Sie sind auf Seite 1von 14
`
`

Tyerant Pte Ltd

Tyerant Anti-Slip Cupholder

Group Members:

Loo Zi Shun Jason, Lee Zi Kang, Tsui Siu Ming, Jeremy Yap Zhao Jiang, Pang Chen Hui, N Guruvaraprasad, Tye Zhi Herng Brendan, Simone Lam Yin Shan

11 May 2017 Academic Year 2016/2017, Semester 2

i

This report is commissioned to provide a holistic review of Tyerant Pte Ltd’s product and marketing strategies. This provides better insights and allow Tyerant Pte Ltd to positively-adjust its report to make it more flexible and to position Tyerant as a strong competitor in the target market, Industrial and Scientific Products. With a competent mix of marketing strategies, Tyerant Pte Ltd is confident that the Tyerant Anti-slip Cupholder will be able to perform well in the market and generate sustainable profits.

With is unique design and features such as the adjustable claw clamp, Tyerant Anti-slip Cup holder is able to differentiate itself from its competitors and offer a simple solution to address the problem of inconvenience caused by liquid spillage.

Given the product’s appeal being relatable to the general population in Singapore, There is a large market for Tyerant to tap onto.

Tyerant Pte Ltd will adopt a market skimming pricing strategy, selling Tyerant anti-slipping cup holders at a retail price of SGD$15. Our products will be distributed through selected department stores and online stores to increase the geographical spread of the products to targeted consumers. The integrated marketing communication strategy will also be used to create awareness of the product with a single market voice through advertisement, sales and trade promotion, direct marketing and public relations.

The primary marketing objective is to gain market penetration of 17 percent in the first year, to achieve first-year sales of 3000 cup holders in Singapore. The primary financial goals are to achieve first year sales revenue of SGD$18,000, to achieve revenue growth of 17% annually for the first 3 years and to breakeven in the second year.

ii

Contents

1. Introduction

1

2. Market Analysis

1

2.1. Targeted Demographic

1

2.2. Type of market and distribution

2

2.3. Marketing Needs

2

3. Development and Production

3

3.1. Development Status

3

3.2. Production Process

3

3.3. Cost of Production

4

3.4. Operating Expenses

4

3.5. Capital Requirement

4

4. Sales and Marketing

5

4.1.

Sales and Marketing Strategy

5

4.1.1 Market Introduction Stage of Product Life Cycle

5

4.2. Advertising and Promotion

5

4.3. Pricing Strategy

5

4.3.1. Market Skimming Pricing Strategy

5

4.3.2. Psychological Pricing

6

5. Management

6

6. Finances

8

6.1. Capital Equipment & Supply List

8

6.2. Balance Sheet

9

6.3. Cash Projections

9

7. Funding Request and Returns

10

Conclusion

11

iii

1.

Introduction

Although Singapore can be considered a service industry, manufacturing remains an important pillar of the economy. In 2012, the goods producing industries contributed 27% to the country’s GDP. Over the past years, Singapore has moved up the value chain to undertake more complex and higher value-added manufacturing activities and increased its focus on Research and Development (R&D). Key industry clusters include electronics, chemicals, biomedical sciences, info-communications and media, logistics and transport engineering. New areas of growth such as clean energy, environment and water, and natural resources, complement the established key clusters. On a year-on- year basis, Singapore’s manufacturing output increased 10.2% in March 2017. On a seasonally adjusted month-on-month basis, manufacturing output increased 5.0% in March 2017. Singapore has a full suite of activities to meet business requirements; from R&D to development, manufacturing, supply chain development, logistics and regional and global headquarters functions.

Tyerant Pte Ltd is a not-for-profit incorporated manufacturing company established in 2017. It addresses critical needs in everyday lives. Throughout its history, Tyerant has been at the forefront of developing products to serve the needs of Singapore’s population, providing them with solutions to everyday problems. A strong, customer- focused approach and the constant quest for top-class quality have enabled the company to sustain leadership in its major line. The remit is to promote and sell Tyerant’s products and services in Singapore. Tyerant promotes business development opportunities in Singapore and hopes to endeavours to Southeast Asia. Tyerant is responsible for meeting new and existing clients as necessary, performing demonstrations of products that is specifically marketed to meet the client’s needs.

Our most popular anti-slip cup holder is designed to prevent liquid from spilling from its holder. The adjustable claw clamp easily accommodates the arms of chairs of any form, size and make. It adopts the laws of inertia and conservation of angular momentum and its distinct bright colours stands out to warn users from any accidental contact. There is no product in the market with features like Tyerant Anti-Slip Cup Holder.

2. Market Analysis

2.1. Targeted Demographic

Singaporeans have been known to exemplify the spirit of consumerism, given how private consumption expenditure amounted to a whopping $100 billion in 2013. These figures attest to the locals’ propensity to engage in retail spending; particularly for the up- and-coming strawberry generation backed up with growing spending-power and an increased appetite for consumption, without giving much due thought to possible consequences. Therefore, our anti-slip cup holder should appeal to the younger demographic, as they have been shown to be more willing to spend.

1

2.2.

Type of market and distribution

The targeted market can be segmented into two domains: online and physical. In order to assimilate the product as much as possible, the product should be launched in both types of markets. However, the short-term business model would prefer the former since setting up an online store has lower overheads and start-up costs. The majority of the expenses would stem from the registration of the website, which would pale in comparison to a brick-and-mortar shop. Furthermore, all the relevant costs may be offset by offering advertorial spaces to advertises, where a portion of the website may be leased to them in exchange for a fee, and this fee should be pegged to the amount of traffic our website is able to garner.

Alternatively, we can supply our product to existing e-retailers such as Lazada or Shopee, which would incur even lesser costs. However, the presence of similar products offered by our competitors may lead these e-retailers to be less inclined to accept our product. This calls for greater innovation in the design and manufacturing process in order to better differentiate and position our product ahead of other competitors.

Lastly, we can pitch our product to novelty stores across Singapore and if accepted, supply them with our cupholders. This proposition is similar to the one above except that our product will be supplied to a brick-and-mortar shop instead, and this entails a higher Recommended Retail Price due to additional costs incurred by a physical store (such as rent, electrical bills, etc.)

The main obstacle faced by supplying retailers with our product, be it physically or online, is not only the presence of competitors, but other products being sold that may serve as a distraction for consumers. More choices can prove to be an impediment from our point of view, as now the consumers are able to choose from a wider range of products. The idea of incurring an opportunity cost when purchasing our product over another would become more salient as given the increased amount of choices, the “next best alternative” can take the form of a greater number of products. To mitigate this issue, our product should be distributed according to the first proposition, where we should be tasked with the creation of our own website that caters to the sale of our product only.

2.3. Marketing Needs

An effective marketing strategy encompasses both widespread dissemination of product awareness, as well as creating a sense of desire for the product in the eyes of the consumer. Traditional approaches towards marketing which involve hard advertising through various mediums such as newspaper or e-brochures should be shunned in favor of an emerging trend towards large-scale marketing: capitalizing on the current wave of “influencers”.

This novel approach is not entirely new, as most emerging companies have been approaching these online personalities due to the respectable number of followings they have on social media. An increasing amount of companies have been adopting this strategy due to the low-cost but high-yield effect, given how this is more cost-effective than traditional modes of advertising, and also more versatile. The mechanism works as such: the targeted “influencer” is asked to promote our product by way of a photograph which captures the purpose and essence of an anti-slip cupholder, which has to be uploaded on his/her profile. In exchange, we will provide them with a complimentary

2

cupholder, as well as a token fee depending on the amount of followers they have/pictures of our product they upload on their Instagram. We can then use the analytics function present in the Instagram application which affords us an insight into the statistics behind the post, such as the number of views (people who clicked on the photo) to the extent of reach (people who have seen the photo, but did not click on it). Depending on whether the figures are commendable, these tracking methods allow us to better devise an alternative marketing strategy if the current one proves to be unpopular.

This method then accords with the two main tenets of an effective marketing strategy as mentioned above. An Instagram profile with a decent following of 10,000 active followers would establish our product across these very 10,000 discerning eyes. Furthermore, we should leverage on not just the digits, but the popularity of these profiles as well, as consumers would then be more pre-disposed to purchase our product if someone who is appealing to them is endorsing the very same product. This is analogous to celebrity endorsements we are so familiar with, but without the requisite budget, this is the next best alternative.

This form of marketing is also ideal because the users of these mediums are almost identical to our target demographic: the younger crowd. Given the fervour behind social media applications such as Instagram today, this form of marketing would better position us to make an impact in the market, even in the presence of our competitors. Besides the design and build of our product, marketing is another effective manner which allows us to better distinguish our product vis-a-vis our competitors.

3. Development and Production

3.1. Development Status

Tyerant Pte Ltd is currently at its prototyping and testing phase, the company is aiming to take it to production phase by early summer 2017. Tyerant Pte Ltd is carefully designed and tailored for consumers that had bad experience with spilling drinks on important items such as laptops, important documents and even furnitures. The aim of the product is to prevent any spillage of liquid from any unintentional impacts.

After the completion of the testing phase, the product will be send for the application of patent. The application will be submitted on 1st of June 2017 for examination together with the description and drawings of Tyerant Anti-Slip Cup Holder. Follow by the souring of manufacturers, we will be mainly looking for manufacturers in Thailand. Contract requirements will be send to various manufacturers, then further selection will be based on factors such as costs, quality, reputation and possibilities on future cooperation. Lastly, the distribution phase, products will be will distributed directly to retailers and will not be stored in warehouse in order to cut cost and lower risk.

3.2. Production Process

For mass production of Tyerant Anti-Slip Cup Holder, we will choose a computer guided laser cutting process for handling both the acrylic base and handle. Computer guided laser cutting are more precise and cost effective compared to human labour, therefore indirectly further reducing the cost by reducing the risk of error.

3

The final product is to be assemble manually by workers in the factory, where in will be packed and shipped out. Therefore, man labour is required but at a minimum.

3.3. Cost of Production

Raw materials required (per unit)

1. Acrylic

2. PVC Pipe

3. Wooden board

4. Wire

Total cost for 1 unit $ 25.55.

Aim to reduce the production cost to $10 per unit with mass production, excluding labour cost and shipping.

Estimated cost for per unit produce including labour cost and shipment will be $17 per unit. There are no similar products in the market, thus comparison cannot be made. The cost of patent is estimated to be S$ 30, 000, as the actual cost will vary depending on different products and other factors.

3.4. Operating Expenses

Operating expenses includes:

Advertising

S$5,000

Salary and Wages

S$15,000

Supplies

S$17,000 per unit 1,000 units

Travel and Vehicle Expenses

S$3,500

Utilities

S$10,000

Total Operating Expenses

S$ 41,500

3.5. Capital Requirement

The cost of hiring a manufacturing worker in Thailand require an average of S$250 per month.

The capital requirement varies depending on the start-up requirements, the calculation below based on per 1000 units,

1000 units output in a month require 4 workers

S$1,000 Labour

Material cost for 1000 units

S$10,000

Packing/shipping/transportation

S$6,100

Patent cost

S$30,000

Others

S$8,000

Total Capital

S$ 55,100

4

4.

Sales and Marketing

4.1. Sales and Marketing Strategy

As our targeted prospects are the younger demographic, advertising and selling online would be very effective in reaching out to our tech-savvy targeted audience. Physical product can also be sold to novelty stores such as Box Boss which are often patronised by our targeted demographic. Sale of product has been discussed in section 2.2 and will not be reiterated here.

4.1.1 Market Introduction Stage of Product Life Cycle As it is just being introduced, it will fall in to the Market Introduction Stage of the Product Life Cycle, where sales are low and there are high promotion expenses. As the only distributer of Tyerant Anti-Slip Cupholder in Singapore, Tyerant Pte Ltd will bring in basic designs initially to reduce inventory, cost and management resources. In its initial phase, sales may be limited, but Tyerant Anti-Slip cupholder will create awareness through advertising campaigns so that demand can be generated. Moreover, retailers will be educated about the features and benefits of the technology. As the product goes into the growth stage in the future, the company will bring in more designs to cater to a wider consumer segment.

4.2. Advertising and Promotion

Two key ideas will be made to associate with the Tyerant and they are: Cool and Health. The Tyerant will be advertise as a “cool” product to own. We believe that the younger demographic is attracted to products that are well-designed and functional. In addition, there is a growing trend of consumers paying more attention to their health. As such, the Tyerant will also be market as a “health” product for maintaining a healthy lifestyle by simply staying hydrated. These ideas will work together to create a sense of desire among consumers.

Online advertising and promotion can be made on social media sites such as Facebook, Instagram and YouTube. These sites are often visited by the younger generations. Advertising through such platforms are expected to be more cost effective than advertising on newspapers and magazines. These will be done to achieve widespread awareness of the Tyerant.

The Tyerant can also be sponsored to cafes or eateries for customers to try out while having their meals. A website link or QR code for purchasing the Tyerant can be printed and pasted onto the sample products so that interested customer may place their orders. This will be done to capitalise on a wave of “influencer” in which well-established cafes such as Starbucks can be selected as our “influencer”.

4.3. Pricing Strategy

4.3.1. Market Skimming Pricing Strategy

Tyerant Anti-slip Cupholder will adopt a Market skimming pricing strategy, selling the product at a retail

price of S$15. The products will be sold at a relatively high price so as to maximize profit. Competitors will not be able to produce similar products due to the patent to the innovative technology, thus a higher price can be charged.

5

4.3.2.

Psychological Pricing

To add on, psychological pricing employed against the target segment would influence the consumers to

associate high price with high quality, which is also evident in Tyerant Anti-slip cupholder.

5. Management

Each section is headed by a responsible individual and has local sales organisations. Centrally, there are a number of joint group functions that support each section in order to enjoy the advantages of these common areas, so that each section and product work purposefully according to customer’s requirements.

The Chief executive officer, who is appointed by the board of directors, is responsible for to the management of Tyerant and appoints the members of the executive management team, which is made up of individuals responsible for the following joint group functions: finance, production, sustainability, expansion, communications, human resources, business development and logistics.

Prof Chua Leok Poh Chief Executive Officer, The Tyerant Company Prof Chua Leok Poh has been Chairman of the Executive Board and Chief Executive Officer of The Tyerant Company since Jan 9, 2017. With more than 20 years experience in the Engineering Industry, Prof Chua brings with him a strong background of leadership within the engineering community. Prof Chua has also previously served in senior management positions for engineering and manufacturing industries in Singapore.

Loo Zi Shun Jason Member of Executive of The Tyerant Company Chief Technical Officer

Loo Zi Shun Jason was appointed Chief Technical Officer in January 2016. In his role, he is responsible for identifying the full potential of our assets, leveraging our technical excellence and innovation capabilities. As the CTO of The Tyerant Company, Mr Loo developed the product and company strategy for potential venture capital recipient companies Mr Loo has over 3 years’ experience leading Technical Services groups in demanding high tech environments. His extensive management experience includes leading tech support, IT and production departments, specialising in design and manufacturing.

Lee Zi Kang Member of Executive of The Tyerant Company Chief Manufacturing Technology Officer

Mr Lee Zi Kang has been serving as Chief Manufacturing Technology Officer as of January 2016. Mr Lee ventures hand in hand with the Chief Technical Officer to develop a technical strategy for the company. This involves goal-setting, discussing options and analyzing risks. Mr Lee is also responsible in aiding recruitment and retention efforts, streamlines production operations and advocates for innovative ideas, high production and individuals on the team.

Tsui Siu Ming Member of Executive of The Tyerant Company

6

Chief Communications and Content Officer

Tsui Siu Ming leads the team responsible for corporate communications, content publicity, social media and brand public relations. Mr Tsui is also recognised as a key innovator in the acquisition and distribution for publicity. Mr Tsui is responsible for the commercial strategy and development of an organization. As the Chief Communications and Content Officer, he takes ownership of the customer and the customer interface with the product or service offering, making sure that all functions of the company are aligned to meet its strategic commercial objectives.

Jeremy Yap Zhao Jiang Member of Executive of The Tyerant Company Chief Sustainability Officer

Jeremy Yap was appointed Chief Sustainability Officer in January 2017. In this role, Mr Yap focuses on long-term, strategic sustainability trends, helping management anticipate changes, and manage key external risks to our production. Mr Yap is responsible for providing an ongoing evaluation of the company’s profits, personnel and other factors that affect company performance.

Mr Pang Chen Hui Member of Executive Board of The Tyerant Company Chief Officer Finance

Mr Pang Chen Hui has been a board member of the Executive Board and Chief Financial Officer of The Tyerant Company since 9 January 2017. Mr Pang Chen Hui is responsible for all the day-to-day transactional accounting for the business. This will include the tracking of all transactions and the management of any government reporting. Mr Pang Chen Hui is also responsible for management of the organization’s cash flow and ensuring there are enough funds available to meet the day-to-day payments.

Mr N Guruvaraprasad Member of Executive of The Tyerant Company Chief Officer Hub Management

Mr Guruvaraprasad has been a Member of the Executive Board of The Tyerant Company since 9 January 2017. He heads the Hub Management division of the Tyerant group since January 2017. Mr Guruvaraprasad has spent the bulk of his professional career with the Tyerant Group and was one of the founding members of the company. Over the following months, he held a number of management positions, beginning with the responsibility for design development and manufacturing operations and procedures.

Tye Zhi Herng Brendan Member of Executive of The Tyerant Company Chief Marketing Officer

Mr Tye has been Chief Marketing Officer of The Tyerant Company since January 2017. Mr Tye is responsible for Tyerant Group’s Sales and Marketing. As the CMO of the company, Mr Tye is

responsible for Tyerant’s top line revenue across all product lines

Mr Tye oversaw all aspects

7

of marketing for start-up. In addition to directing all branding, pricing, strategy and demand generation for Tyerant, he also established complete sales and marketing integration.

Simone Lam Yin Shan Member of Executive of The Tyerant Company Chief Business Development Officer

Ms. Lam joined The Tyerant Company as Chief Business Development Officer in January 2017. She is responsible for developing marketing and business plans for achievement of revenue goals for the company. She also entails participating in media communication activities for the company. As a CBDO, She is responsible for understanding the trends of the company’s field of specialty and developing business proposals for existing and new customers.

6. Finances

This section offers the financial overview of Tyerant Pte Ltd with regards to its marketing activities. We strive to meet our financial objectives when forecasting for the start-up expenses, operating expenses, sales revenue and net profits. Below are the financial objectives of Tyerant Pte Ltd:

Achieve first year sales revenue of S$18,000

Achieve revenue growth of 17% per year for the first 3 years

Achieve breakeven point in second year

6.1. Capital Equipment & Supply List

Capital Equipment & Supply List

Computer-aided Laser Cutters

S$10,000

Intellectual Properties

S$30,000

Factory and Plant

S$25,000

Wages/per month

S$16,000

Utilities/per month

S$10,000

Supplies/per month

 

Acrylic

S$2,500

PVC pipes

S$3,000

Wires

S$2,500

Wooden Boards

S$2,000

Total:

S$10,000

8

6.2.

Balance Sheet

Tyerant Pte Ltd Balance Sheet 11 May 2017

Assets

S$

Liabilities

S$

Current Assets:

 

Long Term Debt

55,100

Cash

96,500

 

55,100

Petty Cash

350

   

Inventory

10,000

Shareholders’ Equity

 

Supplies

51,000

Preferred Stock

51,000

Total Current Assets

157,850

Common Stock

52,400

   

Total Shareholders’ Equity

103,400

Goodwill

650

   
 

650

   
 

158,500

 

158,500

6.3. Cash Projections

Our proposed cash flow projection forecast is summarised in the table below. We foresee that we will incur a loss of S$16,000 as our estimated revenue of S$60,000 by selling 3000 units at an average manufacturer price of S$10 per unit is less than our estimated cost incurred of

$19,000.

Tyerant Pte Ltd Internal Cash Flow Projections January to 12 May 2017

 

January

Febuary

March

April

Operating Cash, Beginning

S$19,000

S$1,000

S$3,000

S$1,000

Sources of Cash:

       

Receivable collections

S$50,000

S$70,000

S$65,000

S$60,000

Customer Deposits

S$10,000

S$11,000

S$10,000

S$12,000

Loans from the bank

-

S$20,000

S$18,000

S$20,000

Other

-

-

S$3,000

 

Total Sources of Cash, including Beginning

S$60,000

S$102,000

S$99,000

S$93,000

Uses of Cash:

       

Payroll, including payroll taxes

S$15,000

S$15,000

S$15,000

S$15,000

Advertising

S$5,000

S$4,500

S$4,000

S$3,500

Purchases of Fixed Assets

S$51,000

S$51,000

S$51,000

S$51,000

 

9

Estimated Income Taxes Current year

S$5,000

S$5,000

S$5,000

S$5,000

Total Uses of Cash:

S$76,000

S$75,500

S$75,000

S$74,500

Excess (Deficit)

(S$16,000)

S$26,500

S$24,000

S$18,500

Key Assumptions:

1)

75% of sales will be collected the month after the sale

2)

25% of sales will be collected the 2 nd month after the sale

3)

Payables are due in 25 days

4)

60% of eligible receivables can be used for the revolving line of credit.

7.

Funding Request and Returns

Tyerant is a new startup company that will set itself apart from other production companies in Singapore by offering a range of products not available elsewhere in the region. Its target customers are a mix of working adults and students.

We have established that the following are our financial needs:

Capital/ Equipment Needs

S$55,100

Start-up Inventory

S$30,000

Prepaid Expenses & Deposits

S$10,000

Miscellaneous Start-Up Costs

S$41,500

Materials

S$10,000

Marketing & Promotional

S$5,000

Total:

S$151,600

We believe that the initial funding of S$151,600 will be sufficient to carry Tyerant through initial profitability. These financial needs will be met through a blend of bank loans, equipment leases and personal cash investment. At present, we anticipate that we will meet our capital/equipment needs by collaborating with the Nanyang Technological University Lab. We will seek a start-up capital loan in the amount of S$55,100.

We anticipate that we will be able to sustain minimum gross margins of 30%. We will seek to increase this level through the management of our inventory and sourcing. We further anticipate that, after our initial year of operation, we will be able to sustain a net return of sales of 16% - 17%.

Furthermore, with this level of performance, we anticipate expanding our presence outside Singapore to other Southeast Asia Countries after 3 years. Should this concept take off as anticipated, it can enjoy significant economies of scale in terms of higher bargaining power and decreasing average fixed cost. Hence, this would help to lower its variable cost and cost of goods sold. Tyerant foresees that the profit earned in the long run is likely to be significant and sustainable.

10

Conclusion

All in all, we will be focusing on building brand awareness through innovative marketing strategies to appeal to the consumers and to leverage on established retailers to sell our product to our target market. This will be done through comprehensive marketing strategy with the end goal of achieving long run sustainability in sales as well as high market share of our target group. We will then aim to expand our product to include more customizable functions as well as widen our target segment. It is also vital to interact with our consumers and keep up with changing trends, remaining competitive among current and potential competitors.

11