MKT 652Marketing Plan

HALAL Organic Soap

Norbaizura Abd Rani2005213274

Nurul Ain Mohd Ali2004269865

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HALAL Organic Soap

ACKNOWLEDGEMENT

The objective of our report is to obtain the assistance and support of the marketing plan that

details the actions necessary to achieve the marketing objectives as to penetrate the market

of product.

The overall marketing communication deals with situation analysis, target market specification,

product evaluation, marketing objectives and the marketing communication programme

itself.

As in our group project, we focus specifically on Zurain (M) Sdn Bhd - Herbal Organic

Soap. Since this is a anew product in the market, it will take more affort to introduce it to the

consumer.

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HALAL Organic Soap

EXECUTIVE SUMMARY

Zurain (M) Sdn Bhd has designed a new product that provides managers with a quick, easy,

and affordable method to effectively monitor employee hand washing. Proper hand washing

is the most effective preventative measure available to combat communicable diseases.

Zurain (M) Sdn Bhd is the first producer using organic materials that answers this problem

and provides indisputable proof every time a person washes his or her hands. After washing

occurs, the unique dye in our soap remains on the hands and fades to the skin’s natural

color in less than six minutes. This would allow supervisors to conclusively verify at a glance

whether hand washing has taken place. No other product on the market offers such a high

level of assurance of sanitation compliance. The product is safe and no chemicals that

effect our sensitive skins. Now a days since Halal has become an issue in purchasing a

product. Because of that Zurain (M) Sdn Bhd had line up the Halal ingredient in making this

product .

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HALAL Organic Soap

The following SWOT analysis captures the key strengths and weaknesses within the

company, and describes the opportunities and threats facing Halal Organic Soap.

1.1 Strengths

• In-depth industry experience and insight.

• Accessible, approachable and economical products.

• The use of a highly-efficient advertisement.

• HALAL product produce by muslim.

1.2 Weaknesses

• Had a lot of shortages, not have enough of the right product in the stores.

• Underestimated how much they would sell when they first entered the market.

• Competition within the usual soap product which is cheaper.

• Not available in high volume.

1.3 Opportunities

• Participation within a growing industry.

• Promoting organic and hand made product which is safer in used.

1.4 Threats

• Future and potential competition from an already established market participant.

• A slump in the economy that could have a negative effect on people’s spending of

discretionary income on self hygiene products.

SWOT analysis

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HALAL Organic Soap

The Market

Although restaurants and hospitals have tremendous market need for a product such as ours,

day cares represent the best opportunity for our initial target market. Day cares are an ideal

market because they have a vested interest in reducing disease transfer amongst children,

and have adamant support from their clients [parents] to create as clean an environment as

possible.

The Company

Zurain (M) Sdn Bhd boasts a strong founding team and experienced board of advisors

brings twenty years of industry experience and networked relationships to accelerate market

penetration of the product line.

Zurain (M) Sdn Bhd will follow three concise strategies to achieve our desired growth:

• Exploit first-mover advantage in a highly fragmented market with a unique and

differentiated product.

• Develop a strong branding campaign to build awareness, positive perception and sales

of our products within our target markets.

• Continue to develop new products to satisfy an ever growing set of markets.

Mission

Our mission is to create value for customers and shareholders by continually improving

health and reducing preventable illnesses through the use of our soap.

Keys to Success

• A first-mover branding campaign to build awareness of our products as the standard for

ensuring body and hand washing compliance.

• Patent protection to defend our time-sensitive dye and product concept from

competitors.

• Complementary relationships with organizations interested in increasing body and hand

washing compliance.

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HALAL Organic Soap

Objectives

• Become the specialty soap of choice for day cares.

Products

It is estimated that the world’s Halal products trade averages nearly US$150 billion per year.

The existence of such a big market naturally opens the doors of economic opportunities for

these engaged in the business, directly or indirectly.

A successful marketer is not always the one who produces exactly the same as of others,

but the one who, while producing the same product lines, can cater to the special tastes,

preferences and needs of a group of customers which other producers have failed to meet.

Halal product market exists wherever there are Muslim consumers whose tastes and

preferences are governed by Halal rules and specification. Halal products may be similar

as most of other product, but its nature, technique of its processing, the ingredients used,

the handling methods from the beginning to the end, is always the one approved and

recommended by Islamic law.

In light of this, Zurain (M) Sdn Bhd have made the decision to produce and market a product

that is targeted specifically for Muslim consumers. Halal organic soap. There are loads of

shower gel products that are already available on the market at current, however, how many

of those products can be used confidently by Muslim consumers. Zakeeyah shower gel will

provide that “confident” to the consumers

The producers of Halal food can take the cue from this relationship and sponsor activities

that would raise the level of Islamic consciousness of the people, eventually contributing to

increase in the demand for their particular product.

Zurain (M) Sdn Bhd product line provides a unique control level to managers, supervisors

and parents alike. Halal organic Soap is an antimicrobial-based product for hospitals

(HEALTHassure) and restaurants (FOODassure) - the antibacterial products are not yet in

development.

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HALAL Organic Soap

Product Description

• Zurain (M) Sdn Bhd will produce a line of institutional Halal organic soaps with a time-

sensitive dye blended into the mixture.

• The packaging will be compatible with existing soap dispensers mounted in washing

stations and be available in a variety of sizes.

• Initially, Zurain (M) Sdn Bhd will produce products with child care acquirers in mind,

utilizing the brightest colors possible. This product line will consist of herbals and organics

that comes together with HALAL.

• HALAL had become an issue here because, in the market, there are a lot of organic

soap available. Consumer cannot realy trust the product because they don’t realy know

satisfy the ingredient use in the soap making..

Market Segmentation

Zurain (M) Sdn Bhd will first be introduced in the Klang Valley area, before sequential

expansion to additional day care markets. After successful implementation in Klang Valley,

we will begin expansion into the other States in Peninsular Malaysia, Sabah and Sarawak.

TARGET MARKET SPECIFICATION

A. Demographic Target

i Gender

The targeted group for this product is for both woman and also man who are concern

health and cleanliness. Since Halal Organic Soap is produce with herbal blended

that can help consumer to make body feel soft.

ii Medium and lower Income

With the price of RM 5.90 per piece Halal Organic Soap is affordable for people

who conscious about health and cleanliness.

iii Young and matured consumers

Our target customers are for those who are busy and don’t have time to use soap

while bathing. This product is suitable for all type of people. The young consumers

are between ages 20-45 while the mature consumers are among 46-75 years old.

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HALAL Organic Soap

B. Psychographic Target

i. A female buyer may have different opinions from a male buyer on our product. A

female buyer may look into the ingredients of the products such as no artificial

ingredients, 100% natural and no animal testing. On the other hands, male buyer

may not concern about the ingredients as far as it can have a nice scent. As long as

it gently cleanses buyer skin, leaving it silky clean, soft, and beautiful. The attitude

would help us to identify the most reliable and appropriate people to buy our

product.

ii. Social class and lifestyle may also take effect on the way people behave. Working

people who surely don’t have much time to have a bath with normal soap will buy

Halal Organic Soap. Furthermore the healthy skin awareness may relate our product |

to good skin healthy lifestyle.

C. Geographic target

i. For local market we are targeting people who live in urban and sub urban areas,

most spcific to working people who may think that time is always running out,

therefore, they must have something clean, healthy and fast for shower.

ii. People in rural area may be lack of awareness on certain product marketed in modern

and tremendous lifestyle.

D. Size of target market

Our company estimates the numbers of consumers nationwide who compromise target

market are:

i. Young-aged and matured customer - 25%

ii. Single & working people – 25%

iii. Medium and low income workers – 50%

(From the total workers in Malaysia – 8,569,200 people)

Industry Analysis

The Industrial and Institutional soap industry, of which we are a part, is quite fragmented, but

contains several well known main competitors: Kimberley Clark, Dettol as well as generic

brands that provide to distributors like Tesco and Giant. The industry is stable and growing;

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HALAL Organic Soap

between 1998 and 2003 it grew by an average of 4% annually. Within the I&I sector there

is fierce competition for market share among the existing popular soap offerings, leading to

lean profits on soap sales.

Distribution Patterns

Distribution in the soap industry is provided by regional providers. These distribution

companies usually serve a large portion of the market based on the respective size of the

market, delivering to the organizations monthly or bi-monthly depending on demand and

usage patterns. Food services typically receive deliveries of cleaning products once a month.

Hospitals typically have a distribution system that operates on monthly deliveries of large

quantities. Restaurants typically have a weekly delivery schedule.

Competition and Buying Patterns

Commercial customers select soap based on the necessary minimum safety regulations

for the intended user; restaurant and hospital regulations require anti-bacterial/microbial.

Customers will typically select a product based on price, distributor availability, and

convenience. Distributors will deliver a complete order of cleaning and maintenance products

to customers. Major competitors sell to a variety of customers, including distributors like

Tesco, who receive generic soap from bulk producers, then repackage and deliver it along

with other products it sells, utilizing the same distribution systems.

Target Market Segment Strategy

Our initial day care to all end-user consisting of children, adults and citizen people.

Organizations of this type such as hospitals and health instituional are attractive because they

are well managed, successful, health conscious and nationwide. Within these organizations

we will target decision level managers with the power to implement use of our product in

those locations.

Body and Hand washing in all end users is an ideal initial target market for several additional

reasons:

• Child care facilities have rampant illness and germ problems that can be directly reduced

through frequent child and worker hand washing.

• Child care facilities have strict, government mandated rules that require frequent hand

washing.

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HALAL Organic Soap

• Parents are particularly interested in reducing child illness, making them one of our

strongest advocates for the use of organic soap in environments they cannot directly

monitor.

Marketing Strategy

For our initial target market of day care facilities, the company will implement two parallel

marketing efforts, aimed respectively at day care facility decision makers, and the parents of

young children who use these facilities. We will create a push factor by effectively convincing

the decision-level managers within the organizations that our product provides an ideal

solution to the hand washing compliance. A “first to mind” branding campaign will build

organic soap as the leader in increasing body and hand washing compliance.

Positioning Statement

Organic soap is valuable to day care managers who need effective control solutions to

ensure frequent child and child-care worker hand washing to keep the environment clean

and to minimize preventable illness. No other product on the market serves the hand

washing compliance aspect of workplace safety with such an affordable, direct and complete

solution. Unlike traditional soaps, our product provides conclusive evidence every time an

employee washes his or her hands for only a marginally higher cost than traditional soaps,

and significantly less than gloves or other hand washing compliance systems.

Promotion Strategy

One of the most important aspects of a successful launch is positive publicity for our product.

We will develop an awareness campaign to promote our product through several avenues.

Our management team will fiercely pursue positive public perception through government

endorsements promoting the benefits of our products. We will also attempt to capitalize on

the novelty of the solutions provided by our product by actively seeking local news and media

coverage to help spread awareness. Buzz will be developed in social hubs by distributing

samples to parties with potential interest. Parental support of the product will be garnered

through free trials, demonstrations, and direct mailings to the day care parent roster lists,

parent groups and PTA’s.

At washing stations in client facilities we will spread awareness with stickers targeted

towards children, showing them the process of washing to turn their hands different colors

and emphasizing how fun it can be. Pamphlets will be sent to the family homes through

the day care roster mailing lists, to calm fears regarding a new product in their child’s

environment, explain the benefits and encourage the parents to respond and build feedback

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HALAL Organic Soap

for the benefits of the product to further increase implementation.

Some of the government programs of interest are the various compliance and workplace

hygiene programs supported and funded by the Center for Disease Control (CDC), the

Food and Drug Administration (FDA) and the National Center for Disease Control (NDIC).

Programs such as the Health Protection Research Initiative implemented by the CDC

demonstrate an invested interest by government programs in increasing the overall health

of Americans.

Distribution Strategy

Our initial distribution strategy will involve a combination of distributor and direct sales.

Relationships with local Northwest distributors will be established to increase promotional

reach and potential users. The first orders will be available immediately through direct delivery

by our executive team. Outsourcing distribution entirely in the future will allow SAFEassure,

LLC to focus its efforts on marketing and expanding as quickly as possible.

Distributors will pay for the inventory up-front, and although this cuts our profit margins it helps

SAFEassure, LLC to maintain a more flexible structure. By the start of 2007, distribution will

be entirely outsourced to distribution companies, and direct deliveries from the executive

team will cease.

Marketing Programs

Our most important marketing program is our branding program, aimed initially at regional

chain and franchise managers. This program is intended to penetrate the target markets, and

establish SAFEassure’s products as the soap of choice. Achievement should be measured

against our projected 45% monthly sales growth rate for the first year.

Emphasizing the risks associated with hand washing non-compliance, our marketing program

will employ the fear of disease, costs of illness and government regulations extensively.

Written materials will convey urgency, connect users to the underlying problem and suggest

SAFEassure’s products as the optimal solution to the problem.<

Sales Strategy

Sales strategy will initially address local and regional managers with ordering authority for

the establishments in that area. The prospective clients will be supplied with a professional

product information packet and moved into the sales funnel to begin closing prospect,

followed up with a direct mail brochure and a phone call.

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HALAL Organic Soap

There will be no initial direct compensation or commission for closed sales. Proceeds from

sales will be invested back into developing and expanding the business. As the company

begins to increase its initial sales force, commission-based incentive programs will be

implemented.

Sales Forecast

• If we are able to distribute our product through existing distributors, it will provide us a

significant financial advantage, as well as the ability to meet the quick increase in demand

for our product.

• Beginning with an initial monthly sale of $1,250 for our day care soap product

(CHILDassure), we predict sales will increase by 45% per month for the first year. We

then calculate a growth rate of 90% yearly. Cost of Goods Sold is approximately 47% of

sales. However, COGS grows at a yearly rate of 88%, which is less than the sales growth

rate in order to represent the economies of scale that we hope to achieve as our operations

grows.

Sales Forecast

Year 1 Year 2 Year 3

Sales

CHILDassure soap (day care) $237,168 $450,620 $856,177

HEALTHassure/FOODassure $0 $0 $0

Total Sales $237,168 $450,620 $856,177

Direct Cost of Sales Year 1 Year 2 Year 3

CHILDassure soap (day care) $94,867 $178,351 $321,031

HEALTHassure/FOODassure $0 $0 $0

Subtotal Direct Cost of Sales $94,867 $178,351 $321,031

Strategic Alliances

SAFEassure, LLC will initially encourage critical strategic alliances in two distinct areas:

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HALAL Organic Soap

Distributors

The relationship between Zurain (M) Sdn Bhd and the product distributors will be essential.

A flexible distribution system will be critical to the success and growth of our product. Good

distribution will allow our product to satisfy and flexibly expand to accommodate demand.

The Government

By teaming up with government organizations, Zurain (M) Sdn Bhd will be able to utilize

existing body and hand washing compliance programs to reach a much larger potential

audience than could be directly contacted. Government endorsement of our product and

the mention of its benefits in government brochures and written materials could be a major

competitive advantage and sales opportunity for Zurain (M) Sdn Bhd

Financial Plan

Based on market research, we expect the business to begin growing at 45% per month for

the first 12 months, then at a yearly rate of 90% for the next two years. Due to our low initial

investment costs, we can maintain the operations of the business with the cash buffer we

will have from start up. In addition, we will almost immediately have a positive cash flow,

allowing us the flexibility to cover any unforeseen expenses.

Important Assumptions

Sales

• We have assumed no payroll expense for the startup period.

• 100% of sales will be made on credit, the industry standard. Although we do plan to sell

some of our product (mostly for product promotion purposes) to the government agencies

who usually demand substantially longer payment terms, our major target group will remain

commercial entities. As such, we assume, on average, a 45-day collection schedule.

• Customers will pay for all relevant shipping charges.

• To be flexible in meeting the customer demand, we plan to maintain a minimal stock of

product at a rented warehouse and dispatch it from there. The rest of the product we

expect to be shipped from the outsourced producer’s site.

• Once we make the decision to address additional market segments, we will begin

increasing our marketing and sales expenses to represent the expected increase in

costs associated with developing packaging, advertisements, additional promotions,

and creating awareness of our products in the differing markets.

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HALAL Organic Soap

Projected Cash Flow

Overall, our business is expected to generate suffi cient cashfl ows. Our cash balance will,

among other things, depend on the level of inventory we’ll decided to keep at a rented

warehouse. At the moment, our projections in this respect are preliminary and we expect to

fi ne-tune them as the demand for our products grows.

We expect to secure a RM50,000 line of credit in year 3 to fi nance our receivables, listed as

“New Current Borrowing” in the table below.

In year 5 of operations, we will begin looking at our ability to begin paying back our initial

investors the RM250,000. Although the terms of the additionally sought investment are yet

to be agreed upon, we belief that our investors will provide us with a buffer of some years

before expecting a return on their investment, allowing us the capital and time to expand

and grow at an appropriate or desired rate. Nevertheless, for planning purposes, we have

made provisions to start paying out a modest dividend from the third year of our operations.

Currently, we set dividend payments to be equal to 5% of net profi ts.

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HALAL Organic Soap

Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales RM0 RM0 RM0

Cash from Receivables RM138,736 RM362,031 RM687,858

Subtotal Cash from Operations RM138,736 RM362,031 RM687,858

Additional Cash Received

Sales Tax, VAT, HST/GST Received

New Current Borrowing RM50,000

New Other Liabilities (interest-free)

New Long-term Liabilities

Sales of Other Current Assets

Sales of Long-term Assets

New Investment Received

Subtotal Cash Received RM138,736 RM362,031 RM737,858

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending RM57,600 RM144,000 RM216,000

Bill Payments RM128,381 RM215,710 RM438,395

Subtotal Spent on Operations RM185,981 RM359,710 RM654,395

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing

Other Liabilities Principal Repayment

Long-term Liabilities Principal Repayment

Purchase Other Current Assets

Purchase Long-term Assets

Dividends

Subtotal Cash Spent RM185,981 RM359,710 RM654,395

Net Cash Flow (RM47,245) RM2,320 RM83,463

Cash Balance RM29,455 RM31,775 RM115,239

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HALAL Organic Soap

Projected Profit and Loss

Our profit and loss projections reflect our expectation that monthly fixed costs will remain

constant over the course of the first year.

Cost of goods sold increases at a decreasing rate, as economies of scale make soap

production cheaper per unit as production volume increases. Based on these projections

the company will become profitable in October, 2005.

Advertising expenses will remain steady during our first year of operations. However,

Advertising and Promotion will grow in years 2007 and 2008 to reflect the purchase of print

ads, PR brochures, and additional promotional content.

Pro Forma Profit and Loss (MYR)

Year 1 Year 2 Year 3

Sales 237,168 450,620 856,177

Direct Cost of Sales 94,867 178,351 321,031

Other 0 0 0

Total Cost of Sales 94,867 178,351 321,031

Gross Margin 142,301 272,269 535,146

Gross Margin % 60.00% 60.42% 62.50%

Expenses

Payroll 57,600 144,000 216,000

Payroll Taxes 0 0 0

Depreciation 0 0 0

Rent 8,400 8,400 8,400

Utilities 1,200 1,200 1,500

Insurance 6,000 6,000 6,000

Telecommunications 1,200 2,500 3,500

Travel 1,800 2,500 4,000

Warehousing 3,600 4,000 4,500

Other General and 1,200 1,200 1,200

Administrative Expenses

Total Operating Expenses 81,000 169,800 245,100

Profit Before Interest and Taxes 61,301 102,469 290,046

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HALAL Organic Soap

EBITDA 61,301 102,469 290,046

Interest Expense 0 0 2,500

Taxes Incurred 18,390 30,741 86,264

Net Profit 42,911 71,728 201,282

Net Profit/Sales 18.09% 15.92% 23.51%

Projected Balance Sheet

Once we have established a relationship with the manufacturer, we will purchase inventory

in minimum quantities of approximately 15,000 gallons for approximately MYR20,000 per

shipment (following the initial start-up inventory purchase, at MYR50,000). As sales increase

we expect that inventory turnover rate to increase.

Our only significant Accounts Payable will be Inventory, which are a direct reflection of the

level of inventory on hand. We will be paying off our Accounts Payable in accordance with

sale of inventory. Therefore, as we begin to sell more soap, we will be increasingly capable

of meeting our obligations in a timelier manner, ensuring that we have enough cash on hand

to cover our short term liabilities.

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HALAL Organic Soap

Pro Forma Balance Sheet (MYR) Year 1 Year 2 Year 3

Assets

Current Assets

Cash 29,455 31,775 115,239

Accounts Receivable 98,432 187,021 355,340

Inventory 119,146 34,927 60,193

Other Current Assets 0 0

Total Current Assets 247,032 253,723 530,772

Long-term Assets

Long-term Assets

Accumulated Depreciation

Total Long-term Assets

Total Assets 247,032 253,723 530,772

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable 77,422 12,384 38,150

Current Borrowing 0 0 50,000

Other Current Liabilities 0 0 0

Subtotal Current Liabilities 77,422 12,384 88,150

Long-term Liabilities

Total Liabilities 77,422 12,384 88,150

Paid-in Capital 250,000 250,000 250,000

Retained Earnings (123,300) (80,389) (8,661)

Earnings 42,911 71,728 201,282

Total Capital 169,611 241,339 442,621

Total Liabilities and Capital 247,032 253,723 530,772

Net Worth 169,611 241,339 442,621

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HALAL Organic Soap

CONCLUSION

Halal Organic Soap is going to be one of the competitor product that is entering the market.

The broad sum of diverse activities performed in the interest of delivering a particular product

to market. The disciplines hold by the product management, as occupational domains

are product planning and product marketing. This is because the product’s functionality is

created for the user via product planning efforts, and product value is presented to the buyer

via product marketing activities.

Marketing is the business function that identifies customer needs and wants, determines

which target markets the organization can serve best, and designs appropriate products,

services, and programs to serve these markets. It guides the entire organization. The goal

of marketing is to create customer satisfaction by building value-based relationships with

customers, in conjunction with other internal and external business units. The end-result

is gaining market leadership by understanding consumer needs and finding solutions of

superior value, quality, and service. It is important to reach the customer at the right time in

the right media. It is also important that when we applying the Marketing Communication

program to introduce the product, we have to be particular about the sensitive isssue to the

Malaysian. It is important that we knew the product before we can market it, so that we are

approaching the right consumer.