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.

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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
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 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
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 can’t afford this avenue
yet and isn’t 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. Engineering design
ii. Using precision machinery: outputs, operation, efficiency
iii. Marketing skills
iv. Selling
v. Communication skills
vi. Customer service
vii. Estimating and pricing

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 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 doesn’t have many

written procedures. However, they have written a set of guidelines for all staff outlining
expected behavior’s 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 it’s 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.

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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:

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 i. Full liability Insurance
ii. dedication of the staff
iii. financial resources
iv. good network of contacts for potential clients, suppliers and tradespersons
v. ability to respond to the needs of the market
vi. business is located within the target market
vii. Compliant (health &safety, employment)

4.2 Weaknesses

Focus Manufacturing Services & Consultancy has identified areas where

improvements are required, including:

i. Lack of management skills

ii. Small size of workshop
iii. No current plan for management succession in the short term
iv. Lack of research and development facilities
v. 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. Poor reputation of many existing fabrication businesses.

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 iii. Availability of casual staff and tradespersons.
iv. Availability of display and manufacturing premises within the area.
v. Potential for future expansion of the business into other areas and/or
franchising.
vi. Biohazard licenses and permits.
vii. 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. Poor reputation of the industry in the areas of quality and reliability.

ii. Potential for economic downturns.
iii. Existence of competitors within the industry.
iv. Increasing cost of materials, equipment and subcontractors.
v. Difficulties of getting and retaining suitable staff and reliable
subcontractors.
vi. Possible government regulation.
vii. Geographically diverse market.

4.5 Key issues

From the SWOT, the important issues to consider are:

i. Inexperience and lack of brand awareness.

ii. Sufficient funds for projections but limited resources for growth.
iii. Keeping projects affordable if materials costs increase unexpectedly.
iv. Need to gain knowledge in recruiting and managing staff.

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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. Popularity of oil & gas industry in the area.
iii. Utilizing technology to promote business and keep in contact with staff.
iv. 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.

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5.0 Assumptions

This plan is based on the following assumptions:

i. Tanjung Maintenance Services is only focus in oil and gas product.
ii. Interest rates remain fairly low and steady.
iii. The website won’t require much maintenance once it is created.
iv. TATI Production have not enough skill worker.
v. Materials and equipment costs don’t change much.

6.0 Objectives

6.1 Sales

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

7.0 Strategy

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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
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. All company in Kemaman Supply Base (KSB),
ii. All company in Teluk Kalong Industrial MIEL
iii. Petronas Sendirian Berhad
iv. All Oil and Gas company at Kerteh/Paka area
v. YTL Power Station
vi. Company at Gebeng
vii. Company at Jakar
viii. PFCE

7.3 Branding strategy

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 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.
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 client’s 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. Each project will be cost as part of the quote process.

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 iii. 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%.

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. Always being punctual on finished the jobs and delivered on time.
ii. Providing information resources for local media interesting in
fabrication and design tips.

7.7.2 Advertising strategy

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 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.

7.7.3 Direct marketing strategy

Focus Manufacturing Services & Consultancy will use a lot of direct

marketing to launch the business and will:

i. Conduct a letter box drop of flyers in the industry area.

ii. 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. Discounts during the first month of operation to attract customers.

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 ii. 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.

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

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 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 hasn’t yet produced all of

the procedure manuals. However, procedures are being discussed and prepared to
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 mini-
plan of one year’s 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. Expansion of production facilities.

ii. Expenditure on promotional activities.
iii. 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

10.2 Initial costs

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 Lease(Legal Costs, stamp duty, rent in advance, bond) RM2,500
Electricity, gas and phone(connections and security deposits) RM500
Opening stock RM4,000
Insurance premiums(property damage,public lialibility , vehicle,
theft, personal disability, professional indemnity) RM800
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
Subtotal:RM1600
Total RM9,400

Capital Cost
Business structure(registration, professional fees) RM1,200
Office equipment(desks, chairs, safe, computers, fax,telephone system) RM2,800
Plant and machinery(purchase price, delivery, repairs, installation/commissioning) RM2,000
Building costs(shop front,partitions, electrical wiring and fittings, floor coverings,
toilets, plumbing and drainage, painting, signs. RM600
Display materials RM1,500
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
Subtotal:RM600
Total : RM12,700

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10.3 Possible direct costs for the first year

Subcontractors RM103,300
Materials RM84,300
Wages RM50,400
Work Cover
Group tax/payroll tax
Maintenance and repairs
Waste disposal
Commisions
Royalties
Freight
Subtotal:RM12000
Total: RM250,000

10.4 Possible overhead expenses for the first year

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Rent RM14,400
Outgoings RM1,600
Interests RM2,250
Motor vehicles expenses RM9,600
Advertising and promotion RM12,000
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
Subtotal: RM10,800
Total: 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. Cash book.
ii. Receipt book.
iii. Invoices, received and sent.
iv. Bank deposits and statements.
v. Petty cash expenditure.
vi. Employee service leave records.
vii. Employee details.
viii. Capital assets register.
ix. Materials purchased and allocated to each job or temporarily as floating stock.
x. Contact details of all enquirers, existing clients, suppliers and subcontractors.
xi. Individual job records showing progress.
xii. Job estimates.

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