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SECTION III: MARKETING

A. RESEARCH AND ANALYSIS

1. Target Market

Target market is a group of people that has similar wants and needs which can be
expected to show interest in the same product or services. By targeting a specific
target group, marketing activities can be focused directly upon them, thus
reducing the marketing costs. It is very important to determine target market
because it can help us to focus on the certain customer. Focusing on the wide
range of market could affect all the marketing effort.

Our target market is to sell our service to customers who will use freight
forwarding services persistently so that they will be our regular customer. We try
to sell our services to all customers without boundary to certain customer as long
as it is legal.

2. Market Size and Trends

We have decided to locate our business location in Free Commercial Zone, Kuala
Lumpur International Airport (KLIA). We believe our business will develop
according to strategic place we choose. KLIA is where all the operation happens,
and this will lighten the burden of the customers since we locate near the airport.
Based on our observation research, we conclude that customers choose to have the
forwarding agency near the place that they are used to.

Based on our research, the total market is large which consist of many
competitors. We have identified our 4 main competitors such as AAA Freight
Forwarding Agency, FM Worldwide Logistics Sdn Bhd, Birkart Globistics Sdn
Bhd and Forward Freight Services Sdn Bhd which located near to our business
location and provide almost the same services as ours. From the main 4
competitors, the total market share is almost RM8, 750,000. We still believe with
our new entrance to this business will attract many customers to use our services
since we complete the task according to our company philosophy
(P.E.R.F.E.C.T.).

The demand in freight forwarding agents is really good. So we assume that it


would be no problem for us to do our business there.

3. Competition

Before deciding to form for this business, we already make a complete analysis to
know the competitors position. The benefits will keep us from any undesirable
matter that may arise. Regarding on this analysis, we try to find attractive
opportunities and avoid environmental threats. The solution to this analysis is
analyzing company strengths and weaknesses.

According to our analysis and observation, we found that there are 4 competitors
in our business location and other than that there are also few competitors in the
Kuala Lumpur International Airport (KLIA) area. But we focus more on our main
competitors only where we are going to compete with them. What we did is to
make a comparison and evaluation with these main competitors in order to have
overall view of their business.

So, with the existing business, we have to determine our competitor’s strength and
weaknesses. Below are the list of competitors and their strength and weaknesses.
Name of Address Strength Weaknesses
competitors
AAA Freight Lot 115, 1st Floor, • Offer good and • Expensive charges
Forwarding Agency Customer Service variety of
Centre Building, services
KLAS Cargo • Offer movers and
Complex, KLIA, storage service
Selangor
FM Worldwide Lot E3-A, Block E, • Offer movers and • Not strategic
st
Logistics Sdn Bhd 1 Floor, Southern storage service location
Common Amenities
Facilities,
Suite 4333,
KLIA, Selangor
Birkart Globistics Lot C6, Cargo • Offer good • Provide only few
Sdn Bhd Forward Building, services services
Malaysia Air Line, • Take long time to
Advanced Cargo prepare Customs
Centre, KLIA, documentation
Selangor
Forward Freight Lot C, Malaysia • Offer variety of • Have records
Services Sdn Bhd Airlines Freight services on freight damages
Forwarder
Complex, KLIA
Free Commercial
Zone, Southern
Zone, KLIA,
Selangor

Table 1: Potential Competitors Strengths and Weaknesses

1. Estimated Market Share


Market share refers to the estimated potential sales of the business after taking
into consideration the market size and competitors’ influences.
Calculation
Market Share = Total Annual Sales X 100%
Annual Market Size

Loss in Market Share =


Share Before Entrance X Company’s Share After Entrance
100

Sales = Market Share X Market Size


100

Percentage of Share = (Before – After) % Share

No. Business Name Yearly Sales Before Yearly Sales After % of Loss
Entrance Entrance
RM % RM %
1. AAA Freight
Forwarding 3,150,000 36 2,961,000 31.23 4.77
Agency
2. FM Worldwide
1,837,500 21 1,727,250 18.22 2.78
Logistics Sdn Bhd
3. Birkart Globistics
2,362,000 27 2,220,750 23.43 3.57
Sdn Bhd
4. Forward Freight
1,400,000 16 1,316,000 13.88 2.12
Services Sdn Bhd
5. Zenith Freight
- - 1,255,000 13.24 -
Services Sdn Bhd
Total 8,750,000 100 9,480,000 100 -
Table 2: Estimated Market Share
Sales Forecast

Month Sales (RM)


January* 25,000
February* 35,000
March* 45,000
April* 55,000
May* 65,000
June* 75,000
July* 85,000
August** 100,000
September** 120,000
October*** 150,000
November*** 200,000
December*** 300,000
Total sales for the year 2009 1,255,000
Total sales for the year 2010 1,317,750
(Increase by 5%)
Total sales for the year 2011
1,449,525
(Increase by 10%)
Table 3: Sales Forecast

Notes:
* In this early stage, we expected to have fewer customers because of not being
recognized yet.
** In this stage, we already gain trust from customers and being recognized.
*** We expected to have increased sales because of seasonal factor which big
festival will be held on this date and there will be many requests for this service.

For the year 2010 we expected to have increase by 5% of sales from the year 2009
and increase by 10% in the year 2011 since we will have regular customers and
increase our efficiency and effectiveness of business that will attract other
customers.
4. SWOT Analysis and TOWS Matrix

SWOT Analysis
Item Explanation
Strength Expertise
• Availability of experience and knowledgeable personnel to
advise and guide you

Management
• We have an efficient management
Weaknesses Difficulty to compete with the competitor
• The difficulty in providing our service because we are new in
the market
No warehouse
• We does not have our own warehouse and need to rent from
airport’s warehouse

Opportunities Government support


• Availability to extent business through loan from MARA

Demand from previous client


• Client who satisfy with our service from previous job already
gain trust to cooperate with our new business

Threats High experience competitors


• Have to compete with high experience competitors

Table 4: SWOT Analysis

TOWS Matrix
Strengths Weaknesses
• Availability of experience and • The difficulty in providing
knowledgeable personnel to our service because we are
advise and guide you new in the market
• We have an efficient • We does not have our own
management warehouse and need to rent
from airport’s warehouse
Opportunities SO WO
• Availability to • Using the availability of • With the client who satisfy
extent business experience and knowledgeable and already gain trust with
through loan from personnel to advice and guidance our new business and our
MARA can convince the availability to company philosophy
• Client who satisfy extent business through loan from (P.E.R.F.E.C.T.) can
with our service from MARA. overcome the difficulty in
previous job already providing our service even if
gain trust to cooperate we are new in the market.
with our new business

Threats ST WT
• Although we have to compete • Even though we are new
• Have to compete with high experience competitors, in the market, we can still use
with high experience after analyze the competitors all of our STRENGTH to
competitors strength and weaknesses we can gain trust from our client who
conclude that we have an efficient satisfy with our service thus
management compared to other we can compete fairly with
competitors. high experience competitors.

Table 5: TOWS Matrix