Internal Factors Impacting Aeon Big's Retail Management Strategy

This report provides a comprehensive analysis of the internal factors that have contributed to the success of Aeon Big, a leading retailer in Malaysia. It examines the company's internal environment, including its marketing strategies, product innovation, pricing strategies, and location selection. The report employs a SWOT analysis framework to assess the impact of these factors, highlighting the strengths, weaknesses, opportunities, and threats. Key areas of focus include Aeon Big's commitment to customer satisfaction, positive work environment, and effective promotional techniques. The report also explores the company's goals, values, and mission, emphasizing its focus on sustainable development and corporate social responsibility. Through an analysis of these internal factors, the report aims to provide insights into Aeon Big's approach to retail management and its ability to adapt to the dynamic business environment.

Running head: INTERNAL FACTORS AFFECTING RETAIL MANAGEMNET
Internal marketing techniques of Aoen Big in Malaysia
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction:...................................................................................................................2
Discussion:.....................................................................................................................3
Key findings from External environment analysis of the brand:...............................3
Assessing the Internal Environmental Factors of the brand:.....................................4
Key areas of internal environment analysis:..............................................................4
Favourable location selection.....................................................................................5
Effective Promotion and distribution technique:.......................................................6
Organisation’s goals, value and mission....................................................................7
Positive and encouraging work environment:............................................................7
Customer-centric attitude of the brand:......................................................................8
Conclusion:....................................................................................................................9
References:...................................................................................................................10

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Introduction:
Aeon Big is recognised as one of the leading retailers in Malaysia which has over 22
outlets. This retail brand has always stood high to its customer commitment of bringing in a
hassle-free shopping experience (About Us - AEON BiG, 2020). The brand believes in
building long-term valuable customer relationship. Colour orange has been chosen as their
brand identity colour because this colour signifies joyfulness and friendliness and aligns very
well the core believe of the brand which is:” BIG CHOICES, with GREAT VALUE” (Bank,
2015). Varied market researchers and entrepreneurs suggest that the primary reason behind
the tremendous amount of growth of this brand has been its flexible outlook towards
conducting their business. In the past 5 years Aoen Big has identified the immense need of
constantly developing and experimenting with one’s business to sustain the growing
challenges of this dynamic business environment. It was this thinking which led them
transform from a mere grocery selling brand to a big grocery retail super market with
physical stores as well as online service to altogether enrich their consumer buy experience.
Hence, in this report the basic focus would be extended towards analysing the core internal
operating factors which has contributed significantly in the growth and development of this
retain outlet. The internal factors would be analysed through a SWOT analysis framework to
better understand the impact of each element and how the company has responded in meeting
and beating the challenges.

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Discussion:
The retail business sector in Malaysia in past 5 years has witnessed a favourable
growth climate, nearly amounting to 7 percent. Hence to seize the best out of it, Aeon Big
conducted a detailed internal and external business environmental analysis to ascertain the
crucial factors on which the firm needs to evolve.
Key findings from External environment analysis of the brand:
PESTLE analysis framework was employed in determining certain key external
environment issues which basically highlighted on:
 The existing major competitors of this retail chain which are: 99 Speedmart, Fresh
Direct, Instacart, Tesco and many others (Ismail, et al. 2015)
 The overall market size. Malaysia no doubt provides huge opportunity and growth
scope for the retail industry sector. Hence the brand does have the required
infrastructure to grow and expand its business.
 The next major understanding was of the Political factors operating in favour of the
company and how further challenges can be met with an efficient management of
minimum wage factors and keeping favourable terms with the trade unions (Vijayan,
et al 2014).
 The economic structure of the Malaysian Retail market which suggested that factors
like interest rate, rate of exchange will eventually turn significant factors for
determining the overall growth and investment rate for the company.
 The next important factor which the study highlighted on was the social factor
compromising of the demographic the psychographic stud of the consumer population
which suggested how both the genders mostly aged between 20-50 years are major

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buyers while females are more inclined towards fashion products, the male
population is obsessed with grocery and electronics (Muniady, et al. 2014).
Assessing the Internal Environmental Factors of the brand:
No matter how big and established an organisation is, proper management of the
internal operating factors play a vey crucial role in balancing the overall operation of the
corporate identity. Internal strategic analysis will specifically highlight on the four P’s of
marketing which are product, price, place, promotion (Khan, 2014) along with other variables
to anise how the brand is making it bigger and better with every passing
Key areas of internal environment analysis:
As one of the leading organisations in the retail industry sector in Malaysia the core
areas of its internal working dynamics include:
Extensive product Innovation-
This is regarded as one of the basic strength of Aeon Big to continuously experiment
and modify its offering to suit the needs of every customer. The brand launched multiple
technology initiatives in 2018 like introducing their e-wallet app, launching their Aeon
Member Plus Visa Card aiming to ensure smooth and convenient payment transaction for
their valued customers (AEON Credit Malaysia, 2020). This initiative of going cashless was
very well received by the mass which resulted in attracting more customers to develop a
long-term relation with the brand. According to Yoshizo Hirano the senior general manager
of business administration of Aeon Big, the cashless mode of payment will automatically
help in reducing the load of long queue at the check counter and altogether facilitate hassle-
free transactions. The company officials also declared that payments from other wallets are
such as Alipay and WeChat Pay will also be accepted in the near future as the company is
working on it. Hence a brand which has over 35 stores in more than 27 shopping malls across

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Malaysia offers a one card solution to all its shopping freak customers along with attractive
discounts and score points which can be redeemed after a certain period of time.
Well planned pricing strategy-
Aeon Big understands that the customers of retail market in Malaysia is quite price
sensitive hence it well recognised for following a power pricing strategy. The retail store
offers huge variety of products at a very reasonable cost (Heimeshoff and Klein, 2014). With
such an intense market competition by brands like 99 Speedmart, Fresh Direct, Instacart and
Tesco, Aeon focuses of bringing in larger variety in terms of product quality as well as cost to
target its wide range of customer base. While there are some exclusive high-ranged products
in terms of clothes, accessories or cosmetics there are also huge variety of low-end daily wear
and relatively cheap products.
Offering products at a relatively low cost level as compared to its immediate
competitors is only possible because Aeon Big has two major revenue generation technique,
one is its retail and the other is its property management service which basically incorporates
the shopping-malls (Kumar Anand and Song, 2017). Thus the financial security is also
retained from the rental payments it receives from the tenants who occupy shops in Aeon’s
Shopping centre. Thus this itself accounts to more than 35 per cent to 40 per cent of AEON's
operating profit and help the firm invest better in designing and pricing its products.
Favourable location selection:
One of the biggest strength of Aeon Big is its strategic selection of places to build its
business. Major retail stores of Aeon Big are located in major cities where the population rate
the income rate and the overall footfall of the customers is expected to be high (Zakaria, et al.
2014). Such a strategic selection of location automatically favours a large inflow of high
quality customers and in turn increases sales.

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Another major step which helps Aeon to make its business bigger and better is the
decision of maintaining relatively young stores. This basically means that the managerial
heads of the company feel that it is not very wise to have too many stores operating at the
same time neither keeps very old stores in operation as they generally do not bring in much
profit. Hence Aeon Big has chosen a store age of approximately 9.2 years which it considers
to be enough to successfully build in the brand loyalty and also receive the maximum returns
from the investment made in building and setting up the whole store (Omar, Ramly and
Nazri, 2014).
Effective Promotion and distribution technique:
The competition in the retail business sector in Malaysia is quite intense. However
Aeon Big has still managed to hold strong to its position and ranks twenty-sixth in terms of
its world retail sale and the second largest retailer in Japan (Van Baal, 2014). The credit can
definitely be extended to its quite innovative and largely effective promotional techniques.
Aeon Big concentrates on a cross-platform media promotion technique which can be
categorised as above the line and below the line advertising and promotion. Above the line
option comprises of television, radio, print and online advertising whereas below the line are
catalogues, tradeshows and direct mail campaigns (Kulik, 2014). The promotional or
advertising messages are very target customer centric and strictly abides by the AIDA
(awareness, interest, desire, action) model of persuasion. For instance their latest BAMBOO-
ON-THE-GO food ware collection campaign which promotes the use of eco-friendly
materials as utensils has received huge response from the customers as the bright colourful
digital posters on its official website are too tempting to resist (Bamboo Foodware - AEON
BiG, 2020).
Apart from the strong promotional strategy the brand has equally concentrated on
building a strong dealer community (Cova and Saucet, 2014) by training their distributors and

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dealers to impart specific product related knowledge to their sales team, so that the latter can
work efficiently and bring justice to the product sold.
Apart from these four above mentioned factors which are considered as the key
internal operating factors behind the huge success of Aeon Big, there are certain other factors
which cannot be overlooked and includes:
Organisation’s goals, value and mission:
One of the prime factors that have been identified by the market analyst which no
doubt has a strong impact behind the success of Aeon Big is its business conducting ways.
The brand has always stood strong to its goal of balancing business with nature. The goal of
sustainable development has been incorporated in the very mission and vision of this brand.
Hence each and every product is designed in an eco-friendly manner and the customers are
also encouraged to do their part of using eco-friendly product and protecting the environment.
The brand also takes minute consideration in fulfilling its corporate social responsibilities by
holding strong to its vision of promoting “Peace, people and Community”. The brand has
been engaged in promoting various humanitarian projects ranging from spreading awareness
of global warming, to community healthcare initiative to promotion free education for the
poor and disabled and so on (AEON BiG Heart - AEON BiG, 2020).
Positive and encouraging work environment:
This is another major strength of this retail brand, where the employees are constantly
engaged in learning new things, experimenting new methods and innovating their products.
The company heads realise the importance of critical thinking and the ability to constantly
experiment to survive in the cut throat competition. Therefore there is always a positive and
encouraging work environment offered to the employees who are motivated to learn and
participate in the decision making and take responsibility of every action. This in turn helps

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in creating a satisfied and expert work force who no doubt serves the best interest of the
origination.
Customer-centric attitude of the brand:
One of the most important attribute of this brand which makes it most desirable is its
principle belief, “Customer is the king”. Aeon’s credit facility, to e-wallet every single move
is well planned and designed to ease the whole process of shopping and altogether promising
a rewarding experience to its valuable customers (Bruhn and Schnebelen, 2017). The brand
extensively looks for building long-term relations with its customers by niche target market
segmentation and offering tailor made products to suit the needs of each and every customer.
This altogether has helped the brand in building a strong brand portfolio which is no doubt an
exclusive asset for any organisation in today’s age of cut throat competition.

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Conclusion:
The term Aeon has its roots in Latin Language, meaning “eternity”, and the company
officials proudly states that its eternal philosophy does only surround around build a
consumer friendly brand which is engaged in fruitful social activity apart from managing its
business . Hence from the above presented discussion, it is quite evident that a brand as huge
as Aeon has significantly designed a strong internal operating mechanism to ensure that the
external operating environment can be well taken care of. The retail brand extensively works
for achieving the right balance between its internal and external environment factors to help
the business grow and achieve greater heights. While some of these factors are well under the
control the business firm the other might often vary and creating challenging situations. Thus
Aeon Big has substantially built its brand image to protect itself during any crisis situation
and come out victorious against all odds.

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References:
AEON BiG. 2020. About Us - AEON Big. [online] Available at:
<https://aeonbig.com.my/about/> [Accessed 30 March 2020].
AEON BiG. 2020. AEON Big Heart - AEON Big. [online] Available at:
<https://aeonbig.com.my/aeon-big-heart/> [Accessed 30 March 2020].
AEON BiG. 2020. Bamboo Foodware - AEON Big. [online] Available at:
<https://aeonbig.com.my/bamboo-foodware/> [Accessed 30 March 2020].
Aeoncredit.com.my. 2020. AEON Credit Malaysia. [online] Available at:
<https://www.aeoncredit.com.my/announcements> [Accessed 30 March 2020].
Bank, Z., 2015. Corporate profile. Changes.
Bruhn, M. and Schnebelen, S., 2017. Integrated marketing communication–from an
instrumental to a customer-centric perspective. European Journal of Marketing.
Cova, B. and Saucet, M., 2014. Unconventional marketing. The Routledge Companion to the
Future of Marketing, p.217.
Heimeshoff, U. and Klein, G., 2014. Bargaining Power and Local Heroes.
Ismail, M.K., Kumaran, V.V., Sarifuddin, S., Gorondutse, A.H. and Sabarudin, N.A., 2018.
Sustainability in Retail Industry: Competition Factors among Small Retailers and
Supermarkets In Agrofood Business. International Journal of Entrepreneurship.
Khan, M.T., 2014. The concept of'marketing mix'and its elements (a conceptual review
paper). International journal of information, business and management, 6(2), p.95.
Kulik, C.T., 2014. Working below and above the line: The research–practice gap in diversity
management. Human Resource Management Journal, 24(2), pp.129-144.

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Kumar, V., Anand, A. and Song, H., 2017. Future of retailer profitability: An organizing
framework. Journal of Retailing, 93(1), pp.96-119.
Muniady, R., Al-Mamun, A., Permarupan, P.Y. and Zainol, N.R.B., 2014. Factors
influencing consumer behavior: A study among university students in Malaysia. Asian Social
Science, 10(9), p.18.
Omar, N.A., Ramly, S.M. and Nazri, M.A., 2014. Understanding the Infuence of Shopper-
Based Mall Equity On Loyalty. MIICEMA 2014 ORGANISING COMMITTEE, p.525.
Van Baal, S., 2014. Should retailers harmonize marketing variables across their distribution
channels? An investigation of cross-channel effects in multi-channel retailing. Journal of
Retailing and Consumer Services, 21(6), pp.1038-1046.
Vijayan, G., Kamarulzaman, N.H., Mohamed, Z.A. and Abdullah, A.M., 2014. Sustainability
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Zakaria, I., Rahman, B.A., Othman, A.K., Yunus, N.A.M., Dzulkipli, M.R. and Osman,
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