FARM FRESH MAGAZINE

FARM 
FRESH

By
SITI AYSHAH BINTI SANIP
A18HA0276

CONTENTS

3 About Farm Fresh
4 Pricing practice
5 Organization
6 Implementations
7 Farm Fresh success
8 What other businesses

draw from this
company

9 Farm Fresh smart

pricing

FFAARBEROSMUHT

INTRODUCTION

Farm fresh milk Sdn. Bhd is a
company based in Malaysia with
its head office in Johor Bahru. It
operates in the Animal Production
and Aquaculture industry. Farm
fresh has two factories operating
in Muadzam Shah, Pahang and
Larkin, Johor where the plant
production capacity reaches 12
million litre a year at an estimated
one million litre per month. It was
founded in 2009 by Loi Tuan Eee
and own by 30% Khazanah
National Berhad, a Malaysian
government investment arm.

FARM FRESH

PRICING PRACTICE

Pricing  practice strategy refers to method that companies use to
price their product or services. Many of the companies base the
price of their products or services on labor, production, expenses
and add on certain percentage so they can make a profit.

Farm fresh Sdn. Bhd has released its own Setting the price market is also determine
brand of fresh milk called Farm fresh to by demand and supply of Farm Fresh
ensure that fresh milk can be enjoyed by product in the market. There are three
everyone in this world. According to the pricing strategies such as skimming
Director of Operations, Mr. Azmi B. Zainal, strategy, penetration strategy and
Farm fresh product now dominates 39% of competitive strategy. Farm Fresh used
the local fresh milk market through a unique penetration pricing strategy. Penetration
marketing system. It is clear that although pricing attract customer with low price of
most dairy products are imported using the product in the market for a limited
mixed milk by incorporating fresh milk, milk period of time to so that it secured market
powder, solid and preservatives in their acceptance. Penetration pricing strategy
products, Farm fresh remains one of the that Farm Fresh used sacrifices immediate
Malaysian dairy companies that market fresh profits to build long-term relationships
milk directly from the farm. with buyers.

Pricing of ones product is important to Farm Fresh is also used psychological
achieve goals in an organization. Pricing pricing such as odd pricing to attract
strategy deals with the procedures of setting customer to buy their product. Odd
profitable and justifiable prices. Pricing is pricing is certain price or odd number just
important so that it must consider some under round numbers to make products
factors and the objective of the product or more appealing to attract buyers. As an
brands. Usually, the one that decide the example, the price of Farm Fresh pure
pricing objective before the actual price was fresh milk 1 litre is RM7.85 each instead of
set is the marketing manager. Pricing RM8.00, mostly customer will focus only
objective is a guideline to develop and on the first number. This strategy suggest
manage marketing strategy. The main a bargain verses even pricing, which
objective of Farm Fresh Sdn. Bhd is to encourage buying.
maximize their sales every year. Same as
other company, Farm Fresh applied cost-
based pricing which is setting price that
cover cost with target profit.

ORGANIZATION

Farm Fresh milk company is a brand name under The
Holstein Milk Company Sdn. Bhd. is an agriculture
company that provide milks to consumer that base in
Malaysia. It is the first ever milk company that are
Malaysian product. The founder of this milk company is
Mr. Loi Tuan Ee which is born in a small town in Perak. He
has a deep respect for agriculture and loves nature. He
notice that many of Malaysian brands were selling
product that made from powdered milk, so he decided to
purchase a small land in Johor and imported 60 Holstein
Jersey cows from Australia to setting up his Holstein Milk
Company. His dreams is to produce fresh and pure dairy
just as nature intended. Mr. Loi Tuan Ee enlisted the help
of his old friend which is En. Azmi Zainal as his partner
and brought in Khazanah National, the strategic
investment arm of the Govenment of Malaysia, as an
investor of the company. Collaboration that they did laid
the groundwork for the company's continued success.
The demand of Farm Fresh product increase drastictly
each year. To deal with the growing demand, Farm Fresh
expend its operation by moving to a larger land in Mawai,
Johor and setting up a second farm in Muadzam Shah,
Pahang.

IMPLEMENTATION

Implementation of product should look up
to product design / model. Same as the other
product, Farm Fresh product also changing
their packaging design from time to time.
The improvement of packaging design helps
to increase the product sell because
customer tend to realize the existence of
product. It is applied in the production of
Farm Fresh. Farm Fresh tend to change their
packaging design from time to time to keep
their product updated and interesting.

Farm Fresh did not have specific target
market because it is much easier for them to
sell their product. Their target market is the
customer who wants to consume fresh milk
everyday for their healthy life. Research
shows that almost 90% of teens didn't meet
the recommended daily intake for calcium.
So, as a nutrient concern, Farm Fresh make
dairy product that can consume and suit
with any type of age. Not just dairy milk,
Farm Fresh also product yogurt and yogurt
drink to those who does not like milk.

FARM FRESH SUCCESS

Farm Fresh milk produce the best selling fresh milk in
Malaysia, while it's yogurt and yogurt drink products are
also loved by people. The quality of Farm Fresh product
has its own uniqueness of the taste of milk, yogurt and
even yogurt drink. All of Farm Fresh product are made
from fresh milk, no coloring and no preservatives contain
and are freshly bottled before being transported to local
supermarket.

The production of Farm Fresh milk is just within 2 days
which is once it has milked, it is chilled and prepared to
be transported to processing plant. There is pasteurised
and homogenised on the day then send it to the local
retailer. Farm Fresh guarantee that within 2 day, their milk
is ready to be sell on supermarket. Not like the other fresh
milk, most of the fresh milk in the market comes from
Australia or New Zealand which needs to go through a
long journey before it reach to supermarket. The
shipment to Malaysia can be over to 3 weeks only then
they send it to the retailer. It is a long journey for a fresh
milk. Farm Fresh take better approach to fresh milk.
Instead of imported milk, they imported cows. This can
cut the journey of the milk from 2 weeks to just 2 days to
ensure the freshness of the milk.

On top of that, this is the reason why Farm Fresh product
growth increasingly compare to other competitors.

INSIGHT CAN OTHER
BUSINESS DRAW
FROM THIS COMPANY

Farm Fresh Sdn Bhd can be set as an example of other
brand company because in just 3-6 years, Farm Fresh
name has already well known as a good product that
provided good quality of fresh milk. It is a first time
Malaysian product that provide a good quality of fresh
milk. Farm Fresh get customers interaction by
promising them that they produce the best selling
fresh milk. Not just fresh milk, Farm Fresh also
catching customer trust by producing yogurt and
yogurt drink that loved by people which popular with
its rich, creamy taste and local origin. 

Others company should also look up with the Farm
Fresh production strategy. Instead of importing milk
from oversea, they took other approach which is
importing the cow itself and raising it in Malaysian
land. It is because they want to make sure the milk
fresh as what they promises which is "deliver to you as
freshly and naturally as possible".

COMPANY THAT SHOULD FOLLOW
THE PRACTICE OF SMART
PRICING BY CRITIQUING THE
CURRENT PRICING PRACTICE OF
THE COMPANY

As we know, F&N also produce some fresh F&N can also make a strategy for pricing
milk beside their other product. F&N used to by by selling multiple item together.
produce fresh milk as their product but years Businesses that selling an item with
after years, their fresh milk production promotional discount is the most
decrease and did not run smoothly. F&N noticeable in the industry.
magnolia fresh milk rarely found in
supermarket shelf nowadays. I believe that Other than that, F&N product especially
F&N more focus on their other product magnolia fresh milk should use
because we can see that other product have penetration pricing strategy. It is used by
rise increasingly and continue their other company to gain customers and
production. From time to time, f&n release greater market shares. Penetration
many product range and it is not just about strategy depends on a large market
milk anymore. Because of that, the response to a low price. It might occur if
production of magnolia fresh milk shrinking the low price leads customers to find new
compare to the other f&n product. product.

I believe that f&n should take a look about F&N should choose the right pricing
their compatitors on how they determine strategy to build up their magnolia fresh
their product price or promotion. F&N can milk product again so then the
use value-based pricing instead of determine production of magnolia fresh milk did not
their price by considering the production have to decline and end the production.
cost. Value-based pricing determine on how
much products or services worth to the
customer. Price determination is neither too
low nor too high, based on the benefits of
what customer will receive. F&N should have
accurate information about their market
demand and profit margin on each item
sold.

VIDEO
PRESENTATION

https://drive.google.com/file/d/1oInGYtIPMko-oy-
hlKzUpkQwoViDLzvg/view?usp=sharing

REFERENCES

Richard Whitehead. (2018, Sept 26). Malaysia's dairy king
milks funding to grow herd. Retrieved July 2 from
https://www.dairyreporter.com/Article/2018/09/26/Malay
sia-s-dairy-king-milks-funding-to-grow-herd

Tan Heong Hong. (2018, May 26). Farm Fresh adding
fresh milk supply from Australia to feed rising demand.
Retrieved July 3 from
https://www.minimeinsights.com/2018/05/26/farm-fresh-
adding-fresh-milk-supply-from-australia-to-feed-rising-
demand/

Abdul Razak Raaf. (2018, Sept 6). Holstein milk company
purchases dairy plan in Australia. Retrieved July 3 from
https://www.nst.com.my/business/2018/09/408922/holst
ein-milk-company-purchases-dairy-plant-australia
Farm Fresh Malaysia. Retrieved July 3 from
http://www.farmfresh.com.my/

Fraser & Neave Holdings Bhd. F&NHB continues to evolve
to meet the nation's beverage and dairy needs with new
milestone into dairy & crop farming. Retrieved 4 July from
https://www.fn.com.my/fnhb-continues-to-evolve-to-
meet-the-nations-beverage-and-dairy-needs-with-new-
milestone-into-dairy-crop-farming/