KwanG Venture Blog

Just recently we were invited to present our profile and idea to a group of General Mangers and Marketing Managers of a development company who is developing an upscale shopping mall. Before we could really begin to present our thoughts, we were bombarded with this question: “How can we get the target tenants into their mall?” And the whole was only focused on that particular problem that they could seem to solve. To us the answer to the problem is simple Marketing Planning. Simple Economic and Marketing is more than enough to solve their worries or problem.

They should just step into the shoes of their potential tenants and they would realize what tenants want in return for paying the extra cost they would have to endure if they operate in shopping malls. If I am paying for the high rental fees and maintenance fees, all I want is as follows (demand part of the equation):

• A steady flow of quality consumers,
• A good steady flow of revenue income,
• Optimal efficiency of income over cost,
• No or low direct competition within the mall,
• A well structured and organized management to handle issues that may occur.

So, as the Management of the shopping mall they would need to make sure happens is the placement of the followings before they can really speak of attracting potential tenants (supply part of the equation):

• A forward looking vision of the mall as a whole,
• A proper detailed marketing plan for the mall as a whole and for the individual tenants,
• A niche or specialty that attracts constant flow of quality shoppers for the long run,
• A plan to optimize not only revenue income but the also the profitability of their tenants,
• A reduced supply of competition, • A strong professional team to run and manage the shopping mall and to serve the tenants,
• A well plan traffic flow or circulation of shoppers within and out of the mall.

If I am to pay for the high cost involved in operating in shopping malls, I would need to first be sure that I can make sufficient margins to pay for the costs and still make a hefty profit or better profits as compared to the current made at the current location. What businesses want is just a simple brighter future, as with everyone on this island!

Previously I wrote about what to look for when shopping for a franchise business to invest in, now I will dwell on a topic that is quite a fad in Malaysia now, Creating Our Own Franchise. My recent trip to Kuala Lumpur and encounter with 2 F&B outlets in Kuchai Lama in Kuala Lumpur that wants to franchise their business made me came up with a series of article related to franchising.

Franchising is an avenue to successfully expand ones business at the shortest time possible with the least capital investment and risk burden for the franchisor. But it should not be considered an easy way to fortune and also a tool to boost or assist ones ailing business. A successful franchise will allow both the franchisor and franchisee to reap the benefits.

Many of the world’s largest corporations have used franchising to speed up their growth as a global brand. As with any business venture, the business needs to be well managed, must be profitable and have a reputable and creditable track record. Thus, before one begins to offer ones business to potential franchising market, they have to ask themselves these simple questions:

• Does the business have enough reputable history and track record to attract potential franchisee and investment at a premium price?
• Are the products or services easily replicable by the franchisee to offer to their potential market?
• Are there Standard Operating Procedures in place and practiced to manage the business to ensure uniformity and consistency?
• Can this concept, SOPs, terms and conditions be easily accepted and transferable to the franchisee to learn to operate the business in 3 months or less?
• Does the business have a structure that is able to oversee a franchise base business venture and support franchisees in many different locations?
• Does the franchise have a sound marketing plan to branding campaign that will also benefit the potential franchisees?
• Are the concept sufficiently unique and the target market properly differentiated to provide a substantial amount of security and competitive advantage that will transpire to an adequate return on investment, which is around 8% to 20% after royalties?

THE PROCESS OF FRANCHISING

Ø Maintain a lucrative and successful business model.

Ø Develop a sound plan for expansion, which must take into consideration the numerous issues like momentum of growth, territorial distribution, support, human resource, and fee structure, etc.

Ø Then the franchisor needs to draft a proper legal documentation or franchise contract.

Ø Followed by the development of an operations manual or SOPs.

Ø And finally, the franchisor will need to create marketing and promotion materials to sell the franchise to potential franchisees.

The key to success in franchising is not only limited to creating a lucrative business model which is easily replicable and mange, it also lies in the ability to sell the franchise and to ensure franchisees also succeed in their franchise venture. Passion, time and effort are pump into the franchise by both the franchisor and franchisees, the franchise may become the next Old Town or Manhattan Fish Market.

Ineffective Marketing practices forms part of the down fall of many businesses. I remember a fellow consultant that we met recently had this to say: “Many business owners think that they can do the job and save a few bucks, then let them feel the pain and suffer”.  I greatly agree with his statement, not because I am cruel but I have seen my fare share the type of business owners he was talking about.

Many people see marketing only as advertising or selling, but real Marketing is more than just pushing your massage to the masses and selling things that have no value to the buyer or consumer.
The key word here is value or customer satisfaction. Especially in this difficult times, consumer’s place more emphasis on their perceive value on their needs rather than their wants. Therefore, as a business owner you must know exactly what your customer need, what makes them decide to buy from you, who are the decision makers, and what are their experiences with your product or service. This is what Marketing is all about.

Selling Concept

Marketing Concept

Strategic Marketing assists organisations to gain market leadership or popularity by identifying and understanding consumer needs, then finding solutions or products that would most satisfy the customers’ needs and value. It provides a focus use of precious funds to efficiently target the market segment and product that would provide a lucrative return on investment. If customer value and satisfaction are absent, no amount of advertising or selling can compensate. Thus, the business would loose the buying power of the loss customer to a competitor business, and would in end reduce the sales volume and profits that the business could have achieved.

Everybody needs Marketing. Marketing is used not only by manufacturing companies, wholesalers, and retailers, but all kinds of individuals and organisations. Lawyer, accountants, and doctors use marketing to manage demand for their services. So do hospitals, museums, and performing art groups. Even politician cannot survive the political jungle if he does not market him or her self efficiently to fish for the much needed votes.

Of recent, we have acquainted 2 not so new F&B outlet in 2 major malls in Penang. They are currently suffering losses or at least not earning a fare return on their investment because they have lost track of their initial business bearings, and most importantly the patronage of the their customers as they could not provide the perceive value of their diners.

So, have you developed your marketing plans and budgets to survive the fight for survival?