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1.

0 Introduction

I am the Marketing President of Xtreme Creative Sdn. Bhd. which is an international marketing
firm in Kuala Lumpur. We have assigned to prepare a marketing report about Hiding Alarm
Clock, also called ‘Clocky’. It is a revolutionary alarm clock. It has many special features
compare to other alarm clock. The creator, Nanda, is planning to market this product in
Malaysia. However, she unsure of how to position a product and she was faced with a number of
difficult decisions as she attempted to devise a marketing plan to bring her Clocky project to
fruition. The following is our analysis of her situation and suggestions on how she should
proceed.

2.0 Overall Marketing Plan and Objectives

2.1 Background

Clocky is a special alarm clock that outfitted with wheels which allowing it to hide itself. Then
the owner has been forced to awake to find it. It was invented by Gauri Nanda, a graduate
student at MIT Media Lab. Clocky won the 2005 Ig Nobel Prize in Economics. After earning her
Master Degree from MIT, she founded a company, Nanda Home Inc, to commercialize Clocky
and other home products.

2.2 The Clocky and Target to Achieve

Clocky is not an ordinary alarm clock - it has wheels. It can run away with beeping sound and
the users have to get out of bed to silence Clocky's alarm. Clocky beeps in an R2D2-like robotic
pattern, this kind of annoying sound sure can awake users from sleeping. Users can set Clocky to
run away right when the alarm sounds, or set to snooze one time before it runs away. Besides,
users can customize snooze time up to 9 minutes long. Users can also turn off Clocky’s wheels if
users don't want Clocky to run away. A backlight helps users see Clocky at night. Clocky is the
best choice for those who have trouble waking up in the morning. It is compact, attractive
design, clever, and playful. It will amuse users as they wake up in the morning.

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We target to achieve our goal, RM1 million sales in first year and RM500,000 sales in the
second years. The sales will drop in second year because we are going to use skimming pricing
strategy and technological product has short life cycle.

2.3 Target Market

The potential customers are divided into 5 groups. The following explain the value propositions
and reasons for each target market:

- Fun Market: This market composed of people who might see Clocky as an amusing appliance
and a nice robotic household pet. Innovation and playful nature of Clocky can meet the needs of
this group of customers.

- Need Market: This market composed of people who have serious difficulties waking up in the
morning with a standard common alarm clock. They might see Clocky as a useful technology
and pioneering wake-up function.

- Innovators: This market composed of people who are like new ideas and technologies. They are
very active consumers, and their purchases reflect cultivated tastes for upscale, niche products
and services. They like to receive innovative idea and technologies.

- Experiencers: This market composed of people who are young, enthusiastic, and impulsive
consumers. Their purchases reflect the emphasis they place on looking good and having "cool"
stuff. They quickly become enthusiastic about new possibilities but are equally quick to cool.
Therefore, we have to keep on innovate new features on Clocky in order to keep this group of
customer.

- Strivers: This market composed of people who are trendy and fun loving. They favour stylish
products that emulate the purchases of people. The socializing effect influence them to buy the
product.

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3.0 Competitive Analysis

3.1 Market Study

There are many type alarm clocks in the market, for example, battery alarm clock, phone alarm
clock, spring-driven alarm clock, digital alarm clock and radio alarm clock. The price range is
from RM2.00 to RM30.00.

Consumer can get a normal alarm clock easily because these alarm clocks are buyable at many
places, such as, hypermarket, supermarket, stationery shops, watch shops and ‘pasar malam’.

3.2 SWOT Analysis

Using a SWOT analysis we are able to define the success factors that will influence Clocky in
future launch on the market. Therefore we will identify internal organizational strengths and
weaknesses with external opportunities and threats.

3.2.1 Strengths

a. Add value- We use some strategies to add value to our product. Firstly, we composed a slogan
to promote our product, it is “Say Goodbye to Late”. Another purpose of this slogan is to attract
our main potential target market, Need Market. Secondly, we will choose colours and type of
package that make your product look more valuable. Therefore, we can attract attention from the
others potential customers- fun users, experiences, and strivers.

b. Customer list- We’ll have a customer list which contain the customers’ personal information
because we’ll requested them to fill in a form to register a 1-year warranty of Clocky. We will
have competition advantage because the information allows us to do more accurate and detail
market analysis in future. In addition, we’ll request for their feedback and provide them the latest
product and information about our company, through sending e-mail to them. This method is
very cost effective and customers can control the volume of information that they want to
receive.

c. Special features and Innovative- There are many features in Clocky, such as, run away with
beeping sound, customizable snooze time, clever, playful and innovative design. This is an
innovative product in the market.
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3.2.2 Weaknesses

a. Weak market image- Nanda Home Inc. is a new company or brand, people have less or no
knowledge about the company. The sales of Clocky may be affected by this factor. Customer
may not dare to try to buy Clocky. This challenge relates directly to our choice of distribution
channels, as the channels we choose will impact the way in which the Clocky brand is perceived
immensely. If we address this communication properly, the weak image of company factor will
be diminished significantly.

b. Short product life cycle- The nature of technological product dictates that Nanda must already
be considering the positioning and timing of the next generation of Clockys.

c. High cost- The quality of Clocky is excellent so the components used are expensive. Therefore
the cost of producing Clocky is high.

3.2.3 Opportunities

a. Creating brand loyalty- In order to create brand loyalty, the quality of Clocky must be
controlled. If the product is of a poor quality, the customer will look elsewhere for something
similar when it is time for their next purchase.

b. Growth strategy- The market of Clocky can be expanded to other countries, such as Thailand,
Indonesia, and China.

3.2.4 Threats

a. Competitors- Since we are the first mover in the market to market Clocky- an alarm clock
outfitted with wheels, many competitors will enter the market if Clocky has a good respond from
consumer. They will observe closely the innovations of first movers and then improving from to
gain advantage.

b. 10% import tax- This policy has increased our cost, therefore we have to charged higher price
to maximize our profit, we lost a lot potential customers in consequences.

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3.3 PEST Analysis

A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T.
is an acronym for the Political, Economic, Social, and Technological factors of the external
macro-environment.

3.3.1 The Political-Legal Environment

a. Political Stability

Malaysia had its fair share of internal problems due to the differences and existence of various
races. Notably between the three major races, that is the Malay, Chinese and Indian community.
The biggest incident was way back in May 1969 when racial tension between the Malay and
Chinese caused riots and fights which resulted in hundreds of deaths. Since then, the races have
learned to live rather amicably with each other and want to avoid such a serious conflict from
happening again. It is normal now to see the various races working together in the same office,
joking and helping each other out or eating together, although they do not necessary live in the
same area.

b. Sales Tax and Import Duty

Sales tax which is currently enforced is a single stage tax levied on certain imported and locally
manufactured goods, either at the time of importation or at the time the goods are sold. It is not
imposed on personal or professional services, sales of real property, or sales of intangible
property. General rate on all goods is 10%.

The rate of import duty varies according to the type of goods imported. The rate applicable to
each category of goods is indicated in Columns (4) and (5) of the "First Schedule to the Customs
Duties Order of 1996." Normally the rate on watch and clock is 10%.

3.3.2 The Economic Environment

a. Malaysian GDP to grow 8% in 2010 - strongest since 1996

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Malaysia’s gross domestic product (GDP) is expected to grow to 8% in 2010, underpinned by
strengthening domestic and external conditions, according to AmResearch.

Strengthening domestic and external conditions led them to upgrade Malaysia’s economic
growth to 8% in 2010, versus Bank Negara’s forecast of 4.5%-5.5% and World Bank’s 5.7%.

The Malaysian economy may have probably expanded at a more rapid pace in first quarter of
2010 at 9.8% year-on-year, its highest in a decade, with private sector spending by households as
well as exports leading the way.

b. Income/ Buying Power

Malaysia is classified as an upper-middle income country, and considered as one of the most
developed of the developing countries. The proportion of middle-income households, defined as
those earning between MYR1,200 and MYR3,499 per month, has increased from 47.7% in 1999
to 47.9% in 2002. Mean monthly gross income per household increased from MYR2,472 in
1999 to MYR3,011 in 2002, denoting average growth of 6.8% per annum.

Private consumption increased at a faster pace of 5.1% year-on-year in 2003, underpinned by


improved consumer confidence. The propensity to consume is likely to be further enhanced by
firm commodities prices, higher export profits, low interest rates, a stable job market and the
positive wealth effect of the buoyant stock market.

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3.3.3 The Social-Cultural Environment

a. Lifestyles / Shopping habits

Malaysia’s consumer lifestyle has been changing due to education levels. High profile
international retailers have played important role in shaping consumer-buying behavior.

Malaysians also have an open demand for foreign brands. It is easy to find products marketed by
Procter & Gamble, Unilever and Nestlé on the retail scene. Therefore, Malaysians who live in
urban areas have become accustomed to shopping for groceries at hypermarkets and
supermarkets.

High and middle-income households spend most of their money at hypermarkets, followed by
supermarkets and traditional grocery stores. The high-income group has household income of
more than MYR3,500 per month.

b. Domestic growth to buoy retail sector

In view of the young customer base in Malaysia – forty-two percent of the total population is
aged between 10 and 34, so the demand for lifestyle products is very high. Over the last two
years, some local retailers have been offering interest-free installment plans for expensive
purchases. This will encourage consumer spending thus boosting retail sales.

3.3.4 The Technological Environment

a. The internet users in Malaysia

Among ASEAN Countries, Malaysia is one of the most prominent countries as it ranks as
number 2 in terms of internet penetration, with 57.80 of every 100 Malaysians being internet

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users. It is positioned just behind Singapore. There 64% out of the whole internet users in
Malaysia are in the age of 15-34 years old.

b. Malaysia e-commerce statistics

Half of Malaysia’s Internet users are buying or transacting online, which equal to more than 8
millions in 2009. Most of the numbers are contributed by airline tickets. Other popular goods
sold online include books, general consumer goods, movie tickets, technology gadgets and so on.
The most preferred online payment method in this part of the world is credit cards followed by
Internet banking.

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4.0 Product Strategy

Our main product hiding alarm clock (clocky) is a consumer product (B2C) in the
market. Business–to-consumer (B2C) defined as a transaction that occurs between company
business and a consumer, as company provides goods or services for consumers.

There are many type of consumer product such as specialty product, convenience
product, shopping product and unsought product. We classify our product as shopping product
because normally consumer will spend considerable time and effort gathering relevant
information about price, quality, style, color, resale value and etc, before making a decision to
buy it. The characteristics of shopping product in consumer factors is considerable time for
planning to purchases, less purchase frequency, important of convenient location and
considerable of comparison in price and quality. In additional, the characteristics in marketing
mix factors is the price of the product is relatively high than other product, seller image is very
important, have a short distribution channel and the promotion of selling and advertising created
by producer and retailer.

The product life cycle is the progression of a product through introduction, growth,
maturity, and decline stage. When our product enter into the market is a starting life cycle at
introduction stage which our product price, promotion and investment should be perform as high
level because is a new product, less customer knowing for it and sale is low but slowly growing
therefore, marketer will put more effort in promotion and investment for the product. Next stage
is growth; sales will grow rapidly in market our profit gain faster and product knowing from
customer, they will look for it in the market. We need to keep on perform Investment, price, and
promotion at the higher level to attracting customer. After that product will enter to the maturity
stage which is the climax growing of our product, sale of the product is slow but our profit still
having high cash flow and product become common in market, therefore price of the product
should be maintained or reduced, low investment and promotion in differentiate. Last stage is
decline; sales, profit, and product will decrease in market, promotion will be stop and lower
investment on this product because the decline of product life cycle which makes the product
price will be reduced in market.

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As a technological product we estimate our product life cycle is shorter den other product
because the nature of technologic which is a fast growing and development product in the
market. Besides that, technologic products get obsolete very fast from season to season. Based
on the problem, as a marketer will suggest company either extends the product life cycle which
at maturity stage or stop invested the product at the decline stage.

We can extend the product life cycle through increase the number of users, changing
package size, labels, or product quality, finding new uses, and increase frequency of use. During
the maturity stage, we can increase the number of users by extend our product to other
geographical area such Indonesia, Thailand, and other Asia countries. Besides that, we can
change the product package or quality during the seasonal events because the product with the
new design packaging outlook will attracted difference type of customer to purchase it. Lastly,
finding the new uses of the product which we can add new function into our product such as
alarm tone can change to customer favorite music song and according to the seasonal produce
the new edition of the product. This is the way that we can extend the product life cycle in the
market.

Hiding alarm clock recognized as the individual brand in the market. We decide to build
strong brand equity for this product with slogan “say good bye for late”. The advantage for using
brand equity can easily get likelihood from customer to recognize the firm and product which
can increase the sale volume and higher profit margin against competing brand.

Packaging plays an important role to form part of the product such as protection to the
product, assistance in marketing and cost-effective packaging. Successful packagings have the
power to influence buyer decisions which help increasing the sales of the product. We decide to
package our product with the attractive outlook that can capture the customer attention and can
enhance convenience for customer.

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5.0 Distribution Strategy

Distribution defined as the management plan for moving product to intermediaries and
final customers. A distribution channel can be as short as being direct from the manufacturer to
the customer or may include several intermediaries such as agents, wholesalers, distributor and
retailer. There are different types of distribution channel such as manufactures to customer also
known as direct channel, manufactures to retailer to customer, manufactures to wholesaler to
retailer to customer and manufactures to agents to wholesaler to retailer to customer.

For our product we decide the distribution channel as manufactures to retailer to


customer. The reason that we choose this type of distribution channel is the manufacturers can
earn higher profit margin which the product can go through less intermediaries to the customer.
Example: manufactures sell product to first intermediary (wholesaler) with price RM 5 each,
after that first intermediary sell product to second intermediary (retailer) with price RM 8 each,
lastly second intermediary sell product to the customer with price RM 10 each. Based on the fact,
the price of the product will increase when pass through to each intermediary until to the
customer. Therefore, it is better that manufactures can earn higher profit margin by go through
less intermediary.

By using this type of distribution channel, we also faced disadvantages as inefficiency on


distribution which less intermediaries the channel of distribution will become more complex
between manufacturers and retailer. Example; there are 2 manufacturers direct sell product to
100 retailers, there are 100 contact lines and one line from each manufacturers to each retailers
which the arrangement for the distribution will be complex and inefficiency.

In addition, we also can use dual distributions which mean moving the product through
more than one channel to reach the firm target market. There are two type of channel we can use
in help for distribution the product, first is the channel from manufacturers to retailer to customer
and another is the direct channel which the manufacturers direct sell to the customer. By using
the direct channel as distribution, we will use internet as our intermediary to communication with
customer which use the direct mail (e-mail) provide more information to them.

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After that, we choose selective distribution for the manufacturers distributes product in
each particular market. Selective distribution involves a manufacturer using a limited number of
channels in a geographical area to sell product. The reason that we use selective distribution is
can reduce the total marketing cost and give more control over product in advertising, price and
display. Besides that, we also want to do a marketing test for the product and estimate the
problem.

Lastly, the logistics and supply chain management that we are perform for the product is
downstream management. Reason that we use downstream management is our product and
manufacturers are from outsider countries which import by air freight to Malaysia. Besides that,
we also decide to have a manufacturer base at Malaysia for future expansion to other Asia
countries and we can perform upstream and downstream management in the distribution plan.

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6.0 Promotion strategy

Since Clocky product hasn’t market in Malaysia yet, hence our main objective of
promotion is to provide information to the market about the availability of Clocky product. We
need to inform the targeted market that our product is available to buy now. To achieve our
promotion objective, we will focus on 3 types of promotion marketing. They are Guerrilla
Marketing, Electronic Direct Marketing, and Advertising.

Guerrilla Marketing uses unconventional, innovative, and low-cost technique to attract


consumer’s attention. Here is our idea to implement the guerrilla marketing, we will produce
many units model of Clocky that are in larger size then put it in the place that is easy to exposure
to consumer like shopping center, LRT stations, airports, etc. Based on the AmResearch statistic,
it shows that the forecast of Malaysia Gross Domestic Product (GDP) is expected to grow to 8%
in 2010. With this statistic, we get know that the expectation of Malaysian going to shopping
center will be increase. When people saw our Clocky model, they will feel interested on our
Clocky product, this will indirectly help to generate the sales.

Beside focus on guerrilla marketing, we will also use Electronic Direct Marketing
Channels to promote the Clocky. According to past record, U.S spending on online advertising
has totals about $16 billion per year. This is equals to more than 5% of total advertising
spending. We will advertise Clocky in the web and we will also send email notices to our
targeted market. Based on the research statistic, the Malaysian internet age group from 15 to 34
year old has possessed 64% out of the whole internet user. This means that our targeted market is
inside this 64% of user group. According to comscore.com, total online spending near $30
billion in 2009. From here, we can see that how huge for the internet user market. By using this
electronic direct marketing channel also cost less than traditional advertising marketing.

We will also use advertising to promote the Clocky. Advertising is non personal
communication through various media about a business firm, not for profit organization, product,
or idea by a sponsor identified in a message that is intend to inform, persuade, or remind
members of a particular audience. Here, we want to inform market about the Clocky through TV
advertising. According to market research by Nielsen show that advertising on media had surged
18% across Asia Pacific in the first quarter of 2010 with the average spending on ad advertising

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in media across the region has lifted to US$31.16 billion. By placing the ad in TV advertisement,
this will make sure our potential customers are aware with our Clocky product and this will also
help to generate repeat and higher value purchases.

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7.0 Pricing strategy

Since the Clocky product is a shopping product, hence we can set the price at a relatively
high. The price we set for Clocky is RM49.90. Whereby the pricing strategy we use for Clocky is
Skimming Pricing Strategy. This type of pricing strategy is the strategy that involves charging a
relatively high price for a short time where a new, innovative, or much-improved product is
launched onto a market.The main objective we use Skimming Pricing Strategy is to get benefit
from high short-term profits.

The reasons why we are using Skimming Pricing Strategy is because from the practice of
this pricing strategy it allows for some return on the set up costs, where when our
innovativeclocky product is launched, the research and development costs are likely to be high,
such as the costs of introducing the product to the market via promotion, advertising and etc.
After we launched this new product, we will suffer a threat from getting new competitors for
clocky product in the market. The price of clocky is expected to fall when new competitors come
into the market. We have to monitor our competitors carefully because competitors may copy
and modify our clocky product, the produce and sell it in the lower cost. When competitors have
coming into the market, we are able to lower down our price to compete with competitors.

Based on the research on household income and buying power we have done, Malaysia is
classified as an upper-middle income country, and considered as one of the most developed of
the developing countries. The proportion of middle-income households, defined as those earning
between MYR1,200 and MYR3,499 per month, has increased from 47.7% in 1999 to 47.9% in
2002. Mean monthly gross income per household increased from MYR2,472 in 1999 to
MYR3,011 in 2002, denoting average growth of 6.8% per annum.On average, households living
in urban areas spent 1.5 times more than households living in rural areas. Average consumer
spending stands at MYR1,943 per month in the urban areas and MYR1,270 per month in the
rural areas. According to Certification Salary Survey Results, salary by age group between
18-25 earn the salary average at $31,241.37 and 26-35 are $43,533.00. With the statistics
above, we can understand that our targeted markets are able and affordable to spent RM49.90 for
our clocky product.

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8.0 Conclusion

Marketing is acknowledged to be the most challenging activity for any company. First of
all, as a marketer we need do more research and collecting as much as relative information from
the market before we start our marketing plan which can assist us to setup our marketing plan
goal or objective. Based on the information, we can clearly classify that what type of product we
are selling and which type of customer will be our target market. After that, we will go through
to the marketing analyses which are PEST, SWOT and 4P. PEST means the Political- legal
environment, Economic environment, Social-culture environment and technological
environment. SWOT mean as Strength, Weakness, Opportunities, and Threats. PEST and SWOT
are playing the important role in whole marketing report which assisting us to understanding the
market needs.

Next, 4P mean as price, place (distribution), promotion, and product strategy. For
planning the 4P strategy, we based on the PEST and SWOT marketing analysis for assisting us.
Besides that, we can estimate how the changing of environment influences the product and
determine the SWOT of the product in the market. For examples the 4P strategy that we use in
this marketing report are skimming pricing strategy, dual distribution, guerrilla marketing
promotion, and shopping product.

As a conclusion, an effective marketing report will brings together all of the elements of
the marketing mix (4P) to achieve the company marketing objectives by delivering to customers
what they want and satisfy their need in the market. Therefore, the most successful marketing
planning will be those that can meet these need most effectively.

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References

(http://www.docstoc.com/docs/35312835/NEW-CLOCKY!-The-Run-Away-Alarm-Clock-Hide-
and-Seek, 2008)

(http://www.malaysia-trulyasia.com/mta/political_stability.htm, 2002)
(http://www.marketingteacher.com/lesson-store/lesson-pest.html, 2010)
(http://www.odci.gov/cia/publications/factbook/geos/my.html, 10/15/03)
(http://biz.thestar.com.my/news/story.asp?
file=/2010/4/23/business/20100423113511&sec=business, 2010)
(http://www.pwc.com/en_GX/gx/retail-consumer/pdf/malaysia.pdf, 2004)
(http://certification.about.com/od/selfstudy/l/bl_02results_c.htm, 2000)

(http://comm215.wetpaint.com/page/Malaysia+Internet+Penetration, 2008)

(http://www.marketingservicestalk.com/news/loa/loa106.html)

(http://my.nielsen.com/news/20100712.shtml, 2010)

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