MPP

Marketing Planning Process
Membership no: 9097872
Professional Diploma in Marketing

December 2009
Subject: Marketing planning Process Student Membership Number :9097872 Study Centre :Self Education & Learning Forum Total words :
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APPENDIX ONE COMPANY BACKGROUND I-Mix Concrete Industries Sdn Bhd

I-Mix concrete Industries Sdn Bhd is a Malaysian corporation. It was established in 1995 and its headquarter is situated in Ipoh, Malaysia. It is operating as a ready-mix concrete supplier. In 2007, I-mix was bought by CIMA group (Malaysia third largest cement manufactory, it is also belonged to the government investment arm- Khazaner Berhad) I-mix has a strong reputation on Quality and Service. Currently, I-mix owns 12 plants over the peninsular of Malaysia; it generates 600000m3 of ready-mix concrete worth around RM1.08 billion annually.
THE CUSTOMER
I-mix has three (3) distinct primary customer categories: -
(I)
Sub-contractor and trader In this category, the target customers are mainly light user. The volume demand on ready-mix concrete of this category is usually less than 500m3. Generally, transactions with this customer category are on cash term. I-Mix does not offer any credit account to this group of customer. Total sales from this segment are around 3% of total sales of the corporation, which is around RM3.24 million.
(II)
Industrial user This segment relates to large construction companies and developers that involve in sizeable building projects. Their volume demand is usually more than 500m3. I-mix offers this group of customer terms and credit limit and look for long-term relationship with this group of customers. Sales from this group of customer are around 67 % of the total sales of the corporate, which is about RM 73million.
(III)
Project base This group of customers requires huge volumes of ready-mix concrete for mega project and thus batching plant is required to be set up for these customers.
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Typically these projects are owned by LCCT (low cost carrier terminal) and headquarter of Bank Rakyat. Demand by LCCT is around 500,000m3 and the demand by the Headquarter of Bank Rakyat is around 135,000m3.
Product groups
I-mix has a diversified product portfolio to target its three primary groups of the customers. Its three (3) key product groups are: Normal strength mix
Normal strength mix is common product or grade. It is suitable for all kind of building jobs, and only grade 25 and above is requested to carry on the cube test (a kind of test for the strength). This normal strength mix is usually recommended to sub-contractors, traders and industrial users. In 2008, the sales of this normal strength concrete were RM75million, which is 70% of the total sales of the business. High strength mix
High strength mix is a special type of concrete and it is only suitable for those constructions, which require high slump (higher water contain) to discharge. The users of this high strength mix concrete are industrial users and project base contractors. In 2008, the sales of this high strength mix were around RM16million, equivalent to 15 % of the total sales. JKR mix
JKR mix is designed by the Public Works Department of Malaysia for the governments project, and only contractors with Government award will use this type of concrete. Sales of this JKR mix were around RM16 million.
Competitors
In 2008, I-mix has produced around 600000m3. It was ranked number 5 in the nation. Corporations that have been ranked before I-mix include BUILDCON, LAFARGE, HANSON and TASEK. They are all members of National Ready Mix Concrete Association (NRMCA). Apart from HANSON, the rest are also cement manufactories. All the concrete corporations try to own their own quarry, transportation firm, and sand factory in order to reduce the cost to become the low cost producer and to gain more market share.
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APPENDIX TWO
MARKETING AUDIT
1) COMPANY INFORMATION a) I-Mix is specialised in the production and supply of ready-mix concrete. Effective 8 August 2008, the Company became a subsidiary of CIMA, which holds 70% controlling interest and the other 30% is hold by I-Mix Incorporated Sdn Bhd (I-Mix Incorporated). b) Total employees 190 155 in production departments 6 in sales and marketing 22 in account department 1 in credit control department 4 in admin department 2 in technical and quality control. Weaknesses: Insufficient in number of skill workers. Foreign worker problem of working permit and cost of admin to keep . Retention of skill worker was low. Credit control and technical department not enough of staffs. No human and resources department and research and develop department.
Time length between the delivery order and invoices issued Bureaucratic approach-flat structure (all department head direct report to Managing director) as
table 1.
Strength:
Managing Director ____________________________|______________________________ | | | | | Marketing Financial Production Account QA & QC & Sales & Credit Control & Admin c) Company scorecard Excellent Marketing & Sales Financial & Credit Control Production Account & Admin QA & QC Good X Satisfy Not Satisfy Poor
X X X X
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2) FINANCIAL INFORMATION a) The Companys financial performance for YTD2009 (up to 30 June 2009) as compared to the budget, as well as the FY2008 results, are summarised as follows: Profit & Loss Item Revenue Cost of Goods Sold Gross Profit: Other Income Interest Income Operating Expenses Finance Expenses Profit Before Tax (PBT): Less: Taxation Profit After Tax (PAT): Gross Profit Margin (%): PBT Margin (%): Weaknesses: RM (000) YTD2009 (up to 30/6/09) Actual Budget Variance 55,888 57,196 (1,308) (42,687) (42,727) (40) 13,201 14,469 (1,268) 41 60 18 18 (11,299) (13,423) (2,125) (122) (240) (118) 1,839 806 1,053 437 199 (176) 1,402 607 857 23.6% 25.3% NA 2.5% 1.4% NA Budget FY2009 117,619 88,082 29,537 (27,283) (480) 1,774 443 1,331 25.1% 1.5% Actual* FY2008 118,991 85,528 33,463 286 40 (31,534) (412) 1,843 477 1,366 28.1% 1.6%
Unable manage cash flow. Cost of materials is relatively higher. A lot of bad debt and long over due account.
Strength: Profitable
3) SUPPLIERS INFORMATION
There are five (5) main ingredients of concrete namely cement, store, sand, chemical and water. 1. In house cement supply CIMA (a cement manufacture company) 2. Sand supply by the local transportation firm, i.e. FOOK KIM, LEVERHILL, APT Industries, KUASAMATE and etc.
3. Stone Aggregate (3/4) supply by the Quarry near the batching plant. Like PATI, HANSON, KUANG rock, KAJANG rock, SUNGAI LONG, DOLOMITE, and etc 4. Water supply by SYABAS (Government water supply department)
5. ADDMIXTURE (a kind of chemical for reduce the water cement ratio) was supply by SIKA, GRACE and etc.
Weaknesses: No purchase department therefore no purchase order issued before the material delivered. Also was bought on higher price. In term of without price comparable.
Stone price was controlled by the MQA (Master Quarry Association). Therefore, I-mix has to buy at the standard price like other operators. Water usage on ready mix concrete is extremely high. Thus I-Mix has to find alternate sources. Like underground water.
Strength:
Credit term and facilities offered by all suppliers. No shortages of raw materials.
4) COMPETITOR INFORMATION
I-Mix is facing intense competition from its competitors in the industry, namely Buildcon Ready Mix, Lafarge Concrete, Tasek Concrete, Hanson Concrete and Cemex Concrete.
1) BUILDCON READY MIX TRUCKS CAPACITY UTILISATION: 300000m3 per month 50 batching plants and 500 trucks Cement 100% supply by own (YTL cement) Sand and stone 60-70 % supply by own (BATU TIGA quarry) Very competitive through low concrete price. 2) LAFARGE CONCRETE TRUCKS CAPACITY UTILISATION: 150000m3 per month 36 batching plants and 300 trucks Cement 100% supply by own (LAFARGE cement) Sand and stone 30 % supply by own (LAFARGE quarry) Good coverage of Malaysia market 3) TASEK CONCRETE TRUCKS CAPACITY UTILISATION: 90000m3 per month 10 batching plants and 160 trucks Cement 100% supply by own (TASEK cement) Though few plant but efficient and very competitive through low concrete price. 4) HANSON CONCRETE TRUCKS CAPACITY UTILISATION: 120000m3 per month 40 batching plants and 250 trucks Stone 90% supply by HANSON quarry
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Too many plant but not efficient
5) CEMEX MALAYSIA TRUCKS CAPACITY UTILISATION: 140000m3 per month 14 batching plants and 200 trucks 50% of Quarry product supply by own (CEMEX Quarry) Efficient on credit control. WEAKNESSES: Inefficient in credit control and management
I-mix does not own its own quarry and thus unable to become low cost producer
STRENGHT:
Insufficient capacity and coverage of batching plant
I-mix has full focus on their high strength concrete market Sales teams are commission based and rewarded with incentive.
5) Distribution information a) As at 31 May 2009, I-Mix has 7 commercial and 4 project plants, located at various areas in Peninsular Malaysia, as follows: Type Commercial Project Total No. of Plant 7 4 11 Location Labu, Nilai, Paroi, Balakong, Kajang, Alam Jaya, Shah Alam. Jelebu, Senai, Penang, Seberang Prai.
Currently, the Company is in the midst of relocating a commercial plant from Kajang to Semenyih. The forecasted revenue for 24 months covering sales for areas around Kajang, Semenyih and Balakong is approximately amounted to RM16.5 million. In addition to the above, the Company is also in the process of setting up 2 project plants located at Rembau and Johor Baharu for Double Tracking and Eastern Dispersion Link Projects, respectively. Audit was informed that these plants are scheduled to operate in June/July 2009. Based on the Project Feasibility Report, for a period of 24 months, the forecasted revenue for the 2 plants is approximately RM14 million and RM15 million, respectively.
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WEAKNESSES: Location plants coverage not comprehensive.
STRENGHT: I-mix has 11 Wet batching plants.
6) MACHINARY INFORMATION a) I-mix concrete has own 11 batching plant and 125 mixed trucks. WEAKNESSES: I-mix has lack of skill machinist to control the machine, and the maintain cost are high.
Truck maintenance problem. Suffer in labour to maintain the trucks Usage period of the trucks age is too long
Retention of drives are high,
Attitudes of workers. I.e., mixes truck drivers are not willing to travel outstation.
STRENGHT: All plant was WET plant Able to produce High strength concrete. Less maintenance if compared to DRY plant
POLITICAL INFORMATION
Currently Malaysia government was control by BN (Barisan National), Malaysia's predominant political party, the United Malays National Organization (UMNO), has held power in coalition with other parties.
OPPORTUNITIES: KHAZANAR Berhad direct control by UMNO, so it was benefit to I-mix for supply those KHAZANAR and government projects.
THREATS: Current Malaysia political situation is unpredictable after the general election on 8 March. Rumours of elected members of parliaments from the ruling coalition crossing over to the opposition anytime hereby forcing a change of government is not doing the country. Even if a change of government occurs, it is going to be unstable. The ruling coalition is not going to sit still.
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7) ECONOMIC INFORMATION a) The world economy to slide into a deeper recession in 2009, Malaysia's GDP contracted by a steep -6.2 per cent in 1Q09, following a stagnant 0.1 per cent growth in 4Q08. THREATS:
The demand of ready mix concrete will decrease. The next 2 years I-mix might have
difficulties meeting the demand.

OPPORTUNITIES: Government had launched stimulate package, A lot of mega job under KHAZANAH Group.
8) LEGAL INFORMATION
a) Malaysia Legal Department always changes its foreigner worker rules. For instance, on 16 April 2008 Home Minister Syed Hamid Albar announced that Malaysia intended to stop the import of foreign workers to the country.
THREATS:
I-mix has to reduce the number of foreigner workers. As a result, the labour cost will be increased. (salary of local worker is higher than foreign)
Foreign work more hardworking than local worker, in term of output.
9) TECHNOLOGY INFORMATION
a) Initially, more than 90% of Malaysia ready mix concrete companies are using DRY method batching plant (information from NRMCA-National ready mix concrete association).
THREATS: I-mix still not ready entry to the e-market, in term of equipment, manpower and knowledge.
There are communication problems among departments. Oversupply and wrongly graded I-mix have become the common issues between production department and admin department. This is because batching plants only inform the admin offices at LABU when purchase orders are received and doesnt inform the batching plant
OPPORTUNITIES:
There is opportunity for I-mix to become Malaysia bigger wet plant (High Grade) producer. I-mix also in leading position in term of technology
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Task 1 To: Managing Director From: Marketing Manager Date: 06/11/2009 Subject: Marketing Plan 2010
1.0 Executive Summery Worldwide economic crisis, Malaysia 1Q of GDP 6.2 gradually adverse affected to the demand on RMC seriously decrease. All the above issues have adverse our company, for the year 2010 we have facing more challenging than the past. 1.1 Goal and objectives Despite the deterioration of economy situation and the business performance, company revenue and its market share in the industry are still the key factor concerned. I-Mix aims to meet its target demand at 612,000m3 and to increase 2% of its market share. . 1.2 Key Issues Launching of RM 7 billion of stimulate package by the Government has been an advantage to I-Mix. 70% of shares in Mix are owned by CIMA, a government link company. Hence, the opportunity of I-Mix being awarded with Government projects will be higher. However, I-Mix should also be aware of the disruption in the credit market that may negatively affect its consumer market and result in bad debts.
1.3 Strategies and implementation In this marketing plan, ANSOFF has been carried out as the companys strategy to improve the business performance and to increase the market shares. This reports contents as below: 1. 2. 3. 4. 5. 6. Introduction Situation analysis Mission, vision and objective Marketing strategy Action plan and Budgeting Control
2.0 Situation Analysis Intense competition in the industry is the main issue that affect the demand of ready-mix concrete. Therefore, necessary steps have to be taken to conquer the problems in order to maximise its shareholders welfare. The actions are: 1. Keep our existing customers 2. Prevent competitors for stealing customers 3. Increase short terms sales and recruit more sales persons (Currently only have 6 number of sales persons.) 4. Focus and build up the long terms relationship with the government sectors XI
5. Focus on governments projects (set for new plant)
2.1 Market summery I-mix has aim their target customer to 40% for interested on Normal strength concrete and 60% on High strength concrete.
Norm al strenght High strenght
2.1.2 Marketing Need Understanding the basic consumer need is necessary to all companies including I-Mix. Below are the basic needs of ready-mix concrete users that should be acknowledged by IMix: 1. The delivery system RMC is a kind of just in time product. It must be delivered on time, otherwise the schedule and progress of projects and the budget of projects will be affected. In other words, the users or clients will need to incur excessive time and cost on manpower and machinery. 2. Consistency of Quality and Quantity Besides of the high strength quality of ready-mix concrete, I-Mix should also look into the consistency of slump and the quantity (meter cubes) of concrete. Otherwise,
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contractors will have to conduct a test to ensure that all the concrete are safe to be used for the construction
3.
After sales service Follow up services are important for users. Excellent follow up services is one of the main key to maintain the client base. Users might need helpful and useful technical advice when they are in need.
2.1.3 Market Trends Competitor The competitors keep steal customers. Because the reduction on projects. Customer Customers have more bargaining power to ask for lower price. Supplier Suppliers from other sectors such as sand and stone have started to offer discount.
2.2 SWOT Analysis The following SWOT analysis captures the key strength and weaknesses within the company and describes the opportunities faced by I-mix. Kindly refer to the APPENDIX 2-Market Audit.
2.3 Key to Success The following variables are the key to success for I-mix: 1. 2. Aim to the government projects, especially on those high strength mix requirement. Consistent on High quality product XIII
Marketing Planning Process 3. 4. 5.
Consistent on good delivery services Superior customer services Well credit control management
2.4 Critical issues The critical issues that I-mix faces are: 1. There will be 25% decrease in total market demand according to NRMCA,
equivalent to 33,000,000m3. 2. 3. Intense competition in the industry due to low market demand. Suppliers intend to adjust their profit margin when the demand has dropped. This
will result in an inconsistency in the raw material price, especially in the cement sector.
2.5 Competition The intense competition in the ready-mix concrete industry include the following areas: (a) Pricing
I-Mix is unable to become a low cost producer like other competitors do because its competitor such as BUILDCON has quarry, sand factory and cement factory where I-Mix doesnt.
(b)
Service
Competitors such as Lafarge and CEMAX have a very good control of its customer service. However, I-Mix still needs to put more effort on the customer service and try to keep the customer complaints to zero.
(c)
Quality XIV
Among the competitors in the industry, I-Mix, Vimix and Tasek are aware of the importance and advantages of wet plant technology. I-Mix is the lead company in this sector.
(d)
Connection with government sector
Among the competitors in the industry, I-Mix, Buildcon and Hanson are those who have strong connection with government sector. This helps the companies to obtain more government projects.
3.0 Mission, Vision and Objective I-mix aims to provide the highest quality of products and services to the contractors and builders. It always tries to fulfil its customers expectation and their needs.
3.1 Corporate Objective I-Mix aims to be ranked as the Top 3 ready-mix concrete company in Malaysia by 2015. It has a target sales turnover of RM110million by 2010 and intends to improve its market position with target growth of RM110 million over FC2011.
3.2 Marketing Objective Maintain steady and sustainable growth each quarter. Continue to increase market penetration by 0.5% every quarter. Increase brand awareness by 5% of I-Mix Concrete Industries Sdn Bhd and its superior products and services standard. Target to increase its annual sales by 2%, equivalent to 612,000m3. (it was 59,983m3 in year 2008).
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Marketing Planning Process 3.3 Financial Objective
Continue to generate operation efficiencies and increase the profit margin. Reduce the debt collection period from 120 day to 90 days. Reduce the overhead cost.
4.0 Marketing Strategy I-mix addresses the market by three product segments Normal Strength Mix, High Strength Mix and JKR Mix (refer to appendix one). There are three (3) marketing strategies, namely market penetration, new market development and new product development. As for I-Mix, it uses only market penetration and new market development as its marketing strategies due to the time restriction, resources and the market trend.
Current product
Market penetration Strategy
New Product
New Product development Strategy
New market development Diversification Strategy Strategy
Current Market
New Market
ANSOFFs Product-market Expansion matrix
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Marketing Planning Process 4.4.1 Marketing penetration strategy 1. 2. 3.
Obtain more demand from existing customer. We could introduce sales promotion to push up our demand volumes. Gain customers from competitors Reduce price ( the price cannot lower than existing customer ) Recruit experienced sales people from competitors Convert non-used into users Convert the Premix used to RMC user
4.4.2
New market development New geographical segment To explore the new market by using the connection with CIMA. Khazanar has projects that worth RM3.5 billion at Iskandar Zone, Johor.
4.5 Marketing Segmentation Customers of I-Mix are segmented into four (4) categories below: GEOGRAPHIC
West Malaysia All the plants and resources are located in peninsular for easier controlling and monitoring.
PENANG, SELANGOR, NEGERI SEMBILAN, JOHOR.
There are government projects worth more than RM50 billion to be awarded before December 2010. Within 20 km with coverage for batching plant. XVII
Concrete can only last for 2 to 4 hours. If the delivery distance is more than 20km, concrete will set inside the truck.
PURCHEASE CATEGORIES
Quantity request on 500m3 to 30000m3 Cash or Credit (Depend on ready mix quantity) Ensure the payment
Have not black listed on NRMCA if the customer request to open an credit account To show that the customer are clean.
4.6 Target Market Our target market is divided into 2 segments Normal strength mix market Focus on commercial market like local contractor, developer, Hardware shop and trading house. Interested on Grade 10 to 30 (Normal strength) Project volumes from 50m3 to 5000m3 Recommend duel on cash term (Cash before delivery) or credit terms (Subject to open credit account) This segment is estimated to contribute 60% of the annual sales, equivalent to 360000m3. The reason of selecting this group of segment is because more than 75% of the projects are recommended to use this type of concrete. Hence we target to gain 60 % of our sales.
High strength and JKR MIX market Focus on sizable market like Mix development project, High-rise project, government super structural project and etc Special request on design mix, Grade 35 and above and etc XVIII
Marketing Planning Process Project volumes from 5001 and above Recommend dual on credit terms
This segment is estimated to contribute 40% of the annual sales, equivalent to 240000m3. The reason to target this segment is because all the government projects are required to use JKR mix.
4.7 Positioning I-mix will rank itself as a medium-sized player in the mass market with high technology equipments to produce high strength concrete with consistent supply services. This position will be achieved by leverage. I-mix competitive edge is in the batching plant system (Wet Plant) and more than 150 trucks to deliver the ready mix concrete. This has created a sustainable competitive advantage to the other industry participants.
Perceptual positioning Map of I-MIX

PRICE HIGH Vimix
Blacktop Lafarge I-mix Cemex QUALITY HIGH
LOW Hanson Buildcon
LOW
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Summery of Marketing Strategies Marketing Objective 1) Increase sales by 0.5% Quarterly. 2) Increase 2% sales annually 3) 5% awareness of brand
Marketing Strategies To develop market penetration Strategies to increase the sales
To develop the advertisement program to bring up the awareness
4.8 Marketing Mix Decisions Product
The core value for I-mix to their customer is its product. I-mix must lead the innovation of the product to sustain the competitive advantage. XX
Marketing Planning Process Pricing
The price of product is one of the key issue for customers decision making. So I-mix must become a low cost producer. Promotion
To communicate with the target customers are very important to an organisation. It is the only way to let the customers to understand our products and services. I-mix should fully conduct the communication mix such as personal selling, sales promotion and etc to connect to the target market.
Place
Distribution network will influence the market share. For instance, I-Mix should allocate new plant at strategy places to increase the sales volumes. People
People is very important for marketing mix decision. All other Ps cannot be implemented without people. Thus human resource department is very important for recruitment, selection, training and motivation.
Process
As simple as process conducting, as much as opportunities we have for to the customers. So I-mix must reduce the process time on ordering, opening credit account,
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delivery and customer complaint. Employee empowerment can be a good solution to solve the process time problem. Physical evidence
It would help I-mix to increase the image of the corporation. Image of staff, clean uniform, trucks and batching plants will help to improve the impression from customers. I-mix should provide uniform, safety shoes and caps to workers. It would help I-mix to create good-will and good image to the stakeholder.
4.8.1
Marketing strategies vs Marketing Mix Decision
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Marketing mix promotion To conduct aggressive Sales promotion exercises on selected trader and contractors in big volumes Tactical To encourage the existing customer to use more in a dedicated period Like: within 3 months purchase more than 1000m3 will get extra RM5 discount for the quotation price -Gain customer from promotion below the line promotion, competitors offer cheaper price to the target customer Tactical To steal the customer by offer lower price or service like RM5 discount on cash terms. Or extra 20kg cement with same price to the competitor. -Recruit sales person People To recruit the sales person from competitor Price from other competitors Tactical To offer better or higher Salary or incentive try to steal them from competitors, Indirectly their customer also will follow them to our. -Convert non-used into Promotion To convince those Premix Users People User change to RMC user Tactical To persuade and showing the different between the Premix and the RMC to the consultant or the owner for the building. New geographical Place To research and expose the segment Price new potential area. Promotion Using connection to convince People or corrupt those consultant. Tactical Objective are to put our batching plants into the project site for supply the RMC Strategy To develop market Penetration strategy -Existing customer Increase usage
Target market Normal mix strength mkt
Normal mix strength mkt
Normal mix strength mkt & High strength mix market
Normal mix strength mkt
High strength mix market
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5.0 Action Plan
Task Marketing plan completion Recruitment Sales personal action Sponsorship program Advertisement
Years 2010 1 2 3 X X X X X X X X
10
11
12
X X
X X
X X
X X
X X X
X X X
X X
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5.1 Budget The budgeting techniques we are conduct the Objective and task budgeting.
Milestone Start date End date Marketing plan completion 1/1/2010 28/2/2010 Recruitment on sales person 1/2/2010 31/3/2010 Sales personal action 1/1/2010 31/12/2010 Sponsorship progrem 1/6/2010 31/12/2010 Advertisement 1/10/2010 30/11/2010
Budget(RM)
0 10000 600000 150000 100000 860000
Manager Department Raymond Marketing Michael sales Raymond Marketing Raymond Marketing
5.2 Sales strategy The sales strategies below are outlined into two phases: 1. Phase one is to accommodate existing customers and to make sure that current order and subsequent order are maintained. 2. Phase two will commence when the capacity are expanded. I-mix will be able to get new customers on order and be able to accommodate the orders (like extra plants or capacity). I-mix must plan to hire more sales persons to assist in defining its marketing program. ( recommend to recruit more experienced sales persons in the industry)
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5.3 Sales forecast The sales forecast assumes no significant change in cost or these sales were without the benefit of a marketing program and adequate plant facilities they can achieve a sales goal of RM110 million in 2010 and over RM120 million in 2010. The contribution is RM 35 per M3.
5.4 Expense forecast The expense forecast will be used as a tool to keep the department on target and provides indicators when modifications or correction is used to insure the proper implementation of the marketing strategy.
Table: Marketing Expense Budget Marketing expense budget Sales salary Sponsorships Advertisement Recruitment sales person Total sales and marketing expenses Percent of sales Contribution margin Contribution margin sales
2009 2010 2011
RM580,000.00 RM600,000.00 RM650,000.00 RM 80,000.00 RM150,000.00 RM150,000.00 RM 80,000.00 RM100,000.00 RM100,000.00 RM RM 10,000.00 RM 20,000.00
RM740,000.00 RM860,000.00 RM920,000.00 4.70% 1.625 M 32.80% 5% 1.832 M 30% 5.50% 1.923 M 31%
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6.0 Control The purpose of I-mix marketing plan is to serve as a guide for the organization. The following areas will be monitored to gauge performance. Sales target-Weekly and Monthly Revenue-Quarterly and Annually Expense-Monthly Production-Weekly, Monthly and Quarterly Average selling price-Monthly and Quarterly Customer satisfaction-Monthly and Quarterly
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Task 2
To: Senior Management From: Market manager Date: 16/09/2009 Title: Evaluation Report
1.0
Introduction This report is an evaluation of the following areas: 1. 2. 3. 4. The role of marketing and the marketing planning The Auditing The Marketing Strategies The Risk factors
For your information, the following criteria have been used to evaluate the abovementioned areas: Quantitative (How much-more or less) Qualitative (How good-good or bad) Comparison (Who are better) Benchmark (Did we reach to the average)
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2.0
Role of marketing A Successful business must possess four (4) elements below: - (Malcolm Mcdonald 2007) An excellent core product - Core value Excellent process- Efficiency process Perfect internal marketing- Creativity Professional marketing- Understanding the market need
Marketing with the above four (4) elements are very important for all kind of businesses. However, the sales and marketing department of I-Mix has been putting too much emphasis on its current sales than its long term marketing planning. The sales department and marketing department of I-Mix are combined and thus its marketing planning has long been neglected. I-Mix should be aware that the function of sales department is more on short term and marketing department is more on future planning such as creating brand awareness and customer loyalty. I-Mix should in fact separate its current sales and marketing department into two independent departments. The tasks of the staff will then be clearer and unambiguous. By having two separate departments, sales persons can concentrate on their sales performance and marketer can put more effort on its marketing planning.
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2.1
Marketing Department We will be evaluating the responsibilities of the marketing department and the marketing department scorecard in this section.
2.1.1 Marketing Department There are six (6) staff in the sales and marketing department of I-Mix. Please refer to Table 1- Marketing scorecard.
Marketing Tasks The marketing tasks include: 1. Identify target markets Management has to identify its target markets according to the customers wealth and their business ability.
2. Market research Information on its current and potential customers is important. For instance, I-Mix has to know what the customers are asking for, what its competitors are offering to the customers, customers purchasing pattern and etc so that I-Mix will know what marketing channels to be used.
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3. Product development I-Mix must not neglect the research and development of its product in order to compete with its competitors and attract more customers.
4. Marketing mix Having identified the target markets and developed relevant products, management must then determine the price, promotion and distribution for the product. The marketing mix is tailored to offer value to customers, to communicate the offer and to make it accessible and convenient.
5. Market monitoring The marketing objective is first to attract customers - and then (most important) retain them by building good relationship with them. In order to do this effectively, they need feedback on customer satisfaction. They also need to accommodate the customers desire into product design and marketing mix.
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Mark (10 is Marketing tasks max) 6
Identify target markets
Remarks B2B market, the segments of the customers are not that significant but still acceptable. ~ Never show the customer size like volumes and behaviour. Lack of primary information, competitors movement are not accurate. ~S&M department have no interviews with the customers, suppliers and competitors. Currently I-mix is still doing very well on this stage, the information from marketing is important. ~No direction from top management. Product, place, price and promotion are above average, the sales volume is significant. ~ Average 50000m3 per month. Lack of monitoring activities. When the contingencies happen, I-Mix will lose its competitive advantages. ~The system for control is not effective and efficient.
Market research
Product development
Marketing mix
Market monitoring
27/50
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Table 1 Marketing scorecard
2.2
Marketing Plan
The commend after evaluated the I-mix Sales and Marketing department: The segmentation of the group is not significant The region manager should require the sales team to collect primary data. XXXIII
Marketing Planning Process The targeting process is not clear
The management is always unsure which target market to go for. Information on target market such as their demand, paying methods are not known by the management. The positioning of I-Mix is quite similar to CEMEX, no identity differentiation. Customers will be confused while choosing suppliers. The flowing of the plan is good. But the action plan is not detail. Never show the progress and the objective to be achieved. The control sectors never identified which kind of report control to kind of task. Like Sales volumes control by the monthly sales report. what
2.2.1 The contingency VS the marketing Plan According to this scorecard, it clearly shows that I-mix doesnt have the ability to encounter the problems when contingencies happen due to the lack of resources, manpower and etc during the bad time. Please refer to Table 2.
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Marketing Planning Process Table 2
Marketing Plan Contingency The impacts Objectives Economic come worse -Marketing objectives will become inaccurate -the reduction on target. Political change Technology change -All the strategies will lose the direction and Strategies Action plan Legal change Social change Ecological change Budget effectiveness -The programs may not be on time -Some of the activity will delay, like the New market Segment. -the budget must be review or reduce. -cut the unnecessary program -must come out some new report to control and Control review the situation.
2.2.3 Marketing plan scorecard The marketing plan scorecard shows that I-Mix is doing well on its strategies but doing badly on its control planning. Thus I-Mix should have a correction on its action plan, redo the budget part and modify the control system. Please refer to Table 3.
XXXV
3.0
Marketing Audit This section is to evaluate the process of marketing audit. For the performance of auditing,
Table 3 Marketing Plan Executive summery
Mark (10 is max) 6
Remarks Good, have identify the key opportunity and key issues. Comprehensive analyse the current situation, market trend and competitions between the competitors. Not too bad, the plan have showing out the long and short terms mission and objective. Have no doubt, the penetration strategies was fantastic, recruit competitors sales person must be the best way. So simple, Too little information and activities provide but at least have the time scale. The task and the budget have not actual figures.
Situation analysis
Objectives
Strategies
Action plan
Budget
Control
4 41 60
Not enough report and skill to monitor and control. Pass! But can be better.
please refer to Table 4.
3.1
Company Audit XXXVI
Marketing Planning Process a)
The process for auditing the company is clear because all the figures and problems are significant.
b)
Human resources are important to a company, it helps the corporate to train, motivate and recruit staffs.
c)
The audit report has missed out the importance of the innovation compare to other competitors. I-mix never realized that innovation is important.
d)
The insufficient of skilled workers is a common problem in the industry. This problem is more serious in Buildcon and Hanson
3.2
Financial Audit During the economic crisis, I-Mix will have the problems such as bad debt and slow collection. Even though I-Mix is profitable now but once the outstanding debt is more than 30 %, I-mix will face cash flow problems.
Competitor such as CEMEX has reduced its debt collection period from 105 days to 90 days and its long over due account has already been reduced to less than 10. So I-mix must work hard on this area.
3.3
Suppliers audit All suppliers must submit their quotation before they start to supply, this is a very important procedure to avoid conflicts and argument on prices, terms and conditions. I-Mix
XXXVII
should have a call purchase department to handle the purchase process. Currently, I-Mix does not have a systematic work flow.
3.4
Competitors audit Figures shown in the audit report are only based on secondary date. I-mix should firm up a term to collect the primary data like suppliers, customers, consultants and etc.
3.5
Distribution audit I-Mix has been ignoring the problems of plants maintenances and the spare parts suppliers, in term of delivery and installation.
3.6
Machinery analysis There is lack of skilled machinist in I-Mix.
3.7
Economic analysis It is believed that the economy wont be good within these two years. However, I-Mix has cement backup from CIMA in case there is price war again. I-mixs overhead is not too high, compare to the industry we are below the average.
XXXVIII
3.8
Technology analysis From the audit report, it shows that the importance of innovation has been neglected. The importance of staff training especially on new technology tool such as computer, Internet, on line, e-mail and SMS have also been ignored. I-Mix should implement more new technology tools to save time, manpower and money.
XXXIX
Audit sector Company
Mark (10 is max) 9
Remarks Comprehensive information provided, The weaknesses has pointed out. Good job, comprehensive financial figures provides concise and easy to understand. Listed out all the suppliers, but have not price and suppliers background provide. So depend on secondary information, have no primary data, fail! can be better, like provide the map and information of plants capacities. Point out the weaknesses and strength Short of information, But pointed out the only main key opportunity Bad time, but never tell how bad, cannot appear the fear factor. Poor information provided Pointed out the treats should concern.
Financial
Suppliers
Competitors
Distribution
Machinery Political
6 5
Economic
Legal Technology
4 5 61 100
Table 4 From the scorecard above, the internal environment audit shows that the information is detail, clean, concise and comprehensive but the external environment audit shows a negative result.
3.9
Recommendations
XL
I-Mix can recruit professional team to prepare marketing audit report. Candidates with CIM qualifications can be considered. Or appoint the external Audit firm to carries on the job.
4.0
Segmentation, Targeting and positioning Before we conduct the strategies to conquer the market, the process of segmentation, targeting and positioning must be considered first. This is because it will be more accurate for us to carry on the communication process once we have confirmed the right target. We will evaluate the way to carry out the segmentation, targeting and positioning job, i.e. to discuss whether the strategies are properly implemented. Please refer to Table 5 for the command of STP.
4.1
Segmentation The main reason why I-Mix should have market segmentation is because there are many type of customers. Segmentation has become so important because different customers have: XLI
1. Become more numerous, we have many more types of segments. 2. The differences among groups have become more distinct. 3. The groups have become larger in number
What has I-Mix done on its market segmentation? According to the report, there are two types of segment, namely geographic and purchase categories.
4.1.2 Geographic segment The distance between the plant and the project sit is an important issue to I-Mix because ready mix concrete can only last for 4 hours. If the distance between the plant and project site is more than 20 kilometres, the ready mix concrete will start to set. Therefore, I-Mix focuses mainly on west Malaysia and those areas that have high potential of growth.
4.1.3 Purchase categories
XLII
There are two segments of customers in I-mix: cash or credit customer. Those customers who ask for credit terms must not have blacklist record in NRMCA (National Ready Mix Concrete Association) and the minimum quantity ordered must be more than 500m3.
4.2
Targeting There are two distinct groups of customers: Normal strength mix market High strength and JKR Mix market
I-Mix has a proper target market. Business to Business (B2B) market is almost the same, the only different is whether they are light or heavy users, their trading terms and also the product required. .
4.3
Positioning I-mix is a medium-sized player in the mass market with high technology equipments to produce high strength concrete with consistent supply services. Thus it will be easy and effective for I-Mix to implement the market penetration strategies. If there is no price different, I-Mix will have the advantage over other competitors because it is a high quality producer.
Table 5 Segmentation Mark (10 is max) Command 6 Not bad, Have identify the segment criteria Like Homogenous, Heterogeneous, XLIII
Membership no: 9097872 Substantial, Competition and Resources.
Targeting
So comprehensives, positive and dynamic
Positioning
Clearly identifying the right position and advantages on the value has being offer to the customers.
20/30
4.5
Marketing Strategies After the process of segmentation, I-Mix now has the right groups of customers and right position in the market and in the mind of the customers. It now comes to the marketing strategies. I-Mix has to consider the appropriate strategies to adopt and the right strategies to gain more customers. I-mix should have a more effective and efficient marketing penetration strategy. If the target market is normal strength mix market, thus all the tactical of marketing penetration should be functional and the result must be significant.
For the high strength and JKR Mix market, the new market development strategy will be the appropriate choice because I-mix has positioned as a supplier with high technology equipments to produce high strength concrete in the mass market. It also has the advantage over other competitors to gain the Government projects and sizable jobs.
XLIV
Marketing Planning Process 4.6 Comments
According to the scorecard, I-Mix has shown a good job on the segmentation, targeting and the positioning before the marketing strategies implemented. The strategies that have been conducted by I-mix are also appropriate to the target groups.
5.0
Rick Factors There are always risks involved in all businesses. I-Mix should be aware of the potential risks and uncertainties all the time.
5.1
Failures of infrastructure I-Mix is heavily depends on our infrastructure. Significant problems of infrastructure are such as batching plant, air compressor, and water pump break down that could halt or delay manufacturing and hinder our ability to deliver the good and services on a timely manner, and subsequently lead to customers dissatisfaction. Customers dissatisfaction will then result in the loss of customers, a decrease in revenue, and the incurrence of significant costs to solve these problems or failures.
5.2
Failures on quality When there is cube test failure, there will be debt collection problems because the customers will hold their payments until I-Mix carries out those tests such as rebound hammer test, core test and etc and make sure the concrete is safe to use. The delay of payments from customers will increase costs (usually the test was costly). Failure on quality will also affect the companys reputation.
5.3
Failures on credit control XLV
Cash flow is very important to most of the businesses including I-Mix. When the bad debt has become more serious or the debt collection period is too long, it will affect the operation flow of the company. Bad cash flow might result in delay of payment to I-Mixs suppliers and delay payment of salary to its employees. This has a bad impact on the credibility of the firm and the reputation of the firm will also be affected.
5.4
Competitors Actions or strategies that implemented by competitors can have an adverse impact in the market because it might lead to price war or loss of customers to the company.
5.5
Law and regulations Governments policies on cement industry will have an impact on the companys performance and market share as well. For instance, if the Government allow foreign competitors to come into the market, this move will definitely affect the price of the product and the local market.
5.6
Economy has worsen If the economic has become worse, it will affect the consumers buying sentiment and their spending behaviour. Demand on ready mix concrete will fall due to the decrease in the demand of new houses and the development projects.
5.7
Subsidiary for ready mix concrete Currently, Malaysia contractors are using the discharge method called IN
SITU(discharge the concrete immediately when the ready mix concrete is delivered). When this discharge method is substituted by over new method
XLVI
Like PERCAST (a kind of building technology, usually the contractor will cast all parts of building such as wall, column and slab). The demand of ready mix concrete will definitely decrease. It will then adversely affect I-Mix.
5.8
Catastrophic events Unforeseen events such as war, terrorism and other international conflicts, public health issues, and natural disasters could disrupt the operation of suppliers or customers. It will also result in political or economic instability. These events could reduce demand for the ready mix concrete and make it difficult to reach our business goals.
6.0
Conclusion Based on the current situation, the ready mix concrete industry is suffering decrease on demand. I-mix has the right direction and the capable sales and marketing staff to implement the marketing tasks. With no doubt, the results must be significant and its prospect is bright.
The auditing report clearly shows that the corporate strengths and weakness. However, the external environment analysis has shown a negative result because the information is not collected based on primary data.
The opportunities and threats are below the expectation. The process of segmentation, targeting and positioning against the marketing strategies are functioning. So if everything goes right, I-Mix still can be profitable.
XLVII
Entering 2010, I-Mix is realistic about the challenging business environment around it. We expect to remain profitable and aim to generate cash flow to sustain its competitive advantages in the coming year.
XLVIII

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Marketing Planning Process

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Professional Diploma in Marketing

Marketing Planning Process

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APPENDIX ONE COMPANY BACKGROUND I-Mix Concrete Industries Sdn Bhd

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Marketing Planning Process

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Marketing Planning Process

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Marketing Planning Process

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Insufficient capacity and coverage of batching plant

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WEAKNESSES: Location plants coverage not comprehensive.

STRENGHT: I-mix has 11 Wet batching plants.

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difficulties meeting the demand.

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Marketing Planning Process

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Marketing Planning Process

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5. Focus on governments projects (set for new plant)

Norm al strenght High strenght

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Marketing Planning Process 3. 4. 5.

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Connection with government sector

Marketing Planning Process 3.3 Financial Objective

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New market development Diversification Strategy Strategy

ANSOFFs Product-market Expansion matrix

Marketing Planning Process 4.4.1 Marketing penetration strategy 1. 2. 3.

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PENANG, SELANGOR, NEGERI SEMBILAN, JOHOR.

Marketing Planning Process

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Perceptual positioning Map of I-MIX

Blacktop Lafarge I-mix Cemex QUALITY HIGH

LOW Hanson Buildcon

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Marketing Strategies To develop market penetration Strategies to increase the sales

To develop the advertisement program to bring up the awareness

4.8 Marketing Mix Decisions Product

Marketing Planning Process Pricing

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Marketing Planning Process

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Marketing strategies vs Marketing Mix Decision