION 

Companies are responsible for ensuring that they follow the advice of the
marketing environment department as it changes from time to time. In addition, it can
help the company to be more successful in the future.

A company needs to know and target the demands of their customers to increase
the level of customer satisfaction and at the same time ensure that customers stick to the
company. The wants and desires of customers can sometimes help a company to target a
larger audience to become a successful and competitive company. The success of the
company can then attract more suppliers to join them thus making it easier for the
company to produce their products, goods and services.

Therefore, each responsible management team needs to identify the factors

needed to help the company be more productive in its products, goods and services. The
success of each management team to address the problems identified in the company can
help the company and at the same time make the management team better. Thus each
department must work together and act together by moving as a family and a large team
to compete with other companies.

Finally, the conclusion is the Marketing Environment Factors are most important
that need to be implemented in any company. Because the companies can identify and
resolve any problems regarding their products or services by studying the marketing
environment.

 
 6. REFERENCES
 

1. Massimo | Halal Certification. (2018). Retrieved November 26, 2021, from Massimo
website: https://www.massimo.com.my/halal_integrity.php
2. Ahmed, G. (2014, March). How Marketing Micro Environmental Factors Affect
Business Strategy – Study Lecture Notes. Retrieved November 26, 2021, from Study
Lecture Notes website: http://studylecturenotes.com/how-marketing-micro-
environmental-factors-affect-business-strategy/
3. Massimo. (2020). Retrieved November 26, 2021, from Massimo.com.my website:
https://massimo.com.my/
4. Wikipedia Contributors. (2021, October 9). The Italian Baker. Retrieved November 26,
2021, from Wikipedia website: https://en.wikipedia.org/wiki/The_Italian_Baker
5. Responding to The Marketing Environment. (2014). Retrieved November 26, 2021, from
Blogspot.com website: https://marketinglord.blogspot.com/2014/02/responding-to-
marketing-environment.html
6. Hansen, E. (2018, December). Chapter 3: The Marketing Environment, an Information
Approach. Retrieved November 26, 2021, from Oregonstate.education website:
https://open.oregonstate.education/strategicmarketing/chapter/chapter-3-the-marketing-
environment-an-information-approach
7. APPENDICES