AGC602 MARKETING MANAGEMENT

MARKETING MANAGEMENT PRACTICE IN BABA

ECO GROUP BERHAD

SUBMITTED FOR:
ASSOC. PROF. DR. TAN CHENG LING
DR. KAVIGTHA MOHAN KUMAR

PREPARED BY:
TAN HUI THIEN

SUBMISSION DATE:
16 JUNE 2023

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TABLE OF CONTENTS

1. COMPANY PROFILE.....................................................................................................3

1.1. COMPANY BACKGROUD.....................................................................................3

1.2. ORGANIZATION CHART.....................................................................................4

2. MARKEITNG DEPARTMENT PROFILE...................................................................4

2.1. MARKETING DEPARTMENT STRUCTURE........................................................5

2.2. ROLE & RESPONSIBILITIES...............................................................................5

3. MARKETING MANAGEMENT PRACTICES............................................................6

3.1. PRODUCTS...............................................................................................................6

3.2. PRICE.........................................................................................................................8

3.3. DISTRIBUTION........................................................................................................8

3.4. COMMUNICATION..............................................................................................10

4. MARKETING MANAGEMENT ISSUE & RECOMMADATION..........................11

5. CONCLUSION...............................................................................................................13

6. REFERENCES................................................................................................................14

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1. COMPANY PROFILE
Baba Eco Group Berhad (KLSE: 03012), is a distributor and manufacturer of gardening
supplies under “Baba” brand name, which also Malaysia’s first brand in horticultural
industry. The company operates through its subsidiaries, Era-I Enterprise (M) Sdn. Bhd and
Keng Beng Lee Industries (M) Sdn Bhd. Apart of it, Baba also strike the best in providing
premium quality products and professional service to gardening enthusiasts. The business
segments of the company are included producing and trading in biodegradable flower post,
planting media, organic fertilizers and natural pesticides, also disturbing gardening tools, non
GMO seeds and agricultural products in local and overseas market. (I3 Investor, 2018)

1.1. COMPANY BACKGROUD

Baba Eco Group Berhad was established in 1987 with a 1 second-hand machine and 2
workers. In 1990s, the company moved into a factory with built up area 6,000 sq ft in
Pulau Piang, further extended to 17,200 sq ft after 6 years and it now reaches 72,200 sq ft
with more than 200 employees.

The corporate vision is sustainable life’s guardian - create a sustainable health and
beautiful world together. The company believes that long term use of chemical fertilizers
and pesticides could change the soil pH, upset beneficial microbial ecosystems. To raise
the awareness of environmental sustainability, Baba has been promoting several programs
for public, such as Malaysia Organic Conference, to gather community, discuss and
influence better farming practices. No matter who you are, you can do our part and work
together towards a conscious and sustainable agriculture. Environmental consciousness
shall educate from earlier age, children will play a vital role in determining the future of
the Earth. Baba has started to extend their green movement of environmental education to
schools through the launching of the Junior Landcare Farming Program.

The business mission is to be a one stop solution, a global mind, to green the world. Baba
strives to developing a full range of gardening products to be one stop solution supplier
for consumers. Baba not only continues to strengthen their R&D and product innovation
advantage, but also integrates them into an effective experimental model. Their goal is to

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 incorporate organic pesticides and fertilizers into a complete ecosystem. Whereas
everyone can easily access these products at affordable prices.

1.2. ORGANIZATION CHART

The company believes that customers is the only true “profit center”, so instead of a
traditional organization chart, Baba has a modern inverted organization chart. At the top
are frontline department, such International Trade, Domestic Sales, Modern Trade, who
meet, serve, and satisfy the customers; the next important are under them are the middle
managers, whose job is to support the frontline people so they can serve customers well;
and at the base is top management, whose job is to hire and support good middle
managers.

Figure 1: The organization chart of Baba Eco Group Berhad

2. MARKEITNG DEPARTMENT PROFILE

The marketing department plays a important role in an organization, it is responsible for
marketing function. They design marketing strategies and combine the right marketing mix to
satisfy customer needs and wants, they are also responsible for developing promotions and
managing long term relationships with customers. It is important to introduce the business,
thereby generating a strong corporate image, the team reaches not only customers or retailers
but also investors and the community while creating a corporate image in the eyes of these
stakeholders. (Nasrudin, 2022)

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2.1. MARKETING DEPARTMENT STRUCTURE
Extract marketing department form the company organization chart, there are 3 main
departments which are related to marketing activities, Sales Unit, Public Communication
and Design & Advertising

Public Design &

Sales Unit
Communication Advertising

Ecommerce & International Business

Domestic Sales Modern Trade
Customer Service Trade Development

2.1.
Figure 2: The organization chart of Baba Eco Group Berhad’s marketing department

2.2. ROLE & RESPONSIBILITIES

Sales Unit is one of the main marketing function departments in the organization which
keep the closest contact with customers. There are total 25 employees from Sales Unit
and the department splits into 5 sub-divisions based on different work function and sales
channel.

 Business Development is mainly responsible for branding and communication

strategy. Their main role is communicating with sales department, production
department and design department, to design, plan, decide and execute for brand
promoting.
 International Trade is taking care of all international business transactions in the
organization. Currently, Baba has exported the products to over 30 countries in
the world. The position from the division is required to attend trade show to
acquire new leads to extend the market share.
 Modern Trade division serves for a sales channel through a more structured and
sophisticated system of chain retailers like mini-markets, supermarkets, and
hypermarkets. They are responsible to drive the marketing activities on the
assigned Modern Trade channel. They also follow up and coordinate purchased
order, delivery, recurring and credit note.

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  Domestic Sales belongs to B2B business method, the duties and responsibilities
included selling products and services to prospective customers, promoting the
brand to existing and potential customers and maintaining positive business
relationships to ensure future sales. There are main target markets for Baba’s
domestic sales which are local gardens centers, farmers and growers.
 Ecommerce & Customer Service is the only division dealing with end
consumers directly in Baba. They are responsible to sell Baba full range of
products online via official website and ecommerce platform. Customer service
personnel provides planting knowledges and products information by using
Facebook instant messenger App. This is also a window for Baba collecting
feedback and complaint from end consumers.

Public Communication responses to organize all Corporate social responsibility (CSR)

activities in the company. A few years back, Baba started to organize various educational
activities on environmental protection and organic farming, to cultivate their future potential
market.

Design & Advertising department is a supportive unit to business development. Basically,

they need to complete all design job distribute by sales unit and public communication. Also,
they are responsive for context editing of marketing materials, such as article posts, leaflets,
offers and advertisements.

3. MARKETING MANAGEMENT PRACTICES

3.1. PRODUCTS
Baba has a strong image of the branding on environmentally friendly in the market.
Hence, most of the products contain eco-friendly feature to align with the brand image.
Baba aims to be a one stop gardening product supplier, so they have a range of product
from flowerpots, planting media, fertilizers, pesticides, seeds and gardening tools and
accessories and all of them are related to organic, natural and eco-friendly.

There are 3 key production lines in Baba, the first line is flowerpots, they produce over 20
million flowerpots a year to supply into market. Instead of manufacturing a normal
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plastic pot, Baba decided to produce a unique biodegradable flowerpot by using a special
plastic formula which has been approved by the international laboratory, to reduce the
burden of earth. Apart from achieving the international ASIM certification for
biodegradable pots. Baba’s biodegradable flowerpots have a high biodegradable quality
function that can withstand extreme temperatures ranging from -17 °C to 48 °C. After the
flowerpot being discarded into the landfill, it can be 100% decomposed naturally by
microorganisms in microbial, anaerobic or aerobic environments, into humus, carbon
dioxide, or biogas, without burdening the Earth’s environment (Baba, 2023) Baba is also
a cultivation soil producer in Malaysia, who produce close to 15 million litres of soil
every year which equals to about 1.5 million family packs.

Figure 3： How does biodegradation process started?

Their third production line focused on organic fertilizers and natural pesticides. Most of
our organic fertilizers and natural pesticides have achieved the certification standards in
the US and European Union, the products are also certified by SIRIM Malaysia. In terms
of development of eco-friendly fertilizers and pesticides. Baba conducted research on an
enormous number of raw materials and mix various combinations among them. Besides,
Baba needs to ensure the effectiveness of pesticide and fertilizers by long of field trials
verification before registering the products. The process of registering organic and eco-
friendly raw materials is very stringent, other than examining the raw materials, the entire
manufacturing process also required to be verified before products launched into the
market.

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3.2. PRICE
Pricing is one of the most important and visible aspects of Baba market practice. Baba
positions themselves at the middle price range in the market. Their pricing objective is to
expand the market share with perceived-value pricing method. Looking at the price
competitiveness among similar products category in the market, Baba is facing a
significant cost gap between normal plastic flower, chemical fertilizers and pesticides.
Therefore, Baba tends to be delivering more perceived value to consumers to be
outstanding from existing competitors in market.

Food safety and environmental protection are the key perceived value that Baba is
created. Consumers believe that they are deriving healthier life and greener world from
consuming products from Baba. Hence, each of the promotion strategies have to inform,
convey and remind the standard message. Besides, Baba has put a lot of effort in adding
on value for their products, such as by awarded different related certifications and
meeting different international standard of requirement.

It is normal that an organization has variable price strategies available based on market
supply and demand situation. Baba also apply promotional pricing for their new
launched products by offer a special discount to create the awareness, interest and desire
of dealer and consumers. Promotional price is usually set at a limited time, means that
after the limited time offers, the price would rebound to their normal the selling price.
Normally, after new products are widespread in the market, the company would re-adjust
the price strategy.

Baba is also applied psychological pricing for the products, for instance charm pricing
when they listed their products through modern trade channel. When Baba is using
charm pricing strategy, it would create the perception of a lower price for consumers, it
could stimulate consumers’ purchase intention and increase the sales of company as well.

3.3. DISTRIBUTION
The distribution strategy of Baba is comparatively simple, there are only 3 different
methods with maximum 1 level of distribution channel. The 1 level channel mainly
reached consumers by distributing the full range of products locally and internationally.

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Distributor, such as local garden centers, hypermarkets and chain store is the
intermediaries of Baba. In Malaysia, Baba distributes the products to local garden
centers, supermarket, hypermarkets and mini chain stores.

Figure 4： The brand of departmental and hyperstores which Baba products are available in.

For direct distribution, there are 2 different types. As Baba strive to promote land
protection, so they also provide a set of solution for farmers and growers to preserve their
lands, thus one of the distribution channels is supplying the products in farmer pack for
farmer and growers directly in Malaysia. Furthermore, the only distribution channel
directly reach to end consumers is through their official shopping website and ecommerce
platform, Shopee and Lazada.

Figure 5： Level of consumers marketing channels of Baba

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1.
2.
3.
3.1.
3.2.
3.3.
3.4. COMMUNICATION
Baba has a strong branding perception, because they convey a standard message to the
market throughout the years. Nowadays, consumers recognize Baba as an eco-
friendly and greener brand with slightly higher price in the market. The marketing
communication mix practice in Baba is a combination of various methods. Sales
promotion is the oldest marketing skill for Baba, it is effective to beneficiate for
company revenue in short term and long term. They have consumer promotion, such
as festival discount and new items launching offer; trade promotion, such as bulk
order discount, cash rebate and display allowance.

Furthermore, the budget for advertising is always a concern for the company. It must
be cautious to choose a right media for advertisement. During Pandemic, the
advertisement was forced on social media, especially Facebook Ads, it is because
their target market is slightly matured age adults who range above30 years old.
However, the return ratio Facebook Ads was getting low, due to there were too much
of adv during Pandemic. Considering at this issue, Baba diversified the investment of
advertising into multimedia, such as radio channel, google ads, newspaper and
youtube channel in late Pandemic period. They also arrange their point of purchase at
all hyperstore outlets to promoting the brand to increase the brand exposure.

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 Figure 6: Baba’s Point of purchase

Starting from 2015, Baba began to promote a public relations event named “Help
Malaysia Organic Grow”. This event is important to help boost the growth of the
Malaysian organic industry. This is also key in helping farmers transform into organic
farming. Nonetheless, the spending of organic transformation is financially
substantial in nature, create a problem to farmers in general. To reduce the burden of
farmers, we have set up a funding instrument called the “Malaysian Organic
Certification Fund” which is contributed to annually from business revenue. (Baba,
2023)

4. MARKETING MANAGEMENT ISSUE & RECOMMADATION

The product lines could not hit the 100% of listing rate in Malaysian market. Baba
distributes their products to around 400 local garden centers, but less than 10% of them
are carrying a full range of Baba’s products, the reason which can be foreseen might be
the discounted scheme towards distributor is not comprehensive enough. The price
scheme designed for distributors is straightforward, discount mainly based on quantity
purchased. The simple way of price scheme normally demotivates distributors promoting

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Baba products. Baba could consider to re-think the rebate scheme tight up less hot selling
items, to encourage distributors carrying and promoting the full range of their products.

Meanwhile, although the relationship between Baba and hyperstore is consignment

based, but the decision of products final list is still based on buyers as there is always
limited display area for Baba.

Besides, the biggest challenge for Baba is the inconsistent retails price of their products.
Although Baba set a recommended retail price for their distributors, but distributors still
held the final decision on retail price, so it creates conflict between Baba, distributors and
consumers. Nowadays, the retails price is transparent, consumers able to access the retail
price easily by check from online marketplace. Seeing a product listed for multiple prices
online can be confusing for customers and may even raise red flags of counterfeits on the
market. (Lindsey, 2017) Baba could be fully control the retails price when the brand
becomes indicated brand among end consumers.

Figure 7: Baba’s Point of purchase

Furthermore, Baba does not have standard packaging design for their products and the
design of packaging changes frequently. They might have different packaging design for
same products but in different pack type (based on weight). Although, there is standard
product name on the packaging, but it might confuse consumers if they do not read
properly. Therefore, standardize the design of packaging for same products is important
for consumers remember the brand

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 Figure 8: Different packaging design for same product in different pack type

When it comes to packaging, it is extremely important to stay consistent with the design
so that consumers can spot easily and recognize the brand. (Swedbrand blog posts, 2017)
Gardening products is not considered as a fast-moving consumers goods, as gardening is
more like hobbies than essential to people, if the frequency of revising design is high,
consumers might no recognize during their 2nd time purchased. Therefore, Baba could
consider to re-adjust to frequency level of re-design the product packaging. standard
packaging design would help marketers to be focus on their advertisement planning, as it
would implant the brand into consumers’ life easier.

Communication strategy is not sustainable, once the marketers foresee the outcome of
promoting and advertising is unsatisfied, they would change the plan immediately, it
caused a high spending to retain the existing customers and create awareness of potential
customers.

5. CONCLUSION
The design of marketing strategy is important for the company continuously growing to
achieve the revenue target. After Pandemic, the sales are dropping significantly, due to
people no longer work from home, so they spend lesser time for hobbies activities, or
even swift to chemical products because of lower price. Meanwhile, the market trend and
economy downturn also efforted the business.

However, environmental protection is always a vital topic in the world no matter now or
in future. The public has higher awareness on food safety, it has become more important

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 for farmers to protect and preserve our lands. The organic and eco-friendly products will
be an area of great potential in the future. Therefore, Baba should now not only keep
inspiring more people to come together to protect environment, but also improving and
innovating their products to be more effective and reduce the manufacturing cost, it will
definitely benefit to the company and our mother earth.

6. REFERENCES

Baba. (2023). Eco-Friendly Biodegradable Flower Pots. Retrieved from

https://www.baba.com.my/our-gardening-products/eco-friendly-flower-pot/

Baba. (2023). Organic Certification Subsidy. Retrieved from

https://www.baba.com.my/csrmalaysia/help-malaysia-organic-grow/organic-
certification-subsidy/

I3 Investor. (2018). Baba Eco Group Behad – Overview. Retrieved from

https://klse.i3investor.com/web/stock/overview/03012

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Lindsey, D. (October 23, 2017). Why A Lack of Pricing Consistency Damages Your Brand.
Retrieved from
https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2017/10/23/why-a-
lack-of-pricing-consistency-damages-your-brand/?sh=2fdeabd62337

Nasrudin, A. (December 25, 2022). Marketing department: Functions and Responsibilities.

Retrieved from https://penpoin.com/marketing-department/

Swedbrand blog posts (September 21, 2017). How Often Should You Change Your
Packaging

Design? Retrieved from https://www.mynewsdesk.com/swedbrand/blog_posts/how-

often-should-you-change-your-packaging-design-61845

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