HALAL Organic Soap MKT 652

Marketing Plan

Norbaizura Abd Rani

2005213274

Nurul Ain Mohd Ali

2004269865
 HALAL Organic Soap

ACKNOWLEDGEMENT

The objective of our report is to obtain the assistance and support of the marketing plan that
details the actions necessary to achieve the marketing objectives as to penetrate the market
of product.

The overall marketing communication deals with situation analysis, target market specification,
product evaluation, marketing objectives and the marketing communication programme
itself.

As in our group project, we focus specifically on Zurain (M) Sdn Bhd - Herbal Organic
Soap. Since this is a anew product in the market, it will take more affort to introduce it to the
consumer.

1
 HALAL Organic Soap

EXECUTIVE SUMMARY

Zurain (M) Sdn Bhd has designed a new product that provides managers with a quick, easy,
and affordable method to effectively monitor employee hand washing. Proper hand washing
is the most effective preventative measure available to combat communicable diseases.

Zurain (M) Sdn Bhd is the first producer using organic materials that answers this problem
and provides indisputable proof every time a person washes his or her hands. After washing
occurs, the unique dye in our soap remains on the hands and fades to the skin’s natural
color in less than six minutes. This would allow supervisors to conclusively verify at a glance
whether hand washing has taken place. No other product on the market offers such a high
level of assurance of sanitation compliance. The product is safe and no chemicals that
effect our sensitive skins. Now a days since Halal has become an issue in purchasing a
product. Because of that Zurain (M) Sdn Bhd had line up the Halal ingredient in making this
product .

2
 HALAL Organic Soap

SWOT analysis

The following SWOT analysis captures the key strengths and weaknesses within the
company, and describes the opportunities and threats facing Halal Organic Soap.

1.1 Strengths
• In-depth industry experience and insight.
• Accessible, approachable and economical products.
• The use of a highly-efficient advertisement.
• HALAL product produce by muslim.

1.2 Weaknesses
• Had a lot of shortages, not have enough of the right product in the stores.
• Underestimated how much they would sell when they first entered the market.
• Competition within the usual soap product which is cheaper.
• Not available in high volume.

1.3 Opportunities
• Participation within a growing industry.
• Promoting organic and hand made product which is safer in used.

1.4 Threats
• Future and potential competition from an already established market participant.
• A slump in the economy that could have a negative effect on people’s spending of
discretionary income on self hygiene products.

3
 HALAL Organic Soap

The Market

Although restaurants and hospitals have tremendous market need for a product such as ours,
day cares represent the best opportunity for our initial target market. Day cares are an ideal
market because they have a vested interest in reducing disease transfer amongst children,
and have adamant support from their clients [parents] to create as clean an environment as
possible.

The Company

Zurain (M) Sdn Bhd boasts a strong founding team and experienced board of advisors
brings twenty years of industry experience and networked relationships to accelerate market
penetration of the product line.

Zurain (M) Sdn Bhd will follow three concise strategies to achieve our desired growth:

• Exploit first-mover advantage in a highly fragmented market with a unique and

differentiated product.

• Develop a strong branding campaign to build awareness, positive perception and sales
of our products within our target markets.

• Continue to develop new products to satisfy an ever growing set of markets.

Mission

Our mission is to create value for customers and shareholders by continually improving
health and reducing preventable illnesses through the use of our soap.

Keys to Success

• A first-mover branding campaign to build awareness of our products as the standard for
ensuring body and hand washing compliance.

• Patent protection to defend our time-sensitive dye and product concept from
competitors.

• Complementary relationships with organizations interested in increasing body and hand

washing compliance.

4
 HALAL Organic Soap

Objectives

• Become the specialty soap of choice for day cares.

Products

It is estimated that the world’s Halal products trade averages nearly US$150 billion per year.
The existence of such a big market naturally opens the doors of economic opportunities for
these engaged in the business, directly or indirectly.

A successful marketer is not always the one who produces exactly the same as of others,
but the one who, while producing the same product lines, can cater to the special tastes,
preferences and needs of a group of customers which other producers have failed to meet.

Halal product market exists wherever there are Muslim consumers whose tastes and
preferences are governed by Halal rules and specification. Halal products may be similar
as most of other product, but its nature, technique of its processing, the ingredients used,
the handling methods from the beginning to the end, is always the one approved and
recommended by Islamic law.

In light of this, Zurain (M) Sdn Bhd have made the decision to produce and market a product
that is targeted specifically for Muslim consumers. Halal organic soap. There are loads of
shower gel products that are already available on the market at current, however, how many
of those products can be used confidently by Muslim consumers. Zakeeyah shower gel will
provide that “confident” to the consumers

The producers of Halal food can take the cue from this relationship and sponsor activities
that would raise the level of Islamic consciousness of the people, eventually contributing to
increase in the demand for their particular product.

Zurain (M) Sdn Bhd product line provides a unique control level to managers, supervisors
and parents alike. Halal organic Soap is an antimicrobial-based product for hospitals
(HEALTHassure) and restaurants (FOODassure) - the antibacterial products are not yet in
development.

5
 HALAL Organic Soap

Product Description

• Zurain (M) Sdn Bhd will produce a line of institutional Halal organic soaps with a time-
sensitive dye blended into the mixture.

• The packaging will be compatible with existing soap dispensers mounted in washing
stations and be available in a variety of sizes.

• Initially, Zurain (M) Sdn Bhd will produce products with child care acquirers in mind,
utilizing the brightest colors possible. This product line will consist of herbals and organics
that comes together with HALAL.

• HALAL had become an issue here because, in the market, there are a lot of organic
soap available. Consumer cannot realy trust the product because they don’t realy know
satisfy the ingredient use in the soap making..

Market Segmentation

Zurain (M) Sdn Bhd will first be introduced in the Klang Valley area, before sequential
expansion to additional day care markets. After successful implementation in Klang Valley,
we will begin expansion into the other States in Peninsular Malaysia, Sabah and Sarawak.

TARGET MARKET SPECIFICATION

A. Demographic Target

i Gender

The targeted group for this product is for both woman and also man who are concern
health and cleanliness. Since Halal Organic Soap is produce with herbal blended
that can help consumer to make body feel soft.

ii Medium and lower Income

With the price of RM 5.90 per piece Halal Organic Soap is affordable for people
who conscious about health and cleanliness.

iii Young and matured consumers

Our target customers are for those who are busy and don’t have time to use soap

while bathing. This product is suitable for all type of people. The young consumers
are between ages 20-45 while the mature consumers are among 46-75 years old.

6
 HALAL Organic Soap

B. Psychographic Target

i. A female buyer may have different opinions from a male buyer on our product. A
female buyer may look into the ingredients of the products such as no artificial
ingredients, 100% natural and no animal testing. On the other hands, male buyer
may not concern about the ingredients as far as it can have a nice scent. As long as
it gently cleanses buyer skin, leaving it silky clean, soft, and beautiful. The attitude
would help us to identify the most reliable and appropriate people to buy our
product.

ii. Social class and lifestyle may also take effect on the way people behave. Working
people who surely don’t have much time to have a bath with normal soap will buy
Halal Organic Soap. Furthermore the healthy skin awareness may relate our product |
to good skin healthy lifestyle.

C. Geographic target

i. For local market we are targeting people who live in urban and sub urban areas,
most spcific to working people who may think that time is always running out,
therefore, they must have something clean, healthy and fast for shower.

ii. People in rural area may be lack of awareness on certain product marketed in modern
and tremendous lifestyle.

D. Size of target market

Our company estimates the numbers of consumers nationwide who compromise target
market are:

i. Young-aged and matured customer - 25%

ii. Single & working people – 25%

iii. Medium and low income workers – 50%

(From the total workers in Malaysia – 8,569,200 people)

Industry Analysis

The Industrial and Institutional soap industry, of which we are a part, is quite fragmented, but
contains several well known main competitors: Kimberley Clark, Dettol as well as generic
brands that provide to distributors like Tesco and Giant. The industry is stable and growing;

7
 HALAL Organic Soap

between 1998 and 2003 it grew by an average of 4% annually. Within the I&I sector there
is fierce competition for market share among the existing popular soap offerings, leading to
lean profits on soap sales.

Distribution Patterns

Distribution in the soap industry is provided by regional providers. These distribution

companies usually serve a large portion of the market based on the respective size of the
market, delivering to the organizations monthly or bi-monthly depending on demand and
usage patterns. Food services typically receive deliveries of cleaning products once a month.
Hospitals typically have a distribution system that operates on monthly deliveries of large
quantities. Restaurants typically have a weekly delivery schedule.

Competition and Buying Patterns

Commercial customers select soap based on the necessary minimum safety regulations
for the intended user; restaurant and hospital regulations require anti-bacterial/microbial.
Customers will typically select a product based on price, distributor availability, and
convenience. Distributors will deliver a complete order of cleaning and maintenance products
to customers. Major competitors sell to a variety of customers, including distributors like
Tesco, who receive generic soap from bulk producers, then repackage and deliver it along
with other products it sells, utilizing the same distribution systems.

Target Market Segment Strategy

Our initial day care to all end-user consisting of children, adults and citizen people.
Organizations of this type such as hospitals and health instituional are attractive because they
are well managed, successful, health conscious and nationwide. Within these organizations
we will target decision level managers with the power to implement use of our product in
those locations.

Body and Hand washing in all end users is an ideal initial target market for several additional
reasons:

• Child care facilities have rampant illness and germ problems that can be directly reduced
through frequent child and worker hand washing.

• Child care facilities have strict, government mandated rules that require frequent hand
washing.

8
 HALAL Organic Soap

• Parents are particularly interested in reducing child illness, making them one of our
strongest advocates for the use of organic soap in environments they cannot directly
monitor.

Marketing Strategy

For our initial target market of day care facilities, the company will implement two parallel
marketing efforts, aimed respectively at day care facility decision makers, and the parents of
young children who use these facilities. We will create a push factor by effectively convincing
the decision-level managers within the organizations that our product provides an ideal
solution to the hand washing compliance. A “first to mind” branding campaign will build
organic soap as the leader in increasing body and hand washing compliance.

Positioning Statement

Organic soap is valuable to day care managers who need effective control solutions to
ensure frequent child and child-care worker hand washing to keep the environment clean
and to minimize preventable illness. No other product on the market serves the hand
washing compliance aspect of workplace safety with such an affordable, direct and complete
solution. Unlike traditional soaps, our product provides conclusive evidence every time an
employee washes his or her hands for only a marginally higher cost than traditional soaps,
and significantly less than gloves or other hand washing compliance systems.

Promotion Strategy

One of the most important aspects of a successful launch is positive publicity for our product.
We will develop an awareness campaign to promote our product through several avenues.
Our management team will fiercely pursue positive public perception through government
endorsements promoting the benefits of our products. We will also attempt to capitalize on
the novelty of the solutions provided by our product by actively seeking local news and media
coverage to help spread awareness. Buzz will be developed in social hubs by distributing
samples to parties with potential interest. Parental support of the product will be garnered
through free trials, demonstrations, and direct mailings to the day care parent roster lists,
parent groups and PTA’s.

At washing stations in client facilities we will spread awareness with stickers targeted
towards children, showing them the process of washing to turn their hands different colors
and emphasizing how fun it can be. Pamphlets will be sent to the family homes through
the day care roster mailing lists, to calm fears regarding a new product in their child’s
environment, explain the benefits and encourage the parents to respond and build feedback

9
 HALAL Organic Soap

for the benefits of the product to further increase implementation.

Some of the government programs of interest are the various compliance and workplace
hygiene programs supported and funded by the Center for Disease Control (CDC), the
Food and Drug Administration (FDA) and the National Center for Disease Control (NDIC).
Programs such as the Health Protection Research Initiative implemented by the CDC
demonstrate an invested interest by government programs in increasing the overall health
of Americans.

Distribution Strategy

Our initial distribution strategy will involve a combination of distributor and direct sales.
Relationships with local Northwest distributors will be established to increase promotional
reach and potential users. The first orders will be available immediately through direct delivery
by our executive team. Outsourcing distribution entirely in the future will allow SAFEassure,
LLC to focus its efforts on marketing and expanding as quickly as possible.

Distributors will pay for the inventory up-front, and although this cuts our profit margins it helps
SAFEassure, LLC to maintain a more flexible structure. By the start of 2007, distribution will
be entirely outsourced to distribution companies, and direct deliveries from the executive
team will cease.

Marketing Programs

Our most important marketing program is our branding program, aimed initially at regional
chain and franchise managers. This program is intended to penetrate the target markets, and
establish SAFEassure’s products as the soap of choice. Achievement should be measured
against our projected 45% monthly sales growth rate for the first year.

Emphasizing the risks associated with hand washing non-compliance, our marketing program
will employ the fear of disease, costs of illness and government regulations extensively.
Written materials will convey urgency, connect users to the underlying problem and suggest
SAFEassure’s products as the optimal solution to the problem.<

Sales Strategy

Sales strategy will initially address local and regional managers with ordering authority for
the establishments in that area. The prospective clients will be supplied with a professional
product information packet and moved into the sales funnel to begin closing prospect,
followed up with a direct mail brochure and a phone call.

10
 HALAL Organic Soap

There will be no initial direct compensation or commission for closed sales. Proceeds from
sales will be invested back into developing and expanding the business. As the company
begins to increase its initial sales force, commission-based incentive programs will be
implemented.

Sales Forecast

• If we are able to distribute our product through existing distributors, it will provide us a
significant financial advantage, as well as the ability to meet the quick increase in demand
for our product.

• Beginning with an initial monthly sale of $1,250 for our day care soap product
(CHILDassure), we predict sales will increase by 45% per month for the first year. We
then calculate a growth rate of 90% yearly. Cost of Goods Sold is approximately 47% of
sales. However, COGS grows at a yearly rate of 88%, which is less than the sales growth
rate in order to represent the economies of scale that we hope to achieve as our operations
grows.

Sales Forecast

Year 1 Year 2 Year 3

Sales

CHILDassure soap (day care) $237,168 $450,620 $856,177

HEALTHassure/FOODassure $0 $0 $0

Total Sales $237,168 $450,620 $856,177

Direct Cost of Sales Year 1 Year 2 Year 3

CHILDassure soap (day care) $94,867 $178,351 $321,031

HEALTHassure/FOODassure $0 $0 $0

Subtotal Direct Cost of Sales $94,867 $178,351 $321,031

Strategic Alliances

SAFEassure, LLC will initially encourage critical strategic alliances in two distinct areas:

11
 HALAL Organic Soap

Distributors

The relationship between Zurain (M) Sdn Bhd and the product distributors will be essential.
A flexible distribution system will be critical to the success and growth of our product. Good
distribution will allow our product to satisfy and flexibly expand to accommodate demand.

The Government

By teaming up with government organizations, Zurain (M) Sdn Bhd will be able to utilize
existing body and hand washing compliance programs to reach a much larger potential
audience than could be directly contacted. Government endorsement of our product and
the mention of its benefits in government brochures and written materials could be a major
competitive advantage and sales opportunity for Zurain (M) Sdn Bhd

Financial Plan

Based on market research, we expect the business to begin growing at 45% per month for
the first 12 months, then at a yearly rate of 90% for the next two years. Due to our low initial
investment costs, we can maintain the operations of the business with the cash buffer we
will have from start up. In addition, we will almost immediately have a positive cash flow,
allowing us the flexibility to cover any unforeseen expenses.

Important Assumptions

Sales

• We have assumed no payroll expense for the startup period.

• 100% of sales will be made on credit, the industry standard. Although we do plan to sell
some of our product (mostly for product promotion purposes) to the government agencies
who usually demand substantially longer payment terms, our major target group will remain
commercial entities. As such, we assume, on average, a 45-day collection schedule.

• Customers will pay for all relevant shipping charges.

• To be flexible in meeting the customer demand, we plan to maintain a minimal stock of

product at a rented warehouse and dispatch it from there. The rest of the product we
expect to be shipped from the outsourced producer’s site.

• Once we make the decision to address additional market segments, we will begin
increasing our marketing and sales expenses to represent the expected increase in
costs associated with developing packaging, advertisements, additional promotions,
and creating awareness of our products in the differing markets.

12
 HALAL Organic Soap

Projected Cash Flow

Overall, our business is expected to generate sufficient cashflows. Our cash balance will,
among other things, depend on the level of inventory we’ll decided to keep at a rented
warehouse. At the moment, our projections in this respect are preliminary and we expect to
fine-tune them as the demand for our products grows.

We expect to secure a RM50,000 line of credit in year 3 to finance our receivables, listed as
“New Current Borrowing” in the table below.

In year 5 of operations, we will begin looking at our ability to begin paying back our initial
investors the RM250,000. Although the terms of the additionally sought investment are yet
to be agreed upon, we belief that our investors will provide us with a buffer of some years
before expecting a return on their investment, allowing us the capital and time to expand
and grow at an appropriate or desired rate. Nevertheless, for planning purposes, we have
made provisions to start paying out a modest dividend from the third year of our operations.
Currently, we set dividend payments to be equal to 5% of net profits.

13
 HALAL Organic Soap
Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received
Cash from Operations
Cash Sales RM0 RM0 RM0
Cash from Receivables RM138,736 RM362,031 RM687,858
Subtotal Cash from Operations RM138,736 RM362,031 RM687,858
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing RM50,000
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received RM138,736 RM362,031 RM737,858
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending RM57,600 RM144,000 RM216,000
Bill Payments RM128,381 RM215,710 RM438,395
Subtotal Spent on Operations RM185,981 RM359,710 RM654,395

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent RM185,981 RM359,710 RM654,395

Net Cash Flow (RM47,245) RM2,320 RM83,463

Cash Balance RM29,455 RM31,775 RM115,239

14
 HALAL Organic Soap

Projected Profit and Loss

Our profit and loss projections reflect our expectation that monthly fixed costs will remain
constant over the course of the first year.

Cost of goods sold increases at a decreasing rate, as economies of scale make soap
production cheaper per unit as production volume increases. Based on these projections
the company will become profitable in October, 2005.

Advertising expenses will remain steady during our first year of operations. However,
Advertising and Promotion will grow in years 2007 and 2008 to reflect the purchase of print
ads, PR brochures, and additional promotional content.

Pro Forma Profit and Loss (MYR)

Year 1 Year 2 Year 3

Sales 237,168 450,620 856,177
Direct Cost of Sales 94,867 178,351 321,031
Other 0 0 0
Total Cost of Sales 94,867 178,351 321,031

Gross Margin 142,301 272,269 535,146

Gross Margin % 60.00% 60.42% 62.50%

Expenses
Payroll 57,600 144,000 216,000
Payroll Taxes 0 0 0
Depreciation 0 0 0
Rent 8,400 8,400 8,400
Utilities 1,200 1,200 1,500
Insurance 6,000 6,000 6,000
Telecommunications 1,200 2,500 3,500
Travel 1,800 2,500 4,000
Warehousing 3,600 4,000 4,500
Other General and 1,200 1,200 1,200
Administrative Expenses

Total Operating Expenses 81,000 169,800 245,100

Profit Before Interest and Taxes 61,301 102,469 290,046

15
 HALAL Organic Soap

EBITDA 61,301 102,469 290,046

Interest Expense 0 0 2,500
Taxes Incurred 18,390 30,741 86,264

Net Profit 42,911 71,728 201,282

Net Profit/Sales 18.09% 15.92% 23.51%

Projected Balance Sheet

Once we have established a relationship with the manufacturer, we will purchase inventory
in minimum quantities of approximately 15,000 gallons for approximately MYR20,000 per
shipment (following the initial start-up inventory purchase, at MYR50,000). As sales increase
we expect that inventory turnover rate to increase.

Our only significant Accounts Payable will be Inventory, which are a direct reflection of the
level of inventory on hand. We will be paying off our Accounts Payable in accordance with
sale of inventory. Therefore, as we begin to sell more soap, we will be increasingly capable
of meeting our obligations in a timelier manner, ensuring that we have enough cash on hand
to cover our short term liabilities.

16
 HALAL Organic Soap

Pro Forma Balance Sheet (MYR)

Year 1 Year 2 Year 3
Assets
Current Assets
Cash 29,455 31,775 115,239
Accounts Receivable 98,432 187,021 355,340
Inventory 119,146 34,927 60,193
Other Current Assets 0 0
Total Current Assets 247,032 253,723 530,772

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets 247,032 253,723 530,772

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable 77,422 12,384 38,150
Current Borrowing 0 0 50,000
Other Current Liabilities 0 0 0
Subtotal Current Liabilities 77,422 12,384 88,150

Long-term Liabilities
Total Liabilities 77,422 12,384 88,150

Paid-in Capital 250,000 250,000 250,000

Retained Earnings (123,300) (80,389) (8,661)
Earnings 42,911 71,728 201,282
Total Capital 169,611 241,339 442,621
Total Liabilities and Capital 247,032 253,723 530,772

Net Worth 169,611 241,339 442,621

17
 HALAL Organic Soap

CONCLUSION

Halal Organic Soap is going to be one of the competitor product that is entering the market.
The broad sum of diverse activities performed in the interest of delivering a particular product
to market. The disciplines hold by the product management, as occupational domains
are product planning and product marketing. This is because the product’s functionality is
created for the user via product planning efforts, and product value is presented to the buyer
via product marketing activities.

Marketing is the business function that identifies customer needs and wants, determines
which target markets the organization can serve best, and designs appropriate products,
services, and programs to serve these markets. It guides the entire organization. The goal
of marketing is to create customer satisfaction by building value-based relationships with
customers, in conjunction with other internal and external business units. The end-result
is gaining market leadership by understanding consumer needs and finding solutions of
superior value, quality, and service. It is important to reach the customer at the right time in
the right media. It is also important that when we applying the Marketing Communication
program to introduce the product, we have to be particular about the sensitive isssue to the
Malaysian. It is important that we knew the product before we can market it, so that we are
approaching the right consumer.

18