GROUP BUSINESS AND DESIGN PROJECT EAS 5103

Assignment 2 Marketing Plan

Lecturer: Assoc. Prof. Lt. Col. Mohamed Tarmizi Ahmad

Group Members: Mohd Shamsul Azmi Bin Mohd Alim GS 32270 Muhammad Khalil Bin Zakaria GS 32370 Afnan Afif Bin Abdul Mutalib GS 32564 Abdulsalam Zakari Suleiman GS 33300

1.0 Mission Statement

The core activity of Focus Manufacturing Services & Consultancy will be manufacture parts of precision product for oil & gas, and heavy industry also consult the company on manufacturing industry. The business will provide a complete service, including designs, fabrication and supply of the precision parts.

2.0 Current Market Position

Focus Manufacturing Services & Consultancy is a new business and has no existing clients, projects or history to account for. However, the proprietors are experienced in the industry and have the financial capacity to conduct business successfully.

2.1 Product

Focus Manufacturing Services & Consultancy provides materials such as common iron steel and aluminum as part of the fabrication services. All of the materials selected will be of the best available quality suitable for the purpose. Competitors: At this times, we have 3 competitors nearby which have own strengthen and weakness. The competitors are TATI Production Sdn Bhd, Jakar Machinery Sdn Bhd, and Tanjung Maintenace Services.

2.2 Place
Focus Manufacturing Services & Consultancy will have a shop lot which divide into office and workshop partition for people discussion and demonstration. This will allow some demonstration of work and products available and provide a space where projects can be discussed, planned and contracts signed.

Figure: Shop Lot and Plan

Alternatively, Focus Manufacturing Services & Consultancy staff will visit clients yards to discuss projects and sign contracts. This provides a level of customer service that clients like when considering such large projects and expenses.

2.3 Price

Focus Manufacturing Services & Consultancy pricing policy includes: i. High margin ii. Priced for traditional customers iii. Competitively priced against competition for the quality iv. Discounts offered when pricing three concurrent jobs at once (e.g. a design parts, fabrication, and delivery) v. No set prices as each job is quoted according to its requirements vi. Progress payments offered vii. Discount offered for prompt payments
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2.4 Promotion

Focus Manufacturing Services & Consultancy is a new business so there are no existing marketing activities in place. A graphic designer has developed a logo, business cards and letterheads ready to promote the business, and a website is underway. Tanjung Maintenance Services advertised in machine magazines with some success but this is an expensive option Focus Manufacturing Services & Consultancy cant afford this avenue yet and isnt sure of the returns anyway.

2.5 People

Focus Manufacturing Services & Consultancy has collected a team of dedicated and qualified staff. The proprietors have experience in the industry but need training or experience in managing staff. They are providing training for all staff into the preferred service technique and style for the business. The priority areas for staff training will be: i. ii. iii. iv. v. vi. vii. Engineering design Using precision machinery: outputs, operation, efficiency Marketing skills Selling Communication skills Customer service Estimating and pricing

The proprietors plan to develop their basic business skills by attending an eight week course, 'Planning and Starting a Business', at the Cherating Beach by Management Skills company. They will also join the Master Builders Association and attend a number of relevant industry courses.

2.6 Processes
Focus Manufacturing Services & Consultancy currently doesnt have many written procedures. However, they have written a set of guidelines for all staff outlining expected behaviors such as cleaning a work site at the end of each day when operate in their yard or workshop, being helpful and courteous to customers and being punctual to work sites. As part of the business planning process, the proprietors made notes of procedures and will employ the services of a professional writer to create an operations manual.

2.7 Physical Evidence

Focus Manufacturing Services & Consultancy staff will all wear a work shirt with the business logo on the left pocket. This will identify them as part of Focus Manufacturing Services & Consultancy and present a neat, uniform team approach. Initially, staff will not be provided with vehicles but its in the business plan to later provide cars and vans with the business name painted on the side. Once premises are finalized, they will be set up specifically to suit the workshop requirements. Workshop staff will be required to keep the workshop neat and tidy at all times and to be welcoming to customers entering the workshop.

3.0 Market overview

Focus Manufacturing Services & Consultancy understand that the internet is a powerful marketing tool so they are creating a website as an electronic brochure. They also make use of email by providing an email address on all documents and for all staff. Senior staff, such as project managers, will also be using a palm computer and a smartphone to make sure they are contactable and have all required information when visiting clients. The metal fabrication in oil & gas industry is doing well at the moment with interest rates staying at manageable levels. There are many older oil & Gas Company in the area so Focus Manufacturing Services & Consultancy have a lot of potential for work in the foreseeable future. There are news supply base area open in the area that will open for oil & Gas Company for incoming 12 month. The factor of close location between industry area are seen as advantages to Focus Manufacturing Services & Consultancy to get the job contracts and they will pay extra to save themselves time and worry.

4.0 SWOT Analysis

4.1 Strengths

Focus Manufacturing Services & Consultancy have a number of marketing strengths, including:

i. ii. iii. iv. v. vi. vii.

Full liability Insurance dedication of the staff financial resources good network of contacts for potential clients, suppliers and tradespersons ability to respond to the needs of the market business is located within the target market Compliant (health &safety, employment)
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4.2 Weaknesses

Focus Manufacturing Services & Consultancy has identified areas where improvements are required, including:

i. ii. iii. iv. v.

Lack of management skills Small size of workshop No current plan for management succession in the short term Lack of research and development facilities Business is principally dependent on one person during the formative stages

4.3 Opportunities

There is opportunities for metal fabrication business at Teluk Kalong, Kemaman which is why Focus Manufacturing Services & Consultancy is locating itself in that area. The key opportunities available are:

i.

Rapidly growing market due to a preference by oil & Gas Company towards rejuvenation rather than build a new plant.

ii. iii. iv. v.

Poor reputation of many existing fabrication businesses. Availability of casual staff and tradespersons. Availability of display and manufacturing premises within the area. Potential for future expansion of the business into other areas and/or franchising.

vi. vii.

Biohazard licenses and permits. Awareness amongst other industries and sectors.

4.4 Threats

Focus Manufacturing Services & Consultancy will need to be aware of and try to overcome the following threats:

i. ii. iii. iv. v.

Poor reputation of the industry in the areas of quality and reliability. Potential for economic downturns. Existence of competitors within the industry. Increasing cost of materials, equipment and subcontractors. Difficulties of getting and retaining suitable staff and reliable subcontractors.

vi. vii.

Possible government regulation. Geographically diverse market.

4.5 Key issues

From the SWOT, the important issues to consider are:

i. ii. iii. iv.

Inexperience and lack of brand awareness. Sufficient funds for projections but limited resources for growth. Keeping projects affordable if materials costs increase unexpectedly. Need to gain knowledge in recruiting and managing staff.

4.6 Key opportunities

From the SWOT, the key opportunities include:

i.

Providing good customer service that will put Focus Manufacturing Services & Consultancy ahead of market perceptions and earn word of mouth advertising.

ii. iii. iv.

Popularity of oil & gas industry in the area. Utilizing technology to promote business and keep in contact with staff. Good networks allow good service and joint promotion activities.

4.7 Competitor Analysis

Focus Manufacturing Services & Consultancy main competitors are Tanjung Maintenance Services and TATI Production. Tanjung Maintenance Services is only focus in oil and gas product like pipe, flange, motor and pump and so on, but needs to be monitored in case they expand on the precision fabrication. TATI Production have not enough skill worker, also need to monitor in case they hired lot of specialist employee.

5.0 Assumptions
This plan is based on the following assumptions: i. ii. iii. iv. v. Tanjung Maintenance Services is only focus in oil and gas product. Interest rates remain fairly low and steady. The website wont require much maintenance once it is created. TATI Production have not enough skill worker. Materials and equipment costs dont change much.

6.0 Objectives
6.1 Sales

Over the next 12 months, Focus Manufacturing Services & Consultancy will undertake: i. ii. 25 fabrication jobs valued average at RM100, 000 each. Include consultancy in 12 jobs.

7.0 Strategy
7.1 Strategy Introduction

Market research carried out by the project manager/ proprietors reveals an increase in oil & gas fabrication activity in the target market. Such company, especially established company like Petronas and Shell, and the subcontract are increase growth by time. Market research also indicates that some of existing manufacture part do not meet the specification, therefore, the proprietors believe they can gain a competitive advantage through the provision of top quality products and services, access to specialty items and
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innovative designs. The proprietors believe the best marketing strategy combines a good network of contacts, the development of a reputation for quality and reliability and the attainment of personal referrals. This strategy will be pursued through the distribution of brochures, direct contact with oil & Gas Company in selected areas and a small display in the rented business premises.

7.2 Target market

The target market consists of manufacturers or manufacturing divisions of large corporations that move their products through dealers, distributors, or brokers. Some of the companies are listed below: i. ii. iii. iv. v. vi. vii. viii. All company in Kemaman Supply Base (KSB), All company in Teluk Kalong Industrial MIEL Petronas Sendirian Berhad All Oil and Gas company at Kerteh/Paka area YTL Power Station Company at Gebeng Company at Jakar PFCE

7.3 Branding strategy

Focus Manufacturing Services & Consultancy will slowly build up brand awareness for their name and logo. This will be done as part of the overall marketing strategy for the next three to five years. The branding strategy includes ensuring that any marketing or advertising materials, such as business cards and staff uniforms, are created in accordance with Focus Manufacturing Services & Consultancy corporate identity style guide. Focus Manufacturing Services & Consultancy will present its image as trustworthy and reliable.
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Figure : Company Logo

7.4 Product strategy

Focus Manufacturing Services & Consultancy offers personalized service whereby the design is part of the project and can be done in the clients office with discussions. This personalized service is our unique selling point.

7.5 Pricing strategy

Focus Manufacturing Services & Consultancy pricing policy is: i. Supply of built in precision and oil & gas part (such as valve, pipeline) will be done with a 2 percent commission to remain competitive with the retailers. ii. iii. Each project will be cost as part of the quote process. Each project will include a 6% establishment GST (Government Service Taxes). iv. The profit margin on labor of fabrication, materials and direct costs will be 30%.

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7.6 Distribution strategy (place)

Focus Manufacturing Services & Consultancy transports the prepared part and equipment to clients directly, rather than through a distributor.

7.7 Promotional strategy

7.7.1 Public relations strategy

Focus Manufacturing Services & Consultancy wants the reputation of being local manufacture who produce quality results with professional attitudes by: i. ii. Always being punctual on finished the jobs and delivered on time. Providing information resources for local media interesting in fabrication and design tips.

7.7.2 Advertising strategy

Focus Manufacturing Services & Consultancy will start advertising on a small scale until resources increase. Initial advertising will be carried out through letter box drops on industry area, local paper listings and a direct mail campaign to the company in the area. At the same time, the advertising strategy on magazine and online network (such as LinkedIn, Facebook) advertising will be considered along with direct mailing to real estate agents.

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7.7.3 Direct marketing strategy

Focus Manufacturing Services & Consultancy will use a lot of direct marketing to launch the business and will:

i. ii.

Conduct a letter box drop of flyers in the industry area. Create a newsletter to go out monthly to customers and interested people as a reminder of the business and develop a relationship by offering tips and information.

iii.

Add a survey to the website asking people to select which topics most interest them.

7.7.4 Sales promotion strategy

Focus Manufacturing Services & Consultancy will offer some sales promotion tools, including:

i. ii.

Discounts during the first month of operation to attract customers. Discounts for multiple projects (e.g. design and fabricate).

7.7.5 Sales strategy

Initially, there will be no sales staff, but within three months, at least one sales person will be working in the showroom to assist customers. This will allow the owners and trades people to concentrate on quotes and projects. The website includes a contact form to collect information so return contact will be efficient and informative for the potential customer. All staff giving quotes and doing designs will be trained is sales techniques to encourage additional work or appliances without being pushy.
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7.7.6 Packaging strategy

The packaging for Focus Manufacturing Services & Consultancy is delivered the part and equipment in a pristine condition with clean, neat and tidy.

7.7.7 Partnership

A partnership with a local tool and equipment manufacture company will be investigated to ensure clients parts and equipment are meet the standard specification and requirement.

7.8 Services marketing

7.8.1 People

Focus Manufacturing Services & Consultancy staff will always wear a green shirt with the logo on the left pocket and will be instructed to keep equipment and uniform neat and in good condition. Staff meetings will include discussions on sales techniques and customer service. After six months of operations, a service staff of the month awards program will be introduced. A list of award winners will be prominently placed in the showroom. Feedback forms for customers will always include a question on staff performance and manner to capture all kinds of feedback.

7.8.2 Process
Focus Manufacturing Services & Consultancy hasnt yet produced all of the procedure manuals. However, procedures are being discussed and prepared to

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include quote processes, sales behavior, care of customers parts, security and confidentiality, customer service and invoicing procedures.

7.8.3 Physical evidence

Focus Manufacturing Services & Consultancy will take before and after photos of every project and present them in a folder as a memento for the customers. All projects will be cleaned up at the end of each day and thoroughly cleaned at the completion. The finished part and equipment will be wrap up with stretch plastic in vacuum condition. Staff will all wear a blue shirt with the company logo and eventually, company vehicles will carry the logo as well.

8.0 Resource requirements and budgets

Focus Manufacturing Services & Consultancy has the marketing plan that include a miniplan of one years operations. This includes details about how to achieve the overall objectives and costs for various activities.

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, Online Network

8.1 Evaluation and control

Focus Manufacturing Services & Consultancy will review the marketing plan every month to assess progress and alterations as the business progresses. After six months, this may reduce to every second month if marketing is under control and working effectively.

9.0 Business growth and development

Focus Manufacturing Services & Consultancy will keep abreast of new products, technology and production methods. They will be in regular contact with local and overseas suppliers. Marketing techniques will be monitored. Any techniques deemed successful will be expanded and those which are unsuccessful will be abandoned. The proprietors are especially conscious of the need to continually monitor the financial position of the business. Monthly comparisons will be carried out between actual sales, profitability and cash flow, and their
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projections. The cost of each job will be compared with estimates to ensure that future estimates remain accurate and profitability is achieved. The business will not be profitable in the first year. However, projections indicate it will be profitable in subsequent years. Profits will be put back into the business in order to aid growth and development, with a focus on the following areas:

i. ii. iii.

Expansion of production facilities. Expenditure on promotional activities. Reserving cash to pay for the greater volume of materials, labor and subcontract work associated with a higher level of business activity.

All unsuccessful quotations will be analyzed. Prospective customers will be asked to provide comment on why they rejected the quotations, and information gained this way will be used to monitor the effectiveness of pricing and sales strategies.

10.0 Financial forecasts

10.1 Exploratory costs
Accomodation Accounting fees Business planning Consultants Entertainment Legal Fees Market Research Publications Sample Telephone,fax, letters, photocopying Translations Travel Valuation fees Total :

RM2,600

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10.2 Initial costs

Lease(Legal Costs, stamp duty, rent in advance, bond) Electricity, gas and phone(connections and security deposits) Opening stock Insurance premiums(property damage,public lialibility , vehicle, theft, personal disability, professional indemnity) Printing and artwork Wages Credit card establishment fee Initial promotion Promotional cost Loan establishment cost Stationery and office supplies Computer software Installation Training Statutory charges(licences,permit and registration) Subscriptions for publications Association membership fees Total Capital Cost Business structure(registration, professional fees) Office equipment(desks, chairs, safe, computers, fax,telephone system) Plant and machinery(purchase price, delivery, repairs, installation/commissioning) Building costs(shop front,partitions, electrical wiring and fittings, floor coverings, toilets, plumbing and drainage, painting, signs. Display materials Purchase Price of business Franchise fee Training Shop fittings(counters, racks, shelving, storage, decorations) Security system Trade marks, design and patents(registrations and patent attorney fees) Reference materials Land Total : RM1,200 RM2,800 RM2,000 RM600 RM1,500 Subtotal:RM1600 RM9,400 RM2,500 RM500 RM4,000 RM800

Subtotal:RM600 RM12,700

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10.3 Possible direct costs for the first year

Subcontractors Materials Wages Work Cover Group tax/payroll tax Maintenance and repairs Waste disposal Commisions Royalties Freight Total:

RM103,300 RM84,300 RM50,400

Subtotal:RM12000 RM250,000

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10.4 Possible overhead expenses for the first year

Rent Outgoings Interests Motor vehicles expenses Advertising and promotion Bank charges Hire Purchase Payment Lease Payment Insurance Payments Accounting Payments PAYG TAX Legal fees Staff amenities Electricity and gas Postage Entertainment Travel and accomodation Subscriptions Total: RM14,400 RM1,600 RM2,250 RM9,600 RM12,000

Subtotal: RM10,800 RM54,650

Total first year overheads (RM 50,650) + exploratory and initial costs (RM12,000) =RM 62,650 overheads for the first year of business

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11.0 Records
Focus Manufacturing Services & Consultancy will maintain sufficient business records to demonstrate the financial position of the business on a monthly basis. Financial records will compare profitability with projected profit/loss and cash flow statements. Records will also be kept for each job to show its progress and cost in labor, materials and subcontractors. These will be regularly compared with estimates for that job. The following specific records will be kept: i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. Cash book. Receipt book. Invoices, received and sent. Bank deposits and statements. Petty cash expenditure. Employee service leave records. Employee details. Capital assets register. Materials purchased and allocated to each job or temporarily as floating stock. Contact details of all enquirers, existing clients, suppliers and subcontractors. Individual job records showing progress. Job estimates.

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