B. Ownership Information
The business will be established through sole proprietorship. It is considered as the simplest way of being in business for one’s self (Mancuso & Schroeder, 2007). Sole proprietorship is the type of business organization registered in Malaysia under the Registration of Business Act, 1956, which under the jurisdiction of Suruhanjaya Syarikat Malaysia (SSM) or Companies Commission of Malaysia (CCM) under the Domestic Trade and Consumers Affairs Ministry. Just like in other country, sole proprietorship, in Malaysia is owned by one person called the sole proprietor by a Malaysian citizen or permanent resident who attained the age of 18 years and above (Venture, 2009).
Because sole proprietorship is considered as not a legal entity, the owner is entitled to all the profits that are generated from the business. But, the liability of the owner is unlimited, not just when the business is having financial difficulty, but also when the business fails and he faces bankruptcy. Thus, the creditors may sue him for debts incurred and also obtain a court order to claim against his personal assets, including his house (Venture, 2009). Another important to consider is that all of the turnover or sales of the company will be a personal property of the owner. Thus the said money can be used in order to expand the business.
Thus, all of in-flow of money in the business will be going to the sole owner of the business, while, the process of decision making will be done with the help of the employees. However, the most important factor to consider is the fact that the owner is solely responsible for the risks that are available in the way of the business, including the risk of bankruptcy that will endanger his or her personal assets such as house and car.
V. Marketing & Sales Management A. Market Penetration Strategy
Market penetration strategy helps to estimates the strengths the ability to successfully launch any business (McKnight, 2004). Thus, the market penetration strategy can help to gain competitive advantages. It is important to take note that there are three approaches which can be used including: cost-based, skimming the market and differentiation market penetration strategy. Thus, in the case of the business, the cost-based market penetration strategy will be used, by penetrating the market by lower prices than the competitors (Alonzo, 2006). The said strategy involves the process of using quite low prices when introducing a product or service to the market for the first time. This is because the company is expecting to introduce the product to a large mass market and to sell a lot of product. Thus, the company believes that the said strategy will help to discourage the competitors and take a large part of the possible market from them. This strategy is important because there is a massive competition in the market (Kloppler, et al., 2006).
B. Strategy for Growing the Business
The company is also looking forward for the future expansion or growth. Thus, the company focuses on the different strategies that help the company to be ready for the future. In the case of the business, the horizontal strategy will be used or apply. It is the process where in the business will provide the same type of products to the different segments of the customers. In the case of the business, it will focus on offering toy cars for the other age segment of the customers including toddlers and the adults.
In the case of toddlers, it will focus mainly on distributing products that are safe and can meet the demands of the toddlers as well as the changing and hard to please parents. These toy cars will mainly focus on more educational factors which will develop the physical and mental factors of toddlers. Thus, it will focus on the demand of 1 – 3 years old kids. It will focus on rubberized, blocked and musical cars, which is feasible for the kid market.
On the other hand, it will also focus on the teens or more matured market that will focus on 16 and up customer segment. It is important to consider that toy cars, especially those remote controlled one are becoming a hobby for young adults. Thus, it will be helpful if the company will cater the demands of the said groups.
Aside from that, the company can also focus on focusing on the premium products, which will enable to market products that will meet the demands of the possible customers in the upper level of the society. It is important to consider that customers have the mentality that when a product is somewhat expensive, it signifies high quality. Therefore, it will be important to offer higher priced products in order to focus on the demands of those brand sensitive customers.
C. Channels of Distribution Strategy
In the case of the distribution channel strategy, the company will focus on the retailers. It is important to consider that retailer is in the best position in order to know what their customers require due to the fact that they have the direct contact with them (see Appendix B) (Varley, 2006). Thus, the company will connect and communicate with the retailers in the industry, which can help them gather information about the demands and behaviors of the customers towards the product. This is because the company will be able to use the information gathered by the current systems of a specific retailer that can help the decision making, including the total unit sales for a given model of toy car. By doing this, the company will be able to note what products to be developed, changed and even removed to the product lists of the company. Aside from that, it would also give the company the idea regarding what geographic segments have the greater demands.
D. Communication Strategy
Communication strategy is important because it can help the business to deliver their marketing message towards the customers. In the case of the company, it will focus on the online marketing, as a continuation to its effort towards using technology. In Malaysia, the Internet has a great influence in the behavior of the customers, thus, it is the reason why there are many companies in the country that are specializing in online marketing including those e-marketing that focus on blog marketing.
Above all, leaflets will also used in order to disperse the information about the products in easy and wider market. This will be distributed inside and outside the retail shops and in other place where there are lots of children such as school premises, playgrounds, parks and malls. The leaflet will focus on bragging the cost-effectiveness of the product.
VI. Service of Product Line A. Product Description
The company will be offering 12 different types of products (see Appendix C). VB801-1689 is replicas of jeeps which come with 3 different colors: orange, and two different shades of green. VB1283-2009-10B is a van-type car, which is replica of common cars which can be seen in the street, but it comes with stickers that serve as designs. VB1275-688 is another replica of jeeps; however, it is more manly compare with the VB801-1689 because it comes with more realistic designs and colors. VB950-1689 is replica of turbo high power luxury car, with the design that is open. This type of car is the replica of cars that can commonly see in movies and television shows. VB1209-835 is replica of military jeep. It comes with missiles, which shows more realistic appeal. VB804-88A is also known as the kiddie police. It was called that way because it is the replica of police car but it comes with attractive color such as green and yellow. 0403B is another replica of police car, but is known as the wacky version, because it has face. VB912-2028 is the more realistic replica of police car. VB1264-937B and VB1016-2040 are the replicas of tour car, which can commonly see in the street with the tourists. 878 and VB1128-371 are replicas of race cars which come with two colors: white and red.
B. Research and Development Activities
The research and development activities focuses on first knowing what are the latest models of cars in the market, together with the different famous designs of cars in the world by focusing on the different famous movies, particularly those from the West. Aside from that, the company also focuses o on the different factors that will ensure that all of the products that will be produced are safe for the children, including the issue of hazardous chemicals or materials and the safety of the physical design itself.
VII. Financials
Balance Sheet
ASSETS 2009 2008 2007
Current
Cash ,225 ,569 -
Accounts Receivable ,970 ,698 ,569
Deposits and Prepaid Expenses 3,568 3,256 2,589
Inventory 186,526 182,563 179,256
255,289 245,086 217,414
PROPERTY, PLANT 69,568 89,526 95,568
AND EQUIPMENT
INVESTMENTS - 49,526 48,256
4,857 384,138 361,238
LIABILITIES
CURRENT
Bank Loan $- ,000 ,000
Accounts Payable
and Accrued Liabilities 30,000 20,254 10,025
Income Tax Payable 12,256 - -___
42,256 70,254 80,025
Statement of Income
2009 2008 2007
REVENUE ,056,557 9,256 1,689
COST OF SALES
Opening Inventory 135,569 115,269 99,263
Delivery 1,253 1,156 1,063
Purchases 670,236 702,263 703,263
807,058 818,688 803,589
Closing Inventory 123,569 119,256 117,489
683,489 699,432 686,100
GROSS PROFIT 373,068 289,824 305,589
OPERATING EXPENSES 238,458 249,537 268,923
INCOME FROM
OPERATIONS 134,610 140,287 136,666
OTHER INCOME
Loss on disposal of
property, plant and
equipment. - (456) (356)
Gain on sale
of investment. 17,968 16,569 -
Miscellaneous (1,268) (1,698) 369
NET INCOME
BEFORE TAX 115,374 125,872 136,653
INCOME TAX EXPENSE 14,256 18,987 -
NET INCOME 101,118 106,885 136,653
Statement of Cash Flow
CASH FLOWS FROM
OPERATING ACTIVITIES 2009 2008 2007
Net Income for the year 1,118 106,885 136,653
Adjustment for:
Amortization 16,784 14,325 13,967
Loss on disposal of
property, plant
and equipment. - 456 356
Gain on disposal
of investment (17,968) (16,569) -
Cash derived from operations 99,898 105,097 153,976
Decrease (increase) in
working capital items
Accounts receivable 52,970 49,698 35,569
Deposits and prepaid
expenses. 3,568 3,256 2,589
Accounts payable
and accrued liabilities. 30,000 20,254 10,025
Income tax payable 12,256 - -___
Cash Flows from
Operating Activities. 98,794 73,208 48,183
Schedule of Operating Expenses
2009 2008 2007
OPERATING EXPENSES
Advertising ,568 ,968 ,896
Amortization 16,784 14,325 13,967
Bank charges and interests 5,587 6,987 7,997
Insurance 6,589 7,532 9,263
Membership and Licenses 12,596 15,104 17,879
Office and General 12,263 12,599 14,089
Rent and Utilities 20,639 22,545 26,263
Repairs and Maintenance 5,963 9,587 9,784
Supplies 4,896 7,523 8,987
Wages and Benefits 128,610 122,944 121,564
Vehicles 5,963 9,423 11,452
238,458 249,537 268,923
VIII. References
Agency, M. N. (2009). Are Toys Really Safe? Retrieved May 15, 2009, from Bernama.com: http://www.bernama.com/bernama/v3/printable.php?id=278921
Alonzo, R. (2006). The Upstart Guide to Owning and Managing a Bar Or Tavern. Kaplan Publishing.
Baschab, J., & Piot, J. (2004). The Professional Services Firm Bible. John Wiley and Sons.
Entrepreneur. (2009). Market Testing. Retrieved May 15, 2009, from Entreprenuer: http://www.entrepreneur.com/encyclopedia/term/82442.html
Ghani, N. H., & Zain, O. (2004). Malaysian Chilren’s Attitudes Towards Television Advertising. Advertising & Marketing to Children , 41 – 51.
Guide, H. (2007). Organizational Structure. Retrieved May 15, 2009, from Organizational HRM: http://www.hrmguide.co.uk/hrm/chap4/ch4-links3.htm
International, E. (2008, November). Toys and Games in Malaysia. Retrieved May 14, 2009, from Euromonitor International: http://www.euromonitor.com/Toys_and_games_in_Malaysia
Kerin, R., Hartley, S. W., & Rudelius, W. (2003). Market: The Core. McGraw Hill Professional.
Kloppler, H. B., Petzer, D., Ismail, Z., Roberts-Lombard, M., Klopper, L., Subramani, H., et al. (2006). Marketing: Fresh Perspective. Pearson South Africa.
Kotler, P. (2000). Marketing Management: The Millennium Edition. New Jersey: Prentice Hall.
Mancuso, A., & Schroeder, A. (2007). From Your Own Limited Liability Company. Nolo.
McKnight, T. (2004). Will it Fly?: How to Know If Your New Business Ideas Have Wings — Before You Take the Leap. FT Press.
News, A. (2000, September 21). Malaysia July Manufacturing Sectors Sales Up 27.8% Yr-On-Yr. Retrieved May 14, 2009, from HighBeam Research: http://www.highbeam.com/doc/1G1-65346699.html
Tan, E. (2009, March 19). Malaysia a Prime Market for Cartoon Network. Retrieved May 14, 2009, from The Edge: Your Window to Malaysia: http://www.theedgemalaysia.com/media-a-advertising/2238-malaysia-a-prime-market-for-cartoon-network.html
Unicef. (2007). Malaysia. Retrieved May 15, 2009, from Unicef: Unite for Children: http://www.unicef.org/infobycountry/malaysia_statistics.html
Varley, R. (2006). Retail Product Management: Buying and Merchandising. Routledge.
Venture, H. (2009). Sole Proprietorship – Issues to Consider. Retrieved May 15, 2009, from Hero Venture: http://www.readycompanies.com/SoleProprietor.htm
IX. Appendices
A. Appendix A: Market Test
The process of market test has been done by focusing on the perspective of the customers regarding the products of the company. During the first stage, a prototype, model and description of the product was done in order to show to others. This was done by preparing a list which classifies and introduces the products and toy car models of the company. In preparation, I also tried some of the toy car models in order to ensure that the products also passed by qualification and standards.
After that, the process of determining the prices was done, which focus on the prices of the products to be sold in the market. It includes the accurate prices and delivery from the suppliers, together with the different costs such as offices, shipping, loss, breakage, insurance, transportation and salaries, together with labor costs. After which I asked my family members, especially those young children, if they will buy the said product in the given price.
In the end, I conducted a survey that will ask for the opinion of the possible customers, including the issue of price, quality and design. I asked the 10 possible customers including 6 male children and 4 male adults to answer the following questions:
Survey Question:
Age:
How much would you pay for these products (in average)?
What can you say about these product? Why?
Would you buy them?
Responses:
Age
Q1 (RM)
Q2
Q3
6
1.00
Nice, because they are colorful
Yes
8
1.50
Cute, lots of design to choose from
Yes
5
.85
Very colorful
Yes
12
.90
Cool designs
Yes
10
1.25
Looks affordable
Yes
15
.1.00
Childish designs
No
40
.80
Not so attractive, because there are some designs that needs some improvement such as blending of colors.
No
35
.60
Good, I like it!
Yes
29
1.00
Perfect for my boy and my pocket *laugh*
Yes
45
.90
Look nice
Yes
B. Retailer in Distribution Channel
Appendix C: Product Lists and Description
Model No.
Image
Retail Packing Size
Price/Packing Size
VB801-1689
3
RM 0.90 / per packet (3 pcs)
VB1283-2009-10B
1
RM 0.60 / pc
VB1275-688
1
RM 0.60 / pc
VB950-1689
6
RM 0.80 / set (6pcs)
VB1209-835
1
RM 0.60
VB804-88A
6
RM 0.80
0403B
1
RM 0.60
VB912-2028
12
RM 0.60 /pcs
VB1264-937B
12
RM 1.50 / box
VB1016-2040
12
RM 1.00
878
1
RM 0.80
VB1128-371
1
RM 0.60
Credit:ivythesis.typepad.com
0 comments:
Post a Comment