TABLE OF CONTENT

CONTENTS PAGE

1. Introduction 2

2. Business Background 2-3

3. Marketing Strategies & Business Plan 3

3.1. Website Design 3-4

3.2. Website Function 4-5

3.3. Advantages of e-Commerce 6-7

3.4. Payment Options 7-8

3.5. Delivery Options 8

4. Internet Security & Legal Concerns

4.1. Property Rights 9

4.2. Contracts 9

4.3. Computer Crime 9-10

4.4. Privacy 10

5. Financial Plan 11

6. Conclusion 12

7. References 13

8. Appendix 14-18
1. INTRODUCTION

Best Food Delights is an established bakery retail café which is better known as Roti
Delights (RD). Since business to consumer e-Commerce on the Internet is an area of
rapid development, RD wishes to use e-commerce as a sales and promotional medium.

RD e-commerce missions can be identified as:-

i) expand market share by 15% both locally and out-station
ii) increase return on investment (ROI) to 15% within 1 year
iii) increase profit level by 20% in Year 2009.

2. BUSINESS BACKGROUND

RD is incorporated in the Year 2000 and it is equally owned and managed by its four
partners. It is an established bakery retail café located at Pandan Indah, Kuala Lumpur
where the population is one of the most density areas.

These partners represent sales, management, finance and administration areas

respectively. The partners will provide funding from their own savings, which will cover
start up expenses and provide a financial cushion for the first few months of operation. A
ten year small business loan will cover the rest of the required financing. RD plans to
build a strong market position in the town, due to the partners’ industry experience and
mild competitive climate in the area.

RD expects to catch the interest of the regular loyal customer base with its broad variety
of food and pastry products. Its products are:-
- Bread wrapped with chicken curry (Core product)
- Nasi Lemak with variety of choices
- Variety of hot desserts
- Full Moon Packages and Catering Services

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Most importantly, all the foods are served halal which is also one of RD’s target market.
RD aims to offer its products at a competitive price to meet the demand of the middle to
higher income local market area residents.

3. MARKETING STRATEGIES & BUSINESS PLAN

The marketing and sales strategies usually describe how the business will implement the
marketing plan to achieve the expected sales performance. There are a number of
electronic business models that builds on traditional market spaces. As for RD, it uses
the web catalogue revenue model as one of the marketing tools. RD can use the web
catalogue to promote their new products. Each time RD comes out with new types of
food, they will include it in the web catalogue as well as print it in flyer and sent it to
their prospective customers. RD is already an established company thus, customer
mailing address can be easily obtained. As for customers which do not have Internet
address in the database, printed catalogs will be distributed to their home address.

RD also uses another means of advertising, which is the radio advertisement. Through
this media, the listeners will be able to gain RD products information as well as the
online purchasing system in the website. It is cost-effective and able to attract customers
to visit RD website. Besides, it can also create customers awareness of RD. (Jay
McDonald, 2001)

3.1 Website Design

First, the proposed RD website attracts the consumer’s attention by creating a website
that is easy to use, informative and fast. It is personalized, comprehensive, highly visual,
and easy to navigate. To grab the consumer’s attention, the website uses media elements
such as graphics. This is to catch the customer’s attention with content that is well
structured and enticing and by value-added offers.

Hyperlinks, either in the form of navigational buttons, tool bars, or textual links, make the
process of interacting website easier.

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The key success for effective selling on-line is simplicity. A simple rule of thumb to
follow is to ensure that any order confirmation should not be more than 3 clicks away
from an interested buyer. An efficient purchase process also allows accurate information
be entered easily for an order.

3.2 Website Function

RD has planned not to host the website for the time being. It decides to outsource to
other web hosting service company. It also has to take into account that to connect to the
internet, users need to have a suitable microcomputer, the right kind of connecting
software and an internet service provider (ISP). They then need software to browse the
World Wide Web (Baskin & Adam, 1999).

As such, a “web hosting service” stood out as the optimum plan. A web hosting service
is to host websites on its server and provides common webmaster tools such as Common
Gateway Interface (CGI) templates, mailing lists, and even a shopping cart feature, to
enhance any website (Cataudella et al, 1998).

For the Home page of the website, it gives a brief introduction of RD. This function is
created for the website visitors (customers) to gain some general information and
products of RD.

In the Menu page, this function enables the customers to know what are the foods and the
packages that are available in RD together with the prices. There are also some pictures
of the RD foods in this page in order to attract the customers to purchase the foods and to
make the website looks more interesting.

About the Location page, it clearly stated the location of the RD with the map, the
address and also the contact number. This function is created for the purpose to let the
customers to know the exact location of RD.

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For the Contact Us page, it stated the details of the company for the convenience of the
customers to contact RD. There is also another function available, which is the feedback
system. It is simple to give comments/feedback. Customers need to fill in a simple form
and just submit it. They can even select whether they want a response from RD or
otherwise. By using this function, RD not only obtained the personal information of its
customers and also feedback which can be used for future promotions and to improve its
performance.

In the Order Form page, the customers can place their order online in this page.
However, delivery will only be made for purchases above RM20.00. What they need to
do is just a few simple steps. Then, they need to enter their account’s user name and
password to login to the next page, for those customers who do not have an account can
create a new account here. Once they login, the page will be encrypted with Secure
Socket Layer (SSL) protocol.

This function is created for the convenience of the customers of RD to order and
purchase the foods through online system. The customers do not have to visit RD shop in
order to buy the foods. For security purpose, the customers have to setup an account in
the website before they can purchase online to avoid fraud.

On the Terms and Conditions page, it stated the terms and conditions for RD online
purchasing system. This function is created for the customers to know about the terms
and conditions in using the RD online purchasing system. Two vital points are:-

 Delivery will only be made for purchases above RM20.00.

 Credit card payment will only be applicable for purchases above RM50.

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3.3 Advantages of e-Commerce

RD core product is already established in the market. This website is designed to

convenient their customers to purchase online. It can also attract new customers to know
about RD. RD is obviously a Business-to-consumer (B2C) model, where the products
are directly sold to individual customers. (isos, 2007)

The web allows almost instant change to your entire business structure, merchandise,
pricing, marketing, promotions and sales process. In fact, the Internet will allow you to
change all of these from customer to customer and have various advantages.

Among the advantages of Internet e-commerce (Whitely, 2000) (isos, 2007) for both
customer and the trader are:-

3.3.1 Catalog flexibility and Online fast updating

• Capable to link directly to the content page and visual displays. The e-catalog can
be updated anytime without incurring any cost whether to add new product, or to
edit the prices.
• Wide search capabilities either by item, corporate name, division name, location,
manufacturer, partner, or price.

3.3.2. World-Wide, 24 Hours a Day Trading

• Customers can browse and shop at their convenience at any time day or night, i.e.
24 hours a day, and 7 days a week.
• The Internet allows to reach people around the world, offering products to a
global customer base.

3.3.3 Home Shopping

• E-Shopping can be done from home or office so that the customers can avoid the
hassles of traveling, parking, and queuing to buy the products.

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3.3.3 Lower Cost of Doing Business

• Reduce inventory, purchasing costs, order processing costs associated with faxing,
phone calls, and data entry.

3.3.4 Eliminate Middlemen

• Sell directly to the customers without going through any middlemen.

3.3.5 Easier Business Administration

• With right software, store inventory levels, shipping and receiving logs, and other
business administration tasks can be automatically stored, categorized and
updated in real-time, and accessed on demand.

3.3.6 Customers Loyalty

• Builds customers’ loyalty by offering special promotions.

3.3.7 Secure Payment Systems

• Recent advancements in payment technologies allow encrypted, secure payment

online.

3.4 Payment Options

There are two types of payment method available for RD online purchasing system. The
customers can either choose to pay by Cash On Delivery (COD) or credit card. For the
credit card users, RD accepts MasterCard and Visa credit card payments through the
partner payment gateway provider ‘Public Bank Berhad’. All the information of the
Credit card is kept by the partner payment gateway provider and RD wouldn’t get this
information. Authentication and approval are made by the partner payment gateway
provider in real-time through their payment gateway to credit cards acquiring banks. The
customer’s credit card account will be debited for purchase amount once it has been
approve and any error of the purchase amount must be settled with the bank. There is the
strongest encryption technology provided for all the credit card transactions and over
secured internet connection. ( secretrecipe, 2007)

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The steps in credit card processing are, the customer have to key in their credit card
number into RD’s payment page and is transmitted to RD. Next, the customer’s
information will be send to RD acquirer (third-party processor) and the acquirer will send
to the issuing bank. Next, issuing bank will authenticates the credit card and checks
availability credit or funds with the credit card issuer, and puts a hold on credit line or
funds needed to cover the charge. After get the approval, issuing bank will reply to the
acquirer and the acquirer will inform RD. After the customer is notified, the issuer will
settle the transaction. Finally, the settlement occurs when foods are delivered by RD to
their customers. RD choose credit card as one of the payment method is because it is
worldwide acceptance, it built-in security for merchant and users, maintain audit trails
(purchase and payment histories) and convenient for customers. (Turban et al, 2004)

3.5 Delivery Options

The delivery system for e-Commerce purchases has to depend on the size of the product,
its nature, urgency and the distance that packet will have to travel. Some examples of
delivery systems (Whiteley, 2000) are:-
• Post
• Packet
• Local delivery
• Collect your own
• Electronic delivery
• No delivery

In the case of RD, it adopts two delivery systems, i.e. local delivery and collect your own
option. The local delivery is done by the runners either on motorbike or van depends on
the quantity of orders. An alternative to local delivery, some customers would like to
pick up the goods on their own from the café. The customers ordered and paid online but
cuts out the queues at the café.

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There is no real savings to an e-Commerce retailer of perishable goods that can be offset
against the costs of picking, packing and delivery. Hence, a minimum delivery charge of
RM3.00 is imposed by RD for every purchase of RM20.00 and above.
4. INTERNET SECURITY & LEGAL CONCERNS

The four legal concerns of businesses are:-

4.1 Property Rights

All the foods that are selling in RD are “HALAL” certified by Jabatan Kemajuan Islam
Malaysia (JAKIM). Therefore, RD can also target to the muslim market and can increase
the revenue compare with just targeted on non-Muslim business.

The word “Roti Delights” has became a brand name and need to be patented. It is the
trademark of BFD and nobody can use the same name for the business.
(Turban et al, 2004)

4.2 Contracts

Security of data in e-commerce is concerned with the notion that there is protection from
intrusion that no-one can access the contents of data or information being sent, and that
no-one can identify who is sending or receiving a message (Lawrence et al, 1998). This
is especially important where highly sensitive documents such as strategic plans, business
plans and contracts are exchanged electronically. The security of data are commonly
protected by storing the data internally behind a firewall. (Turban et al, 2004)

4.3 Computer Crime

Transaction processing integrity refers to the precision with which transactions are
processed according to agreed upon methods. Some of the underlying transactions
processing integrity issues are whether the transactions are handled as disclosed, or how
to ensure the orders are not lose, or how to ensure the bills and accounts information are

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accurate. By using e-commerce, trading partners should be able to receive some level of
assurance regarding the integrity of transaction processing. (Greenstein, 2000)

The process of ensuring transaction processing integrity must include an auditing process
(Lawrence et al, 1998). Therefore, electronic checks need to be built into the systems and
a constant vigilance in searching networks for viruses.

Meanwhile, as for SSL, this protocol works when a customer logs in to the payment page,
the SSL protocols will encrypt the whole transaction process. The use of SSL is to
encrypt the credit card numbers and other transmission between a Web browser and a
Web server. Encryption of data can prevent hackers from hacking into customer’s
information. This can ensure a safe transaction when the customers pay online using
credit cards. (Turban et al, 2004)

4.4 Privacy

The privacy of data refers to the confidentiality of data collected by businesses about
their customers (Greenstein, 2000). Potentially such data collection could have
advantages for both business and on-line consumers because the business is able to offer
a service tailormade for the consumers.

In RD, the website security system will be outsource to another solution company. This is
because these companies are more specialize in the network securities. RD requires the
company to include firewalls and Secure Socket Layer (SSL) in the website.

RD chooses the firewalls because it can protect the private network from the public
network. The reason of using firewalls because it can prevent intruders hacking into the
customer database and get their private information. There are many kinds of firewalls
available and RD chooses the packet filtering routers. Using this method, RD can choose
to accept or reject data coming from the public network. If the firewalls detect unknown
network address trying to access RD private network, this firewalls can alert the system
and thus reject the access from the particular network. (Turban et al, 2004)

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5. FINANCIAL PLAN

Once the online bakery becomes established and the cash flow is steady, RD would like
to hire one staff for help desk and another assistant baker. The Projected Profit & Loss of
RD (Appendix 1) illustrates the needs of the current employees, and two more new
employees. This new hiring of two employees will coincide with the launching of our
new website on our bakery café. In addition, there will be an increment in our personnel
cost by 10% each year. This will boost the morale of the staff to have better commitment
in their work.

RD’s Projected Profit & Loss also shows a net loss in the 1st year not only due to
consultancy, set up and development fees in the website, and also promotional and
advertising cost. All these extra costs were clearly appended in Appendix 2.

We are considering keeping 60% of net profit for bakery’s reserves, to keep this reserve is
for the purpose of growth and expansion of the business in future.

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6. CONCLUSION

Based on the strengths of RD, RD is ever ready for setting up its own website. In the
beginning, RD should put up a “look good and feel good” website design to provide
friendly navigation and interaction to its targeted market. It has also planned to start his
storefront static pages so as to minimize costs and maintenance. In view of the budget
constraint, RD should outsource rather than hosting in-house so as to avoid the heavy set-
up cost of server, hardware and software.

Local marketing efforts and site promotion methods were identified for integrating into
the site. RD need to maintain its website regularly to ensure the system works perfectly.

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7. REFERENCES

Books
BASKIN, COLIN and ADAM, STEWART (1999), “Managing on the Internet”, Prentice
Hall, Sydney

CATAUDELLA, et al., (1998), “Creating Stores on the Web”, Peachpit Press, USA

GREENSTEIN, F., (2000), “Electronic Commerce, Security, Risk Management and

Control”, Irwin McGraw-Hill, New York

LAWRENCE, et al., (1998),“Internet Commerce: Digital Models for Business”, John

Wiley & Sons, Brisbane

TURBAN, EFRAIM et al., (2004), Electronic Commerce A Managerial Perspective,

United States of America, Pearson Prentice Hall

WHITELEY, D., (2000), “e-Commerce: Strategy, Technologies and Applications”,

McGraw-Hill Companies, London

Websites
MCDONALD, J., 2001, “So you want your business to be a radio hit? Listen up!”
(online), Available from http://www.bankrate.com/brm/news/biz/Biz_ops/
20010601a.asp, (Accessed on 3/08/07)

2007, Advantages of e-Business Applications, Available from

http://www.isos.com.my/ecommerce/b2c.htm, (Accessed on 3/08/07)

2007, Terms And Conditions, Available from

http://www.secretrecipe.com.my/secretrecipe/catalog/exchange/c4352.html, (Accessed on
25/07/07)

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8. APPENDIX

Appendix 1
PROJECTED PROFIT & LOSS
PARTICULARS YEAR 1 (RM) YEAR 2 (RM) YEAR 3 (RM)
SALES:
General Operation 540,000 648,000 666,000
Food Catering 300,000 364,000 388,000
Total revenue 840,000 1,012,000 1,054,000
Less: Cost of Goods Sold (252,000) (303,600) (316,200)
GROSS PROFIT 588,000 708,400 737,800
Less: Expenses
Consultancy, set up & 9,000 0 0
development fee (Note 1)
Salaries expenses 300,000 330,000 363,000
Rent expenses 182,000 182,000 182,000
Advertising & promotion 68,000 68,000 55,000
expenses (Note 2)
General expenses 40,000 45,000 47,000
Net Profit / (Loss) (11,000.00) 83,400 90,800

Appendix 2
BEST FOOD DELIGHTS BUDGET SUMMARY FOR AN E-COMMERCE SITE
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 Percentage
Budget Description Per Year Cost Total (%)
$ $ of Budget

PHASE I: $30,000 BUDGET

(A) Consultancy, set-up and development fees:
Consultancy, creative design, develoopment fee,
including
project review (industry estimate of 15-20% of 5,00
$30,000) 0.00
1. Web hosting fees (up to 50 products, static web 1,80
pages) 0.00
1,20
2a. First year on-line fee 0.00
1,00 9,00
2b. Site maintenance (static web pages) 0.00 0.00 12%

(B) Advertising and Promotion:

Direct mailer flyers } minimum colour printing 20
with 0.00
Printing & stationery } BFD logo and URL 70
address 0.00
3. Search engine ("Gold subscription includes up to 10
200 0.00
search engines and directories using keywords
and
keyword phrases.
49,0
4. Radio advertisement 00.00
3,00 53,0
Launch party discounts, giveaways, contest prizes 0.00 00.00 69%
15,00
5. Banner advertisement (3 months) 0.00 19%
77,00
TOTAL 0.00

PHASE II: ADDITIONAL BUDGET OF $30,000

4,50
2c. Site maintenance (dynamic web pages) 0.00 15%
3,00
6. SSL-enabled web hosting fee 0.00 10%
2,50
7. BFD food magazines 0.00 8%
20,00
8. Customer Service Representative 0.00 67%
SUB-TOTAL 30,000.00
107,0
GRAND TOTAL FOR PHASE I & PHASE II 00.00

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