FACULTY OF BUSINESS & MANAGEMENT

SEMESTER JANUARY / 2011

BBPM2203

MARKETING MANAGEMENT II

MATRICULATION NO : 820822065772001
IDENTITY CARD NO. : 820822-06-5772
TELEPHONE NO. : 016-338 2477
E-MAIL : [email protected]
LEARNING CENTRE : SHAH ALAM LEARNING CENTRE
MARKETING MANAGEMENT II BBPM2203

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1.0 TABLE CONTENTS

1.0 Table of Contents ________________________________________ 1-2

2.0 Executive Summary______________________________________ 3

3.0 Company Description ____________________________________ 4

3.1 Brief description of the company ________________________ 4

3.2 Brief description of the new product and strategic role in the
future position of the company __________________________ 5

4.0 Situational Analysis ______________________________________ 5

4.1 Political _____________________________________________ 5

4.2 Economical __________________________________________ 5
4.3 Socio-Cultural ________________________________________ 6
4.4 Technologies _________________________________________ 6
4.5 Competition _________________________________________ 6~7
4.6 Environmental _______________________________________ 7
4.7 Sales ________________________________________________ 7

5.0 SWOT Analysis__________________________________________ 8

5.1 Strengths ____________________________________________ 8~9

5.2 Opportunities ________________________________________ 9~10
5.3 Weakness ____________________________________________ 10
5.4 Threats _____________________________________________ 11

6.0 Marketing Objective______________________________________ 11

6.1 Target Market _______________________________________ 11~12

6.2 Positioning __________________________________________ 12

7.0 Marketing Mix Strategy___________________________________ 12

7.1 Product _____________________________________________ 12

7.2 Price ________________________________________________ 13
7.3 Place ________________________________________________ 13
7.4 Promotion ___________________________________________ 13

8.0 Marketing Research ______________________________________ 13~14

9.0 Implementation__________________________________________ 14

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9.1 Quality Control System ________________________________ 14

9.2 In Case of Slow Sales __________________________________ 15

10.0 Budget _______________________________________________ 15

10.1 Break-even Analysis __________________________________ 15~16

11.0 Control _______________________________________________ 16

12.0 Appendix A ____________________________________________ 17

13.0 Reference ______________________________________________ 18

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2.0 Executive Summary

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3.0 Company Description

3.1 Brief description of the company
The Group had its beginnings in 1965, with a company named Keat Radio & Electrical
Co., a sole proprietor business, which was a retailer for electrical appliance at Balik
Pulau, Penang. The sole proprietor business was subsequently incorporated into a private
limited company in 1977 under the name of Keat Radio Co. Sdn Bhd. Then in 1982,
Pensonic Sales & Service Sdn. Bhd. was set up with various branches throughout the
country to accommodate the increase in business. “PENSONIC” brand name was
registered under the trademark no. 84/01379 up 1984. In 1988, PENSONIC started to
manufacture and assemble its own products under the brand, “PENSONIC”. Amongst the
products manufactured then were slow cookers, table fans, blenders, thermo- flasks and
hair dryers. Since then, PENSONIC has emerged into producing high quality household
appliances throughout the country. PENSONIC was the first brand of “Made in
Malaysia” electrical products registered in Malaysia, the management of the PENSONIC
group is looking at increasing the local materials composition of PENSONIC products
and eventually manufacturing them as 100% local products. This would reduce the
dependency on foreign suppliers; result in lower manufacturing cost and foreign
exchange saving for the government. Currently, with the newly set up Factory occupying
some area of 3 acre in Bukit Tengah Industrial Park, Penang, with more than 10 assembly
lines, and total PENSONIC workforce of more than 400 employees, PENSONIC had
indeed increased the efficiency and effectiveness in operation, sales and services
distinctively. Over the years, the name PENSONIC has become synonymous with
reliability and durability and the group has evolved into a well- known player in the home
appliances market. In response to the Government’s call, PENSONIC is gearing towards
automation to produce communication device besides to further improve technology in
electrical items to cater for export, in particular to ASEAN, Middle East and South
countries (PENSONIC).

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3.2 Brief description of the new product and strategic role in the future position of
the company

The purpose of this proposal is to analyse the feasibility of launching the new product (P-
PHONE) into highly competitive Telecom market. “P-PHONE” will be positioned as the
first and only smartphone fully made by Malaysia. The “P-PHONE” will have combining
features of a mobile phone with PDA (Personal Digital Assistant). It features differs from
a normal mobile phone in that it has a distinct software operating system and local
storage, so users can add and store information, send and receive e-mail, and install
programmes to the phone such as music and video applications, web browsing and GPS
apart from chat, notetaking and media playback. The strategic role of “P-PHONE” for
PENSONIC company is centered around three objectives:
 To stay at the forefront as the market leader in innovative product introductions
and successful product launches;
 To strengthen and satisfy the needs of the more adventures Generation Y
consumers with a new eye-catching and functional product;
 To become the market leader in the functional communication segment with
increased market share.

4.0 Situational Analysis

4.1 Political Situation

 As require by governments, PENSONIC should study the taxation country by

country in anticipate profitability and pricing strategy.
 Countries are very variable in stability of, so we should study each country case
by case.

4.2 Economical

 Economy recovering post recession slower than forecasted.

 Low marketing potential due to high competition in Telecom sector.

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4.3 Socio-Cultural

 Population growth leading to expansion of the sector needs for mobile phones.
 People depend more an more on mobile communication everywhere.
 There id educational growth in the world.
 Culture’s perception of the technology devices is positive worldwide.
 Literacy and illiteracy level is not affecting using mobile phone but affecting high
technology mobile phones, this fact needs to be considered.
 Acceptance of imported products in some countries is less if there is local
provider.

4.4 Technology

 Level of technology in the world is increasing.

 Internet level of awareness and usage for individuals and industrial aspect are
increasing in worldwide.
 New technology in the mobile phone is increasing.
 Future plans for technology linkage between cities, universities, colleges,
hospitals and other institutes are increasing and can be connected to mobile
phones.
 Level of usage of the E-Technology for example online biding, billing,
complaints, blogging and etc are high and trendy.

4.5 Competition

 According to the world's leading information technology research and advisory

company Gartner, Inc there are more than 10 big companies competing at the
world level market. The table below shown the top 5 mobile phone maker for
Third Quarter 2010 are Nokia, Samsung, LG, Apple and Research In Motion
(Gartner, 2010).

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3Q10 3Q10 Market 3Q09 3Q09 Market

Company Units Share (%) Units Share (%)
Nokia 117,461.0 28.2 113,466.2 36.7
Samsung 71,671.8 17.2 60,627.7 19.6
LG 27,478.7 6.6 31,901.4 10.3
Apple 13,484.4 3.2 7,040.4 2.3
Research In Motion 11,908.3 2.9 8,522.7 2.8
Sony Ericsson 10,346.5 2.5 13,409.5 4.3
Motorola 8,961.4 2.1 13,912.8 4.5
HTC 6,494.3 1.6 2,659.5 0.9
ZTE 6,003.6 1.4 4,143.7 1.3
Huawei Technologies 5,478.1 1.3 3,339.7 1.1
Others 137,797.6 33.0 49,871.1 16.1
Total 417,085.7 100.0 308,894.7 100.0

Table 1: Worldwide Mobile Terminal Sales to End Users in 3Q10 (Thousands of Units)

4.6 Environmental

 The global concern of the Global Warming issue and other pollution effects
concerning the packaging material and radiation of the mobile phone.
 The demand of the international environmental approvals is a must (if there is
any)

4.7 Sales

 Mobile phone industries are one of the most profitable industries everywhere and
the market is increasing.

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5.0 SWOT Analysis

5.1 Strengths

 Innovative

The P-PHONE has an innovative touch screen. It also has many functions of other
mobile phones all in one device. Effectively, it is purposed to provide users the
better of the two worlds of voice service and “computer” capabilities in a handset.
To put it simply, it is a mobile phone with PDA (Personal Digital Assistant)
functionality. P-Phone differs from a normal mobile phone in that it has a distinct
software operating system and local storage, so users can add and store
information, send and receive e-mail, and install programmes to the phone such as
music and video applications, web browsing and GPS apart from chat, notetaking
and media playback.

 Compatibility

The P-PHONE will work with some of the PENSONIC home appliance devices.
Such optimum capability will obviously offer people a wider choice to carry P-
PHONE which offers both cellular based voice and Internet connection with PC-
like functionality.

 User Friendliness

The all new touch screen interface recognizes multi finger gestures, just as the
human hand normally behaves. Its dual touch and virtual keyboard make the size
of the screen is getting bigger and more colorful. This is following the trend of
customer based multimedia entertainment.

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 Price

The price of the P-PHONE would be sold at a reasonable price for its value.

 Quality

In term of quality, it is cover by a high quality of scratch resistant screen on top of

durable and light metallic finish. In additional to that, it also furnish with security
software to protect the P-PHONE against loss and stealing while safeguarding the
user privacy data from cyber criminals.

5.2 Opportunities

 Increasing in demand and expansion to a new target segment

Worldwide mobile phone sales to end users totaled 417 million units in the third
quarter of 2010, a 35 percent increase from the third quarter of 2009, according to
Gartner, Inc. Smartphone sales grew 96 percent from the third quarter last year,
and smartphones accounted for 19.3 percent of overall mobile phone sales in the
third quarter of 2010 (Gartner, 2010). This has been proof that the demand of the
smartphone is keeping increasing over year by year due to it technologies
enhancement

 Upgradeable

P-PHONE software allows new exciting features to be brought in which take

advantage of the touch screen ability. Future version will also be hardware
upgradeable.

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 Partnerships

PENSONIC can collaborate with many powerful global mobile phone companies
to penetrate the market with P-PHONEs, which reduces costs in marketing and
increase revenue through long-term agreement deals while at the same time,
creating a brand-awareness as a trusted brand in the market through such
collaborations. Although diversification to the telecom market is a new challenge
for PENSONIC, market awareness of PENSONIC as a good brand in the electric
home appliances market has already been established.

5.3 Weakness

- Image

The PENSONIC brand is not targeted towards business people and does not have
a reputation as being compatible with the corporate world.

- Price

PENSONIC does not yet offer lower priced models for more cost conscious
consumers.

- User Interface

The touch screen interfaces suffer from the problem of “gorilla arm”. “Gorilla
arm” was a side-effect that destroyed vertically-oriented touch-screens as a
mainstream input technology despite a promising start in the early 1980s
(Wikipedia).

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5.4 Threats

- Competition Increasing

Smartphones are easier to make now more than ever. More companies may enter
into the market segment, and competitors or even PENSONIC contractors can
maneuver around patents to create similar device.

- Downward Pricing Pressure

The P-PHONE is marketed as a high-end phone, but phone price are almost
certainly going to fall when other competitors undercut the price of P-PHONE.

- Difficulty Penetrate Into Asian Market

There have difficulty to penetrate in Asia market since other brand of
smartphones are better known and already widely used.

6.0 Marketing Objectives

• Set an achievable objective for the first and second years of market:
First Year Objective – We are aiming for a 2 percent of share from Asia market
through the sales volume of 450,000 units.
Second Year Objective – To achieve 10 percent of share from Asia market based
on sales.
• Extend on the PENSONIC brand name and link to the established meaningful
positioning.
• Extend on PENSONIC image by innovation, quality and value.
• Measures the awareness and response of the market in order to make adjustments
to the marketing campaigns as necessary.

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6.1 Target Market

 Differentiate the P-PHONE from other brands of smartphones in the

market.

 Primary consumer targeted is the middle-upper income professional to

coordinate their busy schedules and communicate with colleagues, friends and family.
 Secondary consumer targets are high school, college and graduate students
who need one portable multifunction device.
 Primary business target is to collaborate with large mobile communication
provider like Maxis, Digi and Celcom.
 Secondary business target is mid to mid size corporation that want to help
managers and employee stay in communication or access critical data on the go.
 Market segment will consist of companies with RM10 million to RM50
million in annual sales.

6.2 Positioning

 Using product differentiation, positioning the P-PHONE as the versatile, convenient,

value-added device for personal and professional use.
 Focus on the features of multifunction which having one device for communication,
but also music, pictures, and video as well as full Internet access.
 The P-PHONE will be promoted as both professional and hip.

7.0 Marketing Mix Strategy

7.1 Product

 Full year warranty along with an optional for three years PENSONIC Care Warranty
 Same quality as all other brand of smartphone
 Special edition version to be launched in conjunction with PENSONIC anniversary

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 Launching a cheaper version with less advanced features along with a more advanced
version for professional use
 Adding the following features to the P-PHONE (large disk storage capacity, lower
weight, thinner device, long battery life, 4G wireless, GPS and improved camera)

7.2 Price

 Set the base model at a cheaper price of RM1,299

 A more advance model for RM1,699
 Special limited edition P-PHONE for special prices
 Generally lower our prices to ensure we establish market dominance in as short of
time as possible

7.3 Place

 Massive rollout worldwide at all reputable major retailers

 Massive rollout through online, showrooms and in all mobile phone suppliers
 Eye catching displays will be found at most of the big shopping mall featuring the P-
PHONE to make the product stand out from the pack

7.4 Promotion

 Integrate PENSONIC message of all new communications and audio or visual

experience together in all media advertisements
 Differentiate the P-PHONE with other brands of smartphone
 Emphasize PENSONIC brand prominently and associate the P-PHONE with others
PENSONIC home appliance’s groundbreaking lineage
 A massive TV campaign shall be planned before launching the P-PHONE featuring a
soon to be legendary ad to be talk of the country
 Advertising will be appearing on a regular basis to maintain general public awareness

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8.0 Marketing Research

 Four age groups will targeted: 15~20 years, 20~25 years, 25~45 years, and 45
years and above
 High school and college aged people will demonstrate social uses
 The 25~45 years group will be used to determine business application and social
or personal use
 The 45 years and above will give us a plan to market to more senior well-retired
group
 This researcher will be done through surveys (via email campaign through portals
such as other online application developed for P-PHONE) and interviews (in big
shopping mall) with the same age groups listed before
 To bring the P-PHONE to the front of the business world it is important to
research different ways to grow the 15~25 years old group into business uses of the
product
 Brand awareness will be an important tool in taking the PENSONIC brand from
“social cool” to “business cool”
 We will ask for feedback on P-PHONE features, and modify the significant
features according to the end user’s need in the next generation P-PHONE
 We will allow users themselves to design their own ideal P-PHONE through
online and use any useful ideas to further refine future P-PHONE models

9.0 Implementation

9.1 Quality Control System

 Workers will get RM8 incentive pay for every non reject phone they produce
 RM40 per phone for Six Sigma quality program. Six Sigma seeks to improve the
quality of process outputs by identifying and removing the causes of defects (errors)
and minimizing variability in manufacturing and business processes (Wikipedia).
 Each workers will be given RM5,000 each year for best practice training
 Use control measures to closely monitor quality and customer service satisfaction

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 Setup a specify P-PHONE Customer Service Bar to allow the customer to contact
about any technical problems and a customer service phone number stored in the
phone book

9.2 In case of Slow Sales

In case of slow sales, offer P-PHONE to customers who have purchased other
PENSONIC products with a special price RM20 per phone for six sigma quality program,
which will lead to demonstrate the product for consumers in order to promote synergy
and lure buyers. Besides that it also will develop deep relationship with two very
different segments which are those who have it and those who aspire.

10.0 Budget

10.1 Break-even Calculation

Based on Assumption:

*Wholesale revenue is RM1,818 per unit

*Variable cost is RM499 per unit

*Estimated fix cost of RM50,000,000

Break-even calculation for base model:

Total Cost = Total Revenue

Variable Cost + Fixed Cost = Unit Price x Total Quantity Sold

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499q + 50,000,000 = 1818q

499q – 1818q = -50,000,000

-1319q = -50,000,000

q = 37,908 units

 Break-even calculations indicate that PENSONIC will become profitable after the
sales volume exceeds 37,908 units. PENSONIC will make a profit of approximately
544 million after the first year sales of 450,000 units. Details of data can be referred
to Appendix A.
 Recommended price is RM1299 per unit for base model. The markup is 40 percent.
 It is predicted that sales volume will increase at least 30 percent from this change; this
will decrease the impact of fixed costs and improve opportunities to increase our
production scale, which will further improve profits in the long run

11.0 Control

To plan our strategy we will meet monthly with the board of PENSONIC, present our
information, and make a proposal for continued marketing efforts. Before each meeting
our team will meet in private, with each person presenting their own proposal based on
the information they have learned. After the initial proposals, we will vote on the best one
or come to a compromise. The final proposal sent before is the result of that meeting.

Total Words Count:

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12.0 Appendix 1

Table 1: Data Source for Break Even Analysis Chart

Sales volume per
period (pieces) 45,000 90,000 135,000 180,000 225,000 270,000
Sales price per unit 1,818 1,818 1,818 1,818 1,818 1,818
Fixed costs per period 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000
112,275,00
Variable costs 22,455,000 44,910,000 67,365,000 89,820,000 0 134,730,000
117,365,00 139,820,00 162,275,00
Total costs 72,455,000 94,910,000 0 0 0 184,730,000
163,620,00 245,430,00 327,240,00 409,050,00
Total sales 81,810,000 0 0 0 0 490,860,000
128,065,00 187,420,00 246,775,00
Net profit (loss) 9,355,000 68,710,000 0 0 0 306,130,000

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Chart 1: Break Even Chart

13.0 Reference

Gartner, Inc. (2010, November 10). Gartner Says Worldwide Mobile Phone Sales Grew
35 Percent in Third Quarter 2010; Smartphone Sales Increased 96 Percent [Press
Release]. Retrieved from http://www.gartner.com/it/page.jsp?id=1466313

Gesture Recognition. Retrieved February 2, 2011, from Wikipedia:

http://en.wikipedia.org/wiki/Gesture_recognition

Pensonic Official Website. Retrived from http://www.pensonic.com/pabout.htm

Six Sigma. Retrieved February 1, 2011, from Wikipedia:

http://en.wikipedia.org/wiki/Six_Sigma

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