The assignment I have been set is to start up a small business in Kuala Lumpur Malaysia as a part of my GCSE Business studies coursework.The idea I have is to set up a restaurant. I chose to start up a restaurant as I this is an area of business I am interested in and thought it would be a both enjoyable and profitable business to do. I also thought it would be good idea as I know people from the restaurant business and they can help with good advertising companies and help me with my marketing ideas. I could get information on the business from someone who has already put the time and effort in to start up a restaurant.Although I’d like to conduct some research before finally deciding I have an idea to open an Italian restaurant near Hock Lees in Damansara Heights in Kuala Lumpur. This restaurant will be a modern Italian family friendly restaurant. We will open in the mornings and through lunch with the aim to have expats who shop at Hock Lees during the day stop by for coffee, a snack and lunch. We will also open in the evening for families who live in the area with children to stop by for a quick dinner.The food that we will offer is modern Italian food, pasta, pizza, meats and fish. Our speciality will be carbonara pasta and for dessert chocolate pudding and custard. Our pricing strategy will be medium to expensive, as expensive as Jarrod and Rawlings and more expensive then W.I.P, the reason for this is that the people who live near Hock Lees, are generally very wealthy and can afford to pay a little bit extra for food.NameJJ’s PizzeriaI have chosen this name as it is the initials of my first and middle name; I thought it sounded really good with pizzeria next to it. It will be different to other pizza brands as I will have a home made recipe of tomato sauce and in my restaurant all our pizzas will be made form a wood fire overAims, Mission Statement and Constraints.An aim is to attempt or intend to reach a certain goal.A mission statement is a brief statement of the purpose of a company, organization, or group. Companies use this as general objectives and principles of operation of an organization.Business objectives are the steps a business will take to achieve the overall aim.A constraint is a factor which limits the ability of the business to achieve its objectives. It will limit the potential of my business chances of succeeding.AimsThe aims of my business are:* To make a profit in the first year.* To provide high quality contemporary Italian food to the local and wider community of hock lee’s* To provide enjoyable employment for enthusiastic young people.Mission StatementThe mission statement for my business will be to sell delicious and remarkable food and drinks in a friendly relaxed environment.ObjectivesThe objectives of my business will be:* To break-even by the end of the first year, to survive.* To gain a great reputation in the local community* To serve at least 20 people each day (to be confirmed based on profit and loss projection) by May 2009* To provide employment for at least 15 peopleConstraintsThe constraints of my business will be:Internal:* Financial resources – I’ll only have a small amount of money to start with* My initial experience – I’ve never run a restaurant before, but I will be able to ask for advice from people I know who already run their own restaurants* No financial resources at disposal e.g.- brothers and sisters to help* Have to start with a small restaurantExternal* Rent an existing building (as I won’t have enough money to build a brand new one)- If there are other restaurants nearby – competition- No other restaurants nearby – need to get people to come in the area* Wealth of the economy – the wealth of the economy is in a recession in recent developments, more people are unemployed, and don’t have enough money to come out to eat.* Available workforce – that speak English* Rules and regulations for setting up a restaurant as a foreigner- what restrictions may occur while opening my restaurant* Number of other people who want to set one up – large number of other people setting up a restaurant, what would make them come to mine instead.* How many people are in Kuala Lumpur* How many people in Kuala Lumpur will like the food- choice of cuisine might be different to what they are used to.Section 5The importance of marketingThe importance of Marketing for me is about finding out what customers need and want, providing it at the right price, and right place making sure the public is aware of it and where they can buy it.’The aim of marketing is to make selling superfluous. The aim is to know and understand the customer so well that the product or service sells itself.'(Peter Drucker)A marketing plan is the part of the business plan that outlines the strategy of a product or service. It also outlines your approach to attracting potential customers and clients to your product to buy them.For my marketing plan to be successful. I will need to outline the specific stages for that to happen. This will includes* Set my marketing objectives. By setting my objectives this will help me to understand what I need to do for my restaurant to be successful.* To gather information via internet research. I would use this process as it will help me to gather relevant research I can use for my restaurants business plan. The data will be used so I can draw conclusions from it about what, where and timings my restaurant will have.* Analyse the data gathered. This allows me to look at patterns that my data shows and to profile my marketing plan segments for my market plan.* Implement my strategy. This will help me understand the marketing mix. This will tell me how to use it and make my restaurant products to stand out.* Review my strategy. This will help me review my implement strategy. It will help me understand what I need to do to make it better, what was done well, and what if need to do for the next time I run my marketing plan.Production OrientationProduction orientation to marketing is developing a product and then finding the market to sell it in. It is also where it is important to produce a product and then persuade customers to buy it.Market OrientationA market orientation when a company develops products or services after analysing the market research results to find out what the customer wants and needs.The orientation that is more suitable nowadays is the marketing orientation as most businesses nowadays cannot afford to produce the products and hope that the customers will buy it.My orientationThe orientation that I will use in this project is the marketing orientation. I feel this will be better as i would get to know what the customer wants before I start up my business as then it will help me to get customers in to buy my product.Market SegmentationMarket segmentation means dividing the market for a product into different types of consumers who share similar characteristics.Market segments are when the business is divided by different types e.g. by Gender, Age, Income, Geographical, and Interests.Market NichesMarket niches is a small but profitable segment of the markets, this segment of the market is on what the customer needs and wants.My segmentationThe segment I will attempt will be the market niches. I think this will be a better market as it focus more on what the customers need and want rather than what the company I am starting wants. This will bring in more customers as it’s what they want.I will try to segment my market by Age and Location primarily but also by trying to bring in people with a higher income. I will segment my market by age as i would like mostly adults to come to my restaurant because adults bring in all the money into the household this will also tie into the higher income segment because i would like a higher income from people coming into the restaurant. I will also segment the market by location as i would like people that live nearer to the restaurant to come.Section 6Market researchMarket research is the collection of information about existing or potential products which uses a collection of primary and secondary research. It is crucial in a business as it can minimise risk and pay dividends and by making market research part and parcel of the business process.The stages of market research areMy market research objectivesThe objective of my market research would be to:* Find out what the local community want to have – what products, what prices are they prepared to pay, what concept and design (packaging) would they find attractive, what promotions would the be incentivised in.* To make sure the questions are easy to understand so they are answered properly* To improve the business using the results from the questionnaire – how to promote my businessSecondary market researchSecondary market research is when you look at information that has already been gathered.The different types of secondary market research I might use will be* Magazines – To find out information about market research summaries* Newspapers e.g. Business section – To find out information about different business in the area* Internet- To find out information about other customers and to locate them, also to look up business news on different websites.* Informal contacts e.g.: Business owners, family – To find out more about what market research they did.* Market research reports – on food franchise in MalaysiaI have decided to use Magazines to find information about market research summaries. I will also use the internet so I can research about business on different websites and so I can also locate potential customers. I will also use the market research report to find information about opening a business in Malaysia.Secondary market research FindingsAlthough I will discus the secondary findings later in my marketing plan, this is just some of the things I have been doing so far.For one of my secondary market research, I used the internet. I found out from different sites useful information. http://www.quantifiedmarketing.com/our_services/research.php – I used this site to help me find out information on market research for restaurants. It gave me a lot of information on the reasons and percentage of people that live in London that would come and eat out instead of in. it also told me that more people eat out then in. This will be useful as I would want more people to want to eat out then in.Dine Malaysia – I used this website to find out information on the restaurants in the surrounding areas of where my restaurant was going to be and also in areas where the restaurant is most successful. I used this website to also decide what I want it to be likeI also used Magazines and newspapers, I looked in the magazines and newspapers that I either bought or looked in the newspapers that my dad brought home from work.For my informal contacts, I asked two people. I asked a business owner that has 3 successful restaurants around KL and a restaurant that is being opened in Singapore soon. I also asked my dad about what market research they do for the company that he works at.From the Market research report I found out a lot about consumer demand. It said that the consumer franchise has been growing since the first food franchise, A&W, was introduced into the Malaysian market in 1963. These franchises helped to nurture a second generation of Malaysians that grew up with American fast food and are therefore willing to spend money for the food and Ambience.Here is some more of the market research report. The reset will be put in my appendix (1)The consumer demand for food franchises has been growing since the first food Franchise, A&W, was introduced into the Malaysian market in 1963. This was followed by the entrance of KFC in 1973, which became the most successful food franchise in Malaysia. McDonald’s and Pizza Hut entered the market in 1982 and 1984 respectively and became popular among Malaysians. These franchises helped to nurture a second generation of Malaysians that grew up with American fast food and are therefore willing to spend money for the food and Ambience. Patronizing the American food franchise outlets is a natural lifestyle for them, which helped to pave the way for new American franchises in various food categories that subsequently entered the market shown below: With rising disposable income and a growing appetite for Western food with a third generation of consumers being nurtured, the consumer demand for American food franchise will continue to grow.Primary market researchPrimary market research is information that is collected for a specific reason or to solve a specific problem.The different types of Primary market research I might use will be* Interviews – it would be the easiest way to find out information on the owner and what you need to do to start up a restaurant.* Surveys – i chose this method because it is the easiest way to find out what the customers want in a restaurant* Questionnaires – i chose this method because it will be the best way to find out why the customers come to a restaurant and why they come to the restaurantFor my primary market research I have decided to use a questionnaire and an interview. I will use a questionnaire to find out what the customers would want to see in the restaurant. I will use an interview to ask people in the restaurant business what it takes to set up a business and what I need to do to start one up.In my questionnaire I used both open and closed questions because then I could get an opinion from the customers for some specific questions. I used only one open question and the rest were closed.The questions I used for my questionnaire were:MaleFemale1. What age are you?Below 18 39-4918-27 50+28-382. How much are you willing to pay for a good meal?0-10 100 +11-3031-5050-1003. Indicate how often you might eat at the following types of restaurant?A lot Often Sometimes NeverItalianMexicanIndianJapaneseChineseOther: (Please state)4. How often would you eat at the following areas?A lot often sometimes neverSeri HartamasDamansara HeightsBangsarAmpangOther (please state)5. How far would you be prepared to travel to have a good meal?0-5 Km 20Km6-10 Km11-20Km6. How many times a month do you eat out?DailyWeekendsOnce a monthOnce every other monthOther (Please state)7. Do you prefer eating at a restaurant that has only one cuisine or a restaurant that has more than one cuisine? Why?8. To what extend do the following factors of a restaurant are important to youNot at all somewhat important Very ImportantThe AtmosphereThe quality of the foodThe drink selectionsThe quality of the serviceThe interior of the restaurantThe exterior of the restaurantThe only open question I used was if they prefer a restaurant with one cuisine or more. I used this question as I am still unsure whether I want to open a restaurant with one cuisine or more for a large range.The people I will give my questionnaire are, business owners and target market customers. I will construct my sample by going to places that people visit most often, e.g. – shopping centres. Also if business owners will let me I will leave some surveys with them and ask them to pass them to the customers when they are asking for the bill.I will construct my sample by giving the questionnaire to people in my year and also to my parents and their close friends. I will ask a minimum of 50 people to answer the questions as then I will get a better opinion of what I could improve.For my pilot survey I found that the questions I had didn’t need changing. This is as I got all the results I need for the questionnaire.For my questionnaire I have put a blank one in my appendix (2), a completed one appendix 3, and a results sheet appendix 4.Section 7Analyse and evaluation of Market research FindingsFrom my questionnaire I received the following information that will help me with my market research. The use of different graphs and charts will help me to see the contrasting numbers of what the public would want. Graphs are the best way of displaying information as I feel that if it was just numbers, no one would pay attention. Graphs are a good way catching the reader’s eyes while presenting the informationMale or FemaleI found out that the majority of people that I asked were female than male. In total I asked a number of 69 people. I asked 27 males and 42 females. I found i got these results because i asked mostly my mum’s friends.1. The agesI found that I got a range of ages. I found that most of the people I asked were between 39 – 49 years of age. I think this happened because I generally asked my mum’s friends first. The other ages were a range i got, 11 from 50+, 12 from 28-38, 10 from 18-27 and 8 from below 18. From these results I now have a decent cross section of ages.2. How much they are willing to pay for a good meal (in RM)I found that after i asked the people my questionnaire, most of the 69 people are willing to pay more for a good meal. I found that 0 people are willing to pay 0-10 for a good meal as i think that it was too low for them. 11-30, i found that only 6 people are willing to pay for that much is willing to pay for a good meal. I found that people are willing to pay from 31-50 RM; i think this is a reasonable amount for a meal and i was expecting more people to choose this price. I will use this information to have a decent strategy of pricing ranges. I think the best pricing range will be about around 15-20Rm for a main course. So the total comes to around 50RM.3. Indicate how often you might eat at the following type of restaurantTypeAlotOftenSometimesNeverItalian2418234Mexican7123217Indian2122225Japanese8112225Chinese9162914Greek1Malay563Thai222Western241Korean11Fast food1French21Sri Lanka1Vietnamese1Fusion1According to the table above most people go to, Mexican restaurant sometimes, Italian restaurant Alot, Indian tie with often and Sometimes, Japanese restaurant never, and finally Chinese restaurant sometimes. Out of the others that people choose, most people go to a Malay restaurant often.4. How often would you eat at the following areasAreaAlotOftenSometimesNeverSeri Hartamas2517243Damansara Heights13242112Bangsar3020156Ampang972526Chang Kit11 Utama11Shah Alam1Mont Kiara1Heritage RD1KL Sentral1From this table i found that Seri Hartamas and Bangsar is the most visited place to go to alot of the time. It seems Damansara height is good to go too often and that Ampang is a good place to go sometimes. From these results I have decided I will have my restaurant in Bangsar, this is as most of the people that i asked go to Bangsar alot of the time.5. How far would you be prepared to travel to have a good mealFrom the pie chart below i found that from 6-10 Km would be the ideal distance to travel to have a good meal as 27 out of 69 people would travel that distance. Other than that i found that 11-20 would also be an ideal distance as 21 people would travel this distance.From the last two answers i have decided to have my restaurant in the Bangsar area. I feel this is a good place to have it as more people go to Bangsar then any other place. I also will have it here as it is not far from many populated places and it has a good access from most places. This also tells me where I should focus my advertisements more.6. How many times a month do you eat outFrom this graph i found that weekends was the most popular time to eat out during the month. I think this is as most people stay at home in the evenings during the week. Whereas most people decided to eat out during the weekend when the family is all together.I have decided to have my Restaurant open daily, but on weekdays I will open at 12pm for lunch and close at 3pm I will then re-open at 6pm for dinner, this is as most of the people that might come to my restaurant in the week are non-working mothers or fathers, I will then re-open at 6pm because most of the time people like coming out when it starts to get darker during the week, but this time will hopefully be only business dinners. On the weekends however, I will open at 10am for lunch and close at 11pm, this is as most people decide to eat out during the day on weekends. Having it open most of the day will be easier for more customers to come.7. Do you prefer eating at a restaurant that has only one cuisine or a restaurant that has more than one cuisine?I found that most of the people who i asked the questionnaire to said that they would prefer a restaurant with only one cuisine. I think this is so that there are specialised restaurants that the public would go to.The reasons that i found why they said only one cuisine were 3 main ones. Although most people didn’t give me a reason, some of the people did. The answers i got from only one cuisine were, that 6 people have said that they thought the restaurant should be specialised. 3 people said that the food is better quality, and 1 person said that the food would be fresher.The reasons i found why they said more than one cuisine is also 3 main ones. The answers i got from more than one cuisine are, out of 25 people, 6 people said that there is more variety of food, 3 people said because that it is better for eating out with kids, and 2 people said it was because there is more of a choice of food, although most people again didn’t record an reason why.From the results above i have decided to start a business with one cuisine, i think this is a good decision as the public think that it’s better because you can be specialised. I agree with what the customers want, because i would like to have some specialties of my restaurant.8. To what extent do the following factors of a restaurant are important to youNot at allSomewhat importantVery importantThe atmosphere42341The quality of food11354The drinks selections92331The quality of service21452The interior of the restaurant14616The exterior of the restaurant153815According to the public when they choose a restaurant is the mainly the quality of the food, and the quality of service. These are the most important to the public as if they don’t like the quality of the food; they won’t want to return in the future. This would apply with the quality of service as it no body serves the table then they also won’t want to return.I chose these types of graphs and tables because i thought it would be the easiest way to present my data. In total i used 2 graphs, 3 pie chart, and 2 tables. For my pie charts, I thought it would be the best way to present my data as a pie chart, because it is the easiest way to show the results in comparison. I used my graphs because i thought that it would be best to present large amounts of information, for my questions that have multiple answers. I used my tables to present the questions with different choose for each answer e.g. alot, sometime, never – questions.Summary of market researchPrimaryFrom my questionnaire i was able to find out what people look for in a restaurant. I found out that most people come to a restaurant that only has one cuisine on offer. The reason for this is because that most people go to a restaurant for the food to be specialised and for the food to be a better quality. The reason people don’t like going to a restaurant with more than one cuisine is because the public don’t think that the food is as good quality because they don’t spend all the time on one cuisine, they change depending on what dish is being ordered.I found that most people would travel between 6-10 km for a good meal. I agree with this as it is a reasonable distance to travel for a meal. It is one that i would like for people to do to come to my restaurant, as i don’t want all people that live in the area.I also found out that having an Italian restaurant is very popular with the public, with most people eating at a restaurant alot of the time. I liked this result i got because an Italian restaurant was the type i would like to open, so from this result i will now open a restaurant with one cuisine that being and Italian restaurant.SecondaryFor my secondary market research I looked at reviews in different magazines and on websites. I also found out about the competition i would have as there are many new restaurants and restaurants that are being re-opened.From the research i have found, I found out that near to where my restaurant will be that there are two other well know restaurants that sell Italian food, for my restaurant to be successful I would need to visit these restaurants to know what do have that is different to mine. (Appendix 5;6)I found out from my secondary market research that the only restaurant that is just starting up is a Mediterranean cuisine in Mont Kiara. This is good for my business because it will help me to bring in more customers as not many people like Mediterranean food. (Appendix 7)Finally i found out that the only restaurant that is re-opening is a restaurant in town, which is at least 45 minutes away from where my restaurant will be, this is good for my restaurant because before this was a well know restaurant which was closed for awhile, hopefully this will make the customers wonder why it closed and not go to that restaurant for awhile. This will help me as less people will be staying in the area they live in, which is mostly around where i will have my restaurant. (Appendix 8)The information that i have gathered from websites is information about the restaurant business.I found out that the food service business is the third largest industry in the country. It accounts for over $240 billion annually in sales. The independent restaurant accounts for 15% of that total. The average Malaysian spends 15% of his/her income on meals away from home maybe even more. This number has been increasing for the past seven years. In the past five years the restaurant industry has out-performed the national GNP by 40%. The reasons given by the Folkney Report (November 1994) are 1) lifestyle changes, 2) economic climate, and 3) increase of product variety. Finally that there are 600 new restaurants opening every month and over 200 more needed to keep pace with increasing demand. (appendix 9)Target Market ProfileMy target market is a mix of young working professionals with families, and non-working mothers who would come for afternoon tea or lunch. The target would be 25-50 year olds. I would mainly like non-working mothers and professionals at lunch time and mainly families at dinner.Limitations to market researchThe limitations i found with my market research was that while i was doing my secondary market research i found that most of the information i wanted to look at, i had to buy first, this limited me as i couldn’t find any internet website for market research reports that were free and the ones you had to buy were too expensive.Looking back at my questionnaire i would have asked more questions about, would they rather eat in a shopping centre, hotel, or separate restaurants? I would have asked this question as i though it might have helped me to decide where the restaurant will be.I expect the results of my market research to be quite accurate as the questionnaire results are from primary research. The issues i had with my primary research was that when i first made my questionnaire, i had to decide what my sample size would be, this was confusing as i didn’t know if the number i had was too big or too small. The final sample size I did was 8 people, for the samples i mostly asked people in the same class as me, but i also asked my parents. The frame of people asked was generally another limitation. I found that after i had asked all my questionnaires most of the answers were the same, i think this was because i mostly asked expats. I feel that if i had asked locals i would have got completely different answers, i also feel i asked too many women, I think if i did it again i would make sure i had at least 50-50 men and women. Finally the last limitation i feel was the amount of time i spent asking people, i think that when i asked them they didn’t spend enough time answering them, i think that if they had longer time to do it then they would of thought more about the answers.Section 8Business EnvironmentThe business environment is anything that can affect which surrounds it, which the business can have no control over. The factors that will affect my business will be based on SLEPT.SocialLegalEnvironmental and EthicalPoliticalTechnologicalThese are all external factors that affect the running of the businessSocial* The main factor of social environment which will affect my business is Demography* The two main areas that my Business will be concerned with is The Working Population and The PopulationLegal* My business must operate with the law* There are two types of Law – Criminal law and Civil LawEnvironmental* My business must always incurs costs and benefits from their activities* Wider costs and benefits incurred by society are called externalities* The government will try to control environmental costs within my businessEthics* Is the ‘Set of social principles that govern or influence how we behave’* Meaning that there may be issues other than profits, which can affect the decision made by my business* Being ethnical means having good publicity, additional sales and content workers.Political* Are any change in the government will affect the political balance of a country and will impact my businessTechnological* Technology is constantly changing and businesses must manage and incorporate new technologies to survive* Investing in technology will be expensive for my businessCompetitionLocal competition would affect my business across each one of the four P’s. Product – I’ve got to have a range of a menu, at least as exciting or more than exciting than other restaurants in the area. My restaurant needs to get a reputation for having fantastic food and for the special ingredient. Price- whilst having internal margin systems to earn a profit, local competitors affect how high you can price. Initially my business will have a lower price this would mean that more people would start to come into the restaurant, this would build the reputation of the restaurant, hoping that this would help more people would talk about the restaurant. When the restaurant has got a higher reputation I would start to increase the pricing. Packaging – lots of competition in an area means I have to make it where customers will come – I need to spend money on the design and ambience. No competition means I might be able to get away with having plastic tables and chairs. Promotions – a way of getting customers to come back to my restaurant, first time or coming back. Lower price means that there is a lower margin for my restaurant. Overall competitive environment affects everything about my business.Competitor analysis is identifying the strengths and weaknesses of competitors and their productsNAMELOCATIONCuisinePricingADVERTISINGTARGET MARKETDELIVERY SERVICEGillsDamansara HeightsIndianMainstreamNot reallyFamiliesYesDevi’sBangsarLocalValueNoFamiliesNoChili’sBangsarMixedMainstreamYesFamilies / TeenagersNoPrimeBangsarSpecialty steak houseSuper PremiumNoAdultsNoLa RisataDamansara HeightsItalianMainstreamYesFamiliesNoThe significance of these results is the that in the area there are 4 different price ranges of restaurants, these price ranges are 3 mainstream, 1 value and 1 super premium. After looking at the different price ranges of restaurants i noticed that there are no premium restaurants available, i have now decided that i will do a premium restaurant. The other opportunities are the age of the target market, i have decided that i will have a restaurant for younger adults aged 20-45, locals and expats. This is that it would have a bigger act on the advertising and menu, as young adults are willing to try different foods.Impact of my Retail Outlet on Local Community & BusinessI think that the opening of my Business will be good for the community, I think it will be easier for people to travel to a premium restaurant like mine now, instead of going all the way into the city. The advantages of this outlet would be, more people will be travelling to this restaurant in a shorter distance, and this will bring in move turnover. Another advantage will be that as it is a new restaurant more people will be willing to try it out once, if they like it they will return and tell all their friends. Disadvantages of this idea would be that employment of waitresses and cooks will be hard as most of the well known employees would have already been hired to work for different restaurants. Another disadvantage is that parking could be limited as there are many restaurants nearer to each other, and then there will be limited parking for both customers and employees.Cost – Benefit analyseCOSTBENEFITPRIVATE:Employees and employmentExisting businesses* Maybe staff in existing restaurants will see their income reduces as they get less tips because some customers now go to JJ’S* Increases in property prices and rental costs – harder to find a good place for my restaurant* More competition for service providers, electricians plumbers – as more restaurants in the area* More competition might lower the prices – meaning to get people into my restaurant instead of other places I might have to lower my prices* Lower unemployment – because of more jobs available* Higher wages – because of more jobs available* People go to places where there are good choices – more people go to places where there a larger range of good choices* Bigger pool of trained potential employees available to hire for my restaurant* Makes the area busyEXTERNAL:Environment, road congestion and parkingLocal government and taxes* More traffic – people less willing to travel* More pollution – less people willing to sit outside* Slower road speeds – more people getting stuck in traffic* More difficult to find parking spaces – not many people willing to eat out if there is no available parking spaces* More traffic therefore more maintenance* More people in the area therefore more police, traffic wardens, refuse collection costs* Profit is taxed therefore more government revenue* Employees pay tax therefore more government revenue* Lower unemployment therefore less crime and welfare costsFULL SOCIAL COST( = private + external)Legal and Ethical issuesAll businesses especially food businesses are subject to rules and regulations by the government to protect welfare of the citizens when setting up the business. A business must understand the rules and regulations and comply with all different rules and regulations. There will be a number of licences and permits that I have to secure before the authorities will allow me to open a restaurant; therefore I have to find a legal advisor to help ensure everything is the right way at the right time.There are rules and regulations that all businesses operating in Malaysia have to follow including advertising and promotion. These are here to protect citizens from making false or miss leading claims or from encouraging citizens to do something that might be antisocial. Some examples are: you can’t advertise that the Queen of England has visited my business and said that it was the best pizza she ever had, unless it was true. You also can’t advertise promotions for drinking alcohol as this might lead to drunken people on the street afterwards.From the ASA website I found out the rules for advertisement in Malaysia. These are the rules I have to follow to advertise my restaurantThe Code contains principles describing the essence of good advertising.1. All advertisements should be legal, decent, honest and truthful.2. Advertisements must project the Malaysian culture and identity, reflect the multi-racial character of the population and advocate the philosophy of RUKUN NEGARA.3. Advertisements must not identify or typecast each particular racial group or sex with vocations, traditional values and backgrounds.4. Advertisements must comply in every respect with the Law, common or statute.5. All advertisements should be prepared with a sense of responsibility to consumers and to society.6. All advertisements should conform to the principles of fair competition as generally accepted in business.7. No advertisements shall bring advertising into disrepute or reduce confidence in advertising as a service to the industry and to the public.8. Advertisements must be clearly distinguishable as such.Ethics is the investigation into the basic concepts and fundamental principles of human conduct. I would want to make my promotion ethical because I don’t want to miss lead any promises or upset people – right thing, right way. I also want to make it ethical because I don’t want the authorities to shut down my business or to send me to jail. I would do this by firstly making sure my own business has a set of values it operates on – integrity, being fair/ reasonable and respecting the customers and their beliefs. I will also insure that my business try’s to act in ethical manner, insure what I know about the rules and regulations therefore through values or rules and regulations I am always acting the right way.Section 9Marketing StrategyUndifferentiated marketing – A strategy in which market segment differences are ignored and one product or service is offered to the entire market.Differentiated marketing – Selecting and developing a number of offerings to meet the needs of a number of specific market segments.Concentrated / Niche marketing – A type of marketing strategy where a firm chooses to focus its marketing efforts on one particular market segment.For my business I think I will use the Concentrated/ Niche marketing strategy. I will use this strategy as I feel it will be the best for my restaurant. This is as i want to focus on having one good product.The segment I will attempt will be the market niches. I think this will be a better market as it focus more on what the customers need and want rather than what the company I am starting wants. This will bring in more customers as it’s what they want.My Unique selling Proposition will be that in my restaurant the pizzas i will make will be made in a traditional wood fire oven. Also that the tomato sauce recipe is different to other restaurants, as it is a family recipe which was first made by my Aunt Francesca, which is now the best tomato sauce recipe in Nepal.Positioning is the process of ensuring that the potential customers have a perception of a product or service relative to my competition. I will achieve this through the marketing mix will be through Product/service, Place, Price and Promotion.I will achieve this through Product/service by making sure the positioning satisfies my customer’s needs, e.g. thinking about how the customers will experience itI will also achieve this through Place as i will have my restaurant near a place where most customers will come and use the services.I will achieve Positioning through the Price because, i will make sure it is at the right value for the customers to buy. Also that i will have to compare it with my competitors.Finally i will achieve it through Promotion as i will make sure my market gets across to my target market, and how i will get this across e.g. billboards, internet, flyers, and signs.I will position my service to the market by having my restaurant identifying what the restaurants in the area where my restaurant will be, and opening a restaurant based on what they don’t have available.Positioning MapA positioning map is a model used to identify where a product sit in the market compared to the competitorsProductThe features of my restaurant will be by selling food that my customers would want. My product will satisfy my target market by producing what they like and dislike. I will differentiate my products from my competitors by having unique ingredient – Francesca’s tomato sauce which will try to attract customers to buy. The quality of my product must also match the price of the product so that they will feel worth of buying it. My menu is in the appendix 10PricingCompetitive pricing is marketing-oriented strategy whereby a service retailer sets its prices on the basis of the prices charged by competitors. Going Rate pricing is establishing the price for a product or service based on prevalent market prices. An advantage to this pricing is that it is a safe strategy because it avoids price competition which can be damaging to my company. The disadvantages however are that I have to find other ways of attracting customers to my product, such as increasing my advertisement. Another disadvantage is that the competitive price may only just cover the costs of the product which can result in low profits.Penetration pricing is introducing the product at a low price intended to capture the mass market for the product or service. An advantage to this strategy is that it attracts customers to the product and makes them more likely to try it. Another is that it helps to increase the market share of the product more quickly. A disadvantage however is that the revenue is lost while the product is selling at a lower price. Another is that it is not suitable for products with short product life cycles. Finally that it does not to help to recover the research and development costs.Market Skimming Pricing is a pricing approach in which the producer sets a high introductory price to attract buyers with a strong desire for the product and the resources to buy it, and then gradually reduces the price to attract the next and subsequent layers of the market. An advantage to this is that while the price is high my business can make large profits to help pay for the research and development costs of the product. Another is that high prices can give a product a good image which is helpful for a new product. A disadvantage however are some possible customers may be put off buying the product because of the high price. Another is that my competitors may bring out a lower-priced imitation and snatch the market.Promotional pricing is temporarily pricing a product or service below list price or below cost in order to attract customers. An advantage to promotional pricing is that it can help to renew customers’ interests in products with falling sales. Another is that it earns revenue on goods that are no longer popular. A disadvantage however is that sales revenue will be lower on each item and therefore profits will be lower or non-existent. Finally that when used to renew interest in a product, it can be a very risky venture if sales do not rise.For my pricing strategy I think that I will use the Competitive pricing. I think this will be a good strategy to use as it will help me identify what my future customers would want, whether my competitors pricing was too high and I needed to be lower or the competitors have a pricing which is too low and mine needs to be higher.For my restaurant i would like to charge more premium pricing because I have a special sauce, because of this sauce I think that more people will be willing to pay extra for it. This will help me to also bring up my brand image. For my pricing method when I first start up, I want to be bench marking; this is as I need to look at the retail prices against other restaurants in the area first, which is more expensive. Firstly I will aim for the profit margin cost to be lower which will allow me to have consistent approach. I will then check prices against other restaurants and stores. I will plan to target my gross profit at 1 or 2 times the ingredients prices. This is as I will have money for the rent, electric and water bills and to pay my employees. For my net profit margin I will try to aim for 50 to 100% this is as I would like to have a good margin.PlacementPlacement decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers.Placement is unlikely going to be a major consideration as in my product because in my brief it has already chosen the distribution channel for me, I am going to be retail outlet.Section 10PromotionPromotion is any activity of a business that informs and/or persuades potential customers to buy its product or service, or which reinforces existing customers’ loyalty.The purpose of production is to inform your potential customers about your company’s products.Promotion is important because if you want to improve your sales figures or get more clients or keep the customers you have coming back, you have to actively work at business promotion all the time.Above the line promotion uses independent media. This allows a business to reach a wide audience easily. It includes:* TV* Cinema* Newspapers and magazines (both national ; local)* Radio* Posters* Internet* Own vehicles, signs outside premises etcBelow the line promotion does not depend upon media such as newspapers and TV. It includes:* Direct Mail* Exhibitions ; Trade Fairs* Sales Promotions – coupons, competitions, celebrity endorsement, samples, demonstrations, special offers, tasting sessions, loyalty schemes, credit arrangements, warranties* Branding* Merchandising- POS* Packaging* Personal Selling – sales representatives, telemarketing* Public Relations – PRDifferent types of PromotionDefinitionAbove or below the line promotion?AdvantagesDisadvantagesPostersAn advertisement printed on a large piece of paper.Above* They can stay in one place for a long time* Many people can see repeatedly* Cheap form of advertisement* They can get damaged* Not as persuasive* Customers take it for granted* Don’t have a long term effectInternetMarketing on the internet using email, the web, and other internet based techniquesAbove* Interactive* Large amount of information can be given* Cost effective* Operates 24/7* Not everyone has internet access* Competing with a larger of different productsNewspapers and Magazines (National and Local)A daily or weekly publication on folded sheets; contains news and articles and advertisementsAbove* Cheap* Reader can refer back to it* Specific details included* Clear target audience* Advertisement might not be noticed* Only read once* Read by certain social groups* Limited to black and whiteSales PromotionsPromotion that supplements or coordinates advertisingBelow* Defined target audience* Indirect roles* Short term sales increase* Only short term* Hidden costs* Price cutting* Lack of effectivenessThe different types of promotion i plan to use vary in price. I did some research contacting my mother’s friends who have their own business in Kuala Lumpur and this is what they said. I found out that if i want to use flyers for my advertisement that there is a place in Selangor that will print 5,000 flyers for 788RM. This was cheaper than i though it would be as i expected it to be about 500 ringgit for 1,000 flyers. I found out that if i want to put my advertisement in an expat and expat living magazine, it cost about 3,000 to 4,000 ringgit for a 1/4 of a page. I also found out for this magazine it is 8,000 ringgit a month for the advertisement. This for me is extremely more expensive than i thought. I had an idea about how much it would cost and it was nowhere near this price. I also asked a different magazine Association of British Women Malaysia (ABWM) this costs about 800 ringgit to advertise. I was also told that the efficient way to advertise is through sponsoring charity events, this would be by having prize giving’s. Another efficient way of advertising is through word of mouth, you do this by telling people about it, then getting them to tell friends and family. I also found out that to do an advertisement campaign it costs 10,000 ringgit to do.The costing above doesn’t change my chose of promotion methods because i feel that even though the advertisement campaign is expensive, i feel that it would be good for my business to have.The promotional and advertising methods i will use will be Leaflets, Bulletin boards, advertisements, posters and a website. I will use these methods because i feel that, a leaflet is an efficient way of telling people in crowded areas, Eg. Shopping centres about a new business that is opening up. I feel that advertising my restaurant in a magazine or newspaper will be more efficient as it will get word to people in a shorter amount of time, this will help as it will also inform more people about the details that they will need to come visit the restaurant. A bulletin board will also be good as it will tell more people the same way that a newspaper will tell them. I think posters will be a good way of advertising because i could put them anywhere in Kuala Lumpur and still have alot of people knowing about my restaurant. This would be also good as i can put more posters nearby my restaurant to try and attract them to come. Other promotions i will do is a daily special menu item. I will pick a new or existing item from my menu and use this to try to encourage more people to come into the restaurant. I will also encourage special prices Eg. RM20 off a bottle of wine. I will also try to offer a 10% discount off of your next meal if you come back, this will try to encourage more people to come back to my restaurant.My Costing budget for my marketing campaign:This table below shows the price of promotional methods and other prices i will need for my restaurant, it also tells me what i should aim to pay for the different products i will need in my restaurant and the promotional material.TypeDescriptionRate (RM)QuantityAmount (RM)AppendixLeaflets2 sides, full colour, A4 8.3 x 11.70.1650007889Name cardsFull colour0.082,00016012Advertisement in magazines and newspapersQuarter Page130mm(H) x 85mm(W)Full colour1,2502250011Half Page(Horizontal)130mm(H) x 180mm(W)3,400.001340011Bulletin BoardsDouble Box80mm(H) x 85mm(W)Colour550155011Menus12PosterA2 (Single)Full colour1.18500588.2413Website design10GB, up to 100 email accountsDesign features Static HTML/CSS design only780178014Budget price8,766.24 +menu pricingPromotion MaterialFact ; opinionMy material has both facts and opinion.Facts – opening times – weekdays at 12pm for Lunch and close at 3pm open again at 6pm for dinner. On the weekends we are open from 10am till 11pm.Opinion – our Pizza Margarita is the best in Malaysia, delicious traditional Italian food.Facts and opinions are both important because people have a need to know certain things about the place that they chose to eat. Opinions help persuade them where to go, it paints a picture of what they expect my restaurant to deliver.EvaluationI will use my flyer to try to address what my customers from my target market want to see and read about the restaurant, this will help try to bring more of my target market into my restaurant. I also put in the flyer that the restaurant caters for ‘Halal and Non-Halal’ food trying to address the Muslim community across of Kuala Lumpur.I think it will be efficient because it has all the information you could need about the restaurant. From contact information to the address and what is available. It also has a picture of our wood fire oven, which will help customers to see what to expect when they are looking at the advertisement.The flyers fit in with the promotion and marketing plan as it is able to address a more variety of people across Malaysia that could come and use my restaurant.ImprovementsTo improve my flyer i would have gone down to the actual area where my restaurant will be and take pictures to put in the flyer. To improve my promotional campaign i would have had more of a variety of promotional materials. E.g. set up a homepage, television add, radio etc. I would improve it as this way it will reach a lot more peoples attention in a shorter amount of time.I think this would affect my cost more, which would reduce my profit. I feel that it would reach a wider variety of people in a shorter amount of time. This would have affected my cost by going up but overall would help me by bringing more revenue into my business.I think that it would be good for these improvements, as although the costs would reduce in the short term, I feel that it would help the revenue go up in the long term. This would be good for my business as we would be able to hire more staff and cater for more people.Section 11SWOT analysis and evaluation of proposalStrengths* Unique product and service – my business has a unique product for the public to have, it also has a unique service as we will be doing it differently to other restaurants* Location of my business – my business is in an area where there is only one other Italian restaurant, which makes it easier for more customers* Quality of restaurant – my restaurant will have a high quality of service and food.Weaknesses* Lack of experience – this will be a weakness as this is the first time I am starting up a restaurant and I don’t know everything about making a restaurant successful* Lack of training staff – this is as I won’t know how to train my staff because I don’t know what to train them for* Unlimited liability – this is as I am a sole trader, which means if my business fails, all the money that I have put in to it could be lost through my possessions* Cash flow difficulties – this is as because I am just starting up less people are willing to try it out so less revenue will be made, also that I will need to have more money to pay for the rent, and ingredients.Opportunities* Develop strong brand image – developing a strong brand will help me to bring in more customers for my restaurant* Able to develop USP – having a USP will help me to also have an advantage over my competitors.* Merger – Once my restaurant is well know and has a higher income, more restaurants will be willing to go in to mergers with me.Threats* New laws – this could be as the government change a law then my business maybe in treat of being shut down* Change in consumer tastes – if the customers have been to my restaurant many times, they may get bored of what food is always there, this could mean they go to other places.* New competitor sets up – this means that once they have set up more people will be willing to try the new restaurant instead of my restaurant.* Pricing of other restaurants – if my competitors have a lower price then I have more people will be willing to go to a restaurant with a lower price.EvaluationI think that the strengths outweigh the weaknesses as I am able to have a unique product and service, I will have the location of my business in an good area, and the quality of my restaurant will be high. This will outweigh the weaknesses as I am able to overcome them, the lack of experience won’t limit me as I know people that have already opened a business who said they would help me if needed, I will try to hire trained staff so I don’t have to train them myself, and finally for the liability or cash flow difficulties, if needed my family said they would help me to overcome this problem.My marketing plan achieves it objectives as I said that I plan to:Profit and loss statement:Total sales – 20 X 75 = 1500 X 7 = 10,500Total staff+ 5X100 = 500 X 7 = 3,500Wages=Total Rent = 4000 a month = 1000 a weekTotal food + = 2300 a week = 2300Drinks costOther costs = 2000 a week = 2000(Electric,marketing)Total cost 8800Net profit = 1700 a year* To break-even by the end of the first year, to survive – having put together a profit and lose statement, if I hit the minimum number of people per day, I can make a small profit by the end of the year.* To gain a great reputation in the local community – plan to have a good reputation helps drive the sales up.* To serve at least 20 people each day (to be confirmed based on profit and loss projection) by May 2009. – A lot of people go to Bangsar (the area where my restaurant is) I would need to make my restaurant more attractive to make people come in.* To provide employment for at least 15 people – I think I will be able to achieve this also as I will need, cooks, waiters/waitresses, people at the bar, and people at the door to greet customers.The most critical thing is to get the number of people through the door.ImprovementsThe improvements I would use for my restaurant if I were setting it up for real would be to spend more time researching the area around where my business will be and spending longer on ways to promote my restaurant. But most importantly on how to promote it would be to spend longer and make more designs for my promotional material.