Cepuros Foods Malaysia: Case Study on Baik Sos Salsa Growth Strategy

This case study examines Cepuros Food International Malaysia (CFI-M) and its Baik Sos Salsa line, focusing on strategies to increase sales and market share. It identifies the demand for halal-certified, high-quality products using natural ingredients among urban Malaysian households in the Klang Valley. A SWOT analysis reveals the brand's strengths (healthy image, premium positioning), weaknesses (low brand awareness for salsa), opportunities (new flavors, increased selling expenditure), and threats (competition from larger brands). The study explores growth strategies using the Ansoff matrix, including market penetration, market development, product development, and diversification. It concludes that while mass-market strategies can double sales, they also carry risks of diluting the brand image. The case emphasizes the importance of extensive market research, innovation in flavors, and effective marketing investments to build brand awareness and expand distribution channels for Baik Sos Salsa in Malaysia. Desklib provides access to this and many other solved assignments and study resources.

Cepuros Food International Malaysia 0
Analysis of case study
Cepuros Food Malaysia
Student’s Name
12/15/2018

Cepuros Food International Malaysia 1
Determination of demand for baik sos products
Cepuros Food International- Malaysia introduced the Baik Sos to target the urban households
living in the Klang Valley region of Malaysia because here the households receive the salary
from dual sources and are generally not price conscious. The household in Malaysia demands
a premium quality product, which is halal certified and uses the natural ingredients in the
process of making. The demand for baik Sos gets an increase in the Klang Valley region of
Malaysia because here the consumers believe to use the packaged product rather than making
the meals from scratch. The people in Malaysia have busy lifestyles so they prefer the
packaged products, which help the household in making meals fast. They explore globally
and have the global travel experience, which shapes the craving to have exclusive, innovative
and global flavour profiles (Ferrell, 2014).
The demand for baik Sos increase, because the products made, is halal certified and do not
uses monosodium glutamate, it does not uses artificial colour or artificial preservatives and
fulfils the needs of the customers by providing good healthy sauce with premium packaging
in addition to the involvement of high-quality ingredients (Quelch and Hartman, 2018).
The products of Baik Sos were packaged using vacuum seal, plastic pouches with zip
closures and the recipes and the nutrition labelling were put at the back of the bottle. Such
packaging and the detailed information of the product helps CFI-M to gain the trust of the
customers and become a popular brand. Such a strategy helps the company in retaining its
customers and builds its market share (Quelch and Hartman, 2018).
In 2016, CFI-M introduced a single shelf based salsa under the brand name as Baik Sos salsa.
In comparison to Baik Sos cooking sauce, Baik sos salsa was mild spicy which was made by
mixing of a chunk of tomatoes, onions and lemongrass, chilly and garlic. It was inspired by
Mexican style salsas commonly used in the United States. This Baik Sos was introduced to
replace the sambal paste, which was very popular in Malaysia. It was priced as a premium
product to replace sambal paste and was promoted as first and only Malay- fusion salsa
(Quelch and Hartman, 2018).
A SWOT analysis of CFI-M 2017
Strengths

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CFI-M deals in three product lines under the name baik sos. The brand was known for
being healthy as the company uses quality ingredients and do not add any kind of
artificial colour or preservatives. It offers two brands of cooking sauces i.e. the baik
sos sihat line and baik sos riang line. The sihat was positioned as super premium and
riang line was positioned as premium. In 2016, CFI-M introduced single, shelf stable
salsa under the brand name baik sos salsa which was positioned as premium product
and till 2017 it was the only packed sauce in Malaysia. It is analysed that baik sos was
the top seller in two of the largest premium supermarkets in Klang valley. It was
analysed that sihat and riang both has strong brand awareness, which was similar to
maggi and adabi (Scott, 2015).
Weakness
It is observed that baik sos salsa did not perform well in case of brand awareness
because only 19% of shoppers were known about the brand and out of them only 10%
shoppers have actually purchased the product. In Malaysia, people got confused
between baik sos sauce and baik sos salsa because baik sos sauce was used in cooking
and salsa was used without cooking which creates confusion in the minds of the
customer. It was analysed that the company has not used the promotion tools to create
brand awareness of baik sos salsa, which in turns leads to decline in sales of salsa as
people were less aware of the baik sos salsa (Schneider and Hall, 2011).
Threats
Introduction of new product lines by nestle or Heinz is a threat for baik sos salsa
because they will introduce at the lower prices and will capture the market share.
However to overcome such vigorous competition the baik sos salsa brand has to
create promotion and brand awareness within a short span of time. It can also cause
the dilution of the premium image of the brand (Proctor, 2014).
Opportunities
If the brand baik sos salsa introduces new flavours and promotes its brand by
increasing the selling expenditure it is analysed that there is growth opportunity and
the company can double the sales by the ear 2019 and the sales will increase by 15%
in the year 2018. The company has immense of growth opportunities if it introduces
the new product lines because the people in Malaysia have the global travel
experience and demands for unique and innovative flavour profiles. Such demand
leads to the creation of immense opportunities for the baik sos brand (Scott, 2015).

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The growth strategy for CFI salsa line
To expand the market for CFI salsa line the company must adopt the Ansoff matrix
strategy, which describes the scope of growth using the new or the existing product in
the new or the existing market. It consists of four growth strategies
Market Penetration-
The company must expand the promotion of existing brand i.e. baik sos salsa by
increasing its selling expenditure and using the promotion tools such as an
advertisement on radio’s, television and can also increase the sales by building strong
relationships with the retailers so that they allow to promote the brand using their
shelf case. The company must provide the product at the discount prices to promote
the product and build the trust among the customers (Smart Insights, 2018).
Market Development
The company can develop the market by introducing the new product lines into salsa
and promoting the brand by developing the videos, which uses chefs to make the
dishes using baik sos products. The company can use other promotional tools such as
social media platform to create brand awareness and however leads to an increase in
market share (Harvard Business Publishing, 2017).
Product Development
It is analysed that the consumers in Malaysia has the global travel experience and
continuously demands unique, innovative flavour profiles. To meet this demand the
brand must introduce different flavours to salsa to attract more customers and increase
its market share. The company can bring alterations by developing small packages,
which are easy to handle (Grunig and Morschett, 2017).
Diversification
The company can use the strategy of diversification but prior to diversification; it
requires intensive research of the market conditions, as there is always a threat of
close substitutes, which can lead to dilution of the brand image (SSRN, 2018).

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The difference in operating income
Existing product line Introduction of the new
product line
Revenue 34,297,050 68,594,100
Variable cost 20,093,082 40,196,142.6
Gross Profit 14,203,968 28,397,957.4
Fixed Cost
Selling Expenses
General and administrative
expenses
Operating Income
4,499,925
4,552,246
5,151,797
5,299,925
5,102,246
17,995,786.4
From the above calculation, it is analysed that by introducing the new product line of salsa,
the sales will increase but it will also lead to increase in fixed cost. Using the mass market
strategies will double the sale but can also leads to dilution of brand image if the competitors
come up with the product lines at lower price offers. However if the company adopts the
strategy to moderately create brand awareness the sale will increase by 30% in the year 2019.
It requires extensive market research for the adoption of appropriate marketing strategy by
understanding the customer requirements and analysis of the close substitutes of the product
(Bhatia and Thakur, 2017).
Development of Salsa market in Malaysia
It is analysed that the people in Malaysia are more health conscious and thus focuses on
products that are halal certified and uses quality ingredients in the process of making sauce
and salsa. They want the products that are in small packages and consist of the detailed
nutrition label. The people in Malaysia have busy lifestyles and demands for ready to use the
product, as they do not have the time to start from scratch. However to develop the market for
salsa the company must analyse the five forces to gain an in-depth knowledge of the market
trends of Malaysia (Kaser, 2013).
The company must analyse the close competitors of the product so that it does not lead to
dilution of the image of the brand and must focus on increasing its selling expenditure to

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promote and create brand awareness for the product because if people will be aware of the
brand it sales can increase in doubles. It must develop the new lines in the product according
to the changing taste of the customers and providing them with the unique global flavours
(Rosenbloom, 2013).
The CFI-M must allocate its marketing investments by educating the customers about the
product and creating brand awareness by using various celebrity endorsements and using a
social media platform to make the people aware of the products. The company must use
television and radio advertisements to make people aware at large and must expand its
distribution channel to make it easily available to a wide range of customers. The company
focuses on making videos and blogs, which uses local chefs to provide different recipes,
which uses salsa to create the demand for the product (Abratt and Bendixen, 2018).
The company can allocate its marketing investments by expanding its distribution channel
and make it available at large. The company must use the attractive packaging to build the
trust of the customers and must provide free samples with the baik sos sauce to create brand
awareness of baik sos salsa. It must bring the innovations in flavours of salsa and must use
the mass-market strategy to develop its market in Malaysia (Gopaldas, 2015).
Conclusion
From the above discussion, it is concluded that people in Malaysia have the busy lifestyles
and prefer ready to use packages of sauce and salsa because they don’t have the time to make
it from the scratch. It is analysed that baik sos sauce enjoys the strong brand image and is
considered as a healthy sauce while the awareness for baik sos salsa is still less and various
marketing measures are adopted to promote brand awareness and increase the market share of
baik sos salsa.
It is analysed that if the company adopts the mass-market strategies the sales will increase to
double but it involves higher risk and more selling expenses while if the company moderately
creates awareness of the product the sales will increase to 30% by the year 2019. Therefore,
the company must conduct extensive research about the trends and the analysis of the close
competitors to maintain the brand image in the eyes of existing customers and effectively
increase its market share in the new market. The company must develop innovative unique
flavours to provide the customers with global flavour profiles.

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References
Abratt, R., and Bendixen, M. (2018) Strategic Marketing: Concepts and Cases.
London:Routledge
Bhatia, A., and Thakur, A. (2017) Choice of diversification strategies in an emerging market
environment: an empirical evaluation. International Journal of Business and
Globalisation, 19(1), pp.52-78.
Ferrell, C.O. (2014) Marketing Strategy. United Kingdom: Cengage Learning
Gopaldas, A. (2015) Creating firm, customer, and societal value: Toward a theory of positive
marketing. Journal of Business Research, 68(12), pp.2446-2451.
Grunig, R., and Morschett, D. (2017)General strategic planning as the starting point for going
international for new markets. Developing international strategies, pp. 57-65.
Harvard Business Publishing. (2017) Competitive strategies [Online]. Available from:
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Kaser, K. (2013) Advertising and sales promotion. Canada: Cengage Learning
Proctor, T.(2014) Strategic marketing: an introduction. 2nd ed. London: Routledge.
Quelch, A.J., and Hartman, B.K. (2018) Cepuros Foods Malaysia: Finding the Secret Sauce
for Growth. Harvard Business Review, pp.1-10.
Rosenbloom, B. (2013)Marketing Channels. Australia: Cengage Learning
Schneider, J., and Hall, J. (2011) Why the product launches fail. Harvard business review,
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Scott, M.D. (2015) The new rules of marketing and PR: How to use social media, online
video, mobile applications, blogs, news releases, and viral marketing to reach buyers
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[Accessed 15/12/18]

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SSRN. (2018) The Ansoff Matrix: A Legendary Tool, But with Two Logical Problems
[Online]. Available from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3130530
[Accessed 15/12/18]