CENTRE FOR FOUNDATION STUDIES

FHBM1124 MARKETING

SEMESTER 201901

Tutor name:
Ms.Nalini a/p Panneer Selvan

Tutorial Group : T5

Company name:
Hwa Thong Bags Industries Sdn Bhd - SWAN®
\
Prepared by

No ID No. Name
(alphabetical order)
1 18UHF01955 Jenny Ee Xue Zhen
2 18UHF02868 Kong Hui
3 18UHF05534 Lim An Chie
4 18UHF05570 Ng Qing Xuan
5 18UHF01874 Pang Yue Cheik
6 18UHF01817 Tau Li Bing
7 18UHF01856 Yong Jian

Date of submission: 22nd March 2019

Content Page
 Number Contents Pages

1 1.1 Introduction 1-2

2 2.1 Product Strategy 3-4

3 2.2 Pricing Strategy 5-6

4 2.3 Place Strategy 7-8

5 2.4 Promotion Strategy 9 - 10

6 Conclusion 11

7 References and Appendices 12

1.1 Introduction
SWAN® is an in house brand of the Hwa Thong Bags Industries Sdn Bhd which founded
in 1951 and with the history of over 65 years. Hwa Thong Bags Industries Sdn Bhd
started its operations from a mere three story shop lot in Taman P. Ramlee, Setapak,
Kuala Lumpur and has expanded its operations steadily from a small family business into
one of the largest manufacturers and distributors of bags in the country. Ong Seng Wah,
the founder of Hwa Thong Bags Industries had the inspiration and desire to fill a niche
market in the school bag industry. As Hwa Thong began to garner a rapidly growing
market share, an in house brand, Swan, was born to personify the commitment of the
founder to quality, value-added attributes and contemporary styling. Today, Swan has
grown to be a household name in the bag industry and in many school children's lives for
many years. Among many Malaysian school-going children, the SWAN® brand of
school bags definitely rings a bell. The famous brand has captured 85% market share in
the local school bag manufacturing industry. SWAN® is a trendsetter in the school bag
industry with new designs and materials continuously being developed. Heading the
needs of school children who have to carry a heavy load of textbook to school everyday.
SWAN® Bags are reliable, durable and light. SWAN® has a huge product range, other
than school bag SWAN® also produce school uniform, socks, school shoe, pencil case,
student belt, watches, water bottle, kid apparel and also co-curriculum uniform.
Currently, the products are sold nationwide in hypermarkets, leading departmental stores,
independent luggage stores as well as the Swan outlets. Hwa Thong has set up
manufacturing plants in Malaysia and in China. Swan has expanded operations and
established many SWAN® Distribution outlets all around the Klang Valley regions. In
future, it plans to increase the number of outlets covering more Malaysian regions. In
conjunction with the ever evolving world of internet and computers, SWAN® has
established an online purchasing website for customers to buy bags that can be delivered
right up to the customers' door-step. The distribution channel will continue to increase to
better serve the Malaysian customers with greater ease. Hwa Thong is a successful family
run business run for over 50 years. Over these years, Hwa Thong's success was a result of
many hard working and dedicated people that form the Hwa Thong family. At current, its
operations were passed on to 3 generations to manage and continuously it has grown to
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be a success. There are also a few of achievements and award receive by SWAN® which
included Superbrands Award, The Brand Laureate Award, E-Entrepreneur Award, SMIB
Recognition Award, Malaysian Emerging Brand Award, Most Promosing Award,
Business of the Year Award Golden Bull Award and KERIS Award. Hwa Thong Bags
Industries intends to strengthen its current bag products by providing customers with
greater satisfaction and better quality. At current, Hwa Thong is a strong major player of
bag manufacturing and distribution in entire Malaysian market. Hwa Thong intends to
expand its operations to various international markets in the near future. Their vision is to
continuously serve our customers with products of state of the art quality and standard.
We welcome the challenge of an increasingly competitive future. Hwa Thong will
continue to “Think Global and Act Local”. With this in mind, Hwa Thong will grow
internationally however adapting to the needs of different countries.

2.1 Product Strategy

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SWAN is a trendsetter in the school bag industry. SWAN is leading school bag brand in
Malaysia, with selling high quality bags to children and teenagers. They had came out the
5 wheels trolley school bag to kindergarten so this time they decided to came out a new
bag to teenagers nowadays which is the solar charging bag.

Product Classification
SWAN solar charging bag is a consumer product, which can be categorized as the
convenience product. The SWAN solar charging bag is segmented under convenience
product as SWAN is targeting large market. The price is not very expensive so that the
customers will feel that is affordable. Besides, the company sell a large volume of
product in order to make profit. This product will bring a simple life to the customers
who buy this bag.

Three Level of Production

FIRST LEVEL:CORE BENEFIT
The core benefits of this product is to bring convenience to customers; customers enable
to charge their mobile phone when it is battery low. Our customers do not need to buy
another ‘power bank’ to charge their mobile phone. This can help the customers to save
their money.

SECOND LEVEL:ACTUAL PRODUCT

Features
SWAN solar charging bag can help the customers to charge their mobile phone or even
laptop at anywhere and anytime. For example, if you are in a shopping mall and your
mobile phone in a battery low condition, you can just charge your mobile phone by using
the solar charger in the bag in order to avoid any inconvenient if there is an emergency
happened. Besides, the material of the bag, waterproof nylon material, is very light but
strong. It is easy to carry and the strong material can help the bag to bear heavy things
such as laptop, books and other needs. Besides, the waterproof nylon also can protect the
bag and what the customers put inside from the damage by rainy day.
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Packaging and design
Our company will use the best cardboard boxes to avoid the collision during
transportation to the customers’ houses. Furthermore, there have the instruction notes
inside the box to information how to use and clean the bag when the bag is dirty. This can
help the customers to use the bag in a correct way to prevent it from broken.

Our company also designed the bag to a bigger space bag in order to let the customers to
have more space to put more things inside it. We also used heat resistant fabric, a
material which can resistant heat, to cover around the solar charger to prevent over heat
while using the charger. The solar panel will place at the outside of the bag to absorb the
sunlight effectively.

THIRD LEVEL:AUGMENTED PRODUCT

SWAN solar charging bag will provide two years warranty and twice free repair service
to the customers. We will receive the bags which need to be repair from any states in
Malaysia. We also often the changing solar panel service to our customers if the solar
panel is not work anymore.

2.2 Pricing Strategy

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Solar Panel Bag is our SWAN company’s new product. Pricing strategy refers to method
companies use to price their products or services. The price of the product is based on the
cost for producing and distributing. So that, the product’s prices will be coordinated with
the design of product quality and promotion decisions to form a good marketing program.
Our company were setting prices based on the cost for producing, distributing, and
selling the product plus a fair rate of return for its effort and risk. Our Company with
lower costs can set lower prices that results in greater sales and profits.

First and foremost, we use the cost based pricing methods cost plus pricing to add the
standard mark up to the cost of the product. We also decide to make a break even analysis
target profit pricing setting price to make a profit. So that, our company set our new
product price as RM388 for normally prices and the special prices is RM308. The
product has two different option.

After that, our company new product is making with a better quality by using a light
material for the body and it is a backpack bag. It is easy for the student and office worker
to carry out. So that these features will allow with the price that we set and ensures our
customer will buy our product.

Other than that, our product market type is monopolistic competition. They are many
sellers and buyers in the market so that we trade over a range of prices. The product mix
pricing strategy of our product is captive-product pricing. Our company generally follow
a product-mix pricing strategy that involves offering a lower price for the core product
but placing a higher mark-up on captive products. This strategy is to attract customers to
a product with a low price, then make a profit off the captive products necessary to use
the product. For example, we will give customer some discounts RM80, if they buy more
than two of our product they can get the special prices RM308. Both of the prices can get
1year warranty and some free gift. Moreover, we also have our online stores for
customers to buy this product. Delivery charges will be applied and different charges for
East and West Malaysia.
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Last but not least, we have chosen the market skimming pricing strategy. Price skimming
is a pricing strategy in which a marketer sets a relatively high initial price for a product or
service at first, then lowers the price over time to attract the new customers. The
product’s quality and image must support its higher price and enough buyers must want
the product at that price.

Buy one can get 1year warranty and some gift with:
Normally price RM388
Buy more than one gets discounts RM80 1year warranty and some gift with:
Specially price RM308

2.3 Place Strategy

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Place strategy plays fundamental role in the marketing mix of a product or services. Place
strategy outline how and where will place its products and services in an attempt to gain
market shares and consumer purchases. This component is sometimes referred to as
distribute strategy and may include stores, both physical and online, and any other means
by which the company reach customer. Therefore, the SWAN company activities that
make the Solar Panel Bag product available to target the consumer.

The SWAN company understand the need of the customer and determine which avenue
provides best ability to put the Solar Panel bag and its services in front of the potential
buyer. Besides, the SWAN company increase its sales and maintain these over a longer
period of time through the use of the right place and way.

The major way used by Swan company is sold their product through retail outlet and
store. Swan company has its own exclusive stores in which the materials is provided
directly from the company. On the other hand, the Solar Panel bags are sold through
online medium via swan store.com via the online website of Swan. They have an
organized official web system to handle the product distribution. Besides this, they have
merged with other sites to sell their goods through their shopping portals. Thus, the
distribution channel of Swan company is as follow:

1) Retail Outlet/Store

2) SWAN Online Store

For example, the retail store for solar panel bag is specialty store. It will focus on one or
two specific categories and have a very narrow line. However, the customer will find
many things in that store related to that specialty which customer might not find on the
open market. Besides, many customers are preferring the online store. This is because
online shopping is very convenience, customers do not need go to the store and they can
directly to buy the bag via Swan online store.
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Due to the excellent brand equity of SWAN, the operating margins are fairly high thereby
keeping the distribution channel motivated. A happy distribution channel means better
promotion for the company.

2.4 Promotion Strategy

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Promotion is about attracting the right people to buy your products. There are many
techniques that can be combined in many ways to create the most cost-effective strategy
for your needs, including advertising, personal selling, direct marketing, sales promotion,
and public relations.

Firstly, SWAN company can advertise the Solar Panel Bag by print (newspapers,
magazines, billboards, and flyers), broadcast (television and radio), and on the Internet as
advertisement is one of the effective way that can communicate with large audiences and
it can create brand images and symbolic appeals of SWAN.

Besides, SWAN can use personal selling tool by hiring some sales forces so that their
sales forces can promote the product to customers directly. They can let more customers
know about the usefulness and advantages of the Solar Panel Bag as well as SWAN can
build customer relationship.

SWAN company can have direct marketing to promote the Solar Panel Bag which by
engaging directly with carefully targeted individual customer. By using direct marketing
tools, SWAN can obtain immediate response from customer and it can cultivate lasting
customer relationships.

Moreover, SWAN can have sales promotions often attract the customers who are
primarily looking for low prices and high quality and not loyal to a particular brand. For
example, SWAN can have 30% to 50% promotion sales when the school season is
coming in order to attract the customers. Therefore, especially in markets with highly
similar brands, sales promotions can lead to short-term sales growth of SWAN company,
but there is little permanent in market share. On the contrary, in markets where brands are
quite not similar, sales promotions can change market share more permanently.

Lastly, SWAN company can also build public relations as it usually involve a less
commercial form of communication compare to advertising and sales promotion. The
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main purpose of building public relations is to disseminate information and opinions to
groups and individuals who have a real or potential impact on the ability of company to
achieve their objectives. For example, SWAN can sponsor some sports event so that the
events audiences can aware about the Solar Panel Bag while enjoying the event. Besides,
SWAN company can organize a charity for helping people who need helps and they can
promote the Solar Panel Bag to those people who participate the charity. Therefore, it can
reach many prospects who avoid salesperson and advertisement. Public relations also
able to dramatize Solar Panel Bag.

Conclusion
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Solar Panel Bag is a bag that has a solar panel on the top. The purpose of insertion of the
solar panel on the bag is to create conveniences for people nowadays. The solar panel on
the top of the bag is to absorb the solar energy and turn to electric energy which can
charge smartphones, laptop and etc. This charging function is very convenient for
students and workers nowadays as electrical things like smartphones and laptop are
important things that can help them to do their works and tasks. Besides, bag can be
carried to anywhere and any places so that the user of this solar panel bag don’t need to
worry about the charging problem for the electrical things like smartphones and laptop
when those electrical things are out of battery. On the other hand, this transformation of
solar to electric energy is an environmental friendly function as solar energy is renewable
resources so that this function can help to reduce the usage of unrenewable resources and
it can help to protect the environment. Furthermore, it also have low maintenance cost as
solar energy systems generally don’t require a lot of maintenance so that most of the
people are able to afford this Solar Panel Bag.

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References and Appendices

 http://www.swanbag.com/html/aboutus.aspx

https://www.britannica.com/topic/marketing/Sales-promotion

https://www.greenmatch.co.uk/blog/2014/08/5-advantages-and-5-disadvantages-of-
solar-energy

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