MKT 542

CHANNEL MANAGEMENT
GROUP ASSIGNMENT

MASIRAH BINTI ABDUL RAHIM 2013387339

NURUL SARIY ZAKIAH MOHD YUSOF 2012523517
NORLYANA MANSOR 2014369125
WAN NUR DIANA BINTI WAN MOHAMED AZIZI 2012378941
NORHAYATI BINTI ISHAK

FACULTY OF BUSINESS MANAGEMENT (BM240)

GROUP : NBM4B

SUBMITTED ON : 17 JUNE 2017

PREPARED FOR : MADAM YUSLINA LIZA BINTI MOHD

YUSOF
 TABLE OF CONTENT

CONTENTS PAGE

1.0 BACKGROUND OF NAELOFAR HIJAB AND NOOR NEELOFA 3-6

1.1 PRODUCT SEGMENTATION
1.2 MARKET SEGMENTATION
1.2.1 Geographical Segmentation
1.2.2 Demographical Segmentation
1.2.3 Psychograpical Segmentation
1.2.4 Behavioral Segmentation
2.0 COMPETITORS 7-11
2.1 Naelofars Competitive Advantage Against Competitor

3.0 NAELOFAR HIJAB CHANNEL MEMBERS 12-16

3.1 Naelofar Hijab Partnership
3.2 Naelofar Hijab Group Members
3.3 Naelofar Hijab as Channel Captain
3.4 Naelofar Hijab Wholesaler & Distributor
3.5 Naelofar Hijab Retailers
3.3.1 Online Retailers
3.3.1 Flagship Store
3.3.2 Bazaar
4.0 PROS OF HAVING NAELOFAR HIJABS CHANNEL MEMBERS 17-19
4.1 CONS OF HAVING CHANNEL MEMBERS IN NAELOFAR HIJAB
5.0 CHANNEL MARKETING STRATEGY 20-23
5.1 CHANNEL RELATIONSHIP MARKETING
6.0 APPENDIX 24

2
1.0 BACKGROUND OF AND NOOR NEELOFA

Noor Neelofa Mohd Noor widey known as Neelofa is Malaysian celebrity, actress, host and
presenter, commercial model and also being a public figure with 1.4 million likers on Facebook,
4.8 millions followers on Instagram and the number kept increasing by day. Every time she
appears on screen, her adoring fans goes crazy about her looks, the clothes she wears, whom she
acted with, to a point her fan are so fanatics about her love interest.

She came from a business oriented family, it was only a matter of time that Neelofa would
eventually become an entrepreneur herself. Her love for fashion and passion for business is the
starting point for making her own label. As she was going through her own personal
transformation and with her decision to dress more modestly, it was just a natural progression
that she decided to start with shawls as her first product.

Venturing into business with a small team of trusted and like-minded individuals, Neelofa and
her partners decided to revolutionize and simplify modest fashion, to make shawls more practical
and easier to wear. After countless brainstorming sessions, trials and errors, they came up with a
design for an instant shawl and launched Naelofar Hijab in 2014.

However, she never thought the brand can be

accepted widely all around the world. The brand
Naelofar Hijab has become an international
brand. The company sells its product at its
flagship store in Taman Tun Dr Ismail, KL and
through network of 700 distributors nationwide.
They sell online and ship to anywhere in the
world. With distributors in Singapore, Brunei,
London, Australia, Netherlands and US, the
goal is for Naelofar Hijab to be a global brand.

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The product that NH launched, aimed for modest fashion,the market aimed to be worth USD 327
billion by 2020, Naelofar Hijab aim to serve the untapped market. Her being in limelight, as an
actress, host, business women has been an advantages for her to market her product.

My platform in the entertainment industry gives me an advantage to market

my products and advertise myself as a brand, not just to Malaysians, but to
consumers abroad.1

That, alongwith Noor Neelofas success in her business venture lands her as Forbes 30 under 30
Asia 2017 Pioneer Woman2.

1
https://www.nst.com.my/lifestyle/groove/2017/04/234338/neelofa-go
2
https://www.forbes.com/profile/neelofa/?list=30under30-asia-pioneer-women

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1.1 PRODUCT SEGMENTATION

Naelofar Hijab offered wide range of product to their customer. The

product segmentation help Naelofar Hijab to understand and influence
consumer buying decisions and shape a successful marketing campaign.

With 40 collections in their portfolio, Naelofar Hijab offer great variety of

hijab styles to consumer.

Neelofa successfully marketed her Naelofar Hijab collection during her

acting and hosting job. Her roles as Warda in Suri Hati Mr Pilot was
endearing to her fans and it has boosted the demand of the collection of
Lady Warda and Queen Warda, which almost all are sold out.

1.2 MARKET SEGMENTATION

Naelofar Hijab release many type of scarf and shawl to matches the
expectation of customers in the targeted segment in order to satisfy
customer. By segmenting their market, it helped Naelofar Hijab to focus
their marketing strategies on the particular market. Besides, it makes this
company can be reached more efficiently and effectively with the product
that match customer unique need such as what type of scarf that customer
want and which should they sell.

Under market segmentation, there are four major variables that can be used
to segment the market.

1.2.1 Geographical Segmentation

1.2.2 Demographical Segmentation
1.2.3 Psychograpical Segmentation
1.2.4 Behavioral Segmentation.

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1.2.1 Geographic Segmentation

First is geographic that includes nations, regions, states, cities and population. In TTDI, there
complete facilities provided which are needed by their boutique such as public transport that
everyone is assessable and easily get to boutique. This shop is also situated near to the main
road. Other facilities that provided are water, electricity, telecommunication line and others.

1.2.2 Demographic Segmentation

Second in demographic, which divides market into segments based on variables such age, life
cycle stage, gender, income, occupation, education and generation. Demographic is the most
popular bases for segmenting customer group.

In this segmentation, more focus on Malaysian youth and middle age of career woman who have
their income. Lady and woman with the range of 18-60 years.

1.2.3 Psychographic Segmentation

Third is psychographic that segmenting based on social class, lifestyle and personality. Middle
class range to upper class range of households modern ladies who prefer to dress modestly, but
also international audiences who desire hijab that fit comfortably and also look contemporary.

1.2.4 Behavioral Segmentation

Last but not least is behavioral, it segmenting customer under occasion, benefit, user status,
usage rate, loyalty status.

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2.0 COMPETITORS

NH market ready-made designs with new revolution. NH often facing an issue with plagiarized.
However, NH always come up with a new collection. So they are not overtaken by them and NH
keep faster than plagiaristic. Neelofa and her partners decided to revolutionize and simplify
modest fashion, to make shawls more practical and easier to wear.

They started selling the shawls online and at bazaars. The instant shawls were a hit and stockists
were appointed to handle the increasing demand. Currently there are more than 100 stockists in
Malaysia, Brunei and Singapore.

The explosion of a scarf or shawl brands are becoming more common. Of course it was, the
trend is gaining momentum haunt her hijab.

Even with various new brands emerging on the market, NH product continuosly being embraced
by the customers, whether it is sold in boutiques or online. NH itself is among the market leader
and it has trigger the phenomenon with their own group of loyal followers. The influence of
advertising, models or celebrities who sport a hood that is one factor that brand into a frenzy
women in hijab. Social networking sites is also one of the factors consumers obsessed with
popular brands.

The following diagram illustrate in detail, the competition from other brands in the market :-

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 NAELOFAR AIDIJUMA RADIUSITE SUGARSCARF ARIANI TUDUNG DUCK
HIJAB SCARF RUFFLE SCARVES

Brand & Logo

Product type Instant shawls, Bawal Instant shawls Variety scarf Shawl,variety Instant shawls Scarf
shawls scarf

Price RM 39 - 200 RM 12.50-40 RM 39-139 RM 60 - 300 RM 39 - 300 RM 32-100 RM 120 - 800

Variety of design High/High Medium/medium High/medium High/high High/high Medium/medium Low/High

/ quality

Product market Low, medium & Low & medium Medium & high High Medium & high Medium & high High
high

IG FOLLOWER 510k 482k 410k 363k 291k 285k 269k

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 ALHUMAIRA TUDUNGPEOP OWL By Nora CAKENIS BAWAL FAREEDA TWINKLE by
LE Danish EXCLUSIVE Elfira
Brand & Logo

Product type Instant shawls variety scarf Scarf Instant shawls, BAWAL variety scarf Scarf
shawls
Variety of design RM 49-100 RM 59 - 200 RM 150- 200 RM 40 - RM70 RM 60- -1200 RM 60 -500 RM 70-150
/ quality
Variety Medium/medium Medium/medium Low/high Low/medium Medium/High Medium/High Low/medium
Product market Medium & high Medium & high High Medium High High High
IG FOLLOWER 258k 254k 215k 181k 141k 125k 106k

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2.1 Naelofars Competitive Advantage Against Competitor

Brand
Naelofar collection Hijab Brand increasingly have special place at customer's heart because each
design have their own class.

Location
Other than online, there are many physical boutiques and vendors that sell NH in order to always
be close to their fans and customers. Boutique and HQ located in Taman Tun Dr Ismail in Kuala
Lumpur.

Prospect
NH suitable with all ages. From teenagers to women and mature women.

Product
Most design is Instant shawls. Simple but nice is a key element of the product NH. NH always
come up with the latest collection to add variation to an existing collection. This new collection
is a premium collection of more elegant. NH constantly improving existing products. It is to
ensure that each product can meet tcustomers needs. Every month NH will launch new design
and strategy. Each new NH design will surely hit the crowd because of the quality always bring
satisfaction to customer. In addition to its fabric is soft and good quality, attractive designs and
vibrant colors also correspond with the times. Different designs and use of high quality fabric
becomes a factor that reinforces the brand Naelofar Hijab in the hearts of consumers and even,
very reasonable prices typical of this product. NH always produce new products follow by trend
and market needs to ensure sales momentum is constantly increasing.

Quality
Best quality and workmanship to ensure customer satisfaction. In addition, NH used soft fabric
and good material quality

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Price
The price affordable with the best quality.

Promotion
NH constantly produce new designs, always have a good promotion for NH old designs. Online
NH Parties will provide free shipping for customers who make purchases of products exceeding
RM250 in a single booking.

Publicity
Naelofar always wearing NH scarves whenever its latest issue to appear on television or formal
occasions.

Packaging
Comes with attractive packaging and can be a gift for a loved one.

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3.0 NAELOFAR HIJAB CHANNEL MEMBERS

3.1 Naelofar Hijab Partnership

Low-cost carrier AirAsia in collaboration with Naelofar Hijab has created an exclusive hijab to
be worn by its female pilots.

As AirAsia brand department head Rudy Khaw sais, AirAsia and AirAsia X's female pilots will
wear the white-colored Naelofar Hijab that has been specifically designed to ease their duties
started the month of June.

This is the first time the airline collaborated with a hijab designer to create such a product. The
company reportedly also cooperated with the brand to breathe new air to hijab design for its
other workers.

3.2 Naelofar Hijab Group Members

Lofalens
o Lofalens has been beautifying eyes since 2014. Withits new packaging,
our favourite soft contact lens is now better than ever. They use Hema as a
colouring agent to give the lens a naturally flawless look.

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 Busana Naelofar
Neelofa Handbags
Maryam
o A full set of ansemble
Kurta Fahd
o Menswear

3.3 Naelofar Hijab as Channel Captain

Naelofar Hijab organizing training programmes their authorize distributors to ensure that they
are given the necessary exposure handling Naelofar Hijabs products and understand their roles
and responsibilities as Naelofar Hijabs authorized distributors.

3.4 Naelofar Hijab Wholesaler & Distributor

Naelofar Hijab started selling the shawls online and at bazaars. The instant shawls were a hit and
stockists were appointed to handle the increasing demand. Currently there are more than 100
authorized stockists which is 3 in Brunei, 13 in Singapore and the rest is in Malaysia.

In fact, Naelofar Hijab has sells through a network of 700 distributors nationwide. They sell
online and ship to anywhere in the world.

The type of wholesalers of Naelofar Hijab is manufacturers own wholesaler. It is because,the

sales categorized as manufacturers sales branches and sales offices. They act as the wholesalers
for the manufacturers and they are normally located away from the manufacturing plant.

As procedure, Naelofar Hijab will terminate the members who is not active within 5 month. But
although, Naelofar Hijab will contact the authorized stokist first and remind them.

Besides, Naelofar Hijab will be organising a mini road tour by visiting stockists boutiques
across the nation as an initiative from HQ to strengthen the relationship between the management
team and the stockists as well as to find out the problems faced by stockists so issues can be
resolved as a team.

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3.5 Naelofar Hijab Retailers

Singapore

UK Brunei

France London

New
Australia
York

US Netherlands

Besides wholesalers, Naelofar Hijab also has retailers which is refer to the another prominent
group of intermediaries in many channel structures. The retail intermediaries can take form of ;

3.3.3 Online Retailers

The diagram shows that, among the 37 countries sold online by Naelofar Hijab's
scarf collection. In addition, Naelofar Hijab still in planning to extend reach
midlle east, Riyadh, Cairo and other places in Egypt. Naelofar Hijab also will
open store at UAE and Turkey.

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 Haute Elan
o By the end of September 2016, Naelofar Hijab have its first overseas pop-
up store in upmarket Chelsea in London, hosted by UK-based Haute Elan.
The headscarves will also be available on Haute Elans e-commerce site.
o The e-tailer targeting Muslim women.
o Haute Elan, which was founded by former investment banker Romanna
Bint-Abubaker, was founded as a luxury modest fashion site. But last year
the company raised $1m in seed funding from a Singapore investor to
launch a curated store with a broader reach, covering both high-end and
mass-market fashion. Brands on the new Modlist.co include Gucci,
Joseph, Mango, Uniqlo, and a selection of over 150 designers and
boutiques.

Lazada
o A privately owned German e-commerce company founded by Rocket
Internet in 2011.
o The CEO is Maximilian Bittner.
o During Ramadhan, Naelofar Hijab take this opportunity to promote in
Lazada.

11street
o 11street Malaysia is one of the largest e-commerce companies established
in Malaysia.
o It was originally a leading e-commerce company in South Korea,
operating under the management of SK Planet Co., Ltd.
o 11street expanded its operations to Malaysia to grow and expand the E-
Commerce industry in the country.
o The 11street Malaysia is currently operating from their main office located
at Kuala Lumpur Sentral since January 2015.

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 ZALORA
o Asias leading online fashion destination.
o They are the largest and fastest growing fashion focused e-commerce site
in Southest Asia.
o Founded in early 2012, Zalora are present in Singapore, Indonesia,
Malaysia & Brunei, the Philippines, Thailand, Vietnam and Hong Kong.

3.3.4 Flagship Store

Naelofar Hijab opened its first flagship store in TTDI in January 2015.
The second outlet of Naelofar Hijab is at Publika Shopping Mall, Jalan Dutamas
1, Sri Hartamas ,KL on March 2017.

3.3.5 Bazaar
Naelofar Hijab also involved in Bazaar which consist of events and booths during
Ramadhan and Hari Raya Aidilfitri.
Currently, they have more than ten bazaar in Malaysia which is ;
o Bazar Ramadhan at Kuala Terengganu
o Bazar Raya Utara at Woodlands Bazaar
o Bazar Ramadhan 2017 at Giant Hypermarket Taman Permata Hulu
Kelang
o Booth Jualan Ramadhan near KFC Papar Sabah
o Vendoria Ramadhan 2017 at Sunway Putra Mall, Kuala Lumpur
o Uptown Kota Damansara, Expo Raya 2017 at Aeon Tebrau City, JB
o Bazaar Raya 2017 at MITC Ayer Keroh Melaka
o Urban Fest Raya at Sg Nibong, Penang
o Uptown Pahlawan Taming Sari at Melaka
o Downtown Kajang at Jalan Reko, Anjung Putrajaya
o Uptown MITC at Ayer keroh Melaka
o I Love Bazaar at Petaling Jaya, Selangor
o Flea Bazaar at MPAJ Pandan Indah, KL.

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4.0 PROS OF HAVING NAELOFAR HIJABS CHANNEL MEMBERS

Channel activities may be carried out by Naelofar Hijab in seeking specialist organizations to
assist with certain functions. As explained in previous page, these are the pros and cons of
having Naelora Hijab's Channel Members:-

The Benefits of Naelofar Hijab Partnership with Low-Cost carrier AirAsia.

1. Symbiotic benefit As both of these organizations are totally different in business,

having the female pilots to wear Naeloar Hijab is a very good tactic in marketing to
promote Naelofar Hijab to the extend that every passenger no matter from where and all
around the world can see the designs of Naeloar Hijab. This is a free advertisement which
expand globally.

2. Cost saving Although Naelofar Hijab need to spend on advertisement and promotion,
the outcome from the spending will be greater when people get to know about the
product. Thus, sales will increase when mass society buy the product.

The Benefits of having Naelofar Hijab's Wholesaler, Distributor and Retailer.

1. The members of distribution channel are specialized in what they do and perform at a
much lower costs than companies trying to run the entire distribution channel all by itself.

2. Time saving Along with costs, time of delivery is also reduced due to the efficiency
and experience of the channel members. For example, if a grocery store were to receive
direct delivery of goods from every manufacturer, the result would have been chaos.
Everyday, hundreds of trucks would line up outside the store to deliver the products. The
store may not have enouv=gh space for storing all their products and this would add to
the chaos. If a grocery wholesaler is included in the distribution chain, then the problem
can be solved. Most of wholesaler have a warehouse where they can store bulk
shipments.

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3. Customer convenience Including members in the distribution chain provides customer
with a lot of convenience in their shopping pattern. Customer can purchase the product
through retail store as well as online store.

4. Customer can buy in small quantities Work as a middle person, retailer will buy bulk
quantities from the manufacturer as this is more cost effective than buying in small
quantities. The customer have benefit of buying smaller quantities through these retailers
or stokist.

5. Reseller often use persuasive techniques to persuade customers into buying the product.
Thus, this can increase sales for Naelofar Hijab. They often make use of various
promotional offers and special product isplays to entice customer into buying the product.

6. Reseller provide valuable information Manufacturer who include reseller for selling
their products rely on them to provide information which will help in improving the
product or increasing its sales. High-level channel member often provide sales data. On
all other occasions, the manufacturer can always rely on the reseller to provide them with
customer's feedback.

7. Wide plantform via online Having many websites such as Lazada, 11 Street and
Zalora to sell Naelofar Hijab creates many convenience to customer as well as can hype
to promote the product as these websites have its own loyal customer and heavy traffic
feed.

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4.1 CONS OF HAVING CHANNEL MEMBERS IN NAELOFAR HIJAB

1. Loss of revenue The HQ or manufacturer sells the product to the intermediaries at

costs lower than the price at which these middleman sell to the final customer. Therefore,
the manufacturer goes for a loss in revenue. The intermediaries would never offer their
services to the manufacturer unless they made profit out of selling their products. They
are either made a direct payment by the manufacturer, for instance, shipping costs or as in
the case of retailers by selling the product at costs higher than the price at which the
product was bought from. When reseller markup the price too high, this can also
jeopardized the image of the brand as reseller should actually sell the product at the
agreed price. The manufacturer could have sold at this final price and made a greater
profit if he had been managing the distribution all by himself.

2. Loss of Communication Control Along with loss over the revenue, the HQ also loses
control over what message is being conveyed to the final customers. The reseller may
engage in personal selling in order to increase the product sale and communicate about
the product to its customers. The reseller might exaggerate about the product and put up
higher price which may lead to miscommunication problem to end user. The retailer may
provide training to it's salesperson of retail outlet but on the whole, they have no control
on the final message conveyed.

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5.0 CHANNEL MARKETING STRATEGY

Islamic fashion is a rapidly growing industry: Muslim spending on fashion is expected to reach
US$488 billion by 2019. The sheer size of market would also be attractive for competitors to
gain bigger market share. In facing threats of new entrant, Naelofar Hijab are not shy from facing
challenges in the industry. An effective distribution channel can be a source of strategic
advantage for the company. With more 700 channel members under their name, NH would be
able to gather market intelligence that would be impertinent to formulate their marketing
strategies in order to gain bigger market share.

Trademark registration in overseas countries are also ongoing to avoid counterfeit product
manufactured oversea at cheaper and inferior quality that would affect NH orinal products sales
at the same time compromising their channel members income. For instance, a textile company
in Vietnam allegedly manufactured knock-off NH in 2016. This knock-off product eventually are
found in stores back in Malaysia. By registering trademarks in Vietnam, it allowed NH to take
legal action towards the textile producer that supplied the counterfeit to the stores in Klang
Valley.

Constantly sharing product information among channel members are among Channel Merketing
Strategy implemented by NH. Seemless connectivity and ease of communication assisted the
share of knowledge especially by email. Channel members are supported by NH in term of
events promotions
which is also
advertised in their
official website. 3

3
https://naelofarhijab.com/pages/bazaar

20
Since Naelofar Hijab was launched in December 2013,
many copycats have tried to use the brand name to sell
their own designs.

"I have a team that will investigate and then approach

them or send them letters. We do what we can within
our means to stop them..."

Meanwhile, Neelofa said she had resorted to lodging the

matter to the authority after two legal letters served to
the owner of a shop chain and kiosks against selling the
fake goods were not responded to. 4

4
http://www.tnp.sg/m/more/hijab-business-success-not-
going-her-head

21
In other aspect of Naelofar Hijabs Channel Marketing Strategy, they are strengthening local
production in order to meet with the current customer demand.

Well, we want to focus on strengthening local production.

Neelofa noted that products under her label are entirely Malaysian-made
and she has never appointed any foreign manufacturer. 5

In reference to Neelofas comment to a local press in April 2017, local production would be
referrring to manufacturing in the channel structure. Strengthening the production in term of
efficiency, development of infrastructures, and enhancing the production quality would be part
of the strategy to strengthen the channel structure.

Having confirmed by its owner, Naelofar Hijab are mass manufactured locally.Quality control,
packaging and labelling are also done locally making production time delivery lead time are
relatively shorter. By having 3 manufacturing facilities which is strategically located in Shah
Alam and Kuala Lumpur, it is within close proximity to the companys HQ in Taman Tun Dr
Ismail, Damansara.

As for 2017, their expansion to go international would be further strengthening their brand equity
and at the same time part as the channel marketing strategy. Opening new stores in Chelsea,
London aimed to be generating RM15mil in 2017, triple from RM5mil revenue that Naelofar
Hijab gained in 2016 from their online platform for international segment.

5
https://www.pressreader.com/malaysia/new-straits-times/20170421/282578787922076

22
5.1 CHANNEL RELATIONSHIP MARKETING

In protecting their channel members interest, conflict resolution are handled meticulously by NH
team. As the relationship between channel member and company is long-term oriented and
members of the channel rely on each other to jointly realize their goals by serving buyers. And in
any long-term relationship conflict is inevitable and its resolution will impact relationships
among channel members.

CRM is highly important in maintaining relationship between company with over 700 channel
member. NH took seriously on the wellbeing of the channel members and created specific email
to handle issues such as reporting counterfeit, fake items, unauthorised sellers, and staff
misconduct, to name a few.

Source: Naelofar Hijab official website

Stockist is the heart and core of their success. They relied to stockist consistency and
capabilities. 6 Thus CRM for Naelofar Hijab is essential to take care of the heart and core of the
business. Appreciation events are also part of the motivation to keep the channel members
motivated.

6
https://www.hmetro.com.my/node/159339

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6.0 APPENDIX

1. https://naelofarhijab.com/pages/bazaar

2. http://www.tnp.sg/m/more/hijab-business-success-not-going-her-head

3. https://www.pressreader.com/malaysia/new-straits-times/20170421/282578787922076

4. https://www.hmetro.com.my/node/159339

5. C. M. Sashi, Florida Atlantic University, USA, Conflict Resolution Strategies and

Marketing Channel Relationships: Framework and Research Propositions

6. Nurzihan Hassim, Taylor's University, Globalizing the Hijab: A Malaysian

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