FACULTY OF BUSINESS & MANAGEMENT
SEMESTER JANUARY / 2011
BBPM2203
MARKETING MANAGEMENT II
MATRICULATION NO
:
820822065772001
IDENTITY CARD NO.
:
820822-06-5772
TELEPHONE NO.
:
016-338 2477
E-MAIL
:
[email protected]
LEARNING CENTRE
:
SHAH ALAM LEARNING CENTRE
MARKETING MANAGEMENT II BBPM2203
MARKETING MANAGEMENT II BBPM2203
1.0 TABLE CONTENTS 1.0 Table of Contents ________________________________________
1-2
2.0 Executive Summary______________________________________
3
3.0 Company Description ____________________________________
4
3.1 Brief description of the company ________________________ 3.2 Brief description of the new product and strategic role in the future position of the company __________________________
5
4.0 Situational Analysis ______________________________________
5
4.1 Political _____________________________________________ 4.2 Economical __________________________________________ 4.3 Socio-Cultural ________________________________________ 4.4 Technologies _________________________________________ 4.5 Competition _________________________________________ 4.6 Environmental _______________________________________ 4.7 Sales ________________________________________________ 5.0 SWOT Analysis__________________________________________ 5.1 Strengths ____________________________________________ 5.2 Opportunities ________________________________________ 5.3 Weakness ____________________________________________ 5.4 Threats _____________________________________________ 6.0 Marketing Objective______________________________________ 6.1 Target Market _______________________________________ 6.2 Positioning __________________________________________
4
5 5 6 6 6~7 7 7 8 8~9 9~10 10 11 11 11~12 12
7.0 Marketing Mix Strategy___________________________________
12
7.1 Product _____________________________________________ 7.2 Price ________________________________________________ 7.3 Place ________________________________________________ 7.4 Promotion ___________________________________________
12 13 13 13
8.0 Marketing Research ______________________________________
13~14
9.0 Implementation__________________________________________
14
3
MARKETING MANAGEMENT II BBPM2203
9.1 Quality Control System ________________________________ 9.2 In Case of Slow Sales __________________________________ 10.0 Budget _______________________________________________ 10.1 Break-even Analysis __________________________________
14 15 15 15~16
11.0 Control _______________________________________________
16
12.0 Appendix A ____________________________________________
17
13.0 Reference ______________________________________________
18
4
MARKETING MANAGEMENT II BBPM2203
2.0 Executive Summary
5
MARKETING MANAGEMENT II BBPM2203
3.0 Company Description 3.1 Brief description of the company
The Group had its beginnings in 1965, with a company named Keat Radio & Electrical Co., a sole proprietor business, which was a retailer for electrical appliance at Balik Pulau, Penang. The sole proprietor business was subsequently incorporated into a private limited company in 1977 under the name of Keat Radio Co. Sdn Bhd. Then in 1982, Pensonic Sales & Service Sdn. Bhd. was set up with various branches throughout the country to accommodate the increase in business. “PENSONIC” brand name was registered under the trademark no. 84/01379 up 1984. In 1988, PENSONIC started to manufacture and assemble its own products under the brand, “PENSONIC”. Amongst the products manufactured then were slow cookers, table fans, blenders, thermo- flasks and hair dryers. Since then, PENSONIC has emerged into producing high quality household appliances throughout the country. PENSONIC was the first brand of “Made in Malaysia” electrical products registered in Malaysia, the management of the PENSONIC group is looking at increasing the local materials composition of PENSONIC products and eventually manufacturing them as 100% local products. This would reduce the dependency on foreign suppliers; result in lower manufacturing cost and foreign exchange saving for the government. Currently, with the newly set up Factory occupying some area of 3 acre in Bukit Tengah Industrial Park, Penang, with more than 10 assembly lines, and total PENSONIC workforce of more than 400 employees, PENSONIC had indeed increased the efficiency and effectiveness in operation, sales and services distinctively. Over the years, the name PENSONIC has become synonymous with reliability and durability and the group has evolved into a well- known player in the home appliances market. In response to the Government’s call, PENSONIC is gearing towards automation to produce communication device besides to further improve technology in electrical items to cater for export, in particular to ASEAN, Middle East and South countries (PENSONIC).
6
MARKETING MANAGEMENT II BBPM2203
3.2 Brief description of the new product and strategic role in the future position of the company
The purpose of this proposal is to analyse the feasibility of launching the new product (PPHONE) into highly competitive Telecom market. “P-PHONE” will be positioned as the first and only smartphone fully made by Malaysia. The “P-PHONE” will have combining features of a mobile phone with PDA (Personal Digital Assistant). It features differs from a normal mobile phone in that it has a distinct software operating system and local storage, so users can add and store information, send and receive e-mail, and install programmes to the phone such as music and video applications, web browsing and GPS apart from chat, notetaking and media playback. The strategic role of “P-PHONE” for PENSONIC company is centered around three objectives:
To stay at the forefront as the market leader in innovative product introductions and successful product launches;
To strengthen and satisfy the needs of the more adventures Generation Y consumers with a new eye-catching and functional product;
To become the market leader in the functional communication segment with increased market share.
4.0 Situational Analysis 4.1 Political Situation
As require by governments, PENSONIC should study the taxation country by country in anticipate profitability and pricing strategy.
Countries are very variable in stability of, so we should study each country case by case.
4.2 Economical
Economy recovering post recession slower than forecasted.
Low marketing potential due to high competition in Telecom sector. 7
MARKETING MANAGEMENT II BBPM2203
4.3 Socio-Cultural
Population growth leading to expansion of the sector needs for mobile phones.
People depend more an more on mobile communication everywhere.
There id educational growth in the world.
Culture’s perception of the technology devices is positive worldwide.
Literacy and illiteracy level is not affecting using mobile phone but affecting high technology mobile phones, this fact needs to be considered.
Acceptance of imported products in some countries is less if there is local provider.
4.4 Technology
Level of technology in the world is increasing.
Internet level of awareness and usage for individuals and industrial aspect are
increasing in worldwide.
New technology in the mobile phone is increasing. Future plans for technology linkage between cities, universities, colleges,
hospitals and other institutes are increasing and can be connected to mobile phones.
Level of usage of the E-Technology for example online biding, billing,
complaints, blogging and etc are high and trendy. 4.5 Competition
According to the world's leading information technology research and advisory company Gartner, Inc there are more than 10 big companies competing at the world level market. The table below shown the top 5 mobile phone maker for Third Quarter 2010 are Nokia, Samsung, LG, Apple and Research In Motion (Gartner, 2010). 8
MARKETING MANAGEMENT II BBPM2203
Company Nokia Samsung LG Apple Research In Motion Sony Ericsson Motorola HTC ZTE Huawei Technologies Others
3Q10 Units 117,461.0 71,671.8 27,478.7 13,484.4 11,908.3 10,346.5 8,961.4 6,494.3 6,003.6 5,478.1 137,797.6
3Q10 Market Share (%) 28.2 17.2 6.6 3.2 2.9 2.5 2.1 1.6 1.4 1.3 33.0
3Q09 Units 113,466.2 60,627.7 31,901.4 7,040.4 8,522.7 13,409.5 13,912.8 2,659.5 4,143.7 3,339.7 49,871.1
3Q09 Market Share (%) 36.7 19.6 10.3 2.3 2.8 4.3 4.5 0.9 1.3 1.1 16.1
Total
417,085.7
100.0
308,894.7
100.0
Table 1: Worldwide Mobile Terminal Sales to End Users in 3Q10 (Thousands of Units) 4.6 Environmental
The global concern of the Global Warming issue and other pollution effects concerning the packaging material and radiation of the mobile phone.
The demand of the international environmental approvals is a must (if there is any)
4.7 Sales
Mobile phone industries are one of the most profitable industries everywhere and the market is increasing.
9
MARKETING MANAGEMENT II BBPM2203
5.0 SWOT Analysis 5.1 Strengths
Innovative
The P-PHONE has an innovative touch screen. It also has many functions of other mobile phones all in one device. Effectively, it is purposed to provide users the better of the two worlds of voice service and “computer” capabilities in a handset. To put it simply, it is a mobile phone with PDA (Personal Digital Assistant) functionality. P-Phone differs from a normal mobile phone in that it has a distinct software operating system and local storage, so users can add and store information, send and receive e-mail, and install programmes to the phone such as music and video applications, web browsing and GPS apart from chat, notetaking and media playback.
Compatibility
The P-PHONE will work with some of the PENSONIC home appliance devices. Such optimum capability will obviously offer people a wider choice to carry PPHONE which offers both cellular based voice and Internet connection with PClike functionality.
User Friendliness
The all new touch screen interface recognizes multi finger gestures, just as the human hand normally behaves. Its dual touch and virtual keyboard make the size of the screen is getting bigger and more colorful. This is following the trend of customer based multimedia entertainment.
10
MARKETING MANAGEMENT II BBPM2203
Price
The price of the P-PHONE would be sold at a reasonable price for its value.
Quality
In term of quality, it is cover by a high quality of scratch resistant screen on top of durable and light metallic finish. In additional to that, it also furnish with security software to protect the P-PHONE against loss and stealing while safeguarding the user privacy data from cyber criminals. 5.2 Opportunities
Increasing in demand and expansion to a new target segment
Worldwide mobile phone sales to end users totaled 417 million units in the third quarter of 2010, a 35 percent increase from the third quarter of 2009, according to Gartner, Inc. Smartphone sales grew 96 percent from the third quarter last year, and smartphones accounted for 19.3 percent of overall mobile phone sales in the third quarter of 2010 (Gartner, 2010). This has been proof that the demand of the smartphone is keeping increasing over year by year due to it technologies enhancement
Upgradeable
P-PHONE software allows new exciting features to be brought in which take advantage of the touch screen ability. Future version will also be hardware upgradeable.
11
MARKETING MANAGEMENT II BBPM2203
Partnerships
PENSONIC can collaborate with many powerful global mobile phone companies to penetrate the market with P-PHONEs, which reduces costs in marketing and increase revenue through long-term agreement deals while at the same time, creating a brand-awareness as a trusted brand in the market through such collaborations. Although diversification to the telecom market is a new challenge for PENSONIC, market awareness of PENSONIC as a good brand in the electric home appliances market has already been established. 5.3 Weakness -
Image
The PENSONIC brand is not targeted towards business people and does not have a reputation as being compatible with the corporate world. -
Price
PENSONIC does not yet offer lower priced models for more cost conscious consumers. -
User Interface
The touch screen interfaces suffer from the problem of “gorilla arm”. “Gorilla arm” was a side-effect that destroyed vertically-oriented touch-screens as a mainstream input technology despite a promising start in the early 1980s (Wikipedia).
12
MARKETING MANAGEMENT II BBPM2203
5.4 Threats -
Competition Increasing
Smartphones are easier to make now more than ever. More companies may enter into the market segment, and competitors or even PENSONIC contractors can maneuver around patents to create similar device. -
Downward Pricing Pressure
The P-PHONE is marketed as a high-end phone, but phone price are almost certainly going to fall when other competitors undercut the price of P-PHONE. -
Difficulty Penetrate Into Asian Market
There have difficulty to penetrate in Asia market since other brand of smartphones are better known and already widely used.
6.0 Marketing Objectives •
Set an achievable objective for the first and second years of market: First Year Objective – We are aiming for a 2 percent of share from Asia market
through the sales volume of 450,000 units. Second Year Objective – To achieve 10 percent of share from Asia market based
on sales. •
Extend on the PENSONIC brand name and link to the established meaningful positioning.
•
Extend on PENSONIC image by innovation, quality and value.
•
Measures the awareness and response of the market in order to make adjustments to the marketing campaigns as necessary.
13
MARKETING MANAGEMENT II BBPM2203
6.1 Target Market
Differentiate the P-PHONE from other brands of smartphones in the
market.
Primary consumer targeted is the middle-upper income professional to
coordinate their busy schedules and communicate with colleagues, friends and family.
Secondary consumer targets are high school, college and graduate students
who need one portable multifunction device.
Primary business target is to collaborate with large mobile communication
provider like Maxis, Digi and Celcom.
Secondary business target is mid to mid size corporation that want to help
managers and employee stay in communication or access critical data on the go.
Market segment will consist of companies with RM10 million to RM50
million in annual sales. 6.2 Positioning
Using product differentiation, positioning the P-PHONE as the versatile, convenient, value-added device for personal and professional use.
Focus on the features of multifunction which having one device for communication, but also music, pictures, and video as well as full Internet access.
The P-PHONE will be promoted as both professional and hip.
7.0 Marketing Mix Strategy 7.1 Product
Full year warranty along with an optional for three years PENSONIC Care Warranty
Same quality as all other brand of smartphone
Special edition version to be launched in conjunction with PENSONIC anniversary 14
MARKETING MANAGEMENT II BBPM2203
Launching a cheaper version with less advanced features along with a more advanced version for professional use
Adding the following features to the P-PHONE (large disk storage capacity, lower weight, thinner device, long battery life, 4G wireless, GPS and improved camera)
7.2 Price
Set the base model at a cheaper price of RM1,299
A more advance model for RM1,699
Special limited edition P-PHONE for special prices
Generally lower our prices to ensure we establish market dominance in as short of time as possible
7.3 Place
Massive rollout worldwide at all reputable major retailers
Massive rollout through online, showrooms and in all mobile phone suppliers
Eye catching displays will be found at most of the big shopping mall featuring the PPHONE to make the product stand out from the pack
7.4 Promotion
Integrate PENSONIC message of all new communications and audio or visual experience together in all media advertisements
Differentiate the P-PHONE with other brands of smartphone
Emphasize PENSONIC brand prominently and associate the P-PHONE with others PENSONIC home appliance’s groundbreaking lineage
A massive TV campaign shall be planned before launching the P-PHONE featuring a soon to be legendary ad to be talk of the country
Advertising will be appearing on a regular basis to maintain general public awareness
15
MARKETING MANAGEMENT II BBPM2203
8.0 Marketing Research
Four age groups will targeted: 15~20 years, 20~25 years, 25~45 years, and 45
years and above
High school and college aged people will demonstrate social uses
The 25~45 years group will be used to determine business application and social
or personal use
The 45 years and above will give us a plan to market to more senior well-retired
group
This researcher will be done through surveys (via email campaign through portals
such as other online application developed for P-PHONE) and interviews (in big shopping mall) with the same age groups listed before
To bring the P-PHONE to the front of the business world it is important to
research different ways to grow the 15~25 years old group into business uses of the product
Brand awareness will be an important tool in taking the PENSONIC brand from
“social cool” to “business cool”
We will ask for feedback on P-PHONE features, and modify the significant
features according to the end user’s need in the next generation P-PHONE
We will allow users themselves to design their own ideal P-PHONE through
online and use any useful ideas to further refine future P-PHONE models 9.0 Implementation 9.1 Quality Control System
Workers will get RM8 incentive pay for every non reject phone they produce
RM40 per phone for Six Sigma quality program. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes (Wikipedia).
Each workers will be given RM5,000 each year for best practice training
Use control measures to closely monitor quality and customer service satisfaction 16
MARKETING MANAGEMENT II BBPM2203
Setup a specify P-PHONE Customer Service Bar to allow the customer to contact about any technical problems and a customer service phone number stored in the phone book
9.2 In case of Slow Sales
In case of slow sales, offer P-PHONE to customers who have purchased other PENSONIC products with a special price RM20 per p hone for six sigma quality program, which will lead to demonstrate the product for consumers in order to promote synergy and lure buyers. Besides that it also will develop deep relationship with two very different segments which are those who have it and those who aspire. 10.0 Budget 10.1 Break-even Calculation
Based on Assumption: *Wholesale revenue is RM1,818 per unit *Variable cost is RM499 per unit *Estimated fix cost of RM50,000,000 Break-even calculation for base model: Total Cost
=
Total Revenue
Variable Cost + Fixed Cost
=
Unit Price x Total Quantity Sold
17
MARKETING MANAGEMENT II BBPM2203
499q + 50,000,000
=
1818q
499q – 1818q
=
-50,000,000
-1319q
=
-50,000,000
q
=
37,908 units
Break-even calculations indicate that PENSONIC will become profitable after the sales volume exceeds 37,908 units. PENSONIC will make a profit of approximately 544 million after the first year sales of 450,000 units. Details of data can be referred to Appendix A.
Recommended price is RM1299 per unit for base model. The markup is 40 percent.
It is predicted that sales volume will increase at least 30 percent from this change; this will decrease the impact of fixed costs and improve opportunities to increase our production scale, which will further improve profits in the long run
11.0 Control
To plan our strategy we will meet monthly with the board of PENSONIC, present our information, and make a proposal for continued marketing efforts. Before each meeting our team will meet in private, with each person presenting their own proposal based on the information they have learned. After the initial proposals, we will vote on the best one or come to a compromise. The final proposal sent before is the result of that meeting.
Total Words Count:
18
MARKETING MANAGEMENT II BBPM2203
12.0 Appendix 1
Table 1: Data Source for Break Even Analysis Chart Sales volume per period (pieces) Sales price per unit
45,000 1,818
90,000 1,818
135,000 1,818
180,000 1,818
Fixed costs per period
50,000,000
50,000,000
50,000,000
50,000,000
Variable costs
22,455,000
44,910,000
Total costs
72,455,000
Total sales
81,810,000
94,910,000 163,620,00 0
9,355,000
68,710,000
67,365,000 117,365,00 0 245,430,00 0 128,065,00 0
89,820,000 139,820,00 0 327,240,00 0 187,420,00 0
Net profit (loss)
225,000
270,000
1,818
1,818
50,000,000 112,275,00 0 162,275,00 0 409,050,00 0 246,775,00 0
50,000,000 134,730,000 184,730,000 490,860,000 306,130,000
19
MARKETING MANAGEMENT II BBPM2203
Chart 1: Break Even Chart
13.0 Reference
Gartner, Inc. (2010, November 10). Gartner Says Worldwide Mobile Phone Sales Grew 35 Percent in Third Quarter 2010; Smartphone Sales Increased 96 Percent [Press Release]. Retrieved from http://www.gartner.com/it/page.jsp?id=1466313 Gesture Recognition. Retrieved February 2, 2011, from Wikipedia: http://en.wikipedia.org/wiki/Gesture_recognition Pensonic Official Website. Retrived from http://www.pensonic.com/pabout.htm Six
Sigma.
Retrieved
February
1,
2011,
from
Wikipedia:
http://en.wikipedia.org/wiki/Six_Sigma
20