Company Background

Foot Tang Gold Smith is small shop run by his founder Mr Whon Foot Tang with the help of
his wife. Initially, the business of gold smith was first started by Mr Whon Foot Tangs father
in a small fishing village in the Kota Tinggi call Sungai Rengit, Pengerang.
In 1987, Mr Whon had move his shop to Ulu Tiram, a business area call Taman Tiram Baru.
Taman Tiram Baru is the core business activity centre for residential around Ulu Tiram. Ulu
Tiram have a very strategic location, which it is the centre of Johor Bahru with Kota Tinggi,
and the Masai and Kulai.
Around Taman Tiram Baru, it it surrounded by many residential area, and 2 major Felda,
Felda Ulu Tebrau and Felda Sg. Tiram. And Taman Tiram Baru itself have many business
activity such as banking, some small retail shop that sell verity of household, daily product
and market. The market attract many customer due to it unique to sell fresh meat.
In the 80s to 90s, Taman Tiram Baru is a busy and energetic business area. And it start lose
her ability after few other new housing residential area started to build such as Taman Puteri
Wangsa, Taman Desa Cemerlang and Taman Johor Jaya. The business activity started to
divert into other residential area.
After running this business of 26 years, Mr. Whon would like to have a marketing strategic to
boost his business.
Problems faced by Foot Tang Gold Smith
Foot Tang Gold Smith is a traditional family business that was inherited from one generation
to another generation. It had its glorious day in the 80s where it became the first choice for
the consumer around its neighbourhood when it came to jewellery purchase. However, with
the growth of economy and globalization effect, the lifestyle of the urbanites had changed.
Many big brands either from overseas or local market (eg. Poh Kong, SK Jewellery, TOMEI,
Diamond & Platinum, Gold Heart, Tiffany & Co. and etc...) had started to make their
presence felt in the Malaysia market. Foot Tang Gold Smith was facing a serious challenges
from all these well known brands and it start to lose their customers especially the young
generation. Their sales revenue was in a declining trend as well. As a summary, below are the
main weakness that had been identified for Foot Tang Gold Smith.

1. Lack of Product Variety & Limited Design

As Foot Tang Gold Smith is a small scale jewellery shop which focus on the gold jewellery
only. It do not have a big variety of product and its design is not as fashion as the big player
in the industry. The organization structure of Foot Tang is not well established and it did not
emphasis on the job specification. Therefore, it do not have a specific design department like
their competitor. Some competitors even have a design software to simulate the appearance
of the jewellery of the customer's choices if the real product is not available in their display
cabinet. This help the customer to visualize on the product of their choices and it will
definitely help to build up the customer desire to purchase the item. As contrast, the products
of Foot Tang is more towards the traditional design where they manufactured base on their
past experience in the industry. They do not have the designer who will crack their head to
design the product which suit the preference of each of the different customer group.
As mentioned, the jewellery sold in the Foot Tang is mainly made from Gold. It do not have a
mixture of jewellery which made from Gold, Platinum or Silver. This limitation had a huge
impact on their effort to expand the customer base and subsequently increase the revenue.
With only limited product variety, it could not create a ONE STOP Jewellery centre which
offered all type of jewellery products to their customer.

2. Price Competitiveness
Base on the market survey, the price of the jewellery sold in Foot Tang are generally higher
than the other big players in the industry especially during their sale period. Foot Tang could
not held the big sale event like the other competitors due to the limitation of the material
price and its financial ability to keep huge inventory in house. For all the big brand like Poh
Kong and Tomei, they do have the advantage when negotiating with the raw material supplier
as they are able to purchase the raw material in bulk quantity which will resulted in a lower
price. With the lower material prices, they are able to fix a price which is more competitive.
Although the quality of the product from Foot Tang is undoubted better than the jewellery
sold in the jewellery branches in the shopping complex, but the price factor is always the
deciding factor for most of the consumers.
3. Popularity
With the size of Foot Tang Gold Smith, it is understandable that their brand is not as famous
or as popular as the other big brand that available in Malaysia market. They do not have a
systematic marketing strategy or strategist who working on to promote their name to every
household. The situation is totally different at the well known jewellery provider who
frequently advertised their current or new products in the media like newspaper and TV
advertisement. All these advertisements are showing day and night and it will help to create
an impression in the consumer's mind that they are the best brand and they will visit the shop
when they need to purchase jewellery. Besides, with the internet become common in every
household, the consumer approach had been changed when they want to purchase a jewellery.
Most of them will start to search for the recommended brand or shop from the internet and
review through the comments from the other consumers before making the trip down to the
display outlet to look at the real product. However, the current business model of Foot Tang
did not permit this kind of promotional approaches but the management should think of a
way or make some investment on the brand promotion in order to expand its customer base
and make it presence felt, at least around its neighbourhood as the beginning.

4. Appearance
"Don't Judge the Book from its Cover" do not work nowadays especially in the industry that
Foot Tang was currently in. Unlike their competitors, they do not have a grand outlet with all
the amazing display cabinet which showcase the jewelleries. The outlet of Foot Tang was
located in an old residential area with some crude renovation. This do not create a feel good
factor to its customer or potential customer. The overall appearance of Foot Tang definitely
will not help to boost the confidence of the customer who plan to spend thousands of dollar
on their gold jewellery.
In addition, the sales person working in Foot Tang do not have an uniform and the
management do not set the dress code for their employee either. This make the situation
worst. Every employee come to work with their casual attire and it is not appropriate and it
do not look professional as well when it come to serving the customer. This approach may be
fine in the old days but definitely it will not work in current era. A proper attire is needed to
create the feel good factor among the customers.

5. Location
The current location of Foot Tang Gold Smith is at an old residential area, in a double storey
shop house. Previously, this was the busiest business centre for that area. However, after the
completion of new business district, most of the retails shop had been shifted there except
Foot Tang. Currently Foot Tang is surrounded by a minimarket selling vegetables and fishes,
some local eateries outlet and worst still a garbage collection centre had been set up just few
shops away. Although there is some advantage on remaining on the old venue as this will
help to keep the frequent customer, but with this kind of surrounding, it will definitely hinder
the interest of the potential new customer to visit its outlet. A proper analysis need to be done
to evaluate the pros and cons and make the best decision for Foot Tang.
Industry Analysis of Jewellery Industry
1. Political

Government of Malaysia is very important to development any industry by its government

policies. In year 2011, when our Prime Minister presented Malaysia Budget 2011, Malaysian
government wants to promote our country as shopping heaven in Asia, so the import duty of
300 goods is abolished (which include jewellery). The export duty of jewellery is exempted
to help jewellery manufacturers and exporters in Malaysia to export jewellery to overseas.
Therefore tax free policies really helped and transformed Malaysian to become tourist spot as
shopping heaven to encourage them to do shopping of luxury things in Malaysia at more
lower prices. This will help to grow our Malaysian economy because jewellery industry is
expected to grow in export and import sector. According to the International Trade and
Industry Ministry statistics, gold jewellery, silver and platinum exports are growing year-on-
year from RM5.4 billion in 2010 to RM6.2 billion year 2012.In the first six months of year
2013, exports touched RM3.7 billion compared to RM3.3 billion over the same period
previous year 2012.

Federation of Goldsmith and Jewellers Association of Malaysia was established on 25

April 1978. It was made up of twelve founder associations: the Goldsmith Association of
Selangor, Negeri Sembilan and Pahang, the Perak Chinese Goldsmith Association, the
Penang Gold and Silver Merchants Association, Province Wellesley Gold and Silver
Ornament Merchants Association, the Gold and Silver Merchants Association Kedah, the
North Perak Goldsmith Association, the Lower Perak Goldsmith Association, Melacca
Goldsmith Merchants Association, the Muar Goldsmith Merchants Association, the Batu
Pahat Gold and Silver Merchants Association, the South Johore Golden Ornaments Trade
Association, Kelantan Chinese Gold Merchants Association. This association is having 1500
members of gold smith companies in Malaysian. It also standardizes retail charges of gold
and other jewellery ornaments. In order to protect the member, the association will try to
bargaining with the government on the taxation.

2. Social
Malaysia is a multi-cultural society. The main ethnic groups are the native Malays as
well as large populations of Chinese, and Indians. When visiting the country it is clear that
the ethnicities retain their religions, customs and way of life. Due to our multi-racial
populations, Malaysian gold jewellery is quite varied in designs, catering to the three main
races, namely, Malay, Chinese and Indians. Each race has its own preferences as far as
designs go and they are quite unique to each individual taste. Chinese would prefer designs
more oriental and modern; Malays go for designs with floral motifs and designs based in
natures. Due to higher unit gold prices now, most gold jewelleries tend to be light-weight,
hollow, with surface texture diamond-cut or matt-finished.
In Malaysia, each race has its own new year, own festive, therefore the gold and
jewellery industry performance can be further boosted by these festive. For example part of
Chinese traditional culture, gold and precious stone jewellery will be the popular gift to their
friend when they are get married or give birth. Furthermore, the Valentine's Day, Christmas,
and Mother's Day, and etc are also the main boost of the sales in the jewellery sales. It is a
desirable possession as well as a store of value or memory to be passed down through
generations.
 Nowadays, younger generations jewelry preference has changed too. Younger
consumers do not prefer the jewelry sets in yellow gold color. They prefer white gold and
platinum. Younger generation consumers tend to regard jewelry as an accessory to mix and
match with the daily clothing. They are opting for more fasionable and lightweight jewelry

3. Technology

In old days, jewelry was made by handcraft skills. Goldsmiths must be skilled in
forming metal through filing, soldering, sawing, forging, casting, and polishing metal.
Traditionally, these skills had been passed along through apprenticeships. The early
craftsmen and stone setters started off as a apprentice and learned their skill through hands-on
training from their masterswho engage them with a monthly allowance. Upon completing
the apprenticeship and being able to produce a complete masterpiece of their learnt skill, they
become qualified goldsmith producing the same type of jewellery.
Traditional methods of piece by piece production is almost completely phased out and
replaced by mass production output from advanced technology machineries. Since the
advancement of technology, the development of Rapid Prototyping and Tooling Technology
in jewellery CAD (computer aided design) has made the jewellery process more precisely
and less craftsmanship is needed. This new technology had simplifies the designing process,
ease the adjusting processes if the design is not well designed hence it shorten the time of
making a jewellery and increase the productivity.
References
[1] A Comparative Study On the Consumptions Preference Towards Branded Jewellery
Over Non Branded Jewellery in Mumbai, Chetan N Nakte, Kohinoor Business School
University of Mumbai, 2013 from http://www.slideshare.net/abhijit055/a-comparative-study-
on-the-consumers-preference-towards-branded-jewellery-over-non-branded-jewellery-in-
mumbai

[2] Gold jewellery industry in Malaysia, a little known bright spark, Ermin Seow Executive
Director, Poh Kong Jewelleries Berhad, from
http://www.bullionbulletin.in/more_expert_column.aspx?pageid=DtPohKong080814

[3] Intricate gems from Malaysias golden age of jewelry, Lesley Chow, CNN, 12 Nov
2015, from http://edition.cnn.com/2014/05/05/travel/gems-from-malaysias-golden-age-of-
jewelry/

[4] Study on the gold and jewelry industry, Anna Ong, InvestPenang, March 2012, from
http://www.investpenang.gov.my/files/investment-updates/10/Gold&Jewellery_Report_-
_Part_1.1418721084.pdf