You are on page 1of 53

J.

CO DONUT AND COFFEE


SUBJECT
PRINCIPLES OF MARKETING | JMS1263

PREPARED BY
ZULFADLI BIN YUSMAR

4151004191

ZULKARNAEN BIN ZAINAL ABIDIN

4151006631

MUHAMAD SHAFIQ BIN AMSIR

4151002751

NUR LIYANA INSYIRAH BINTI SAAYA

4151006601

AKMAL SYAFIQ BIN MOHARMI

4151003831

NUR ELYANA ZALINI BINTI AHMAD ZULHILMI

4151006131

MUHAMAD AZLIE BIN MOHD AZZHAR

4151003941

NIK MUHD HANIF FATHI

4154009731

LECTURER
MR. ROSLEE BIN ALI

SUBMISSION DATE
3 DECEMBER 2015

CONTENT
1.0

EXECUTIVE SUMMARY

2.0

CURRENT MARKETING SITUATION


2.1

2.2

Environment
2.1.1

Market Desciption

2.1.2

Product Review

Competition

Distribution

Market Analysis
2.2.1

3.0

4.0

5.0

1-3

Market Segmentation
2.2.1.1

Geography

2.2.1.2

Demography

2.2.1.3

Psychographic

2.2.1.4

Behavioral

10

2.2.2

Target Market

11

2.2.3

Positioning

11

STRENGTH, WEAKNESS THREAT AND OPPORTUNITY (SWOT) ANALYSIS

12

3.1

Strength

13 14

3.2

Weakness

15 - 16

3.3

Oppurtunity

17 18

3.4

Threat

19 - 20

OBJECTIVES AND ISSUES


4.1

Vision

4.2

Mission

4.3

Award

4.4

Objective

4.5

Issue

MARKETING ENTRY STRATEGY


5.1

5.2

21

22

Marketing Mix
5.1.1

Product

23 - 26

5.1.2

Price

27

5.1.3

Promotion

28

5.1.4

Place

28

Strategy Alternatives
5.2.1

Product Life Cycle (PLC)

29

5.2.2

BCG Growth-share Matrix

30

5.2.3

Five Forces Driving Profitability

5.2.4
5.3
6.0

8.0

Supplier Power

31

5.2.3.2

Buyer Power

31

5.2.3.3

Threat of New Entry

32

5.2.3.4

Threat of Substitute

32

5.2.3.5

Competitive Rivalry

32

Product-Market Expansion Grid

Marketing Communication Mix

33
34

ACTION PROGRAM
6.1

7.0

5.2.3.1

Gantt Chart

35 - 36

BUDGET
7.1

Products

37

7.2

Calculations

38

7.3

Profits

39

7.4

Breakdown

39

7.5

Budgeting Method

40

7.6

Promotions and Activities of J.CO Donuts & Coffee Malaysia

41 - 42

CONTROL
8.1

Annual Plan Control


8.1.1

Sales Analysis
8.1.1.1

Sales Target for a Month

43

8.1.1.2

The Issues Why J.CO Donuts & Coffee Cant Achieve

44

Target
8.2

Market Share Analysis


8.2.1

Big Apple

45

8.2.2

Krispy Kreme

45

8.2.3

Most profitable product

46

8.2.4

Marketing Expense to Sales Analysis

46

8.2.5

Profitability Control
8.2.5.1

Internal Control

46 - 47

8.2.5.2

External Control

48

9.0

APPENDIX

49

10.0

REFERENCES

50

1.0 EXECUTIVE SUMMARY


J. CO Donuts & Coffee is a franchise of caf restaurant chains best known for their tasty donuts,
coffee and frozen yogurt that spans over four Asian countries. The company is owned and
managed by Johnny Andrean Group. Starting their first chain of stores over 8 years ago in
Indonesia, J. CO has grown to have 187 stores in Indonesia, 14 stores in Malaysia, 38 stores in
the Phillippines, and 6 stores in Singapore.
The main focus of the report is the chain of J.CO Donuts & Coffee in Malaysia that started
in 2007. The report will contain the current marketing situation of J.CO, the strength, weakness,
threat and opportunity (SWOT) analysis, the objectives and issues, the marketing entry strategy,
the action program or implementation strategy, the budget for marketing, and the marketing control
for J.CO Donuts.
The marketing process or method is made up of three main elements that will be described
in detail in the following report. The first element is the market analysis. When the target market is
known, it will be easier to design a marketing strategy that would best attract the customers and
thus increase sales. Market analysis aims to find out who will buy a product, and is done through
segmentation, targeting and positioning.
The second element is the marketing-mix planning used to prepare a marketing plan and
program that is thorough and would send the intended value to customers that have been chosen
during the market analysis. This planning includes the marketing tools of market entry, called the
4 Ps in short, which are product, place, promotion and price. In determining the market entry
strategy, the 4 Ps are found by asking the questions of what, where, how much and how. The last
element is the control element in which evaluation of the marketing plan is done. This is to find out
whether or not the plan was a success. The tools of control that are used are annual-plan control,
profitability control, and strategic control.
The report begins with the current marketing situation of J.CO Donuts and Coffee Malaysia.
The environment in which J.CO mainly focuses on is the urban environment and aim towards the
urban community as their target market. Adults and children are targeted with their large variety of
products consisting of donuts, coffee and frozen yoghurt to fulfill the consumer appetite regardless
of age. All of J.CO products in Malaysia are sold at a reasonable price. J.CO mainly focuses on
their soft and premium donuts that have unique names as the main product with about 26 different
flavors. Recently a wide variety of beverages was also introduced into the menu. Quality is
emphasized by the use of high quality raw materials imported from other countries to make their
donuts and beverages.

This brand has successfully penetrated into the local market in Malaysia going against
Dunkin Donuts and Big Apple as their main competition. With each having their own identity and
strategies to attract their customers, J.CO stands out by using the caf concept and does not only
focus on donuts like the other competitors. They also have their own trained barista and baker to
serve the foods and drinks.
J.CO Donuts started in Indonesia, and with the positive feedback from customers they
spread their chain to Malaysia in 2007, Philippines in 2013 and Singapore in 2008. The location of
J.CO outlets are also easily reachable with it usually being in major shopping malls in the cities.
J.CO market segmentation focuses on locations with a high population that leads to a variety of
consumers from different backgrounds, buying behavior and needs. Geographically, J.CO targeted
Johor Bahru as the location that is most profitable after they had done their research.They focus
on groups of people that love to eat and have a sweet tooth which is why Asian countries are
chosen as the base of the marketing scope because they believe that most Asians love to eat.
For J.CO, a strategic location is crucial as it can affect the profits of the company causing
them to choose urban shopping malls as their top priorities. They aim people with a medium to
high rate of income as their product may be considered pricey by those with a lower income.
According to their researches, they concluded that people nowadays are attracted to cafes with a
classy theme, great ambience and music causing J.CO to maintain these elements in their caf
design. The main selling point of J.CO is their premium quality products that comes with great taste
that is suitable for all types of people. J.CO believes that their brand strength is enough to help
position themselves in the market.
The strength, weakness, threat and opportunity (SWOT) analysis helps J.CO Donuts in
developing a strong business strategy as they have made known all the factors that will help them
stay as the best against their competitors. The strength of J.CO is in their quality products that
taste better than their competitors, high quality raw materials and still being sold at a medium price.
Their product innovation brings fresh air to the market. J.CO Donut also prides itself for creating a
life caf concept that is vibrant and energetic, stylish yet interactive, customer friendly, and more
to a family concept.
Their weaknesses are from the lack of promotion and activity to develop more loyal
customers as well as to retain the customers. The external weaknesses that J.CO Donut & Coffee
face is they do not provide any online ordering or deliveries to their customers. For opportunities,
J.CO have planned to further expand their franchise to new locations. For J.CO, they know that
their products are considered pricey to some and this is their opportunity to offer attractive
promotions, offers and discounts to their loyal customers.

As a large company, there are bound to be threats from the competition. As a newcomer
in the food industry, J.CO had to compete with other companies to ensure that they can survive in
the donut industry. Therefore, before the company opened their first store, the founder of J.CO
Donut & Coffee, Johnny Andrean, had done extensive research on the making of donuts and flavor
to generate donuts that are unique to beat the current competitors in the industry. The main vision
of J.CO is to establish itself as a trend-setting lifestyle and the foremost international premium
donuts and coffee brand in the industry. Its missions revolve around putting the customers as the
utmost priority.
In J.CO Donuts marketing entry strategy into the Malaysian market, they have done a
franchising strategy as it is works well for a company that have a strong brand name. The first
element of marketing mix is product. J.CO products include donuts, coffee, chocolate and yoghurt.
Pricing is the second element in the mix and is the most important as this generates a turnover for
the company. J.CO underwent several pricing strategies when it entered the Malaysian market.
The pricing strategy they used was penetration pricing to attract new customers. Currently the
price is set using competition pricing strategy where they set a price in comparison with competitors
such as Big Apple Donut and Dunkin Donut. The third element is promotion which to J.CO is the
business of communicating with customers. J.CO uses the pull strategy to attract customers using
social media. The last element is place. For J.CO Donut & Coffee, they prefer to sell the product
directly to their customer which also known as direct distribution to consumer.
For their strategy alternatives, J.CO uses the Product Life Cycle to ensure that they do not
lose their customer, profit and to delay the decline of a well-established product which has the
potential of generating further revenue. J.CO also uses the BCG Growth-share matrix and the
identification of the five forces driving profitability. For J.CO Donuts & Coffees market
communication mix, it is their policy that they rarely advertise on television and radio. They usually
rely on sales promotion during the festive season and public relations to promote their products or
services. They also do a lot of corporate social responsibility (CSR) program.
The action program of J.CO is shown in the form of a Gantt chart in the report. It is shown
that J.CO does promotion during the celebrations of each religion in Malaysia. Besides that, they
have CSR activities three times a year and occasional management meetings. The budget section
of this report aims to analyses the overall budget of J.CO in terms of how they spend their income
on the promotion and activities or the company. The last part of this report is the marketing control
to compare the results to the marketing plan. J.CO uses an annual plan control and profitability
control for their business. It is recommended that J.CO continuously adapts its marketing mix to
keep up with the changing times. In conclusion, this report has shown a clearer picture of how a
business uses marketing mix to identify its target market, attract them and retain their loyalty.

2.0 CURRENT MARKETING SITUATION


2.1 Environment
2.1.1 Market Description
J.CO Donut & Coffee is a caf restaurant that is selling donut and beverages thus J.CO Donut &
Coffee is considered to be in food and beverages (F&B) industry. They claimed that since their
opening in Jakarta, their always target a high income customer because their price are quite too
expensive from their competitor as they use price skimming strategy or known as premium pricing
strategy. Other than donut, they also knew for their high quality of the frozen yogurt that they sold.
Jco Donuts headquarter was located at Jakarta, Indonesia.
Most of the J.CO Donut & Coffee outlet was built in urban environment. By doing this, it
will help and increase the J.CO Donut & Coffee sale and customer rate. For their customer, J.CO
Donut & Coffee aim the children up to adult as their main customer. That is why they have variety
type of food to fulfil their customer appetite regardless of their age and different background. J.CO
Donut & Coffee food is quite pricy hence it makes peoples that have medium to high income
suitable for J.CO Donut & Coffee goods. There are so many company that sell donuts as their
main product. For example of them are Big Apple, Krispy Kreme, and Dunkin Donuts. Each of
their product has their own unique ways and strategies that they use to attract consumer. Starbuck
can also become one of the J.CO Donut & Coffee competitors due to the caf concept and menu
that they both provide to the public.
2.1.2 Product Review
J.CO Donut & Coffee have several types of product, food and beverage for their customer.
Currently they focused on donut, coffee and frozen yogurt which has become one of Jco Donuts
main or core product. For their donut, there are about 26 flavors that consist of chocolate flavors,
vanilla, coffee and many more. Besides that, they also provide cool and hot beverage that come
with so many choice. Meanwhile, the price range of J.CO Donut and Coffee set their donut price
at about RM2 to RM4 for ala carte.
They also sell their donut in combo set that comes with affordable price. For their beverage
and coffer, the price range is RM8 to RM17. J.CO Donut & Coffee are emphasizing the importance
of their high quality product and services for their customer. They will make sure that their customer
having a high quality of foods and good time in their caf. Hence, Jco Donut are using high quality
raw material to make their foods and drinks. Most of their raw materials are imported from other
country. For example they are using chocolate from Belgium and Coffee from Brazil.

2.1.3 Competition
In Malaysia, there are several companies that produce the same product like J.CO Donut & Coffee.
For example of company that sell donut as their main product in Malaysia is Dunkin Donut and Big
Apple. Even though they all sell the same products which is donut and coffee, each of them have
their own identity and strategies to attract their customer. For J.CO Donut & Coffee, they are
different from their competition in few aspects such as their ingredient, their caf concept, their
donut name and many more.
First of all, J.CO Donut & Coffee are using caf concept that not only focusing on their
donut just like others competitor. They also emphasize their beverages, coffee and frozen yogurt
to customer. They claimed that their beverages especially their coffee taste better because they
use Brazil coffee bean. Other than that, J.CO Donut & Coffee said that they are different from their
competitors because Jco Donut is using high quality of material and ingredient to make their donut.
Their flour is originally imported from Indonesia and they not only use machine to produce the
donut, they also use baker skill to produce light as an air donut. Most of their material was
imported from other country such as their coffee beans are imported from Brazil and some of their
chocolates are from Belgium.
They also only choose the best quality and healthy material to produce their product. Every
three hour, they will replace their unsold donut with the fresh donut in order to maintain a high
quality taste. They said that its important for them to give their customer the best, great service
and food because they believed that by provide a great customer service it will help them to ensure
that their customer will come back again. In addition of that, they also have their own well trained
barista and baker to serve the foods and drinks. By hired the high skilled barista and baker, it will
help Jco Donut to ensure that all of their customer satisfy with these foods and drinks. From the
interview, J.CO Donut & Coffee claimed that by using a unique and easily remembered name for
their product, it will attract their customer and create an unique identity which will help the customer
to differentiate J.CO Donut & Coffee from other competitors. Some example of their product that
have unique name is Tira Miss U which is a donut with tiramisu toping. Other than donut, they
also have unique flavor of beverages such as Oreo Frappe.

2.1.4 Distribution
J.CO Donut & Coffee is one of the great caf that serve fresh and tasty foods and drinks out there.
They all started from Indonesia then growth to other Asia country. Due to positive feedbacks that
J.CO Donut & Coffee received from consumers, they open up their outlet and build a network to
other country such as Malaysia, Singapore, Thailand, Philippines and many more.
By doing this, J.CO Donut & Coffee can distribute their product to other country and ensure
outsider consumer can grab J.CO Donut & Coffee goods. Urban location and mega mall is one of
the places that J.CO Donut & Coffee usually choose to open their new outlet. By choose these
types of location, J.CO Donut & Coffee caf can be easily founded by consumer and have a high
rate of visitor or buyer per days. There is about 11 J.CO Donut & Coffee outlet in Malaysia and
260 outlets around Asia. On 2007, J.CO Donut & Coffee launch their first branch in Malaysia. After
that, they expand their business to Singapore on 2008 and Philippine on 2013. Currently J.CO
Donut & Coffee only sold their product through their restaurant and they not did provide any
delivery or online ordering services.

2.2 Market Analysis


2.2.1 Market Segment
2.2.1.1 Geographic

Geographic segmentation by state


Seremban
9%

Selangor
27%

Penang
9% Melaka
9%

Johor Bahru
37%

Kuala Lumpur
9%

For geographic segment, Jco Donut is usually choosing any location that have high rate of
population of people that come with a good rate of income. In Malaysia, there are about 11 J.CO
Donut & Coffees franchise has been opened at different state that have high percentage of
working people. There are 4 franchises at Johor Bahru, 3 at Selangor, and 1 franchise for Kuala
Lumpur, Melaka, Penang and Seremban.
Each of the J.CO Donut & Coffee are specifically located in mega mall that have a good reputation,
high rate of visitor per day and good popularity for each of the state. They believe that by doing
this, they can easily spread and promote their product to the locals. J.CO Donut & Coffee exposed
that they choose to open their store near to the mall entrance so it can be easily spotted by their
target customer. From the chart above, J.CO Donut & Coffee said that they open most of their
store at Johor Bahru than other state because of the geography factor. Its because majority of
Johor Bahru people have high rate of salary.
This is because Johor Bahru is one of the national trading center. Other than that, Johor
Bahru also known as one of the biggest tourism center in Malaysia because in Johor Bahru they
got attractive places such as Legoland and many more. Hence it may affect the total customer of
J.CO Donut & Coffee, profit and many more. A similar situation also occurred in Selangor which
is one of the advanced states in industrial plants so, it indirectly have a positive effect on the income
of resident of Selangor.
7

2.2.1.2 Demography

Demography segmentation by cusomer's


income status

Low Income
Rate
20%
High Income
Rate
45%

Medium
Income Rate
35%

For demographic segment, J.CO Donut & Coffee target customer are those who are come from
medium and high rate income customer. This is because they set any their price a little bit higher
than their competitor as they are using price skimming strategy. Due to the price rate of Jco Donut
product, customers that come with medium to high rate of income are suitable and most likely
would buy Jco Donut product. Regardless of their gender, Jco Donut is emphasizing their customer
who is teenagers, adult and senior citizen. With the variety product that come with different taste
and form which is hot and cold, it cause the Jco Donut customer scope become larger.

2.2.1.3 Psychographic

Psycographic segmentation based on


J.CO Donut & Coffee Background

Rural Area
30%

Urban Area
70%

During our interview, J.CO Donut & Coffee claimed that Malaysian are having one common things
that can help their businesses growth up rapidly which is majority of Malaysian are love to eat fast
food. During the first week after the launch of JCO Donut & Coffee at Pavillion, Kuala Lumpur, it
was reported that people were having a long queues just to buy their donut. During our interview,
JCO Donut & Coffee claimed that knowing your customer is one of the important elements that
they must practicing in order to have a good outcome for their business. One of these elements is
by knowing the customers personality and life style.
Besides that, J.CO Donut & Coffee stated that Malaysia is one of the great market place
due to their citizen that known for their eating habit. Majority of Malaysian are love to eat fast food
and dessert. This has been proved through research that has been done on 2014 by British medical
journal, The Lancet, showed that 49% of women and 44% of men in this country were found to be
obese. They said that Malaysians obesity rate is the highest in Asia. Another element that plays
an important role is the customer life style. As we know there are rural and urban place in Malaysia.
Different environment can lead to different life style of certain population. Since J.CO Donut &
Coffee choose urban place or environment to open their store, lets take a look with peoples that
live in that area.

From the situation that has been observed, peoples that live at urban and city area are
usually like to eat at the restaurant and caf especially for those who are single. Unlike for those
who are live at rural area, they prefer to cook by them self. This situation is occurred because most
of the people that live at urban area are too busy with their daily life and work until some of them
could not cook a meal because of time matter or too tired after through a stressful day at workplace.
Through this problem, they take another alternative way by go to caf or restaurant. From this
situation, J.CO Donut & Coffee conclude that they are more profitable and high potential customer
in urban place such as downtown or city area.
2.2.1.4 Behavioral
Besides knowing the customer life style and personality, J.CO Donut & Coffee also said that they
must identify the shortage and needs of the customer. By doing this, J.CO Donut & Coffee can
improve and makes their business suitable with the customers needs.
From what has been observed by JCO Donut & Coffee Company, they said Malaysia is
lack of caf that sell variety of foods and beverage in the same times in order to fulfill people needs.
Even though they are so many caf and food company has doing their business in Malaysia, most
of them especially for company that sell donut or coffee are usually focusing in one type of the food
or drink. Through this situation, consumers are served with limited menu and choose.
Due to this situation, JCO Donut & Coffee come with few solutions by providing much more
option and choice of foods and beverage to the customer that has different needs and want. For
example, J.CO Donut & Coffee is selling donut that has various flavor consist of fruit, creamy,
chocolate and nuts ingredient. For example of people that have an allergic with nuts still can enjoy
and eat the J.CO Donut & Coffee foods cause of the various type of donuts flavor or ingredient.
A good, healthy and high quality food is one of the common things or needs that people
usually seeking for. With these need, J.CO Donut & Coffee has accomplish them by provide a
foods or beverages that has made from high quality ingredient. By using a great quality of
ingredient that has been imported, it will make the customer feel pleasure to eat J.CO Donut &
Coffees foods and beverages. Even though most of the J.CO Donut & Coffee product are pricy,
its still worth it for the customer to invest their money for having a great experience with J.CO
Donut & Coffee foods. By this, J.CO Donut & Coffee believe most of the consumer around Malaysia
will be happy with the concept and menu that provided at JCO Donut & Coffee.

10

2.2.2 Target Market


There is a reason why J.CO Donut & Coffee choose an urban and mega mall as their top priorities.
For them, a strategic place or location is everything because it can affect the result and profits of
a company. By selecting these type of location, they can easily having and attract consumer that
suitable for their product. J.CO Donut & Coffee set an aim for people that come with medium to
high rate of income as their customer because most of their product quite pricy. Even though its a
bit pricy, its still worth because of the quality that J.CO Donut & Coffee provide for their consumer.
They only use the best quality of raw material that mostly imported from other country. For
example, J.CO Donut & Coffee are using chocolate from Switzerland to make their drinks or
donuts. They also choose Brazil as their supplier of coffee to ensure that their coffee full of aromatic
and delicious. In their research, they conclude that people nowadays are so in love with caf that
comes with classy theme, great ambience and music. In order to attract more people, J.CO Donut
& Coffee keep these 3 elements in their caf design.
They will make sure that their customer feels relax and safe while enjoying their cup of hot coffee
or chocolate, lovely and fresh yogurt or their signature foods which is donut. Jco Donuts target
market is not only come from group of adult people. They also aim the child and teenagers as their
customer regardless of their gander.
2.2.3 Positioning
J.CO Donut & Coffee are famous with their premium quality of products. Come with the great taste
that suitable for all type people, its help them to make their customer attracted and will buying J.CO
Donut & Coffee product for the second times. J.CO Donut & Coffee believe that their product
qualities are the best.
Even though, they are not advertising their product through medium such as television, radio or
printed media, people still come to them cause of their great service and goods. J.CO Donut &
Coffee also trust that their brand strength. This is how they ensure that their customer will think
automatically of J.CO Donut & Coffee whenever they talk about donuts, coffee or yogurt.

11

3.0 STRENGTH, WEAKNESS, OPPORTUNITY AND THREAT (SWOT) ANALYSIS

J.CO DONUT &

ANALYSIS

Strength

COFFEE STRATEGY
Quality donut
Innovation with their
product line
More to relax and family
concept

Lower price than


competitor
Selling fast and

Price: Premium
Pricing Strategy
Product: All

good coffee at good

ingredient are

value

import
Promotion:

Change new donut

Attractive offer

every 2 hours

during festive
Place: High
income location
Weaknesses

Lack of promotion to
develop more loyal
No online ordering or
delivering

Opportunity

Lack low calories


options
Lack of marketing
effort

Expensive product

Location not suitable

Further expansion in

Online sale

new location

Menu diversification

Wide range product

Using social media


for promotion
Strong marketing
strategy
More strategic
place for new
outlet
Changes in social

more preferred by

pattern and

consumer
Offer attractive

lifestyle

promotion and offer


Threat

Number of competitor
Changing taste of
consumer
Equipment breakdown

Number of
competitor
Unhealthy lifestyle

Maintain product
quality
Produce new
flavor

12

3.1 Strengths
J.CO Donut & Coffee and Dunkin Donuts are two biggest donut companies in the world. These
two companies provide same product which is donut and beverage to their customers. The
different from quality and facility become the strength for the J.CO Donut & Coffee. J.CO Donut &
Coffee offer a quality donut to their customer meanwhile Dunkin Donuts offer a lower price to their
product. Its means that they only uses the best ingredients from all over the world such as Belgian
Chocolates, Californian Almonds, Japanese Matcha Green Tea and Italian Roasted Coffee in their
products. J.CO positions itself to be that Elegant donut with a medium price. It serves the market
to be satisfied with a quality donut that tastes even better than its competitor who has been in the
market for a much longer time. Dunkin Donuts attract their customer by offer lower price among
donut companies in the world. That a main reason why Dunkin Donut become a first choice to
people. People are preferred a product with more affordable price even they also complaint about
the product quality.
Beside, J.CO Donut & Coffee also become innovation with their product lines and Dunkin
Donut selling a fast and good coffee at good value. Dunkin donuts as a market leader was already
in their comfort zone make them uncompetitive to the innovation, consumer as the market didnt
have their ability to choose another product, since Dunkin is the only one at that moment. J.CO
Donut & Coffee as the new player bring the fresh air to market, by make donuts as a trend setting
lifestyle. Marketing mix between Sakura strategy and open-kitchen in every outlet seems attract
customer curiosity to tried and tastes the new J.CO Donut & Coffee experience. J.CO Donut &
Coffee comes out with new idea and environment to attract the target people for their products.
They do not only focus on their products but also the environment of their outlet because one of
the ways to attract people is from the decoration of their outlet.
J.CO Donut & Coffee also prides itself for creating a life caf concept that is vibrant and
energetic, stylish yet interactive, customer friendly, and more to family concept. This not only
means customers can bring home food to the house, but they can also relax with friends or family.
The modern concept that created by the J.CO Donut & Coffee has made their customers enjoy
when dine in at the caf. J.CO. Donuts & Coffee seem to be different from other products in the
country because the product is positioned as a lifestyle and targeted to consumers of the middle
and upper segment with a dynamic lifestyle, young and modern. For the modern technology now,
people looking for the innovative caf that can cheer up their day or moments. As well as the basic
materials, more than 50% is imported from abroad. Like the chocolates imported from Belgium and
milk from New Zealand. Also, to drink, the ingredients mostly imported anyway. Most coffee
powder imported from Italy and Costa Rica. All the donuts also changes every two hours to make
sure the quality of the donuts. Because when the donuts left for too long, it will make the donuts
become hard and cold. That why they change to new donut every two hours.

13

So, to make J.CO Donut & Coffee become well than their competitor, they use 4P as their
strategy to involve in market which is product, price, promotion and place. For the product, J.CO
Donut & Coffee only use a best product to make sure their quality is maintained. All ingredients
are import to make sure that all the donuts that they sell in a great quality. For them, quality is more
important than a quantity of the products. The consumer will judge their products by the quality,
that why J.CO Donut & Coffee take this seriously. People nowadays are looking for foods that are
something new that can satisfy their cravings without being conscious on their health. J.CO Donut
& Coffee is currently serving its customers a less sweet donut with soft, thin and chewy bread. The
size of each doughnut is perfectly enough. Its worth the pay since its delicious, not too oily and
its taste is not as sweet as other donuts.
For the price, J.CO Donut & Coffee use a price skimming strategy which means their price
are expensive due to their product quality. They know that their price are expensive to the market,
but they promised that consumer will get the satisfaction after buy their products. J.CO Donut &
Coffee will not produce a product if their quality is bad. J.CO & Donut also believe that their
customer will always stick with them even their price are expensive because they get a customer
capability from the beginning of their outlet in Malaysia.
For the promotion, they already know that their product is expensive and this is their
opportunity to offer an attractive promotion, offers and discount to their loyal customers. This is
how they manage their marketing strategy. Usually J.CO Donut & Coffee will make offer during the
festival or celebration such as New Year, Independence Day and Hari Malaysia. Every festival
they will come out with new donuts that only offer for the limited time. For example, the promotion
is buy 1 dozen will get free 1 drinks of coffee and only offer during the festival celebrated. J.CO
Donut & Coffee will never decrease or reduce their price, but they only make a promotions or offer
for a certain time only.
Last, for the place J.CO Donut & Coffee choose a high class place to open their outlet such
as in a shopping mall. Therefore they are only open outlets in shopping malls that have many
visitors. J.CO Donut & Coffee choose a high class places because from there people will see their
outlet and easy for their customer to get their product after they have spend a long time during
shopping. For example, J.CO Donut & Coffee open their outlet in Pavilion Kuala Lumpur because
the place is famous and most the visitor is come from a high profile background.

14

3.2 Weaknesses
Every company has their own weaknesses behind of their successful. The weaknesses can be
defined from the internal or external factor. For the J.CO Donut & Coffee, their weaknesses are
from the lack of promotion and activity to develop more loyal customers as well as to retain the
customers and for the Dunkin Donuts their weakness is lack low calories options for the consumer.
J.CO Donut are rarely use advertisement in newspaper or television. The reason is because they
believe on their product capability in the market even they do not do a big promotion of their
products. Meanwhile Dunkin Donuts do a lot of promotion of their product to make people become
more alert to their product. That why Dunkin Donut is more positioning in people mind. Dunkin
Donut also lack low calories options to their customer which means their customer didnt have a
choice for the donut if some of them are not eat sweeter donut.
Other than that, the external weaknesses that J.CO Donut & Coffee faced is they do not
provide any online ordering or delivering capability to their customers. To be a good and different
donut company J.CO Donut & Coffee should come out with the new strategy which is makes a
delivery of their products. Not to all outlets make a delivery, but only a few outlets that get a higher
demand. From the interview, they have no plan to make a delivery of their products since they
believe that their customers will stick with them even they do not provide any delivery. This is
because they believe on their product capability. For their competitor, Dunkin Donut weakness is
lack of marketing effort to increase their product quality. That the reason why J.CO Donut & Coffee
is more strong than their competitor. Dunkin Donut did not do any effort in order to increase their
quality even they receive a lot of complaint from their loyal customer.
From the interview, one of the weaknesses of J.CO Donut & Coffee is their product are
expensive. J.CO Donuts & Coffee is too expensive maybe because the quality and taste made by
J.CO Donuts & Coffee itself is different from other donuts it would cost a fortune. For J.CO Donut
& Coffee, they will not put the price if their quality products are bad. It means that the price is
suitable for the quality of donuts and coffee because all the ingredients are imported. J.CO Donut
& Coffee will never decrease their price even their customer complaint because for them, even
their customer always complaint about their price, but they will buy because they only serving good
food and delicious. J.CO Donut & Coffee know that their weaknesses will make their competitor
take a chance to become more better from them. So J.CO Donut & Coffee using a social media
as their strategy to make their advertisement or promotion become wide. This strategy is realized
in the form of sampling around the store, making a twitter account, webpage and Facebook fan
page in the virtual world. For J.CO Donut & Coffee, endorsement visitor, long queues snaking
through at the outlets and media who write a story about the delights and distinctiveness J.CO
Donut & Coffee more important than advertising. This branding strategy succeeded in creating
word of mouth and reap the publicity.

15

Beside, J.co has a website www.jcodonuts.com that provides a variety the menus inside
the complete content to answer the curiosity of enthusiasts J.co and web design is very appealing.
J.CO Donut & Coffee will also have a twitter account for the media promotion of highly innovative
in addition to facilitate the costumer to find out the latest products from J.CO Donut & Coffee. They
do not do advertising in newspapers or television, but only using social media and their own
websites. Ineffective advertising would limit the user's knowledge about J.CO Donut & Coffee or
products sold by them. This is because there are certain groups who do not use social space as a
source of reference even those still using print media or on television advertising to influence them.
Without extensive advertising, this certainly would limit the promotion of their products.
Furthermore, J.CO Donut & Coffee also use strong marketing analysis in order to
overcome their weaknesses such as market segment, target market and positioning. For market
segment, J.CO Donut & Coffee are usually choose any location that have high rate of population.
They believe that by doing this, they can easily spread and promote their product to the locals.
Another benefit of choosing this kind of place, they can have variety of consumer that come from
different background, buying behavior and needs. For demographic, most of the J.CO Donut &
Coffee consumer are come from group of people that love to eat, especially for food that have
sweet taste regardless of their genders and ages. This is why J.CO Donut & Coffee choose Asia
country as their base or center of marketing scope because they believe that most of the Asian
love to eat something that not to heavy but tasty.
Beside, for target market J.CO Donut & Coffee choose an urban and mega mall as their
top priorities. For them, a strategic place or location is everything because it can affect the result
and profits of a company. By selecting these type of location, they can easily having and attract
consumer that suitable for their product. J.CO Donut & Coffee set an aim for people that come with
medium to high rate of income as their costumer because most of their product quite pricy. Even
though its a bit pricy, its still worth because of the quality that J.CO Donut & Coffee provide for
their consumer. Last for the positioning, J.CO Donut & Coffee come with the great taste that
suitable for all type people, its help them to make their costumer attracted and will buying J.CO
Donut & Coffee product for the second times. J.CO Donut & Coffee believe that their product quality
is the best. Even though, they are rarely advertising their product through medium such as
television, radio or printed media, people still come to them cause of their great service and goods.
This is how they ensure that their costumer will think automatically when they talk about donuts,
coffee or yogurt.

16

3.3 Opportunities
As we all know, Malaysian people love to eat snacks and most of people make a donut as their
side dishes. So, J.CO Donut & Coffee takes this opportunity to further expansion in new location.
Different for Dunkin Donut, they take an opportunity due to Malaysian people love a sale by do an
online sale for their loyal customer. In Malaysia, J.CO Donut & Coffee has opened a total of 11
branches throughout the country. In Johor, J.CO Donut & Coffee has opened 4 outlets, followed
by Selangor at 3 outlets. Others such as Kuala Lumpur, Negeri Sembilan, Malacca and Penang is
one outlet only. Since J.CO Donut & Coffee already known by Malaysians, especially, so J.CO
Donut & Coffee has plans to open two new branches in Kedah and the East Coast. This is an
excellent opportunity because this will helps to increase sales and expand J.CO Donut & Coffee
empire and continues to be recognized in the eyes of the world.
Beside, wide range of products is much preferred by consumers. This is good opportunity
for J.CO Donut & Coffee to attract their loyal customer to keep stick with them. Because of J.CO
Donut & Coffee introduce various types of donuts, it became a magnet for strong attraction by the
customer. Buyers have a huge selection of donuts and coffee to choose. Each donut is served with
different flavors that are sure to make their customers really love it, especially young people. Coffee
is also on special import from Costa Rica and it smells delicious. Each donut creatively named
based toppings and flavors. This creates a unique and easy to remember, for example, Cheese
Me Up is the name for a donut with melted cheese on top layer. Tira Miss U is the name for a donut
topped with tiramisu. Its different with other donut company. While other companies compete to
increase promotion for their products, J.CO Donut & Coffee just to make sure that their products
is always in good quality. For Dunkin Donuts, this is time for them to make menu diversification.
The company has more than just entertained the idea of breaking into lunch and dinner day parts
over the past few years. Dunkin has added new sandwiches and drink options to its menu to meet
this growing demand.
Furthermore, for J.CO Donut & Coffee, they already know that their product are expensive
and this is their opportunity to offer an attractive promotions, offers and discount to their loyal
customers. This is how they manage their marketing strategy. Usually J.CO Donut & Coffee will
make offer during the festival or celebration such as New Year, Independence Day and Hari
Malaysia. Every festival they will come out with new donuts that only offer for the limited time. For
example, the promotion is buy 1 dozen will get free 1 drinks of coffee and only offer during the
festival celebrated. J.CO Donut & Coffee will never decrease or reduce their price, but they only
make a promotions or offer for a certain time only. The offer also will be in two or three days, not
more than five days so that they do not incur significant losses.

17

In order to compete with their competitor, J.CO Donut & Coffee make a strategy that their
new outlet will be open in more strategic place. The opening of a new outlet is from the survey that
was conducted among visitors to the mall involved. Based on survey was done, mall visitors in
Kedah and the East Coast are welcomed the opening of their donut empire since J.CO Donut &
Coffee there is no longer any open branches there. Most of them are very interested donut
produced by J.CO Donut & Coffee and can only be bought donuts and coffee if they travel to Kuala
Lumpur or Penang. This has restricted their desire to buy donuts from J.CO Donut & Coffee. So
by opening their branches in two states was selected will make the public more familiar with what
J.CO Donut & Coffee generate for consumer who likes to eat a donut. J.CO Donut & Coffee can
also meet the high demand in the region. By choosing a strategic places, J.CO Donut & Coffee
can expand their business and make all the Malaysian people know about their products.
Everyone knows that Malaysian people love to eat. Even they said the price are expensive,
they will still buy it. From this J.CO Donut & Coffee take this opportunity to change the way people
live by change in social patterns and lifestyle. When J.CO Donut & Coffee managed to persuade
Malaysians to be interested in all the food and drinks they provide, this will change people life style
especially for donut lover. If before this many people prefer to eat Korean food like sushi, they can
try all kinds of donut and no sense of doubt because the company has received approval from
Jakim and has the Halal logo that have been recognized.
With each outlet themed family concept, so this will be of interest primarily with families to
come and relax in their outlets. Without having to queue and caf imaginable user-friendly, it will
delight everyone who came. For young teenagers especially, they can having time with their friends
at any J.CO Donut & Coffee outlet and enjoy with some donut and cups of coffee. This is how J.CO
Donut & Coffee attracts young people to become half of their loyal customer and can change a
teenagers lifestyle from hangout at mall for nothing to have some enjoy at their donut caf.

18

3.4 Threats
As large companies that produce the best donut in the region asia, certainly behind the success
there must be some great competition on a par with them. It cannot be denied since before the
existence J.CO Donut & Coffee, there are other companies that produce similar products such as
Dunkin Donut and they also has a same threat like J.CO Donut & Coffee. As a newcomer in the
food industry, J.CO Donut & Coffee had to compete with other companies to ensure that they can
live a long time in the making donut industry. This is definitely a big challenge for them because
they have to be more innovative in making donuts from being seen together with other donut
company. Therefore, before the company opened a donut their first empire in Indonesia, the
founder of J.CO Donut & Coffee, Johnny Andrean, has done extensive research on the making of
donuts and flavor to suit every donut produced. This study is important because it needs to
generate donut with the uniqueness that beats the existing donut.
Beside, changing taste of the consumer is also one of the challenges or opposition to be
encountered by J.CO Donut & Coffee. What we can seen now, a variety of "hipster" foods which
became popular especially among a young people. Among the latest is the preferred choice of
homemade donuts. Homemade donuts produced similar with the donut that produced by all
companies in the country's. Homemade donuts are produced with some new flavor that will appeal
to donut lover. Prices were much cheaper than J.CO Donut & Coffee or other companies. This
becomes a great challenge for J.CO Donut & Coffee especially because of changing consumer
taste will affect the sales of their donut but J.CO Donut & Coffee will not overreact by this issues.
They take this positively because they strongly believe that their products are the best. Even
everyday their competitors will produce a new donut with new flavor it still cant be same with their
donut that has been produce by the best ingredients. Same goes to the coffee.
Now, many of homemade coffee people can get with a cheapest price. But J.CO Donut &
Coffee still become the best choice among the coffee lover. For Dunkin Donuts, unhealthy lifestyle
become their threat because their customer complaint that their product are too sweeter especially
for old man. Too many people have a problem with a lot of sugar intake. This can lead to many
diseases such as, Diabetes. Dunkin Donuts uses a lot of sugar in their products could be
threatened by this issue.
Based on the interview, equipment breakdown also become one of the threat in their
management. Machinery breakdowns are always costly and it will take a long time before they get
a new machine. This becomes a major problem because they had to borrow a machine in another
outlet nearby. This damage has slowed their service and suffered losses due to a donut that has
been damaged. This needs to be faced by J.CO Donut & Coffee when their machine is damaged.
They had to close the shop for a few hours while waiting for the machine to be borrowed. There

19

are times when they had to close up shop earlier than usual to avoid any problems arising from an
interrupted process. They also faced a problem that sort of workers in every outlets. When asked
if the salary is making it a shortage of workers. J.CO Donut & Coffee answered salary offered is
among the highest in the food industry in Malaysia. The reasons given by the J.CO Donut & Coffee
is the average Malaysians lazy to work and it become problem when having a full house, due to
sort of workers, their service become slow and make a customer waiting in long queue.
To overcome the threats, J.CO Donut & Coffee need to maintain their product quality to
make sure that their product still in first choice of Malaysian people. J.CO Donuts & Coffees donut
are made using machines, both when mixing the ingredients, cooking and making donuts topping.
All machines are used entirely imported from the USA. In order to maintain high quality product for
their customer, J.CO Donut & Coffee imported more than 70% of their ingredients from abroad.
The chocolate used for donut topping are specially imported from Belgium and the milk from New
Zealand. Most of their coffee products are imported from Italy and Costa Rica. Based on all this,
J.CO Donuts & Coffee positioned their self as a premium quality products in the donut market in
Malaysia. Most of the raw material for making donuts J.CO Donuts & Coffee use goods imported
directly from the USA.
J.CO Donut & Coffee also will produce a new flavor for donut that will meet their loyal
customer next year. Their new flavor is fresh and no other competitor has produced the flavor in
the market. They promised that their new flavor will full their customer satisfaction and as a sign of
appreciation for the loyalty of their customers. J.CO Donut & Coffee will keep improve their quality
in the future so that their customer will always remember their products. To overcome the problem
sort of workers, they had to bring in workers from J.CO Donut & Coffee Jakarta to fill a vacancy in
any of their outlets. This is also one of the obstacles for J.CO Donut & Coffee because when they
lack workers, they had to draw workers to a longer time. The strategy that J.CO Donut & Coffee
do to overcome their threats will help them in future and become strong company that produces
good products in the world.

20

4.0 OBJECTIVES AND ISSUES


4.1 Vision

To establish J.CO Donuts & Coffee as the foremost International Premium Donuts and
Coffee brand

To be the trend-setting lifestyle in the Donuts & Coffee industry

To be the right company for the right people who want to achieve their dream

4.2 Mission

To provide premium quality donuts & coffee

To encourage people to attain their dreams

To put customers as our first priority

To commit ourselves in giving excellent service sincerely

To make a difference in our community

Grow the number of customers by 25% by the end of 2015

Increase revenue from existing customers by 30% in 2 years

To provide perfect locations for hanging out

To treat each other with respect and dignity

4.3 Awards
In its first year of operation, J.CO Donuts & Coffee was awarded "Marketing Award" as the brand
with the best product innovation. Following this award, J.CO won "Best Donut 2006" by FREE
Magazine at the end of 2006. In early 2008, J.CO Donuts & Coffee received the award "The
Integrated Marketing Strategy Champion 2008" by SWA business magazine and MarkPlus Co.
Since its establishment, J.CO has already won many awards.
4.4 Objective
J.CO Donuts & Coffee are international premium Donuts and Coffee brand, and they offer unique
flavours of donuts and beverages to their customer like they've never tasted before. J.CO Donuts
and Coffee only uses the best ingredients from all over the world - such as Belgian Chocolates,
Californian Almonds, Japanese Matcha Green Tea and Italian Roasted Coffee in their products.
The first outlet opened in Indonesia on June 26th, 2005 at Supermall Karawaci. After founded on
June 2005, within less than 6 years of operation, J.CO has succeeded in opening more than 120
outlets throughout Asia with its expansion in Indonesia, Singapore, China and Malaysia.
4.5 Issue
J.CO Donut & Coffee did have an issue about several thing such as shortage of workforce in
Malaysia and the imported ingredient are whether damage during shipping or held by the authority
for a long time until the ingredient is unusable.
21

5.0 J.CO DONUTS & COFFEES MARKETING ENTRY STRATEGY


Market entry strategy can be defined as the planned or method of delivering and distributing
products or services to a target market. As J.CO Donut & Coffee are originated from Indonesia,
they need a strong market entry strategies in order to maintain in their business outside Indonesia.
In marketing, there are many ways on how a company can enter foreign market or international
market. According to J.CO Donut & Coffee Malaysia, they use franchising strategy as it is works
well for a company especially food industry that have a strong brand name.
J.CO Donut & Coffee said that they believe in their brand name and thus it can be utilized
internationally around South East Asia. Other than Malaysian and Indonesia, J.CO Donut & Coffee
are available in Philippine and Singapore. They are planning to expand their business in Brunei
and Korea in the next 5 years.
5.1 Marketing Mix
According to McCarthys, there are 4 basic elements that comprise any marketing strategy which
is product, price, promotion and place. As a new player in a food and beverages industry in
Malaysia, J.CO Donut and Coffee have use these four element in order to reach certain target
customer. According to them, their marketing mix is simple to understand and it is important for
them especially their franchisor to identify on what market sector there were in.
In general, the first element of marketing mix is price which refers to how and how much a
client will be charged. The product can be anything from cheap to a luxury item. It can be paid for
all at once or divided into monthly payments. There are also other strategies, such as psychological
price, pay what youd like, auctions and many more.
Second, place are refers to the setting in which this product will be made available. It could be
online or in physical stores. Delivery and service deadlines are also a concern to be addressed in
this element. In many cases, its best to make sure that companys product and place match as
much as possible. For example, sports products are best sold in gyms or recreation centres.
The next element of marketing mix is product. Product refers to the companys product or
services characteristics and attributes. Company therefore should decide on size, colour, design
and the general functionality of what the company offered to their customer.
Lastly, promotion refers to the marketing strategies used. This involves both digital marketing
such as affiliate links, Fan Page, social media, and offline strategies such as outdoors and
newspaper advertisement.

22

5.1.1 J.CO Donuts & Coffees Product


J.CO Donuts & Coffee is present in the community with several kinds of products on offer. Their
products are donuts, coffee, chocolate, as well as the newest products, yogurt. JCO Donut and
Coffee claimed that their product such as beverages as superior quality beverages and innovative
range of light-as-air-donuts. Differ from their competitor, J.CO Donut and Coffee served the same
product with the same name in all their store in South East Asia.
J.CO Donuts & Coffees donut are made using machines, both when mixing the
ingredients, cooking and making donuts topping. All machines are used entirely imported from the
USA. In order to maintain high quality product for their customer, J.CO Donut & Coffee imported
more than 70% of their ingredients from abroad. The chocolate used for donut topping are specially
imported from Belgium and the milk from New Zealand. Most of their coffee products are imported
from Italy and Costa Rica. Based on all this, J.CO Donuts & Coffee positioned their self as a
premium-quality products in the donut market in Malaysia. Most of the raw material for making
donuts J.CO Donuts & Coffee use goods imported directly from the USA and several other
countries. Therefore, the procurement of raw materials is a very important part in the production
process of J.CO Donut & Coffees products.
J.CO Donuts & Coffee offer unique experience to their customer by offering open kitchen
concept in their store, where their customer can actually see thru the glass panel the making of
J.CO Donut & Coffees donuts and product. This uniqueness make their brand different from other
competitors and it make them one step forward over their competitors. Other than that, J.CO Donut
& Coffee have named each of their donut in accordance with creative toppings and flavours to
create a unique and easy to remember names, for example, Cheese Me Up is the name for a
donut with melted cheese on top. Tira Miss U is the name of a donut topped with tiramisu. Currently
JCO Donut & Coffee offered 28 different flavour and topping of donut, 26 various flavour of
beverages and four yogurt based product to their customer.
The J.CO Donut & Coffee offer high quality packaging for their product as they believe that
a quality product starts from how it look on the outside. Currently, J.CO Donut & Coffee will served
their donut on a box of 12 pieces, 6 pieces and 3 pieces. For their beverages, their offer a plastic
cup, glass mug and their customer can buy their own J.CO Donut & Coffee merchandise such as
special printed glass mug and bottle. Below are some of the J.CO Donut & Coffees donut that was
currently offered in market:

23

Berry Spears

Al Capone

Avocado DiCaprio

Black Jack

Blueberry More

Candycane

Cheese Cakelicious

Choco Caviar Chocolate

Choco Caviar Strawberry

Choconutzzy

Coco Loco

Copa Banana

24

Crunchy

Don Monchino

Forestglam

Glazzy

Heaven Berry

Jacky Chunk

JCoccino

Mesisipi

MrGreen Tea

Oreologi

Snowwhite

Strawberry Fondue

25

Sugarrice

TiraMissU

White Desert

Why Nut

26

5.1.2 J.CO Donuts & Coffee Price


J.CO Donuts & Coffee mentioned that pricing is one of the most important elements of the
marketing mix, as it is the only mix, which generates a turnover for the company. The remaining
3ps are the variable cost for the company. It costs to produce and design a product, it costs to
distribute a product and costs to promote it. Price must support these elements of the mix. Pricing
is difficult and must reflect supply and demand relationship. According to J.CO Donuts & Coffee,
in Malaysia market, pricing a product too high or too low could mean a loss of sales for the
company.
In order to maximize their profit, J.CO Donuts & Coffee have listed some of the factors that
affected their products price such as fixed and variable costs. Currently J.CO Donuts & Coffee
fixed cost are rent, insurance, license and loan payments while their variable cost are ingredients,
staff salary, and many more. The next factors are their competitors price, their target group salary
and their willingness to pay for the product.
J.CO Donuts & Coffee reveal that they undergo several pricing strategy when it enter
Malaysia market. Some of the pricing strategy that they use is penetration pricing which is the
pricing technique of setting a relatively low initial entry price, usually lower than the intended
established price, to attract new customers. According to J.CO Donut & Coffee, this strategy aims
to encourage customers to switch to the new brand in Malaysia because of the lower price. J.CO
Donut & Coffee said that this strategy have some advantages for their company such as
encouraging word-of-mouth recommendation for the product because of the attractive pricing thus
making promotion more effective. Other than that, it also forces the business to focus on minimising
unit costs right from the start as the productivity and efficiency are important.
Currently J.CO Donut & Coffee price was set using competition pricing strategy where they
set a price in comparison with competitors such as Big Apple Donut, Dunkin Donut and many more.
Among this three major competitor, J.CO Donut & Coffee price are at the highest because they
said that they believed their customer will always come back to their store as they are using high
quality ingredients imported from all around the world to produce high quality product such as
donut and beverages. Setting the price higher also known as price skimming strategy as the price
are set to high to reflect the exclusiveness of the product as J.CO Donut is known for their high
quality of their ingredient and exclusiveness of their caf and restaurant. All transaction in all store
in Malaysia with their customer based only on cash only.

27

5.1.3 J.CO Donuts & Coffee Promotion


When asked about promotion that was being used by J.CO Donuts & Coffee, they said that
promotion is the business of communicating with customers. Referring to the promotion mix
strategy, J.CO Donut & Coffee claimed that they are using pull strategy which mean they usually
use social media network to advertise their product in order to create a stronger consumer demand.
They believe that promotion will provide information that will assist their customer in making a
decision to purchase a product or service.
The cost associated with promotion often represents a sizeable proportion of the overall
cost of producing the product. However, successful promotion increases sales so that promotion
and other costs are spread over a larger output. Though increased promotional activity is often a
sign of a response to a problem such as competitive activity, it enables J.CO Donuts & Coffee to
develop and build up a succession of messages and can be extremely cost-effective.
They also believe that promotion is the method that they should be using to spread the
word about their product to customers, stakeholders and the broader public. According to J.CO
Donuts & Coffee, once theyve identified their target market, theyll have a good idea of the best
way to reach them. For J.CO Donut & Coffee, they are choosing sales promotion strategy and
public relations strategy to promote their products.
5.1.4 J.CO Donuts & Coffee Place
In the marketing studies, place is concerned with various methods of transporting and storing
goods, and then making them available for the customer. Getting the right product to the right place
at the right time involves the distribution system. For J.CO Donut & Coffee, they prefer on selling
the product directly to their customer or also known as direct distribution to consumer.
According to J.CO Donut & Coffee, efficient and effective distribution is important if the company
is to meet its overall marketing objectives. If a company underestimate demand and customers
cannot purchase products because of it, profitability will be affected. They choose not to distribute
their product by using wholesaler, retailer or agent because they need to maintain the freshness
of their product in order to maintain the high quality taste of their donut and beverages. Other than
that, they also regularly change their unsold donut each in 3 hours and some of the unsold donut
will be given to orphanage house to prevent any waste of food. As J.CO Donuts & Coffee are one
of the exclusive caf, they deliberately chose a place that is frequently visited by public. It became
J.CO Donut & Coffee priority to ensure that their store are located in suitable area such as shopping
mall. In Malaysia, all J.CO Donut & Coffee caf are situated inside famous shopping mall such as
Pavillion, Palm Mall Seremban, Queensbay Mall Penang and many more. They said the location
will be the key of the success of their store so they focus on choosing a ground floor location and
near an entrance location in the shopping mall.

28

5.2 Strategy Alternatives


5.2.1 Product Life Cycle (PLC)
J.CO & Donut said that their customer always expect new product during the festive season and
this is become customer demand are unlimited and it is J.CO Donut & Coffee challenge to
accommodate the needs of their customer. The needs and demand of their customers change
over time and thus the product offering has to be changed accordingly. In order to stay in top of
the business, J.CO Donut & Coffee always assume that what is favourite product today may be
out of market within few month. Thus innovation is required to maintain the customer needs and
the company profit.
To counter these changes J.CO Donut & Coffee have their own research and development
(R&D) located in Jakarta, Indonesia. The J.CO Donut & Coffee R&D are responsible on producing
a new flavour whether it is donut, beverages or yogurt. They claimed that their R&D played an
important role in attracting their customer thus although they experience loss during product
development stage, they always gaining profit when the product reached growth stage. Since its
opening in Indonesia, J.CO Donut & Coffee are continuously introduced a new products during
festive season and has phased out the old ones which were at the decline stage of their product
life cycle. The introduction is timed such that the new product does not cannibalize the product
already in the maturity or growth stage. Thus the secret lies in getting profits with same product
but different topping or flavour in the different stages of the PLC.

J.CO Donut always monitored their annual sales volume based on product to keep their
time on PLC in maturity mode. Whenever J.CO Donut & Coffee product reach the some level of
their maturity, J.CO Donut will either replace it with new product or withdrawn it from the market.
This is to ensure that they didnt lose their customer, profit and to delay the decline of a wellestablished product which has the potential of generating further revenue.
29

5.2.2 BCG Growth-share Matrix

Growth Rate

High

QUESTION MARK

STAR

COW

Low

High

DOG

Low
Market Share

According to BCG Matrix, J.CO Donut & Coffee can be considered as the question mark
in the Malaysian donut industry. The reason for this is its high market growth and their low market
share in the Malaysia market. These happened due to the several reason such as J.CO Donut &
Coffee are the younger competitor in donut industry. In Indonesia market however, J.CO Donut is
the star because they have high market share and high market growth. J.CO Donut & Coffee are
aiming to become the star in Malaysia donut industry by planning to open several dozen caf in
the coming year.
By having a high market share and high market growth, Big Apple Donut & Coffee are the
star because they have 85 outlet and caf selling their product and some of the public are already
being customer with Big Apple Donut for a long time as Big Apple is Malaysian company and its
the pioneer in Malaysian donut caf concept. The cow in Malaysian donut industry is Dunkin Donut
as Dunkin Donut although have high market share, it have a low growth rate. Currently, Dunkin
Donut are having 81 caf in Malaysia including Sabah and Serawak. Dunkin Donut have low
growth rate may be due to their same menu with new product being introduced since their opening.
Lastly, Krispy Kreme are considered as the due to its low market share and low market growth.
Krispy Kreme currently have 12 store in Malaysia and it is assume that it the dog because the
brand is from United State of America and it is not widely known by public.

30

5.2.3 Five Forces Driving Profitability


5.2.3.1 Supplier Power
J.CO Donut & Coffees case have a large population of suppliers for their ingredient however they
claimed that their bargaining power of suppliers is moderate. This is because they have a good
relationship with their suppliers thus making the bargaining power is fairly stable currently. It is also
believed that the reliance that J.CO Donut & Coffees has on suppliers is equal to the reliance
suppliers have on J.CO Donut & Coffees.
On one hand, J.CO Donut & Coffees has a good supply chain of quality ingredients at fair
prices while on the other hand, suppliers are surely content with supplying to a large consuming
company such as J.CO Donut & Coffees. However, there are many substitute suppliers out there
that can replace current suppliers such as their supply of coffee bean and chocolate. J.CO Donut
& Coffee are importing their ingredient for their product came from same region for all their store
in South East Asian. Most of the J.CO Donut & Coffee ingredient supplier are kept as company
secret.
5.2.3.2 Buyer Power
The biggest challenge faced by J.CO Donut & Coffee is the buyer power as in Malaysia, there are
many others competitor and it usually have a significant choice in donut and coffee shops. In
addition to that, with the Malaysia law, it was with difficult and involve a lot of money to patent their
coffee, donut or yogurt product. Due to this reason, a lot successful innovations by J.CO Donut &
Coffee such as the Oreo Frappe are subject to copycat products.
In order to serve their customer well, J.CO Donut & Coffee have an official customer
service website in their official website where their customer can shared their idea about J.CO
Donut & Coffee new product or giving suggestion on how the company should improve. Since its
opening in Malaysia, J.CO Donut & Coffee received more than 2, 500 ideas and suggestion from
their customer and Malaysia. From that number, J.CO Donut & Coffee have regularly do a blind
taste for their product to all their loyal customer.
According to the study done by the J.CO Donut & Coffee R&D Department, their decision
which is to allow the customer share their idea is helping them building a stronger relationship with
their customer. Listening to customers will generate loyal customer, which is clearly critical in an
industry with low switching costs. J.CO Donut & Coffee claimed that they need to maintain their
product and customer service at the highest level because there are many competitor in Malaysia
donut and coffee market.

31

5.2.3.3 Threat of New Entry


J.CO Donut & Coffee brand image is very strong in South East Asia as a high quality donut and
coffee seller. This creates power by reducing customer susceptibility to visiting competitor stores
in proximity to J.CO Donut & Coffee, making it a hard market for new entrants. According to the
J.CO Donut & Coffee and regular visitor of Pavilion, after 3 month of J.CO Donut & Coffee opening
its store in Pavilion, their competitor Dunkin Donut have closed their store in Pavilion.
In Malaysia, there is a relatively low threat of new entrants into the Malaysian coffee and
snack shop industry. Other than that, there is not many competitor in exclusive donut & coffee
caf, it is not an easy for a new entry to build a strong brand that could match the J.CO Donut &
Coffee brand. According to J.CO Donut & Coffee, they build a strong brand name for almost 10
years in South East Asia and many of their competitor take almost 15 years.
Although it is still possible for a new entrants to thrive in this market, they may experience
several problem for example, licenses, insurance, or other qualifications that may be required are
not hard to obtain In addition, since customers incur minimal switching costs when switching
suppliers, they are able to buy from multiple stores. This element of the Five Forces analysis shows
that the threat of new entrants is a low threat issue for J.CO Donut & Coffee.
5.2.3.4 Threat of Substitute
In all of the five forces, threat of substitute is the highest threat to the company. The threat of
substitute products and services is high. Coffee and snacks caf concept restaurant that are
serving donut is a substitute products for J.CO Donut & Coffee. Caf and restaurant that served
similar donut include nationwide chains are Dunkin Donut, Big Apple Donut, Krispy Kreme and
also Mister Donut. Substantial substitute products exist in the Malaysian donut & coffee industry
whether they are similar in nature or completely different, yet still classifiable as fast food.
5.2.3.5 Competitive Rivalry
To conclude, it is clear from the above explanations that the J.CO Donut & Coffee brand does offer
the company significantly enhanced competitive rivalry through its contribution to the reduction of
all four threats.
Therefore, in accordance with Porters Five Forces theory, it can be said that J.CO Donut
& Coffee strong brand influences its external environment and the donut and coffee industry as a
whole. J.CO Donut & Coffees faces tough competition because the donut and coffee market is
already saturated. J.CO Donut & Coffee also claimed that their brand identity within the industry
is also a huge factor for the rivalry, as three major brands have captured the majority of the market.
It is important to note, however, that the industry does not have over capacity at the moment

32

5.2.4 Product-Market Expansion Grid


Existing Product

New Product

Market

Product

Penetration

Development

Market

Diversification

Existing
Market

New
Market

Development

In the Product-Market expansion grid, J.CO Donut & Coffee are located in the product
development strategy. They claimed that this strategy suit the business that they are in. Product
develop can be define as developing new products and offering to the existing current markets.
These strategies often try to sell new products to regular customer. Product development is used
when there is a new product which has to be introduced in an existing market. In J.CO Donut &
Coffee, they regularly introduced new donut topping and beverages flavour. When they introduced
new product, they sometimes removed the less profit product. The department that responsible
for product development in J.CO Donut & Coffee are their Research and Development (R&D)
department.

33

5.3 Market Communication Mix


For J.CO Donuts & Coffee, it is their policy that they rarely use advertising on television and radio.
They usually rely on sales promotion and public relations to promote their products or services.
Sales promotion relates to short term incentives or activities that encourage the purchase or sale
of a product or service. Some of the promotion that J.CO Donuts & Coffee do is each festive
season, they will introduce new donut flavour with lowest price in order to increase their chance to
get new customers. Other than that, J.CO Donuts & Coffee also contributed a lot to the society
thru corporate social responsibility (CSR) programme.
Public relation refers to how you handle your relationships and the flow of information with
your various "publics" or the people who have a stake in or are affected by your business. This
includes the general public, consumers, shareholders, employees, partners, competitors and the
government. J.CO Donuts & Coffees CSR programme is also known as one of the public relations
(PR) strategy used by J.CO Donuts & Coffee. According to Chartered Institute of Public Relations,
public relation is defined as the deliberate, planned and sustained effort to establish and maintain
mutual understanding between an organisation and their publics. J.CO Donuts & Coffee said that
their public relations is about building good relations with the public of your business by obtaining
favourable publicity, building a good corporate image and handling or heading off unfavourable
rumours, stories and events.
Currently, J.CO Donuts & Coffee CSR programme only involved activity with orphanages
and homeless people around Kuala Lumpur area. J.CO Donuts & Coffee believe that building good
relationships with your stakeholders, particularly customers, you can generate positive word of
mouth and referrals from satisfied customers. Many small businesses do not devote enough
attention to public relations in their promotional mix but done properly, it can be a powerful and
cost effective business development and marketing tool.

34

6.0 ACTION PROGRAM


6.1 Gantt Chart
Activity

JAN

FEB

MAR

APR

MAY

JUN

JUL

OGO

SEP

OCT

NOV

DEC

AMOUNT
BUDJET

Promotion

RM 8000

Raya
Orphanage

RM

and Sponsor

12000

International

RM

JCO meeting

18000

Serivce

RM

Equipment

15000

Hiring

RM 9000

and

Training
Research

RM

and

12000

Development
JCO

RM 4500

Malaysia
Meeting
Based on the Gantt Chart stated above, JCO Donut and Coffee had a promotion during each
festival that celebrate in every religion. At each year, they will do a promotion include the Chinnesse
New Year, Hari Raya Aidilfitri, Deepavali and Christmas. Besides on the promotion, at every three
times a year, they will do a sponsor towards the orphanage withthin January, May and December.
Meeting with the international JCO meeting had always done total of six months in a year
which is straight from the January untill June. On top of that, on the grey scale above stated that
JCO had their service equipment at every three times a year that is on March, April and May.
Therefore, their equipment is always in a good condition. On the black scale above, the JCO Donut
and Coffee hiring and training the employees at every three months in a year which on January,
February and March. Throughout the training, the company served a good technique and skill for
their work. Most of the time, research and development had the longest period compare to the
other activities. The Gantt chart above shows that, the company done it at every twelve times in a
year that from the January and December which they always making an improvement on the taste
of their drink and food to satistfied their customers. Before the development been made, they
always done a research by having a survey and online survey giving out towards the customers to
know exactly what is less on their foods and drink or even their services.
35

Last but not least, At every three times in a year JCO held a meeting between the CEOs
of the JCO in every state in Malaysia that are on April, May and June. Throughout the meeting,
most of the time, they are disscussed about the finacial problem or to solve the problem that their
company faces. The problem that the company faced in targeting the time that had been set, there
are several problem that they face especially because of the employees itself. Less numbers of
workers caused the company severe a problem. As what that we had earned from the interview
that we had made, Malaysian people are not giving their interested towards the jobs and
demanding for a better job.
Other than that, from what we have known based on the interviewed that we had done, the
problem that cause the problem is the equipment. Less of equipment that are provided for the
company. The JCO Donut and Coffee divided the task towards their employees in order to
achieved their time that have been set, the company find a solution to acheive it by creating a
timetable toward each of the employee. The time working for each of the employee for the JCO
donut and coffee is eight hour a day. The period of time for the work hour is long due to the lack of
worker for the JCO. On the other hand, if the worker didnt perform well for the JCO they will attend
for the couching and counseling and they will have 2 months notice before they been terminated
for the job.

36

7.0 BUDGET
This section aims to analyse the overall budget of J.CO Donuts & Coffee Malaysia (Pavillion
Branch) in terms of their target sales and the actual generation of income which consists of 3
phases; daily, monthly and yearly projection.
7.1 Products
To understand how J.CO Donuts budget works within its business operation, we must first take a
look at the range of product they deliver to understand the dispersal of prices. J.CO Donuts offers
5 different varieties of food products, which are:
1) Donuts: The donuts that comes in 24 different flavours are sold in 3 different
quantities which are a dozen per box, half a dozen per box and ala-carte. The
amount of donuts produced in J.CO donuts (Pavillion) is 5000 pieces daily. The
actual projection they managed to sell is at the capacity of 3,500 pieces daily
average, which amounts to 105,000 pieces monthly.
2) J.Coffee: J.Coffee managed to sell at an average of 90 cups per day, which
comprised of 3 different sizes; tall, grande, venti. For an extra RM1.00, you can
upgrade from medium to large. This coffee comes in 26 different varieties.
3) J.Club- J.Club are sold at an average of 30 units per day, they come in 2 different
flavours. They are one of the least within the product to generate sales throughout
their daily operation.
4) J.Pops- J.Pops or Baby Donuts is also popular among its customers, with a box of
24 pieces, they are selling at an estimated 40 boxes per day.
5) J.Cool Yogurt- The J.Cool Yogurt is also apparently selling 40 cups average per
day which comes in 4 different sets.

37

7.2 Calculations
The breakdowns for the calculation of unit sold are as follows:
1) Donuts- (i) 12pc x 230 boxes (RM 26.00)= 2760 units
(ii) 6pc x 110 boxes (RM13.00) = 660 units
(iii) Ala-carte (RM3.00) = 80 units
2760+660+80 = 3500 units (daily)
3500 x 30 = 105,000 units (monthly)
105,000 x 12 = 1260000 units (annually)
RM26.00 x 230 = RM5980
RM13.00 x 110 = RM1430
RM3.00 x 80 = RM240
RM5980+RM1430+RM240 = RM 7650 (daily)
RM7659 x 30 = RM229500 (monthly)
RM229500 x 12 = RM2754000 (annually)
2) J.Coffee- (i) venti (rm 8.00) = 50 cups
(ii) grande (rm7.00)= 30 cups
(iii) tall (rm 5.00) = 10 cups
50 + 30 + 10 = 80 cups (daily)
80 x 30 = 2400 cups (monthly)
2400 x 12 = 28800 cups (annually)
RM 400+ RM 210+ RM 50 = RM660 (daily)
RM 660 x 30 = RM19800 (monthly)
RM 19800 x 12 = RM237600 (annually)
3) J. Club- (i) Cheezy Rich (RM6)- 15 units
(ii) Red Velvet (RM6)- 15 units
15 + 15 = 30 units (daily)
30 x 30 = 900 units (monthly)
900 x 12 = 10800 units (annually)
RM 90 + RM 90 = RM180 (daily)
RM180 x 30 = RM5440 (monthly)
RM 5400 x 12 = 64800 (annually)

38

4) J. Pops- 40 boxes daily ( RM18.00)


40 x 30 = 1200 boxes (monthly)
1200 x 12 = 14400 boxes (annually)
RM 18.00 x 40 = RM720 (daily)
RM 720 x 30 = RM21600 (monthly)
RM 21600 x RM259200 (annually)
5) J. Cool Yogurt- (i) J. Cool Single (RM 6.50) = 12cups
(ii) J. Cool Couple (RM 12) = 10 cups
(iii) J. Cool Sharing (RM 13) = 10 cups
(iv) J. Cool To Go (RM 10) = 8 cups
12 + 10 + 10 + 8 = 40 cups (daily)
40 x 30 = 1200 cups ( monthly)
1200 x 12 = 14400 cups (annually)
RM 78+ RM 120 + RM 130 = RM 80 = RM408 (daily)
RM 408 x 30 = RM 12240 (monthly)
RM 12240 x 12 = RM 146880 (annually)
7.3 Profits
1. Gross profits:
(i)

Daily = RM 7650 + RM 660 + RM 180 + RM 720 + RM 408 = RM 9618

(ii)

Monthly = RM 229500 + RM 19800 + RM 5440 + RM 21600 + RM 12240 = RM 288,580

(iii)

Annually = RM 2,754,000 + RM 237,600 + RM 64800 + RM 259,200 + 146880 = RM


3,462,480

7.4 Breakdowns
Monthly gross profit = RM 288,580
1. Cost of raw materials: RM 70,000 (24.25%)
2. Workmanship: 20 employees ( RM 1,800 each) + 2 store manager (RM 2,200) = RM
40,400 (14%)
3. Premis rental: RM 20, 000 (7%)
4. Utility bills: RM 5,000 (1.7%)
5. Franchise monthly fee: RM 10,000 (3,4%)
6. Monthly Profit Margin: RM 143,180 (49.61%)

39

7.5 Budgeting Method


For this section, we will use Task and Objective approach of budgeting. This method will analyse
and determine how much funds to be spend on sales and promotion, marketing and advertising
which will based on the desired results. It will involve:
1) Setting specific objectives
2) Deciding what tasks need to be completed to achieve those objectives
3) Calculating how much money it will cost to complete the task list
J.CO Donuts and Coffee Malaysia uses the objective and task method of setting up its
advertising budget. The advertising manager feels that this method is the best way for the company
to plan its advertising. The stores staffs first identify the merchandising events that will be held
during the budget period. Then the manager determines the advertising that will be needed to
promote these events properly, how much advertising will cost, and sets up the budget according
to these figures. If the competition proves particularly active in promoting one category of
merchandise the advertising budget can be adjusted so that additional funds can be spent to
promote this merchandise.
(a) Planning the budget
The following list explains the merchandising events, which are held during this year. For each
event funds have been estimated for advertising expenditures that will be needed to accomplish
the promotion.
7.6 Promotions and Activities of J.CO Donuts & Coffee Malaysia

Raya Promotions include Chinese New Year, Hari Raya Aidilfitri, Deepavali, Christmas
(Digital Advertisement RM2000)

Orphanage and Sponsor (CSR)- January, May and December (RM 4000 each month)

J.CO International Meeting- January until June (RM3000 each month)

Equipment Service- March, April and May (RM5000 each month)

Hiring and Training- January, February and March (RM3000 each month)

Research and Development for 1 year (RM1000 each month)

JCO Malaysia Meeting- April, May and June (RM1500 each month)

40

MONTH

TASK

OBJECTIVE

CALCULATION AND
COST

JANUARY

CSR

Donation for

J.CO International Meeting


Hiring and Training

Orphanage
Discuss marketing
plans

Research/Development

Enhance staffs

RM 4000
RM 3000
RM 3000
RM 1000
TOTAL: RM 11,000

performance

Enhance sales and


services

FEBRUARY

J.CO International Meeting


Hiring and Training
Research/Development

Discussing means of

RM3000

effective promotions

RM3000

Enhance Staffs

RM 1000

Enhance sales and

TOTAL: RM 7,000

services
MARCH

Raya Promotions (Digital


Advertisement)
J.CO International Meeting
Hiring and Training

Chinese New Year


Promo
Discussing unified

RM 2000
RM 3000
RM 3000

agreements

RM 5000

Equipment Servicing

Enhance Staffs

RM 1000

Research/Development

Maintain and restore

TOTAL: RM14,000

equipments
Enhance sales and
services
APRIL

J.CO International Meeting


Equipment Servicing

Discussing problems
and solutions

RM3000
RM5000

Research/Development

Maintain equipment

RM1000

J.CO Malaysia Meeting

Enhance sales and

RM1500

services

TOTAL: RM 10,500

Discussing local promo


MAY

CSR

Old Folks Home

RM4000

J.CO International Meeting

Discussing expansion

RM3000

Equipment Servicing

Maintain equipment

RM5000

Research/Development

Enhance sales and

RM1000

J.CO Malaysia Meeting

services
Discussing problems

RM1500
TOTAL: RM 12,500
41

JUNE

J.CO International Meeting

Maintaining Efforts

RM 3000

Research/Development

Enhance sales and

RM 1000

J.CO Malaysia Meeting


JULY

Raya Promo (Digital


Advertisement)
Research/Development

services

RM 1500

Discussing Solutions

TOTAL: RM 5,500.

Hari Raya Aidilfitri

RM 2000

Promo
Enhance sales and

RM 1000
TOTAL: RM 3,000

services
AUGUST

Research/Development

Enhance sales and

RM 1000

services
SEPTEMBER

Research/Development

Enhance sales and

RM 1000

services
OCTOBER

Research/Development

Enhance sales and

RM 1000

services
NOVEMBER

Raya Promo (Digital


Advertisement)
Research/Development

DECEMBER

Raya Promo (Digital


Advertisement)
CSR
Research/Development

Deepavali Promo

RM 2000

Enhance sales and

RM 1000

services

TOTAL: RM3,000

Christmas Promo

RM 2000

Orphanage donation

RM 4000

Enhance sales and

RM 1000

services

TOTAL: RM7,000

TOTAL:
RM11, 000 + RM7, 000 + RM14, 000 + RM10, 500 + RM12, 500 + RM5, 500 + RM3, 000 +
RM1000 + RM 1000 + RM 1000 + RM 3000 + RM 7,000
= RM76, 500 annually
RM 3,462,480 - RM76, 500 = RM 3,385,980 annual nett profit.

42

8.0 CONTROL
Marketing control is the way to compare your actual results to your marketing plan. To confirms
that your company already in the right track. The control step will help the company to improve the
performance. There is four tools of control in marketing which is Annual-plan control, Profitability
control, Efficiency control, Strategic control. J.CO Donuts & Coffee is using an Annual plan control
and profitability control for their business purposes. Annual plan control is the process to aim and
achieve sales volume and all objectives which already have been set up by the company. After
that, profitability control is how the company controls the sales made, profit earned and
expenditures incurred by them. Usually it relates with profit earning capacity of firms product by
the company. J.CO Donuts & Coffee will look back all the process get to know what they achieve.
Even though J.CO Donuts & Coffee already plans their strategy smoothly but theres no guaranty
profit for it.

MARKETING
CONTROL
ANNUAL PLAN
CONTROL

PROFITABILITY
CONTROL

8.1 Annual Plan Control J.CO Donuts & Coffee


8.1.1 Sales Analysis
8.1.1.1 Sales Target for a Month
Sales Goals
5000 pieces day X 30 days = 150,000 pieces of (donuts a month)
J.Coffee = 200 cups per day
J.pops = 100 boxes per day
J.cool yogurt = 70 cups per day
J.club = 50 units per day
J.CO Donuts & Coffee target their sales every month depends on quantity of donut that produce.
they target that every outlet will produce around five thousand pieces every day which is can
produce around hundred and five thousand pieces of donuts every month.

43

Actual sales
3,500 pieces X 30 days =105,000 pieces of (donuts a month)
J.Coffee = 90 cups per day
J.pops = 40 boxes per day
J.cool yogurt = 40 cups per day
J.club = 30 units per day
Eventually, J.CO Donuts & Coffee not achieve their target every month, their just achieve around
3,500 pieces of donut a day. This show has some issue of what they already planned. .
8.1.1.2 The Issues Why J.CO Donuts & Coffee Cant Achieve Target
Price
The most important part that the company needs to consider is price. Before J.CO Donuts & Coffee
enter Malaysia market their already has their plan for price. For instance, J.CO Donuts & Coffee
used penetration pricing which is the pricing technique of setting a relatively low initial entry price,
usually lower than the intended established price, to attract the customer.
J.CO Donuts & Coffee was not achieve their target sales because of the others competitors has a
cheaper price of donut than them, their gives the best quality of donut to the customer. The price
of J.CO Donuts & Coffee actually the most reasonable, the company cant low the prices due to
the quality of ingredients that their used. For instance, J.CO Donuts & Coffee used the chocolate
that import from oversea such as from Belgium.
Style
J.CO Donuts & Coffee actually not seem the others ordinary donut company. J.CO Donuts &
Coffee ideas actually selling lifestyle, which is all type of people, can enjoy their donut and coffee
with happiness in the outlet. They most competitors are Big Apple and Crispy Crme because
these company also selling donut, but J.CO Donuts & Coffee also takes the caf such as Starbuck
and coffee Bean as their competitors too. That the reason they one of the pricy Donut among the
competitor.
Promotion
Promotion is the one of the strategy to makes the company popular in market. J.CO Donuts &
Coffee is the company just do the promotion in the outlet with give information to the customer
about their new promotion and to increase their sales. Due to this style of promotion J.CO Donuts
& Coffee enables to develop and build up a succession of massages like the others competitors
did.

44

8.2 Market Share Analysis


Market share based number of outlets that J.CO Donuts & Coffee have in Malaysia.

Total of outlets

12

11

Jco
Big Apple
Krispy Kreme

80

Market share is the amount of consumer sales dominated that same product in particular industry.
The market share analysis of J.CO Donuts & Coffee, this Cafe has two close competitors which
are Big Apple and Krispy Kreme. These brands were selling the same product with them which is
Donut and coffee. Big Apple leading the market followed by J.CO Donuts & Coffee and next is
Krispy Crme.
8.2.1 Big Apple
This is because Big Apple already has over 80 branches in Malaysia. Big Apple brings the cheaper
price of donut compared to the J.CO Donuts & Coffee. They also creates makes the topping of
donut to the maximum compared to them. The fact is J.CO Donuts & Coffee actually brings the
truly taste of donut not just about the feeling and topping.
8.2.2 Krispy Kreme
Krispy Kreme already has 12 branches around Malaysia. The price of Krispy Crme more pricy
compare to this two brands. Besides doughnuts, Krispy Kreme also offers high-quality brewed
coffee, roasted by Krispy Kremes own roast master and a variety of other delicious beverages.

45

8.2.3 Most profitable product


The most profitable is the Donut, majority customer carving for it. J.CO Donuts & Coffee staff said
glaze donut is the best donut that they have. After that is baby donut, the 24 pieces of small donut
with a variety flavors that compile all together. Everyday J.CO Donuts & Coffee donuts will sell
donut around 230 box of dozen.
8.2.4 Marketing Expense to Sales Analysis
Promotion gross profit
Type of product

Gross Profit Monthly

105,000 units donuts

RM 229500

2400 cups coffee

RM 19800

900 units of Jclub

RM 5440

1200 boxes of Jpop

RM 21600

1200 cups of yogurt cup

RM 12240

Total monthly
When

it

promotion
sales

will

RM 288,580

comes

to

RM404,012

month

the

increase

around 40%

RM 115,432
Budget for promotion each
outlet is RM20,000

8.2.5 Profitability Control


J.CO Donuts & Coffee marketing department said the way they achieve the target sale for every
month depends on expenditures internal and external in their company. The most important. After
that, the external control is based on promotion, customer and place of shop.
8.2.5.1 Internal control
Staffing
Usually internal factors are about the staffing in the company. In J.CO Donuts & Coffee all the staff
will be divided by three departments which is first is store manager and assistant manager, next is
bakers and lastly is the front line. JCO Donut and Coffee hiring and training the employees at
every three months in a year which on January, February and March .Throughout the training, the
company served a good technique and skill for their work
Workmanship: Employees salary (Each Outlet)
20 employees (RM 1,800 each) + 2 store manager (RM 2,200) = RM 40,400 (14%)

46

The manager needs to monitor the bakers to achieve the target amount of donut every day
and the front liner needs to push the sales of donut and coffee. J.CO Donuts & Coffee needs to
produce every day is about 4000-5000 pieces. Every day the manager has to updates the sales
report. After that, they needs to analyze and compares the report. From the amount of donut, the
cup of coffee and yogurt is the way how they control their profitability every day.
Staff Training
J.CO Donuts & Coffee do their ongoing promotion in the outlets, usually the staff needs to know
how communicate and attracts with the customer to increase their sales. For example, when the
customer just want to buy the half dozen of donut the front liner needs to show the customer will
save a lot when they buy for a dozen.
Hiring and Training - January, February and March (RM3000 each month)
J.CO Donuts & Coffee has their own strategy to control their profit. First with Staffing and
push the sales of product by the staff. J.CO Donuts & Coffee also said the most important to fight
with their competitors is trust on the quality of what they using. Even though their donut is one of
the pricy but the most important the quality of ingredient that their using. Quality and price actually
are come together.

47

8.2.5.2 External Control


Promotion
J.CO Donuts & Coffee said their do the promotion in outlets which is the promotion needs to be
done by the front liner. Other than that, J.CO Donuts & Coffee do their promotions with celebrates
the
Malaysia feast such as Hari Raya Aidilfitri, Deepavali, Chinese New Year and Christmas. Every
feast J.CO Donuts & Coffee will change the theme of their outlets and donut design.
OUTLET RAYA PROMOTION

MARCH

RAYA PROMOTIONS (Digital Advertisement)

Chinese New Year Promo = RM 20,000

JULY

RAYA PROMOTIONS (Digital Advertisement)

Hari Raya Aidilfitri = RM 20,000

NOVEMBER

RAYA PROMOTION (Digital Advertisement)

Deepavali Promo = RM 20,000

DECEMBER

Raya Promo (Digital Advertisement)

Christmas Promo = RM 20,000

Next, J.CO Donuts & Coffee also makes their customer satisfied with their service. They needs to
make sure that the customer will come back to the caf to having their donuts and be a loyal
customer. Usually, the loyal customer will select the best of taste and experience that their get.
J.CO Donuts & Coffee improve their relation with stakeholder regularly. Lastly, J.CO Donuts &
Coffee maintain their strategic place and know the profitability place. Usually, they choose the
place that have many crowd such as Pavilion Shopping Centre and IOI Mall Puchong. The placing
of shop also takes the important role, what we can see J.CO Donuts & Coffee chose their shop
that near to the entrance of the mall.

48

9.0 APPENDIX

CONTACT NUMBER
J.CO Donut & Coffee Malaysia
(Pavillion Kuala Lumpur)
Marketing Department
+60127313391

49

10.0 REFERENCES
-

Armstrong, G., & Kotler, P. (2000). Marketing. Upper Saddle River, NJ: Prentice Hall.

Zeithaml, V. A., Bitner, M. J., & Gremler, D. D. (2006). Services marketing: Integrating
customer focus across the firm.

Kotler, P. (1999). Marketing management. Upper Saddle River, N.J.: Prentice Hall.

Vargo, S. L., & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal
of marketing, 68(1), 1-17.

Cateora, P. (1983). International marketing. Homewood, Ill.: R.D. Irwin.

Grnroos, C. (1990). Service management and marketing: managing the moments of truth
in service competition. Jossey-Bass.

Winter, G. (2011). The Man Who Cured the Performance Review. Somerset: Wiley.

Lamb, C., Hair, J., & McDaniel, C. (2004). Marketing. Mason, Ohio: Thomson/South-Western.

Peter, J. P., Olson, J. C., & Grunert, K. G. (1999). Consumer behavior and marketing strategy
(pp. 122-123). London: McGraw-Hill.

Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing.
The journal of marketing, 20-38.

Sandhusen, R. (2000). Marketing. Hauppauge, N.Y.: Barron's.

Evans, J., & Berman, B. (1982). Marketing. New York: Macmillan.

Palmatier, R. W., Dant, R. P., Grewal, D., & Evans, K. R. (2006). Factors influencing the
effectiveness of relationship marketing: a meta-analysis. Journal of marketing, 70(4), 136153.

Stough, R. R., Haynes, K. E., & Campbell Jr, H. S. (1998). Small business entrepreneurship
in the high technology services sector: An assessment for the edge cities of the US national
capital region. Small Business Economics, 10(1), 61-74.

Keegan, W., & Green, M. (2005). Global marketing. Upper Saddle River, N.J.:
Pearson/Prentice Hall.

50