2.

2 External Market Environment Analysis

The external marketing environment refers to anything that happens outside of the firm

that can have an impact on it. Economic, technological, political and legal, as well as cultural

and social contexts, make up the external marketing environment. Marketers typically have

no control over things in the external environment. Our company has to understand how the

external environment is changing and how that shift will affect the target market. These

external influences will have an impact on our industry as a whole, but they will have no

direct impact on the firm.

2.2.1 Economic Environment

Figure [Link] Gross Domestic Product Graph

A microenvironment and a macroenvironment make up the marketing environment.

The microenvironment is made up of nearby actors who have an impact on the company’s

ability to engage and service its consumers. The macroenvironment is made up of societal

forces that have an impact on the microenvironment. Markets necessitate both people and

purchasing power. Economic elements that influence consumer purchasing power and

spending patterns make up the economic environment. Consumer spending and buying

habits are influenced by a variety of economic factors. These include the Gross Domestic
Product (GDP) growth rate, interest rates, inflation, income distribution and other major

economic variables. The economy’s ups and downs, whether in general, within individual

industries, or in certain parts of the world can have a significant impact on what people

buy.

According to Statistica, GDP in 2021 is 3.5%, GDP in 2022 is estimated at 6.00%

with an increase of 2.50% and in 2023 GDP growth is estimated at 5.70% with a decrease

of 0.30%. This tells us that the GDP growth rate will be increasing by 2.50% in 2022.

Emerging markets like Malaysia will benefit from increased commodity prices as a result

of quicker global economic growth. As the Covid-19 outbreak becomes endemic in

Malaysia, Massimo will see an increase in sales and demand for goods like our own

Massimo Purple Sweet Potato with Berries Loaf. Malaysia is expected to enjoy a positive

GDP growth in 2022 as the purchasing power of consumers will increase especially

consumers who want to follow a healthy and fit lifestyle to make sure they are in good

health condition. Malaysia’s GDP growth rate in 2023 is expected to slightly decrease by

0.30%. this shows that Malaysia’s economic growth rate will decrease and so does the

purchasing power of consumers.

[Link]
malaysia/
2.2.2 Technological Environment

Figure [Link] Happy Fresh Application

The technological environment refers to the country’s condition of science and

technology, as well as related factors such as the rate of technological process, institutional

arrangements for the development, and application of new technology. Malaysia is

becoming more technology-oriented. Social networking sites are playing a vital role

among the community of Malaysia especially the younger generations with networks and

electronic gadgets. The adaption of technology will be enhanced to increase the

productivity of Massimo’s business. The power of technology can be seen quite strong

during the period of the Covid-19 pandemic as Covid-19 accelerates e-commerce growth

in Malaysia according to GlobalData. This is due to the closure of physical stores, social

distancing, and lockdown of the country as the pandemic affects the whole world since

2020. Thus, Massimo’s business will be operated online and offline. Consumers can

purchase Massimo’s products offline by visiting the nearest physical stores and online via

grocery applications that are available on Google Play Store. For example, Massimo’s

products can be found in the nearest physical stores such as 99 Speedmart, Mydin, Jaya
Grocer, supermarkets, and hypermarkets. Massimo’s products are also available on

applications like Happy Fresh.

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globaldata/

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2.2.3 Political and Legal Environment

Laws, government agencies, and pressure groups all have an impact on different

organisations and individuals in the political and legal environment. Changes in the

political environment have an impact on marketing decisions. According to Malaysian

Law, products manufactured in Malaysia need to follow The Food Act 1983. This is to

ensure that the food on the market is both safe and fit for human consumption. Massimo

Purple Sweet Potato with Berries Loaf will be based on the Act mentioned above.

Moreover, changes in the political environment often led to changes in the legal

environment. Most of the political policy will have an impact on Massimo’s products. For

example, a reimplementation of Goods and Service Tax (GST) will have a huge impact on

businesses. This is due to an increase in taxes in the country can lead to the high cost of

the products of Massimo. In addition, a sudden increase in the prices of food items can

also affect the cost of the products of Massimo. This is due to an increase in the price of

raw materials to make the products of Massimo. State and federal legislation, as well as

regulatory agency decisions, govern all marketing operations.

[Link]

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of-food-items

2.2.4 Cultural and Social Environment

 The cultural and social environment refers to trends and developments in changes in

attitudes, behaviour, and values in society. The population, way of life, culture, tastes,

customs, and traditions all have an impact. The community creates these variables, which

are frequently passed down from generation to generation. The cultural and social

environment affects how and why people live and behave as they do which affects

consumers’ buying behaviour. It is encouraged and advised to produce or sell a Halal

product, in Malaysia. The Halal certificate assures consumers that food products are

manufactured by Shariah Law, as well as being clean, hygienic, environmentally friendly

and respecting animal welfare. Massimo is recognized as a recipient of the Halal

Certificate. Massimo’s new product Massimo Purple Sweet Potato with Berries Loaf is

also recognized as Halal in Malaysia.

According to Says, almost half of Malaysians are into exercising since the start of

the Movement Control Order (MCO). Malaysians are more concerned about their health as

the obesity rate among Malaysians is increasing. It also concerns their physical health and

lifestyle. In addition, the government unveiled Agenda Nasional Malaysia Sihat (ANMS),

a long-term strategy to lead the country toward a healthier lifestyle. Besides that,

consumers buying behaviour decisions are normally influenced by their reference group.

They make take values and follow the trend of their reference group. For example, people

will be attracted to fitness lifestyles as most of their family, friends and influencers are into

the fitness journey. They are also looking for foods that are healthy to consume where

Massimo’s new product comes in handy. Thus, Massimo’s new product Massimo Purple

Sweet Potato with Berries Loaf provides nutrition for everyone to live healthier and

productive lives.

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wellness-plan-guide-malaysia-towards-healthy

2.3.2 Weaknesses

1. Time to adapt the new product

Consumers need time to adapt the product since it is new in the market, although

Massimo products are recognizable and well-known among Malaysian consumers.

It will take time for the consumers to like the taste and buy the product regularly.

They need to spend a lot of resources on promotions and marketing through

various mass media.

2. Limited number of product lines

In comparison to its competitors, Massimo has a limited number of product lines.

Their product line is also slowly expanding. As a result, Massimo will be unable to

meet the needs and desires of the consumers. Furthermore, Massimo will lose the

ability to sell its products to consumers because the products the consumers desire

are not manufactured by Massimo. Consumers will tend to lean toward competitors

who sell products that meet their needs and desires.

3. Advertising methodology is outdated

Advertising is crucial for a product. An advertisement needs to be creative as it

helps catch the consumers’ attraction, but Massimo focuses on text-heavy content

when they advertise. It is nice but it does not appeal to consumers. In this era of

digital technology, consumers prefer an advertisement that has short text and video
 in seconds because they are easy to read. Moreover, advertising does not refer to

text-heavy content only but videos, visuals, infographics, and podcasts. Massimo

should focus on making advertisements as aforementioned to appeal to the

consumers.

[Link]
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[Link]

External Market Environment Analysis

i. Economic Environment (outlook or forecast for the next two years [January 2022
– December 2023]

ii. Technological Environment (the advances in technology which can affect Brand
X’s business, e.g. augmented reality; mobile devices)

iii. Political and Legal Environment (state of federal laws enacted that can affect
Brand x’s business)

iv. Cultural and Social Environment (reference groups e.g. influencers; changes in
family structure and social class; cultural and lifestyle changes)

K-culture

SWOT Analysis – Weakness

1. Time to adapt the new product
2. Sweet potato and berry allergy
3. Lack of involvement from top management in developing a new product. Internal
factors.
1. Time to adapt the new product
2. Maintaining benchmark
3. Advertising methodology is outdated

1. Maintaining benchmark

Massimo is a well-known bread chain brand under The Italian Baker Sdn Bhd.

Consumers have high expectations. They need to maintain and suit the taste of

consumers and their preferences as they have already met the requirements in their

existing products and existing lines. The Italian Baker Sdn Bhd needs to plan

accordingly, analyze the market, integrate the data collected before taking an

action. Therefore, it is necessary to maintain a benchmark to be able to meet

consumer expectations.

2. Similarity with the products offered by the competitors

One of the weaknesses is the similarity between Massimo Purple Sweet Potato

with Berries Loaf and other flavoured loaf bread available in the bakery industry.

Many bakery competitors offer similar products such as Gardenia offers Gardenia

Delicia Raspberry Milk & Cranberries and Bread History offers Cranberry Orange

Loaf. Not only are similar products such as berries are offered some of the

packagings of different brands also resemble one another. The similarity of the

products of different brands could confuse the customers in choosing which brand

to purchase. The unique flavour and taste of Massimo Purple Sweet Potato with

berries can secure several customers since the product is still new and innovative in

the market.